Client entertainment or staff cost? Deductions for meals, gifts and parties
Written by Mads Antonsen · bookkeeper at Numina
Updated July 17, 2026
A dinner can be fully deductible, quarter-deductible or not deductible at all — depending on who sat at the table and why. Here's the difference between client entertainment (repræsentation), staff costs and advertising, and how to document it properly.
The three buckets
- Entertainment (repræsentation): expenses aimed at clients and business connections — dinners, gifts, receptions. Tax deduction: 25%
- Staff costs: expenses for your employees — Christmas party, summer party, coffee and fruit. Tax deduction: 100%
- Advertising: aimed at an indefinite circle of customers — ads, sponsorships, product samples. Tax deduction: 100%
Entertainment: 25% for tax, (almost) no VAT
Take a client out for dinner, give a bottle of wine or host a reception, and only 25% of the expense is tax-deductible. The VAT generally can't be deducted at all — with one exception: for restaurant visits with a strictly business purpose you can deduct 25% of the VAT.
Staff costs: fully deductible
Expenses for your own employees — Christmas party, company party, team building, coffee and canteen — are ordinary operating costs with a full tax deduction. VAT follows its own rules: a Christmas party at a restaurant gives a 25% VAT deduction, while food in your own premises gives none.
If both employees and clients attend the same event, the expense generally has to be split — the clients' share is entertainment.
Advertising or entertainment? The audience decides
The line between advertising (full deduction) and entertainment (25%) runs at the recipients: advertising targets an indefinite circle, entertainment targets selected people. An open house advertised broadly can be advertising; a reception for invited clients is entertainment.
Promotional gifts carrying the company's name or logo, worth under 100 kr. excluding VAT, count as advertising with a full deduction — think pens and calendars bought in bulk. A bottle of wine for a specific client is entertainment, logo or not.
The documentation: write the occasion on the receipt
The Tax Agency applies stricter documentation requirements to entertainment expenses: Beyond the receipt itself, the occasion and the participants must be recorded — who ate along, and in what business context? Note it on the receipt right away; it's impossible to reconstruct years later if the accounts are audited.
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Are Christmas gifts for employees deductible?
Yes — gifts to employees are staff costs, fully deductible for the company. Whether the employee is taxed on the gift depends on the year's thresholds for staff benefits; check the current limits at skat.dk.
Can I deduct a lunch with a business partner?
Yes, as entertainment: 25% of the amount for tax and 25% of the VAT, when the lunch has a strictly business purpose. Remember to note the occasion and participants on the receipt.
What about my own lunch on workdays?
Your own everyday lunch is a private expense with no deduction — also when you're self-employed. Deducting your own meals requires special situations, such as travel covered by the per-diem rules.