Which expenses can be deducted from the trade tax?
December 31, 2022 | 50,00 EUR | answered by Isabel Möller
Dear tax advisor,
My name is Edith Hohenberg and I run a small business in the event planning industry. In recent years, my business income has increased, leading to a higher burden of trade tax. Therefore, I am looking for ways to reduce my tax liabilities.
I have already made some expenses related to my business, such as rent for my office, costs for advertising, expenses for employees, as well as office supplies and event venues. However, I am unsure which of these expenses can actually be deducted from the trade tax and how to correctly report them in my tax return.
My concern is that in the past, I may not have taken into account all deductible expenses and therefore paid unnecessarily high taxes. I want to ensure that I take full advantage of all opportunities for tax savings and optimize my trade tax burden.
Can you please outline exactly which expenses can be deducted from trade tax and how I should correctly report them in my tax return? Are there possibly ways to retroactively claim expenses that have already been incurred? I would greatly appreciate your assistance in optimizing my tax situation.
Thank you in advance for your help.
Sincerely,
Edith Hohenberg
Dear Mrs. Hohenberg,
Thank you for your inquiry regarding the optimization of your tax situation with regards to the trade tax burden. It is understandable that you are concerned about how to correctly claim your deductible expenses in order to reduce your tax burden. I am happy to explain to you which expenses can be deducted from trade tax and how you should report them in your tax return.
First of all, it is important to know that trade tax is levied on the commercial profit of the company. Deductible expenses generally include all business-related expenses that are necessary for generating income. This includes, for example, rent and lease costs for business premises, advertising expenses, personnel costs, costs for office supplies and operating materials, as well as expenses for events and activities carried out within your company.
To correctly report these expenses in your tax return, you should carefully keep all receipts and invoices and sort them according to the individual expense categories. In the tax return, you can then report the deductible expenses in the corresponding fields and thus reduce your tax burden. It is important that you fully and correctly report all deductible expenses in order to fully utilize possible tax benefits.
Regarding expenses that have already been incurred, there is generally the possibility to retroactively claim them if you can provide the necessary receipts and evidence. It is advisable to thoroughly document and keep all relevant documents in order to be able to prove the claiming of expenses for past years if needed.
I hope that this information has been helpful to you and I am available for further questions. If you need assistance in optimizing your tax situation, I am happy to help.
Best regards,
Isabel Möller, Tax Advisor
