SteuerGo FAQs

Do tradespeople need to itemise the wage portion separately?

Customers have a legal right to a correctly issued invoice, especially for tradesmen's services. To deduct labour costs for tax purposes, the labour portion must be shown separately. Find out why this is important and what rights you have as a customer.

Deduct tradesmen's services for tax purposes

Tradesmen's services can be deducted directly from the tax liability at 20% of the labour costs, up to a maximum of 1,200 Euro per year. Only the pure labour costs, including machine and travel costs and the VAT on them, are eligible. Ancillary services such as disposal costs or consumables (e.g. tape or protective film) are also deductible. However, material costs are not eligible for tax relief.

Separate statement of the labour portion

To claim the tax deduction, the labour portion must be clearly stated on the invoice. Customers have the right to a detailed invoice that lists the labour portion separately. This was decided by the Mülheim District Court (judgement of 30.7.2015, 12 C 1124/14). Only with such an invoice can tradesmen's services or household-related services be deducted for tax purposes in accordance with § 35a para. 2 EStG.

Withholding payment if invoice is missing

If the tradesman does not correctly state the labour portion, the customer can withhold payment under § 273 BGB. Issuing a proper invoice is a secondary obligation of the tradesman, which the customer can demand. Payment may be refused until this obligation is fulfilled.

Cash payment can prevent tax deduction

Cash payments often lead to the tax office refusing the tax deduction for tradesmen's services or household-related services. The Eisenhüttenstadt District Court ruled (judgement of 8.3.2021, 5 C 65/20) that the client has no claim for reimbursement against the service provider if cash payments are made. It is the customer's responsibility to comply with the tax requirements.

Conclusion: Make sure that the tradesman shows the labour portion separately on the invoice to benefit from the tax advantages. Always pay by non-cash means to ensure the tax deduction. If there are problems with the invoice or a lack of cost breakdown, you have the right to withhold payment until a proper invoice is provided.

Tip:

The Düsseldorf Finance Court ruled (judgement of 18.7.2024, 14 K 1966/23 E) that advance payments may also be eligible. However, an advance payment cannot be considered without a request from the tradesman.