Tax Changes for 2023 – An Overview

Various laws are bringing a number of changes to tax law for the new year. Most of them took effect at the start of the year and provide some relief—to a greater or lesser extent—during these times of inflation and the energy crisis. Here is an overview for taxpayers:

Home Office

Expenses for a home office remain deductible. As before, they can be deducted as business expenses if the majority of business or professional activities take place there. What’s new is that, as of January 1, 2023, the expense is also deductible even if an alternative workspace is available. Instead of deducting actual expenses, however, a flat-rate deduction of €1,260 per year—calculated on a monthly basis—is now also available.

Home Office Allowance

The home office allowance has been increased from five to six euros and is no longer time-limited. Its maximum amount is €1,260 per year. This amount corresponds to business or professional activities in a home office for 210 days per year.

Employee flat-rate allowance

The employee allowance has been increased by €30, from €1,200 to €1,230. The saver’s allowance has been increased from €801 to €1,000.

Operation of photovoltaic systems

Income from the operation of photovoltaic systems is retroactively exempt from income tax as of January 1, 2022. This applies to systems with an installed capacity of up to 30 kW. The same applies to income from the operation of systems with a gross nominal capacity of up to 30 kW on single-family homes and commercial properties, or 15 kW per residential and commercial unit for other properties (e.g., multi-family homes or mixed-use properties). The operation of photovoltaic systems is also favored for buildings used primarily for business purposes; the phrase “buildings used primarily for residential purposes” was removed from the previous government draft. A zero tax rate has been introduced for the supply and installation of photovoltaic systems.

Depreciation Allowance (AfA) for Residential Buildings

The straight-line depreciation allowance for residential buildings will be increased from 2% to 3% for buildings completed after December 31, 2022. This brings the depreciation allowance in line with that for commercially used properties.

Sales Taxation of the Public Sector

The transition period for the mandatory application of the new rules on sales tax for the public sector is being extended by another two years.

Tax Consulting in Düsseldorf and Oberhausen

Tax law is constantly changing. To ensure you always get the best possible outcome for your business and yourself, you should consult a tax law expert. Contact us for comprehensive advice and optimization of tax-related matters. Feel free to schedule a consultation with your tax advisor in Düsseldorf or Oberhausen.