Can I claim the value added tax on travel expenses and entertainment expenses?
July 17, 2024 | 40,00 EUR | answered by Quentin Reuter
Dear tax consultant,
My name is Sebastian Müller and I run a small business in the field of business consulting. In my business, I regularly incur travel and entertainment expenses that I would like to claim for tax purposes. However, I am unsure whether I can deduct the VAT on these costs and what conditions need to be met.
So far, I have not taken into account the VAT on my travel and entertainment expenses and accordingly have not reported it in my VAT return. However, now that I have learned that these costs are tax deductible under certain conditions, I am concerned that I may have possibly missed out on tax benefits.
My worry is that I may have acted incorrectly and now may have to expect additional payments or penalties if I want to claim back the VAT on my travel and entertainment expenses retroactively. Therefore, I would like to know from you if and under what conditions I can deduct the VAT on travel and entertainment expenses in my business.
Can you please explain to me what conditions need to be met in order for the VAT on travel and entertainment expenses to be tax deductible? Are there specific evidence or documents that I need to provide for this? And how should I best proceed to correctly record the VAT on my previous travel and entertainment expenses and report them in my VAT return?
Thank you in advance for your support and guidance in this matter.
Sincerely,
Sebastian Müller
Dear Mr. Müller,
Thank you for your inquiry regarding the tax deductibility of VAT on travel and entertainment expenses in your company. It is understandable that you may feel unsure and want to take advantage of possible tax benefits. I am happy to explain to you the requirements and proper handling of these costs.
In principle, you can claim the VAT on travel and entertainment expenses as input tax, provided that these costs are business-related. This means that the expenses have been incurred in the course of your business activities and are directly related to your company. Private travel and entertainment costs, on the other hand, are not deductible.
In order to claim the VAT on travel and entertainment expenses for tax purposes, you must meet certain requirements. First and foremost, the expenses must be properly documented. This includes, for example, invoices, receipts, or other documents showing that the costs were actually incurred and the services were provided.
Furthermore, the travel and entertainment expenses must be reasonable. This means that the expenses must be in proportion to your business and financial situation. Excessive or unreasonable costs may not be accepted by the tax authorities.
If you wish to retroactively claim the VAT on your previous travel and entertainment expenses, it is important that you make the necessary corrections in your VAT return. You should provide the correct amounts and submit the necessary documentation to support the accuracy of your claims.
It is advisable to consult with an experienced tax advisor to ensure that you comply with all tax regulations and make the most of possible tax benefits. A tax advisor can also assist you with recording and deducting the VAT on travel and entertainment expenses and provide you with additional tips and recommendations if needed.
I hope that my explanations are helpful to you and assist you in the tax treatment of your travel and entertainment expenses. If you have any further questions, please do not hesitate to contact me.
Best regards,
Quentin Reuter
