Business trip refers to a trip undertaken for professional reasons by a business owner, freelancer or employee away from the regular place of business or usual workplace. It is intended to fulfill business duties (client visits, trade fairs, training, negotiations) and triggers special travel expense rules under tax and commercial law.
Typical components of a business trip
For accounting and expense reporting purposes the following cost categories are typically distinguished:
- Travel costs (train or flight tickets, mileage allowance when using a private car)
- Accommodation costs (hotel invoices, guesthouses)
- Per diem meal allowance (flat-rate allowances for meals when working away from home)
- Incidentals (parking fees, taxi fares, tolls, baggage fees)
Different documentation requirements and tax treatments apply to each of these categories (e.g. input VAT deduction under the German VAT Act (UStG) for VAT-eligible businesses).
Tax treatment and accounting recognition
Business trips are generally deductible as business expenses under the German Income Tax Act (EStG). For entrepreneurs and freelancers this directly affects profit determination; for employees the tax relief is often provided via payroll tax-free reimbursements by the employer.
Per diem meal allowance
The flat-rate per diems for meal allowances are set by law and administrative guidance. As of 2024 the standard rates within Germany are:
- more than 8 hours away: €14
- 24 hours (full calendar day): €28
For foreign travel there are country-specific rates which are updated regularly. Per diem meal allowances are relevant for tax-free treatment and do not require individual receipts.
Input VAT and VAT
For businesses entitled to deduct input VAT, the VAT portion on hotel or restaurant invoices is deductible as input VAT under the UStG. Note: input VAT deduction does not apply to VAT-exempt businesses (e.g. small businesses under § 19 UStG).
Evidence, documentation and formal requirements
Careful documentation is essential to substantiate business expenses in the event of an audit. The following information is recommended:
- Purpose of the trip (specific reason), date and route
- Duration of the trip and times away (to determine applicable per diems)
- Participants (for joint travel with third parties)
- Receipts for travel, accommodation and other expenses (original invoices)
- Mileage log when using a private car (date, purpose, km)
Missing or incomplete receipts can lead to reductions in recognition by the tax office or during an audit.
Practical examples and booking cases
Practical example 1 – Freelancer travels for two days with one overnight stay:
- Train ticket: €120 (incl. 19% VAT)
- Hotel: €120 (incl. 7% VAT)
- Per diem meal allowance: €14 (first day) + €14 (last day) = €28 (tax-free, flat rate)
Booking concept (simplified):
| Receipt | Net | VAT | Gross/Payment |
|---|---|---|---|
| Train | €100.84 | €19.16 | €120 |
| Hotel | €112.15 | €7.85 | €120 |
| Per diem meal allowance | €28.00 | – | €28.00 |
Account example (Debit/Credit, simplified):
- Travel expenses (business) €241.00 (net amount + allowance)
- Input VAT €27.01
- Bank/Cash €295.01 (total gross amount)
Practical example 2 – employee reimbursement:
- The employer reimburses travel expenses. As long as the per diems and receipts meet the requirements, the reimbursement is payroll tax-free and is not treated as employment income. Documentation and a travel expense claim are recommended.
Note: Legal values (allowances, VAT rates) and administrative guidance change. Always check the current guidance from the Federal Ministry of Finance, the wage tax guidelines and the provisions of the UStG/EStG for exact amounts and special rules (e.g. foreign travel tables, mileage rates).