Daily allowances also apply for one-day trips without overnight stays

Problem statement and legal background

Daily allowances are intended to compensate for catering expenses resulting from travel for business purposes (travels necessitated by work) due to a lack of knowledge about the local cuisine – typically the problem arises in the early stages of longer work-related trips, which also involve staying overnight in the location. According to settled case law of the VwGH, catering expenses can be considered tax-deductible for approximately one week in such cases. However, the question has been debated in the legal literature for some time whether daily allowances are also due for covering catering expenses even for one-day trips – thus for trips without overnight stays.

The case in point: the tax office’s refusal to allow the advertising expense deduction

The BFG (GZ RV/5101570/2019 of 23.3.2026) had to deal with a case in which a taxpayer had undertaken 43 day trips for business purposes (acquiring new customers) within a year, but each time without overnighting, and had allocated corresponding daily allowances as advertising costs under the employee compensation scheme. However, the tax office denied the deduction of advertising costs for meal expenses, stating that in the case of a mere one-day trip without overnighting, the ignorance of the local cuisine in the new location could be compensated by taking food or previous or subsequent meals.

Differentiation of the BFG from the previous VwGH jurisprudence

In its decision-making process, the BFG primarily considered the fact that the refusal by the tax office to grant daily allowances for one-day trips (without overnight stays) was based on statements made by earlier decisions of the VwGH. For example, the VwGH had refused to grant daily allowances because the place where the "trip" was undertaken was located near the workplace. In fact, if different professional activities are carried out in the same locality in the immediate vicinity, this does not lead to additional meal expenses that must be taken into account for tax purposes.

The BFG decision: an interpretation that respects equality

The BFG came to the conclusion that, in accordance with the text of the law and an interpretation of the relevant provisions that is compatible with equality, daily allowances are due for one-day business trips (one-day business trips without overnight stays) to cover the additional costs of catering. This applies both to the deduction as an advertising expense and to the deduction of operating expenses. Employees under § 26, paragraph 4, EStG are not taxable for one-day business trips, provided that the business trip lasts longer than 3 hours and the maximum amount is not exceeded – a night stay is not required. The same must apply to the deduction of advertising expenses for catering for business-related travel under § 16, paragraph 1, Z 9 of the EStG, as otherwise there would be a differentiation that is not justified on a factual basis.

Outlook and practical relevance for taxpayers

Although it has been customary practice in the financial administration to allow the tax deduction of daily allowances for one-day trips without overnight stays (based on the income tax guidelines), this BFG ruling is pleasing news for taxpayers. Courts such as the BFG or the VwGH have not traditionally been bound by the (income tax) guidelines, which meant that there was a risk that daily allowances previously deducted by the BFG would not be recognized by the BFG in the context of a appeal against a notice. The present decision of the BFG therefore has positive signaling effects.

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