06. 10. 2025.
The income statement is the heart of every business report – it shows whether your business is profitable or struggling with costs. What is often overlooked is the fact that certain expenses, although they may seem like a burden, can significantly improve your tax position.
Recognized expenses in the income statement are not just numbers – they are a strategic tool for optimizing operations and achieving tax relief. Here is an overview of key expenses that are recognized and how to manage them properly.
1. SALARIES AND COMPENSATION COSTS
If you pay salaries, royalties, or service contracts – these expenses are recognized for tax purposes, but only when they are actually paid.
That is why it is important to make payments regularly and on time.
2. DEPRECIATION
The value of fixed assets decreases over time, and that loss of value can be recorded as an expense.
· The depreciation rate depends on the asset group and ranges from 2.5% to 30%.
· Assets valued up to 300€ are immediately recognized as an expense, without additional complications.
Depreciation is an excellent way to reduce your tax base while your company continues to use the purchased assets.
3. DONATIONS AND CORPORATE SOCIAL RESPONSIBILITY
Donations are recognized as an expense up to 3.5% of total revenue, while donations to national sports associations are recognized up to 5% of revenue.
To be recognized, donations must be paid to legal entities engaged in the relevant activity (NGOs, educational institutions, sports clubs, cultural and religious organizations, etc.).
This is a great opportunity to contribute to the community while also gaining tax benefits.
4. REPRESENTATION AND MEMBERSHIP FEES
· Representation expenses (business lunches, meetings) are recognized up to 1% of revenue, provided they are documented and justified.
· Membership fees to chambers, associations, and alliances are recognized up to 0.1% of revenue.
· Membership fees that are legally mandatory are recognized in full.
5. WRITE-OFF OF DOUBTFUL RECEIVABLES
Doubtful and uncollectible receivables can be recognized as an expense, but under certain conditions:
By properly writing off these receivables, you avoid unnecessary increases in your tax base.
6. PROVISIONS AND ASSET IMPAIRMENT
If assets lose value due to damage, theft, or write-off, that expense is recognized in the period when the event occurred.
It is important to have documentation (report, record) confirming the loss of value.
Proper management and recognition of expenses in the income statement not only ensures compliance with the law but can also bring you significant tax savings. Treat expenses as a tool for business optimization, not just as a cost.
If all of this seems complicated – you are not alone.
Our agency Perfectum provides expert support in accounting and tax consulting. We ensure legality, accuracy, and timeliness of all reports, while you focus on what you do best – running and growing your business.
