Operating expenses
August 12, 2011 | 30,00 EUR | answered by Dr. Yanqiong Bolik
Hello,
I have been a self-employed lawyer since 2010. I have built office spaces on my husband's property (see preliminary question R-STE-11153, answered by tax advisor Olaf Gayko). The office spaces are financed by a loan. The loan for the office construction is in my husband's name because he has the necessary securities. The tax office does not want to recognize the interest on the office loan as business expenses because I am not the borrower. My husband and I are jointly assessed for tax purposes. How do you assess this "legal opinion" (quote tax office) of the tax office or how should we proceed?
Thank you very much for your efforts!
Dear inquirer,
Thank you for your inquiry, which I am happy to answer taking into consideration your input and the rules of this platform. This is a fundamental initial assessment of the situation you have presented.
In order for the following explanation to be helpful and useful, it is important that my assessment is based on the correct facts. Please note that adding, omitting, or changing information can affect the tax result.
According to your information, I found a preliminary question "Question: Building on someone else's property" from 30.07.2010. Therefore, I assume that the office is now in your business assets. Your husband took out a loan to build this office. The loan was used exclusively for the construction of your office.
In your case, the interest on the loan is business-related. The question is, who bore the interest.
For example, if you can prove that you always paid the interest to your husband and your husband then paid the interest to the bank, then you have indeed borne the interest. In this case, the interest should be considered as operating expenses.
If you did not bear the interest, then essentially there is a shortcut in the contractual path. Generally, the expenses can be attributed to you as expenses borne by you under the principle of the shortcut in the contractual path. However, a loan is considered a continuing obligation, where the case law has so far rejected the application of the principles of the shortcut in the contractual path.
I hope that my explanation has been helpful to you and I am happy to assist you with any further questions.
Best regards,
Dr. Yanqiong Bolik
Tax consultant
Bildstöckle 6, 70567 Stuttgart
Tel: +49 (0)711 / 9332 2657
Email: info@zdbz.de
