What business expenses can you deduct as an entrepreneur or self-employed person?
July 2026 - As an entrepreneur or self-employed person, you don’t want to pay more taxes than necessary. A clear understanding of deductible expenses—whether or not in consultation with your accountant—helps you optimize your tax situation and avoid surprises. Which expenses can you claim as business expenses, which ones only partially, and which ones not at all? Time for a quick refresher.
What exactly are business expenses?
Business expenses are expenditures you incur to keep your business running and generate income. They reduce your taxable profit, which ultimately means you pay less in taxes. Examples include investments in equipment, software, training, or office furnishings. But not every expense automatically qualifies.
To be tax-deductible, an expense must meet three conditions:
· the expense is related to your business activity
· it was incurred during the fiscal year in which you claim it
· you can prove it with an invoice, receipt, or other valid supporting document
Which expenses are deductible?
Some expenses are fully deductible. These include:
· social security contributions
· professional insurance
· office supplies
· professional training
· software and subscriptions used exclusively for business purposes
In addition, there are so-called mixed expenses: expenses that serve both a professional and a personal purpose. These are only partially deductible. Some examples:
· restaurant expenses: up to 69%
· business gifts: 50 to 100%, depending on the situation
· internet and phone costs for working from home: typically up to 75%
· utility costs in a home office: based on business use
· car expenses: depending on factors such as the vehicle’s CO₂ emissions
Which expenses are not tax-deductible?
Some expenses can never be claimed for tax purposes, even if they are related to your professional activities. Examples include:
· traffic fines
· everyday clothing worn while working
· private insurance, such as hospitalization insurance
Work clothing is an exception, however. Safety shoes or clothing with a visible company logo are generally deductible.
Do you work from home?
Many professionals run their businesses partly from home. In that case, you can claim a portion of certain fixed costs as business expenses. These include:
· electricity and heating
· water usage
· internet
· insurance
· office supplies
It’s important that you can properly document the business portion of these expenses.
Expenses or Depreciation?
Smaller expenses are usually deducted immediately. Larger investments, such as a company car or expensive equipment, are often spread out over several years. This is called depreciation. This way, you align the tax treatment with the economic life of the investment.
Incurring More Expenses to Pay Less Tax?
It’s true that business expenses can lower your tax burden. However, it’s not a good idea to incur expenses solely to save on taxes. After all, a cost is still an expense. Even if it’s fully deductible, you’ll only recoup a portion of it through the tax benefit. Making unnecessary purchases just to pay less in taxes therefore rarely pays off.
Don’t forget your supporting documents
Accurate record-keeping remains essential. Therefore, always ask for an invoice whenever possible and carefully keep all relevant documents. With a complete set of records, you can not only prove your business expenses but are also better prepared in the event of a tax audit. Furthermore, as a VAT-registered business owner or self-employed individual, you can in many cases also recover all or part of the VAT you’ve paid.
