What are the effects of the new regulation of input tax on travel services?
December 14, 2022 | 30,00 EUR | answered by Phillip Buchner
Dear tax advisor,
I am reaching out to you because I am uncertain about the impact that the new regulation regarding input tax on travel services could have on my company. So far, I have been claiming input tax for travel expenses such as hotel stays, meals, or rental cars in order to deduct the incurred costs for tax purposes. However, I have heard that there are changes in this area and I am concerned that this could negatively affect my tax options.
Currently, I work as a freelance event manager and regularly plan business trips both domestically and internationally. These trips are essential for my work and constitute a significant part of my business expenses. Therefore, it is important for me to understand how the new input tax regulation will affect my tax situation.
My main concerns are whether I can continue to claim input tax for travel services and to what extent this will be possible. Additionally, I wonder if there are specific requirements or new regulations that I need to consider in order to avoid any tax disadvantages.
Could you please explain to me the specific impact that the new input tax regulation on travel services will have on my company and what possible solutions there are to continue benefiting from tax advantages?
Thank you in advance for your support.
Kind regards,
Elvira Klein
Dear Mrs. Klein,
Thank you for your inquiry regarding the new regulations concerning input tax on travel services and their potential impact on your company in the field of event management. I understand your concerns and will explain in detail below what has changed in this area and how you can continue to benefit from tax advantages.
The new regulation on input tax on travel services mainly affects the ability to deduct input tax on travel expenses such as hotel accommodations, meals, and rental cars. Previously, entrepreneurs could claim input tax for such costs to reduce their tax burden. However, with the new regulation, it is necessary to clearly distinguish between private and business travel expenses.
For business travel expenses, you can still claim input tax, provided they are clearly separated from your private trips. This means that you must prove that the travel expenses were actually work-related and not primarily for personal interests. It is important to keep all receipts and documents carefully to be able to prove in case of a tax audit that they are business travel expenses.
To continue benefiting from tax advantages, I recommend keeping a precise and transparent travel expense management. This involves documenting all business trips accurately, clearly separating business and private costs, and keeping all relevant receipts. Additionally, ensure that your travel expenses are reasonable and traceable to prevent any potential tax disadvantages.
It is also advisable to regularly stay informed about current tax regulations and changes to always be up to date. As a tax advisor, I am available to assist you with any questions regarding input tax and travel expenses and provide you with further tips and solutions.
I hope that my explanations have been helpful and reassuring. If you have any further questions or need assistance, please do not hesitate to contact me.
Best regards,
Phillip Buchner
