Why is the government taxing prize money
Income from services within the meaning of Section 22 No. 3 EStG
Table of Contents
1 General overview
2 individual cases relating to Section 22 No. 3 EStG
3 Disposal-like transactions
4 repayment of income
5 Consideration of advertising expenses
6 exemption limit
7 Consideration of losses
8 Related Lexicon Articles
1. General overview
Performance within the meaning of Section 22 No. 3 EStG is any action, toleration or omission that can be the subject of a paid contract and is provided for the sake of payment, provided that it is Not This concerns sales or similar sales in the private sector, where payment is made for the fact that an asset is finally given up in its substance (BFH judgment of June 27, 2006, IX R 25/05, BFH / NV 2007, 657, LEXinform 5903201 ). According to the system of the EStG, increases in value due to reallocation of private assets are finally taxed in accordance with § 17 and § 22 No. 2 in conjunction with § 23 EStG. Outside the scope of these regulations, profits from the sale of WG remain tax-free.
As with the other types of income, the characteristic of earning income is assumed (H 22.8 [General] EStH; → Hobby).
The duration and frequency of the services are irrelevant in the context of Section 22 No. 3 EStG. Not only occasional or one-time behavior is recorded, but also repetitive, regularly performed or (a certain) duration or repetition of behavior (BFH judgment of April 24, 2012, IX R 6/10, BStBl II 2012, 581).
Income from services within the meaning of Section 22 No. 3 EStG is only available if it does not fall under one of the other types of income or one of the other elements of Section 22 EStG. For example, a (self-employed) prostitute earns → income from a commercial enterprise (BFH decision of February 20, 2013, GrS 1/12, BStBl II 2013, 441).
For the existence of a service within the meaning of Section 22 No. 3 EStG, it is crucial whether the consideration (the remuneration) is due to the behavior of the taxpayer. is triggered. If the payment is not made in anticipation of a consideration, taxation according to § 22 No. 3 EStG is out of the question (see e.g. BFH judgment of 19.3.2013, IX R 65/10, BFH / NV 2013, 1085, LEXinform 0928226; see note dated July 25, 2013, LEXinform 0944000). This includes, for example, compensation payments (→ compensation), lottery and other game winnings and strike money.
In a judgment of November 28, 2007 (IX R 39/06, BStBl II 2008, 469), the BFH decided that the participant in a television show for the prize money she received there in the amount of € 250,000 is subject to income tax (see also BFH press release No. 25/08, LEXinform 0174029). The BMF letter of May 30, 2008 (BStBl I 2008, 645) comments on the consequences of the BFH judgment of November 28, 2007 (IX R 39/06, BStBl II 2008, 469) (→ Prize money). The prize money for the television production "Big Brother" is also consideration for other services provided by the participant within the meaning of Section 22 No. 3 EStG and is therefore subject to income tax (BFH judgment of April 24, 2012, IX R 6/10, BStBl II 2012, 581; comment of 7.8 .2012, LEXinform 0632912 as well as BFH press release No. 42/12 of June 6, 2012, LEXinform 0438018). Regarding the controllability of the prize money from participation in a television show, see the judgment of the FG Münster from January 15, 2014 (4 K 1215/12 E, EFG 2014, 638, LEXinform 5016219, rkr., Non-admission complaint by BFH decision of June 16, 2014, IX B 22/14, BFH / NV 2014, 1540, LEXinform 5907852, rejected as unfounded).
Lifeguards of the DLRG, who are deployed to safeguard the bathing operations in seaside resorts, are neither in an employment relationship with the deployment communities nor with the DLRG (judgment FG Schleswig-Holstein of August 12, 1980, I-124/75, EFG 1981, 96, LEXinform 0056885, rkr.). Rather, it is a relationship of its own. By working as a lifeguard, the person concerned only achieves the statutory goals of the DLRG. He does not achieve any work success with his ArbG, but he voluntarily realizes the statutory goals recognized by him as his own. This is also shown by the fact that the DLRG does not take any legal action against a lifeguard if he stays away from the lifeguard service. Another argument in favor of the lack of an employment relationship is that the lifeguard must insure himself in the event of illness. Lifeguards in the water rescue service do not earn any income according to § 19 EStG. Rather, they earn income in accordance with Section 22 No. 3 EStG. Income according to Section 22 No. 3 EStG is not taxable if it was less than € 256 in a calendar year. If the lifeguards earn less than € 256, e.g. € 8 a day for up to 31 days, this income is not taxable. Section 3 No. 26 EStG applies here - provided all requirements are met (Vfg. OFD Frankfurt dated May 14, 2014, S 2257 A - 11 - St 220, LEXinform 5235054).
2. Individual cases relating to Section 22 No. 3 EStG
Income from services within the meaning of Section 22 No. 3 EStG are (see also H 22.8 EStH) in particular:
one-time guarantee commission (BFH judgments of January 22, 1965, VI 243/62 U, BStBl III 1965, 313 and of April 14, 2015, IX R 35/13, BStBl II 2015, 795);
Fee for voluntarily collecting and recycling empty bottles (BFH judgment of June 6, 1973, I R 203/71, BStBl II 1973, 727);
Fee for a restriction on the use of the property (BFH judgment of April 9, 1965, VI 82/63 U, BStBl III 1965, 361 and of August 26, 1975, VIII R 167/71, BStBl II 1976, 62);
Fee for granting a right of first refusal (BFH judgment of August 30, 1966, VI 284/64, BStBl III 1967, 69 and of December 10, 1985, IX R 67/81, BStBl II 1986, 340); If the remuneration is offset against the purchase price at a later date, the offense of Section 22 No. 3 EStG retroactively according to Section 175, Paragraph 1, Clause 1, No. 2 AO (BFH judgment of August 10, 1994, XR 42/91, BStBl II 1995, 57) ;
Fee for not complying with the legally prescribed limit distance of a building erected on the neighboring property (BFH judgment of 5 August 1976, VIII R 97/73, BStBl II 1977, 26);
Payment for the submission of a time-limited purchase offer for a property (BFH judgment of April 26, 1977, VIII R 2/75, BStBl II 1977, 631);
Remuneration for the owner of a registered trademark waiving his rights of defense (BFH judgment of 25.9.1979, VIII R 34/78, BStBl II 1980, 114);
Remuneration for a contractually agreed comprehensive non-competition clause (BFH judgment of June 12, 1996, XI R 43/94, BStBl II 1996, 516 and of February 23, 1999, IX R 86/95, BStBl II 1999, 590);
Fee for an agreement to tolerate the building project of the payer (BFH judgment of October 26, 1982, VIII R 83/79, BStBl II 1983, 404);
Remuneration for the consent of the property owner to the construction works of the neighboring property that violate the development plan (BFH decision of August 22, 2003, IX B 85/03, BFH / NV 2004, 41);
Fee for regularly taking a work colleague with you on the journey between home and work place (BFH judgment of 15.3.1994, X R 58/91, BStBl II 1994, 516; → distance lump sum). Additional expenses for a detour to pick up and bring back the passengers can be included with the kilometer rates for business trips and motor vehicle accident costs (→ accident costs) can also be deducted as business expenses. They are deducted from a passenger allowance when calculating the income under "Other income". The same applies to additional expenses for increased fuel consumption and greater wear and tear, which can be estimated at € 0.02 / km per person taken with you (Hartz et al., ABC guide wage tax, routes between home and work);
Remuneration for withdrawing the objection to the construction and operation of a power plant (BFH judgment of November 12, 1985, X R 58/91, BStBl II 1986, 890);
Compensation payments to a »predatory shareholder« (judgment FG Cologne dated June 11, 2015, 13 K 3023/13, EFG 2015, 1540, rkr.). A “predatory shareholder” is understood to mean a shareholder who brings legal challenges under stock corporation law and thereby significantly disrupts the corporate policy of a stock corporation in order to subsequently withdraw the lawsuit against substantial financial compensation. The payment of an AG to a small shareholder for the withdrawal of a lawsuit against a company decision is subject to the recipient of the income tax according to § 22 No. 3 EStG and, in the case of repetition, also to the sales tax (see also press release of the FG Cologne from July 15, 2015, LEXinform 0443403);
Fee for tolerating the use of partial property to operate a gaming room to a neighboring apartment owner (BFH judgment of November 21, 1997, X R 124/94, BStBl II 1998, 133);
Personal commissions if they are paid for a one-off occasion and for brokering personal contracts (BFH judgment of May 27, 1998, X R 94/96, BStBl II 1998, 619).
A commissionthat is received as payment for a brokerage activity is included in the income from services within the meaning of Section 22 No. 3 EStG (BFH judgment of July 17, 2007, IX R 1/06, BFH / NV 2007, 2263). In the case of the judgment, the policyholder's wife brokered a capital life insurance contract between her husband and the insurance company and received around € 2,100 in return.
Another service within the meaning of Section 22 No. 3 EStG is any action, toleration or omission that can be the subject of a paid contract and that triggers a consideration. It is crucial whether the consideration (the remuneration) is due to the behavior of the Stpfl. is caused. It is sufficient that he accepts a consideration given as such in the economic context of his activity. In this way, he assigns his behavior to the sphere that is important in terms of business and tax law.
However, a policyholder does not provide any benefits within the meaning of Section 22 No. 3 EStG if, through an agreement with an insurance agent, he passes on part of his commission to him (BFH judgment of 2.3.2004, IX R 68/02, BStBl II 2004, 506; → taxation of pension benefits, → pension expenses / pension expenses);
Commission payments. If someone receives a commission in economic connection with an activity he has performed and he accepts it as consideration, the remuneration is taxable according to § 22 No. 3 EStG (BFH judgment of 21.9.2004, IX R 13/02, BStBl II 2005 , 44). A service within the meaning of Section 22 No. 3 EStG is also present if remuneration is paid retrospectively for an activity that can be the subject of a paid contract and accepted by the service provider as an appropriate consideration for the activity performed by him (BFH judgment of 21.9 .1982, VIII R 73/79, BStBl II 1983, 201; H 22.6 [General] EStH);
ring-wise life insurance brokerage. According to a ruling by the BFH of January 20, 2009 (IX R 34/07, BStBl II 2009, 532), commissions from the ring-wise brokerage of life insurance policies must be taxed by each recipient.
Meet several Stpfl. the agreement to mediate ring-wise life insurance, so to speak, and to pass on the commission received for this to the respective policyholder, the commission received as consideration for the mediation by the insurance company and taxable according to § 22 No. 3 EStG cannot be increased by the amount of the commission as Advertising costs, which the intermediary must pass on to the policyholder, are reduced if, conversely, he has a payment claim against the person who mediates the conclusion of his insurance.
In the case decided by the BFH in its judgment of January 20, 2009 (IX R 34/07, BStBl II 2009, 532), three people (A, B and C) had agreed with each other that A broker an insurance for B, the commission received (15,750 €) but should forward it to B, while C should arrange insurance for A and transfer the earned commission (15,750 €) to A - and so on. This usage agreement, which includes the brokerage services, eliminates the expense of the (forwarding) payments (see also BFH press release No. 22/09 of 4/4/2009, LEXinform 0432833).
Paus (DStZ 2009, 318) contradicts this on the basis of an economic point of view and instead accepts a hidden price reduction;
Fee for the temporary rental of a mobile home to changing tenants (BFH judgment of November 12, 1997, XI R 44/95, BStBl II 1998, 774; → Hobby);
Fee for renting movable shared apartments (BFH judgment of May 31, 2007, IV R 17/05, BStBl II 2007, 768). The mere fact that rented mobile shared flats are exchanged for newer, more functional shared flats before the end of the normal or actual useful life cannot be concluded that the leasing company is doing a commercial activity. The area of private asset management is only abandoned if additional circumstances arise, such as the need for sales to achieve a total profit or a large number of shared apartments that have been sold.
The LFD Thuringia comments with the decision of January 31, 2012 (S 2170 A - 28 - A 3.15 (R), DStR 2012, 970) on the question of the allocation of leasing rates for container leasing models (see also BayLfSt of May 15, 2012, S 2257 1.1 - 2/3 St 32, DB 2012, 1179, LEXinform 5233989). See the explanations under → Private sales.
Bribes paid to an employee by a third party (BFH judgment of January 26, 2000, IX R 87/95, BStBl II 2000, 396). With the judgment of June 16, 2015 (IX R 26/14, BStBl II 2015, 1019), the BFH confirms its case law of January 26, 2000 by stating that the bribes paid to the ArbN by a third party other income within the meaning of Section 22 No. 3 EStG are. The repayment or surrender of the taxable Bribes to the aggrieved labor law leads to income from income from § 22 No. 3 EStG at the time of the outflow. If the advertising expenses exceed the income from § 22 No. 3 EStG, the losses from § 22 No. 3 EStG may not be offset against positive income from other types of income. This is countered by the prohibition of loss compensation in Section 22 No. 3 Sentence 3 EStG. According to the BFH judgment of June 16, 2015 (IX R 26/14, BStBl II 2015, 1019), the loss compensation restriction of Section 22 No. 3 Sentence 3 EStG is constitutional. According to § 22 No. 3 Clause 4 EStG, however, there is the possibility of a cross-period loss offsetting within the same type of income;
if someone expresses his willingness to help someone else with his personal relationships in a business transaction and he receives a commission for this, this behavior is taxable according to § 22 No. 3 EStG (BFH judgment of April 20, 2004, IX R 39 / 01, Federal Tax Gazette II 2004, 1072);
makes a Stpfl. Subsequently, successfully claiming remuneration before the labor court for services rendered due to failed remuneration expectation (farm handover), this does not justify the determination that it is to be regarded as ArbN from the start, also in the tax sense.
Another service within the meaning of Section 22 No. 3 EStG is any action, toleration or omission that can be the subject of a paid contract and that triggers a consideration. Subsequent compensation payments for services rendered in the event of a committed but not completed farm handover do not represent wages, but income from services within the meaning of Section 22 No. 3 EStG (BFH judgment of 2.5.2008, VI R 50/05, BFH / NV 2008, 1589, LEXinform 0586814);
→ Support services provided by voluntary supervisors. The OFD Hanover (coordinated federal state decree) comments on the income tax treatment of expense allowances for volunteer supervisors according to § 1835a BGB (German Civil Code) in its ordinance of 6.2.2009 (S 2337 - 121 - StO 215, LEXinform 5231977);
Remuneration that is a taxpayer because of a failed farm handover (BFH judgment of 8 May 2008, VI R 50/05, BStBl II 2008, 868). For more information on this judgment, see → Employees under Employee Terms in ABC Form - Relatives, failed farm handover;
Payments and expense allowances to referees and their assistants are generally to be recorded as other income (Section 22 No. 3 EStG) if their use is determined exclusively at national level by the association (DFB including the state and regional associations). Referees and assistant referees who are also deployed internationally for UEFA or FIFA or in other foreign leagues, on the other hand, generate income from commercial operations from their entire refereeing activity (Section 15 of the Income Tax Act).
If arbitrators are also active for advertising purposes, they also generate income from commercial operations (BayLSt decree of January 15, 2010, S 2257 2.1 - 5/3 St 32, LEXinform 5232500).
A tennis referee earns income from commercial activity within the meaning of Section 15 Paragraph 1 No. 1, Paragraph 2 Clause 1 of the Income Tax Act. Participation in general economic traffic is to be answered in the affirmative, as it is not - as e.g.a Bundesliga referee - only for a sports association, but operates internationally (Lower Saxony judgment of November 24, 2004, 9 K 147/00, EFG 2005, 766, LEXinform 0819690). S.a. OFD Frankfurt from April 24, 2012 (S 2257 A - 19 - St 218, LEXinform 5233948).
Interest received for renting a crypto currency - e.g. in the form of coins of this crypto currency - does not qualify for tax under Section 20 (1) No. 7 EStG because it does not involve income from other capital claims, since crypto currencies are not claims based on cash payments represent. When selling cryptocurrencies, Section 23 Paragraph 1 Clause 1 No. 2 Clause 4 EStG applies. If they are used as a source of income, Section 22 No. 3 EStG is relevant (services provided they neither belong to other types of income nor to income within the meaning of Section 22 No. 1, 1a, 2 or 4 EStG). Due to the existing exemption limit according to § 22 No. 3 sentence 2 EStG, such income is not subject to income tax if it is less than € 256 in the year (see Ingo Heuel and Dr. Isabell Matthey in NWB 15/2018).
The renovation services for the participants in the television format "Home in Luck" (documentary reality show) are taxable as income from other services according to § 22 No. 3 EStG, FG Cologne from February 28, 2019, 1 V 2304/18, EFG 2019 , 895 No. 11.
3. Disposal-like transactions
These processes are not based on a transfer of assets; However, there is a reallocation of assets through loss of substance or abandonment, which benefits a third party and pays a fee for it. The transactions similar to the sale include, among others, the following facts:
Tenant compensation: A compensation paid to the tenant by the landlord for the premature abandonment of the (property rights) arising from the rental agreement (property rights, tenant protection) is not subject to taxation according to § 22 No. 3 EStG (BFH judgment of 14.9.1999, IX R 89 / 95, BFH / NV 2000, 423; see H 22.8 [No income from services within the meaning of Section 22 No. 3 EStG are:] EStH).
The tenant's right of ownership based on a rental agreement is an asset-based legal position that has the right to use and dispose of. The position of the apartment tenant created by the tenant protection regulations of the BGB also has an asset.
Sells a Stpfl. his property to his neighbor, who wants to achieve with the acquisition of property at the same time that the Stpfl. does not (no longer) assert his public-law defense rights against his building project, the fee is to be allocated to the sales process that is not taxable according to § 22 No. 3 EStG even if the taxpayer is involved. in the purchase contract expressly obliged to waive his neighbor's rights (BFH judgment of May 18, 2004, IX R 63/02, BStBl II 2004, 874). The waiver of legal remedies does not constitute any other service that is to be split off from the sale process. With the transfer of ownership of the property, the neighboring rights of the Stpfl. in his person under.
Waiver of a right in rem: Is the Stpfl. As the property owner, the owner of a right in rem to a neighboring property, the buildability of which is restricted as a result, and if he finally waives this right in return for a fee, the fee is not part of the income according to § 22 No. 3 EStG (BFH judgment of 19.12.2000, IX R 96/97, BStBl II 2001, 391).
The waiver in return for a conditional usufruct or an obligatory right of residence bequeathed in a will is not taxable according to § 22 No. 3 EStG. The payments to replace the reserved usufruct are not taxable according to § 22 No. 3 EStG or § 24 No. 1 EStG (BFH judgment of 25.11.1992, X R 34/89, BStBl II 1996, 663).
In its judgment of August 9, 1990 (X R 140/88, BStBl II 1990, 1026), the BFH ruled that a waiver of a compulsory right of residence in a will for an economically equivalent remuneration in the private sector is not taxable. In continuation of the previous ruling of the BFH, he stated that such a waiver contract in particular does not establish a taxable usage relationship according to § 22 No. 3 EStG, because this legal transaction, taking into account all relevant circumstances as a transaction-like transaction, is the normal picture of a (remunerated) reallocation of assets in corresponds to private area. The BFH adheres to this view. The same legal principles apply to the waiver of a conditional usufruct in rem against payment. This asset right of use can also be the subject of a sale to the owner or a similar sale-like transaction under tax law. The beneficiary receives a fee for completely relinquishing his legal position.
However, the payments are taxable according to § 22 No. 1a EStG if the waiver of the usufruct represents a (free) transfer of assets in exchange for benefits; then it is a private pension that is fully deductible as a permanent burden for the obligated party (Section 10 (1a) No. 2 EStG) and taxable for the recipient as income from recurring payments (Section 22, No. 1a) (margin no. 11 of the BMF letter of September 16, 2004, BStBl I 2004, 922; → anticipated succession, → usufruct).
If an object belonging to private assets is sold and the purchase price claim is deferred in the long term - longer than a year - up to a certain point in time, the payments made (purchase price installments) must be broken down into a repayment and an interest component. This also applies if the contracting parties have not agreed or even expressly excluded interest. The interest portion is subject to the income tax as "interest from other capital claims" according to § 20 para. 1 no. 7 EStG (BFH judgment of November 26, 1992, X R 187/87, BStBl II 1993, 298).
If a claim from private assets is settled through recurring payments, the repayment portion is irrelevant for tax purposes, regardless of whether the payments are made uniformly or in fluctuating amounts.
Payments by parents to their child in return for the waiver of the compulsory portion are not income taxable (BFH judgment of 9.2.2010, VIII R 43/06, BFH / NV 2010, 1524, LEXinform 058797). A remunerated compulsory portion waiver is not subject to income tax as a transaction similar to a sale (final abandonment of a legal position) in the private sector.
4. Repayment of Income
The repayment of income within the meaning of Section 22 No. 3 EStG in a later assessment period is to be taken into account in the full amount of tax deduction at the time of outflow (BFH judgment of January 26, 2000, IX R 87/95, BStBl II 2000, 396; H 22.8 [repayment of income ] EStH).
5. Consideration of advertising expenses
→ Income from one-off (other) services is also deductible in the year in which the income was received, if they were incurred before this year or will definitely be incurred after this year. If income-related expenses arise in the future that could not be foreseen with certainty in the year of accrual, the assessment of the year of accrual must be changed in accordance with Section 175, Paragraph 1, Clause 1, No. 2 AO (BFH judgment of 3.6.1992, XR 91/90, BStBl II 1992, 1017; H 22.8 [time of deduction of income-related expenses] EStH).
6. Exemption limit
Income from services within the meaning of Section 22 No. 3 EStG are not subject to income tax if they were less than € 256 in the fiscal year (Section 22 No. 3 Sentence 2 EStG). If both spouses assessed together received income within the meaning of Section 22 No. 3 EStG, the exemption limit specified in this provision must be taken into account for each spouse - up to the amount of their income within the meaning of Section 22 No. 3 EStG (R 22.8 EStR).
7. Consideration of losses
Losses from § 22 No. 3 EStG may only be up to the amount of the profit that the taxpayer. in the same year from § 22 No. 3 EStG, can be offset (§ 22 No. 3 sentence 3 EStG). The Stpfl. Carry it back to the immediately preceding assessment period in accordance with Section 10d EStG or carry it forward to the following assessment periods (Section 22 No. 3 Clause 4 EStG). Offsetting is only permitted with profits from income from Section 22 No. 3 EStG. From VZ 2007, Section 10d (4) EStG (separate statement) applies accordingly. See also → Loss deduction in income tax.
8. Related Lexicon Articles
→ Bribes and kickbacks
→ Care services
→ Distance flat rate
→ Car rental to employers
→ Prize money
→ Other income
→ Loss deduction in income tax
→ Asset management
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