Hospitality expenses

In the course of their activities, organizations incur representative expenses intended for official receptions, servicing representatives present at negotiations on the installation and maintenance of cooperation between enterprises. They relate to other costs of production and sales. That is why when calculating income tax they are taken into account as indirect costs of the enterprise.

Representation expenses include expenses for:

- conducting negotiations, official receptions (lunches, breakfasts, other similar events) for certain persons and official representatives of the taxpayer enterprise participating in the negotiations;

- buffet service of negotiations and official meetings;

- ensuring the transport delivery of officials to the place of the representative event;

- payment for services of hired translators that are not included in the staff of the taxpayer enterprise, but provide translation.

Representation expenses cannot include expenses for leisure, entertainment, treatment and prevention of diseases, attendance at cultural events. They can not be attributed to ordinary dinners in restaurants, hotel expenses, travel expenses, visas, anniversaries and holidays. All these costs do not reduce the tax base.

In accounting, hospitality expenses are included in other expenses in full. For tax accounting, they are taken into account within certain norms. The total amount may be included in other expenses in the limit of 4% of the enterprise’s labor costs. Such costs include payroll on salaries and tariff rates, allowances, compensation payments, bonuses, employee costs provided for in collective agreements. Exceeding these costs in excess of the established norm is not taken into account in other expenses.

Management accounting of hospitality expenses is made depending on what they are intended for. They are written off at the expense of certain funds of the enterprise:

- the cost of production;

- trade circulation costs;

- capital investments;

- other expenses displayed in the financial result, accepted or not accepted for tax purposes;

- targeted sources of financing;

- an account on which values ​​are recorded (for example, those related to the purchase of securities).

Capital costs associated with the equipment of the premises for a business meeting cannot be attributed to hospitality expenses.

Registration of such expenses should be made by order or order of the head of the enterprise, which will stipulate all the nuances of registration. The tax code does not contain specific requirements for such primary documents. The company establishes the procedure for spending representative funds, paperwork and control over this. Representation expenses, postings on which are carried out according to primary documents containing information about the place, date of the event, a list of representatives, a specific purpose of expenses, the result of negotiations, should be drawn up in a specific package of documents. It should include: an order on the implementation of such expenses, an estimate of expenses, a report (act) on their implementation, primary documents, an accounting statement with the calculation of the limit standard.

Representation expenses are shown in the debit of accounts 44 “selling expenses”, 20 “main production” and 26 “general business expenses”, and for loans - on accounts VI of the section “settlements” and accounts: 50 “cash desk”, 19 “VAT”, 51 “settlement accounts”, 71 “settlements with accountable persons”.