Healthcare
Tax advisor for care service providers
From the 25 % quota to the night shift supplement: we keep the taxes of your care organisation stable. In the care sector, VAT exemption depends on evidence: on the recognition of your organisation or on the 25-%-Sozialgrenze (social threshold), and on cleanly separating Behandlungspflege (medical and nursing treatment care), Grundpflege (basic personal care) and domestic support services. We build this evidence into your billing, take over payroll including tax-free supplements for night, Sunday and public holiday shifts, and deliver the reports you need for remuneration negotiations and investments.
Key areas for care service providers
- VAT (Umsatzsteuer): exemption for care and support services (§ 4 Nr. 16 UStG); recognition, social threshold (Sozialgrenze) and evidence
- Home nursing care (häusliche Krankenpflege): separating Behandlungspflege (medical and nursing treatment care), Grundpflege (basic personal care) and domestic support services correctly for tax purposes
- Freelance (freiberuflich) or commercial? Classification of the care service provider and the requirements where nursing staff are employed
- Payroll: structuring and documenting tax-free Sunday, public holiday and night supplements correctly
- Management reports (betriebswirtschaftliche Auswertungen) for remuneration negotiations and investment decisions
The quota your VAT exemption depends on
For many care service providers, a single figure decides the VAT treatment of the entire year: are you recognised under social law, typically through the care provision contract (Versorgungsvertrag), or do you meet the 25-%-Sozialgrenze (social threshold), meaning that statutory bodies bear the majority of the costs in at least a quarter of the cases? Then your care and support services are exempt, including towards self-paying clients (Selbstzahler), as far as the type of service is covered. The quota does have to be evidenced, however: case by case, month by month, with clean proof of the paying bodies. We build this monitoring into your billing so that the exemption is not an annual game of nerves.
Behandlungspflege, Grundpflege, domestic support: three services, three rules
"Home nursing care" is not a single pot for tax purposes. Behandlungspflege (injections, wound care, intensive care by qualified staff) runs through the medical treatment exemption (Heilbehandlungsbefreiung) and requires qualification and a therapeutic purpose. Grundpflege and support run through the care exemption (Pflegebefreiung) with its recognition requirements. And domestic support services help decide, for income tax purposes, whether your organisation can be freelance at all; if they dominate the overall picture, it is commercial. This three way split belongs in your service descriptions, tour planning and billing. We implement it where it arises: in the system, not in later corrections.
Payroll is your largest cost item and your largest tax opportunity
Care is staff intensive, and there is real money in payroll: supplements for Sunday, public holiday and night work are tax-free if they are paid in addition to the basic wage for hours actually worked, capped correctly and documented. Here the duty roster (Dienstplan) and time recording (Zeiterfassung) are your most important tax records. Flat rate payments only work with an annual reconciliation. We take over payroll with these particularities and at the same time deliver the reports you need for remuneration negotiations and investment decisions. We want to highlight two details in particular: for services provided through the personal budget (Persönliches Budget) or as a subcontractor, the quota only counts if the social body knows your organisation and is willing to bear its costs; that belongs on record. And flat rate supplements in payroll only stay tax-free if they are treated as an advance and reconciled with the hours actually worked by the end of the year at the latest. Both are details that regularly cost money in audits, or do not, if the system is right from the start.
Three services, three rules
- Behandlungspflege → medical treatment exemption (qualification + therapeutic purpose)
- Grundpflege and support → care exemption (recognition or 25 % quota)
- Domestic support services → predominantly taxable and commercial for income tax purposes; report separately
An example from our advisory practice
Hypothetical example: an outpatient service additionally takes on clients with a personal budget (Persönliches Budget) and expands its domestic support services. Challenge: the social threshold (Sozialgrenze) has to remain evidenced case by case, and the domestic support must not unnoticeably tip over either the VAT exemption or the income tax classification. Suitable service: quota monitoring plus separate service billing. Intended benefit: a stable exemption despite growth. Next step: a first meeting with the case and revenue structure.
Frequently asked questions
When your organisation is a privileged one: either recognised under social law, typically through the care provision contract (Versorgungsvertrag), or through the social threshold (Sozialgrenze), meaning that statutory bodies bear the majority of the costs in at least a quarter of the cases. In addition, the individual service must by its nature be care or support for people in need of assistance, and must be covered by the recognition or the contract. Both belong on record on an ongoing basis, not only at year end.
Because the two follow different exemptions: Behandlungspflege (injections, wound care, intensive care) is medical treatment and requires qualified staff together with a therapeutic purpose. Grundpflege and support run through the care exemption with its organisational requirements; domestic support services can also shape the income tax classification. Only those who separate the three types of service in planning and billing can evidence each exemption cleanly; that is why the question matters so much.
Yes, under four conditions: the supplements have to be paid in addition to the basic wage, relate to Sunday, public holiday or night work actually performed, stay within the statutory percentage rates and be verifiable through duty rosters or time recording. Flat rate allowances only work as an advance with an annual reconciliation; supplements that continue to be paid during holiday are taxable. Set up correctly, this is a noticeable net benefit for your team.
Yes. If your organisation is a privileged one, for example through the care provision contract (Versorgungsvertrag) or the fulfilled 25-%-Sozialgrenze (social threshold), the exemption also extends to services of the same kind for self-paying clients (Selbstzahler). The condition is that the service is by its nature covered by the recognition or the contract and that the need for assistance is documented. Pure comfort or additional services outside this framework remain taxable and belong on a separate invoice. We classify your entire service catalogue once, in full.
Only for that part; the exemption for care remains untouched. In practice this means: separate revenue accounts, invoices without a tax statement for exempt services and with a correct statement for taxable ones, plus advance returns only to the extent required. You also have to keep an eye on the input VAT deduction (Vorsteuerabzug), which with predominantly exempt turnover is regularly only possible on a pro rata basis. We set up invoicing and the chart of accounts so that the separation runs automatically in day to day business.
For care service providers, the care provision contract (Versorgungsvertrag) and a current case overview are also helpful. A few things are enough for the initial assessment: the last management report (betriebswirtschaftliche Auswertung) or the last tax assessment (Steuerbescheid), an overview of your service areas and, if available, the current list of accounts. For taking over the ongoing engagement you will receive a short checklist from us; we set up powers of attorney and data access together. You do not have to carry paper files around: you can submit all documents digitally.
Yes. You submit documents digitally, you receive reports electronically, and we hold meetings by video, by telephone or in person, as you prefer. This means the engagement is not tied to the location of the practice; what matters is sector knowledge, not the postcode. Whether payroll and duty roster data can be taken over through interfaces, and which tools are used specifically, is something we review together with you at the start.
For care service providers, headcount and range of services shape the scope of the engagement. The fees follow the German tax advisor fee regulation (Steuerberatervergütungsverordnung) and depend on the value of the matter (Gegenstandswert), the scope of services and the effort involved; flat rate agreements are possible for ongoing services. You will receive a sound quote after the first meeting; the last report, the number of documents and the modules you want are enough for that. We do not consider invented fixed prices without a look at your operation to be serious.
Your next step
Outpatient or inpatient: we review your quota and your payroll in the first meeting. After your enquiry you receive a confirmation of receipt; your dedicated contact person then gets in touch. Still getting your bearings? We answer the most frequent questions directly at the top of this page.