A business hospitality tax law

(a) the scope of business hospitality expenses

in the scope of business hospitality, whether the financial accounting system or the old and new tax law have not given a precise definition. In tax law enforcement practice, the specific scope of hospitality is as follows: 1. For the production and operation of the enterprise needs to feast or working meal expenses; 2. For the production and operation of the enterprise needs to give souvenirs of the expenditure; 3. For the production and operation of the enterprise needs to occur in the tourist attractions to visit fees and transportation and other costs of expenditure; 4. For the production and operation of the enterprise needs to occur in the business relationship with the staff of the travel expenses.

The tax law stipulates that enterprises should strictly distinguish between business entertainment expenses and meeting expenses, and should not include business entertainment expenses in meeting expenses. Taxpayers declare the deduction of business hospitality expenses, the competent tax authorities require to provide supporting information, should provide proof of authenticity, sufficient and effective vouchers or information. The supporting materials for meeting expenses include the time, place, attendees, content, purpose, cost standard and payment vouchers of the meeting. If the tax authorities find that the business hospitality expenditure is false, or in the tax inspection found that there is unreal business hospitality expenditure, the right to require the taxpayer to provide proof of authenticity, sufficient and effective vouchers or information within a certain period of time, overdue information can not be provided, the tax authorities can not be further inspection, and directly negate the right of the taxpayer has declared the right of deduction of business hospitality expenses.

(ii) business hospitality tax treatment of the deduction base

The State Administration of Taxation on the revision of enterprise income tax return notice further clarifies that since July 1, 2006, the "Enterprise Income Tax Return (Trial)" provides that the base of calculation of the deduction of advertising expenses, business hospitality, business promotion expenses, etc., are the main table of the return for the calculation of the sales (operating) income. Sales (business) income in accordance with the accounting system accounting for the main business income, other business income, as well as according to tax regulations should be recognized as current income of the deemed sales income of the three components.

Income from main business is the net amount after deducting other discounts and sales returns. Cash discounts incurred in the taxpayer's operating business are recognized as financial expenses, while other discounts and sales returns are always reflected in the net amount of income from main business.

Other income includes non-operating income accounted for in accordance with the accounting system, as well as debt restructuring proceeds reflected in the capital reserve, the acceptance of donated assets, asset appraisal value-added and other income that should be recognized in the current period in accordance with tax regulations. For the income increased by the tax authorities, according to the regulations, the sales (business) income is the declared number of taxpayers, not the number determined by the tax authorities after inspection, and the income increased by the tax authorities should be listed in the increase of tax adjustments, which can't be used as the base for calculating the hospitality expenses.

Deemed sales refers to the transfer of goods or services that are not accounted for as sales in accounting, but as sales in taxation, recognition of income and payment of taxes. Mainly contains: non-monetary asset exchanges, as well as goods, property, services for donations, debt repayment, sponsorship, fund-raising, advertising, samples, employee benefits or profit distribution, etc., should be treated as the sale of goods, the transfer of property or the provision of services, but the State Council competent departments in charge of finance and taxation, except as otherwise provided.

(C) The percentage of deduction of business entertainment expenses for tax treatment

The new Regulations for the Implementation of the Enterprise Income Tax Law changed the percentage of deduction of business entertainment expenses from the previous different standards for domestic and foreign-funded enterprises. Article 43 of the said Regulations provides that business entertainment expenses incurred by enterprises in connection with production and business activities shall be deducted in accordance with 60% of the amount incurred, but the maximum shall not exceed 5 per cent of the current year's sales (operating) income.

Two, business hospitality reasonable planning

(a) maximize the reasonable use of the proportion of deduction

The tax law provides that business hospitality expenses incurred by enterprises in connection with production and business activities, according to the amount of the 60% deduction, but the maximum shall not exceed the current year's sales (operating) income of 5 ‰, that is, the business hospitality expenses incurred by enterprises to be deducted before tax, both the business hospitality expenses incurred by the enterprise to be deducted before tax, and the maximum shall not exceed the current year's sales (operating) income of 5 ‰. Hospitality to be deducted before tax, both first to meet the standard of 60% of the amount incurred, but the maximum shall not exceed the current year's sales revenue of 5 ‰ of the provisions of the use of here is the "two card" approach. Why this design? The author believes that the occurrence of business hospitality is only allowed to lie 60%, in order to distinguish between business hospitality and personal consumption of business hospitality, so artificially designed to design a uniform proportion of business hospitality in the removal of personal consumption; restricted to a maximum of not more than the current year's sales (operating) income of 5 ‰, is used to prevent some enterprises in order not to increase the business hospitality by 40%, on the use of more than one Looking for meal invoices, and even find fake invoices as business hospitality, resulting in inflated business hospitality.

In general, the sales (business) income of the enterprise can be measured.

If the enterprise actually incurred business hospitality 1 million yuan & gt; plan 830,000 yuan, that is, greater than the sales (operating) income of 8.3 ‰, then 60% of the business hospitality can be deducted, tax adjustments increased by 100-60 = 400,000 yuan. However, on the other hand, sales (operating) income of 5‰ only 500,000 yuan, but also further tax adjustments to increase 100,000 yuan, in accordance with the principle of the lower of the two restrictions on the comparison, take the lower value of the direct tax adjustments, *** adjustments to increase taxable income of 500,000 yuan, calculated to pay corporate income tax of 125,500,000 yuan, or the actual consumption of 1,000,000 yuan will have to pay the price of 1,125,500,000 yuan.

If the actual occurrence of business hospitality costs 400,000 yuan

Therefore, the following conclusion: when the actual business hospitality costs of enterprises is greater than the sales (operating) income of 8.3 ‰, more than 60% of the portion of the need to be fully taxable, more than the part of each payment of 1,000 yuan, will lead to a tax outflow of 250 yuan, equal to the consumption of 1,000 yuan to pay 1,250 yuan out of the waistband; when the enterprise When the actual business hospitality less than 8.3 ‰ of sales (operating) income, 60% of the limit can be fully utilized, only 40% of the part of the need for tax treatment, equal to the consumption of 1,000 yuan to shell out only 1,100 yuan of the waistband.

(ii) the comprehensive use of similar deductions balance

In practice, business hospitality and business promotion costs there are items that can replace each other. Although the tax law does not explain more about the scope of business hospitality, but in the implementation, the tax authorities usually define the scope of payment of business hospitality as the hospitality of customers' meals, lodging and cigarettes, tea, gifts, normal recreational activities, and arrangements for customers to travel and other costs and expenses incurred. The above expenditures are not generalized. Generally speaking, outsourced gifts used for presentation should be treated as business entertainment expenses, and if the gifts are produced by the taxpayers themselves or processed through entrustment, and have marking and publicity effects on the image and products of the enterprises, they can also be treated as business promotion expenses. On the contrary, the catering and lodging expenses incurred by the enterprise due to product fairs and exhibitions can also be classified as business entertainment expenses. This provides taxpayers with "activity" space for planning business hospitality.

In view of the above policy and planning space, taxpayers can be based on the nature of the expenditure project reasonable use of their rights to implement tax planning. For example, in the "administrative expenses" account set up "business hospitality" and "business promotion costs" sub-accounts, used to account for the usual business hospitality and business promotion costs, in order to prevent end-of-year This is to prevent unnecessary disputes over similar items in the year-end declaration or inspection by the tax authorities. The amount of expenses accounted for in the "Business Entertainment Expenses" and "Business Promotion Expenses" sub-accounts should be compared with the realized net sales (operating) income (total) in a timely manner, and when one of the expenses is found to be "overspent", the amount of expenses accounted for in the sub-accounts of "Business Entertainment Expenses" and "Business Promotion Expenses" will be used in a timely manner. "When, in a timely manner with the two" approximate "items for adjustment. Such as an annual net sales income is expected to reach 10 million yuan of enterprises, "business hospitality" pre-tax deduction limit of 50,000 yuan, "business promotion expenses" and advertising expenses pre-tax deduction limit of 1.5 million yuan, to the end of October has been incurred business hospitality expenses of 10 million yuan (60% of the amount incurred). By the end of October, business entertainment expenses have been incurred 100,000 yuan (60% of the amount incurred is 60,000 yuan), business promotion expenses of 300,000 yuan, business entertainment expenses have exceeded the deduction limit, business promotion expenses still have a larger limit of space. In this way, taxpayers can be incurred in the remaining months of self-produced or commissioned processing of goods as gifts to customers as well as business fairs, exhibitions, catering, accommodation and other costs incurred in the "business promotion costs" account.

Three points to note

(a) everything to the premise of lawfulness

(b) grasp the authenticity and reasonableness

(c) establish a good communication relationship with the tax authorities