If a tax deduction amount has been declared and withheld for your invoice by a recipient of a construction work performed by you, this will be deducted from your taxes payable.

The following taxes are credited sequentially:

1. The income tax withheld and declared in accordance with § 41a paragraph 1 of the Income Tax Act (Einkommensteuergesetz - EStG),
2. advance payments of income tax or corporation tax,
3. the income tax or corporation tax of the tax or assessment period in which the service was provided, and
4. the deduction amounts to be declared and paid by you for construction work within the meaning of §§ 48, 48a EStG

The crediting is carried out by the tax office, an application for this is not required.

A credit can be refused if the recipient of your construction work as the person liable to deduct has declared the deduction amount but has not paid it and there is reason to believe that there has been misuse.

If you are not obliged to submit income tax declarations and an assessment for income tax or corporation tax is out of the question or you can credibly demonstrate that no tax claims to be secured will arise during the assessment period, you can apply to the tax office for reimbursement of the deduction amounts.

The application shall be submitted using an officially prescribed model form. This can be accessed via the Form Management System (FMS) of the Federal Finance Administration.

The application is subject to a time limit. It may be submitted until the end of the second calendar year following that in which the amount of the deduction was declared. If the provisions of a convention for the avoidance of double taxation apply and a longer period is specified therein, this longer period applies.

The tax office will examine the application and, if the above conditions are met, will reimburse you for the deductions paid for your account.