Business expenses

Betriebsausgaben (business expenses) are all expenses caused by the business (§4 para. 4 EStG). They reduce profit and thus the tax burden in Germany.

Fully deductible business expenses:

• Office supplies: printer, paper, pens
• Hardware: laptop, monitor, smartphone (for business use)
• Software: Office, Adobe, accounting
• Internet & phone: proportionally for mixed use
• Rent: office or home study (€1,260/year flat rate)
• Further training: courses, books, conferences
• Insurance: professional liability, legal expenses (business)

Partly deductible:

• Entertainment: business meals at 70% (with receipt and documentation of participants)
• Gifts to business partners: max. €50 per person/year
• Company car: 1% rule or logbook
• Home study: in full if it's the centre of your activity; otherwise €1,260 flat rate

Travel costs:

• Business trips: €0.30/km (own car) or actual costs
• Meal allowance: €14 (8–24 h absence), €28 (over 24 h)

NOT deductible:

• Private expenses (even if paid from the business account)
• Fines and penalties
• Donations (these go under special expenses)
• Unreasonable expenses (luxury company car for a small business)