Provisions for ‘future’ maintenance are not permissible
Provisions regularly rank among the main focal points of tax audits. In the case of maintenance obligations, in particular, the question that arises is: can an economic cause already exist in the past? The Federal Fiscal Court (Bundesfinanzhof, BFH) has now taken up this issue again and confirmed its restrictive line.
In the case in question, a GmbH [German private limited company] operated a rail transport company and leased traction units for this purpose. The maintenance and servicing obligations resulted from both regulations under public law (Sections 32, 33 of the German Railway Construction and Operating Regulations) as well as from lease agreements that contained arrangements with identical content. The GmbH created provisions in the financial accounts and the tax accounts for future maintenance costs. During a tax audit, the local tax office refused to recognise the provision for tax purposes - rightly so, as the BFH confirmed in its ruling of 19.2.2025, case reference: XI R 11/22. Provisions for future maintenance may not be created as long as the economic reason for the maintenance obligation has not yet arisen. Such an obligation only arises once the operating period that is relevant for maintenance has come to an end and not already upon conclusion of a lease or user agreement.
In the opinion of the court, there was a lack of an economic cause in the past. Maintenance obligations are linked to ongoing wear and tear and will only become due once the specified operating period has come to an end. It is only from this point in time that, from both a legal and economic perspective, an obligation will arise. Nothing else arises from the civil law maintenance agreement with the leasing company either, since the agreement does not go beyond the obligations under public law. The reference in the agreement as regards the creation of a “sufficient level” of provisions merely establishes an internal precautionary rule, but no legal obligation.
