Funeral services cannot be divided.

The Federal Fiscal Court (BFH) has ruled: Cold storage rooms for corpses and mourning rooms are not tax-free rentals; the services of a funeral director cannot be divided.

The Federal Finance Court (BFH) has decided that the transfer of Cold storage rooms and cells The provision of funeral services is not exempt from VAT. Just like the provision of... Rooms for the funeral service (such as a ceremonial hall or a farewell room) and the hygienic care of the deadThe appeal by a funeral home against a ruling by the Berlin-Brandenburg Finance Court was unsuccessful.

The funeral home bringing the suit sought to have these services exempted from VAT. They had previously been treated as taxable. The company argued that these services were... each of them independent servicesThe rental of cold storage facilities, in particular, should be exempt from VAT. However, the courts ruled that the services provided in a funeral cannot be divided for VAT purposes.

Federal Fiscal Court: The nature of the service is decisive

The Federal Fiscal Court rejected the funeral home's appeal. The decisive factor, the court ruled, was not the formal designation of the service, but its actual economic nature. Essentially, the court clarified that tax-free rental only applies if a room is passively made available to the customer for use – similar to a traditional lease. In this particular case, however, the focus was not on the use of the room, but rather on the refrigeration and storage of the body.

The judges emphasized that the bereaved are not "renting" a cold storage room, but rather entrusting the body to the funeral director, who ensures proper and legally required refrigeration. Therefore, this constitutes a service, not a rental.

With this ruling, the Federal Fiscal Court (BFH) explicitly contradicts the previous administrative interpretation. A letter from the Federal Ministry of Finance in 2020 had left open the question of whether the provision of cold storage facilities could be tax-exempt. For cases like the present one, the BFH now clarifies: No, if the cooling capacity is the determining factor.

The court ruled that the same applies to rooms used for funeral services. Here, too, a typical rental arrangement was lacking. The disputed services are subject to the standard tax rate. The lawsuit was unsuccessful on all counts.

Federal Fiscal Court (BFH) ruling of December 18, 2025, VR 31/23, published on April 16, 2026

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