Tax deduction for construction services Credit Unfortunately this specification of service has not yet been completely translated.

Have you done construction work for a company or a public corporation and it has been withheld in return for construction deduction tax? Then you can apply for a refund of the tax deduction under certain conditions.

If a tax deduction has been declared and withheld for your invoice by a recipient of a construction service performed by you, it will be credited against your taxes to be paid.

The following taxes are set off in succession:

  1. The income tax withheld and declared in accordance with Section 41a paragraph 1 of the Income Tax Act (EStG),
  2. advance payments on income tax or corporation tax,
  3. income tax or corporation tax of the tax or assessment period during which the benefit was provided, and
  4. the deductions to be notified and paid by you within the meaning of Sections 48, 48a of the EStG for works

The crediting is made by the tax office, an application for this is not required.

A credit may be refused if the recipient of your construction work as a deductor declares the deduction amount but has not paid it and there is reason to believe that there has been an abuse.

If you are not required to submit payroll tax declarations and you are not eligible for income tax or corporation tax, or if you can demonstrate that no tax claims will be secured during the tax period, you can apply to the tax office for reimbursement of the deduction amounts.

The application is formal and is made using an officially prescribed model form. This is available via the Form Management System (FMS) of the Federal Finance Administration.

The application is time-bound. It may be made until the end of the second calendar year following the year in which the amount of the deduction has been declared. If the provisions of an agreement to avoid double taxation are applied and a longer period is mentioned in it, this longer period will apply.

The tax office examines the application and, if the above conditions are met, reimburses you for the deduction amounts paid for your invoice.

Credit: - none

Refund: - Application for an official model form

- where possible, settlement notice from the deducted employee (recipient of the construction work)

Request for reimbursement of deductions (Section 48c paragraph 2 EStG)

Available via form management system of the Federal Finance Administration under tax forms -Income Tax-Construction deduction tax

Request for reimbursement of deductions (Section 48c paragraph 2 EStG)

Related Links

  • http://www.formulare-bfinv.de/ffw/action/invoke.do?id=034153

Preconditions

Tax deductions for construction work made domestically have been withheld on your invoice,

the deduction amounts are not offset against other taxes and

You shall, within the statutory period, apply for reimbursement of the deductible amounts withheld using the official form and shall comply with the conditions attached to a refund.

Section 48c Income Tax Act (EStG)

Related Links

  • Section 48c Income Tax Act (EStG)

If a tax deduction amount has been declared and withheld for your invoice by a recipient of a construction work performed by you, it will be credited against your taxes to be paid. You don't have to do anything about this credit.

If credit ingestion cannot be made, you can apply to the tax office for reimbursement of the deduction amounts if you are not obliged to submit payroll tax declarations and if an assessment for income tax or corporation tax is not considered, or if you can demonstrate that no tax claims will be secured during the tax period.

The application is formal and is made using an officially prescribed model form.

The sample form is available via the form management system (FMS) of the Federal Finance Administration.

The application is time-bound. It may be made until the end of the second calendar year following the year in which the amount of the deduction has been declared. If the provisions of an agreement to avoid double taxation apply and it sets out a longer period, that longer period shall apply.

The tax office examines the application and, if all the conditions are met, reimburse you for the deductions paid for your invoice.

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Last update or date of publication
26.11.2020