The Federal Fiscal Court has confirmed that subsidies for a canteen operated by a caterer, under certain circumstances - and contrary to the position of the tax authorities - are not deemed to constitute remuneration paid by a third party to the caterer for the supply of meals to employees. Rather, the companies paying subsidies are regarded as directly purchasing canteen operating services. However, in the particular case at hand, the Court denied an input VAT deduction by arguing that the services purchased were intended to be used for services provided free of charge to the employees. Therefore, companies paying subsidies to canteens are still not entitled to input VAT deduction in this regard but should check whether specific circumstances exist which allow for input VAT deduction due to the fact that the personal advantage of the employees is merely an accessory to the requirements of the business.