Deduct Phone Costs in Germany 2026: Share, VAT & Example

A €35 mobile plan, a landline, the odd international call — phone costs add up to €500–800 a year for most self-employed people in Germany. You deduct the business share in full as a business expense, and under standard taxation you also reclaim the input VAT.

Sounds simple, but it rarely is. Set the share too cautiously, follow the wrong flat rate, or forget the VAT, and you give money away every year — easily a four-figure sum over a decade.

Here is how to document a realistic business share, why the well-known 20-euro flat rate does not apply to you, and where the self-employed most often leave money on the table with their phone.

What counts as "phone costs"?

For tax purposes, phone costs are all ongoing expenses for voice communication — landline and mobile alike. That includes:

• Base fees for mobile and landline contracts
• Call charges for domestic and international calls
• SMS bundles, roaming, and EU/world options
• Hotline, premium, and service numbers
• Voicemail, call forwarding, call management
• Cloud telephony (Sipgate, Easybell, Placetel) and VoIP flat rates

What does not belong here: the smartphone itself (a purchase over €800 net runs through depreciation — see our guide to the GWG threshold and immediate write-off) and the pure internet connection. If your mobile plan bundles calls and data, treat the whole plan as a telecommunication expense and split it by business use.

What percentage can you deduct?

Phone costs are an ongoing expense — you book them every month, in full or proportionally. The key question is not "how much?" but "how high is the business share?". Three situations matter in practice.

1. A dedicated business contract (100%). A separate contract used purely for business lets you deduct 100% of the cost and 100% of the VAT. Cleanest with a second contract in the company's name (UG/GmbH) or a business SIM. Bonus: no share to justify in an audit.

2. Mixed use (private + business). The standard case: one phone for everything. You then estimate the business share. Shares between 50% and 70% are common and usually uncontested:

Profile	Realistic share
Sales, consulting, coaching, brokerage	60–80%
Full-time home office (developer, designer, copywriter)	50–70%
On-site work (tradesperson, photographer, trainer)	50–60%
Part-time self-employment	20–40%

3. Variable use (itemized proof). For the maximum deduction, log all calls across three representative months via the carrier's itemized record and apply the calculated share to the year. Worth it only for call-heavy full-time work with a suspected share above 70%.

Documenting the share — two lines are enough

A short note in your bookkeeping suffices: "Mobile contract used 70% for business: client calls, scheduling, suppliers, hotline. 30% private." In an audit you must make the figure plausible, not prove it to the minute. If you already deduct a home office, you have half the argument for a high business share already in place.

Watch out: the 20-euro flat rate is not for the self-employed

Many guides mention a "phone flat rate" of 20% of the bill, capped at €20 per month. That is the employee simplification under R 9.1 LStR. As a self-employed person it does not apply to you — you estimate the actual business share, which is almost always above €20.

Example: at a €50 plan and 60% business use, that is €30 of business expense per month instead of €20. Over ten years, the flat-rate logic gives away several thousand euros in tax relief.

Input VAT on phone costs

Under standard taxation (not a small business under § 19 UStG), you also reclaim the stated VAT as input VAT. On a €35 gross plan that is €5.59 VAT a month — at 60% business use, €3.35 of input VAT monthly. Requirements:

• A proper invoice with separately stated VAT (the PDF from your account portal is fine)
• Name and address matching your business details
• Over €250 gross: the provider's tax number or VAT ID

You claim the input VAT in the VAT return for the month you receive the invoice. Small businesses deduct the gross amount as an expense but reclaim no VAT — what works for you is covered in our piece on the small business regulation.

Prepaid: here you usually get only a top-up receipt without stated VAT — no input VAT deduction. If you are on standard taxation and call a lot, a contract plan is almost always better for tax.

Special case: a plan with a subsidized smartphone

If the plan includes a "free" handset, the tax office treats it as two transactions: the smartphone purchase (follows phone depreciation — under €800 net immediately, above that over three to five years) and the ongoing plan costs (deductible pro rata by business use). If the provider does not separate device price and plan cleanly, either book the whole contract as a telecommunication expense or split it roughly. Below €1,000 a year the splitting effort rarely pays off.

Norman pulls your Telekom, Vodafone, or O2 invoice straight from your bank account, categorizes it as "phone/mobile," and calculates VAT and the business share automatically — set the share once and the rest runs. For the tax return, see taxes for the self-employed.

Conclusion

Deducting phone costs in 2026 means: set a realistic business share (usually 50–80%), justify it in writing, reclaim the input VAT under standard taxation, and ignore the misleading 20-euro flat rate — it applies to employees only. A dedicated business contract spares you any discussion in an audit. Do this with discipline and you recover a four-figure sum over the years that would otherwise stay with the tax office.