Healthcare
Tax advisor for veterinarians
The healing profession that pays VAT: we turn 19 % and the in-house dispensary (Hausapotheke) into an orderly system. You are the healing profession the VAT exemption does not apply to, and that is exactly what opens up room many practices leave unused: full input VAT deduction on equipment, vehicles and goods purchased. We handle bookkeeping, advance returns and annual accounts for veterinary practices of every size, and we keep a clean line where your practice is split for tax purposes: freelance professional treatment (freiberuflich) on one side, the commercially treated in-house dispensary (Hausapotheke) on the other.
Key areas for veterinarians
- VAT (Umsatzsteuer) liability of veterinary services: correct invoices under the GOT (the German fee schedule for veterinarians), advance returns and input VAT deduction
- Veterinary in-house dispensary (Hausapotheke): dispensing medication is regularly treated as commercial for tax purposes; we make sure it is classified correctly
- Sale of feed and accessories: drawing the line against freelance professional activity (freiberuflich) and protection against trade tax (Gewerbesteuer) cross-contamination of all income (Abfärbung) in joint practices (Gemeinschaftspraxis)
- Mobile practice and house calls: vehicle costs and the driver's log (Fahrtenbuch)
- Practice start-up, practice purchase and investments in practice and laboratory equipment
The healing profession that plays by different rules
Among all healing professions you are the exception: the VAT exemption for medical treatment applies only to human medicine; veterinary services are regularly taxable at 19 %. What sounds like a disadvantage at first has a flip side that many give away: as a fully taxable practice, the input VAT deduction is open to you, on equipment, practice fit-out, vehicles and goods purchased. We make sure your advance VAT returns reflect both sides cleanly: the tax on your services and every euro of input VAT you are entitled to.
The in-house dispensary (Hausapotheke): one practice, two tax worlds
For income tax purposes, the tax authorities draw a line straight through your practice: veterinary treatment is freelance professional activity (freiberuflich), while dispensing medication from the in-house dispensary (Hausapotheke) counts as commercial. For a sole practice this mainly means separate records and, where applicable, trade tax (Gewerbesteuer) on the dispensary part. For a joint practice (Gemeinschaftspraxis) it means more: without separation, the commercial turnover can contaminate the entire practice (Abfärbung). We structure inventory management and bookkeeping so that both worlds work side by side, and we assess from what point an organisational separation is the safe route.
Feed, accessories, shop: growth without the tax trap
Many practices grow beyond the treatment table: feed, care products, accessories. For tax purposes that is trade, not medicine. It is entirely legitimate, but it demands the same discipline as the in-house dispensary (Hausapotheke): separate revenue areas, a clear margin calculation, an eye on the de-minimis thresholds (Bagatellgrenze) for joint practices. On top of that comes the daily reality of a rural practice or small animal clinic: vehicles, emergency duty, staff. We deliver the reports that show which part of your practice actually earns: treatment, dispensary or shop. And because veterinary medicine rarely ends at six in the evening, payroll belongs in the picture too: supplements for your team's night, Sunday and public holiday duty can remain tax free if they are paid on top of the basic wage for hours actually worked and are evidenced by duty rosters; flat-rate allowances with no attribution give this advantage away. We set your payroll up accordingly and supply the documentation with it. An underestimated lever in a staff-intensive business that cannot abolish night duty but should at least pay for it in a tax-smart way. That way more of the emergency duty stays with the team, and the practice remains attractive as an employer.
A typical pitfall
"It all runs through one account anyway": in a joint practice (Gemeinschaftspraxis) that is exactly what costs you freelance professional status (freiberuflich). Record dispensary and shop turnover separately from day one; the de-minimis threshold (Bagatellgrenze) of 3 % / 24.500 € is reached faster than the medicine cabinet empties.
An example from our advisory practice
Hypothetical example: a mixed practice with two owners expands its in-house dispensary (Hausapotheke) and adds feed sales to its range. The challenge: both areas count as commercial for income tax purposes and can contaminate the partnership (Abfärbung). Suitable service: separate inventory management, ongoing threshold monitoring, review of an organisational separation. Intended benefit: growth without trade tax (Gewerbesteuer) on treatment turnover. Next step: an initial consultation with a turnover breakdown for the past twelve months.
Frequently asked questions
Because the exemption for medical treatment covers human medicine only: the legislator ties it to the treatment of people, veterinary services do not fall under it and are therefore regularly subject to 19 % VAT (Umsatzsteuer). The flip side is the full input VAT deduction on your incoming supplies, from practice furnishings through to purchasing medication. Organised correctly, VAT is therefore above all a liquidity matter, not a disadvantage.
For VAT purposes it runs with your practice; for income tax purposes, however, the tax authorities treat dispensing medication as a commercial activity alongside the freelance professional treatment (freiberuflich). For you that means separate revenue and cost-of-goods accounts, so that both areas can be quantified, and in a joint practice (Gemeinschaftspraxis) an eye on the cross-contamination thresholds (Abfärbung). A separate company only becomes necessary once the volume exceeds the de-minimis thresholds (Bagatellgrenze).
Feed, care products and accessories are trading goods: commercial and subject to VAT at the rate applicable in each case. In a sole practice this mainly means a clean separation in the till and in the bookkeeping. In a joint practice (Gemeinschaftspraxis) cross-contamination (Abfärbung) comes on top: the shop can make the freelance professional practice liable for trade tax (Gewerbesteuer) if it grows beyond the 3 % or 24.500 € threshold. We monitor that with you on a quarterly basis.
Yes. Because your veterinary services are subject to VAT, the input VAT deduction is open to you in principle: on treatment equipment, X-ray technology, vehicles, practice fit-out and ongoing purchases of goods. The prerequisites are proper incoming invoices and allocation to business use. With larger investments in particular, it pays to think about timing and financing together with VAT; we calculate the liquidity effect in advance so that the refund arrives where it was planned.
A completely separate set of books is not necessary, but a clear separation within your bookkeeping is. Dispensing medication counts as commercial for income tax purposes, while treatment remains freelance professional activity (freiberuflich); without separate revenue and cost-of-goods accounts, that line can be neither evidenced nor monitored. In a joint practice (Gemeinschaftspraxis) the risk of cross-contamination (Abfärbung) is added, which calls for ongoing monitoring of the revenue shares. We set the account structure up once to fit; after that the separation runs along with day-to-day business.
With veterinary practices, inventory management and dispensary figures are the most important addition. A few things are enough for an initial assessment: your most recent management accounts (BWA) or your latest tax assessment, an overview of your service areas and, if available, your current chart of accounts. To take over ongoing support you receive a short checklist from us; we set up powers of attorney and data access together. You do not have to haul folders around: you can submit all documents digitally.
Yes. You submit receipts digitally, you receive reports electronically, and we hold meetings by video, by telephone or on site, as you prefer. That means support is not tied to the firm's location; what matters is sector knowledge, not the postcode. For mobile practices we look at how receipts can most easily be captured on the road; which tools are actually used is something we agree with you during setup, based on your practice's workflows.
With veterinarians, turnover volume and the in-house dispensary shape the scope of support. Remuneration follows the German tax advisor fee regulation (Steuerberatervergütungsverordnung) and depends on the values of the matter, the scope of services and the effort involved; flat-fee arrangements are possible for ongoing services. You receive a reliable quote after the initial consultation; for that, your last set of accounts, the number of receipts and the modules you want are enough. We do not consider invented fixed prices without a look at your practice to be serious.
Your next step
Sole practice, mobile practice or clinic: tell us in the initial consultation how your practice works. After your enquiry you will receive a confirmation of receipt; your dedicated contact person will then get in touch. Still getting your bearings? We answer the most common questions right at the top of this page.