Counterfeit money tax deductible

The fiscal court Kassel has decided that the damage, which occurred by counterfeit money, can be deducted under circumstances taxable as income-related expenses.

Counterfeit money palmed off on employee

An employee of a machine dealer receives a sales commission for the successful negotiation of orders. A fraudulent customer pretends to be interested in an order worth millions. Before ordering, however, he persuaded the dealer’s employee to change 250,000.00 euros under a pretext. In fact, the supposed customer was only interested in changing the money right from the start. The customer foisted counterfeit money on the machine dealer’s employee.

Employee loses private money

What is particularly bitter for the employee is that he used money from his private assets to exchange the money in anticipation of a high commission. Thus, he suffered a loss of 250,000.00 euros as a result of changing money. He wanted to reduce this loss at least by a consideration with his income tax.

Finance Court: Expenses are deductible

The Kassel Finance Court has recognised the approach as income-related expenses. The employee had no private reason for the exchange transaction. The loss was exclusively due to professional reasons. It does not play a role for the tax consideration that the bill of exchange transaction was only preceding the actual sales contract. Likewise it plays no role for the fiscal view that the business made no sense at all economically.

It was important, however, that there was no indication that the employee had behaved in a criminal manner. In such a constellation, it must be expected that the tax offices will pay close attention to whether there are any indications of criminal behaviour.