When are food and drink expenses deductible?
Assess two questions separately: does the expense reduce your taxable profit, and may you reclaim the VAT? The business purpose, location and recipient determine the treatment.
| Situation | Income Tax | VAT |
|---|---|---|
| Ordinary lunch for yourself | Private, no profit deduction | Non-deductible |
| Business dinner with a client in a restaurant | Mixed business expenses | Not deductible for the end user |
| Client lunch at the office | Mixed business expenses | Depending on the conditions of provision and deduction |
| Staff meals | Separate assessment of costs and pay | Own arrangement; see below |
For income tax purposes: 80% or a threshold
Business meals are generally classified as mixed expenses. For income tax purposes in 2026, you can choose either the 80% deduction or a deduction of the amount exceeding €5,700. This choice applies to the combined annual total of expenses under this scheme, not per receipt or solely for dinners. See the calculation at limited deductible expenses.
For sales tax (VAT)
Food and drink in hospitality or catering
Do you consume food and drink in a catering establishment, or does a caterer provide it in a room specially equipped for that purpose? Then, as the end user, you cannot deduct the VAT. Even a purely business conversation does not change that. Different rules may apply when passing on costs to a third party with VAT. View the VAT rules for hospitality expenses.
Food and drink in the office
An office as a location does not automatically confer the right to VAT deduction. Outside the mentioned hospitality and catering situations, the rules for provisions to business associates apply to gifts and corporate gifts. A separate calculation applies to staff. Your own consumptions do not give rise to VAT deduction.
Food and drink on own consumption
An ordinary personal lunch is private. But meals during a stay elsewhere required by business interests can be mixed business expenses for income tax purposes. The Supreme Court confirmed this on 18 October 2024. This does not make every working day lunch a business expense: record the business stay and expenses and apply the deduction restriction. You assess the VAT separately.
Food and drink at business meals (representation expenses)
A meal with a business purpose can be classified under representation expenses . The following hypothetical examples use the 80% method for income tax.
Example 1: corporate restaurant bill
You pay €109 (including VAT) for a business meal with a client, with no pass-through charges. The VAT is not deductible. The cost is €109 and the profit deduction is 80% × €109 = €87,20.
Example 2: client lunch in the office
You pay €109 including 9% VAT for a business lunch for clients at the office, outside a room specially equipped for catering. Only if you meet all VAT deduction conditions can you deduct €109 × 9/109 = €9 in VAT . The costs are then €100; you deduct 80% = €80 off your profit. If the right to VAT deduction is missing, the non-deductible VAT belongs with the costs. You split out private use.
Deducting food and drink costs for staff
Staff meals require a separate assessment. For benefits provided outside the excluded hospitality and catering situations, calculate the VAT benefit as follows: purchase price excluding VAT plus 25%, minus any reimbursements received including VAT. Allocate any positive result amongst the employees who are eligible to use the benefit.
Assess other staff benefits as well. The €227 threshold is therefore not simply the total meal bill per employee. Use the official calculation and correction rules for personnel. Payroll taxes and profit deduction are assessed separately.
Working overtime during meal times
Record why an overtime meal is provided and to whom. The label of overtime alone does not automatically make all costs and VAT deductible. Have the personnel and payroll rules assessed for that situation.
Coffee and tea in the office
Coffee consumed at home remains a private matter. For coffee and tea served to business associates or staff, the rules applicable to the relevant situation set out above apply. Do not apply a general ‘100%’ rule to both expenses and VAT.
How to record meal expenses
Keep the receipt or invoice and note down the business purpose, attendees and location. That helps to process VAT and profit deduction separately. At Van Passe, you submit this information to your administration. View which accounts and tax returns are included in our package.
