Special expenses and exceptional costs
Special expenses and exceptional costs reduce income.
Special expenses are specifically expenses, not already deductible as business or occupational expenses, for
- personal insurance (e.g. voluntary health insurance, pension fund contributions)
- creation of housing (e.g. community contributions [Genossenschaftsbeiträge], home construction costs)
- refurbishment of housing by authorised professionals (e.g. replacement of windows)
Starting in 2016, the special expense allowance for personal insurance, housing creation and housing refurbishment will expire. In the years 2016 to 2020 these special expenses can continue to be deducted only if the insurance contract or actual building or refurbishment work commenced, or the loan for construction or refurbishment was taken out, before 2016.
Costs for voluntary additional insurance and the subsequent purchase of additional insurance periods, however, continue to be allowable without restriction (even after 2015).
The following are also deductible:
- Church contributions of up to 400 Euro
- Private donations up to a maximum of 10 percent of total income, for privileged recipients, in particular humanitarian institutions, institutions for the protection of nature and the environment, privileged institutions in the field of science and adult education, animal homes and volunteer fire brigades (see Section 4a EStG and the list of privileged recipients). Donations provided out of business assets to privileged recipients are deductible as business expenses.
- Costs of tax advice (but only in exceptional circumstances, as costs of tax advice should normally be deducted as business expenses or occupational expenses)
- Certain annuities
Please note
Deductions of losses also count as special expenses.
Please note
Donations, church contributions and contributions to voluntary additional insurance or the subsequent purchase of additional insurance periods must, from 2017, be notified electronically to the tax office by the receiving institution (as with payslips) and are then automatically included in the assessment.
Exceptional costs include, for example, costs of disabilities, sickness or external vocational training of children. In certain cases (e.g. costs of sickness, although not expenditure due to disability), the costs must exceed an income-related patient’s contribution to have an effect on taxation.
Further links
Legal bases
- Special expenses: section 18 of the Einkommensteuergesetz (EStG)
- Donation benefit: section 4a of the EStG
- Exceptional costs: sections 34, 35 of the EStG
Responsible for the content: Federal Ministry of Finance
