Germany Income Tax Declaration

[Michael2241]

Hello I am hosting my aparment for the first time during Oktoberfest and plan make arround 2000-3000 Euroes, now since the German Goverment  requested information about all hostings it is especially importaint to provide information in your tax declaration.

All profits from AirBnB fall according to German law under income tax which is arround 30-40%

Now my question is: Is ther any resource with tips on making the tax declaration or what you can declare as expenses?

I for example bought the aparment last november and Installed a Kitchen for 3000 Euroes and serverall Prices of Furniture last  year and some this year (all below the magical 800 Euro mark, can I mark them as expenses for AirBnB?

Or does it make sense buying a TV for the apartment and declare at as expenses for AirBnB and do I need to buy it before my guests arrive or during the arrival of guests?

Thank you very much

Michael

[Alis7]

Hi Michael, have you found out any information on this?

Best,

Alis

[Josef59]

Hi,

Generally yes, you should be able to deduct expenses.

The way it works is pretty much the same in all OECD countries actually, the principles of tax collection are pretty harmonized around the world, but local details and exceptions may vary wildly - always consult a local tax advisor!

This is how it works:

I most countries occasional extra income is exempt up to certain amount. So that you don’t have to file tax returns every time you sell old computer or rent apartment for a week.

However, once it becomes “regular business”, then it starts behaving like any other business: you pay income tax and generally you can deduct all costs of business - that means all the repairs, purchase of equipment, furniture, etc. Even electricity bills, Netflix invoices, etc.

And actually in most cases you should be able to deduct the “costs” of the apartment itself. Not all at once, but you put it as an asset into your business and you do “accounting & tax depreciation of the asset” = basically you deduct a portion of the purchase price every year. 

Watch out: if you use the apartment also for your personal needs, ie. not solely for AirBnB rentals, you can deduct the costs only proportionately. So if you live in the apartment 70% of the year and rent it for 30% of time, you cannot of course deduct all the costs, but only the portion attributable to those 30%.

Watch out: tax law of every country is a minefield full of exceptions and special rules - I described general principles, but always consult local tax advisor, to take you through the minefield.

[Gesine2]

Taxes in Germany are not easy at all, that is why I would advise to ask a tax consultant.

For example if you want to be host for one single room in your flat for different guests on the Airbnb platform, you have to sign in as a small business and make a profit and loss account to declare your taxes. In Germany you will have to send your yearly income tax return (Einkommensteuererklärung).

You are not allowed to sell food but only to offer your room with bed and bathroom to your guest.

If you offer any services like cleaning for your guest or other working services you have to make a list with the services and costs and time you have been working. For this extra working hour income you have to pay not only taxes but declare this earned income as well as the working time to your Health Insurance and pay costs for insurance, I have been informed.

So everyone joining the Cleansing program for sure better make a list how many hours are needed to follow up the cleansing of the room. At the moment I stopped to rent out my room until we can either charge all this extra upcoming working hours and costs which we would have to charge in Germany at least with the basic working hour of EUR 10,45 per hour. Of course the hosts in Germany could also ask a company to do the cleansing program for the room, but also these cost would have to be charged to the guest's room price in addition.

While in Germany if you let your room to one person for a long lease time you do not sign in a small business but just insert in your yearly tax income the amount of the long leased income for a room. No taxes, no insurance costs....  It is so true to better always consult your local tax advisor before renting out even a private room in your own flat....