Tax & Legal

In a recently published decision, the Supreme Tax Court held that an employee, in addition to the deduction of expenses for the rented apartment as double-household relief, can also claim the costs for a parking space as income-related expenses.

In a ruling from May 2025, the Federal Constitutional Court decided that the lack of a written contract between related German companies is not sufficient ground for refusing the deduction of business expenses. Rather, an overall assessment must be made to determine whether the agreement actually took place, even if made verbally or implied.

The Supreme Tax Court has held that a customer may fully deduct the VAT charged on a supply in accordance with community law, even if national law prescribes a lower rate.

The finance ministry has issued a decree on the implementation procedures for a retrospective change in the law increasing the scope for deducting home office costs.

The finance ministry has put church tax paid in other EU/EEA member states on an equal footing with its German counterpart from the point of view of a deduction as an allowable personal expense.

The Supreme Tax Court has disallowed an expense deduction up to the higher lump-sum amount for accommodation on business travel, where the employer bore the actual amount payable.