operational expenditure

Operating expenses are - considered for tax purposes - expenses that are occasioned by the operation ( § 4 para 4 ITA).

The expenses are allocated to a firm, and thus may apply only in relation to income from agriculture and forestry, from business enterprise and from self-employment. As part of these types of income profit business expenses reduce profits.

• 2.1 Anticipated operating expenses
• 2.2 Subsequent operating expenses

• 3.1 Non-deductible business expenses
• 3.2 Partially deductible business expenses

Operating instigation

An output is operatively initiated if it is related objectively to the operation and is subjectively determined to serve the operation. Type and amount of operating expenses determined the taxpayer basically self; Occupational reason does not depend on whether the expenses are necessary, customary and appropriate. For example, is also sponsoring deductible unclear despite success as a business expense. However, lack of customary practice, necessity and expediency be a reason to check whether the private initiative of the expenses not so very much outweighs that they can not be sold. A limit is set to § 4 paragraph 5, sentence 1, No. 7 Income Tax Act with a " stark " imbalance between effort and success, as far as expenses according to general accepted standards are considered to be inappropriate.

Unlike "private life "

Expenditure on private life (eg food, clothing, hobbies and apartment) are generally not induced by operations and therefore not deductible - § 12 No. 1 Income Tax Act.

" Mixed " caused costs

At intersection of betrieblichem and private sectors, the question arises whether and to what extent the related expenses as business expenses are deductible. These costs are called mixed expenses. § 12 sentence 1 No. 2 Income Tax Act, which provides that " expenses for the conduct of life " that brings the economic or social position with, even then may not be deducted if they are made to promote the profession or activity of the taxpayer, was so long designed so that even the part of the expenses can not be deducted, which is induced by operations.

Example: For the birthday party of the business owner are relatives and friends, but also invited business partners. Consequently, the cost, even if they relate to the business partners are not deductible.

The general deduction ban was for some time but not when the private Mitveranlassung of only very minor importance.

Example: During a two- day business trip to Paris, an entrepreneur makes there still a short visit to the Louvre. Since this museum is only of minor importance, the full deduction of travel expenses as business expenses is nothing to prevent.

Long a division prohibition of § 12 sentence 2 of the Income Tax Act No. 1 was derived as described above for mixed with more peer weighting induced travel, which prevented even the deduction of an appropriate occasion the operational part of the travel costs for the private event. This changed by a resolution of the Senate of the Federal Fiscal Court (BFH ) of 29 September 2009.

In case of dispute a visitor and guest speakers spent a four-day computer fair in Las Vegas three more days in the city. The BFH allowed for four-sevenths of the airfare to withdraw.

Previously, a division of the expenses at the company over private use of company cars, computers and phones was already possible. In the press release of the BFH to the said decision of the Senate stood beyond: This can also have implications on the assessment of other mixed vera lasster expenses. In the text of the decision itself states: The Great Senate after re- examination of the opinion that § 12 clause 1 sentence 2 ITA normalized no general partitioning and deduction ban.

The BFH reaffirmed its new jurisdiction by two judgments of 21 April 2010 on multi-day training events in which subject-specific seminars / lectures were offset temporally significant program points that were conceived in the relaxation, entertainment or general education (see mission ).

On the problem of mixed initiative in general, see net principle (Tax).

Anticipatory and post- operating expenses

A special case represent expenses incurred before opening operation or after operation completion. In order for these expenses are deductible as business expenses, they must be economically related to the operating activities.

Anticipated operating expenses

Anticipated operating expenses are expenses that are incurred prior to the actual operation opening, provided they are economically related to the planned operations. For a sufficiently specific association of the expenditure must be given to one of the types of income. The fact that the taxpayer seriously intends to continue to make a profit ( profit ) must be furnished on the basis of objective characteristics. For the deduction of expenses than anticipated operating expenses, the general profit determination rules, for example, the rules apply to depreciation.

Subsequent operating expenses

Expenses incurred after the company closure, can in principle no longer be treated as operating expenses. From this principle, the Court has developed several exceptions, eg for subsequent interest owed, which could not be erased from the disposal and recycling revenues.

Not or only limited deductible business expenses

Non -deductible expenses

Regardless of the type of income § 12 Income Tax Act prohibits the deduction of the following operating expenses:

• Expenses for private life and the maintenance of family members, even in the professional context - § 12 No. 1 ITA, see above
• The grants (excluding statutory duty) - § 12 No. 2 Income Tax Act
• Taxes on income and other personal taxes and VAT on unpaid value fees and the amounts of input tax on expenses, subject to the deduction ban the number 1 or § 4, paragraph 5, sentence 1, No. 1, 3, 4, 7 or paragraph 7; the same applies to the portions attributable to such taxes fringe benefits ( § 12 No. 3 German Income Tax Act )
• Fines ( § 12 No. 4 Income Tax Act)
• Expenses of the taxpayer for his or her initial training and for a first degree, if they do not take place in the context of a service relationship ( § 12 No. 5 ITA, see also special issues )

Partially deductible business expenses

§ 4 paragraph 4 and 5 of the Income Tax Act limits the deductibility of business expenses as follows:

• Deduction of corporate debt interest, to the extent that they are caused by over- abstraction ( § 4 para 4a Income Tax Act)
• Expenses for gifts to persons who are not employees of the taxpayer; here an exemption applies: they are deductible if the cost of the gift a total of EUR 35 per beneficiary does not exceed ( § 4 par 5 No. 1 Income Tax Act); the costs are about, no deduction is possible
• Expenses for the entertainment of people traveling for business are deductible to 70% - if they are have to be regarded by the general public's perception as appropriate ( § 4 par 5 No. 2 Income Tax Act)
• Expenses for Guest Houses at the site of operation are always deductible. Are not the guest houses on the site of operation, the expenses are deductible only to the extent they relate to their own employees ( § 4 par 5 No. 3 German Income Tax Act )
• Expenses for hunting tourism, fishing and yachts (sailing, motor yachts ) are only deductible to the extent they are operated as an independent business enterprise. Excludes they are so in other commercial enterprises and in cases of Hobby ( § 4 par 5, No. 4 Income Tax Act)
• Additional expenses for meals when traveling on business have to be evaluated regardless of the actual costs with the rates ( § 4 par 5 No. 5 ITA ) in the absence of 24h: 24 €
• In the absence of at least 14h: 12 €
• In the absence of at least 8h: € 6

Proof of business expenses

The taxpayer must show evidence of expenditure are induced by operations. Can not be ascertained beyond doubt that operating expenses are present, the tax office tax deduction may fail. The Tax Office may require the taxpayer also that he names the creditors or beneficiaries of operating expenses. If the taxpayer does not comply with this, taking into account the operating expenditure declared can be rejected ( § 160 AO).

Operating expense Packages

Only occupational groups are granted an operating expense allowance. The mechanism for this is not found in the Income Tax Act, but in the PIT instructions (H 143 to § 18 of the Income Tax Act, from 2005 H 18.2).

• For full-time freelance literary or journalistic work 30 % of the income can be deducted as business expenses fixed price without a receipt, a maximum of € 2,455.
• In scientific, artistic or literary secondary activity, also lecture or part-time teaching and examination activities, more than 25 % of the revenue can be sent flat rate, maximum € 614, and is also present only if no activity within the meaning of § 3 No. 26 Income Tax Act.
• Childminders ( childminders ) can for each child for whom a weekly service time is agreed upon by at least 40 hours to pull off per month € 300 as operating costs. With less agreed weekly supervision time only the proportionate share of € 300 can be deducted, ie € 300 x Wochenstunden/40.