Contents of issue 06/2026:
All taxpayers
- Questions and answers about the active pension
- Warning about fake emails (phishing)
- Reform of private pension provision and subsidy for electric cars approved – relief subsidy rejected
Landlord
Freelancers and self-employed people
- Investment allowance: Profit threshold includes off-balance-sheet adjustments
- Provisions for an early retirement scheme
- Numerous shortcomings found during health insurance fund audits
VAT payers
- Input VAT deduction: European Court ruling under review
- Full interest payment under Section 233a of the German Fiscal Code does not contravene EU law
Employer
Employee
Final notes
- Taxes and social security contributions: Payment deadlines in June 2026
- Late payment interest
- 40 %: tax appeal cases are decided in favour of the taxpayers
All taxpayers
Questions and answers about the active pension
Who reached the statutory retirement age and continues to work, has been able to receive their wages since 2026 up to 2,000 EUR per month, tax-free under Section 3(21) of the Income Tax Act received (although social security contributions are still payable). This so-called Active pension The Federal Ministry of Finance has now a list of frequently asked questions (FAQ) Published (as at 16 March 2026, available at: www.iww.de/s15439). This involves both Questions for employees and specific questions for employers answered.
Warning about fake emails (phishing)
The Federal Ministry of Justice and Consumer Protection (BMJV) recently pointed out that an increase in fraudulent emails are to be dispatched, which to give the impression, originate from the BMJV or the Federal Office of Justice (BfJ).
These letters are often mistakenly signed „State Secretary”. In addition, the BMJV logo and the flagpole used fraudulently. Fraudsters often use pretexts such as alleged fines, outstanding payments or urgent court summons, in order to persuade the recipient to click on links or open file attachments.
The BMJV emphasises that it never request payment of sums of money by email calls for. Official notifications are usually delivered by post. Furthermore, with e-mails, The sender's address must be considered. This ends with @bmjv.bund.de.
Please note — The affected should Do not click on any links, do not open any attachments and do not enter any personal details or bank account details.
Source — BMJV: „Warning! Latest alert regarding fake emails (phishing)“, published on 18 February 2026
Reform of private pension provision and subsidy for electric cars approved – relief subsidy rejected
The tax- and contribution-free relief bonus up to EUR 1,000 on 8 May 2026 unexpectedly failed to pass in the Bundesrat. By contrast, the Federal Council has approved the Reform of private pension provision. Furthermore, attention should be paid to a government grant to highlight the benefits that private individuals receive when they a new electric car Buy. Reason enough for an overview.
Relief bonus
In order to mitigate the consequences of the war in Iran, the German Government has introduced a relief payment. Under the scheme, Employers (on a voluntary basis) may pay their employees a relief bonus of up to 1,000 EUR can make payments – free of tax and social security contributions. The condition is that the payment must in addition to wages be granted. It may therefore, in particular, not by way of deferred compensation be financed.
On 8 May 2026, the relief bonus is now on the Federal Council’s agenda. Approval was considered a foregone conclusion. However, The federal states refused to give their consent. The main point of criticism: the federal states complained that, with this law, the federal government causes tax revenue shortfalls without making up for them. They and the local authorities would have to bear the bulk of the costs.
Please note — With this the relief bonus has failed. The Federal Government does not wish to pursue the plan any further and is now considering alternative measures to ease the burden.
Subsidy for the purchase of an electric car
The new e-car subsidy supports Private individuals purchasing or leasing a new vehicle registered in Germany for the first time of EU vehicle class M1 with purely battery-electric drive or of certain vehicles with externally.
The specified income threshold is for a maximum of EUR 80,000 in taxable annual household income. This income threshold is increased by 5,000 EUR per child for up to two children (under the age of 18). It is therefore the case for families with two or more children that up to a maximum of 90,000 EUR taxable annual household income.
Eligible vehicles are those that newly registered after 1.1.2026 will be. Applications for funding are expected to go live for the first time sometime in May 2026 possible. The funding can be applied for retrospectively will be. The decisive factor is the date of re-registration after 1 January 2026. The level of funding is tiered and may up to 6,000 EUR amount to.
Please note — These and The Federal Ministry for the Environment has compiled further interesting aspects. („Questions and Answers on Electric Car Subsidies“, as at 14 April 2026; available at: www.iww.de/s15016).
Reform of private pension provision
One new government support for private pension provision will the previous „Replace the “Riester pension„ or “Riester savings scheme’. The Federal Ministry of Finance has made the following statements in this regard, among others („Questions and Answers on the Reform of Subsidised Private Pension Schemes“, As of: 5.5.2026, available at: www.iww.de/s15370).
An important point beforehand: For Riester contracts, which were or will be concluded before 1 January 2027, Does a grandfather clause apply?. Savers can therefore continue with their existing Riester scheme as normal and retain the tax relief they have enjoyed to date.
It will be two different product categories to offer for selection
- Retirement savings accounts (including standard deposit) and
- Guaranteed products.
Please note — In addition, it is still possible to Products designed to support loan repayment under the Home Ownership Pension Scheme to be completed.
Which option is suitable in an individual case depends particularly on individual preferences. For example, a guaranteed product for risk-averse investors are suitable. Guarantee products include firm commitments, what amount is reached at the start of the payout phase at a minimum (80 or 100 % of the amounts deposited).
Please note — The new products can be offered by pension providers. will be offered from 1 January 2027.
The Previous funding system with a Tax exemption of the contributions in the Savings phase and one downstream taxation of benefits in the payout phase will be maintained.
However, the Calculation of the allowance in future Contribution-based and thereby take place more easily. That means:
- Savers receive up to a annual personal contribution of EUR 360 for every EUR saved by the state as a basic subsidy.
- For another €1,440, that they save annually (i.e. from 361 EUR to 1,800 EUR), receive 25 cents for every euro saved.
For every child receives a parent plus a child allowance of 100 % for every euro paid in. Aisle A maximum of 300 EUR per child is subject to an annual personal contribution from 300 EUR achieved.
Please note — The calculation to date the income-dependent minimum own contribution is omitted with the introduction of the contribution-based allowance.
Contributions and entitlement to allowances (basic allowance and child allowance) may as before, as special expenses on the income tax return is claimed. The tax office will then check whether the saver or the taxpayer a tax advantage beyond the entitlement to allowances is due.
Furthermore, The group of people eligible for support has been expanded: Also self-employed people, who derive income under Section 15 („Traders“) or Section 18(1)(1) to (3) of the Income Tax Act and have submitted a tax return, and Compulsory members of a professional pension scheme will be in future are, in principle, immediately eligible for funding.
Source — Tax-free relief payment: BR-Drs. 223/26 (B) of 8 May 2026; Electric cars: Federal Ministry for the Environment: „Questions and Answers on E-Car Funding“, as of: 14.4.2026; Pension Reform Act: Federal Ministry of Finance: „Questions and Answers on the Reform of Tax-Favoured Private Pension Schemes“, as at 5 May 2026; BR-Drs. 206/26 (B) of 8 May 2026
Landlord
On the enforcement of claims arising from a decommissioning obligation
The Federal Fiscal Court has ruled that a claim by the landlord from a not to capitalise the tenant’s obligation to restore the property to its original condition is, as long as the emergence of the claim is still uncertain.
| Facts |
| The claimant (a group company in the legal form of a GmbH) had leased properties to Y-GmbH, on which infrastructure owned by the lessee was located. The framework lease agreement stipulated, under certain circumstances, an obligation for Y-GmbH to dismantle this infrastructure upon termination of the contract or to reimburse the claimant a certain amount for the dismantling costs. However, Y-GmbH, as the owner of the infrastructure, was free to dismantle it at its own expense at a time of its choosing before the contract ended. Y-GmbH had made provisions in its balance sheets for these dismantling obligations. The tax office was of the opinion that the claimant should recognise claims, thereby increasing profits, to the extent of the amounts recognised as liabilities by Y-GmbH. |
| The Cologne Financial Court had upheld the claim. The claimant's claims were not to be recognised, as they were not certain at the balance sheet dates. There was a lack of an almost certain, sufficiently specified, and therefore realised claim. The tax office appealed. However, this was unsuccessful, as the Federal Fiscal Court has now upheld the judgment of the Financial Court. |
Yes the contractual decommissioning regulations only in the presence of infrastructure at the time of contract termination whether they are applicable at all, was the recognition of receivables at the balance sheet date by no means certain. An activation is therefore ruled out.
Practical relevance
In the dispute, it was of capital companies, die a financial statement (Balance sheet and profit and loss statement) must be prepared. If, on the other hand, it is taxpayers who determine their profit by means of Income and expenditure account according to § 4 para. 3 of the Income Tax Act (EStG) or landlords, income under Section 21 of the German Income Tax Code achieve, The question of identifying any claims or provisions does not arise. For in these cases it is Inflow and outflow principle authoritative.
Source — BFH judgment of 27 January 2026, Ref. IX R 33/22, under www.iww.de, Retrieval No. 253409; BFH, Press Release No. 22/26 of 9.4.2026
Freelancers and self-employed people
Investment allowance: Profit threshold includes off-balance-sheet adjustments
The taking out a deductible investment amount (§ 7g of the Income Tax Act (EStG)) inter alia requires that a profit margin is not exceeded. The Federal Fiscal Court has now decided that when determining or calculating the profit limit off-balance-sheet adjustments to be taken into account.
Background
For the future (three-year investment period) Purchase or manufacture of depreciable tangible assets can up to 50 % of the estimated acquisition or production costs deducted from profits.
As the legislator, through this tax deferral option, is particularly encouraging investment by small and medium-sized enterprises to make easier, The profit must not exceed EUR 200,000.
The question now was how this profit margin is defined: Does it apply the net retained profit or are off-balance-sheet adjustments to be taken into account?
| Facts |
| A taxpayer claimed a deduction under Section 7g of the German Income Tax Act (EStG) in their profit calculation, which the tax office did not consider. The tax office was of the opinion that the profit within the meaning of Section 7g (1) Sentence 2 EStG exceeded EUR 200,000. This was because, after the non-accounting addition of trade tax, the profit exceeded the threshold. This view has now been confirmed by the Federal Fiscal Court. |
The Federal Fiscal Court justified its decision, inter alia, as follows: The profit margin is aimed at after taxable profit following § 2 para. 2 sentence 1 no. 1 of the German Income Tax Act (EStG). Off-balance-sheet adjustments are to be taken into account.
Source — BFH ruling of 1.10.2025, ref. X R 16, 17/23, under www.iww.de, Retrieval No. 253060
Provisions for an early retirement scheme
For expenses in connection with an early retirement scheme according to the Federal Fiscal Court the creation of an accrual may be permissible for uncertain liabilities.
| Facts |
| In the case in question, certain senior executives were able to opt for an early retirement scheme under which they could take a leave of absence from work for a period of up to three years before reaching the standard retirement age, whilst continuing to receive 70 % of their gross annual remuneration. This was subject to the condition that the duration of the employment contract would be at least 25 years upon reaching the standard retirement age and that an agreement had been concluded prior to the start of the leave of absence.The tax office recognised the provision set aside for this purpose only in respect of those employees with whom a separate leave-of-absence agreement had already been concluded as at the balance sheet date. The Federal Fiscal Court took a different view. |
A provision can also for employees to be formed, with which at the balance sheet date, although No release agreement yet file and which have not yet been released, but which under the employment contract had a claim.
Regarding the provision amount the Federal Fiscal Court ruled: The remuneration to be paid during the leave of absence is intended to compensate for the work performance covered for the entire duration of employment. Therefore the estimated amount of fulfilment from the commencement of the employment relationship until the scheduled commencement of the leave to distribute.
Now it is up to the Düsseldorf Fiscal Court (lower court) again. It must primarily make findings for a possible fluctuation discount to be considered meet.
Source — BFH ruling of 5 February 2026, file reference IV R 11/24, under www.iww.de, Retrieval No. 253288; BFH, PM No. 21/26 of 02.04.2026
Numerous shortcomings found during health insurance fund audits
The Ministry of Finance Baden-Württemberg (Communication of 7 April 2026) has pointed out that during targeted action days (between 23 February and 27 March 2026) 162 businesses checked including barber shops, tattoo and nail studios. The result: More than every second till inspected showed irregularities.
Background: till checks find without announcement instead. The inspectors come into the shop during opening hours and check, among other things, whether all transactions were correctly entered into the till and receipts issued. If any significant errors are found, a tax auditing be initiated.
VAT payers
Input VAT deduction: European Court ruling under review
The European Court caused a stir with a decision, according to which an entrepreneur is sometimes entitled to deduct input tax earlier (contrary to the previous rules). However, the Advocate General at the European Court of Justice views this critically and has proposed a review. On 26/03/2026 (C-167/26 RX), the European Court of Justice has now ruled, to review the judgment regarding the relevant point in time for entitlement to the deduction of input tax. So, it remains exciting.
Full interest payment under Section 233a of the German Fiscal Code does not contravene EU law
Full interest on VAT under Section 233a of the Fiscal Code (Abgabenordnung - AO) infringes in the opinion of the Federal Fiscal Court not contrary to Union law.
Background
According to § 233a (1) of the AO, the following applies: If the assessment of turnover tax leads to a difference, Is this to be capitalised?.
Regarding the difference amount, Section 3 of § 233a AO states that for the interest calculation the fixed tax is decisive, less any applicable tax credits and by the time interest starts accruing fixed advance payments.
Please note — Pursuant to Section 233a (2) of the German Fiscal Code (AO) starts 15 months after the end of the calendar year, in which the tax arose.
| Facts |
| In the dispute, the tax office had corrected a VAT deduction claimed by the plaintiff, which she had previously claimed incorrectly. This led to tax demands and interest on these tax demands. The plaintiff objected to the interest on the tax demands, essentially arguing that full interest in the area of VAT was contrary to EU law, as it constituted a penalty incompatible with EU law, particularly with the principle of proportionality. However, the Federal Fiscal Court rejected this line of reasoning. |
Full interest accrual (as the Federal Constitutional Court has already decided with its order of 8 July 2021) a balance between the tax debtors, who at different times to be taxed. It also acts in favour of and to the detriment of the taxpayer.
Yes this purpose in Union law (also taking into account the case law of the European Court of Justice) not provided is, the Federal Fiscal Court determines that § 233a AO neither implements Union law nor falls within the scope of Union law otherwise. Within the scope of what Member States are entitled to Procedural autonomy is the regulation sufficient in other respects too the principles of equivalence and effectiveness. Even if it is assumed that full interest constitutes an implementation of Union law, the regulation also faces does not contravene the principle of proportionality under Union law.
Please note — Decisive for the examination of the principle of proportionality under EU law is not the compensatory function of the provision intended under national law, but rather a then to be applied Objective of EU law sanctions.
Source — BFH ruling of 11.12.2025, file reference V R 7/24, under www.iww.de, retrieval no. 253849; BFH, press release no. 28/26 of 7.5.2026
Employer
On the tax-exempt status of special coronavirus payments
The Federal Fiscal Court has ruled: COVID-19 special payments are or were also tax-free even if credited against other voluntary employer benefits. The payments had to be made by the employer for purposes intended to alleviate the burdens of the Corona crisis granted. One concrete (individual) burden the support for employees due to the Corona crisis was not necessary.
Background
In the period from 1.3.2020 to 31.3.2022, employers could provide employees with a tax-free coronavirus bonus of up to 1,500 EUR paid. However, according to Section 3 No. 11a of the Income Tax Act (EStG), this required that the bonus in addition to the wages already due is performed.
| Facts |
| In the year in question, 2020, as in previous years, an employer paid its employees holiday pay (on a voluntary basis) and a year-end bonus. In the year in question, it reduced the holiday pay and the bonus payment by half. However, the employer offset these reductions by granting the employees two additional, separately itemised „Corona special payments“ of the corresponding amount, tax-free, on account of the ‘unusual Corona period’. As a result, the employees thus received higher net amounts than in previous years. The tax office, however, took the view that the special COVID-19 payments had been paid tax-free incorrectly. It was not apparent that the special payment had been made in response to the particular working situation during the Covid-19 period. The employer had converted part of the promised taxable holiday pay and the taxable bonus payment into a tax-free special COVID-19 payment solely in order to achieve a higher net payment. |
| The payments designated as a special Corona payment therefore had to be reassessed by the employer. However, the Federal Fiscal Court saw things differently. |
For tax exemption Is it sufficient for the special coronavirus payment to be made by the employer (as in the case in question)? intended to alleviate the burdens which was granted as a result of the coronavirus crisis. A specific (individual) burden of the employee was Not required.
The Corona special payment was also in addition to the wages already due provided. Because voluntary Benefits (such as, in the case in question, holiday pay and the bonus payment) include not in addition to the wages already due.
Please note — It is therefore permissible for an employer to provide a voluntary additional benefit (in this case: a special coronavirus payment) for another voluntary additional service (in this case: holiday pay/bonus payment) is taken into account, or the latter by converting it for a different purpose.
Source — Judgment of the Federal Fiscal Court of 21 January 2026, Ref. VI R 25/24, under www.iww.de, Reference No. 253857; Federal Fiscal Court (BFH), Press Release No. 26/26 of 7 May 2026
Employee
No preferential taxation: Capital payout from occupational pension scheme
Is it the case that a choice between annuity payments and a lump sum payout for occupational pension provision provided for and the taxpayer decides after the expiry of the contract to a one-off payment of capital, the question arises as to whether here the reduced taxation pursuant to § 34 (2) No. 4 of the Income Tax Act (EStG) applies („Remuneration for multi-year activity“). After several tax courts last dealt with the characteristic of „extraordinariness“ had been busy, the Federal Fiscal Court has now ruled that in such cases regularly no extraordinary income is available.
| Facts |
| In 2005, the employer, as the policyholder, took out a direct insurance policy for the taxpayer, as the insured person, as part of the company pension scheme. The contributions, which arose from deferred compensation, were exempt from tax under Section 3(63) of the Income Tax Act (EStG). Under the terms of the insurance policy, the taxpayer was entitled to a lifelong monthly pension from 1 April 2019. However, she could also opt for payment in the form of a one-off lump sum. This lump-sum option, which the taxpayer exercised, was not subject to any further conditions (apart from reaching the contractually agreed date).The tax office taxed the lump-sum payment in full as income under Section 22(5), first sentence, of the Income Tax Act (EStG) at the standard tax rate. The taxpayer, however, sought the reduced tax rate under Section 34(1) and (2)(4) of the Income Tax Act (extraordinary income from remuneration for activities spanning several years) – but wrongly so, as the Münster Finance Court and now also the Federal Finance Court have ruled. |
The reduced rate of tax on the payment failed due to the exceptional nature of the income. Section 34(2) of the Income Tax Act (EStG) sets out categories of cases for potential extraordinary payments. The wording „As extraordinary income “can only be considered" shows that the categories of cases must first be qualified as extraordinary.
The Federal Fiscal Court has increasingly in its more recent case law the characteristic of actual atypicality is used. Thereafter, it is crucial for the application of § 34 para. 2 no. 4 of the German Income Tax Act (EStG) whether the accrued aggregation of income (here: capital payment instead of ongoing benefits) for the relevant is atypical in the life, economic, and regulatory spheres.
In order to assess the degree of atypicality, some tax courts had, in previous proceedings, Statistical material raised. Although the findings do not meet the criteria for representative statistical surveys (insufficient data basis). Nevertheless, the results suggest In no way concerning existing capital choice options for retirement provision products is exercised only in very rare and therefore atypical individual cases.
Source — BFH judgment of 30 October 2025, file reference X R 25/23, under www.iww.de, Retrieval No. 252381
Final notes
Taxes and social security contributions: Payment deadlines in June 2026
In June 2026, you should pay particular attention to the following due dates:
Tax deadlines (due dates):
- Value added tax (Monthly payer): 10.06.2026
- Income tax (Monthly payer): 10.06.2026
- Income tax (quarterly): 10.6.2026
- Church tax (quarterly): 10.6.2026
- Corporation Tax (quarterly): 10.6.2026
In a Cheque payment the cheque must be received by the tax office at least three days before the due date.
Please note—The three-day grace period, applicable to all taxes for late payment by bank transfer, expires on 15.6.2026. It is hereby emphasised once again that this payment grace period expressly does not apply to payments by cheque.
Social security contributions (due date):
Social security contributions are due by the third to last banking day of the current month for which Contribution month: June 2026, on 26 June 2026.
Late payment interest
For the calculation of default interest, the base interest rate according to § 247 BGB is to be applied. The rate is newly determined on 1 January and 1 July of each year.
Aisle Base interest rate for the period from 1.1.2026 to 30.6.2026 is 1.27 percent.
This results in the following default interest:
- for consumers (§ 288 Paragraph 1 of the German Civil Code): 6.27 percent
- for the Business transactions (§ 288 para. 2 German Civil Code): 10.27 per cent
* for legal relationships that arose before 29.7.2014: 9.27 percent.
The base interest rates applicable for the calculation of default interest were in the past:
| Calculation of default interest | |
| Period | Interest |
| from 1st July 2025 to 31st December 2025 | 1.27 percent |
| from 1 January 2025 to 30 June 2025 | 2.27 per cent |
| from 01.07.2024 to 31.12.2024 | 3.37 percent |
| From 1.1.2024 to 30.6.2024 | 3.62 percent |
| From 01.07.2023 to 31.12.2023 | 3.12 percent |
| from 01.01.2023 to 30.06.2023 | 1.62 percent |
| from 1.7.2022 to 31.12.2022 | -0.88 percent |
| From 01.01.2022 to 30.06.2022 | -0.88 percent |
| from 1.7.2021 to 31.12.2021 | -0.88 percent |
| from 01.01.2021 to 30.06.2021 | -0.88 percent |
| from 01.07.2020 to 31.12.2020 | -0.88 percent |
40 %: tax appeal cases are decided in favour of the taxpayers
The Federal Fiscal Court has in its 2025 annual report e.g. on the percentage of the total Decisions made in favour of the taxpayer informed. After that, the success rate during the inspections at 40 % (compared with 42 % in the previous year), For appeals against a refusal of leave to appeal, the figure is 15 % (compared with 10 % in the previous year). Also of interest: In the revision proceedings lies the average duration of proceedings in the reporting year at 23 months (this corresponds to the previous year). The processing the appeals against non-admission lasted 8 months on average (after 9 months in the previous year).
