It costs 2000 yuan to invite customers to dinner on business trip. Is it included in business entertainment or travel expenses?


I believe that every accountant has been exposed to business entertainment expenses in their work, especially in the work with more social activities, there are always several catering invoices that have taken the business entertainment expenses.But do you know that if you enter the wrong business entertainment expenses, you will also pay more taxes!


Business entertainment, travel expenses, meals

What's the difference?

First of all, it is necessary to know what is business entertainment.

In short, they are three characteristics For the purpose of enterprise operation, there is business relationship between the enterprise and the host, and reasonable expenditure.Does the personal hobby expense of enterprise owner count as business entertainment expense?I believe many people will say "no", because it has nothing to do with business operation.

Clear the characteristics of business entertainment expenses, and then clarify the differences between them and other expense subjects. In terms of the scope of business entertainment expenses, there is no official document definition, so it is easy to be "inseparable" from other expenses. Among them, the most confusing ones are travel expenses and meal expenses. Now, we will make a distinction between these three expense subjects.

What is the difference between business entertainment and travel expenses? For example, if a client comes to the company to talk about a project, the accommodation expenses incurred shall be borne by the company, and the accounting personnel may include the expenses into the business entertainment expenses;If the company's employees go to the client company to talk about the project, and the accommodation cost is borne by the company, it must be included in the travel expenses.The difference between business entertainment expenses and travel expenses is that the former is for the expenses of personnel outside the enterprise, while the latter is for the expenses of internal personnel of enterprises.

What is the difference between business entertainment and meals? Business entertainment expenses include meal expenses, which are not included in business entertainment expenses. The relationship between them is shown in the following figure: an employee has to go on a business trip to Guangzhou to accompany the customer and board the Guangzhou tower with the customer. The leader said that the expenses should be fully contracted. Therefore, the transportation expenses for going to Guangzhou tower, the door ticket fees for the Guangzhou tower, the meal expenses for the banquet after the end, and the miscellaneous expenses for presenting souvenirs to the other party, etc,All included in the business entertainment expenses.

But how to understand that "meal expenses are not business entertainment expenses"? The most common is that the company provides lunch free of charge, which is the meal fee, but is included in the employee welfare expense;Do employees have to eat during business trip?The cost of meals is included in the travel expenses.

What is the base of business entertainment expenses before tax deduction? In the regulations on the implementation of the enterprise income tax law issued by the State Administration of Taxation, there is a provision as follows:

As long as the business entertainment expenses meet the requirements, the enterprise can deduct 60% of the amount before tax on the premise that it does not exceed 5% of the operating income of the current year.


Pay attention to the tax risk of these business entertainment expenses

1. Mistaking business entertainment expenses into other items will affect value-added tax, enterprise income tax and personal income tax.

For example, when Huawei Company maintained the customer relationship, it gave a mobile phone to the customer. The accounting personnel did not include the business entertainment expenses, but included the business promotion expenses.If the advertising and publicity expenses were too much and exceeded the deduction, and the business entertainment expenses were still within the deduction amount, it would increase the enterprise income tax and value-added tax burden of Huawei Company.

2. The expenses that do not conform to the standard and have nothing to do with the production and operation of the enterprise are also included in the business entertainment expenses.
From the above documents of the State Administration of Taxation, business entertainment expenses must be expenses related to business operation.The boss bought an air conditioner and put it in the office, which can't be regarded as business entertainment expenses and can't be deducted before tax.

What's worse, there is an expense that can be included in the business entertainment expenses, but the invoice is not standardized and can not be deducted before tax.

3. The Deduction Policy of business entertainment expenses in preparation period is different from that in normal period.
According to the announcement of the State Administration of Taxation on the tax treatment of taxable income of enterprise income tax (Announcement No. 5 of 2012 of the State Administration of Taxation), the business entertainment expenses related to the preparatory activities of an enterprise during the preparation period can be included in the enterprise preparation expenses according to 60% of the actual amount and deducted before tax according to the relevant provisions.

According to Article 9 of the notice of the State Administration of Taxation on the convergence of several tax matters of enterprise income tax (GSH [2009] No. 98), if the opening (Preparatory) expenses are not clearly listed as long-term deferred expenses in the new tax law, the enterprise may deduct them once in the current year from the date of operation, or deal with the long-term deferred expenses in accordance with the provisions of the new tax law,It must not be changed.

In other words, the company needs to entertain investors during the construction period. The expenses generated during this period can be deducted according to the standard. If the company starts to operate, it has to be deducted according to other regulations.

4. Expenses not actually incurred shall not be deducted.
For example, the accountant of Huawei Company calculated 3 million business entertainment expenses that can be deducted according to the standard deduction according to the income of the current year. However, the actual business entertainment expenses are only 2.5 million, so the remaining 500000 can not be deducted before tax.

5. Business entertainment expenses that cannot be proved to be true shall not be deducted.
If the taxpayer can not provide true and effective documents or information to prove that the expenses really belong to business entertainment expenses, the tax authorities will not apply for pre tax deduction of taxpayers.


Case Q & A

1. I bought 300 yuan of fruit for business entertainment. Whose ID number and name should be written on the voucher?

For the reimbursement application form, the name of the applicant should be written;For receipts, write the name of the person who receives the money.

2. Can the input tax of business entertainment expenses be deducted?
Input items used for personal consumption and social intercourse shall not be deducted.

3. Why does the tea presented to customers involve business entertainment expenses?
If the tea is self-produced, it is regarded as sales:

Debit: sales expenses business entertainment expenses       

     Credit: goods in stock              

          Tax payable value added tax payable (output tax)

If the tea is purchased from abroad:

1) The trade company selling tea gives some tea to customers,

Debit: goods in stock       

  Tax payable - VAT payable (input tax)       

      Loan: bank deposit; 

When presenting:

Debit: sales expenses      

   Credit: goods in stock             

      Tax payable - VAT payable (input tax transferred out)
2) Non tea companies buy back tea as gifts to customers:

Debit: sales expenses business entertainment expenses       

   Credit: bank deposit

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