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Company outing package: How to save on taxes and social security contributions!
Planning an unforgettable company outing without breaking the budget? The tax treatment of corporate events can be complex. Learn how to optimally use the company outing allowance to save on taxes and social contributions. Need support with the planning and implementation? Contact us for tailored advice.
The topic, briefly and concisely
The flat-rate taxation of company outings allows companies to settle payroll tax at a flat rate and be exempt from social security contributions.
The 110-euro threshold is an important factor in planning. If exceeded, the 25% flat-rate tax offers an attractive alternative to keep wage costs under control and boost employee motivation.
Careful planning, precise documentation, and adhering to current jurisprudence are crucial to avoid pitfalls and optimally utilise tax benefits. This can lead to cost savings of up to €3,000 per year.
Find out how to structure your company outings for optimal tax benefits and take advantage of flat-rate taxation. Avoid pitfalls and maximise the benefits for your business!
An office outing is more than just a nice gesture; it's an investment in team spirit and employee motivation. However, to ensure this trip doesn't become a tax trap, correct handling is crucial. We show you how to make the most of flat-rate taxation to avoid unexpected costs while delighting your employees. The flat-rate taxation offers a simple and efficient way to settle income tax and free social security contributions.
The tax conditions for company events are clearly defined. A key point is the 110-euro limit. This stipulates that the costs per employee must not exceed 110 euros to remain tax-free. It is important to understand that this limit is a tax exemption for income tax, but a threshold for VAT. If you exceed this limit, the possibility of the 25% flat-rate tax comes into play. This option is also available to you if you hold more than two events per year. The correct application of these regulations helps you keep wage costs under control while creating attractive incentives for your employees.
At GoTuro, we understand how important it is for your office outings to be not only unforgettable but also tax-optimised. With our tailored offers for party and incentive trips, we help you make the most of your budget while boosting your employees' motivation. Our expertise in the field of flat-rate taxation enables you to take full advantage of all tax benefits and avoid pitfalls.
Costs under Control: How to Optimally Use the 110-Euro Limit
The 110-euro threshold is a crucial factor when planning company outings. But what exactly does this threshold include, and how do you calculate the cost per participant accurately? All expenses, including VAT, for food, drinks, accommodation, travel costs, music, and even gifts up to a value of 60 euros per employee are covered under this regulation. The costs for employees' accompanying persons are also attributed to the respective employee and must be considered in the calculation. It is important to keep track of all relevant expenses to not exceed the 110-euro threshold and to utilise the tax benefits optimally.
However, not all costs need to be included in the calculation. Travel expenses for events outside the regular workplace can be reimbursed tax-free under the general travel cost rules and thus do not fall under the 110-euro threshold. When calculating the cost per participant, it's essential to divide the total costs by the number of actual attendees, including accompanying persons. The actual attendance counts, not the number of invitations. This can be particularly significant if many employees cancel at short notice. Careful documentation is essential to prove the correct calculation.
For VAT treatment, it's important to know that the 110-euro threshold represents an allowance for income tax, but an exemption threshold for VAT. This means that if the threshold is exceeded, the input tax deduction is completely lost. Accurate cost calculation and compliance with documentation obligations are therefore essential to avoid tax disadvantages. At GoTuro, we are happy to assist you in planning and executing your company outings to ensure all tax aspects are considered and you make the most of the flat-rate taxation benefits.
Flat-rate taxation: Conditions and benefits of the 25% rule
The 25% flat-rate tax offers an attractive alternative if the costs per employee exceed the 110-euro threshold or more than two company events take place per calendar year. This option allows you to settle the wage tax at a flat rate while being exempt from social security contributions. Another advantage is that flat-rate taxation is permissible even if not all employees are invited, as confirmed by a Federal Finance Court (BFH) decision on 27 March 2024 (file no.: VI R 5/22). However, it's important to know the requirements and calculation of the flat-rate tax in detail to avoid mistakes and make the most of the benefits.
The flat-rate tax is 25% of the assessment base, plus solidarity surcharge (5.5%) and, if applicable, church tax. By applying the flat-rate taxation, you benefit from simplified accounting and exemption from social security contributions. This can be a significant relief, especially for larger company events with many participants. However, it's crucial to apply the flat-rate taxation in a timely manner, ideally with the next payroll. Omissions can lead to the demand for social security contributions, as emphasised by the Federal Social Court. The deadline for flat-rate taxation ends on 28 February of the following year. By this date, flat-rate taxation must have been completed to avoid social security contributions.
At GoTuro, we support you in the correct application of the 25% flat-rate tax and help you meet all deadlines. Our experts are happy to advise you on the individual requirements and benefits of flat-rate taxation for your company outings. With our support, you can ensure that your company events not only become a complete success but are also optimally structured for tax purposes. Take advantage of our tailored offers for party trips and incentive trips to make the most of your budget while boosting your employees’ motivation.
Avoiding Pitfalls: How to Successfully Handle the Correct Tax Treatment of Company Outings
There are several pitfalls in the tax treatment of company outings that can lead to unexpected costs. A common mistake is the incorrect calculation of expenses, such as considering the number of invitations instead of actual participants or not accounting for accompanying persons. Incorrect allocation of costs, such as benefits in kind during the event, can also cause problems. Therefore, careful cost calculation is essential to correctly check the 110-euro limit and make optimal use of the tax benefits.
There are also often errors in documentation. A missing participant list or incomplete receipts can jeopardise the tax recognition of the company outing. It is therefore important to maintain a signed participant list and document all expenses with receipts. Another common error is the late flat-rate taxation or incorrect application of VAT rules, for instance by wrongly claiming input tax deduction. To avoid these errors, it is advisable to familiarise oneself with the tax regulations early on and, if necessary, seek professional advice.
At GoTuro, we are happy to support you in avoiding these pitfalls and handling your company outings correctly in tax terms. Our experts provide comprehensive advice on all tax aspects and help you to optimally utilise the flat-rate taxation. With our support, you can ensure that your company events not only become a complete success but are also flawless from a tax perspective. Take advantage of our customised offers for party and incentive trips to make the most of your budget while simultaneously boosting employee motivation.
Tax-Optimised Planning: How to Organise Company Outings Efficiently
Careful planning and budgeting are crucial to optimising company outings for tax purposes. Early planning allows for better cost control and consideration of the €110 threshold. The budget should be planned to adhere to this threshold as much as possible to maximise the tax benefits. When choosing activities, you should highlight the social nature of the event and consider the interests of your employees. This helps to promote motivation and team spirit while complying with tax regulations.
To optimise costs, you can take advantage of group discounts and negotiate with providers for better terms. The choice of venue and catering can also significantly impact costs. It is advisable to gather various quotes and compare expenses carefully to achieve the best value for money. A transparent breakdown of costs and detailed documentation are essential to ensure the tax recognition of the company outing. Proper documentation of all event costs with corresponding receipts is important to make the company outing tax-deductible.
At GoTuro, we support you in planning and carrying out your company outings, ensuring that all tax aspects are considered and you can make the most of the benefits of flat-rate taxation. Our experts are happy to advise you on the individual requirements and advantages of flat-rate taxation for your company events. With our support, you can ensure that your company outings are not only a great success but also optimised for tax purposes. Take advantage of our tailor-made offers for party trips and incentive trips to get the best out of your budget while also boosting your employees' motivation.
Special Cases to Consider: How to Properly Handle Part-Time Employees and Anniversary Celebrations
In the tax treatment of company outings, there are a few special cases and regulations to consider. Part-time employees and trainees are to be treated the same as full-time employees for tax purposes. It is important that all employees are treated equally to avoid discrimination and to make optimal use of tax advantages. For company outings involving employees from different locations, the transport costs to a central event point are not tax-advantaged. Therefore, it is advisable to plan the event in such a way that transport costs are kept as low as possible.
A clear distinction is also required between company outings and anniversary celebrations. Anniversary celebrations for individual employees are not company events, but gifts up to a value of 110 euros. These gifts can be claimed as business expenses, but are subject to different tax regulations than company outings. It is therefore important to correctly identify the type of event to make optimum use of tax advantages and avoid errors. Business meals that occur during an extraordinary work task and do not exceed 60 euros are not regarded as company events.
At GoTuro, we support you in the correct management of special cases and regulations related to company outings. Our experts are happy to advise you on all tax aspects and help you make optimal use of flat-rate taxation. With our support, you can ensure that your company events are not only a complete success but are also flawless in tax terms. Take advantage of our tailored offers for party trips and incentive trips to get the most out of your budget while simultaneously boosting your employees' motivation.
Case Law in Focus: Stay Up-to-Date
The tax treatment of company outings is subject to continuous development through case law. It is therefore important to keep an eye on the current rulings and decisions in order to optimise tax benefits and avoid errors. For example, the BFH judgment of 27/03/2024 (Ref.: VI R 5/22) confirms the admissibility of flat-rate taxation even if not all employees are fully included. This judgment is of great significance for practice and should be taken into account when planning and conducting company outings.
Future developments in tax law may also impact the tax treatment of company outings. For instance, it is possible that the 110-euro threshold will be adjusted in the future. Additionally, the digitisation of accounting could simplify tax treatment. It is therefore advisable to stay regularly informed about current developments in tax law and to seek professional advice if necessary. The flat-rate taxation of a company event is a complex topic that requires constant attention.
At GoTuro, we keep you constantly updated on the latest case law and inform you of all relevant changes in tax law. Our experts are happy to advise you on all tax aspects and help you make optimal use of flat-rate taxation. With our support, you can ensure that your company events are not only a complete success but also tax-compliant. Take advantage of our bespoke offerings for party trips and incentive travel to get the most out of your budget while boosting your staff's motivation.
Use the checklist: How to succeed in flat-rate taxation step by step
To ensure the correct flat-rate taxation of company outings, it is advisable to use a checklist. This checklist should include all important steps from planning and execution to billing and documentation. Below is an overview of the key points to consider for flat-rate taxation:
Planning and Execution
Set a budget: Establish a realistic budget, taking the 110-euro limit into account.
Create a participant list: Compile a participant list and record actual attendance.
Collect receipts: Gather all receipts and document the expenses.
Billing
Calculate costs per participant: Calculate the costs per participant, including any companions.
Calculate flat-rate tax: Calculate the flat-rate tax, considering the solidarity surcharge and church tax.
Observe deadlines: Pay attention to the deadlines for flat-rate taxation.
Documentation
Keep participant list: Retain the participant list.
Archive receipts: Archive all receipts.
Document billing: Document the billing process.
At GoTuro, we support you in implementing this checklist and help you make the most of the flat-rate taxation. Our experts are happy to advise you on all tax-related aspects and assist you in ensuring your company events are tax compliant. Take advantage of our tailored offers for party trips and incentive trips to get the most out of your budget while also boosting your employees' motivation.
Secure tax advantages: How to make the most of flat-rate taxation
More useful links
On the Haufe website, you will find detailed information about the flat-rate taxation of company events.
The IHK Nordschwarzwald offers an overview of the tax treatment of company events, helping you keep wage costs under control.
Lexware explains how to tax-deduct a company event, including important documentation tips.
The Bundessozialgericht emphasizes the importance of timely taxation of company events to avoid additional social security contributions.
PKF Fasselt provides an article on the tax treatment of company events, which requires ongoing attention.
FAQ
What exactly does the flat-rate taxation for company outings mean?
The flat-rate taxation means that the employer taxes the monetary benefit from the company outing at a flat rate of 25%. This exempts the employee from individual taxation and leads to freedom from social security contributions.
When does the 110-euro limit take effect?
The 110-euro limit is an allowance for income tax, but a threshold for VAT. This means: Up to 110 euros per employee and event, no taxes apply. If this limit is exceeded, the flat-rate taxation can be applied. For VAT: if the limit is exceeded, the input tax deduction ceases entirely.
What happens if the costs per employee exceed 110 euros?
If the costs per employee exceed the 110-euro limit, the employer can pay the 25% flat-rate tax plus solidarity surcharge and, if applicable, church tax. This removes the social security contributions.
How many company outings per year can be taxed at a flat rate?
In general, a maximum of two company outings per calendar year can be carried out tax-free (while adhering to the 110-euro limit). For additional events, the flat-rate taxation can be used.
Which costs fall under the 110-euro limit?
The 110-euro limit applies to all costs incurred in connection with the company outing, including food, drinks, accommodation, travel expenses, music, and gifts up to a value of 60 euros.
Do all employees need to be invited to a company outing for flat-rate taxation to apply?
No, according to a ruling by the Federal Fiscal Court (BFH) on 27 March 2024 (Ref.: VI R 5/22), flat-rate taxation is also permissible if not all employees are invited.
What should be considered regarding the documentation of company outings?
It's important to keep a list of participants and document all costs with receipts. Costs must be calculated per participant, including accompanying persons.
What happens if the flat-rate taxation is not carried out on time?
If the flat-rate taxation is not carried out promptly (ideally with the next payroll), social security contributions can be subsequently claimed. The deadline for flat-rate taxation ends on 28 February of the following year.
