Don’t gloss over the tradesman’s invoice

Customers can deduct the labor costs for the painting on their tax return, but not the paint itself. Nevertheless, the material must be included in the invoice.

This article is part of the special topic Tax bonus for tradesmen's invoices: What you should know

The customer would be happy if the wages were higher and he could fully utilize the tax bonus for craftsmen’s invoices, However, the contractor would be liable to prosecution with this "favor". 

Craftsmen’s invoices belong in the tax return

It has become common knowledge that tradesmen's invoices can be submitted with your tax return. Tax bonus only on wages and not on materialsA tradesman might now come to the conclusion that he is doing his customer a favor by not officially listing material costs on the invoice and instead charging more for the labor.

The bottom line is that this "special customer service" would result in the client having to pay the same amount, but having a significantly higher amount available to deduct from their taxes. A tradesman should definitely not get involved in such a game, because it will come back to haunt them – not to mention that it's not worth it anyway.n is illegal because it is a courtesy invoiceCustomers can deduct the craftsman’s wages from their taxes, but not the material costs – this could raise the client’s expectations

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Want to take a closer look at the company?

So that To be able to claim the tax relief, the customer must attach the invoice to his tax returnThe tax office clerk in the customer's income tax assessment district will check the requirements for the tax relief. They may then send a copy of the tradesman's invoice to the tradesman's assessment district as part of a control notification. This is not a problem, because in addition to the name and address, the tax identification number must also be included on the invoice. The official's workload is therefore significantly limited.

At the very latest, when the tax office employee responsible for the craftsman receives an invoice that, unusually, does not include any materials but only the service, he or she might come up with the idea of ​​taking a closer look at the company. For example, by audit scheduled.

If this audit finds invoices that primarily charge for services, even though materials have undoubtedly been resold because corresponding items were also purchased on the other side, the tax office can question the entire accounting. 

Lawyers speak of aiding and abetting tax evasion

This will have disastrous consequences for the tradesman, because the tax office will estimate the sales based on the material purchase invoices. The tax office then simplifies the argument: If materials were purchased but virtually none were passed on to the customer, the office will simply assume illegal transactions. A tax surcharge is inevitable.

However, the tradesman cannot admit that the invoices were indeed passed on, but that more labor was listed on the invoices. This would mean admitting that he issued courtesy invoices. The courtesy consisted of allowing his customer the opportunity to claim the invoice as a tax deduction, even though it was not actually fully deductible. Legally, this is also referred to as aiding and abetting tax evasion, which generally not only results in criminal consequences but, under certain circumstances, also brings into play liability for the customer's underpaid income tax!