How to Claim Expenses as a Freelancer in Germany (Betriebsausgaben)

As a freelancer in Germany, understanding which expenses you can claim is one of the most effective ways to reduce your tax burden and keep more of what you earn. Betriebsausgaben (business expenses) are costs directly related to generating your income, and they're deductible from your taxable earnings. Whether you're just starting out or scaling your freelance business, knowing what counts—and what doesn't—can save you hundreds or even thousands of euros each year.

What Are Betriebsausgaben (Business Expenses)?

Betriebsausgaben are all expenditures that are business-related and serve to generate, secure, or maintain your income. The key principle is simple: if an expense is necessary for your freelance work, it's typically deductible. This broad definition covers everything from your laptop and office rent to client entertainment and professional development.

The German tax authorities recognise that running a freelance business involves real costs, and they allow you to deduct these from your gross income before calculating your tax liability. This means your taxable income is lower, which directly reduces the amount of tax you owe.

Categories of Deductible Business Expenses

Operating Costs

Regular operational expenses form the backbone of most freelancers' deductions. These include:

• Telephone and internet costs
• Office supplies and materials
• Software subscriptions and tools
• Workspace rental (whether commercial office or coworking space)
• Utilities for your home office

If you work from home, you have two options: either deduct actual home office expenses (including rent, repairs, and maintenance) or use the Homeoffice-Pauschale (home office allowance) of up to €12,348 annually. Choose whichever gives you the larger deduction.

Travel and Transportation

One of the most valuable deductions for many freelancers is the Entfernungspauschale (commuting allowance). Starting in 2026, this has become even more generous.

If you travel regularly to a fixed workplace—such as your own office or a registered coworking space—you can now claim €0.38 per kilometre from the very first kilometre. This applies regardless of which transport method you use (car, train, bike, or public transport).

Here's a practical example: if you drive 10 kilometres to your office on 180 working days per year, you can claim 180 days × 10 km × €0.38 = €684 as a business expense in your Einnahmen-Überschuss-Rechnung (EÜR, profit and loss statement).

Important distinction: commuting to a fixed workplace counts as a business expense, but travel to different client locations or project sites is classified as a business trip (Geschäftsreise) and follows different rules.

Equipment and Assets

Professional equipment you purchase for your business is deductible. This includes:

• Computers, laptops, and monitors
• Office furniture
• Cameras, microphones, or other specialised tools
• Business vehicles

For items with a long lifespan (typically over one year and costing more than €250), you'll need to depreciate them over several years rather than deduct the full cost immediately.

Professional Development

Investing in yourself is deductible. Claim expenses for:

• Professional courses and training programmes
• Industry conferences and seminars
• Professional books and trade publications
• Membership fees for professional associations

Marketing and Advertising

All costs related to promoting your freelance business are deductible, including:

• Website design and hosting
• Social media advertising
• Business cards and printed materials
• Client entertainment and hospitality
• Professional photography or videography

Personnel Costs

If you employ staff or subcontractors, their salaries and fees are fully deductible business expenses.

Special Situations: Pre-Launch and Post-Closure Expenses

Starting a freelance business often involves costs before you officially begin trading. Good news: vorweggenommene Betriebsausgaben (pre-launch expenses) are deductible even if you incur them before you're officially self-employed. These might include office furniture, professional training, market research, or business-related software purchased before your official start date.

Similarly, nachträgliche Betriebsausgaben (post-closure expenses) can be claimed if they arise after you've closed your business—for example, warranty claims on products sold before closure.

Key Changes for 2026: What's New for Freelancers

Higher Basic Tax Allowance

Your Grundfreibetrag (basic tax allowance) has increased to €12,348 in 2026. This means you can earn up to this amount completely tax-free. For married couples filing jointly, the threshold is €24,696. This change is particularly beneficial if your income fluctuates or you're building your freelance business part-time.

Improved Commuting Allowance

The commuting allowance improvement mentioned above is one of 2026's most significant changes for freelancers who travel to a fixed workplace. Previously, you could only claim €0.30 per kilometre for the first 20 kilometres; now it's €0.38 from kilometre one.

Mobility Bonus (Mobilitätsprämie)

For commutes between 21 and 40 kilometres, you can claim an additional 5.32 cents per kilometre as a mobility bonus. However, this bonus is currently scheduled to end after 2026, so take advantage while you can.

How to Track and Document Your Expenses

Simply knowing what's deductible isn't enough—you need to keep meticulous records. The German tax authorities (Finanzamt) expect you to provide supporting documentation for every deduction you claim.

Essential Record-Keeping Practices

• Keep all receipts and invoices for at least six years (the standard retention period in Germany)
• Organise by category: group expenses into operating costs, travel, equipment, professional development, and marketing
• Use accounting software: tools like Accountable, Billit, or similar platforms make tracking much easier
• Record business purpose: briefly note why each expense was necessary for your work
• Keep digital copies: photograph receipts or scan them to create a backup

When you file your annual tax return (Steuererklärung), you'll need these records to support your Einnahmen-Überschuss-Rechnung (EÜR). If you're audited, having organised, complete documentation can mean the difference between keeping your deductions or losing them.

Common Mistakes to Avoid

Even experienced freelancers sometimes miss deductions or claim expenses they shouldn't. Here are the most common pitfalls:

• Personal vs. business expenses: You can't deduct purely personal costs. A coffee at home is personal; coffee for a client meeting is business.
• Mixing business and private use: If you use your car 70% for business and 30% for personal use, you can only deduct 70% of related costs.
• Forgetting small expenses: While each individual receipt might be modest, small expenses add up significantly over a year.
• Missing documentation: Without receipts, you'll struggle to justify deductions if questioned.
• Claiming illegal or unethical expenses: Bribes, fines, or expenses related to illegal activities aren't deductible.

When to Consult a Steuerberater (Tax Advisor)

While many freelancers successfully file their own tax returns, a professional Steuerberater (tax advisor) can be invaluable if your situation is complex. Consider professional help if you:

• Employ staff
• Have significant international income or expenses
• Run multiple business lines
• Want to optimise your tax strategy for the coming year
• Feel uncertain about what you can and can't claim

The cost of a tax advisor often pays for itself through deductions and optimisations they identify.

Your Next Steps

Start optimising your freelance tax situation today. First, review your current expenses and categorise them using the framework above. Next, set up a simple tracking system—whether it's a spreadsheet, dedicated accounting software, or a folder for receipts. Finally, consider consulting a Steuerberater to ensure you're maximising your deductions legally and efficiently.

Remember: the deadline for filing your 2025 tax return without a tax advisor is 31 July 2026. Starting your expense tracking now means you'll be well-prepared when that deadline arrives. Every euro you properly document is a euro you don't pay in taxes—and that money stays in your pocket to reinvest in your freelance business.