Non-deductible business expenses

These are expenses that, according to their character, are business expenses, and yet must not reduce the profit. The reason for this is the proximity of these operating expenses to the non-deductible costs of private living (Section 12 No. 1 EStG). In order to avoid delimitation problems, § 4 V EStG completely denies the deduction of operating expenses for certain expenses.
Expenses for hunting, sailing and motor yachts, fishing, court fines, interest on evaded taxes, guest houses outside the place of operation may not be deducted. A limited deduction is granted for gifts (as long as they do not exceed € 35 per recipient per year), expenses for entertainment, additional expenses for meals, trips between business premises and home, additional expenses for double housekeeping, expenses for a domestic office.

In the KStG, the expenses listed in Section 10 KStG are counted as non-deductible operating expenses. Half of the remuneration of the Supervisory Board, fines and certain taxes are not deductible.

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