What is 4 4 4 4 5

(1) 1Profit is the difference between the business assets at the end of the business year and the business assets at the end of the previous business year, increased by the value of the withdrawals and reduced by the value of the deposits. 2Withdrawals are all assets (cash withdrawals, goods, products, uses and services) that the taxpayer has withdrawn from the business for himself, for his household or for other non-business purposes during the financial year. 3Withdrawal for non-business purposes is equivalent to the exclusion or limitation of the taxation right of the Federal Republic of Germany with regard to the profit from the sale or use of an asset. 4An exclusion or a restriction of the right to tax with regard to the profit from the sale of an asset exists in particular if an asset that was previously assigned to a domestic permanent establishment of the taxpayer is to be assigned to a foreign permanent establishment. 5Sentence 3 does not apply to shares in a European company or European cooperative in the cases
1.
a relocation of the seat of the European company in accordance with Article 8 of Regulation (EC) No. 2157/2001 of the Council of 8 October 2001 on the Statute for a European Company (SE) (OJ EC No. L 294 p. 1), last amended by Council Regulation (EC) No. 885/2004 of April 26, 2004 (OJ EU No. L 168 p. 1), and
2.
a relocation of the seat of the European Cooperative Society in accordance with Article 7 of Regulation (EC) No. 1435/2003 of the Council of 22 July 2003 on the Statute for a European Cooperative Society (SCE) (OJ EU No. L 207 p. 1).
6An asset is not withdrawn if the taxpayer goes over to the determination of profits according to § 13a. 7A change in the use of an asset that is not a withdrawal when the profit is determined according to sentence 1 is not a withdrawal even when the profit is determined according to § 13a. 8Deposits are all assets (cash deposits and other assets) that the taxpayer has added to the business in the course of the financial year; The justification of the tax law of the Federal Republic of Germany with regard to the profit from the sale of an asset is equivalent to a contribution. 9When determining the profit, the regulations on operating expenses, valuation and deduction for wear and tear or depreciation must be followed.
(2) 1The taxpayer may change the balance sheet even after it has been submitted to the tax office, provided that it does not comply with the principles of proper bookkeeping in accordance with the provisions of this law; this change is not permitted if the balance sheet is based on a tax assessment that can no longer be canceled or changed. 2In addition, a change in the overview of assets (balance sheet) is only permitted if it is closely related in terms of time and material to a change in accordance with sentence 1 and insofar as the effect of the change in accordance with sentence 1 on the profit extends.
(3) 1Taxpayers who are not required by law to keep books and to close accounts regularly, and who also do not keep books and do not close, can use the excess of operating income over operating expenses as profit. 2This excludes operating income and operating expenses that are received and spent in the name and for the account of someone else (transitory items). 3The regulations on the freedom to evaluate low-value assets (Section 6 (2)), the formation of a collective item (Section 6 (2a)) and on the deduction for wear and tear or depreciation must be followed. 4The acquisition or production costs for non-depreciable fixed assets, for shares in corporations, for securities and comparable non-securitized claims and rights, for land and buildings of the current assets are only at the time of the inflow of the sales proceeds or in the case of withdrawal at the time of withdrawal to be considered as business expenses. 5The assets of the fixed assets and the assets of the current assets within the meaning of sentence 4 are to be recorded in special, continuously maintained registers, stating the date of acquisition or manufacture and the acquisition or manufacturing costs or the value that has taken their place.
(4) Operating expenses are the expenses that are caused by the operation.
(4a) 1Debt interest is not deductible in accordance with sentences 2 to 4 if overdrafts have been made. 2An over-withdrawal is the amount by which the withdrawals exceed the sum of the profit and the deposits of the financial year. 3The non-deductible debt interest is typified with 6 percent of the overdrawing of the financial year plus the overdrawing of previous financial years and minus the amounts by which the profit and the deposits exceeded the withdrawals in the previous financial years (underdrawals); When determining the overdraft, the profit is to be assumed without taking into account the non-deductible debt interest in accordance with this paragraph. 4The resulting amount, but not more than the amount of the debt interest accrued in the financial year less EUR 2,050, is to be added to the profit. 5The deduction of debt interest for loans to finance the acquisition or production costs of fixed assets remains unaffected. 6Sentences 1 to 5 are to be applied mutatis mutandis when determining profits in accordance with Section 4 (3); for this purpose, withdrawals and deposits are to be recorded separately.
(5) 1The following business expenses must not reduce profit:
1.
Expenses for gifts to persons who are not employees of the taxpayer. 2Clause 1 does not apply if the acquisition or production costs of the items sent to the recipient in the financial year do not exceed a total of 35 euros;
2.
Expenses for the entertainment of people for business reasons, insofar as they exceed 70 percent of the expenses that are to be regarded as reasonable according to the general public opinion and whose amount and operational cause are proven. 2To prove the amount and the operational cause of the expenses, the taxpayer must provide the following information in writing: place, day, participants and occasion of the entertainment as well as the amount of the expenses. 3If the catering took place in a restaurant, information on the occasion and the participants in the catering is sufficient; the bill for the entertainment is to be attached;
3.
Expenses for facilities of the taxpayer, insofar as they are used for the hospitality, accommodation or entertainment of persons who are not employees of the taxpayer (guest houses) and are located outside the place of a business of the taxpayer;
4.
Expenses for hunting or fishing, for sailing yachts or motor yachts as well as for similar purposes and for the entertainment associated therewith;
5.
Additional expenses for the taxpayer's meals. 2If the taxpayer is temporarily away from his home and the center of his permanent business activity, the additional expenses for meals are deductible in accordance with § 9 paragraph 4a;
6.
Expenses for the taxpayer's journeys between home and business premises and for family trips home, unless otherwise specified in the following sentences. 2To compensate for these expenses, Section 9 Paragraph 1 Clause 3 Number 4 Clause 2 to 6 and Number 5 Clause 5 to 7 and Paragraph 2 shall apply accordingly. 34Section 9 (1) sentence 3 number 4 sentence 8 and number 5 sentence 9 apply accordingly;
6a.
the additional expenses for operationally arranged double housekeeping, insofar as they exceed the amounts deductible according to § 9 paragraph 1 sentence 3 number 5 sentences 1 to 4 and the additional expenses for business-related overnight stays, insofar as they exceed the amounts deductible according to § 9 paragraph 1 sentence 3 number 5a ;
6b.
Expenses for a home office and the cost of equipment. 2This does not apply if no other workplace is available for the operational or professional activity. 3In this case, the amount of the deductible expenses is limited to 1,250 euros; the height restriction does not apply if the study is the focus of all operational and professional activities. 4If there is no home office or if a deduction of the expenses for a home office is waived according to sentences 2 and 3, the taxpayer can for each calendar day on which he carries out his business or professional activity exclusively in the home and none outside the home Visits a place of work located in his home, deducting an amount of 5 euros for his entire business and professional activity, up to a maximum of 600 euros in the financial or calendar year;
7.
expenses other than those referred to in numbers 1 to 6 and 6b, which affect the lifestyle of the taxpayer or other persons, insofar as they are to be regarded as inappropriate according to the general public opinion;
8.
Fines, administrative fines and warning fines imposed by a court or an authority within the scope of this Act or by a member state or by organs of the European Union, as well as related expenses. 2The same applies to services for the fulfillment of conditions or instructions that are issued in professional judicial proceedings, provided that the conditions or instructions do not merely serve to compensate for the damage caused by the act. 3The repayment of expenses within the meaning of sentences 1 and 2 may not increase profit. 4The prohibition on deducting fines does not apply if the economic benefit that was obtained through the violation of the law has been skimmed off, if the taxes on income and earnings attributable to the economic benefit have not been deducted; Sentence 3 does not apply in this respect;
8a.
Interest on evaded taxes according to § 235 of the Tax Code and interest according to § 233a of the Tax Code, insofar as this is offset against the evasion interest according to § 235 Paragraph 4 of the Tax Code;
9.
Compensation payments that are made to outside shareholders in the cases of Sections 14 and 17 of the Corporate Income Tax Act;
10.
the granting of advantages and related expenses if the granting of the advantages constitutes an illegal act that constitutes the offense of a criminal law or a law that allows punishment with a fine. 2Courts, public prosecutors or administrative authorities have to report facts that they learn officially and that justify the suspicion of an act within the meaning of sentence 1 to the tax authorities for the purposes of the taxation procedure and for the prosecution of tax offenses and tax offenses. 3The tax authority shall notify the public prosecutor or the administrative authority of facts that justify the suspicion of a criminal offense or an administrative offense within the meaning of sentence 1. 4These inform the tax authorities of the outcome of the proceedings and the underlying facts;
11.
Expenses that are actually or economically related to direct or indirect donations of non-depositable benefits to natural or legal persons or partnerships for use in businesses, the profit of which is determined in accordance with Section 5a (1);
12.
Surcharges according to § 162 paragraph 4 of the tax code;
13.
Annual contributions in accordance with Section 12 (2) of the Restructuring Fund Act.
2The prohibition of deduction does not apply if the purposes specified in numbers 2 to 4 are the subject of an activity of the taxpayer with the intention of making a profit. 3Section 12 number 1 remains unaffected.
(5b) The trade tax and the related ancillary services are not business expenses.
(6) Expenses for the promotion of state political purposes (Section 10b (2)) are not operating expenses.
(7) 1Expenses within the meaning of paragraph 5 sentence 1 numbers 1 to 4, 6b and 7 are to be recorded individually and separately from other operating expenses. 2Insofar as these expenses are not already excluded from deduction in accordance with paragraph 5, they may only be taken into account when determining profits if they are specifically recorded in accordance with sentence 1.
(8) Sections 11a and 11b apply accordingly to maintenance costs for buildings in redevelopment areas and urban development areas as well as for architectural monuments.
(9) 1The taxpayer's expenses for their vocational training or for their studies are only business expenses if the taxpayer has already completed initial training (vocational training or studies). 2Section 9 (6) sentences 2 to 5 apply accordingly.
(10) Section 9 (1) sentence 3 number 5b shall apply accordingly.

footnote

(+++ § 4: For application see § 52 +++)
(+++ Section 4, Paragraph 4a: For application, see Section 13a, Paragraph 3 (F 2014-12-22) +++)
(+++ § 4 Paragraph 5: For application see § 10 Paragraph 1 +++)
(+++ Section 4 Paragraphs 5 to 7: For application see Section 6 Paragraph 7 InvStG 2018 +++)
Section 4 (5) sentence 1 no. 6b (F. 19.7.2006): According to the decision formula incompatible with Article 3 (1) GG according to BVerfGE v. 6.7.2010 I 1157 (2 BvL 13/09)
Section 4, Paragraph 5, Clause 1, No. 8 (F. 25.7.1984): Compatible with GG insofar as the portion of the fine attributable to the skimming off of the economic advantage is excluded from deduction as a business expense, BVerfGE v. January 23, 1990 I 913 (1 BvL 4/87, 1 BvL 5/87, 1 BvL 6/87, 1 BvL 7/87)