Is compensation for entering into a rental termination agreement taxable?
Hello everyone,
what would a rental termination agreement be like
to be taken into account for tax purposes?
Or to put it another way, would this even be taxable for income tax purposes?
After all, that would be the compensation
for the loss of living space and various specially protected tenancy rights such as Section 574 of the German Civil Code;
There are very different statements on this in relevant legal forums.
According to a ruling by the Federal Finance Court
According to a 2000 Federal Fiscal Court ruling, the severance payment for a lease termination agreement is tax-exempt (Federal Fiscal Court, September 14, 2000, Ref. No.: IXR 89/95). Therefore, no income tax is payable.
Do you perhaps have in-depth knowledge of this tax law issue?
That would make me very happy.
Many thanks in advance and best regards!
(1 votes)
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Decommissioning if the rental contract is cancelled: Note tax (rented.de)
For the tenant, the deduction is tax-free if it clearly refers to the deduction of the tenant (BFH, 14.9.2000, Az.: IXR 89/95, DStZ 2000, 453).
If the compensation also includes the costs of the tenant for the move, the financial offices evaluate this as additional income. The tenant must tax them.
The BFH verdict that you cite is still valid and is applicable on the side of the tenant.
You can also read here for emergency:
BFH of 05.08.1976 – BStBl II 1977 p. 27
I suspect that compensation is to be taxed as an asset.
For guess
As landlords, these are additional revenues or replacements for rent.
Therefore, it is necessary to specify
As a co-worker, it is a compensation for the change of residence
As such, it is tax-free unless the move is additionally paid
Thank you. But what exactly is the cost of moving here? Costs for moving company, or are there also costs for bail or furniture included in moving costs?
Moving costs a stretchy term …
Best regards
It is only necessary to determine whether transfer costs are agreed in the contract
That’s not a “income.” Just as little as the rent paid leads to a tax relief.
hm-naha, the spirits probably divorce. The compensation as such is not, but probably if part of the compensation would be spent on moving costs.
Then the question would be where the directives are going.
Is it only the moving company concerned or all expenses for a new apartment?
How to deposit, furniture, rent etc.?
😊
There are no spirits. The BFH judgment is quite clear.
Relocation costs are only relevant to tax if this move was required.
If you’ve always set up 20% as a working room, you’d have to activate 20% of this amount.
And if the private apartment contains a tax-reviewed working room after the conclusion of the contract? Should the compensation then be taxed as a percentage for the working room (I am self-employed), i.e. at 20 m vlt to 20 % v d compensation for income tax?
also with included moving costs?