How To Correctly Calculate The Deduction Limit For Entertainment Expenses

Many enterprises often deal with the calculation of the pre tax deduction limit of business entertainment in the simplest way. For example, if the sales revenue of accounting statements is multiplied by 5 per thousand, compared with the 60% of the business entertainment expenses, the small person will be taken as the pre tax deduction limit, which not only exposes the relevant enterprises but does not understand and grasp it. tax law The relevant regulations also make enterprises unable to make full use of tax policies. For this reason, the problem of how to correctly determine the pre tax deduction basis of business entertainment expenses is analyzed as follows.

Under normal circumstances, sales revenue The size often determines whether the business entertainment fee can be deducted before tax. The higher the income is, the more likely the business can be deducted before tax. However, the sales revenue as a base for calculating business entertainment expenses is often not only reflected in the sales statements of the accounting statements, but also has to go through the necessary adjustment, and the adjustment results often exceed the income reflected in the accounting statements. There are three common situations that need to be adjusted.

First, according to the regulations of the State Administration of Taxation on the handling of certain tax issues in the implementation of enterprise income tax (National Tax Letter No. 2009] No. 202, when calculating the expenses for deducting the expenses of business entertainment, advertising and business publicity, the sales (business) receipts shall include the amount of sales (business) income stipulated in the twenty-fifth regulations of the implementing regulations.

Two, according to the Circular of the State Administration of Taxation on Issuing the "enterprise income tax treatment method of real estate development and operation business" (No. 31 of the national tax [2009]), the receipts obtained by the enterprises through the formal signing of the real estate sales contract or the real estate pre-sale contract shall be recognized as the realization of sales revenue.

The three is the Circular of the State Administration of Taxation on the implementation of certain tax issues in the enterprise income tax law (National Tax Letter No. 2010, No. 79). For enterprises engaged in equity investment business (including group headquarters, venture capital enterprises, etc.), dividends, dividends and share spanfer income from the invested enterprises can be calculated according to the prescribed ratio.

The income in these three situations should be calculated. Business entertainment expenses The cardinal number.

Although the sales revenue of the enterprise is zero, the business entertainment fee can still be deducted. According to the fifth provision of the State Administration of Taxation on the issue of tax treatment on the taxable income of enterprise income (the fifteenth announcement of the State Administration of Taxation 2012), the business entertainment expenses related to the preparatory activities during the preparation period of an enterprise can be included in the enterprise's preparation fee according to the actual amount of 60%, and it is deducted according to the relevant regulations before tax.

Therefore, the business entertainment expenses related to the preparatory activities during the preparation period will not be affected by the level of sales revenue. Even if the sales revenue can not be obtained during the preparatory period, it can be directly charged to the enterprise's preparatory fee according to the actual amount of the business entertainment fee of 60% and regulated according to the pre tax deduction.

Generally speaking, tax planning can be divided into three levels, namely, strategic structure, business mode and fiscal and taxation management. From the perspective of the role of Financial Accountants in the company, tax planning can be more involved in the company's fiscal and tax management level. In order to raise the level of accounting, maximize the cost deduction, and actively assist the company in applying various preferential tax policies, the tax burden will be reduced while improving the standardization of tax administration and paying less tax.

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