It is indeed true to some degree in Germany. If you give your friend money for some help he provided you would need to pay taxes (otherwise people could always

It is indeed true to some degree in Germany. If you give your friend money for some help he provided you would need to pay taxes (otherwise people could always pretend to be friends and exchange money behind their back while not paying any tax because it wasn't a business exchange) There is a low amount of such work that is free (pretty low, around 300$ per year). In practice people often ignore it. If you give away your gaming console to your friend helping to renovate the house, you might theoretically need to pay taxes. But I think you only get into real trouble if you conduct real business or there simply isn't any enforcement possible anyway. There are similar rules for gifting since it would equally enable you to evade paying tax by declaring mutual gifts instead of service and payment. edit: I think the legal term is "Gefälligkeit", it would you net sources in German of course. The law is also defines claims for both parties. What if your friend painted your house blue, but you wanted it red? Who is responsible for the damage, etc. pp.