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 catering 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 catering 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 private life events - not highly personal private events. Retirement is - despite the personal event - the last act of active service and is therefore still part of employment (BFH ruling of 11.1.2007, VI R 52/03).
The costs for catering for colleagues and employees are not only 70% deductible, as with catering for business partners, but in the actual amount incurred. This involves catering for internal company personnel, i.e., catering for a "professional" occasion (R 4.10 paras. 6 and 7 EStR).
This also means that the strict evidence requirements using formal catering receipts do not apply. The invoice from the catering service or corresponding purchase receipts are sufficient.
