How much you deduct
If you take customers, clients or other business partners out for a business reason, 70% of the cost is deductible as a business expense. The other 30% does not reduce your profit (section 4 (5) sentence 1 no. 2 EStG). The cost has to be reasonable by common standards, and you have to prove the amount and the business reason.
An example: lunch with a customer costs €84.00 net. €58.80 of that is a business expense, €25.20 is not. You still deduct the input tax in full, more on that below.
The cut applies to you as well: your own meal is part of the entertainment and also counts at 70%.
What the business meal record contains
You prove the meal in writing with details of:
- the place
- the day
- the participants, by name, including you
- the occasion, as concrete as you can: “website relaunch planning” rather than “business lunch”
- the amount spent
That is what section 4 (5) sentence 1 no. 2 sentence 2 EStG asks for. If the meal takes place in a restaurant, the occasion and the participants are enough, and you attach the restaurant’s bill. On paper this is the classic form on the back of the bill or a separate sheet, called a Bewirtungsbeleg. You may also create the record digitally and link it to the digital bill. What matters is that you write it down promptly, not at year end.
What the restaurant bill must show
For meals from 2025 on, the BMF letter of 19 November 2025 applies. It replaces the letter of 30 June 2021, which still applies to earlier meals. The main points:
| Bill amount | What the bill must show |
|---|---|
| up to €250 gross | name and address of the restaurant, date of issue, day of the meal, dishes and drinks with prices, VAT rate and gross amount |
| above €250 gross | additionally the restaurant’s tax number or VAT ID, invoice number, net amount and VAT, and your name as the host |
The €250 limit is that of the small-amount invoice under section 33 UStDV. The restaurant may also add your name to a larger bill by hand.
If the restaurant uses an electronic till, the tax authorities only accept machine-printed bills recorded through the certified technical security device (TSE). You recognize them by a transaction number and the till’s serial number, for example. A handwritten replacement is not enough in that case. Neither is a single line that just says “food and drinks”: the bill has to show what was ordered.
Since 1 January 2026, restaurant food is permanently taxed at 7% VAT (section 12 (2) no. 15 UStG), while drinks stay at 19%. A bill therefore usually shows two VAT rates.
Tips
A tip is part of the entertainment cost and so also counts at 70%. It contains no VAT, so there is no input tax on it either. The simplest proof is a tip shown on the machine-printed bill. If that is not possible, ask the server to sign for the tip on the bill. Without such proof you carry the risk that the tax office does not accept it.
Input tax and separate records
You deduct the input tax from a proper restaurant invoice in full, not just 70% of it (section 15 (1a) sentence 2 UStG). This applies only if the cost is reasonable and proven. Under the small business rule you deduct no input tax, and 70% of the gross amount counts.
You record entertainment costs individually and separately from your other business expenses (section 4 (7) EStG). This also applies to the EÜR profit statement. Without separate records the costs are not deductible at all. A separate account or category for entertainment meets the requirement.
When the rule does not apply
- Only your own staff: If you only host your own team, for example at a meeting, that is not entertainment for a business reason, and the 70% cut does not apply.
- You eat alone while traveling: That is not entertainment. The meal allowances apply instead, see the guide on travel expenses.
- A gift instead of a meal: If you give a customer a restaurant gift card and do not go yourself, it is a gift. The rules in the guide on client gifts apply.
This guide explains the rules in general and is not tax advice.
Common questions
What if I lost the restaurant bill?
Ask the restaurant for a copy from the till. A replacement you write yourself is not enough when the restaurant uses an electronic till. Without the bill you lack the proof for the deduction.
How long do I keep business meal receipts?
Since the Fourth Bureaucracy Relief Act, you keep receipts for eight years (section 147 (3) AO). That covers the restaurant bill and your own record. More in the guide on retention periods.
Do I really have to write down every participant?
Yes, by name and including yourself. The law asks for details of the participants, not just their number. Write the names down on the same day, so you don’t have to guess later.
Does inviting someone for coffee count too?
Yes, if it is business entertainment in a café. The same details and the same 70% apply. For small amounts a small-amount invoice up to €250 is enough.