What should be considered when charging expenses?

was ist zu betrachten bei der Spesenverrechnung?

Charging expenses to the customer

Management consultants are often on the road at home and abroad and thus incur considerable expenses, which are mainly charged separately to the client. The charging of additional expenses can be applied using the following methods.

  • Charging of costs to the customer
  • Transitory items

Charging of costs to the customer

With this method, the expenses are usually shown individually in the customer invoice. They are considered production costs of the own service, thus they are treated as input costs for the own service production. This may include expenses such as meals, hotel or travel costs.

As these expenses are directly related to the services of the management consultancy, they are issued and paid as such. What has to be taken into account is the 7.7% VAT, as the service rendered by the consultant is subject to VAT. Although the expenses are charged separately, the total amount of the service must be invoiced with VAT. This rule also applies if the costs were incurred abroad and are not actually subject to VAT. The amount of the VAT rate is irrelevant. This application seems somewhat confusing at first, but it was explicitly communicated as such by the Federal Tax Administration in the MWST Info.

The remuneration includes the reimbursement of all costs, even if these are invoiced separately. These can be, for example:
– Expenses for travel, meals, accommodation, etc., even if incurred abroad.

(Source: MWST-Info 07, “Tax assessment and tax rates”, FTA, January 2010)

Transitory items

In addition to charging costs on to the customer, the transitory item method (DuPo) can also be used. Many advisors like to resort to this, but implement it insufficiently. The Federal Tax Administration has clearly regulated the use of the method. The Article 24., Par. 6, no. b. the MWSTG explains the services that may not be included in the tax base and are thus tax-exempt.

Only the gross price of the third-party service provider paid in advance by the consultant himself/herself will be charged. In addition, Article 24 par. 6, no. B., MWSTG: “Amounts which the taxable person receives from the person receiving the service as reimbursement of expenses incurred in his name and on his behalf, provided he shows them separately (transitory items)”.

Accounting of expenses

Expense invoices are made out to the client company and must be listed separately or even in a separate invoice. Since the receipts are handed over to the client, the expenses may not be booked as expenses by the consultant. Similarly, the adviser cannot book the client’s rebate as income. In order to balance the expenses and the reimbursement, they should be booked to a pass-through account. VAT may not be taken into account by the consultant as input tax or turnover tax. In the best case, this account balances out at the end of the year.
If a flight ticket is booked online, it is difficult to charge this to the client company. This should not be a problem for hotel accommodation that has customer-friendly service. Classics for transitory items are public fees, court fees, customs fees and travel expenses.


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