May 21, 2024

For most people, there is no more tedious task than preparing a tax return. But you often get a lot of money back. If you own a pet, such as a dog, you can still claim a portion of the cost as a tax deduction. In Germany, the number of households benefiting from this is likely to increase each year. According to Statista, in 2021, 47% of German households had at least one pet. The total number of pets was 34.9 million, of which approximately 12.3 million were dogs.

Tax revenue is also clearly dog-oriented. Dog taxes reached a new record level in 2021, according to a report from the Federal Statistical Office. Approximately 401 million euros was collected in dog tax. For local governments, this represented a 5.4 per cent year-on-year increase, with tax revenues increasing by 46 per cent over the 10-year comparison. In 2011, the dog tax brought in just 275 million euros to cities and municipalities.

However, dog owners can get some of their money back through their tax returns. You can read how this works here.

Working dogs vs. family dogs: Which expenses can you deduct from your taxes?

When deducting dog-related expenses, it is necessary to distinguish between domestic dogs and so-called working dogs. According to the VLH Income Tax Subsidy Association, the cost of purchasing a dog, leash, collar, food and toys usually cannot be deducted from taxes. However, there is one exception to this rule. It’s a working dog.

A working dog is a dog that helps people with specific tasks. For example, protection dogs, rescue or detection dogs, guide dogs, therapy dogs, disability assistance dogs, assistance dogs, and even herding dogs are working dogs and are viewed differently for tax purposes.

Therefore, the cost of breeding and training a service dog or disability assistance dog can quickly reach thousands of dollars, but can be deducted from taxes if purchased with a doctor’s prescription, according to VLH. In theory, this also applies to guide dogs. In Germany, the costs are usually covered by health insurance anyway.

Even when it comes to food and decorations, private dog owners are cautious. The tax benefit only applies to people who own a dog for professional reasons. According to a 2010 Federal Finance Court (BFH) ruling, service dogs are considered working tools. Therefore, all costs associated with caring for and housing a dog, such as dog food, leash, collar, and harness, can be deducted from taxes as a business expense, VLH writes. However, it’s important to keep all your bills and identify individual items on your tax return.

Dog Insurance: What expenses can I include on my tax return?

Dog owners usually carry dog ​​liability insurance for their four-legged friends, and health insurance for dogs is also popular. But what kind of expenses can you deduct from your taxes?

According to VLH, dog liability insurance is deductible. However, this is limited to cases where the limit amount is not exceeded. As explained by the Nuremberg Society, dog liability insurance will be listed on your tax return as a special expense along with all other insurance policies. However, this position is limited. The allowance for pension costs is 1,900 euros for employees and civil servants and 2,800 euros for freelancers and self-employed workers. According to insurance companies, many dog ​​owners do not receive any tax benefits at all.

According to VLH, there are no tax benefits for dog health insurance or dog surgery insurance. These cannot be declared on your tax return. Even those who pay for their own veterinary costs may end up going home empty-handed. These are also not eligible for deduction. In both cases, the exception is dogs kept for professional reasons. Expenses can be listed as business expenses on your tax return.

Can I report dog groomers and dog sitters on my tax return?

If you incur costs for grooming or caring for your dog, you can deduct those costs from your taxes if the services are used at home, within the four walls of your home. VLH says the expenses can be claimed as housekeeping services on your tax return. According to VLH, it is also important that invoices are paid by bank transfer rather than cash, as the tax office does not accept cash payments.

However, if the owner takes the dog to a dog salon in the city or leaves it at a dog boarding facility, the cost cannot be deducted from the tax amount.

By the way, since the BFH’s decision on September 25, 2017, anyone who uses dog walking services can claim the cost as a domestic service. The only important thing is to pick up the dog at home and return it there after the walk.

Find out what so-called Mediterranean diseases your dog can catch on vacation, why you shouldn’t pet your dog’s head, which dog breeds are the most peaceful dog breeds in the world, and more. If so, you can find the information you are looking for at the following sites: our article.

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