As Germans tend to make quite a strong separation between work and their private life, it is fairly unusual to be taken out for dinner and even rarer to be invited to someone’s home.
Most business entertaining is done over lunch — either in a restaurant or, at larger companies, in company facilities.
It is not unknown to talk about business during the meal, although it is probably a good idea to try to introduce a few non-work related topics. (Sport is often a good option.)
If invited out for a meal, the host will always expect to pay. Similarly, if you invite someone for a business lunch, you will be expected to pick up the bill. In Germany, the knife is used throughout the meal. Eating with only one hand, with the other hand placed on one’s lap under the table, (as is common in North America) is not considered particularly good table etiquette.
Although alcohol may be offered at a business lunch, many Germans will refrain from drinking during the working day — take the lead from your host.
It is usual to leave a tip of around 10% at the end of a meal.