Betriebsausgaben: Understanding business expenses in Germany

In tax law, Betriebsausgaben are business expenses that serve a business purpose. In many cases, they are fully or partially deductible from income tax by offsetting them against profits.



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Betriebsausgaben: Understanding business expenses in Germany

When you’re running a business, keeping track of your finances is important. Understanding your business expenses is an essential aspect of managing your money effectively. These are the costs associated with running your business, and they can vary greatly depending on the type of business you run.

What are considered business expenses in Germany?

Business expenses are any costs incurred in running your business. This includes everything from buying stock to paying your employees. Any money you spend while running your business can be considered a business expense.

Types of business expenses

There are many different types of business expenses, which can be categorised differently. Some common categories of business expenses are:

1. Operating expenses: These are the day-to-day business costs, such as rent, utilities and office supplies.

2. Cost of goods sold: These are the costs directly associated with producing your business’s goods or services. For example, if you run a bakery, the cost of ingredients would be included in this category.

3. Employee costs: These are the costs associated with employing staff, such as salaries, wages and benefits.

4. Marketing and advertising costs: These are the costs associated with promoting your business and attracting customers, such as advertising campaigns and social media marketing.

5. Travel and entertainment: If your business involves travelling or entertaining clients, the costs associated with these activities will fall into this category.

Why should I care about business expenses?

Why getting to know your business expenses matters:

1. Financial planning: By knowing how much money you’re spending and what you’re spending it on, you can better plan and budget for the future.

2. Tax purposes: Many business expenses are tax-deductible, meaning you can deduct them from your taxable income, potentially reducing your tax bill.

3. Profitability Analysis: Analysing your business expenses can help you identify areas where you may be overspending or potentially reduce costs, thereby increasing your profitability.


Understanding your business expenses is vital to the financial health and success of your business. By keeping track of your costs and understanding where your money is going, you can make more informed decisions and ultimately improve your bottom line.

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