Entertainment expenses are expenses for food and drinks with which a company entertains guests. How much of this is deductible for tax purposes depends on who is entertained and for what reason. The rule is set out in \u00a7 4 (5) sentence 1 no. 2 EStG: for business entertainment, 70% of the costs are deductible as a business expense<\/a>.<\/p>\n If customers, business partners or prospects are entertained for business reasons, 70% of the reasonable costs are deductible. This also applies to the share attributable to the company’s own participants. Typical cases are a business meal<\/a> with customers or a lunch during contract negotiations.<\/p>\n The following are not deductible:<\/p>\n The non-deductible part does not reduce taxable profit, neither for income or corporation tax nor for trade tax. In accounting, it is therefore posted to a separate account, for example 4654 (SKR03) or 6644 (SKR04).<\/p>\n The VAT on business entertainment is fully deductible as input VAT, including for the non-deductible share of 30%. A proper invoice is required. If the amount exceeds \u20ac250 gross, it must be made out to the company.<\/p>\n For the deduction, records of the place, date, participants, occasion and amount of the costs are required. For entertainment in a restaurant, this includes the machine-generated invoice listing the individual food and drinks. It must come from a till with a technical security device (TSE). The host signs the details. The details are set out in the BMF letter of 30 June 2021.<\/p>\n If an employee on a business trip takes part in business entertainment, the meal counts as provided. Their per diem<\/a> is then reduced, in Germany by \u20ac11.20 for a lunch or dinner. This is often forgotten.<\/p>\n In Spesenfuchs, you record the persons entertained, the place and the occasion. From this, Spesenfuchs creates an entertainment receipt<\/a>, with the signature taken automatically from your master data. When passing data on to accounting, Spesenfuchs automatically splits the amount into 70% deductible and 30% non-deductible costs. The split can be switched off, for example if your tax advisor books it once a year. How to enter a receipt is shown in the support guide on entering receipts<\/a> (in German).<\/p>\n More on the term itself under entertainment expenses<\/a>.<\/p>\n Legal basis and sources: \u00a7 4 (5) no. 2 EStG<\/a>, \u00a7 15 UStG<\/a>, BMF letter of 19 November 2025 on entertainment<\/a><\/p>\n<\/div><\/section>When are entertainment expenses 70% deductible?<\/h2>\n
When are entertainment expenses 100% deductible?<\/h2>\n
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Non-deductible entertainment expenses<\/h2>\n
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Input VAT on entertainment expenses<\/h2>\n
What the entertainment receipt must contain<\/h2>\n
Entertainment on business trips<\/h2>\n
Entertainment expenses with Spesenfuchs<\/h2>\n
Typical mistakes<\/h2>\n
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