Articles

German Tax Updates in April 2025

1. Capital Expenditures that Constitute Acquisition Costs: Example of a Condominium
2. Maintenance Payments: Cash Payments No Longer Accepted by the Tax Authorities
3. Employees’ Business Travel: Advance Lease Payments Allocated Over the Lease Term
4. Attention Parents: Childcare Costs will be More Tax-Deductible Starting in 2025

1. Capital Expenditures that Constitute Acquisition Costs: Example of a Condominium

According to Section 6 (1) No. 1a of the Income Tax Act (EStG), expenses are reclassified as production costs if, within three years of the acquisition of the building, repair and modernization measures are carried out whose net expenses exceed 15% of the acquisition costs of the building. The expenses are then not deductible immediately, but only through the depreciation of the building. In the case of a condominium, two special features must be taken into account, as pointed out by the Hessian Fiscal Court.

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