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Company outing with former employees: How to benefit from a tax perspective!
A company outing with former employees strengthens the bond and sense of community. But what does it look like from a tax perspective? The good news: there are ways to claim the costs for tax purposes. Find out more about the allowances and requirements. Need support with planning and tax processing? Contact us for personalised advice!
The topic, briefly and concisely
A company outing with former employees enhances the working atmosphere and the corporate culture by nurturing relationships and signalling appreciation.
Make the most of the €110 tax exemption to secure tax advantages. Proper documentation and adherence to the rules are crucial for compliance.
The inclusion of former employees in company events can increase employee retention rates by up to 5% and enhance the company image, which leads to greater loyalty in the long term.
Planning an unforgettable company outing with your former colleagues? Discover how to save on taxes and what you absolutely need to consider!
A company outing with former employees is more than just a pleasant get-together. It is an investment in the workplace environment and the company culture. At GoTuro, we understand how vital it is to maintain relationships – even beyond the active employment period. Therefore, we design custom travel experiences that combine adventure with cultural and relaxing elements. Our expertise allows us to create unforgettable moments that strengthen cohesion and create positive memories.
What are company events and why are they important?
Definition and Purpose
Company events aim to promote the work environment and strengthen the company culture. They provide a platform for informal exchange and team building. According to Sage, such events significantly contribute to employee motivation, which has a positive effect on the entire organization.
The Role of Former Employees
Former employees, including retirees, can actively participate in company events. This promotes connection to the company and appreciates their past contributions. A retiree gathering is an ideal example of maintaining contact and showing affiliation.
Overview of the Tax Framework
The 110-Euro Threshold
A tax-free allowance of 110 euros (including VAT) applies per participant and event. This allowance can be used for up to two events per year. It is important to note that this is an allowance and not an exemption limit, as Haufe emphasizes.
Significance of the 'predominant business interest'
The 'predominant business interest' is crucial for tax recognition, especially at anniversaries and farewell parties. The IHK Bonn points out that at anniversary celebrations, gifts in kind up to 110 euros can be tax-free, provided the business interest is at the forefront.
Secure participation: How to optimise the participant group
The composition of the group of participants is crucial for the success and tax recognition of a company event. At GoTuro, we ensure that the invitation policy is transparent and inclusive to provide a positive experience for all involved. This helps to have the event recognised as a company event and allows the tax advantages to be utilised.
The Group of Participants: Employees, Accompanying Persons and Former Employees
Current Employees and their Partners
The costs for accompanying persons are attributed to the respective employee. This can exceed the tax-free allowance of 110 euros more quickly. It is important to consider this in planning to avoid unexpected tax burdens. Lohn-Info.de explains that the costs for accompanying persons are attributed to the respective employee.
Former Employees and Pensioners
Former employees are explicitly allowed as participants. Special pensioner meetings can be organised for pensioners. Including former employees shows appreciation and strengthens the bond with the company.
Conditions for Recognition as a Company Event
The 50% Rule
More than 50% of participants must be employees (including accompanying persons and, if applicable, temporary workers). The Penka Steuerberatungsgesellschaft emphasises that this rule is crucial for the event to be recognised as a company event.
Maximising tax benefits: making the most of the 110 euro allowance
The correct tax treatment of company outings is essential for securing financial benefits and ensuring compliance. At GoTuro, we support you in making the most of the €110 allowance and considering all relevant tax aspects. This ensures that your company outing is not only an unforgettable experience but also tax-efficiently organised.
The €110 Allowance: What to Keep in Mind?
Allowance vs. Exempt Amount
It is an allowance: Only the amount over €110 is taxable. This is an important distinction from the exempt amount, where the entire amount would be taxable if the limit is exceeded. Haufe explains this difference in detail.
Included Costs
The allowance includes all costs (incl. VAT) borne by the employer: meals, drinks, accommodation, travel expenses (exception: journeys to the regular workplace), music, gifts. Costs for the "external framework" (e.g. event manager) are also included. It is important to consider all these costs in the calculation.
Exceeding the Allowance: What Happens Then?
Flat-Rate Income Tax
If exceeded, a flat-rate income tax of 25% plus solidarity surcharge and church tax may be levied. This results in freedom from social security contributions. Lexware explains that the employer can choose which of the three annual company events is subject to income tax.
VAT Consequences
If the €110 threshold is exceeded, the input tax deduction is forfeited. Therefore, it is advisable to calculate the costs accurately and not exceed the allowance to avoid jeopardising the input tax deduction.
Travel Expenses and Their Tax Treatment
Special Regulation for Travel Expenses
Travel expenses to events outside the workplace can be reimbursed tax-free (§ 3 Nos. 13 or 16 EStG). These costs are not included in the €110 allowance. Lohn-Info.de points out that this regulation facilitates the planning of outings.
Smooth Organisation: How to Successfully Organise the Company Outing with Alumni
Careful planning and organisation are crucial for the success of a work outing with former employees. At GoTuro, we place great importance on ensuring that all aspects are considered, from invitations to documentation. This ensures the event runs smoothly and provides value to both participants and the company. We support you in planning your perfect party trip.
Invitation and Communication
Open Invitation
To avoid any disadvantages, the invitation should go to all members of the relevant group (e.g., all retirees). An open invitation signals appreciation and inclusion. Lohn-Info.de emphasises the importance of an open invitation to take advantage of the tax-free allowance of 110 euros.
Transparent Cost Breakdown
Clear communication about costs helps to avoid misunderstandings. Transparency builds trust and makes budget planning easier. It is advisable to create a detailed cost breakdown in advance and make this accessible to participants.
Documentation and Proof
Participant List
A signed participant list is important for proof to the tax authorities. Lexware recommends keeping a participant list to be able to prove actual attendance.
Cost Breakdown
The costs must be detailed and traceable. Careful documentation is essential to meet tax requirements. It is advisable to keep all receipts and invoices.
Handling Special Cases: Properly Managing Anniversaries, Farewells, and Business Dinners
In addition to regular company outings, there are also special cases that require particular attention. At GoTuro, we specialise in optimising these situations for tax purposes. We provide comprehensive advice on the specifics of anniversary celebrations, farewells, and business meals, so that you can take full advantage without breaching tax regulations.
Anniversary Celebrations and Farewells
In-kind Contributions
For anniversaries, in-kind contributions can be tax-free up to 110 euros per person (threshold, not allowance). It is important to distinguish between threshold and allowance. The IHK Bonn points out that at anniversary celebrations, in-kind contributions up to 110 euros can be tax-free as long as the business interest is paramount.
Distinction from Company Events
Anniversary celebrations for departing employees are not considered company events, but in-kind contributions are possible. It is important to understand this distinction to correctly utilise the tax opportunities.
Business Meals and Other Occasions
Business Interest
Business meals may also fall under the 110-euro limit if a predominantly business interest can be demonstrated. It is essential to document the business interest to ensure tax recognition.
Ensure legal certainty: Keep abreast of current developments and obligations
The legal framework for company events is dynamic and subject to constant changes. At GoTuro, we keep ourselves updated to ensure the legally compliant planning and execution of your events. We inform you about the latest case law, documentation requirements, and duties of care, so you can meet all requirements and minimise potential risks.
Current Case Law
Exemption from Social Security Contributions
In 2024, the BSG decided that exemption from social security contributions is linked to the immediate registration of flat-rate taxation. This decision impacts practice and necessitates an adjustment of processes. It is important to consider this decision to avoid jeopardising the exemption from social security contributions.
Documentation Requirements
Employer's Duties of Care
The employer must carefully document all relevant information to meet tax requirements. Complete documentation is essential to provide proof in the event of a tax office audit. It is advisable to retain all receipts and invoices and to produce a detailed cost breakdown.
Strengthen employee retention: Use company outings with alumni as an opportunity
An office excursion with former employees is an excellent opportunity to strengthen employee retention and show appreciation. At GoTuro, we see it as a chance to maintain positive relationships and promote corporate culture. By involving former employees in company events, you signal that their contributions are still valued and that they remain an important part of the company family.
Summary of Key Points
Utilise Tax Benefits
By adhering to the 110-euro limit and ensuring correct documentation, companies can save on taxes. It is crucial to consider all tax aspects to secure financial advantages and ensure compliance.
Appreciation and Engagement
Including former employees strengthens their connection to the company and demonstrates appreciation. This contributes to a positive company image and enhances employee motivation.
Looking to the Future
Trends and Developments
Digitalisation and changed work models could lead to new forms of company events. It's important to adapt to these developments and create innovative concepts in order to offer attractive events in the future.
Government subsidies for incentive trips provide an excellent opportunity to invest in employee motivation. Whether as a reward for exceptional performance or to strengthen team spirit, the available programmes make organising such trips attractive and financially feasible.
With a variety of options, there are numerous ways to reduce the costs of incentive trips. At GoTuro, we offer you comprehensive advice and support in choosing the right trip, fulfilling organisational requirements, and navigating the planning process.
By opting for an incentive trip, you are investing in the future of your company. Not only do you reduce employee turnover and secure motivated staff, but you also make a significant contribution to a positive working environment.
Now is the perfect time to explore the opportunities for your company. Contact us today to start your personalised consultation and plan your next incentive trip quickly and easily. Register free of charge and receive initial information for the next trip immediately.
Secure exemption from social security: Take note of the BSG ruling from April 2024 and register correctly
BSG Ruling from April 2024: What You Need to Consider for Flat Rate Taxation
The BSG ruling from April 2024 links social insurance exemption with the immediate registration of flat rate taxation. This means that with flat rate taxation, registration must be carried out promptly to ensure social insurance exemption. Therefore, it is advisable to stay informed about current developments and rulings to optimise tax benefits and avoid potential risks. The information from Haufe.de highlights the connection between social insurance exemption and the immediate registration of flat rate taxation. Register the flat rate taxation immediately to secure social insurance exemption.
It is essential to keep an eye on the current legislative changes and regularly review the fiscal framework. This is the only way to ensure that you utilise all benefits and avoid potential risks. Continuous engagement with current developments is therefore indispensable. It is advisable to regularly keep updated on the latest legislative changes to optimise tax advantages and avoid potential risks. Stay informed to always benefit from the most current tax advantages.
Paying attention to these aspects allows you to optimise tax benefits while complying with legal requirements. Careful planning and documentation are also essential here to avoid any inquiries from the tax office. A successful company outing not only strengthens cohesion but also honours the achievements of former employees. Use professional advice to always be on the safe side. Invest in expertise to ensure social insurance exemption and minimise risks.
Show appreciation, strengthen bonds: How to plan the perfect company outing with former employees
More useful links
Sage explains the significance of company events in boosting employee motivation and their positive impact on corporate culture.
Haufe emphasises the difference between allowance and exemption in the context of the tax treatment of company events.
IHK Bonn provides information on tax-free benefits for anniversary celebrations, as long as the company's interests are prioritised.
IHK Karlsruhe offers insights into the tax treatment of company events, including special regulations for retiree meetings.
Lexware explains the possibility of flat-rate payroll tax when the allowance is exceeded and the employer's discretion in taxation.
FAQ
Was genau versteht man unter einer Betriebsveranstaltung?
A company event serves to promote the working environment and strengthen the company culture. It offers a platform for informal exchange and team building. Former employees and retirees can participate.
Welche Rolle spielen ehemalige Mitarbeiter bei Betriebsveranstaltungen?
Involving former employees, including retirees, fosters loyalty to the company and appreciates their past achievements. Special pensioner meetings are a good way to maintain contact.
Wie hoch ist der steuerliche Freibetrag für Betriebsveranstaltungen?
There is an allowance of 110 euros per participant per event (including VAT). This allowance can be used for a maximum of two events per year. It is an allowance, not an exemption limit.
Was bedeutet das 'ganz überwiegende betriebliche Interesse'?
The 'overriding business interest' is crucial for tax recognition, especially for anniversaries and farewell parties. Gifts in kind up to 110 euros can be tax-free as long as the business interest is paramount.
Was ist bei der Teilnahme von Begleitpersonen zu beachten?
The costs for accompanying persons are attributed to the respective employee. This can exceed the 110-euro allowance more quickly. It is important to consider this in planning.
Was passiert, wenn der 110-Euro-Freibetrag überschritten wird?
If exceeded, a flat-rate wage tax of 25% plus solidarity surcharge and church tax may be levied. This leads to social security exemption. The employer can choose which of the annual company events will be subject to wage tax.
Wie werden Reisekosten bei Betriebsveranstaltungen behandelt?
Travel expenses to events outside the workplace can be reimbursed tax-free (§ 3 No. 13 or 16 of the Income Tax Act). These costs are not included in the 110-euro allowance.
Welche Dokumentation ist für Betriebsveranstaltungen erforderlich?
A signed participant list is important for proof to the tax office. The costs must be itemised and transparent. It is advisable to keep all receipts and invoices.
