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Betriebsausflug Freibetrag: How to save taxes on your next team event!
Would you like to offer your employees an unforgettable break while saving on taxes? The company outing allowance makes it possible! But be careful, there are some things to keep in mind. In this article, you will learn everything important to make optimal use of the allowance and avoid costly mistakes. We are happy to provide individual advice. Get in touch here.
The topic, briefly and concisely
The allowance of 110 euros per employee and event is a valuable tool for boosting employee motivation and improving the workplace atmosphere.
The accurate calculation and documentation of the cost per participant is crucial to make the most of the allowance and avoid tax pitfalls.
The flat-rate taxation at 25% offers an easy way to tax the excess amount and ensure the freedom from social security contributions on the monetary benefit.
Plan the perfect company outing without breaking the budget! Learn all about the company outing allowance and how you can save on taxes. Find out now!
What is the allowance and why is it important?
The allowance for company outings is an essential tool that allows companies to provide their employees with tax and social security-free benefits as part of company events. This not only serves employee motivation but also contributes significantly to improving the work environment. Such events strengthen cohesion and promote communication within the team. At GoTuro, we understand how important motivated employees are to a company's success and we are happy to assist you in planning and implementing your next company outing.
Distinction: Allowance vs. Exemption Limit – What You Need to Know
It is crucial to understand the difference between an allowance and an exemption limit. With an allowance, only the amount exceeding the set limit is taxed. In contrast, with an exemption limit, the entire amount becomes taxable once the limit is exceeded. In the context of company events, the amount of 110 euros is an allowance. This means only the part of the costs exceeding 110 euros per employee is taxable. For more information on tax regulations, visit haufe.de.
Make optimal use of your allowance: Details on amount and scope
Current Allowance Amount
The allowance for company events currently stands at 110 euros per employee and event (as of the current year). This amount is inclusive of VAT, meaning it is a gross amount. It is important to consider this amount when planning your next company outing to optimise the tax benefits. The IHK Munich provides detailed information on this topic.
What Costs are Included in the Allowance?
All costs incurred by the employer in direct connection with the company event are included in the allowance. These include, for example, food, beverages, entertainment, room rental, tickets, and also gifts. However, self-expenses such as wage costs or general operating costs of the company are not considered. A clear distinction of these costs is crucial for the correct calculation of the cash-equivalent benefit. Lexware offers useful advice on the tax treatment of company celebrations.
How Accompanying Persons Affect the Allowance
The costs incurred for accompanying persons (e.g., partners) of the employees are attributed to the respective employee, thus increasing their individual expenditure. It is particularly important to note this, as these additional costs can quickly result in exceeding the allowance. Therefore, plan carefully and take the number of accompanying persons into account in your budget. The Handwerksblatt informs you about the current regulations.
Secure allowance: Requirements for correct utilization
Who is eligible to participate? Detailed eligibility criteria
A key requirement for claiming the allowance is that the company event must, in principle, be open to all employees or at least a significant part of the workforce. This includes former employees, trainees, and employees of affiliated companies. An invitation extended only to selected employees, for example as an incentive, is insufficient to claim the allowance. VLH (Vereinigte Lohnsteuerhilfe e.V.) provides comprehensive information on this topic.
Maximum number: How many events are tax-favoured?
The allowance can be claimed for a maximum of two company events per employee per calendar year. Should more than two events take place, the employer can choose which two events will benefit from tax relief. This allows flexible planning of employee events in line with tax regulations. Stotax explains the tax regulations in detail.
Documentation is crucial: Fulfilling proof obligations
Careful documentation of the company event, particularly a detailed list of participants, is essential to demonstrate compliance with tax requirements. Ideally, the participant list should be signed by all attendees to confirm their presence. This documentation serves as proof in the event of possible tax audits and ensures the entitlement to the allowance. Rödl & Partner provides information on the 110-euro limit for company events.
Precisely calculate monetary benefits: Here's how
Determine Costs per Participant Accurately
To calculate the monetary value advantage correctly, the total costs of the company event must be divided by the number of attendees actually present (employees and companions). According to the current case law of the Federal Fiscal Court (BFH), the costs for so-called no-shows, i.e., registered but non-attending participants, must not be considered. However, a court ruling is still pending, so the legal situation has not been conclusively clarified. The Hamburg Chamber of Commerce offers information about company parties.
Example Calculation for Illustration
Let's assume a company outing costs a total of 5,000 euros. This outing is attended by 40 employees and 10 companions, making a total of 50 people present. In this case, the cost per person is 100 euros. Since this amount is below the allowance of 110 euros, no taxable monetary advantage arises for the employees. This simple calculation illustrates how the allowance can minimize the tax burden.
What Happens if the Allowance is Exceeded?
If the costs per participant exceed the allowance of 110 euros, the excess amount is generally 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 a solidarity surcharge and, if applicable, church tax. Through this flat-rate taxation, the monetary advantage becomes exempt from social security, which benefits both the employer and the employee. We at GoTuro are happy to advise you on the various taxation options for your company outing.
Making the most of flat-rate taxation: Benefits and application
When is flat-rate taxation sensible?
The flat-rate taxation is particularly useful when the costs per participant exceed the tax-free allowance or when the event was not open to all employees. In these cases, flat-rate taxation allows for a straightforward and transparent handling of income tax. It's important to carefully weigh the pros and cons of flat-rate taxation to find the optimal solution for your company.
Overview of the advantages of flat-rate taxation
Flat-rate taxation not only simplifies payroll accounting but also leads to social security exemption for the monetary benefit. This reduces administrative effort and lowers payroll costs. However, flat-rate taxation must be declared promptly with the payroll to avoid incurring social security contributions. Timely and correct handling is therefore crucial.
How flat-rate taxation works
Flat-rate taxation is applied at a tax rate of 25% (plus solidarity surcharge and, if applicable, church tax) on the excess amount. The flat-rate income tax is paid by the employer. This process relieves employees from individual taxation of the monetary benefit and provides a transparent and simple solution. We at GoTuro are here to assist you with the correct application of flat-rate taxation for your next company outing.
Mastering special cases: Exceptions and their peculiarities
Mixed Events: Combining Business and Pleasure
For company events of a mixed nature, such as a conference followed by dinner, the tax-free allowance only applies to the private part of the event. Therefore, costs must be appropriately divided to accurately determine the tax-relevant portion. A clear separation of costs is essential here to optimally benefit from the allowance.
Travel Expenses: What is Tax-Deductible?
Travel expenses can be reimbursed tax-free under certain conditions, particularly if the company event takes place outside the regular workplace and the employee organises the travel themselves. If the employer organises the travel, the costs are included in the allowance. Therefore, it is advisable to consider travel costs separately and make the most of the tax opportunities.
Gifts During the Company Event
Gifts given on the occasion of the company event are tax-free up to an exemption limit of 60 euros. However, this is an exemption limit, which means the entire amount is taxable if the value of the gift exceeds 60 euros. Additionally, the gift reduces the remaining allowance of 110 euros for the event. Therefore, careful selection of gifts considering the tax exemption limit is advisable.
Checklist for Employers: Optimising the Allowance
Planning and Organisation
Early planning of the company event to consider all tax aspects.
Determining the participant group to accurately calculate costs per participant.
Calculating costs per participant, taking into account all relevant expenses.
Execution
Inviting all eligible employees to take advantage of the tax allowance.
Documenting participants with a detailed participant list.
Considering accompanying persons in the cost calculation.
Billing and Taxation
Determining the monetary benefit per participant.
Checking the conditions for flat-rate taxation.
Registering and paying the flat-rate payroll tax (if necessary).
Legal Developments in Focus: Current Trends and Rulings
Ongoing Proceedings and Judgments
The case law on the topic of company events is dynamic. Recent judgments by the Federal Finance Court (BFH) can affect the tax treatment. It is therefore advisable to stay regularly informed about current developments in order to always comply with the applicable regulations. At GoTuro, we monitor the latest case law and are happy to advise you on the implications for your incentive trips.
Future Prospects
It is expected that the tax administration will continue to closely monitor compliance with tax regulations at company events in the future. Careful planning and documentation are therefore essential to avoid potential objections. A proactive approach to dealing with the tax framework is thus of crucial importance.
Planning a company outing made easy: Save on taxes now!
More useful links
Haufe.de provides detailed information on the tax regulations for multiple company events per year.
IHK München provides detailed information on the tax exemption for company events.
Lexware offers useful tips on the tax treatment of company parties.
Handwerksblatt informs about the current regulations concerning the tax exemption for company celebrations and outings.
VLH (Vereinigte Lohnsteuerhilfe e.V.) provides comprehensive information on the regulations regarding tax exemptions for company events.
Stotax provides detailed explanations of the tax regulations related to exemptions for company parties.
Rödl & Partner informs about the €110 limit for company events.
IHK Hamburg offers information on company parties.
FAQ
What exactly is the tax-free allowance for company outings?
The tax-free allowance for company outings is an amount of 110 euros per employee and event, which can be used for contributions towards company events without incurring tax or social security charges. It serves to motivate employees and improve the workplace atmosphere.
Is the allowance per employee or per company?
The allowance applies per employee and per event. This means that each employee can receive up to 110 euros per event tax-free, but only for a maximum of two events per year.
What happens if the costs per employee exceed the allowance?
If the costs per employee exceed the allowance of 110 euros, the excess amount is generally subject to tax and social security contributions. However, the employer has the option to tax the excess amount at a flat rate of 25%.
What costs can be included in the allowance?
All costs directly associated with the company event are included in the allowance. This includes, for example, food, drinks, entertainment, venue hire, tickets, and gifts.
How do accompanying persons affect the allowance?
The costs incurred for accompanying persons (e.g., partners) of employees are attributed to the respective employee, thereby increasing their individual expense. This is particularly important to note, as these additional costs can quickly lead to the allowance being exceeded.
How many company events are tax-advantaged?
The allowance can be claimed for a maximum of two company events per employee and calendar year. If more than two events occur, the employer can choose which two events will benefit from the tax advantage.
Must all employees be able to attend the company event to utilise the allowance?
A key requirement for claiming the allowance is that the company event must be open to all employees or at least to a certain part of the workforce. An invitation to only selected employees is not sufficient.
What should be considered when documenting the company event?
A thorough documentation of the company event, particularly a detailed participant list, is essential to prove compliance with tax requirements. Ideally, the participant list should be signed by all attendees.
