Which business expenses can I deduct as a freelancer in Germany?

• Deduct ordinary and necessary costs directly tied to your freelance activity:software, equipment, marketing, travel, insurance, professional fees.
• Use depreciation (AfA) for larger assets; low-value assets can usually be expensed immediately up to legal thresholds.
• Keep clean invoices, a separate business account, and consistent records to pass audits and reclaim VAT where applicable.

• Work gear & software: laptop, phone, monitor, cloud tools, subscriptions, professional apps.
• Office costs: coworking fees, office rent, utilities share, postage, printing.
• Home office: either a flat allowance for days worked at home or a separate room used almost exclusively for work (actual-cost method).
• Travel: public transport, mileage allowance for business trips, parking, tolls; per-diem meals for business travel days; accommodation on trips.
• Marketing & sales: website hosting, ads, design, photos, conference tickets, prospect meals (with restrictions).
• Professional services: tax advisor, legal fees, bookkeeping, translations.
• Insurance: professional liability, legal protection related to business, equipment insurance.
• Education: courses that maintain or improve skills in your current trade.
• Bank/Payment fees: business account fees, PSP charges, currency conversion.
• Bad debts: documented invoices you couldn’t collect after reasonable attempts.

• Low-value assets (GWG) up to a statutory net limit can typically be expensed immediately; above that, depreciate over the useful life (e.g., laptops/phones often 1–3 years, furniture longer).
• Keep an asset register with purchase date, cost, method, and remaining book value.
• For assets used partly private/partly business, deduct only the business portion; maintain usage logs if needed.

• If you’re VAT-registered, you can usually reclaim input VAT on business purchases with a proper invoice that shows VAT, your name, and your address.
• Cross-border services need destination-based VAT rules; keep client locations and VAT IDs on file.
• If you use the small-business rule (Kleinunternehmer), you don’t charge VAT but also can’t reclaim input VAT: run the math before choosing.

• Flat allowance: simple and audit-friendly; intended for days worked at home up to statutory caps.
• Separate room method: only if a dedicated room is used almost exclusively for work; allocate rent, utilities, and maintenance proportionally.

• Keep itineraries and receipts. For day trips beyond set hours and overnight trips, use applicable per-diems; meals with clients are subject to stricter rules and may be only partially deductible.
• For car use, either track actual costs proportionally or use official kilometre allowances; keep a logbook if you want to deduct a high business share.

• Personal purchases through the business card and calling them business.
• Deducting education for a career change (usually not allowed as business expense).
• Large home-office claims without a dedicated room.
• Missing or incorrect invoices: no VAT reclaim without proper paperwork.

1. Open a separate business account and card.
2. Collect proper invoices (your name, address, VAT where applicable).
3. Categorise expenses monthly; keep PDFs in a cloud folder.
4. Maintain an asset register for items above GWG threshold.
5. Reconcile quarterly and review with your tax advisor.

• Map your typical costs, decide on home-office method, and set up a simple chart of accounts.
• If you sell abroad, read VAT for international freelance clients and When to charge VAT for freelance services.
• If your income varies a lot or you may relocate, see Optimize finances if you’re unsure long-term in Germany.

⚠️ IMPORTANT LEGAL DISCLAIMER:

This content is for educational and informational purposes only and does not constitute financial, tax, legal, or investment advice. You should not rely on this information as a substitute for, nor does it replace, professional financial or tax advice. Always consult with qualified professionals (tax advisors, financial planners, lawyers) before making any financial decisions or taking any actions based on this information.

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Disclaimer: Thresholds, per-diems, and VAT rules can change. Confirm current figures with your tax advisor or local Finanzamt.