Per Diem

In Germany, per diem allowances for business travel in 2025 are regulated under the Bundesreisekostengesetz (BRKG) (Federal Travel Expenses Act). These allowances are meant to reimburse employees for additional meal expenses incurred during work-related travel.

Per Diem Rates for 2025

• Full-day travel (more than 24 hours): €28 per day
• Partial-day travel (more than 8 hours but not overnight): €14 per day
• Accommodation expenses: Actual costs are reimbursed, but a lump sum of €20 per night can be claimed if no receipts are provided.

Additional Considerations

• If an employer provides meals, per diem rates may be reduced accordingly.
• Travel inside and outside Germany may have different rates based on destination-specific allowances.
• Reimbursement follows specific guidelines to ensure compliance with tax regulations.

For full details and official regulations, you can visit the German government website: Gesetze im Internet – BRKG​ gesetze-im-internet.de

For international business travel, different per diem rates apply based on the country visited. These rates can be found on the Bundesfinanzministerium (Federal Ministry of Finance) website.

Additionally, employers can reimburse employees tax-free up to these per diem limits, and self-employed individuals can deduct these amounts as business expenses. However, actual food costs cannot be deducted, only the flat-rate per diem. If a meal is provided at no cost (e.g., included in a hotel stay), the per diem allowance must be reduced accordingly​

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Other deductible travel-related costs include:

• Mileage allowance for private vehicle use (€0.30/km)
• Accommodation costs, provided they are properly documented (hotel invoices are required)
• Incidental expenses, such as parking fees, baggage storage, work-related calls, and transportation at the destination​
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Mileage

In Germany, the mileage rates for business trips (kilometerpauschale) are as follows:

• 0.30 EUR per kilometer for cars
• 0.20 EUR per kilometer for motorcycles and mopeds

These rates apply to employees and self-employed individuals who use their personal vehicles for business purposes. Additionally, for commuters, the government allows a distance-based tax deduction (Entfernungspauschale) for travel between home and work, which is 0.30 EUR per kilometer for the first 20 km and 0.38 EUR per kilometer from the 21st km onward.

For more details on business travel expenses and tax deductions, you can check the German Ministry of Finance’s official website​ bundesfinanzministerium.de.

Paperless

In Germany, businesses can go paperless, but they must comply with the GoBD (Principles of Proper Management and Storage of Books, Records, and Documents in Electronic Form). This regulation, enforced by the German Ministry of Finance, requires that businesses ensure their digital records are traceable, complete, accurate, and immutable. This allows companies to digitally store receipts, invoices, and other financial documents, provided they meet these criteria. All digital records must be retrievable upon request during audits​ globaltax.services.

Key GoBD Principles for Record-Keeping

• Accuracy & Completeness – All records must be correct, consistent, and include all required business transactions.
• Timeliness – Entries must be recorded without undue delay.
• Auditability – The recorded data must be systematically organized and traceable for auditing.
• Immutability – Once data is recorded, it must not be altered without logging the changes.
• Data Security – Protection against loss, unauthorized access, and data corruption must be ensured.
• Machine Readability – Digital records must be stored in a format that allows automated processing by tax authorities.
• Retention Period – Records must be kept for at least 10 years.
• Documentation of Procedures – Companies must document their accounting processes and ensure compliance with GoBD requirements.

Meals, Benefits & Allowances

For 2025, Germany’s business travel allowances and compliance rules are as follows:

1. Domestic Per Diems (Verpflegungspauschale):

• €28 per day for trips lasting a full 24 hours.
• €14 per day for partial travel days (arrival or departure days) if an overnight stay is involved.
• €14 per day for business trips over 8 hours without an overnight stay.
• If an overnight business trip spans two days but neither qualifies for an 8-hour rule individually, the total hours are summed, and €14 is granted on the day with the longer absence from home and the workplace​ bva.bund.de

2. International Per Diems:

• Rates vary by country and city. For example:
  • France (Paris): €48 daily allowance, €159 for overnight stays.
  • United Kingdom (London): €47 daily allowance, €200 for overnight stays.
  • United States (Washington, D.C.): €59 daily allowance, €306 for overnight stays.
• These allowances are determined based on the official ARVVwV guidelines set by the Federal Ministry of the Interior and for Community​
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3. Other Reimbursement Rules:

• Only actual expenses exceeding the per diem can be reimbursed if supported by receipts.
• Reduced allowances apply if meals are provided by the employer or event organizer.
• Employees must follow reporting procedures outlined by the Bundesreisekostengesetz (BRKG).

For the most updated details and country-specific rates, refer to the Bundesverwaltungsamt (BVA) website: BVA Business Travel Rules​ bva.bund.de

Sales tax rates

Germany’s VAT (sales tax) rates for 2025 remain as follows:

1. Standard VAT Rate: 19% (applies to most goods and services).
2. Reduced VAT Rate: 7% (applies to essential goods such as food, books, and public transport).
3. Zero VAT Rate: Certain services, such as medical care, education, and financial transactions, are exempt from VAT.

Businesses operating in Germany or conducting transactions within the EU must register for a VAT identification number if they engage in cross-border trade. Additionally, companies from non-EU countries may apply for VAT refunds under specific conditions

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Business Travel VAT Considerations:

• Hotel Stays: Subject to the reduced 7% VAT rate.
• Transport: Public transport may qualify for the 7% VAT rate, but other travel services (e.g., taxis, rental cars) are typically taxed at 19%.
• Meals & Entertainment: Generally taxed at 19%, though some food items may fall under the reduced rate.
• Refunds for Foreign Businesses: Non-EU and EU businesses can recover
• German VAT on business-related expenses, provided they meet compliance requirements​
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VAT Compliance & Invoicing:

• Businesses must ensure proper VAT invoicing, which includes tax identification details and transaction breakdowns.
• E-invoicing is mandatory for B2G (Business-to-Government) transactions, and starting from 2025, all companies must be able to receive e-invoices​
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• VAT Returns: Can be monthly, quarterly, or annual, depending on revenue levels​
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If your company incurs VAT on business travel expenses in Germany, it may be eligible for VAT recovery, but claims must comply with German tax regulations.