Craftsman services – Development contributions – Tax consultants – Hagen – Holzwickede – Kamen – Lünen – Dortmund

A tax reduction of 20% of the expenses, up to a maximum of 1,200 euros per year, is available for craftsmen’s services for renovation, maintenance and modernization measures; publicly subsidized measures for which interest-reduced loans or tax-free subsidies are used are not eligible. In addition, the expenses may not be business expenses or income-related expenses and the (work) services must be performed in one ‘s own household in an EU/EEA state.

Whether and, if so, to what extent development contributions, e.g. for road construction, are eligible as craftsmen’s services has not yet been decided by the highest court. While the tax authorities generally reject the tax reduction for measures performed by the public sector or a contractor commissioned by it, various tax courts do not see this as a reason for rejection.

However, courts disagree on the scope of eligible actions. While one tax court took the contributions into account (after deducting the cost of materials), another recognized only the labor costs attributable to the access road to the property and excluded the planning costs (not craftsmen’s services) and the labor costs for the road itself because there was no household-relatedness.

An appeal against this decision has been lodged with the Federal Fiscal Court; its decision is awaited.

(Further comments & information on this can be found in our information letter 04/2018 under item 1.)