The business magazine FOCUS MONEY has intensively analysed the competence of tax advisors. We were able to stand out in terms of competence and specialisation and assert ourselves among more than 10,000 participating tax experts. The award-winning tax consulting firms of the year were presented in FOCUS MONEY issue 24/2024, which was published on 5 June.

We are delighted that TLI Steuerberater is once again one of Germany’s Top tax advisors in 2024! This award is proof of our ongoing commitment and expertise in tax consultancy.

Our expertise extends far beyond traditional tax issues. Whether it’s highly complex issues such as generational change, expansion abroad or comprehensive restructuring – our team offers customised solutions and comprehensive all-round support at the highest level. We pride ourselves not only on our professional expertise, but also on our specialisation and in-depth industry knowledge.

Another key aspect of our advisory services is the use of digital communication channels. In an increasingly networked and digital world, it is a matter of course for us to utilise the latest technologies and means of communication in order to offer our clients the best possible service. This includes not only efficient communication, but also the secure and fast processing of all tax matters.

A big thank you to all our employees who do their best every day to maintain and exceed our high standards. We would also like to thank our clients who place their trust in us and work with us to achieve their goals.

We look to the future with confidence and look forward to further exciting projects and challenges. It remains our goal to continue to deliver top performance in tax consultancy and to stand by our clients as a reliable partner.

Inga Stankeviciute | TLI Steuerberater

With the Federal Council’s approval of the Growth Opportunities Act on 22 March 2024, the issuing of electronic invoices, or e-invoices for short, will also become mandatory in the B2B sector in Germany. From 2025, every entrepreneur will be obliged to issue an e-invoice for sales to an entrepreneur based in Germany.

The e-invoice is a structured data record that is created, transmitted and received in an electronic format according to precise specifications. Unlike a paper or PDF invoice, an e-invoice is not a visual document and cannot be compared with a typical invoice.

The e-invoice must fulfil the European standard EN 16931. There are currently two authorised e-invoice formats in Germany (ZUGFeRD 2.0 and XRechnung). Furthermore, it must be possible to process the data record automatically without any media discontinuities.

This measure aims to combat fraud in the area of VAT in particular.

E-invoicing will be mandatory for national B2B transactions. This includes all taxable deliveries or other services between two companies based in Germany within the meaning of Section 2 UStG. Self-employed persons, small businesses and landlords are also obliged to issue e-invoices.

Advantages of e-invoicing:

  • Save costs and time (shorter processing times, savings on paper and postage, everything digital from one system, error-reduced invoice verification)
  • Location-independent invoicing (especially dispatch, receipt and archiving)
  • Conservation of resources

From 1 January 2025, the receipt and processing of e-invoices will be mandatory for every entrepreneur. The technical requirements must be in place by then.

The sending of e-invoices in the B2B sector will be mandatory from 1 January 2025, but there are transitional regulations until the end of 2027. Paper and PDF invoices can continue to be sent with the recipient’s consent until 31 December 2026. From 1 January 2027, entrepreneurs who exceeded an annual turnover of EUR 800,000 in the previous year are obliged to issue an e-invoice. All simplifications will no longer apply from 1 January 2028 and every entrepreneur will be obliged to send an e-invoice in the B2B area.

The only exceptions to the obligation to create an e-invoice apply in the following cases:

  • Small-value invoices (≤ 250 euros gross),
  • tickets and
  • transactions that are tax-free in accordance with Section 4 No. 8 to 29 UStG.

Summary of the legal timetable:

01.01.2025: All entrepreneurs must be able to receive e-invoices;

Paper invoices and other electronic invoice formats (PDF etc.) may only be sent with the recipient’s consent;

01.01.2027: Companies with an annual turnover > €800 thousand must send e-invoices in the domestic B2B sector

01.01.2028: All entrepreneurs must send B2B e-invoices. In addition, the EU Commission currently intends to introduce an electronic reporting procedure for e-invoices from 2028.

We will be happy to support you with the introduction of e-invoicing in your company.

Hannes Hellfeuer | TLI Steuerberater
Laura Böhm | TLI Steuerberater

The Tax Haven Defence Act continues to gain importance in practice. Originally coming into force at the beginning of 2022, the Tax Haven Defence Act initially received less attention in day-to-day advisory practice. With the inclusion of Russia in the list of affected countries from 1 January 2024, the law will be a more frequent part of everyday advisory work in the future.

The following article briefly outlines the effects of the Tax Haven Defence Act in connection with business relationships with Russia:

Stricter add-back taxation

If the income of a subsidiary located in Russia is subject to taxation of less than 15%, the stricter add-back taxation will apply from 1 January 2024. In simple terms, the tightened add-back taxation means that all income of a subsidiary located in Russia and subject to low taxation will be added at the level of the German shareholder and will be subject to taxation there. The effective tax rate is decisive for the assessment of low taxation (less than 15% tax burden). This is calculated on the basis of the ratio of the tax actually paid to the assessment basis derived in accordance with German profit calculation principles.

Withholding tax measures

In the case of the following business relationships, domestic business partners are obliged to withhold a tax deduction of 15% plus solidarity surcharge from the total income and pay it to the German tax authorities:

  • Provision of services to persons resident in Germany,
  • trading in goods or services with persons resident in Germany,
  • Letting and leasing or the sale of rights that are entered in a domestic public book or register,
  • Income from financing relationships with persons resident in Germany.

Non-application of double taxation treaties

Benefits from double taxation treaties are not granted (‘qualified treaty override’ pursuant to Section 1 (3) sentence 2 StAbwG). This means, among other things, that a distribution from Russia may result in a higher overall tax burden.

Increased obligations to co-operate

Taxpayers must keep comprehensive records of business relationships with affiliated companies in the respective countries and submit these to the tax authorities – without being requested to do so – within one year of the end of the financial year. Detailed and comprehensive records of the business relationships must be prepared. In particular, the records must describe the business relationship, the underlying contracts, the functions performed and the market and competitive conditions. The records must be prepared no later than one year after the end of the relevant calendar or financial year and submitted to the responsible tax office and the Federal Central Tax Office (BZSt).

From 1 January 2026, further measures will apply to profit distributions and the sale of shares. In accordance with Section 8b KStG and relief under double taxation agreements will not apply. Tax exemptions and tax reductions under German tax law will be cancelled. Dividends and capital gains from the sale of shares in a Russian corporation are fully subject to taxation in Germany.

From 1 January 2027, there will be a ban on the deduction of business expenses and income-related expenses from business transactions with partners based in Russia. In addition, a DAC6 report is required for business relationships with affiliated companies based in Russia that result in a business expense deduction in Germany.

All of the measures listed also apply to other countries such as Fiji, Samoa and Panama, which are covered by the Tax Haven Defence Act.

Hannes Hellfeuer | TLI Steuerberater

Combining the registered office of the newly founded or already existing company and its management at the private residential address of the shareholder-managing director? This is not a good idea from a tax perspective. Because in this case, there is quickly a risk of splitting the business.

If the shareholder of a corporation uses an essential operating basis, a so-called business split exists for tax purposes due to a personal and factual interdependence, provided that the shareholder can exercise a controlling influence over the GmbH alone or together with others.

Office space in a family home that is otherwise used for personal residential purposes is to be regarded as an essential business asset. According to the case law of the Federal Fiscal Court (Bundesfinanzhof, BFH), the home office is regularly considered an essential business asset, especially if the company has no other rooms or if the center of management or the registered office of the company is located there.

However, if the managing director only uses a home office in addition to his office at the location of the operating company and the scope of the work carried out there is of minor importance, the home office is generally not considered to be an essential business asset.

According to the relevant literature, a temporary use of the workroom that is only intended to be transitional from the outset is considered harmless, but is not entirely without risk and should therefore be avoided if possible.

If a business split has already been (unintentionally) established, it is recommended that the termination is only implemented after consultation with the tax advisor in order to avoid possible negative consequences such as the disclosure and taxation of hidden reserves.

Victoria Lenke | TLI Steuerberater

The double taxation treaty between Germany and the United States of America  (DBA-USA) is not only one of the most complicated double taxation treaties that Germany has concluded with other countries to date, but also allows double taxation of some income, paradoxical as it may sound.

Double taxation is possible because of the so-called “Saving Clause” in accordance with Article 1 paragraph 4 letter a DBA-USA. According to this, the USA reserves the right to tax some income of US citizens based on their US citizenship, regardless of the fact that Germany has the right to tax the same income in accordance with the provisions of DBA-USA. However, DBA-USA does not contain a corresponding reservation from Germany’s perspective. The Saving Clause applies primarily to US citizens who are staying in Germany temporarily but not for a short period of time for professional or business reasons.

Double taxation due to the Saving Clause can affect such income as interest, income from employment, pensions, supervisory board remuneration, other income, etc.

However, DBA-USA is not that unfair. To avoid or rather eliminate double taxation due to the Saving Clause, DBA-USA contains a special multi-step crediting method. This allows US citizens to refund overpaid taxes.

In order to offset taxes paid in both countries and to arrange for the refund of taxes that have been overpaid, we recommend that US citizens who plan a non-short-term professional or business stay in Germany speak to their US tax advisor about the points outlined above. For these reasons, we also recommend that such US citizens find a tax advisor in Germany at an early stage. Of course we are happy to offer our assistance.

Vadym Ponomarenko | TLI Steuerberater

We are pleased that we were named “Best Employers – Working Conditions for Tax Consultants 2024” in the current trade journal (Handelsblatt) ranking. This award as one of the best employers of 2024 in the tax consulting industry (category up to 50 employees) is recognition for our company and our corporate culture.

The award as one of the best employers in the tax industry is not only proof of the quality of our services, but above all of the tireless commitment and team spirit of our employees. We are continually committed to creating a positive and supportive work environment where each individual can achieve their full potential.

At TLI Steuerberater, we place great value on creating a positive and supportive work environment in which each individual achieves their full potential. This prestigious recognition reflects our commitment to outstanding working conditions and team collaboration.

A big thank you to our fantastic team for their tireless effort and dedication. Together we create a work culture that is not only successful, but also brings joy and satisfaction to everyday work.

If you would like to become part of a successful team in a corporate culture that is based on excellence and collaboration, then apply to us.

We are looking for committed talents who would like to work with us to create a positive working environment.

You can find more information about TLI Steuerberater and current career opportunities under Career.

We look forward to a successful future together!

On August 21, 2023, Austria and Germany signed an amendment protocol to the double taxation agreement (DTA). The change log mainly contains adjustments with regard to the cross-border commuter regulation and the associated use of home office opportunities. The aim of the change protocol is to adapt the DTA to the new and “modern” challenges of the working world.

In our article from June 14, 2023 you will find everything you need to know about the legal status of the cross-border commuter regulation before the change protocol.

Go to article: The cross-border workers regulation in the double taxation treaty (DTT) Germany Austria

The change protocol is intended to allow taxpayers to meet the requirements for cross-border commuter status as soon as they work in the border zone and have their main residence there. The daily return trip across the border is no longer necessary. The border zone is currently still 30 km.

In view of the cross-border commuter regulation, days in the home office are no longer counted as harmful days of “non-return”. In addition, the cross-border commuter regulation was also extended to employees in the public sector.

The new cross-border commuter regulation will apply from January 1, 2024.

It remains to be seen which other double taxation agreements with neighboring countries will be changed in this regard. In addition to Austria, Switzerland has also signed an amendment protocol that will come into force on January 1st, 2025.

Hannes Hellfeuer | TLI Steuerberater

As an employee, according to Art. 15 Para. 1 DBA Austria, the remuneration from dependent work is to be taxed exclusively in the country of residence of the employee. If the activity is actually physically performed in the other country, the other country has the right to tax the remuneration.

However, according to Art. 15 Para. 2 – 6  DTA Austria, this basic rule can be deviated from. An exception is the application of the so-called cross-border workers regulation according to Art. 15 Para. 6 DBA-Austria.

Two conditions must be met for the application of the cross-border workers regulation:

On the one hand, both the place of residence and the place of work must be within the border zone. This border strip covers 30 km along the border, based on the straight line. (cf. Consultation Agreement Germany – Austria of 08/24/2000, BStBl. I 2010, p. 645).

On the other hand, the cross-border worker hast to return daily from his place of work to his place of residence (cf. Art. 15 Para. 6 No. 2 DBA Austria), whereby it is not detrimental to the application of the regulation if the taxpayer has no more than 45 working days (based on a entire calendar year) does not return to his place of residence or does so outside of his work for his employer (e.g. due to a business trip to a third country; cf. Consultation Agreement Germany – Austria of 08/24/2000, BStBl. I 2010, p. 645).

The following days are not to be taken into account in the case of non-return (“45-day limit”):

  • Holidays,
  • Sick days,
  • Parental leave/maternity leave and
  • Working days in the home office (so-called teleworking), provided that the working days have been spent in the home office due to the measures taken as part of the corona pandemic. The home office days only apply in the period from March 11, 2020 to June 30, 2022, not on the days of non-return (cf. consultation agreement Germany – Austria of March 28/29, 2022, BMF of April 4 2022, IV B 3 – S 1301-AU/19/10006:005).

Outside of the above mentioned period (March 11, 2020 – June 30, 2022), home office days count towards the number of days of non-return (“45-day limit”), since the daily border crossing does not take place (cf. Consultation Agreement Germany – Austria of 08/24/2000, Federal Tax Gazette I 2010, p. 645).

For the assessment years 2020 and 2021, income from employment is mainly taxed in the country of residence. The possibility of using the home office was retained by most companies in Germany and Austria. Since the simplification regulation for working from home expired on June 30, 2022, days in the home office will again be considered days of non-return as part of the cross-border workers regulation from July 1, 2022. If the 45-day limit is exceeded over the calendar year, the cross-border workers regulation is ultimately not applicable. The taxation right is to be divided into the total working days based on the days of activity in Germany and in Austria.

It remains to be seen whether fundamental adjustments will be made to the double taxation treaty on the subject of working from home. In order to keep cross-border activities of employees up to date, especially within the EU, a change to this effect would be essential.

Hannes Hellfeuer | TLI Steuerberater

For the first time, the Federal Fiscal Court (BFH) had to deal with the taxation of cryptocurrencies (BFH of February 14, 2023 – IX R 3/22). The previous judgment of the Cologne Finance Court (of November 25, 2021 – 14 K 1178/20), according to which profits from the sale of cryptocurrencies are private sales transactions in accordance with Section 23 (1) sentence 1 of the German Income Tax Code (EStG) the BFH has confirmed.

In the underlying facts, the plaintiff had acquired various cryptocurrencies (including Bitcoin, Ethereum, Monero) in several transactions between 2014 and 2017. He made a profit of 3.4 million euros from the sale in 2017 and also declared this in the income tax declaration. The responsible tax office assessed both the profits from the sale of cryptocurrencies for euros and the exchange of cryptocurrencies among themselves as private sales transactions subject to income tax. In the first instance, the Cologne Financial Court followed the opinion of the tax office, whereas the plaintiff filed an appeal because the Financial Court Cologne did not differentiate between the properties of the individual cryptocurrencies. In the current judgment, the BFH has now rejected the appeal as unfounded, since no differentiation is necessary when assessing the economic property of the cryptocurrencies at hand. According to the BFH, cryptocurrencies are “other economic goods”, according to which they qualify as private sales transactions for income tax purposes in accordance with Section 23 (1) sentence 1 no. 2 EStG if they are purchased and resold within one year. It is irrelevant for the qualification whether these are exchanged for other crypto currencies or sold for fiat currencies within the year. What was previously largely a consensus in the tax world has now been clarified by the BFH as a supreme court.

With this first judgement by the BFH on cryptocurrencies, it is now clear that the highest financial court ruling regards cryptocurrencies as economic goods and the sale of these within the one-year period is subject to income tax.

Dominik Becherer | TLI Steuerberater

Let’s start with a statistic: Of the approx. 8.5 million companies in Germany, around 150,000 companies were last checked by the tax authorities. This corresponds to a rounded rate of just 1.8%.

The number initially gives little cause for concern. However, this would be too easy, because the larger the company, the higher the probability of being audited. According to the statistics recently published by the Federal Ministry of Finance on the results of tax audits, the audit rate for large companies is 17.1%. A total of 13,000 examiners were recently deployed. These determined additional tax revenue of 13.1 billion euros. In addition, the statistics published by the Federal Ministry of Finance only include so-called “real” tax audits. In addition to these “real” tax audits, however, there are numerous other audits that are recorded in isolated statistics. These facts and figures are cause for concern, aren’t they? Even if the probability of a real tax audit does not seem that high, you should be prepared for an audit. My experience as a tax consultant, with a focus on corporate taxes, the next tax audit will definitely come.

You can find my full column on tax auditing here.

Christian Dobner | TLI Steuerberater