Editorial

Dear Readers,

In the Key Issue report in this May edition of our magazine we discuss two important metrics that are of high practical relevance for the financing of long-term projects (e.g., the construction of wind and solar parks). We analyse and explain the formation and significance of the debt service coverage ratio (DSCR) and the loan life coverage ratio (LLCR) on the basis of a practical example. 

In the Tax section, you can find an overview of the requirements for the deductibility of hospitality expenses that have been set out by the Federal Ministry of Finance in a new circular. It contains not just clarifications with respect to e-invoicing but, at the same time, tightens the requirements for electronic record-keeping systems and the documentation of tips. Furthermore, we consider the use of high-end motor vehicles by shareholding managing directors and, on the basis of a new Federal Fiscal Court ruling, we highlight the proof that needs to be provided in a specific case.

The consequences of the Iran War are putting a strain on businesses and private households. In the Accounting and Finance section we take a look at German small and medium-sized enterprises (SMEs) and we summarise the implications of rising energy prices and the deterioration of economic prospects. In a further report we also focus specifically on SMEs. If, outside of the legal requirements for large companies, a SME intends to voluntarily report on sustainability, then we would recommend the VSME format. In the second part of our report on this topic, we provide useful pointers on the structure and content of a sustainability report that is prepared voluntarily. 

In the Legal section we reflect on the first two years of the eGbR (registered civil law partnership). For once, the “e” here does not stand for electronic, but instead for eingetragen (registered); in the meanwhile, more than 80,000 entries in the Company Register indicate that acceptance of this new legal form is very high. 

It is May and nature is bursting into bloom, and just as varied as a bunch of spring flowers are the short reports that we have put together for you. We kick off by considering what the new External Audit Regulations will entail; then we go on to answer the question: when are retroactive tax changes possible? A further issue, namely the discount allowance, will be of relevance to many employers and employees. Here, there are encouraging signs as regards the choice of goods that are eligible for discounts. Carnet is not a new matcha variety, however, it is intended to simplify stodgy customs clearance processes; we take you through the changes that will take effect in June. 

We wish you an interesting read. 
Your PKF Team