Field help: (2024) Hospitality costs

List the non-deductible and the deductible hospitality costs here.

When it comes to hospitality expenses, the tax authorities distinguish between hospitality for "business" reasons and hospitality for "general company" reasons. This affects the degree to which the costs are recognised for tax purposes:

• A business occasion exists for entertaining people outside the company with whom business relationships already exist or with whom they are to be initiated. This also includes visitors to the company, as well as employees of affiliated companies and persons comparable with them i.e. specialist colleagues. The same applies to freelancers and sales representatives. Only 70 % of these hospitality costs are deductible and 30 % are non-deductible. Therefore, the costs must be divided accordingly and both amounts entered here.
• A general company occasion covers hospitality to entertain a company's own employees i.e. people working in-house at the company. "Company" occasions also apply to the expenses incurred by a beverage wholesaler for rounds of drinks paid for at its customers' restaurants/pubs and for customer drinks at breweries. In this case, the costs are 100 % deductible and must therefore be entered in full on the "Other fully deductible business expenses" page. According to the Federal Fiscal Court, the above-mentioned restriction on deductions for hospitality expenses does not apply if a coach driver stops at a service station restaurant and is catered for without charge for "bringing paying customers" (Federal Fiscal Court (BFH) judgement of 26.04.2018, X R 24/17)

Lohnsteuer kompakt: Expenditure for hot and cold beverages, biscuits etc. during company meetings are so-called "courtesies" and can be declared in full as business expenses, deductible on the page "Other fully deductible business expenses".

Lohnsteuer kompakt: The VAT included in the hospitality costs is fully deductible as business expenses and must also be entered under "VAT already paid on goods/services" on the "Other fully deductible business expenses" page.