You’re inviting a (potential) client or a business partner to the bistro near your office to discuss a collaboration? In that case, it clearly counts as a restaurant cost. But if you host that same contact at your office and order lunch through a delivery service, what then? And what about the meal you have while on the road, on your way to a work assignment, can you record that in your accounting too? 🧐
What is a restaurant cost?🍴
In our article about restaurant costs, you can read: “A restaurant cost can be recorded in your accounting if the meal in question aimed to maintain or increase your business’s revenue.” A meal with a potential client, a supplier, or another professional partner can therefore absolutely be accounted for. To be safe, you can note the professional nature of the meal when recording it: who you ate with, what your relationship is, and what you discussed. This will make it easier to justify each restaurant expense in case of an audit.
Attention !
A restaurant expense is legally deductible up to a maximum of 69%. This is a limit set by the state, as it is assumed that during a business meal, you are not talking exclusively about work.
What is a reception cost?🤝
Reception costs include expenses you incur to host people, such as drinks or snacks. For example, you can record the cost of drinks offered to business contacts when they visit you at the office. Going out for a coffee with a client can also count as a reception cost, as long as it’s clearly in a professional context. However, drinks in your private kitchen fridge obviously do not qualify.
Attention !
Reception costs also have limited deductibility. You can only record them at 50% of the total amount. That’s simply how tax rules work.
What if I buy food just for myself?🥪
Can I record my own lunch while I’m on the way to a client mission?
No, that’s not allowed. For restaurant or reception costs to be accepted in accounting, they must have a clear professional purpose. Your personal meal or drink during work is not considered essential to your self-employed activity by the tax authorities. So a solo meal or coffee break can never be recorded in the accounting of your sole proprietorship. Enjoy sipping a Coke while working? That too is not a deductible business expense.
What if you order food or pick up a meal for yourself and your business partner?🛵🍕
You’re meeting with a potential client to discuss a future collaboration. After a few hours, it’s clear there’s much more to talk about than expected. Around lunchtime, everyone’s getting hungry. To keep your client around, and maybe win them over, you order pizzas for lunch. How should you record this expense? You guessed it: as a reception cost.
But if you had eaten those same pizzas at the restaurant, it would have been considered a restaurant cost instead. And sometimes, it’s actually more advantageous tax-wise to eat at the restaurant than to order takeout.
This also applies if you pick up sandwiches for yourself and a business partner: If you eat them away from the point of sale, it’s a reception cost. If you eat them at a table in the establishment, it’s a restaurant cost.
And what about VAT?🧾
VAT is not recoverable, whether it’s for restaurant costs or reception costs. Fortunately, this is already preconfigured in Dexxter!
