Enter here the non-deductible and the deductible expenses for gifts.

Gifts to business associates: Gifts are deductible as business expenses, provided the expenditure per person and year does not exceed 35 Euro. The amount of 35 Euro applies to entrepreneurs subject to VAT without VAT and to entrepreneurs not subject to VAT (small businesses, doctors) including VAT. Costs for labeling the gift as an advertising medium are included when determining the limit, but not shipping and packaging costs.

The 35 Euro limit is not an allowance, but an exemption limit: If the costs exceed the amount of 35 Euro per person, they are not deductible as business expenses in total. These non-deductible amounts must also be entered in this line.

Note: You must record the expenses for gifts individually and separately from the other business expenses or enter them in a separate account.

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.

Enter here the non-deductible and deductible expenses for your home office room.

From 1 January 2023, new regulations will apply to the recognition of expenses incurred in the "home office" or "homework" for tax purposes. There are two different cases to consider:

• Workroom as the centre of professional activity:

  • Workroom costs can be deducted in the actual amount or as an annual allowance of 1.260 Euro. This applies to "real" home office rooms that serve as separate rooms and are used almost exclusively for professional purposes.

  • Examples of professions with the home office as the centre of activity are writers, translators or IT specialists who mainly work from home.

• Not a centre, but professional activity at home:

  • In this case, daily allowances of 6 Euro can be deducted from tax for each day in the home office for a maximum of 210 days per year (maximum 1.260 Euro).

  • It doesn't matter whether the workplace is used in a separate room or at a kitchen table, for example.

More details:

• The annual allowance of 1.260 Euro covers the expenses for all business and professional activities in the home office. It can be used uniformly for the entire year.

• If the requirements are not met throughout the year, the annual allowance is reduced on a monthly basis and the daily allowance of 6 Euro/day may be claimed.

• The annual allowance is person-related and cannot be used separately for different activities.

• It is not possible to deduct actual costs, the annual allowance and the daily allowance at the same time.

• If several people use a home office together, the conditions for deduction must be checked individually.

• In addition to the daily allowance, costs for work-related items can also be deducted, but it is not permitted to deduct actual costs and allowances at the same time. Special rules apply in the case of two households or when deducting costs for a home office workroom.

• The daily allowance is deducted from the employee allowance of 1.230 Euro, which means that you only save tax if your total income-related expenses exceed 1.230 Euro. Taxpayers must keep a record of and provide proof of the days on which they claim the daily allowance.

Enter here the non-deductible and deductible expenses for other deductible business expenses.

Entertainment costs

Expenses that relate to the (private) lifestyle of the taxpayer or other persons are generally not deductible as business expenses.

Entertainment costs incurred for business purposes are only deductible "if they are not deemed unreasonable in accordance with the customary understanding of the trade" (sect. 4 para. 5 no. 7 Income Tax Act (EStG)).

Fines, administrative fines, warning fines or monetary penalties

Such fines imposed by courts or authorities in Germany or by the European Communities institutions are not deductible as business expenses. However, this does not apply to fines imposed by courts or authorities of other states outside the European Communities.

Fines imposed as a result of criminal proceedings are not deductible. Fines imposed by a foreign court may be deductible as business expenses if they contradict essential principles of the German legal system.

Enter here the deductible meals allowances incurred in connection with external work, business trips or double household running for company-related reasons.

• Travel expenses to be indicated separately on the page "Vehicle costs and other travel expenses".
• Accommodation costs and additional travel expenses must be entered on the page "Other unlimited deductible business expenses".
• Travel expenses for employees are entered on the page "General operating expenses" under "Expenses for own personnel".

You can only deduct a flat-rate amount for additional meals expenses, not the actual costs. The amount of the flat rates depends on the duration of your absence from your home and company. The meal allowance for business trips within Germany with an absence duration of

For business trips abroad, you can deduct the country-specific meal allowances.

If an external work assignment begins on one day and ends on the following day after more than 8 hours without overnight accommodation, a meal allowance of 14 Euro is granted for the day with the prevailing absence (sect. 9 para. 4a no. 3 of the Income Tax Act (EStG)).

The total of non-deductible and deductible operating expenses and business tax is transferred to the overview page "business expenses" to determine the sum of business expenses.

Here, limited deductible depreciation is shown that you have indicated in the business assets section for certain parts of the building, e.g. for a workroom.