Keeping pets is a personal decision. For this reason, you cannot include related costs in your tax return. Nevertheless, there are some exceptions.
These services are tax-deductible when you have a house pet
Animal owner liability insurance (Tierhalterhaftpflichtversicherung)
You can deduct the liability premiums for your dog or horse completely as special expenses (Sonderausgaben). You list them as part of your private insurance.
If you have an insurance package consisting of several insurances for your pet, e.g., an animal owner’s liability insurance and health insurance (Krankenversicherung), you can only claim the pet owner’s liability insurance against tax.
The bill from the pet groomer is deductible in exceptional cases. You can deduct it as a household-related service if the service is performed by the groomer in your own home. If you take your pet to a hairdressing salon, the bill cannot be deducted.
Pet care during holidays
Do you appoint someone to takes care of your pet when you go on holidays? Then, you can deduct pet care as a household service. However, it’s possible to do so only if your pet is cared for within your own four walls. You can only enter the travel and labour costs in your tax return. The labour includes all pet care activities that you normally carry out. Food and other materials are not tax-deductible.
In a ruling, the Federal Ministry of Finance has extended the tax reductions for household-related services (German reference). It has, thus, reacted to various rulings of the Federal Fiscal Court. This has also impacted the care of pets.
You can now deduct costs that you incur for activities such as feeding, grooming and walking your pet. In the past, walking the animal was rarely recognized as tax-deductible because it was not done within the household.
You cannot deduct the vet’s bill from your tax. Not even if it’s a house call. The Nuremberg Fiscal Court issued a ruling to this effect in October 2012 (4 K 1065/12) (German reference).
Dog licence fee
The dog licence fee is not deductible. It is considered a private expense and is part of your living expenses.
Non tax-deductible services when you have a house pet
Service animals are a special tax feature. These include animals who perform work for humans, such as guide dogs.
People who are dependent on a guide dog can deduct all costs incurred in caring for a guide dog as income-related expenses (Werbungskosten). These include the costs of pet food, accessories and veterinary bills.
It is important that you list all expenses in detail on your tax return. A note such as ‘pet accessories’ is not specific enough. Working dogs are also exempt from dog tax.