SteuerGo FAQs

(2022) Home-related services: Are costs for emergency call systems tax-privileged?

In its new directive, the tax authorities have specified when the costs for an emergency call system are considered a household-related service. Household-related services also include care and support services. The tax benefit can also be claimed by people living in a retirement home, nursing home, or residential care facility. Expenses for household-related services are generally deductible from the tax liability up to 20.000 Euro at 20%, maximum 4.000 Euro per year (§ 35a para. 2 EStG).

A privileged form is assisted living in a retirement residence in a private apartment. In assisted living, the provider offers a package of general support services in addition to accommodation through a so-called care contract, including help and support in emergencies. A care fee is usually payable for this emergency call system, even if no services are used.

The question is whether the care fee can be claimed for the tax benefit according to § 35a EStG.

Currently, the tax authorities state in their new directive when a tax reduction according to § 35a EStG can be granted for the costs of an emergency call system - and make a small but significant distinction (BMF directive of 9.11.2016, para. 11):

• Tax-favoured are the costs for an emergency call system if the on-call service is provided as part of "assisted living" in a retirement home. The care fee can thus be deducted directly from the tax liability at 20%.
• Not tax-favoured are the costs for an emergency call system outside of "assisted living" in a retirement home.

Since the care fee includes the provision of a 24-hour on-call service, emergency assistance, household support in case of illness, and care in the event of a short-term illness, these services are comparable to "household help". The mere provision of the services constitutes a household-related service.

The on-call service ensures that a resident who is in the spatial area of their household can receive help in an emergency. Such an on-call service is typically provided by family members living together in a household. Therefore, these are "household-related services". These are also provided in the household of the elderly. It is irrelevant that the emergency call centre is located outside the household (BFH ruling of 3.9.2015, VI R 18/14).

 

For the tax benefit, a contract for the provision of household-related services is sufficient. It does not depend on the actual use of the services. The certainty of receiving immediate help in an emergency gives older citizens a high sense of security. Thus, the 24-hour emergency call and the provision of services for the care of elderly people are valuable services, and the costs in the form of a flat rate are tax-deductible.

The Berlin-Brandenburg Finance Court ruled on 13.09.2017 (7 K 7128/17) as follows: Flat fees for connection to an emergency call centre located outside the property at a security company for the event of a burglary/robbery, fire, or gas leak in the taxpayer's home are not tax-favoured as household-related services if the emergency call centre is not even near the taxpayer's household and there is therefore no required direct spatial connection between the place of service and the household.

 

Currently: the Baden-Württemberg Finance Court also ruled against the tax authorities that the costs for an emergency call system are tax-favoured even if the elderly live alone in their household. They may also deduct the costs as household-related services according to § 35a para. 2 EStG at 20% directly from the tax liability. Since household members usually call for help when needed, the emergency call system replaces household monitoring for those living alone (FG Baden-Württemberg of 11.6.2021, 5 K 2380/19, revision allowed).