Tax deduction for construction services
The legislator has established a procedure for safeguarding tax claims in order to curb illegal activities in the construction industry. This procedure is governed by § 48 to § 48d of the [German] Income Tax Act (EStG).
Under said stipulations, specific recipients of services (principals) must determine an amount of withholding tax for services specified in detail, deduct it from the remuneration and pay it to the responsible tax office.
§ 48b EStG permits the possibility of waiving the deduction obligation if the taxpayer submits an exemption certificate. Said exemption certificate is issued by the tax office and entered in a database which is available electronically for enquiries at the Federal Central Tax Office.
The enquiry service is available free of charge. You can log in here. For reasons of data protection and in order to preserve tax confidentiality (§ 30 AO), you are asked to register with the system before making your enquiry. Click here to register.
The Links in the left-hand navigation bar provides further information on tax deduction for construction services, exemption from tax deduction for construction services and the new version of the exemption.
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