Entertainment Expenses for Self-Employed in Germany 2026: 70% Rule, Receipts and EÜR Booking

You take a client out for lunch, meet a potential customer at a café, or negotiate contract terms over dinner: these business entertainment expenses (Bewirtungskosten) are deductible for German freelancers and self-employed, but only if you follow the tax office's rules. Here's the 70% rule, the mandatory entertainment receipt requirements, and the most common mistakes that cost real money.

In short

• Business entertainment (clients, prospects, partners) is only 70% deductible as a business expense; 30% is lost for tax purposes (§ 4 (5) No. 2 EStG).
• If you host only your own employees, the cost is 100% deductible.
• Input VAT is always 100% deductible, even on the non-deductible 30% share (§ 15 UStG). As a small business owner (Kleinunternehmer) there is no input VAT deduction.
• The deduction stands or falls with the entertainment receipt: specific reason, all participants, date, amount, signature.
• Above €250 gross, the restaurant invoice must show your name and address; below that a small-amount invoice is enough.
• Since the BMF letter of 19 November 2025, a fully digital proof (e-invoice + digital self-receipt) is explicitly allowed.
• Retention period: since 2025 it is 8 years (§ 147 (3) AO), down from ten.

What counts as entertainment expenses?

Entertainment expenses cover food, drinks and related costs (tips, coatroom fees) you pay when hosting people for a business reason, governed by § 4 (5) No. 2 of the German Income Tax Act (EStG). Typical examples:

• Business lunches or dinners with clients, partners or suppliers
• Networking events where you host food and drinks
• Contract negotiations at a restaurant
• Hospitality for business partners during a workshop or seminar

Purely private invitations and birthday parties don't count. If the occasion is predominantly private, even with a couple of clients at the table, you lose the deduction.

It matters where you draw the line against similar costs that follow different rules:

The 70% rule: How much can you deduct?

For business meals with external people (clients, prospects, partners), Germany applies a hard cap: only 70% of the net cost is deductible as a business expense. The remaining 30% counts as non-deductible private living costs. The lawmaker assumes a flat private-enjoyment share, no matter how clearly business-related the meal was.

Employee-only meals are different: if you host only your own employees (team lunch, internal strategy dinner), the 70% rule does not apply; the cost is 100% deductible. Small refreshments like coffee, water or cookies during a client meeting at your office are not entertainment expenses either. They count as ordinary business expenses with no 30% cut.

Worked example: what's left after the split

You pay €119 gross for a business dinner: €100 net plus €19 VAT. Here is how the amount splits for tax:

Net, the meal only costs you €30 (the non-deductible share), because €70 reduces your profit and you reclaim €19 as input VAT.

Input VAT: 100% deductible with a proper receipt

Unlike the 70% income tax cap, you can deduct the full input VAT (100%), including on the non-deductible 30% portion (§ 15 UStG). You need a proper invoice: for amounts over €250 gross, the receipt must include all standard invoice requirements (your name and address among them). Ask the restaurant to print or add them to the receipt.

If you're a small business owner (Kleinunternehmer), there's no input VAT deduction, but you can still book 70% of the gross amount as a business expense. On €119 that makes €83.30 deductible (70% of €119).

Entertainment receipt: 2026 requirements

The entertainment receipt (Bewirtungsbeleg) is mandatory and, since 2023, must be generated electronically and sequentially by the restaurant's cash register (per the BMF letter of 30 June 2021). Handwritten or after-the-fact printouts are no longer accepted.

The front side (printed by the restaurant) must include:

• Name and address of the restaurant
• Date of the entertainment (machine-printed)
• Itemized food and drinks (not just "food and drinks")
• Tax number or VAT ID of the restaurant
• Sequential receipt number from the cash register
• Gross amount, net amount and VAT shown separately

On the back side you add by hand (or digitally in the self-receipt):

• Specific business reason (e.g. "contract negotiation Project XY", not "business meal")
• Names of all participants, including yourself
• Tip amount, listed separately
• Date and your signature

"Business meal with client" is not enough. You must show a concrete link to your business activity.

Digital proof: the 2025 BMF letter

With the e-invoicing mandate for domestic B2B transactions since 1 January 2025, the Federal Ministry of Finance updated the proof rules. The BMF letter of 19 November 2025 supplements the 2021 letter and clarifies: the proof may be entirely digital.

• The entertainment invoice may be an e-invoice or a digitized receipt.
• The self-receipt (with reason and participants) may be created digitally or digitized, authorized by electronic approval and stored unalterably.
• The digital self-receipt and the digital invoice must be digitally linked, e.g. via a unique index or a document management system.

The principle is "once digital, always digital": if you capture the receipt digitally, you must keep it digital and audit-proof throughout; printing it out later does not replace an orderly digital archive.

Common mistakes to avoid

• Cash payment without an entertainment receipt: the deduction is fully denied.
• Forgotten participant names: even if you dined alone with one client, both names must be on the receipt.
• Vague reason: "lunch" or "client meeting" with no concrete business context gets rejected.
• Family members listed as "business partners": auditors recognize this immediately. Keep private and business strictly separate.
• Forgetting the tip: tips are part of entertainment costs and also 70% deductible, but only if documented separately.
• Only a photo, original thrown away: under the digital rule "once digital, always digital" applies; keep a clean, linked archive.

Booking entertainment expenses in the EÜR

In the income surplus calculation (EÜR), you typically split entertainment costs across two accounts: in SKR03 it's account 4650 (deductible 70%) and 4654 (non-deductible 30%); in SKR04 it's 6640 and 6644. Input VAT is booked in full.

If you capture entertainment receipts with Norman's AI bookkeeping, the system automatically splits the amount, books the input VAT correctly and files the receipt in a GoBD-compliant way; you just snap a photo with your phone.

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Entertainment vs. travel expenses

Eating alone at a restaurant while traveling for a client visit is not an entertainment expense; it falls under the meal per diem (Verpflegungspauschale) for business travel (€14 for more than 8 hours away, €28 for a full travel day). Only when you actually invite a client to dinner does it become entertainment with the 70% rule. The difference matters: you claim the per diem as a daily flat rate with no receipt, while entertainment needs a complete entertainment receipt.

Entertainment expenses as GmbH or UG

For a GmbH the 70% rule applies the same way, but with different accounts and stricter director liability requirements. Read more in GmbH entertainment expenses.

Frequently asked questions (FAQ)

What percentage of entertainment expenses is deductible? 70% of the net cost as a business expense for meals with external partners. If you host only your own employees, it's 100%. Input VAT is 100% deductible in both cases.

Can I deduct entertainment expenses without a receipt? No. Without a proper, machine-generated entertainment receipt showing the reason and participants, the tax office denies the deduction in full, even for cash payments.

Does the tip count as an entertainment expense? Yes, the tip is part of entertainment costs and also 70% deductible. Condition: list it separately on the receipt, ideally acknowledged by the restaurant.

How long must I keep entertainment receipts? As accounting receipts, since 2025 it's eight years (§ 147 (3) AO), down from ten.

Can I prove entertainment expenses entirely digitally? Yes. Since the BMF letter of 19 November 2025, an e-invoice and a digital self-receipt are allowed, as long as both are archived digitally and unalterably linked.

Bottom line

Entertainment expenses are one of the most valuable business expense categories for German freelancers, as long as you document them properly. The 70% rule and a complete, machine-generated entertainment receipt are non-negotiable. Capturing receipts in an app saves you 5–10 minutes per business meal and removes audit risk. Try Norman for free and let AI handle the booking.