Scope of input tax deduction for company events

There is no allowance for input tax deduction from the costs of a company event, but at most an exemption limit of EUR 110 per participant.

Input tax deduction is excluded for services for the private use of employees. An exception to this rule only applies to favors in favor of the employee, which may also include benefits from a company event. While the exemption limit of EUR 110 for wage tax was converted into an allowance from 2015, an exemption limit of EUR 110 continues to apply to gifts for VAT purposes. This was clarified by the Federal Fiscal Court in a dispute regarding the input tax deduction from expenses for a company event. This means that if the costs per participant exceed EUR 110, no pro rata input tax deduction is possible, as VAT law - unlike income tax law - does not allow any allowances due to European legal requirements.

At the same time, the Federal Fiscal Court has ruled that the costs of the external framework of a business event must be included when checking the exemption limit if it is a uniform supply. In addition, the total costs for checking the input tax deduction must be allocated to the participants present at the business event and not to the registered participants, which makes a possible input tax deduction even more difficult.