No provision for future maintenance of trains
Provisions for uncertain liabilities must be recognized in both the commercial balance sheet and the tax balance sheet. They presuppose either the existence of an uncertain liability or the overwhelming probability that liability will arise, the amount of which may also be uncertain. If the obligation has not yet arisen in principle, a provision can only be recognized if it has arisen economically in the financial years up to the balance sheet date.
In the case in dispute, a rail transport company had leased traction units to provide local rail passenger transport services. According to the leasing contract, the maintenance obligation was imposed on the lessee. In this respect, the contract stipulated that regular maintenance was to be carried out in accordance with the manufacturer's specifications and that the main inspections were to be carried out in accordance with Sections 32 and 33 of the Railway Construction and Operating Regulations. Both maintenance and main inspections were to be carried out according to fixed schedules, which were linked to the mileage of the trains. The rail transport company now formed pro rata provisions for the maintenance and main inspections due at a later date in accordance with the mileage achieved in the past years.
However, the German Federal Fiscal Court (BFH) has now confirmed in its ruling from 19.02.2025 (case no. XI R 11/22) that no provisions were permissible in this respect. Following previous case law, the court emphasizes that a maintenance obligation under public law was not economically caused in the past because the essential feature of the overhaul obligation is the achievement of the permissible operating time, which considers the typically occurring signs of fatigue and wear and tear. Only if the operation is to be continued beyond the permitted operating time must the keeper carry out the aforementioned checks. The fulfilment of these obligations therefore does not legitimize the operation of the corresponding device in the past, but enables it in the future. Accordingly, there is regularly an own operating expense that is not a suitable basis for a provision because the maintenance expense is related to future income.
Consequently, no provisions can be recognized for such obligations. Rather, the maintenance costs can only be claimed as operating expenses when they are actually incurred.
The contractual agreement in the leasing contract also did not result in a provision obligation. As the obligation to perform maintenance only arose at the end of the permitted operating period, settlement arrears relating to the leasing contract as a pending transaction could not arise before this point in time.
Incidentally, these principles apply not only to the determination of profits for tax purposes, but also to the commercial balance sheet.
