Field help:
Other business expenses
Other operating expenses (deductible)
Enter here both the deductible and non-deductible expenses for other business expenses.
Representation costs
Expenses that affect the private lifestyle of the taxpayer or other persons are generally not deductible as business expenses. Representation expenses that are, however, incurred for business reasons are only deductible in accordance with sect. 4 para. 5 no. 7 of the Income Tax Act (EStG) "provided that they are not considered unreasonable according to generally accepted standards".
Examples of unreasonable expenses:
- Luxurious vehicles without a clear business reason
- Excessively lavish furnishing of business premises
Fines, administrative fines, warning fines or financial penalties
Fines, administrative fines, warning fines or financial penalties imposed by courts or authorities in Germany or by institutions of the European Communities are not deductible as business expenses.
Exceptions apply to:
- Fees from countries outside the European Communities: These may be deductible as business expenses.
- Fine penalties from abroad: Fines imposed by a foreign court are deductible if they "contradict essential principles of the German legal system".
Document all expenses for other business expenses precisely, and record the distinction between business and private expenses. This will help you avoid queries from the tax office and facilitate correct tax classification.
