Specifying consumer goods as business expenses explained
Deducting a business dinner from your profit. When you make expenses to benefit your business you can specify these costs as business expenses in your tax declaration. This also includes business dinners and lunches.
What are business costs?
It depends on the type of activities involved in your business. The tax authorities are not allowed to determine what’s necessary for your business and what’s not. So if you as an entrepreneur think it’s necessary to make these expenses and you can substantiate them from a business perspective, then you are allowed to specify these expenses as business expenses.
• Suppose you have dinner in a fancy gourmet restaurant and you order every champagne on the menu? Are these business expenses? Well, if you’re making a movie and this is your way to persuade an investor to invest, then yes. Business.
• Having a pizza in Toscany? If you’re writing travel or foodblogs, yes. Business.
• Getting a quick dinner at a McDrive, business expenses? If you’re on your way to a business meeting, then yes. Business.
• You just moved your office to a really cool location and you’re throwing an opening party for all your business associates? Business.
VAT is not deductible
Unfortunately you can’t deduct the VAT of your expenses for consumer goods. So those receipts will not be of any use for your quarterly VAT declaration. Still you need to enter the receipts in your administration. Because they CAN be used for your income tax declaration at the end of the year.
Don’t forget to leave a tip
Not just the food and drinks can be submitted as expenses, the tip you leave can be submitted as well. So make sure you pay your tips with your bank card and keep your receipts. This way you can demonstrate you made these expenses.
Because everyone needs to eat and drink, these costs aren’t fully deductible. The tax authorities have two options for you to compensate for the private part of the expenses.
1. The first € 4.600 is not deductible. Everything above this figure is fully deductible.
2. The costs are deductible for 80% (73.5% in VPB, vennootschapsbelasting, corporate tax). Which means you have to add 20% of the expenses for consumer goods to your income.