Anyone who travels for business with a chauffeur will ask themselves this question, if not sooner, then certainly when filing their travel expense report. The short answer is yes—in full—as long as the trip is for business purposes. More interesting are the three points that are regularly overlooked: The input tax deduction is higher for a chauffeur service than for a taxi. Trips between home and the office are an exception. And without a proper invoice, even the most legitimate business expense is of no use.
Key Points at a Glance
- Business-related trips with a chauffeur are fully deductible as business expenses or income-related expenses. The actual invoice amount applies; no flat rate is used.
- A chauffeur service charges 19 percent sales tax, while a local taxi charges 7 percent. For those eligible for input tax credits, this means a higher refundable amount.
- Commutes between home and the primary place of work are the exception. In such cases, only the mileage allowance applies, regardless of what the trip actually cost.
- For invoices totaling 250 euros or more, the full name and address of the company as the recipient of the services must appear on the invoice. A receipt made out to a private individual is not sufficient.
- When it comes to trips related to a business dinner, the classification is debatable. Please consult your tax advisor regarding this matter.
When the costs are fully deductible
The decisive factor is whether the expense is business-related. According to Section 4(4) of the Income Tax Act, business expenses are all expenditures incurred for business purposes. For employees, the equivalent provision in Section 9 of the Income Tax Act applies as income-related expenses.
Trips with a chauffeur are considered travel expenses—more specifically, transportation costs associated with business-related travel. Unlike when using your own car, there is no mileage allowance in this case; instead, the amount actually billed is used.
Typical cases that fall into this category:
- Transportation to the airport before a business trip and pickup upon return.
- Trips between appointments—for example, on a day with multiple client visits—whether as individual trips or booked by the hour.
- Picking up business partners or customers whose travel expenses are covered by your company.
- Trips to trade shows and events, including those outside the company's headquarters.
In all these cases, the full invoice amount reduces the profit.
When the deduction is limited
Three configurations are not working as expected.
Home and primary place of work. For the commute to one’s own office, only the mileage allowance applies, regardless of the actual costs. Anyone who is driven to the office every day cannot claim the difference. This is the most common misconception regarding this topic.
Personal trips. Going to the theater, attending a wedding, dining out with the family: these are personal in nature and therefore not tax-deductible, even if the bill is sent to the company.
Mixed trips. If a trip includes both business and personal travel, it must be allocated based on objective criteria. In practice, it is recommended to record business and personal trips separately from the outset and have them billed separately.
Input tax credit: 19 percent instead of 7 percent
Here’s the point that hardly anyone knows: A chauffeur service operates as a car rental business, not as a taxi service. According to established case law of the Federal Fiscal Court, the reduced sales tax rate of 7 percent—which taxi companies apply to local transportation—does not apply to rental cars with drivers. Only those who hold their own taxi license are eligible for this benefit.
For individual customers, this means a higher gross price. For businesses eligible for input tax credits, the situation is reversed: For a net service charge of 100 euros, the tax office reimburses 19 euros instead of 7 euros. The net cost is thus the same as for any other business service, and the invoice is clearer than a taxi receipt, which may involve two different tax rates depending on the distance traveled.
An invoice that meets the requirements of Section 14(4) of the German Value-Added Tax Act (UStG) remains a prerequisite. Without it, there is no input tax deduction under Section 15 of the UStG.
In a nutshell
- "Business-related" means: full deduction of the invoice amount; no flat rate.
- The commute to one's own office is covered by the mileage allowance and is an exception.
- The standard tax rate of 19 percent is not a disadvantage for companies that can claim input tax credits—quite the opposite.
What Must Be Included on the Invoice
For gross amounts of 250 euros or more, all mandatory information must be included. For amounts below that, the simplified small-amount invoice under § 33 UStDV is sufficient. Since most chauffeur services exceed this threshold, the full list applies in practice.
| Required Information | Example |
|---|---|
| Name and address of the contractor performing the work | Onyx Chauffeur Service Munich, Schellingstr. 109a, 80798 Munich |
| Name and address of the beneficiary | Your full business address, not your last name |
| Tax ID number or VAT ID number | of the contractor performing the work |
| Date of Issue | Invoice Date |
| Sequential Invoice Number | awarded only once |
| Nature and Scope of the Service | "Passenger Transportation by Rental Car, Transfer from Munich to MUC Airport" |
| Time of Performance | Date of the trip |
| Net pay | broken down by tax rates |
| Tax Rate and Tax Amount | 19 percent, amount shown separately |
The most common mistake in practice: The receipt is issued in the name of the traveler instead of the company. For amounts over 250 euros, this is a procedural error that prevents you from claiming the input tax credit. Therefore, be sure to provide the billing address when you book the trip, not just at the end of the trip. For our business trips, we enter the billing information once and use it for all subsequent trips.
Two Special Cases
Travel related to a business meal. According to Section 4(5) of the German Income Tax Act (EStG), expenses for entertaining business associates are only 70 percent deductible, whereas input tax is fully deductible. Opinions differ on whether transportation to the restaurant should be classified as a separate travel expense or as an incidental cost of the entertainment. Have your tax advisor clarify this issue before you begin claiming it regularly.
The Chauffeur for Employees. If a company provides an employee with a vehicle and driver for business trips, this does not constitute a taxable benefit. The situation is different for trips between home and work: These must be reported as a monetary benefit for income tax purposes. For executives who regularly use a chauffeur service, this is the key consideration.
Conclusion
From a tax perspective, the matter is simpler than it seems: “business-related” means fully deductible, and the input tax credit is higher than for a taxi. The key is the receipt. Once you enter your company information, the receipt will be correct for every trip.
This article provides general information and is not a substitute for tax advice. For your specific situation, please consult your tax advisor. As of September 2026.
Frequently Asked Questions
Is a chauffeur service tax-deductible as a business expense?
Yes, provided the trip is for business purposes, the full amount of the invoice is deductible. This is based on Section 4(4) of the Income Tax Act (EStG). Unlike when using one’s own vehicle, a mileage allowance does not apply; instead, the amount actually paid is deductible.
How much sales tax does a chauffeur service charge?
A chauffeur service operates as a car rental business and charges the standard tax rate of 19 percent. The reduced rate of 7 percent applies only to local taxi services and requires a separate taxi license.
Can I claim my commute to the office as a deduction?
No, only the mileage allowance applies to the commute between your home and your primary place of work. The actual cost of a chauffeur service is irrelevant in this context, even if it is significantly higher.
What must be included on the invoice?
For amounts exceeding 250 euros gross, the complete mandatory information required under Section 14(4) of the German Value-Added Tax Act (UStG) must be provided, in particular the business name and address of the recipient of the service, as well as the separately stated tax amount. Without this information, the input tax deduction does not apply.
Are trips for customers and business partners tax-deductible?
Yes, transportation expenses for business partners are business-related and generally tax-deductible. If the trip is directly related to a business meal, you should consult with your tax advisor regarding how to classify the expense.
Is a receipt enough, or do I need an invoice?
To claim an input tax credit, you need a valid invoice, not a payment receipt. We issue an invoice for each trip that includes all required information; upon request, we can consolidate these invoices at the end of the month.
