SteuerGo FAQs

(2022) Are the costs for introductory and farewell meetings deductible?

With a larger or smaller reception, drinks, or snacks, significant personal events are often celebrated, such as work anniversaries, promotions, birthdays - but also welcome and farewell gatherings. The tax offices believe that in such cases the hospitality costs serve personal representation and therefore refuse to recognise the costs for tax purposes.

However, the Federal Fiscal Court and several tax courts have now clarified that hospitality costs for welcome and farewell gatherings are work-related and can therefore be deducted as business expenses. Welcome and farewell gatherings are - unlike birthdays or other celebrations in the private sphere - not purely private events. Retirement is - despite the personal nature of the event - the final act of active service and is therefore still part of employment (BFH ruling of 11.1.2007, VI R 52/03).

For example, the Hessian Fiscal Court recognised the costs of a farewell party for a tax official on the occasion of his departure from office and civil service as business expenses. (Hessian FG of 23.4.2013, 3 K 11/10). The interesting aspect of the case is that the tax official did not retire but "switched sides" and became a tax advisor. However, this is irrelevant, as the case is no different from the termination of employment due to reaching retirement age.

The costs for hospitality for colleagues and employees are not only 70% deductible, as with hospitality for business partners, but in the actual amount incurred. This involves hospitality for internal company personnel, i.e., hospitality for a "professional" occasion (R 4.10 paras. 6 and 7 EStR).

This also means that the strict evidence requirements using formal hospitality receipts do not apply. The invoice from the catering service or corresponding purchase receipts are sufficient.