Are the costs for introductory and farewell meetings deductible?

With a larger or smaller reception, drinks, or snacks, significant personal events are often celebrated, such as work anniversaries, promotions, birthdays - but also welcome and farewell gatherings. The tax offices believe that in such cases, the catering costs serve personal representation and therefore refuse to recognise the costs for tax purposes.

However, the Federal Fiscal Court and several tax courts have now clarified that catering costs for welcome and farewell gatherings are work-related and can therefore be deducted as business expenses. Welcome and farewell gatherings are - unlike birthdays or other private life events - not highly personal private events. Retirement is - despite the personal event - the last act of active service and is therefore still part of employment (BFH ruling of 11.1.2007, VI R 52/03).

For example, the Hessian Fiscal Court recognised the costs of a farewell party for a tax official on the occasion of his departure from office and civil service as business expenses. (Hessian FG of 23.4.2013, 3 K 11/10). The piquant aspect of the matter is that the tax official did not retire but "switched sides" and became a tax advisor. However, this does not matter, as the case is no different from the termination of employment due to reaching retirement age.

The costs for catering for colleagues and employees are not only 70% deductible, as with catering for business partners, but in the actual amount incurred. This involves catering for internal company personnel, i.e., catering for a "professional" occasion (R 4.10 paras. 6 and 7 EStR).

This also means that the strict evidence requirements using formal catering receipts do not apply. The invoice from the catering service or corresponding purchase receipts are sufficient.