Can I deduct value-added tax for business-related trips?
August 30, 2023 | 40,00 EUR | answered by Oliver Götzinger
Dear tax consultant,
My name is Ludwig Köhler and I run a small business in the IT industry. Lately, I have been taking more business-related trips to visit customers, attend trade shows, and acquire new business partners. Of course, this has incurred costs for accommodations, meals, transportation, and other travel expenses.
Now I am wondering if I can deduct the VAT for these business trips for tax purposes. So far, I have simply recorded the expenses as operating expenses, but I am unsure if that is sufficient. I also have concerns that the tax office could question the deductibility of VAT for my travel expenses.
Can you please help me and tell me if and how I can deduct the VAT for business-related trips? Are there specific requirements that must be met for the VAT to be deductible? How exactly do I need to document the expenses and what receipts do I need to provide? What are the risks if I mistakenly deduct the VAT?
I would greatly appreciate your professional advice and support to ensure that I am handling my taxes correctly and have no unwanted consequences to worry about.
Thank you in advance for your help.
Sincerely,
Ludwig Köhler
Dear Mr. Köhler,
Thank you for your inquiry regarding the value-added tax for business-related trips in your IT company. I am happy to help you clarify and answer your questions in detail.
In general, you can deduct the value-added tax for business-related trips as input tax, provided that the travel expenses are actually business-related and therefore belong to deductible operating expenses. The value-added tax on the travel costs is deductible if it was incurred in the course of your entrepreneurial activity.
In order for the value-added tax to be deductible, the travel expenses must meet certain requirements. Firstly, they must be actually business-related, meaning they must be related to your entrepreneurial activity. This is the case in your situation, as you visit customers, participate in trade fairs, and acquire new business partners.
Furthermore, it is important that you properly document the expenses for the business-related trips. This includes receipts for accommodation, meals, transportation, and other travel expenses. You must carefully keep these receipts as part of your accounting and be able to present them to the tax authorities in case of an audit.
If you incorrectly deduct the value-added tax, this can lead to undesired consequences such as tax repayments, interest, or even fines. Therefore, it is important that you proceed carefully when deducting the value-added tax for business-related trips and comply with all requirements.
I hope that this information has been helpful to you and I am available for any further questions. I am happy to provide professional advice and support for the tax deduction of travel expenses.
Best regards,
Oliver Götzinger
Tax consultant
