Tax consultant fees
Legal status: 09/21
What is remunerated and how?
1) Preliminary remark
To what extent can craftsmen’s invoices be deducted from tax? Is it worth keeping travel receipts and submitting them to the tax office? German tax law is complicated, and many taxpayers find dealing with taxes a chore that they prefer to leave to an expert. We are happy to help you here, but of course we do not work for free, but charge a fee as part of the assistance in tax matters. The amount of remuneration for the services of a tax consultant is based on the Tax Consultant’s Fee Ordinance (StBVV).
In addition to providing assistance in tax matters, as tax consultant we also offer additional services that do not fall under the regulations of the StBVV (e.g. business management consulting).
On the following pages, we will give you an overview with example cases so that you can keep track of the possible items of an invoice.
2) The fee invoice
A tax consultant must charge for all services that are part of the direct area of responsibility of a tax consultant in accordance with the StBVV. Unless otherwise agreed we charge you a fee for the services we provide that meet the requirements of § 9 StBVV and only deviate from the StBVV in the hourly rates.
2.1 Advance
Pursuant to § 8 StBVV, we may, in principle, request an appropriate advance payment from you for the fees and expenses already incurred and those expected to be incurred before commencing the work. For example, when an income tax return is commissioned, an advance payment of € 250 (plus VAT) is usually requested.
2.2 Propriety of the calculation
In order to make the breakdown of the remuneration recognisable for you as a client, the fee invoice will contain the following information in accordance with the regulations of the StBVV:
» the name of the service,
» the fee rules applied,
» the object value (for “value fees”),
» the indication of the hours separated by Framework rates (for “times charges”),
» the expenses,
» VAT
» the signature of the tax advisor.
3.Types of fee calculation
3.1 Calculation according to time fee
The time fee is calculated according to the time required to process the assignment and ranges from € 45 to € 260 per hour, with billing by the minute. We organise our work in such a way that the person whose training is best suited to the job always works in the team to ensure efficient and cost-effective processing. This calculation according to the time fee is always applied if the StBVV provides for it or if there are no sufficient indications by means of which the value of the object could be estimated. As a rule, time charges are applied in the case of:
» Work to determine the offsettable loss in the case of limited liability pursuant to 15a of the German Income Tax Act (§ 15a EStG),
» Preparation of a report on the participation in foreign corporations, asset funds and associations of a persons and in foreign partnerships,
» other applications and notifications under the EStG,
» Preparation of an application for deferral under section 95 (2) EStG,
» Preparation of an application for granting the allowance after re-establishment of unlimited tax liability according to section 95 (3) EStG.
A double time fee will be charged for:
» the monitoring and reporting of the payroll as well as the retention period for inheritance and gift tax issues during the business succession,
» the calculation of the preferential profit within the meaning of section 34a (1) sentences 1 EStG (preferential treatment of profits not withdrawn).
3.2 Calculation according to the value of the object
3.2.1 Item tables
Since billing according to hourly rates is only permitted in very few cases due to the times fee, the StBVV offers a variety of fee frameworks, which differ depending on the activity. What they all have in common is that the fees are based on the so-called object value and the fees for the individual activities are expressed as shares of the fixed fees. The value of the matter in question is usually derived from the total value of the activity, for example, the annual salary of employed persons or the balances sheet totals and annual performance of the companies that are obliged to keep accounts. The four different tables of object values can be found in the annexes to the StBVV. The full fee for the corresponding object value can be read from the respective table. Which table to use depends on the type of service:
» Table A: Counselling Table
» Table B: Table for the annual accounts
» Table C: Accounting table
» Table D: Agricultural Table
The amount in dispute is to be rounded up and read from the next higher table step (“amount in dispute up to…”) The StBVV provides that we as tax advisors determine the amount of fess within a reasonable framework depending on the time spend, the type of task, the value of the object and the liability risk.
3.2.2 Fee rates
For each service, the StBVV provides for a margin in the fee rates within which the fee ranges. In the case of fees for services rendered, one has to deal with tenths and twentieths of the full fee according to the table.
It is important to note that the fee must be appropriately high; however, it must also not fall below the legally prescribed minimum fee. The average fee, i.e. the middle fee within a fee framework, plays a major role in practice. It is calculated simply by adding the minimum and the maximum fee, divided by two. In principle, the average fee is charged when a matter is of average weight, scope and degree of difficulty and the client is in normal income and financial circumstances. The average fee is the starting point for the determining the appropriate tax advisor fees and is also considered a guideline fee by cases law.
However, the average fee does not automatically represent the appropriate fee – the decisive factor is always the individual case.
| Example |
| Mr Müller has a profit of € 30,00 as the owner of a carpenter’s workshop. His wife has income from employment of € 20.000. The value in dispute is therefore € 50.000 (= sum of positive income without losses). |
The StBVV provides the following for income tax:
| Type of activity | Object value/frame | Feerate/-amount |
| Fee type Medium | ||
| Income tax (without determination of income) | positive income, at least € 8,000 | 1-6/10 3,5/10 |
If the value in dispute is € 50,000 the full fee according to the Table A of the StBVV is € 1,230.
| Solution |
| According to the StBVV, the tax advisor can charge 1/10 to 6/10 of the full fee (10/10) for an income tax return without determining the income. The average fee is therefore according to Table A: |
| 1/10 + 6/10 = 7/10 : 2 = 3,5/10 |
| 1.230€ x 3,5/10 = 430,50€ |
| The average fee for Mr and Mrs Müller is therefore € 430.50. |
The chamber of the tax advisor recommend that the average fee is not exceeded by more than 20 % (so-called tolerance limit).
| Note |
| We set our fees with your interests in mind – nevertheless, in individual cases the fee may be above the average fee. This is usually due to difficult or complex situations that create an increased workload for us. |
4) Typical activities and their remuneration
The following examples show the minimum fees (Min), the average fees (Mid) and the highest fees (Max) The exact fee, as already explained, is always determined by the scope, the degree of difficulty and the importance as well as other criteria – the individual case is always decisive here. However, the fee always lies between the lowest and the highest legally prescribed rate.
4.1 Consultation
If you “only” wish to receive advice from us, this is not a free ancillary service, but a service subject to a fee in the tax law matters. We charge our fees according to the time fee in accordance with the respective current remuneration agreement.
4.2 Income tax return
If you commission us to prepare your income tax return, fees will be charged for the income tax return itself and for determining the surplus for the respective type of income. The fee for the income tax return is based on the sum of the positive income with a range of 1/10 to 6/10 according to Table A.
| Example |
| Mr and Mrs Müller instruct their tax advisor to prepare their income tax return. The sum of positive income amounts to € 50,000. The husband earned income of € 45,000 from employed work and the couple had income of € 22,000 from renting and leasing. |
The StBVV provides for a fee of 1/20 up to 12/20 of the full fee according to Table A for the determination of the excess of income over advertising costs.
This results in the following rates:
| Object value in € | Fee | |
| Min in € Mid in € Max in € | ||
| Income tax return | 50.000 | 123 430,50 738 |
| Employed work | 45.000 | 57,30 372,45 687,60 |
| Renting and Leasing | 22.000 | 37,95 246,68 455,40 |
| Solution |
| If the income tax return of Mr and Mrs Müller is a matter of average weight, scope and degree of difficulty, the tax advisor may charge the average fee. The total fees thus amount to € 1,049.63 = € 430.50 + € 372.45 + € 246.68). |
4.3 Financial accounting and tax records
Our day-to-day business in tax consultancy also includes financial accounting and the making of tax records. The fee for this is determined by the annual turnover (or higher expense) of the business for the year in question. The range is 2/10 to 12/10 according to Table C. Low fees may be considered if the scope and degree of difficulty are not very high. Often, however, the fee must be set higher if the accounting must meet higher standards, a special analysis and evaluation are desired, or because the degree of difficulty is higher due to factual or legal circumstances. In addition, there is, for example, the preparation of an economic evaluation, a cost accounting or the consideration of the turnover tax advance return.
| Example |
| Mr Meier is the owner of a retail business that generates an annual turnover of a) € 250,00 b) € 500,00 or c) 1,000,000. He hires his tax advisor to do the monthly financial accounting for the company. |
With the range of 2/10 to 12/10 of the fee according to Table C, the following amounts result:
| Object value in € | Fee | |
| Min in € Mid in € Max in € | ||
| Financial accounting | 500.000 | 96,60 338,10 579,60 |
| Solution |
| For Mr Meier, in a matter of average weight, scope and degree of difficulty, an average fee as a reasonable fee for his tax advisor of € 338.10 per month applies. |
4.4 Revenue surplus statement
Another important field of activity for us as tax consultants is the preparation of a surplus income statement in accordance with section 4 (3) EStG for “smaller” entrepreneurs who arrive at their annual return in this way. The fees are determined within a range of 5/10 to 30/10 according to Table B. Either the business income or the business expenses are taken are the value in dispute – whichever is the higher.
| Example |
| Ms Mayer, a lawyer, earns income of € 200,000. She commissions a tax advisor to prepare the income surplus statement. |
According to Table B, this results in the following fee framework:
| Object value in € | Fee | |
| Min in € Mid in € Max in € | ||
| Financial accounting | 200.000 | 258,50 904,75 1.551 |
4.5 Annual financial statements under commercial law
The fees for the annual financial statement work depend primarily on the legal requirements for the company, but also on the type and scope of the given assignment. Due to the higher scope of services, the fees determined by the StBVV are also higher. In simple terms: The value in dispute is determined by the average between the adjusted balance sheet total and the annual operating performance. Whitin the scope of the year-end closing work, additional fees are incurred – depending on the assignment.
Examples are determination of the tax result or the preparation of the tax balance sheet (“E-Bilanz”), the plausibility assessment and the explanatory report. Table B is used as the basis for calculating the fees. The fees for the notes and disclosure work of corporations are settled by agreement.
| Example |
| Company X commissions its tax advisor to comprehensively prepare its annual financial statements in accordance with commercial law. As further services, the notes, the derivation of the tax result, a plausibility assessment and an explanatory report are to be submitted. The value in dispute is € 1,000,000. |
Based on the Table B, this results in the following fee framework:
| Object value in € | Fee |
| 1.000.000 | Min in € Mid in € Max in € |
| Annual financial statement Under commercial law (section 35 (1) No. 1a StBVV: 10/10 to 40/40) | 1.062 2.665 4.248 |
| Appendix (section 35 (1) No. 1b StBVV: 2/10 to 10/10) | 212,40 743,40 1.274,40 |
| Derivation of the tax result (section 35 (1) No. 3a StBVV: 2/10 to 10/10) | 212,40 637,20 1.062 |
| Plausibility assessment (section 36 StBVV: 2/10 to 10/10) | 212,40 637,20 1.062 |
| Explanatory report (section 35 (1) No. 6 StBVV: 2/10 to 12/10) | 212,40 743,40 1.274,40 |
| Solution |
| For Company X, a matter of average weight, scope and degree of difficulty results in a reasonable fee for its tax advisor in the amount of € 5,416.20 – calculated according to the average fee. |
4.6 Expert opinions
If a tax advisor is commissioned by a court or by the public prosecutor’s office to prepare an expert opinion, his or her remuneration is governed by the Act on the Compensation of Witnesses and Experts.
If we, as your tax advisor, are commissioned by you to prepare a tax or business management report, the remuneration is based on the time spent.
4.7 Representation in litigation
The fees for opposition and objection proceeding before the tax authorities are charged according to the regulations for lawyers (Lawyers Fee Act, RVG for short).
If we have filed an object on your behalf, the amount in dispute is usually the amount of the tax in dispute. The fees amount to 5/10 to 25/10 of a full fee in each case. A fee may also be charged for additional applications (such as an application for a stay of execution). According to prevailing opinion, this fee amounts to 10% of the object value of the main proceedings. In the case of appeals for several parties – also for jointly assessed spouses – the business fees increase by 3/10 per person in each case.
The provisions of the Lawyers Remuneration Act shall apply mutatis mutandis to the remuneration of the tax advisor in proceedings before the fiscal, social and administrative courts, in criminal proceedings, in proceedings before professional tribunals, in proceedings for the imposition of fines and in matters of clemency.
5) Flat rate remuneration
The regulations of the StBVV also allow us to agree flat fees with you. Flat rates are established in payroll accounting. Beyond that, we do not offer flat rates. The nature of a flat rate would otherwise make it necessary for us to charge some clients higher fees than necessary.
6) Expenses
In addition to the fees – resulting from the type of order – we are entitled to claim from you:
» Compensation for fees payable for postal and telecommunication services in the execution of the order: Instead of the costs actually incurred, we may claim a flat rate of 20% of the fee resulting from the StBVV – in the same matter, however, not more than € 20,
» Reimbursement of typing expenses for certain transcripts and photocopies,
» Reimbursement of travel and accommodation cost as travel expenses as well as a daily allowance and absence allowance for business trips and
» the turnover tax attributable to our activities.
7) Right of retention
We have a right of retention for documents if a fee claim arising from a specific matter is not settled. However, this only applies to the handing over of documents to clients, not to tax authorities – so if, for example, a tax auditor requests access during an external audit, this will of course be granted.
This publication is intended as a reference for our clients and makes no claim to the accuracy or completeness of the information it contains. The information is not suitable for basing decisions on in individual case. For the solution of relevant issues, please refer to the sources indicated or contact us directly. Parts of this publication / information may only be reprinted and reproduced with the prior written consent of the publisher. Opinion pieces reflect the views of the individual authors. Legal status: January 2023 © 2023 JAKUS Steuerberatungsgesellschaft mbH & Co. KG. All rights reserved.