What counts as business expenses and what do you have to consider?
Operating expenses when receiving a material good
Here you have to book the access (purchase value) as operating income and post an equally high operating expense so that the booking remains neutral and does not affect the profit.
Business expenses in monetary value
You have to deduct the actual value. You can also apply benefits in kind (for example in the case of an exchange). For this you have to orientate yourself on § 9 BewG as well as § 8 Abs. 2 EStG and § 6 Abs. 6 EStG .
Business expenses and advertising expenses
We have presented everything you need to know about advertising costs in detail in our separate article.
When are donations business expenses?
A corporation can set up the promotion of charitable purposes as a donation. However, it must not be higher than 20% of the total income. Partnerships and the self-employed can only deduct donations as a special expense, because they consider the donation to be a private interest. In any case, you need a donation receipt and the organization must either be charitable or subsidized by the state.
Gifts as business expenses
Not all gifts are deductible. You have to give it away for operational reasons (initiation or maintenance of business relationships) and no consideration may be associated with it. For example, you can easily give gifts in kind and money, flowers or tickets to various events. However, discounts or samples and promotional items are not considered gifts. In addition, you may not exceed the value of 35 euros.
Telephone costs business expenses
You have to separate the telephone costs from the private expenses and provide evidence. They belong to the costs that can be properly separated and have already been addressed above.
Advertising costs business expenses
You shouldn’t confuse advertising costs with advertising costs. These advertising costs are only intended for your planning and use of the advertising. These include, for example, advertisements or company videos. You don’t have to pay special attention to anything, but you have to state and prove the costs specifically and clearly.
Entertainment expenses
Your entertainment expenses for your business partners must be appropriate according to (§ 4 Paragraph 5 No. 2 EStG). So you shouldn’t be performing “champagne orgies”.
Guest houses
The same applies if you accommodate your guests for an overnight stay. Make sure the accommodation is functional and does not include a luxury suite in the most expensive hotel in the area.
Additional expenses for catering
For business trips, you can add the additional meal expenses . However, if you dine very expensive and luxurious, then this is not business-related and your private pleasure. You can only apply the lump sum for meals.
What are Anticipated and Post-Operational Expenses?
Anticipated business expenses
In simple terms, the anticipated expenses are those that you cannot immediately deduct. These are costs that arise in the run-up to your company, for example if you first have to build a company building. Or when you have to pay legal and notary fees. Here you can deduct all start-up costs that are aimed at making a profit for your company.
Post anticipated business expenses
There are several solutions for booking, but that depends on your type of company and whether you need double entry bookkeeping . For example, you can then post the costs to the “other expenses” account or settle them using private deposits (for cash payments). In any case, you should collect the receipts and ask your tax advisor for the best solution in each individual case.
Subsequent operating expenses
Subsequent operating expenses arise after the company has closed . Then you often still have costs to deal with, such as debt interest. Here you can only deduct what is directly related to the economic activity of the closed company.
Subsequent tax advice costs
You can easily deduct tax consulting costs during operation (annual financial statements, balance sheet). If you give up your company and still have to draw up a balance sheet or a conclusion, then of course your tax advisor will also want to be paid in this case and you can state these costs. In the case of individual problem cases, however, you should get specific advice as to whether the costs you are considering are also included or not.
Record-keeping
You are obliged to keep records of all receipts that you would like to deduct from tax. Because you have to be able to prove your information. Therefore, you should always keep all receipts in order to avoid an estimate. It could be more expensive, so it could be negative for you! Pay special attention to the mixed-cost receipts to demonstrate operational use. All receipts for hospitality and gifts are also important.
