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WTF is Liebhaberei

Imagine you are a  single person company, a freelancer with business registration. Imagine further that you also have a company constituted under civil law running, let’s call it Civlaw GbR, with a friend who also owns a single person business. Bot of you mainly work for Civlaw GbR. The obvious thing to do would be to assert expenses (computer, camera, software, etc.) to the freelance-businesses for not having to collect receipts with Civlaw GbR and distribute profits to the freelance-businesses of the associates. There is something you need to consider if you’re not fond of expensive surprises.

Finanzamt is allergic to you not showing a solid intent to realize a profit (Gewinnerzielungsabsicht) with your business. If you assert expenses to a business you’d better account for revenues as well with said business. Otherwise Finanzamt assumes that you are trying to assert expenses to a hobby of yours. This will result in

We do not acknowledge those expenses you asserted five years retroactively because of Liebhaberei. Please refund 10,000€ to the public purse due first of next month.

To prevent that you need to bill Civlaw GbR with those freelance businesses of yours. If you just distribute profits to the associates without billing you could get into a position where profits of your freelance businesses get low enough for Finanzamt to assume Liebhaberei. Never thought of that before, did you?

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