The German Federal Fiscal Court (BFH) has clarified the input tax deduction for expenses related to a company event through its online publication of Decision No. VR 16/21 on July 27. The case revolved around a taxpayer’s attempt to claim an input tax deduction for expenses incurred during a company Christmas party. However, the tax agency rejected the deduction, arguing that the event was primarily for private purposes and the per-employee expenses exceeded the VAT exemption limit of 110 euros for such events.
The Federal Finance Court upheld this decision, emphasizing three key points:
Source: bundesfinanzhof.de