How to reduce your tax base legally and safely

Reducing your tax liability is a legitimate goal for every entrepreneur. The key is to do so in compliance with the law, with proper records and without the risk of additional tax assessments during a tax audit. Let us look at how to reduce your tax base legally and safely, so that you save money and can still sleep soundly.

The difference between optimisation and circumventing the law

Legal optimisation makes use of the options that the Income Tax Act expressly allows, for example claiming costs, depreciation or deductions. By contrast, artificial transactions without any economic purpose may be judged an abuse of law and lead to an additional tax assessment. Every measure you use to reduce your tax base should therefore have a genuine business rationale that you can explain and document.

Tax-deductible expenses

The most natural way to reduce your tax base is to consistently claim all eligible costs related to your business. Many entrepreneurs pay more tax than necessary simply because they forget about some costs or do not keep the supporting documents for them.

• Costs of materials, goods, services and energy
• Depreciation of tangible and intangible assets
• Costs of training and professional development
• Marketing, promotion and sales costs

Depreciation and provisions

Spreading the acquisition cost of assets through depreciation allows you to reflect costs gradually over several periods, which helps to even out the tax base. Creating statutory provisions, in turn, allows you to take future expenditure into account in the period in which the obligation arises economically, even though it will be paid later. Both tools must be managed precisely, with supporting evidence and in line with the rules; otherwise an advantage can turn into a problem.

Deduction of tax losses and other deductions

If a company has reported a tax loss in the past, it can, under the stipulated conditions, deduct it in subsequent years and thus reduce the tax base in a profitable period. Businesses that invest in research and development can also, if they meet the conditions, use special deductions that reduce the tax base even further. Always check the exact rules, the number of years and the limits for the period concerned, as they change.

What to watch out for

Safe optimisation stands or falls on documentation. For every cost, keep a document and, where relevant, a contract and evidence of its connection with your business. Avoid fictitious invoices and costs of a purely private nature, which are among the most common subjects of tax audits and the quickest route to an additional tax assessment. For borderline items such as business trips, fuel or company phones, clarify in advance what share you can defend as business use. It is equally important to keep your documents clear and well organised, so that you can quickly find and present them in the event of an audit.

• Keep complete documentation for every transaction
• Demonstrate the connection between costs and your business
• Avoid artificial transactions without economic purpose

When to approach an expert

It is sensible to discuss more complex situations, such as larger investments, transfers of assets or international transactions, before you carry them out. An expert will help you set up the procedure so that you reduce your tax base legally and safely, while also giving you certainty and peace of mind in the event of an audit. It often turns out that a company has been paying more than it had to for years, simply because it did not use all the legal options. Investing in good advice therefore usually pays for itself in tax saved and lower risk.

Current figures (2026)

Non-taxable portion of the tax base 2026

Flat-rate expenses

Figures valid for 2026; check the current wording.

Related articles: Non-taxable portions of the tax base: overview and conditions, Flat-rate expenses vs. actual expenses for sole traders, Tax bonus for a child: who is entitled and how to claim it.

Frequently asked questions

Is reducing your tax base legal?

Yes, as long as you use the options that the law allows and every cost has a genuine economic rationale and proper documentation. Only artificial or fictitious transactions are a problem.

What is the safest way to reduce your tax?

Consistently claiming all eligible costs, depreciating assets correctly and deducting tax losses. Complete and verifiable documentation is always the foundation of certainty.