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Company outing paid for by the tax office? How to save on taxes!
Planning an unforgettable company outing without breaking the budget? The tax office contributes under certain conditions! Discover in this article how to deduct the costs of your company outing as business expenses and what allowances apply. We are happy to provide you with individual advice. Get in touch here.
The topic, briefly and concisely
Make optimal use of the €110 allowance to deduct the costs for company outings from taxes. Ensure that the costs per employee do not exceed this limit to save on taxes.
Please note the terms and conditions of participation and invite either all employees or a defined department. The equal treatment of all employees is crucial for tax recognition.
Document all costs in detail and retain all relevant receipts and invoices. Thorough documentation is essential to claim business expenses with the tax office and save on taxes. The use of tax software can significantly ease management.
Learn how to claim your company outing for tax purposes. Avoid mistakes and make optimal use of all allowances!
A company outing is more than just a nice gesture for your employees. It can also bring tax benefits if you know the rules. We show you how to claim your company outing at the tax office and save on taxes. Many companies use company outings to strengthen team spirit and motivate employees. However, very few know that the company outing is tax-deductible if certain conditions are met.
The tax treatment of company outings is an important issue for employers and employees. It's essential to observe the relevant tax laws and guidelines to avoid any unpleasant surprises. Correct application of the laws allows you to deduct the costs of the company outing as business expenses, thereby reducing your tax burden. We at GoTuro are happy to support you in planning and implementing your next company outing, ensuring it becomes not only an unforgettable experience but also tax-efficiently designed. Our party trips and incentive trips offer a variety of opportunities for unforgettable experiences.
Below, we provide a comprehensive overview of the key aspects of the tax treatment of company outings. We explain the 110-euro allowance, the participation conditions, the number of tax-advantaged events per year, the deductible costs and their documentation, as well as special cases and exceptions. Furthermore, we show you how to record and tax the costs of the company outing and what documentation is required for payroll tax registration. You will be well-prepared to optimise the tax aspects of your next company outing. The information from the IHK München serves as an initial guide but does not replace individual tax advice.
Make the most of the 110-Euro rule: Maximising your tax benefits
The €110 exemption limit is central to the tax treatment of company outings. But what exactly does this exemption limit mean and how is it calculated? The exemption limit of €110 applies per employee and event. It includes all costs incurred by the employer, including VAT. It is actually an exemption amount, not an exemption limit. This means that only the amount exceeding the limit is taxable. According to Lexware, employers can choose which of up to three annual company parties should be subject to wage tax.
The components of the exemption limit include, among others, transport costs, catering, entrance fees, room rental, entertainment and gifts worth up to €60. It is important to note that travel costs from branches to the central meeting point are not deductible. To calculate the exemption limit correctly, you must determine the total event costs and divide them by the number of participating employees (and possibly family members). This gives you the per-capita share.
But what happens if the exemption limit is exceeded? In this case, a taxable benefit in kind arises. The excess amount is treated as a benefit in kind and is subject to tax and social security contributions. However, the employer has the option to tax the excess amount at a flat rate of 25% (plus solidarity surcharge and church tax). This avoids social security contributions. The Haufe editorial team points out that the employer can choose between individual taxation of the benefit in kind and applying a flat tax rate of 25%.
Ensure equal treatment: How to avoid tax pitfalls when participating
The conditions of participation in a company outing have direct implications on the tax treatment. An important principle is the equal treatment of all employees. This means that participation must generally be open to all employees or a defined department. No individual groups of employees may be favoured, for example, based on position or salary. According to Firma.de, the tax office requires voluntary participation.
An exception to this principle is team outings, which are permissible if all team members are invited. Participation must not be mandatory. Voluntary participation should be documented, for instance, through registration lists. The consideration of family members also plays a role. The costs for family members are attributed to the respective employee. The €110 exemption limit also applies to family members but is not granted in addition.
It is crucial that you adhere to these conditions to avoid tax pitfalls. Ensure all employees have equal opportunities to participate in the company outing and document their voluntary participation. This ensures that your company outing is treated correctly for tax purposes and you can make the most of the advantages. For incentive trips, proof of the business purpose is also required.
Maximize tax benefits: Make the most of two company outings per year
The number of company outings eligible for tax benefits per year is limited. A maximum of two events per year can receive tax benefits. This means that the €110 tax-free allowance can be utilised for up to two events per year per employee. The employer can choose which two events should be tax-advantaged.
But what happens if more than two events are held? In this case, all costs for the additional events are fully taxable. The €110 tax-free allowance cannot be applied. Therefore, it's advisable to keep track of the number of company outings per year and to make the most of the tax advantages.
Plan your company outings carefully and choose the events to be tax-advantaged. This way, you can make optimal use of the €110 tax-free allowance and reduce your tax burden. According to Tagewerk Events, the employer can select the events for which the tax exemption should apply.
Accurately recording costs: How to document your business expenses correctly
Which costs are deductible as part of a company outing and how should they be documented? Various costs are deductible as part of a company outing, including transportation costs, catering expenses, entrance fees and event fees, venue rental, entertainment and programme costs, and gifts up to a value of 60 euros per employee.
The costs must be documented in detail. This includes detailed invoices and receipts, participant lists with signatures, and the allocation of costs to individual employees (including family members). The retention period is at least ten years. It is advisable to use tax software to facilitate the management and archiving of receipts and to automate the calculation of per capita costs.
Proper documentation of costs is crucial to claim business expenses with the tax office and save taxes. Be sure to keep all relevant receipts and invoices and allocate the costs to individual employees. This way, you are well-prepared for a potential audit. Accountable.de recommends keeping receipts and evidence carefully.
Note special cases: Optimize the tax handling of incentive trips and training
In addition to regular company outings, there are also special cases and exceptions that need to be considered in taxation. A significant special case is incentive trips. These are generally considered a taxable monetary benefit. However, there is the option of flat rate taxation at 30% (up to 10,000 euros per employee per year). It's important to be able to demonstrate the business purpose of the trip.
Another special case is the combination of company outing and training. In this instance, the training costs may potentially be partially excluded from the 110-euro limit. However, this must be carefully examined on a case-by-case basis. There are also specifics to consider for company events with business partners or employees of associated companies. These are treated as separate events, and the 110-euro exemption limit does not apply to these individuals.
It is advisable to consult a tax advisor in these special cases to optimise the tax benefits and avoid pitfalls. Ensure you keep all relevant documents and evidence to substantiate the business purpose of the trip or training. This way, you can ensure that your company outing or incentive trip is handled correctly for tax purposes. Teamgeist.com emphasises the importance of appreciating employees to make the outing unforgettable and motivating.
Optimise booking and taxation: How to execute the company outing correctly
The correct booking and taxation of costs for the company outing is crucial to optimally utilise the tax benefits. Book the expenses for the company outing separately, into tax-free and taxable portions. Consider the VAT, as an input tax deduction is possible. The taxation of the monetary benefit can be carried out individually for the employee or generally by the employer (25%).
For the payroll tax registration, it is essential to correctly indicate the taxable amounts. Keep all relevant documents for the audit. Careful booking and taxation of the costs for the company outing are essential to take advantage of tax benefits and avoid mistakes. Ensure to keep all relevant receipts and invoices and accurately allocate the expenses.
This way, you are well-prepared for a possible audit and can make the most of the tax treatment of company outings. Treuhand Hannover recommends considering all costs such as food, drinks, rent, transport, and gifts up to 60 euros.
Secure tax advantages: Optimise planning, communication, and software use
The tax treatment of company outings offers companies the opportunity to do something good for their employees while saving on taxes. Careful planning and documentation are essential in this process. Ensure compliance with the 110-euro allowance, correct documentation of the costs, and adherence to participation conditions. Communicate openly with your employees about the tax aspects of the company outing and use tax software to facilitate the management and archiving of receipts.
For employers, this means approaching the planning with care and gathering all relevant documents. Open communication with employees about the tax aspects fosters transparency and trust. The use of tax software can significantly ease the administration process.
Keep an eye on future developments in tax law to stay up-to-date and make the most of the tax benefits. With careful planning and execution, you can ensure that your company outing is not only an unforgettable experience but also optimally tax-efficient. We at GoTuro are happy to help you find the perfect company outing for your business. Our party trips and incentive trips offer a variety of options for unforgettable experiences. Remember that the information from the IHK Munich serves as a preliminary guide but does not replace individual tax advice.
Tax benefits: Checklist for your next company outing
More useful links
The IHK München provides initial guidance on company events and their tax treatment.
Haufe-Redaktion explains the employer's options between individual taxation and flat-rate taxation of monetary benefits.
FAQ
What exactly is the €110 allowance for a company outing?
The €110 allowance is an amount up to which the costs for a company outing per employee are tax-free. It includes all costs, including VAT. It is an allowance, not a threshold, meaning only the amount exceeding it is taxable.
How many company outings per year can be tax-advantaged?
A maximum of two company outings per year can be tax-advantaged. For additional events, taxes are due on all costs.
Which costs can be deducted under the €110 allowance?
The deductible costs include transportation, catering, entrance fees, venue hire, entertainment, and gifts up to a value of €60 per employee.
What happens if the costs per employee exceed the €110 allowance?
If the allowance is exceeded, a taxable monetary benefit arises. The employer can either tax it individually or apply a flat rate of 25% (plus solidarity surcharge and church tax).
Must all employees be able to participate in a company outing for it to be tax-deductible?
Yes, generally participation must be open to all employees or a defined department. Team outings are permissible if all team members are invited.
How must the costs for a company outing be documented to claim them with the tax office?
The costs must be documented in detail, including invoices, receipts, participant lists with signatures, and assignment of costs to individual employees. The retention period is at least ten years.
What needs to be considered regarding the tax treatment of incentive trips?
Incentive trips are generally considered a taxable monetary benefit. However, there is the option of flat-rate taxation at 30% (up to €10,000 per employee per year). It's important that the business purpose of the trip can be demonstrated.
Can a company outing be combined with a training course to save tax?
Yes, in this case, the training costs may potentially be partially excluded from the €110 limit. However, this needs to be carefully examined on an individual basis.
