Deducting Catering Costs: What Companies Need to Know in 2026
1. Two questions that get mixed up
With catering in a company two questions run side by side. The first concerns the firm and its deduction as a business expense. The second concerns the team and the benefit in kind on the payslip.
This article settles the first one. It covers the deduction from profit and the input VAT on the invoice. The payroll side sits in our article on tax-free benefits for the team, with the limits per person and month.
An example makes the split clear. A firm pays 900 € for a buffet at the Christmas party with 10 people. As a business expense the 900 € are fully deductible. For the team 110 € gross per head stay free, here 90 € per person.
Keeping both apart saves trouble in an audit. The deduction from profit hangs on the receipt and the reason. The benefit in kind hangs on the person and the cost per head. This article does not replace tax advice, and the single case belongs to your tax adviser or payroll team.
2. The cases at a glance
Four cases cover nearly all food in a firm. The first is a working lunch in the office, so pizza during a long session. The second is hospitality for business partners, such as a lunch with clients. The third is the company party, the fourth the running catering for the team.
The working lunch is the simplest case. If only your own team sits at the table, the cost is fully deductible. Under 60 € per person the meal counts as a small gift and stays free of tax for the team.
Hospitality for business partners follows its own rules. As soon as one person from outside sits at the table, the deduction drops to 70 percent. The other 30 percent stay a cost with no effect on tax. The input VAT is not touched by this.
The company party is the third case, so summer party, Christmas party or anniversary. As a business expense the cost is fully deductible. For the team the allowance of 110 € gross per person applies, for up to two parties per year. What that means for planning is shown in our article on the budget for company events.
Running catering for the team is the fourth case. Lunch in the office, fruit and coffee go fully into business expenses. For the team the taxable value of 4.57 € per lunch then applies. The models sit in our guide to employee catering, the daily sums in our article on the meal allowance of 7.67 €.
3. How much is deductible
The deductible share hangs on the circle of people at the table. Only your own team means a full deduction. If one person from outside joins, the deduction drops to 70 percent.
Figure 1: Deductible share of the cost as a business expense, in percent. Hospitality for business partners 70 percent, working lunch in the office 100 percent, company party 100 percent, running catering for the team 100 percent. The input VAT stays deductible at 100 percent in all four cases.
A short sum makes the 70 percent tangible. An invoice of 238 € gross holds 200 € net and 38 € VAT. The firm claims the 38 € back in full as input VAT. Of the 200 € net, 140 € lower the profit and 60 € have no effect.
The input VAT is the point many miss. It does not hang on the deduction of 70 percent, it hangs on a proper invoice. With every required detail on the invoice, the full VAT comes back.
For the other three cases it is simpler. Working lunch, company party and running catering lower the profit by 100 percent. How the cost splits by format is shown in our overview of catering costs for companies.
Plan hospitality with a clean receipt
- Invoice made out to the firm, with every required detail
- Items listed one by one, so the 70 percent deduction fits
- Net price per head shown clearly
- One receipt per date for accounting
4. The hospitality receipt
Here the law asks for a separate record. The invoice alone is not enough. Six details are needed, and they have to reach the receipt promptly.
Figure 2: From the meal to the posting in four steps. Step 1 is the hospitality itself, and the reason is noted the same day. Step 2 is the invoice from the venue, machine written and, from 250 € gross, with the name of the firm. Step 3 holds the six details on the receipt: reason, guests, place, date, amount and signature. Step 4 is the posting with a deduction of 70 percent and full input VAT.
The reason has to be concrete. A word like business lunch is not enough. An audit wants to see the topic, such as the quote for the summer party. One sentence is enough.
The guests belong on the receipt by name, your own people too. An entry like five people from sales is not enough. For groups from 15 people the number plus the name of the group is enough. The host signs in person.
Place, date and amount are usually already on the invoice. A tip belongs there too and is receipted on the invoice. From 250 € gross the name of the firm has to sit on it. Below that an invoice without a recipient is enough.
5. The most common mistakes
The first mistake is a missing reason. An empty field on the receipt costs the 70 percent, because the business purpose is not documented. The input VAT survives here, as long as the invoice is clean.
The second mistake is guests without names. A number alone does not satisfy an audit. The list needs first and last names. Without it the audit drops the deduction for the whole date.
The third mistake is a tip without a record. 20 € left in cash on the table do not exist for tax. Have the amount receipted on the invoice, then it runs along with the 70 percent.
The fourth mistake concerns the company party. If the cost per head goes over 110 € gross, the part above becomes taxable for the team. At 130 € per person that is 20 €, taxed on the payslip or at a flat 25 percent. As a business expense the full 130 € stay deductible.
The fifth mistake is an invoice made out to a private person. With the name of a person instead of the firm, the input VAT falls away. From 250 € gross that is a hard exclusion. Check the recipient before paying, as our checklist for quotes describes.
6. Setting it up cleanly and asking for quotes
Three rules keep the effort small. First: one fixed place for receipts, digital and per date. Second: the reason is noted the same day. Third: invoices always run to the firm, never to a person.
A clear invoice helps at the buying stage. It should show date, place, items and the number of people. For a company party every item belongs in one quote, so food, drinks, staff and technology.
For running catering one collective invoice per month is enough, if the delivery days are listed on it. Hospitality with business partners needs its own receipt per date. Formats for both sit in our business catering.
The rest is a matter of routine. Once the six details sit in a template, the receipt takes two minutes. For the single case your tax adviser stays in charge, above all with mixed groups.
A company party within the 110 € limit
- Quote with every item gross per person
- Formats for up to two parties per year
- Number of guests documented in the quote
Conclusion
For the firm the sum is short. Working lunch, company party and running catering lower the profit by 100 percent. For hospitality with business partners it is 70 percent, and the input VAT stays fully deductible.
For the team separate limits apply: 110 € gross per person for up to two parties per year, 60 € for a meal on a special occasion and 4.57 € as the taxable value per lunch. Whoever keeps the six details on the receipt holds the deduction of 70 percent after an audit as well.
FAQ
How much catering can a company deduct?
Working lunches in the office, company parties and the running catering for the team are 100 percent deductible as a business expense. For hospitality with business partners it is 70 percent of the cost. The input VAT stays fully deductible in both cases.
What belongs on a hospitality receipt?
Six details: reason, guests by name, place, date, amount of the cost and the signature of the host. Place, date and amount are usually already on the invoice.
Why are only 70 percent of hospitality deductible?
The law assumes a private share of 30 percent for hospitality with business partners. Those 30 percent do not lower the profit. On an invoice of 200 € net that is 140 € of deduction and 60 € with no effect.
Is input VAT on hospitality fully deductible?
Yes, the VAT on the invoice comes back at 100 percent, even though only 70 percent lower the profit. The condition is an invoice with every required detail. From 250 € gross the name of the firm has to sit on it.
How is a company party posted?
The cost is fully deductible as a business expense. For the team 110 € gross per person stay free, for up to two events per year. The part above belongs on the payslip or is taxed at a flat 25 percent.
Does coffee in the office count as deductible catering?
Drinks and small snacks in the building go fully into business expenses and stay free of tax for the team. For a full meal the taxable value of 4.57 € applies. From 60 € per meal the small gift status ends.
