On the deductibility of catering costs for business events

September 30, 2024

Operating expenses for the catering of employees in the context of in-house events (in which only employees participate) are generally tax deductible.

The Fiscal Court of Berlin-Brandenburg had to decide on a case in which a company held ‘kick-off events’ and a company anniversary and invited business partners and other guests to maintain contacts. The four managing directors and employees of the class, whose task it was to look after the guests, attended the events.

In the opinion of the Berlin-Brandenburg Fiscal Court, the occasion for this hospitality was a ‘business’ one, meaning that the deductibility is limited in accordance with § 4 (5) sentence 1 no. 2 EStG. This deduction restriction also applies to those expenses incurred in connection with the hospitality of business partners for employees participating in the event.

The recording obligations must also be observed for these catering expenses. Otherwise, as in the case of the Berlin-Brandenburg tax court, there is a risk of the tax deductibility being completely refused.