Material benefits to the staff are generally subject to value-added tax and do not entitle the deduction of input tax. For company events, including Christmas parties, it is assumed that there is a business-related reason if the gross expenses do not exceed 110 euros per participant. According to a recent decision by the Federal Fiscal Court, all costs must be taken into account when examining the threshold. The court rejected the deduction of input tax in a specific case because it considered the event as a single service. Companies must consider all costs when deciding on the input tax deduction for company events. It is planned to raise the tax-exempt amount to 150 euros from 2024, which will likely also lead to an increase in the threshold for the input tax deduction.
Source: umsatz-steuer-beratung.de
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
