Information Sheet for Healthcare Professions: Value Added Tax and Trade Tax

In the tax treatment of healthcare professions, there are certain peculiarities that must be observed. Doctors, dentists, physiotherapists, and other healthcare professionals are generally considered freelancers and are therefore exempt from trade and value added tax. However, this simple rule is complicated by additional services and ancillary services. The emergence of new healthcare professions also challenges traditional taxation. The tax authorities have increasingly focused on this topic and are directing their audits accordingly.

Value Added Tax in Healthcare Professions

Revenues from activities as a doctor, dentist, alternative practitioner, physiotherapist, or midwife are generally exempt from value added tax according to § 4 No. 14a of the Value Added Tax Act. However, there are some exceptions and nuances to consider.

- Doctors: All measures aimed at diagnosing, healing, or alleviating diseases are tax-exempt. Prophylactic measures are also included.

- Dentists: The practice of dentistry is exempt from value added tax. Under certain conditions, bleaching can also be considered a medical treatment.

- Alternative Practitioners: The practice of medicine on humans is tax-free.

- Physiotherapists: Certain services such as peloid baths or inhalations may be subject to the reduced tax rate of 7% if they do not fall under the healthcare professions exemption.

- Midwives: The independent care of pregnant women and care before and after birth are exempt from value added tax.

Checklists for Value Added Tax

To determine whether certain services are subject to value added tax, checklists can provide helpful guidance. However, it should be noted that individual advice from a tax advisor is essential in case of doubt.

Value Added Tax Liable Revenues

Certain activities may be subject to value added tax under certain circumstances:

- Literary or scientific activities

- Lecture activities

- Supply of aids

- Cosmetic services by podiatrists

- Expert opinions for legal proceedings

Value Added Tax Exempt Revenues

Some services remain exempt from value added tax, even if they do not directly serve medical treatment:

- Preventive examinations

- Individual health services (IGeL)

- Occupational health services

- Expert opinions on aid provision

Healthcare professions are generally not subject to trade tax, as they are considered free professions. However, commercial activities such as the sale of aids can complicate this regulation. Special caution is required in group practices, as commercial infection can affect the entire practice. A thorough examination of trade tax liability is therefore essential.

Checklists for Trade Tax

To determine whether an activity is subject to trade tax, the following aspects should be considered:

- Trade tax-free activities such as activities for courts or insurance institutions as an expert

- Individual cases such as the sale of contact lenses by ophthalmologists

Individual advice from a tax advisor is particularly recommended in this area, as the tax situations in practice can be very diverse.

Note: This information sheet is for informational purposes only and does not replace individual advice from a tax advisor. It is based on the legal status as of September 2025.