Entertainment expenses

Entertainment expenses (Bewirtungskosten) are expenses for food, drinks and related costs such as tips that arise for business reasons. For tax purposes, they count if there is a specific business occasion, for example a customer meeting, a business meal with partners or a company event.

Business or internal?

For tax purposes, a distinction is made according to who is entertained:

• Business entertainment: if business partners, customers or prospects are present, reasonable entertainment expenses are 70% deductible as a business expense. The 70% limit also applies to the share of the company’s own employees who take part in the meal. Input VAT, on the other hand, is fully deductible.
• Internal entertainment: if a company only entertains its own employees, for example at a training course or team event, the costs are 100% deductible. Whether wage tax is due depends on the occasion; for example, a tax-free amount of €110 per person applies to company events.

Which exceptions exist and when entertainment expenses are not deductible at all is explained in the entry deductible entertainment expenses. Typical practical cases can be found under business meal.

Entertainment receipt and proof

For recognition for tax purposes, a complete entertainment receipt is required. In addition to the receipt date, it includes the place, the occasion of the entertainment, the names of the participants and the signature of the host. The restaurant bill must be machine-generated and come from a till with a TSE. For amounts over €250, it must also be made out in the name of the company.

Our guide Post entertainment receipts correctly shows how to book entertainment correctly.

Entertainment expenses abroad

The same requirements apply abroad. Foreign bills do not need to contain TSE details, but the details of occasion and participants are just as necessary. Here, too, the business occasion must be clearly documented.

Entertainment expenses in Spesenfuchs

In Spesenfuchs, you record entertainment within a trip or as a single receipt, with a separate form for occasion and participants. The AI reads meal, drinks and tip separately from the receipt. The split into 70% and 30% is automatic and can be switched off for internal entertainment. You attach the entertainment receipt digitally or create it directly in Spesenfuchs, including signature.

If you take part in entertainment on a trip, this reduces your per diem. You mark this meal on the “Days” page of the trip.

Typical mistakes

• Missing or incomplete entertainment receipt
• Privately motivated meals are claimed
• Participants or occasion not documented
• Bill over €250 not made out to the company

Further information: Hamburg Chamber of Commerce: entertainment expenses, tax treatment, IHK Stuttgart: tax trap with business meals (both in German), § 4 (5) sentence 1 no. 2 EStG, BMF letter of 19 November 2025 on entertainment