Tax & Legal

In three judgments, the Supreme Tax Court held that breakfast services provided to hotel guests, as well as access to fitness and wellness facilities, are not subject to the reduced tax VAT rate under Section 12 (2) Number 11 of the Value-Added Tax Act, and that this does not contravene EU law.

In a recent judgment, the Supreme Tax Court confirmed that, when determining whether the profit threshold for claiming the investment deduction allowance has been exceeded, off-balance-sheet adjustments must also be taken into account, including trade tax, which must be added as a non-deductible business expense pursuant to Section 4(5b) of the Income Tax Act .

In a most recently published decision, the Supreme Tax Court commented on the distinction – from a VAT point of view - between brokerage services and own-account transactions on online booking platforms: If an intermediary company clearly presents itself to the consumer as a broker, it cannot be legally be the provider of the core service unless it has actually rented the vehicle itself first, the Supreme Tax Court said.

In a recent judgment, the Supreme Tax Court held that the plaintiff, as a self-employed marine and harbor pilot, does not maintain a permanent establishment within the meaning of Section 4 (5) Sentence 1 No. 6 of the Income Tax Act. Therefore, the deduction of business expenses for travel costs is not limited to the mileage allowance.

In a most recently published judgment, the Supreme Tax Court held that a self-employed person is considered to maintain two households only if he or she maintains a separate household outside the location where he or she primarily carries out his or her business activities and also resides at the location where he or she primarily carries out those activities. In any case, the primary focus of the entire business activity of a self-employed person is at the place where he or she pursues the sole business (permanent establishment) in the context of Section 4 (5) Sentence 1 No. 6 Income Tax Act.

Market development grants paid to a foreign associated company may comply with the arm’s length principle and qualify as deductible business expenses where they are intended to increase licence income and therefore do not constitute withdrawals. Expenditure on foreign market development expenditure may constitute the acquisition cost of an intangible asset comparable to goodwill, including where that asset is created for the first time through an acquisition for consideration.

When forwarding a written document from a firm’s post office box belonging to an authorized tax consulting firm, the professional who signs the document with a simple signature and the professional who initiates the mailing do not have to be the same person, the Supreme Tax Court said in a most recently published decision. However, it is required that both the licensed professional who signs the document and the licensed professional who initiates the mailing be authorized to represent the tax consulting firm.

In a most current decision, the Supreme Tax Court clarified that a financial loss is not considered to be of personal nature simply because the person who caused the damage is a family member or because a special relationship of trust existed. The decisive point is whether the cause of the loss caused by criminal acts stems from business activities which must be established beyond any reasonable doubt.

In a recently published judgment, the Supreme Tax Court decided that hidden reserves from a reserve established in a partnership may, pursuant to Section 6b (3) of the Income Tax Act, also be transferred to the acquisition costs of assets of a partnership limited by shares in which the partners hold an interest as general partners.

On 17 September 2026, the Federal Ministry of Finance published a circular on the recognition and valuation of pension provisions in the tax balance sheet under Section 6a Income Tax Act (“ITA”) in respect of pension commitments that depend on future events such as the performance of the underlying securities.

A tax authority is not required to certify under oath that the information it provided regarding data protection is accurate and complete. In a most recently published judgment, the Supreme Tax Court does not see any legal grounds for this. The court went on to say that it is generally assumed that the information provided is complete and accurate.

According to a recent decision of the Supreme Tax Court, the energy price allowance paid to employees in 2022 is taxable as income from employment. Section 119 para. 1 sentence 1 Income Tax Act, as contested by the plaintiffs, is not unconstitutional.

In a most current judgment, the Supreme Tax clarified the procedural and substantive handling of a late filing penalty when a VAT assessment is amended to a taxpayer's benefit (surplus) during ongoing litigation.

In a recently published judgment, the Supreme Tax Court decided that contributions made by parents to a support association for their children’s private school may, under certain circumstances, be treated as deductible school tuition for income tax purposes. However, expenses for lodging, care, and meals are not eligible.

In a recently published decision, the Supreme Tax Court held that, when determining a late filing penalty as part of a discretionary measure of the tax authorities pursuant to Section 152 (1) Sentence 1 of the General Tax Code, the frequency of missed deadlines must be taken into account even in cases of refunds.

Payments made by the purchaser of a parcel of real estate to a third party constitute consideration within the meaning of Section 9 (2) Number 3 of the Real Estate Transfer Tax Act only if the third party is in such a powerful legal position to prevent the purchaser from acquiring the property, and the purchaser is aware of these circumstances when making the payment.

In a recent decision, the Supreme Tax Court held that, in the absence of an explicitly prescribed filing deadline, the general statute of limitations comes into play when requesting a withholding tax refund. The implementation of this provision does not constitute a violation of the free movement of capital.

In a most recently published judgment, the Supreme Tax Court decided that freelance professionals who voluntarily keep accounts and draw up annual stock inventories cannot determine their VAT payable by using the so-called cash method (at the time remuneration is received) rather than on the basis of the agreed remuneration (as invoiced).