Some people believe that the cost of meals are business hospitality, exceeding the standard tax adjustment. In tax inspections, the scope of payment of business hospitality is usually defined as the cost of meals, cigarettes, water, food, normal entertainment activities and other expenses. From a qualitative point of view, this is not entirely correct. Business hospitality should refer to the enterprises and institutions for the production and operation of business activities and reasonable expenses for the reception of external customers. Assuming that a generalization, the meal costs and business hospitality on the same level, that all meals are business hospitality costs, obviously not appropriate.
Is it as long as the meal must be business hospitality? In fact, it is not. Inside the company, the meal costs for a variety of reasons, such as: the end of the year, the staff will eat; overtime to eat a working meal; filming film and television works when the meal as a prop and so on ...... These are not necessarily related to the reception of the customer, so the above costs or as a welfare, or as the cost of the film to account for. Obviously, meals are not always used to receive customers, and not necessarily business hospitality.
How exactly should we grasp this to be able to deduct it before tax? In fact, as long as the enterprise in the usual good record, strict management, accurate classification, categorized into different expense items, is not necessary to see the meal as business hospitality to deal with. At the same time, the following two tax-related border grasp is also crucial.
One is the enterprise business behavior and personal behavior of mixed expenditures to grasp the border. Mixed expenditures refer to expenses incurred for both profit and personal reasons, which should be divided into a business-use portion and a personal-use portion and deducted in accordance with the applicable provisions of each. In addition, special rules apply to expenses such as certain specific types of mixed expenses (e.g., personal hobbies/vacation homes), i.e., preventing taxpayers from abusing the benefit by disallowing the deduction of all or a portion of such expenses.
The second is the normalcy, necessity and reasonableness of the amount of the border to grasp. Normal expenses:The expenses are normally incurred in a certain activity of obtaining income; the expenses are general and acceptable. Necessary expenses: expenses that are appropriate and helpful to the taxpayer's income-producing activities. In most cases, Pacific Power Source prefers to accept the taxpayer's judgment that the expense is necessary to the operation of the business. Reasonableness of Amount: For an expense to be deductible, it must be reasonable in amount, and fair market value is an important factor.
Business hospitality over the standard deduction is every enterprise will face the problem, but also the income tax settlement involving the adjustment of the most cost items. The part that cannot be deducted before tax will directly increase the taxable income, that is, directly increase the tax burden of the enterprise. Therefore, for the business hospitality expenses, should cause the financial personnel of the enterprise attaches great importance to, especially some of the expenditures related to meals, how to distinguish is particularly important. In the daily work, attention should be paid to carefully analyze the substance of the economic business occurs, to avoid not belonging to the content of business hospitality included in the business hospitality accounting.
I, travel or socializing expenses?
The face of the business staff travel reimbursement of a large number of bills: travel just a few days, meal tickets, but there are thousands of dollars, as well as large amounts of shopping invoices, such a large number of meals, shopping expenditures, the financial staff how to deal with?
Accounts processing:
Financial personnel in the face of such a problem, first of all, to distinguish between these costs which are the normal expenses of the traveler's meals, which is to entertain the customer's expenditures, which is to buy gifts for customers' expenditures. In general, the enterprise for business travelers meal expenses are certain standards. Then, in accordance with the cost of a good division, belonging to the individual's normal travel expenses are charged to the "administrative expenses - travel expenses" and other subjects, the hospitality of the customer's meals and gifts to customers are charged to the "operating expenses - business hospitality "
Taxation
Tax treatment:
Value-added tax (VAT): Gifts given to customers without compensation should be treated as sales. Article 4 of the Implementing Rules of the Provisional Regulations on Value-added Tax (VAT) states that the following behaviors of a unit or an individual industrial or commercial enterprise shall be regarded as the sale of goods: Paragraph 8 provides that the self-produced, commissioned-processed, or purchased goods shall be given away to other units or individuals free of charge.
Enterprise income tax: Expenditures counted as travel expenses are normal operating expenses and can be fully deducted before tax. However, if the tax authorities need to provide supporting materials, you need to provide supporting materials. The supporting materials for travel expenses should include: name of the traveler, location, time, task, payment vouchers and so on.
The part of the business entertainment expenses need to be in accordance with the provisions of the Enterprise Income Tax Law to do the corresponding tax adjustments.
Second, clear the boundaries of meeting expenses and business entertainment expenses
Some enterprises, especially some large enterprises, have offices or molecular companies throughout the country, in order to grasp the situation and deployment of the next step of the work of the next, will be held regularly or irregularly at the headquarters of the company meeting. Offices or molecular companies in the meeting of the personnel during the accommodation costs, meals, conference fees, etc. should be how to deal with it?
In practice, some companies for the convenience of saving time or the company does not have a large conference hall, and rent a comprehensive hotel, that is, lodging, meals, meetings are in a hotel, the end of the meeting by the hotel unified invoices issued by the conference fee; some companies have their own conference halls, meetings are held in the enterprise, the participants of the lodging and meals borne by the hotel or by the hotel and the hotel, the end of the meeting, the hotel issued invoices for lodging. The hotel issued accommodation invoices, the hotel issued meal invoices; there are also enterprises meeting rooms, staff accommodation, staff meals in different locations, respectively, to obtain conference fees, accommodation, meal invoices.
Accounts processing:
According to the enterprise standard on the quality of accounting information "substance over form principle" requirements, the enterprise whether or not to obtain invoices, invoices issued by the content of the conference fees, as long as the meeting costs related to the expenses, should be in accordance with the substance of its costs, as "administrative expenses" or "conference fees".
Taxation:
Enterprise Income Tax: Conference fees incurred by enterprises for business purposes are allowed to be deducted before tax. However, it is necessary to provide relevant supporting documents.
The Measures for Pre-tax Deduction of Enterprise Income Tax (Guo Shui Fa [2000] No. 84) stipulates:
Article 52: If a taxpayer incurs reasonable travel expenses, meeting expenses or board of directors' expenses related to its business activities, and if the competent tax authorities require the provision of supporting information, the taxpayer should be able to provide legal documents proving the authenticity of such expenses; otherwise, no pre-tax deduction shall be allowed.
The supporting materials for travel expenses shall include: name of the traveler, place, time, task, payment vouchers and so on.
Meeting expenses should include: meeting time, location, attendees, content, purpose, cost standards, payment vouchers and so on. Then in practice, the enterprise due to the meeting of the accommodation costs, meal costs can be expensed as a conference fee, and deducted before tax?
At present, on the meeting costs of meals as business hospitality, or as a conference fee accounting, there is a certain amount of controversy, some people believe that the meeting held in a comprehensive hotel, the hotel issued by the content of the "conference fee" invoices, with the relevant proof can be pre-tax, but separately issued meals, accommodation costs can not be deducted according to the conference fee tax, especially in the case of the hotel. The conference fee pre-tax deduction, especially meals, should be used as hospitality, according to the tax law for tax increase.
The author believes that, regardless of whether the invoice is issued comprehensively, or separately issued, the essence of the meeting is to convene the expenses incurred, should be as a conference fee can be deducted before tax. There are three reasons:
1, "facts and evidence combined" is the enterprise income tax to deal with the costs and expenses reasonable and legitimate basic principles, as long as the company has "sufficient evidence" to prove the authenticity of its meeting expenses, the amount of reasonableness, the local tax authorities can be recognized as the reasonableness of its As long as the company has "sufficient evidence" to prove the authenticity and reasonableness of the conference fee, the local tax authority can recognize the reasonableness of the expense. The invoice is one of the tax evidence rather than the only one.
2. The Circular of the Ministry of Finance and the State Administration of Taxation on the Income Taxation of Foreign-Invested Enterprises on the Charging of Costs and Expenses stipulates that the board fee of an enterprise refers to the expenses paid by the board of directors and its members for the execution of the functions of the board of directors, such as: the travel expenses of the directors during the meeting of the board of directors, room and board, and other necessary expenditures. The expenditure and standard of board fees are generally decided by the board of directors. Expenditures decided by the Board of Directors can be charged as current period's expenses whenever they are actually incurred in the current period. However, hospitality, gifts and other expenditures of a sociable nature paid in the name of the board of directors shall not be expensed as board fees, but shall be included in the actual entertainment expenses of the enterprise.
3, "the central state organs of the conference fee management measures" (state management of financial [2006] No. 426), the provisions of the text, specific and clear meeting expenses, including conference room rental (including conference room rent), food subsidies, transportation, office supplies, document printing costs, medical expenses, etc.. Conference organizers shall not organize excursions for conference delegates and visits unrelated to the conference, nor shall they entertain conference participants, issue souvenirs and items unrelated to the conference. Article 11 on the conference fee expenditure standards, according to the type of meeting on the meeting of the rental costs, meal allowances, other costs and the total amount of strict limits, exceeding the standard or expanding the scope of expenditure will not be reimbursed.
Three, business promotion costs and business hospitality boundaries
In order to publicize the enterprise's products, such as advertising shirts, printed promotional messages of small gifts, etc.. In the order or the end of the fair as a gift to customers at no cost. Such costs incurred as business promotion costs accounting or business hospitality accounting?
Business promotion costs are the costs paid by the enterprise to carry out business promotion activities, mainly refers to the advertising expenses not through the media, including the enterprise issued by the enterprise logo printed gifts, souvenirs, etc.;
accounting: from the above definition of business promotion costs, the enterprise should be treated as a business promotional costs of the gifts given to customers. Debit "selling expenses - business promotion expenses" credit the relevant asset class accounts.
Taxation
Value-added tax (VAT): Gifts given to customers at no cost should be treated as sales and subject to VAT.
Enterprise income tax: the expense should be treated as business promotion expense. Regulations for the Implementation of the Enterprise Income Tax Law: Article 44 The qualified advertising and business promotion expenses incurred by an enterprise in each taxable year, except as otherwise provided by the competent financial and taxation authorities of the State Council, not exceeding 15% of the sales (operating) income of that year, shall be allowed to be deducted; and the portion exceeding such amount shall be allowed to be carried forward and deducted in the subsequent taxable years.
Four, clear employee benefits and business hospitality costs of the boundaries
The company does not have its own canteen, in order to solve the problem of employee lunches, unified by a restaurant meals, the company unified settlement, settlement of meals issued by the restaurant invoices, for the acquisition of meals invoices how to deal with it?
Accounts
This cost belongs to the production of products or services in the production of indirect labor costs incurred in the activity, is the enterprise to obtain the services provided by the staff to give other related expenditures, is part of the cost of labor. Should be done as "payable employee compensation - employee welfare costs" accounting, not as business hospitality accounting. In the account processing, should be indicated in the summary column is the employee's lunch expenses, at the same time will be the name of the employee dining and the number of days and standards set out in detail, in order to avoid in the tax audit, was recognized as the nature of hospitality expenditures.
Tax treatment
Enterprise Income Tax: For the employee lunch expenses included in the employee welfare part of the bookkeeping, the tax law is recognized, and is allowed to be deducted before tax when it does not exceed the proportion of the tax regulations.
"The Chinese people*** and the implementation of the State Enterprise Income Tax Law Regulations" (State Council Decree No. 512 of 2007) provides: "Article 40 of the enterprise incurred employee welfare expenditure, not exceeding 14% of the total amount of wages and salaries, are allowed to deduct."
The Circular of the State Administration of Taxation on Issues Concerning the Deduction of Wages and Salaries and Employee Welfare Expenses of Enterprises (State Taxation Letter [2009] No. 3) stipulates that: "Employee welfare expenses of enterprises as stipulated in Article 40 of the Implementing Regulations shall include the following:
(1) For enterprises that have not yet implemented the separation of the function of running a social organization, the expenses for equipment, facilities and personnel incurred by their internal welfare departments, including equipment, facilities and repair and maintenance costs of collective welfare departments such as staff canteens, staff bathrooms, hairdressing rooms, medical clinics, nurseries and nursing homes, as well as the wages and salaries, social insurance premiums, housing provident funds and labor costs of the staff of the welfare departments.
(2) Subsidies and non-monetary benefits for employees' health care, living, housing, transportation, etc., including medical expenses paid by enterprises to employees for overseas medical treatment on official business, medical expenses for employees of enterprises that have not implemented medical coordination, medical subsidies for employees' dependent immediate family members, subsidies for heating costs, summer heat-heat-abatement expenses for employees, hardship subsidies for employees, relief expenses, subsidies for employees' canteens, and transportation subsidies for employees. subsidies, etc.
(3) Other employee welfare expenses incurred in accordance with other provisions, including funeral subsidies, pension payments, settlement expenses, and travel expenses for family visits.
In addition to the above matters, what else do you need to remind the financial staff to pay attention to? That is the preparation of business hospitality evidence and proof of class information and documents.
China's current tax law on business hospitality is still relatively lenient overall policy, but because of its expenditure is the most serious abuse of deductions in the corporate tax law in the area of management difficulties, so, does not rule out the tax audit, the tax authorities require taxpayers to declare the authenticity of deductions to self-evidence. Although the tax authority will generally agree with the deduction expenses declared by the taxpayer, if the tax authority finds that there are irregularities in the business hospitality expenses, or finds that there are untrue business hospitality expenses in the tax inspection, the tax authority has the right to require the taxpayer to provide valid vouchers or information proving that the authenticity of the expenses is sufficient within a certain period of time, and the tax authority can directly deny the right to deduct business hospitality expenses that have been declared by the taxpayer, if the tax authority fails to provide the information after the expiration of the period of time. The tax authorities can directly deny the taxpayer's right to deduct business entertainment expenses and make corresponding tax adjustments.
Related vouchers and information as long as the proof of the authenticity of the business entertainment expenses is sufficient and effective, and does not strictly require the provision of a particular voucher, which also leaves some room for the taxpayer's business management. Voucher information may include invoices, canceled checks, receipts, sales bills, accounting books, taxpayer or other testimony, the more objective testimony is more effective. For example, a gift to a customer's salesman is not, in most cases, supported by specific documentation such as an invoice, but the authenticity of the expense can be recognized as long as there is proof of the gift recipient and that the recipient does have a commercial business relationship with the enterprise. In general, the tax law does not force enterprises to require the signature of the person concerned when giving gifts to customers and business people, but if the tax authorities require proof of authenticity, enterprises can also be retroactive evidence.
Fifth, the threshold for legal deduction of business hospitality expenses
According to the "People's Republic of China *** and the implementation of the State Enterprise Income Tax Law Regulations," Article 43 provides: "enterprises incurred in connection with the production and operation activities of business hospitality expenses, in accordance with the amount of 60% of the amount of the deduction, but shall not be more than the maximum of the current year's sales (operating) income of 5 ‰." This provision, how can taxpayers make full use of business hospitality statutory deduction limit and can maximize
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