The Supreme Tax Court decided that expenses for a gym membership are generally not tax deductible as personal extraordinary and inevitable expenses. This also applies if the participation in a medically prescribed functional training program requires a membership in the gym.
In a most recent judgment following a preliminary request from Finland, the European Court of Justice has once again confirmed that specific fees and commissions associated with debt collection are subject to VAT.
Tax consultancy expenses incurred in connection with the preparation of the tax return and the determination of the profit from the sale of a shareholding in a corporation are not tax-deductible costs of disposal within the meaning of Section 17(2) sentence 1 of the Income Tax Act.
Costs for legal advice and representation in connection with a partition auction for dissolution of a community of heirs are deductible from the total value of the estate. According to the Supreme Tax Court, this also applies if the community of heirs had already assumed management of the estate’s assets prior to a request for distribution by one of the co-heirs.
In a reference for a preliminary ruling from Bulgaria the European Court of Justice is asked whether – in absence of consideration for a service due to the uncertainty of a contingency fee - the advice given by a lawyer against statutory minimum fee payable by the unsuccessful opposing party in the event of a successful outcome is a taxable transaction within the meaning of the VAT Directive. The Advocate General considers this to be a transaction subject to VAT in contrast to the ECJ case law which, in her opinion, has led to some uncertainty and likely misinterpretations in practice.
A professional soldier was convicted of a criminal offense and also had to undergo military disciplinary proceedings. At least he can deduct the legal costs of the disciplinary proceedings as income related expenses, the Supreme Tax Court said in a most recent decision.
Membership fees paid to a charitable organization that promotes cultural activities which mainly serve the furtherance of recreational and leisure activities are not deductible as special personal expenses for income tax purposes.
The Supreme Tax Court decided that maintenance fees incurred under leasing agreements must also be added back to the income subject to trade income tax.
In a most recently published decision, the Supreme Tax Court commented on the VAT situation regarding membership fees for non-profit sports clubs and held that they may be subject to VAT. However, it must be verified whether the sports club provides its members with a single service or several separate services, and whether this constitutes a tax-exempt transaction or one subject to VAT.
The tax courts had to clarify whether an "arrangement fee" and an "agency and security agency fee" are to be included as interest expenses when determining the interest limitation under Section 4h (1) of the German Income Tax Act. The tax authorities were of the opinion that both fees are to be included insofar as they are payable to the lender. The Supreme Tax Court held that the agency fee must be regarded as interest expense, but that the situation is different for the arrangement fee.
Services provided by a fitness studio operator are also subject to VAT if the gym is closed. The continued payment of membership fees as well as the replacement services offered by the gym operator during the corona lockdown is an exchange of services subject to VAT. According to a most recent judgment of the Supreme Tax Court this also applies if the members (as the recipients of the service) do not actually make use of the offered gym services, do not wish to do so or are unable to make use of them.
In a recent decision, the Hamburg Tax Court commented on the deduction of income-related expenses in connection with dividends from portfolio investments paid to a family foundation who itself is not exempt from corporation tax.
The Supreme Tax Court decided that a commercial partnership holding a share in a corporation as its sole activity in order to generate dividend income which is partially tax-exempt in accordance with Section 3 No. 40 Income Tax Act can deduct its ongoing administrative and consolidated group costs only in part because they are economically related to the partially tax-exempt income as defined in Section 3c (2) Sentence 1 Income Tax Act.
Considering the general context and framework of the German media law, the “broadcasting license” issued to a private broadcaster of radio or television programs is not, from a purely tax point of view, to be treated as an intangible asset for which capitalization in the tax balance sheet is mandatory. According to the Supreme Tax Court this is for want of a sufficient enough economic transferability of the broadcasting license. The fees paid in connection with the admission as regional TV-station, as in the case of dispute, are in general immediately tax deductible.
The Supreme Tax Court has decided that the expenses incurred by a special outdoor advertising agency for the provision of advertising media by corresponding advertising media providers (out-of-home advertising) did not meet the requirements for trade tax add-back pursuant to Section 8 no. 1 letters f or d Trade Tax Act.
In a recent judgement, the Supreme Tax Court (BFH) ruled that partial loan forgiveness for professional development training constitutes taxable income from employment under Section 19 (1) Sentence 1 No. 1 of the Income Tax Act.
Part of the fee payable by the foreign client which is initially retained in anticipation of a potential foreign withholding tax liability of the German self-employed contractor is not immediately subject to income tax in the hands of the latter. According to a ruling of the Supreme Tax Court, the fee withheld is only subject to German income tax if the foreign customer settles the foreign (withholding)tax liability incurred on the total amount of the agreed fees.
In a recent judgment the Supreme Tax Court decided that the requirements for an invoice within the meaning of Section 14c (2) Value Added Tax Act (VAT Act) are fulfilled if the document contains the issuer of the invoice, the (presumed) recipient of the service, a description of the service, the remuneration, and information on the VAT shown.
The ECJ has held that a provision requiring notaries to surrender to the state part of their fees for registering changes in legal form conflicts with the prohibition on “other taxes” in the Capital Duty Directive.
On 18 June 2025, member states' permanent representatives (Coreper) approved the Council’s stance on improving the payment services environment in the EU. The upgrade aims to reduce payment fraud, promote technological innovation, better protect consumers and increase transparency on fees.
