Business meals are of immense importance for maintaining business relationships with customers, business partners and suppliers. This is where contacts are established, orders negotiated, conditions negotiated and projects planned. All these negotiations take place in a pleasant atmosphere over a fine business lunch in a good restaurant. Which restaurant is chosen for the business lunch depends on the occasion and the partners. It depends on who the business lunch is with. The cost of the business lunch is tax deductible. However, a prerequisite for this is a receipt for entertainment . It must be filled out correctly and completely in order for it to be accepted by the tax office. Up to 70 percent of the entertainment costs can be deducted from taxes.
Important when it comes to hospitality
At a business lunch, it is not just a matter of correctly completing the entertainment receipt. It is also important that the costs incurred for the entertainment are reasonable in relation to the occasion. Only then can they be claimed for tax purposes. If the costs are unreasonable for the event, tax audits can lead to problems. The tax office checks that the cost of business meals is correctly charged. The expenses for the entertainment are settled with the entertainment receipt.
According to WHOLEVEHICLES.COM, the reason for the business lunch must be correctly stated on the entertainment receipt. It must be clearly indicated whether customers or employees were entertained. When entertaining customers, at least one person from another company must be present at the business lunch, while only employees from your own company may be present for an employee catering. The distinction between customer and employee entertainment is important in order to know how high the costs can be for tax purposes.
In the case of staff entertainment, 100 percent of the costs can be deducted from tax; in the case of customer entertainment, only 70 percent of the costs are tax-deductible. The prerequisite for tax deductibility is that the catering takes place in a restaurant. When entertaining employees at the company’s home, the entrepreneur bears all the costs himself.
How must a hospitality receipt be filled out correctly?
The tax office only recognizes the entertainment receipt if it is properly filled out. It is not enough to just show a receipt from the restaurant to the tax office. What does a hospitality receipt look like? A hospitality receipt is often placed on the restaurant’s bill. The reverse side is used for this, on which there is a corresponding form. If the invoice does not have such a form on the back, a separate hospitality receipt can be filled out. The restaurant’s bill is attached to this. Forms for hospitality receipts in various formats can be purchased in online shops or in stationery stores. Templates of a hospitality receipt can also be found online, which can be downloaded free of charge. Belong on every hospitality receipt
- Place of entertainment
- Date of entertainment
- host person
- Name and company of the hosted people
- Occasion of the hospitality
- costs incurred for hospitality
The entertainment receipt must be signed by the host. Legally, a distinction is made between normal bills with an amount of more than 150 euros and small amount bills with less than 150 euros.
Hospitality receipt: Required information from the restaurant
Most of the time, the operators of a restaurant know what information is required for a complete hospitality receipt. If the amount exceeds 150 euros, the restaurant operator must write the name of the host on the receipt. This is not necessary for small-value invoices . If the restaurant operator forgets this information, the host must remind him of it. The restaurant’s information should be on the hospitality receipt
- Name and address of the restaurant
- Entertainment date
- Information about the food and drinks consumed
- Prices for the individual dishes and drinks.
If the invoice amount of the entertainment receipt including sales tax is above the limit of EUR 150, the name and address of the host, recipient of the invoice, tax number of the restaurant and invoice number must be stated on the entertainment receipt. Regardless of the invoice amount, every hospitality receipt includes:
- Net amount
- Sales tax rate
- Total amount.
In terms of the mandatory information, it does not differ fundamentally from an “ordinary” invoice .
Settle hospitality receipts correctly
How are entertainment expenses booked? In most cases, entertainment receipts are billed to the company’s cash register. To do this, they must be recorded in the cash book and given a serial number. The number, date, net amount and sales tax are recorded in the cash book . The hospitality receipts are kept; for this they must be filed with the other receipts. As with all business receipts, entertainment receipts are retained for ten years. Digital storage is also easily possible. It just has to be ensured that the receipt is always legible within the retention period.