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BFH-Insights

Federal Fiscal Court judgement: Cash-basis VAT and voluntary bookkeeping (section 20 of the VAT Act)

Taxation on the basis of consideration received is a substantial cash-flow advantage for professional practices and other members of the liberal professions [Freiberufler]: VAT need not be paid until the fee comes in. On its wording, section 20 sentence 1 no. 3 of the VAT Act [Umsatzsteuergesetz–UStG] ties the authorisation solely to income from a liberal profession within the meaning of section 18(1) no. 1 of the Income Tax Act [Einkommensteuergesetz–EStG]. By judgement of 16 Apr 2026 (file ref. V R 16/24), however, the fifth chamber of the Federal Fiscal Court [Bundesfinanzhof–BFH] adheres to the position that cash-basis taxation [Ist-Besteuerung] is unavailable where the member of a liberal profession voluntarily uses accrual accounting. At the same time, the fifth chamber refines which records remain not harmful.

Dr Martin Weiss
| 11 min read | 12 Oct 2026
BFH-Insights

Federal Fiscal Court ruling: Section 6b of the Income Tax Act - transfer of hidden reserves to the assets of a partnership limited by shares (“KGaA”)

The transfer of hidden reserves under section 6b of the Income Tax Act [Einkommensteuergesetz–EStG] is designed on a partner-related basis [gesellschafterbezogen]. It can therefore also take place across the boundaries of a single business. The Federal Fiscal Court [Bundesfinanzhof–BFH] has now ruled that this can include assets of a partnership limited by shares [Kommanditgesellschaft auf Aktien–KGaA] in which the former partners [Mitunternehmer] of a limited partnership [Kommanditgesellschaft–KG] participate as general partners [persönlich haftende Gesellschafter] (Federal Fiscal Court judgement of 21 May 2026, file ref. IV R 21/23). Its status as a corporation does not stand in the way. In practice, however, what matters is the correct implementation in the balance sheets and the coordination of the tax proceedings involved: despite the favourable finding on substantive law, the case was referred back to the Fiscal Court [Finanzgericht–FG].

Dr Martin Weiss
| 8 min read | 12 Oct 2026
BFH-Insights

Federal Fiscal Court ruling: Profit threshold for the investment deduction

Since the Annual Tax Act 2020 [Jahressteuergesetz 2020–JStG 2020], the investment deduction [Investitionsabzugsbetrag] under section 7g of the Income Tax Act [Einkommensteuergesetz–EStG] has only been available to businesses whose profit does not exceed EUR 200,000 (section 7g(1) sentence 2 no. 1 (b) of the Income Tax Act). The definition of this “profit” has for a long time been disputed: the tax balance sheet profit, or the profit for tax purposes after off-balance-sheet adjustments? Following the tenth chamber (Federal Fiscal Court [Bundesfinanzhof–BFH] judgement of 1 Oct 2025, file ref. X R 16, 17/23, Federal Tax Gazette [Bundessteuerblatt–BStBl.] II 2026, p. 412), the third chamber of the Federal Fiscal Court has now also decided in favour of the profit for tax purposes (Federal Fiscal Court judgement of 18 Jun 2026, file ref. III R 38/23). In the case at issue, it was once again the non-deductible trade tax (section 4(5b) of the Income Tax Act) that tipped the balance.

Dr Martin Weiss
| 9 min read | 08 Oct 2026
BFH-Insights

Federal Fiscal Court ruling: Business expenses for asset losses caused by relatives

Asset losses resulting from theft, embezzlement or breach of trust [Untreue] can constitute business expenses. In principle, this also applies where a relative of the taxpayer caused the loss. In its judgement of 28 Jan 2026 (file ref. X R 21/23), the Federal Fiscal Court [Bundesfinanzhof–BFH] clarified that neither the family relationship nor lax supervision in itself precludes the deduction. What is decisive is the business-related “triggering factor” [auslösendes Moment] of the loss. At the same time, the evidentiary requirements remain high: the taxpayer must set out and prove the actual loss of assets and the fact that it was caused by the business.

Dr Martin Weiss
| 7 min read | 08 Oct 2026
BFH-Insights

Federal Fiscal Court ruling: Trade tax exemption for team-based outpatient care

Outpatient care services may be exempt from trade tax under section 3 no. 20 (d) of the Trade Tax Act [Gewerbesteuergesetz–GewStG] even where a third party pools the services and bills them to the social insurance bodies. According to the Federal Fiscal Court [Bundesfinanzhof–BFH], the decisive factor is not the civil-law chain of contracts or billing, but who actually provides the care to the sick persons or persons in need of care and who bears the costs in economic terms. The decision strengthens care models based on a division of labour, but at the same time imposes strict requirements on proving that the 40% threshold has been met (Fed-eral Fiscal Court decision of 28 Jul 2026, file ref. VII R 35/24).

Dr Martin Weiss
| 7 min read | 07 Oct 2026
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Press releases

11 Mar 2026

Grant Thornton increases annual revenue to EUR 264 million in financial year 2024/25

The audit and advisory firm Grant Thornton in Germany ended the 2024/25 financial year on September 30, 2025, with consolidated revenue of EUR 264 million (up 6 percent on the previous year). The Audit & Assurance division recorded particularly strong growth with an increase of 14 per cent compared to the previous year.

09 Feb 2026

Grant Thornton Germany wins Martin Biegel for the new position of CFO/COO

Martin Biegel joined the Senior Leadership Team of the audit and advisory firm Grant Thornton Germany in February as the new Chief Financial Officer/Chief Operating Officer (CFO/COO) and in this role will actively help drive the firm’s strategic development.

13 Oct 2025

Grant Thornton Germany and Cinven enter into strategic partnership

The Equity Partners of Grant Thornton AG Wirtschaftsprüfungsgesellschaft (“Grant Thornton Germany”) have approved the strategic partnership with international private equity firm Cinven. This marks a key milestone for the transaction initially announced on 10 September 2025, which is expected to close in the first quarter of 2026. The partnership further strengthens Grant Thornton Germany’s position as a leading, trusted service provider in the German audit and advisory market, ushering in its next phase of growth.

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