Advertising expenses are fully tax deductible for self-employed and small businesses (SMBs) in Germany. These costs are recognized as essential operational expenses intended to generate business income, and thus directly reduce taxable profits.

Common deductible advertising expenses include:

• Online advertising: Google Ads, Facebook Ads, Instagram Ads, LinkedIn Ads, TikTok Ads, and other social media marketing.

• Traditional advertising: Print media ads, flyers, billboards, radio spots, and television commercials.

• Digital marketing services: SEO (search engine optimization), SEM (search engine marketing), email marketing campaigns, and professional agency fees.

To claim advertising expenses, self-employed should maintain clear records, including invoices, receipts, and payment confirmations. These deductions are declared annually through VAT declarations and the profit-and-loss statement (Einnahmen-Überschuss-Rechnung, EÜR).

Google Ads and Meta Ads invoices

Pay attention to the invoices coming from Google and Meta. Likely, they will apply the Reverse Charge mechanism, meaning that they won't include VAT. For a VAT-liable freelancer it's not a problem, just a slightly more complex Umsatzsteuervoranmeldung.

Unfortunately, Kleinunternehmer receiving these invoices get in a VAT trouble. They must complete a Umsatzsteuervoranmeldung and pay the missing VAT on these invoices to Finanzamt.