What do entertainment expenses include? Estimate for entertainment expenses - sample. Planning. Step-by-step action plan - structure. Compose, write. Compilation, writing. Detailing. Clarification, adjustment

In order to develop business, conclude profitable contracts and strengthen long-term cooperation with partners, organizations increasingly have to spend money on various types of events. Can such expenses be recognized as entertainment expenses and taken into account for profit tax purposes? The pressing problem of registering expenses as representative expenses is that such expenses need to be economically justified and documented. Arbitration practice is based on criteria for the limits of reasonable compensation for representation expenses within a wide range of judicial discretion. What documents will confirm the fact that the expenses incurred by the organization are representative expenses, in order to avoid claims from the tax authorities in the future?

Large companies pay serious attention to organizing meetings and negotiations with their business partners. The practice of holding various presentations and official receptions for their regular and potential clients has become ingrained in business customs.

1. What is said in the Tax Code of the Russian Federation

In accordance with sub. 22 clause 1 art. 264 of the Tax Code of the Russian Federation, other expenses associated with production and sales include representation expenses, that is, expenses for the official reception and service of representatives of other organizations participating in negotiations in order to establish and maintain cooperation, in the manner provided for in paragraph 2 of this article.

According to paragraph 2 of Art. 264 of the Tax Code of the Russian Federation, entertainment expenses include the taxpayer’s expenses for official reception and (or) service:

• representatives of other organizations participating in negotiations in order to establish and (or) maintain mutual cooperation;
• participants who arrived at meetings of the board of directors (board) or other governing body of the taxpayer, regardless of the location of these events.

Entertainment expenses include, in particular, the following expenses:

• to hold an official reception (breakfast, lunch or other similar event) for the named persons, as well as officials of the taxpayer organization participating in the negotiations;
• for transport support for the delivery of these persons to the venue of the representative event and (or) meeting of the governing body and back;
• for buffet service during negotiations;
• to pay for the services of translators who are not on the taxpayer’s staff to provide translation during entertainment events.

Representation expenses may include expenses incurred by the organization under a consulting services agreement.

For example, in one of the disputes, the court qualified as representation expenses the costs of negotiations between representatives of the company and a foreign company on business cooperation under an agreement for the provision of consulting services (restructuring of the operating

activities, changing the organizational structure in order to increase efficiency, reduce costs and develop production). The position of the arbitration court is reflected in Resolution of the Federal Antimonopoly Service NWZ dated January 27, 2006 N A42-8823/04-28.

It should be noted that entertainment expenses during the reporting (tax) period are included in other expenses in an amount not exceeding 4% of the taxpayer’s expenses for wages for this reporting (tax) period. Thus, entertainment expenses belong to the so-called standardized expenses.

According to sub. 5 paragraph 7 art. 272 of the Tax Code of the Russian Federation, the date of payment of entertainment expenses is the date of approval of the advance report.

2. Analysis of the general requirements
to expenses

Now let’s analyze the main criteria that any expenses in tax accounting must satisfy. These criteria are specified in paragraph 1 of Art. 252 of the Tax Code of the Russian Federation, which states that expenses are recognized as justified and documented expenses incurred by the taxpayer.

Expenses must be justified

Justified expenses mean economically justified expenses, the assessment of which is expressed in monetary form.

The expenses incurred by the organization are properly documented

Documented expenses mean expenses confirmed by:

• documents drawn up in accordance with the legislation of the Russian Federation;
• documents drawn up in accordance with business customs applied in the foreign country in whose territory the relevant expenses were incurred;
• documents indirectly confirming expenses incurred (including a customs declaration, business trip order, travel documents, report on work performed in accordance with the contract).

Any expenses are recognized as expenses, provided that they are incurred to carry out activities aimed at generating income.

As practice shows, arbitration courts allow organizations to take into account economically justified and documented entertainment expenses. Thus, in one of the cases, the court found that the controversial business trip expenses were incurred by the company in connection with the participation of the general director in a business visit of the official delegation and representatives of enterprises of the republic to the cities of St. Petersburg and Kaliningrad initiated by the government of the Republic of Bashkortostan in order to visit organizations located there and conduct negotiations with their leadership. The topic of the visit was directly related to the production activities of the company. The position of the arbitration court is reflected in Resolution of the Federal Antimonopoly Service UO dated April 26, 2007 N F09-2970/07-S2.

When are representation expenses economically feasible?

Let's consider situations in which arbitration courts recognized the organization's representation expenses as economically justified.

Thus, in one of the arbitration disputes, the court indicated that the company’s expenses met the criteria established in subsection. 22 clause 1 art. 264 of the Tax Code of the Russian Federation and paragraph 1 of Art. 252 of the Tax Code of the Russian Federation, that is, related to the official reception and service of representatives of other organizations participating in negotiations with the aim of establishing and maintaining cooperation, are confirmed and economically justified. The receptions held by representatives of airline companies - contractors of the company are aimed both at fulfilling current obligations under concluded contracts and at further continuation of cooperation, while both specific customers and representatives of other airlines were invited to factory tests ( Resolution of the Federal Antimonopoly Service NWZ dated June 21, 2007 N A56-10798/2006).

Documentary confirmation of the official visit

Resolving another tax dispute on the merits, the court noted that the official nature of the activities being carried out is confirmed by travel orders, which establish the purpose of the trip:

conducting negotiations with the bank's counterparties, concluding agreements (which indicates the focus of the job assignment on maintaining cooperation with the bank's counterparties). The court found that a person had been appointed to act as the absent employee, meaning that the bank manager's visit was not a private one, but an official business trip. Business trip reports also serve as confirmation of the official nature of the events. Thus, the court recognized the bank’s accounting of entertainment expenses as legitimate due to the fact that these expenses are of an official nature ( Resolution of the Federal Antimonopoly Service dated September 12, 2007 N A57-15382/06).

Sometimes tax authorities make conclusions about the economic unjustification of company representation expenses without sufficient grounds. As an example, let's give Resolution of the Federal Antimonopoly Service of March 29, 2007 N A55-10820/06.

OJSC "Mobile Communication Systems - Povolzhye" appealed to the arbitration court with a statement to invalidate the decision of the tax inspectorate. In this decision, the inspectors concluded that the company had unlawfully taken into account the amount of payment for services for organizing and holding an extended production meeting of the company’s management and technical personnel.

The tax authority in court must justify its position on the economic inexpediency of the taxpayer’s expenses

The arbitration court supported the taxpayer's position. At the same time, the court proceeded from the fact that the tax authority did not document its argument about the economic unjustification of these services and the absence of their connection with the company’s production activities aimed at generating income.

As the court found, the program for the extended production meeting and the composition of the meeting participants indicate that the meeting was of an informational, stimulating, advertising and representative nature and was aimed at increasing the efficiency of the company's work in the current year and at informing the public and business partners about high production and economic indicators achieved by society last year.

In this regard, the court considered that, in accordance with sub. 18, 22, 28 p. 1 art. 264 of the Tax Code of the Russian Federation, the costs of holding such a meeting can be taken into account for profit tax purposes as other expenses associated with production and sales.

As the practice of interpreting paragraph 2 of Art. 264 of the Tax Code of the Russian Federation, the law does not contain a limited list of entertainment expenses. When resolving the issue of classifying controversial expenses into this category, the court will first of all proceed from their economic justification ().

Expenses must be documented

If there are documents confirming the fact of incurring expenses, the organization has the right to reduce taxable profit by the amount of entertainment expenses ( Resolution of the Federal Antimonopoly Service NWZ dated April 18, 2007 N A05-10601/2006-22). For example, in one of the tax disputes, the organization presented the following documents to the court: an agreement, estimates of entertainment expenses prepared on the basis of the delegations’ stay programs, bilateral certificates of service, invoices, documents for payment of services, calculations for catering. Having assessed these documents together, the court qualified the taxpayer’s expenses as entertainment expenses and recognized it as legitimate to classify them as other expenses ( Resolution of the Federal Antimonopoly Service of the Moscow Region dated June 19, 2007 N KA-A40/5440-07).

In another dispute, as documents confirming the validity of entertainment expenses, the organization presented an act on attributing expenses to entertainment expenses, an executive estimate, sales and cash receipts, and an advance report. In addition, the company confirmed the fact of an official meeting of the general directors in the city of Tyumen, presented the documents it had - minutes of the meeting, copies of documents signed during negotiations at the company's office. Having examined these documents, the court found the taxpayer’s write-off of entertainment expenses justified. The court's position is reflected in Resolution of the Federal Antimonopoly Service ZSO dated November 30, 2005 N F04-8632/2005 (17413-A70-37).

It should be noted that certain inaccuracies in the preparation of documents do not change the legal nature of payments related to entertainment expenses. This follows from Resolution of the Federal Antimonopoly Service dated November 24, 2005 N A65-3726/2005-SA1-37.

The results of negotiations, signed contracts and agreements, the program of negotiations, as well as the list of issues to be resolved do not relate to primary accounting documents, and their availability is not a prerequisite for the taxpayer to confirm the actual costs incurred ( Resolution of the Federal Antimonopoly Service of March 29, 2005 N A12-18384/04-C36).

Tax legislation does not require the mandatory inclusion in the list of documents submitted by the company of a name list of representatives of organizations participating in negotiations, a business meeting program, etc. This conclusion was made in Resolution of the Federal Antimonopoly Service UO dated 09/07/2005 N F09-3872/05-S7.

The company must confirm the actual representation expenses incurred

In the absence of documents confirming the fact of incurring entertainment expenses, the organization does not have the right to take them into account when taxing profits.

The justice of what has been said is confirmed by the resolution FAS North Caucasus Region dated March 12, 2007 N F08-722/2007-296A. In another case, the arbitration court found that the company included entertainment expenses as expenses based on the accounts of public catering establishments. Meanwhile, these documents, in accordance with the law, do not relate to payment documents confirming the fact of settlements. Under such circumstances, the court concluded that the company did not document the entertainment expenses incurred ( Resolution of the Federal Antimonopoly Service of the Eastern Military District dated August 10, 2006 NА29-4238/2005a).

The tax authorities draw similar conclusions. In their opinion, in the absence of documentary evidence, entertainment expenses are not taken into account for profit tax purposes, since they do not comply with the principles of recognizing expenses for these purposes in accordance with paragraph 1 of Art. 252 of the Tax Code of the Russian Federation. This follows from the letter of the Office of the Federal Tax Service of Russia for Moscow dated December 22, 2006 N 21-11/113019@ “On the taxation of unified social tax on funds allocated for corporate entertainment events and official receptions.”

Expenses must be related to income-generating activities

In order to classify entertainment expenses as expenses that reduce the taxable profit of an organization, it is necessary to confirm their connection with the business activities of the company. For example, when resolving a tax dispute, the court concluded that entertainment expenses are documented, economically justified, were carried out for the purpose of establishing and maintaining mutual business cooperation with counterparties throughout the audited period, that is, related to the generation of income. In this regard, the court found it legitimate to include them as part of other expenses ( Resolution of the Federal Antimonopoly Service of the Moscow Region dated December 19, 2006 N KA-A40/11391-06).

So, in cases where entertainment expenses are related to production activities and are economically justified, the organization has the right to take them into account when taxing profits. Confirmation of this - Resolution of the Federal Antimonopoly Service VSO dated March 21, 2007 N A33-4978/2006-F02-1370/07; FAS ZSO dated May 11, 2006 N F04-2610/2006(22165-A46-40).

For example, the arbitration court found that, as a result of negotiations, contracts were concluded for the supply of raw materials on terms favorable to society and there was no interruption of production activities due to a lack of raw materials. In addition, entertainment expenses are confirmed by relevant primary documents. Under such circumstances, the court recognized the tax accounting of entertainment expenses as legitimate. The position of the arbitration court is given in Resolution of the Federal Antimonopoly Service dated 01.02.2005 N A57-1209/04-16.

3. What documents can be used to confirm
entertainment expenses

Significant shortcomings in documenting expenses will cause difficulties in proving their legality

Documents used to confirm entertainment expenses are:

• order (instruction) of the head of the organization on the implementation of expenses for these purposes;
• estimate of entertainment expenses;
• primary documents, including in cases of using goods purchased externally for entertainment purposes, payment for services of third-party organizations;
• an act on the implementation of entertainment expenses, signed by the head of the organization, indicating the amounts of entertainment expenses actually incurred.

The report on entertainment expenses, compiled specifically for the entertainment events carried out, reflects:

1. the purpose of representative events and the results of their implementation;
2. date and location;
3. program of events;
4. composition of the invited delegation;
5. host party participants;
6. amount of expenses for entertainment purposes.

These documents are stated in the letter of the Office of the Federal Tax Service of Russia for Moscow dated October 6, 2006 N 20-12/89121.2 “On classifying as entertainment expenses the costs of purchasing products and disposable tableware for organizing official reception and buffet service for clients during business negotiations and presentations services".

Moreover, all expenses listed in the report must be confirmed by relevant primary documents. The Russian Ministry of Finance stated this in a letter dated November 13, 2007 N 03-03-06/1/807.

In the case of the acquisition of goods (services) for representative purposes by the accountable person, the supporting documents will be the primary documents issued by the relevant organizations to the accountable person. For example, cash and sales receipts, acts of acceptance and transfer of goods (services rendered), etc., as well as an advance report on the use of imprest amounts. This legal position is set out in the letter of the Office of the Federal Tax Service of Russia for the city of Moscow dated May 16, 2006 N 20-12/41851 “On income taxation of travel and entertainment expenses.”

Thus, the costs of holding an official reception must be documented, including a protocol of the event indicating the persons participating in the event. In the absence of documentary evidence, these expenses are not taken into account for profit tax purposes, since they do not comply with the principles of recognition of expenses for profit tax purposes, provided for in paragraph 1 of Art. 252 of the Tax Code of the Russian Federation. These conclusions were made in the letter of the Office of the Federal Tax Service of Russia for Moscow dated December 22, 2006 N 21-11/113019@ “On the procedure for accounting for entertainment expenses of an organization when determining the tax base for income tax.”

When concluding an agreement with a third-party organization (for example, with a public catering establishment), the contract itself, the act of performing work (rendering services), an invoice, or an invoice will serve as documentary evidence of the implementation of entertainment expenses. If translators who are not on the staff of the organization are involved, the costs are also confirmed by relevant contracts, certificates of completed work and other documents. This is stated in the letter of the Office of the Federal Tax Service of Russia for Moscow dated April 12, 2007 N 20-12/034115 “On accounting for profit tax purposes for entertainment expenses for hotel accommodation.”

4. Accounting for expenses for holding meetings of governing bodies

In paragraph 2 of Art. 264 of the Tax Code of the Russian Federation expressly states that entertainment expenses include the taxpayer’s expenses for official reception and (or) servicing of participants who arrived at meetings of the board of directors (board) or other governing body of the taxpayer, regardless of the location of these events.

Can tax authorities prohibit an organization from taking into account expenses prescribed by law?

In such cases, arbitration courts stand up to protect the rights of taxpayers. Thus, the court found justified the tax accounting of expenses for paying the cost of travel for a shareholder and members of the company’s board of directors to participate in the general meeting of shareholders ( Resolution of the Federal Antimonopoly Service of August 31, 2006 N A65-18519/2005-SA2-22).

5. Accounting for the costs of organizing meetings with media representatives

Certain difficulties in qualifying expenses arise for companies organizing presentations for journalists. According to the tax authorities, these costs cannot be taken into account when taxing profits. However, the courts think differently. Let us illustrate this with the following example from arbitration practice: Resolution of the Federal Antimonopoly Service dated January 12, 2006 N A62-817/2005.

OJSC "Production Association "Crystal"" appealed to the arbitration court with a statement to declare the decision of the tax inspectorate illegal.

The cost of transport services for the transportation of partners’ representatives can be taken into account when taxing profits if there are significant arguments

The arbitration court supported the stated claims and concluded that the company rightfully classified the cost of transport services for transporting journalists as entertainment expenses.

As the court found, the society held a seminar “Russian market of precious stones.

Production, trade, consumption: conflict or consensus?" Journalists from leading Russian media were invited to participate in the seminar. As part of the approved plan of events for holding the seminar, the company concluded an agreement for the transportation of journalists from Moscow to the enterprise in Smolensk to participate in seminar and back.

The need for journalists to participate in the event was determined by the company’s advertising policy, as well as the establishment of long-term economic relations with leading print and television agencies for the placement of advertising materials of the company and the publication of articles about its activities.

These circumstances were confirmed by the documents submitted by the association certifying the holding of the seminar (event plan, list of invited persons, transportation contract, memo from the marketing department).

In another case, the court also classified as entertainment expenses the company’s expenses for organizing a meeting with journalists from regional and local media, which was held with the aim of establishing and maintaining cooperation ( Resolution of the Federal Antimonopoly Service NWZ dated November 28, 2005 N A42-7239/04-28).

6. Can they be considered entertainment expenses?
hotel costs

The question of whether hotel accommodation costs for representatives of another organization are considered entertainment expenses is controversial.

According to the financial department, expenses for paying for the accommodation of participants of a foreign delegation cannot be taken into account as part of entertainment expenses for profit tax purposes, since this type of expense is not provided for in paragraph 2 of Art. 264 Tax Code of the Russian Federation. This point of view is given in the letter of the Ministry of Finance of Russia dated April 16, 2007 N 03-03-06/1/235.

Financial and tax authorities are unanimous in their position on classifying expenses for hotel accommodation as representative expenses, but the courts have their own opinion

The capital's inspectors also believe that the organization does not have the right to take into account, as part of entertainment expenses, the costs of hotel accommodation for officials - foreign business partners who came to an official meeting in order to establish and maintain long-term cooperation.

This is stated in the letter of the Office of the Federal Tax Service of Russia for Moscow dated April 12, 2007 N 20-12/034115 “On accounting for profit tax purposes for entertainment expenses for hotel accommodation.”

However, arbitration courts have a different opinion on this issue, allowing companies to reflect the costs in question in tax accounting. Let us illustrate this with the following example from arbitration practice: Resolution of the Federal Antimonopoly Service ZSO dated 01.03.2007 N F04-9370/2006(30552-A81-27).

LLC "Geoilbent" appealed to the arbitration court with a statement to the tax inspectorate to invalidate its decision. The reason for the dispute was that the inspection authorities recognized that it was unlawful for the company to take into account the costs of hotel accommodation for representatives of other organizations.

The arbitration court found that the invited representatives of other organizations were the heads of legal entities - members of the company, who arrived at the meeting of the taxpayer's governing body, as well as representatives of legal entities who arrived to participate in negotiations in order to establish and (or) maintain mutual cooperation.

At the same time, the court came to the conclusion that the concept of “service” in the sense of paragraph 2 of Art. 264 of the Tax Code of the Russian Federation has a wide range, where, in accordance with the provisions of Art. 11 of the Tax Code of the Russian Federation can also include the provision of housing as a condition for the normal existence of a person arriving from another locality.

As a result, the taxpayer managed to win this legal dispute.

7. Does the organization have the right to take into account expenses?
for alcoholic products

The Ministry of Finance of Russia believes that an organization’s expenses for alcoholic products during an official reception can be included in entertainment expenses, which are taken into account in an amount not exceeding four percent of the taxpayer’s expenses for wages for the reporting (tax) period, if they are made in the amounts stipulated business customs during business negotiations (transactions).

The influence of business customs on the costs of an organization

At the same time, in Art. 5 of the Civil Code of the Russian Federation, a customary business practice recognizes an established and widely used rule of behavior in any area of ​​business activity that is not provided for

legislation, regardless of whether it is recorded in any document.

Such clarifications are given in the letter of the Ministry of Finance of Russia dated 06/09/2004 N 03-02-05/1/49. Similar conclusions were made in the letter of the Ministry of Finance of Russia dated November 19, 2004 N 03-03-01-04/2/30.

Later, the Russian Ministry of Finance confirmed its position on this issue, indicating that the costs of purchasing food, including alcoholic beverages, for organizing the official reception of a foreign delegation, carried out in order to establish and (or) maintain mutual cooperation, can be taken into account as part of representative expenses (letter of the Ministry of Finance of Russia dated August 16, 2006 N 03-03-04/4/136).

The tax authorities support the position of the financial department on this issue. In their opinion, entertainment expenses may include the organization’s expenses for alcoholic products during an official reception. Officials stated this in a letter from the Department of the Ministry of Taxes and Taxes of Russia for Moscow dated September 27, 2004 N 26-12/62972 “On classifying expenses for the purchase of alcoholic beverages for official reception as entertainment expenses.”

The organization will have to prove its position that the costs of purchasing alcoholic beverages are entertainment expenses in court.

Despite the unanimity of the financial and tax authorities on the issue being analyzed, inspectorates present claims to companies related to tax accounting for expenses on the purchase of alcoholic beverages. This is confirmed by Resolution of the Federal Antimonopoly Service NWZ dated December 26, 2005 N A44-2051/2005-9; FAS ZSO dated June 29, 2005 N F04-1827/2005(12476-A27-33).

As an example, let us cite the resolution FAS SZO dated May 12, 2005 N A56-24907/04. The tax inspectorate conducted an on-site inspection of the compliance of LLC Publishing House "Press-com" with legislation on taxes and fees, during which it revealed a number of tax violations. In particular, the taxpayer was accused of unjustifiably classifying the costs of paying for alcoholic beverages as entertainment expenses, which reduce income received.

According to the inspectors, expenses for alcoholic products during an official reception of representatives of other organizations do not apply to entertainment expenses, since clause 2 of Art. 264 of the Tax Code of the Russian Federation, which contains an exhaustive list of expenses for representation purposes.

The publishing house did not agree with this interpretation of the law and appealed the tax authority’s decision in court.

The arbitration court found the inspector's argument that clause 2 of Art. 264 of the Tax Code of the Russian Federation contains an exhaustive list of expenses for representation purposes. At the same time, the court emphasized that the inspection did not dispute the fact that the real costs of society for the purchase of alcoholic beverages are associated with the official reception and servicing of representatives of other organizations, which, by virtue of subsection. 22 clause 1 and clause 2 art. 264 of the Tax Code of the Russian Federation refers to entertainment expenses that reduce the taxpayer’s income received.

As a result, the court ruled in favor of the taxpayer.

A similar approach to solving the issue under consideration can be traced in Resolution of the Federal Antimonopoly Service dated December 16, 2005 N A68-AP-456/11-04. In this case, the court noted that the provisions of Art. 264 of the Tax Code of the Russian Federation does not detail the list of costs that relate to entertainment expenses, and also does not define the list of foods and drinks that cannot be included in entertainment expenses. Thus, expenses for the purchase of alcoholic beverages, subject to compliance with legal requirements regarding the nature of entertainment expenses, can be included in the expenses of the enterprise.

Similar conclusions were made in Resolution of the Federal Antimonopoly Service NWZ dated April 25, 2005 N A56-32729/04, in which the court considered that the costs of alcoholic beverages were the costs of holding an official reception in the form of a dinner.

In the case considered by the Federal Antimonopoly Service of the Ural District, the basis for additional assessment of the organization’s income tax was the inspectors’ conclusion that the tax base was understated by the amount of costs incurred for alcoholic products during an official reception of representatives of other organizations participating in negotiations in order to establish and (or) maintain mutual cooperation . The arbitration court noted that clause 2 of Art. 264 of the Tax Code of the Russian Federation does not define a list of foods and drinks that cannot be included in entertainment expenses, and declared the inspection decision invalid ( Resolution of the Federal Antimonopoly Service UO dated July 12, 2005 N F09-2878/05-S7).

The court will help determine whether the organization’s expenses relate to entertainment or entertainment and recreation.

Practice shows that entertainment expenses may also include the costs of paying for visits by representatives of partner organizations to restaurants, cafes, and beer bars, despite the fact that tax inspectors believe that these expenses are related to

organization of entertainment and recreation. Confirmation of this - Resolution of the Federal Antimonopoly Service of the Moscow Region dated September 12, 2005 N KA-A40/8426-05.

8. What costs cannot be taken into account
as entertainment expenses

According to paragraph 2 of Art. 264 of the Tax Code of the Russian Federation, entertainment expenses do not include expenses for organizing entertainment, recreation, prevention or treatment of diseases.

In addition, paragraph 42 of Art. 270 of the Tax Code of the Russian Federation stipulates that when determining the tax base, expenses in the form of entertainment expenses are not taken into account to the extent that they exceed their amounts provided for in paragraph 2 of Art. 264 Tax Code of the Russian Federation.

Thus, paragraph 2 of Art. 264 of the Tax Code of the Russian Federation establishes that not all expenses incurred by the taxpayer fall within the definition of entertainment expenses for tax purposes in Chapter 25 of the Tax Code of the Russian Federation ( Resolution of the Federal Antimonopoly Service ZSO dated 04/06/2006 N F04-1149/2006(21261-A81-35).

Is it possible to take into account the costs of purchasing souvenirs in the organization’s expenses?

The Financial Department believes that the costs of purchasing souvenirs for a foreign delegation cannot be taken into account as part of entertainment expenses, since they are not provided for in paragraph 2 of Art. 264 Tax Code of the Russian Federation. The Russian Ministry of Finance stated this in a letter dated August 16, 2006 N 03-03-04/4/136.

According to Moscow inspectors, if the events held (for example, dinner in a restaurant) are not of an official nature or there are no documents confirming the conduct of official business negotiations, the expenses for their holding are not taken into account for income tax purposes. Officials reported this in a letter from the Office of the Federal Tax Service of Russia for Moscow dated December 23, 2005 N 20-12/95338 “On the conditions and procedure for accounting for expenses for dinner in a restaurant when calculating the tax base for income tax.”

The Russian Ministry of Finance believes that expenses for breakfasts, lunches, and dinners that are not of an official nature should be paid by representatives of delegations arriving for negotiations, at the expense of daily allowances paid when sending employees, or at their own expense. This point of view is given in the letter of the Ministry of Finance of Russia dated 04/05/2005 N 03-03-01-04/1/157.

The cost of travel of representatives of foreign organizations to the venue of the official event and back does not apply to entertainment expenses

The capital's controllers are convinced that tax legislation does not provide for the possibility of recognizing as entertainment expenses for the purposes of taxing the profit of a Russian organization its costs of transport support for the delivery of representatives of a foreign company to the venue of an official event on the territory of the Russian Federation in order to establish and maintain mutual cooperation.

Consequently, according to Chapter 25 of the Tax Code of the Russian Federation, the cost of air and railway tickets, as well as visa support for employees of a foreign company along the route from a foreign state to the borders of the Russian Federation and directly through its territory are not taken into account by the receiving party for profit tax purposes and are not considered entertainment expenses. These conclusions were made in the letter of the Office of the Federal Tax Service of Russia for Moscow dated November 11, 2004 N 26-12/73173 “On the taxation of entertainment expenses.”

Courts consider hospitality costs to be economically unjustified expenses.

In one of its letters, the Russian Ministry of Finance considered the following situation. The main activity of the bank is mortgage lending to individuals. Clients - individuals, as well as representatives of organizations, are invited to negotiations with the aim of establishing cooperation and concluding loan agreements.

During negotiations and consultations with individuals on the procedure and conditions for issuing loans, the bank’s regulations for working with clients stipulate that every hour a bank employee is obliged to offer the client drinking water, tea, coffee, candies, and cookies. In this regard, the question arises whether it is legal to include costs for the purchase of these goods in expenses for profit tax purposes and take them into account as entertainment expenses (subclause 22, clause 1, article 264 of the Tax Code).

According to officials, the Tax Code of the Russian Federation does not provide for the inclusion of costs for receiving and servicing individual clients as expenses. And if so, then the costs of receiving bank clients - individuals cannot be taken into account as part of other costs associated with production and sales. The Ministry of Finance of Russia stated this in a letter dated November 24, 2005 N 03-03-04/2/119.

Some arbitration courts consider the costs of purchasing flowers to decorate negotiation venues to be economically unjustified. Thus, the court found that the taxpayer did not prove the need to comply with business customs when organizing meetings of business partners ( Resolution of the Federal Antimonopoly Service of the Eastern Military District dated March 15, 2006 N A29-1822/2005a).

Meanwhile, other arbitration courts resolve this issue differently. For example, the Federal Antimonopoly Service of the Volga Region recognized as legitimate the inclusion in entertainment expenses of the amount of costs for the purchase and presentation of flowers ( Resolution of the Federal Antimonopoly Service dated 01.02.2005 N A57-1209/04-16).

Journal "Arbitration Justice in Russia" N 5/2008, O.A. MYASNIKOV, legal consultant, PricewaterhouseCoopers CIS Law Offices B.V., candidate of law. sciences

its preparation is not approved by law - it will be a significant element of document flow in companies that hold official events. What is the purpose of this document and where can I download a sample?

Why do you need an estimate of entertainment expenses?

Representative expenses include expenses of the company that are associated (clause 2 of Article 264 of the Tax Code of the Russian Federation):

• with the organization of official business events;
• with transport and catering services ordered as part of the relevant events;
• with payment for the services of a translator, if his assistance was sought as part of official events.

In an amount that does not exceed 4% of labor costs in the same reporting period (their list is given in Article 255 of the Tax Code of the Russian Federation), entertainment expenses can be used to reduce the tax base of the enterprise.

Like any other expenses, hospitality must be confirmed. At the same time, previously the Ministry of Finance of the Russian Federation (in letter dated November 13, 2007 No. 03-03-06/1/807) advised confirming the relevant expenses by means of:

• issuing an order from the director on holding an official event within the framework of which expenses were incurred;
• drawing up estimates of entertainment expenses;
• drawing up a report on entertainment expenses;
• supplementing the indicated sources with primary documents.

However, there is a newer legal act from the Ministry of Finance - letter dated April 10, 2014 No. 03-03-RZ/16288. In it, among the recommended documents that can be used to confirm hospitality expenses, there is only a report, as well as a primary source supplementing it.

Nevertheless, many companies prefer, when preparing a set of documents to confirm entertainment expenses, to focus on the earlier list recommended by the Ministry of Finance. This is often due not only to the desire to protect oneself from possible claims from controllers, but also to internal corporate financial reporting standards that allow effective control over entertainment expenses in one’s organization.

In many cases, one of the key documents confirming entertainment expenses is the estimate - as a source that allows you to consistently detail costs.

Let's study what this estimate could be.

What is an estimate for entertainment expenses?

It is common to prepare an estimate for entertainment expenses in a structure that involves inclusion in the document:

• a column certifying the fact of approval of the estimate by the head of the company;
• information about the date of preparation of the document, the date and place of the official event;
• title of the document;
• information about the planned number of participants of the official event having one or another status (company employees, freelance invitees);
• a list of expense items indicating the corresponding amounts according to the plan;
• information on the total amount of expected expenses;
• information about the budget preparer, the chief accountant of the company, their signatures, the seal of the organization (if used).

Let us study in more detail the specifics of compiling these sections of the estimate.

Drawing up an estimate: approval of the document and reflection of information about it

In modern companies, a common approach is that estimates, like many other local regulations, are certified by putting in the column “I approve” - indicating the position, full name and affixing the signature of the person who, thus, approves the document . As a rule, this is the head of the company.

The name of the organization is also indicated in accordance with the constituent documents. If a company uses a seal in internal document flow, it should be affixed in the column in question in the document.

Among the most important information about the estimate that should be indicated in it:

• name of the document (for example, “Estimate of entertainment expenses”);
• date of drawing up the document (can also be entered in the “I approve” column).

Budgeting: number of participants

Participants in an official event are most often represented by:

• employees of the company that organizes the event;
• persons not included in the company's staff.

The estimated number of participants in each category is reflected in the estimate.

Some companies also distinguish among the event participants those employees who are actually guests (and do not participate in its preparation) and those who directly organize the event.

Budgeting: reflecting expenses

The next section of the estimate is the one that reflects the list of estimated entertainment expenses. It is usually represented by a table of 3 columns.

The 1st column reflects the serial number of the expense item. In the 2nd - the title of the article. In the 3rd - the amount.

A separate row of the table may reflect the total amount of expenses for financing an official event.

It can be noted that many companies prefer to indicate maximum costs rather than planned amounts - that is, essentially fixing cost limits.

Drawing up an estimate: we certify the document

Despite the fact that the estimate, as we noted above, can be certified by the head of the company using the “I approve” column, it is also recommended to additionally certify the information reflected in the document with signatures:

• chief accountant;
• the person responsible for preparing the budget.

Their full names and positions are also indicated.

The estimate for entertainment expenses can be either an independent local regulatory act or part of another act - for example, an internal corporate regulation on entertainment expenses. In the second case, it will have to be drawn up in a form that is approved as an annex to the relevant regulation.

Let's study this aspect of using estimates in more detail.

Estimate as part of the provision for entertainment expenses: nuances

In companies that regularly organize entertainment events, confirmation of expenses within the framework of these events can be carried out using a special local regulatory act - the regulations on entertainment expenses.

This local standard allows you to regulate the procedure for using tax and accounting documents for expenses within the framework of relevant activities. Having this provision, the company can significantly simplify the work of financial and other internal corporate services that deal with issues related to accounting for expenses for official events. Relatively speaking, even a new, inexperienced employee, using the provision in question, will be able to correctly generate a set of necessary documents to support the costs of entertainment events.

In such a provision, it may be stipulated that employees responsible for accounting for expenses for official events undertake to promptly draw up documents to confirm these expenses according to the list, which is given here. Forms (samples) for documents, including cost estimates, are placed in the appendices to the regulations.

You can download a sample estimate for hospitality expenses on our website.

Results

A company that organizes various official events with varying degrees of frequency and incurs expenses arising in connection with these events can use the corresponding expenses to reduce the tax base - within the limits established by the Tax Code of the Russian Federation (4% of labor costs). To do this, hospitality expenses must be documented. An estimate may be used for these purposes.

You can get acquainted with other facts about working with entertainment expenses in the articles:

To maintain strong business ties with counterparties, it is necessary not only to have business meetings and negotiations held in the office, but also to discuss joint projects in an informal setting.

Such communication helps to establish friendship, which in turn takes business relations between company representatives to a new, higher level.

In addition, conducting business negotiations in an informal setting helps to relieve tension between the parties and quickly reach joint agreements.

To establish informal relationships during business meetings, the following are used:

• joint lunches and dinners (often including drinking alcoholic beverages) - banquets, receptions, etc.,
• visiting various cultural and entertainment events,
• other similar meetings.

In addition, during negotiations, entertainment expenses include:

• buffet service,
• payment for translator services.

When organizing such meetings, the organizing organization may incur significant costs. Such expenses are called representative expenses.

In accordance with paragraph 22, paragraph 1 of Article 264 of the Tax Code, other expenses associated with production and sales include the taxpayer’s entertainment expenses associated with the official reception and service of representatives of other organizations participating in negotiations in order to establish and maintain cooperation.

At the same time, in accordance with paragraph 2 of Article 264 of the Tax Code of the Russian Federation, entertainment expenses include not only the taxpayer’s expenses for official reception and service:

• representatives of other organizations participating in negotiations in order to establish and/or maintain mutual cooperation,
• participants who arrived at meetings of the board of directors (board) or other governing body of the taxpayer,

regardless of the location of these events.

Entertainment expenses include the following expenses:

1. For an official reception:

• breakfast,
• lunch,
• other similar event

for the above persons, as well as officials of the taxpayer organization participating in the negotiations.

2. Transport provision for the delivery of these persons to the venue of the representative event and (or) meeting of the governing body and back.

3. Buffet service during negotiations.

4. Payment for the services of translators who are not on the taxpayer’s staff to provide translation during entertainment events.

To entertainment expenses do not apply organization costs:

• entertainment,
• recreation,
• prevention or treatment of diseases.

Representation expenses during the reporting (tax) period are included in others expenses in an amount not exceeding 4% of the taxpayer’s expenses for wages for this reporting (tax) period.

Our article will cover:

• procedure for processing entertainment expenses,
• Features of tax accounting for entertainment expenses.

TAX ACCOUNTING FOR REPRESENTATION EXPENSES

The procedure for tax accounting of entertainment expenses is regulated by Article 264 of the Tax Code.

At the same time, the taxpayer must be prepared for the fact that the tax authorities will have questions related to the appropriateness of large entertainment expenses incurred by the company.

Accordingly, you need to take care in advance of arguments confirming the validity of the expenses incurred.

Particular attention should be paid to:

• types of expenses incurred,
• composition of meeting participants,
• its venue,

as well as documents confirming expenses incurred.

Most often, entertainment expenses refer to the costs of holding business meetings with representatives of counterparty companies (either existing or potential).

Such meetings are held either to maintain and continue existing mutually beneficial cooperation, or to establish it.

Accordingly, meetings are either related to the current business activities of the organization or are aimed at long-term cooperation.

Thus, holding business meetings pursues the following goals:

• Discussion of the terms of current cooperation and its prospects.
• Extension of existing contracts and coordination of their terms.
• Preliminary discussion of the terms of the proposed transactions.
• And so on.

Despite the fact that the Tax Code does not provide restrictions on the goals and subjects of events, the costs of meetings with representatives of companies with which cooperation has not been established can be challenged by representatives of the tax authorities.

In this case, the taxpayer will have to defend his position in court. At the same time, the courts quite often take the side of the taxpayer.

Thus, in the resolution of the Federal Antimonopoly Service of the North-Western District dated 03/05/2008. in case No. A05-5668/2007 it is indicated that the special norm of paragraph 2 of Article 264 of the Tax Code “there are no restrictions on entertainment expenses depending on the subject of negotiations”.

This resolution also does not deny the possibility that the negotiations could be timed to coincide with some significant event (holiday, anniversary): “ the fact that the entertainment events, within the framework of which negotiations of a production (economic, business) nature were held, are timed to coincide with the celebration of the 60th anniversary of Victory Day, does not exclude their economic justification".

For tax accounting purposes, the name of the event is not particularly important.

Thus, entertainment expenses can be incurred when:

• official reception,
• business meeting,
• negotiations,
• meetings,
• meetings,
• conferences,
• other similar events.

As mentioned above, in accordance with the provisions of Article 264 of the Tax Code of the Russian Federation, entertainment expenses may include expenses for official reception or services for participants who arrived at meetings:

• board of directors,
• board,
• other governing body of the taxpayer.

Hospitality expenses for these events can be confirmed by documents confirming the decision and containing information:

• about the goal (agenda),
• place of the meeting,
• the time of the meeting of the company’s governing body,
• composition of the meeting participants.

In this case, expenses such as:

• expenses associated with renting premises,
• preparing and distributing the necessary information,

other expenses directly related to holding the meeting:

• shareholders,
• shareholders,
• participants,

are taken into account as part of the organization’s non-operating expenses in accordance with paragraph 16, paragraph 1, article 265 of the Tax Code.

Taxpayers should be aware that if a company, during a tax audit, is unable to provide confirmation of the validity of the entertainment expenses incurred (explain the purpose of the meetings), then the primary documents confirming the expenses incurred will not be sufficient to recognize such expenses for tax accounting purposes.

In this case, it will be difficult for the company to defend its position in court.

Thus, in the resolution of the Federal Antimonopoly Service of the North-Western District dated 09.10.2007. in case No. A26-691/2006-216 it is stated that “ from the contents of the invoices submitted by the Entrepreneur, issued by restaurants, cafes, bars, it does not follow that the persons who used the services of public catering establishments are business partners of the taxpayer".

As a result, the court decided in favor of the tax authority.

Below we will consider some questions that taxpayers have when accounting for entertainment expenses in tax accounting and the position of the Ministry of Finance in answering these questions.

Special situations - clarifications of the Ministry of Finance.

1. The costs of organizing an entertainment program for participants in a business seminar are not included in expenses for tax accounting purposes.

To maintain business cooperation and increase the number of concluded contracts, the company organized a business seminar for its clients.

The seminar included a presentation of the new product, as well as a summing up of the work for 2010 with the main dealers.

After the official part of the seminar, the company held an entertainment program for the participants:

• boat trip,
• performance of artists,
• buffet

As a result, the organization had a question: is it possible to include in the income tax base expenses for a buffet table, a ship and artists, as well as accommodation for guests.

Negative response from the Ministry of Finance in the Letter dated December 1, 2011. No. 03-03-06/1/796 was quite expected:

“In accordance with subparagraph 22 of paragraph 1 of Article 264 of the Code, other expenses associated with production and sales include, among other things, entertainment expenses associated with the official reception and service of representatives of other organizations participating in negotiations in order to establish and maintain cooperation, in in the manner provided for in paragraph 2 of Article 264 of the Code.

According to paragraph 2 of Article 264 of the Code, representation expenses include, among other things, the taxpayer’s expenses for the official reception and (or) servicing of representatives of other organizations participating in negotiations in order to establish and (or) maintain mutual cooperation.

Entertainment expenses include expenses for an official reception (breakfast, lunch or other similar event) for these persons, as well as officials of the taxpayer organization participating in the negotiations, transportation support for the delivery of these persons to the place of the entertainment event and (or) meeting of the management authority and back, buffet service during negotiations, payment for the services of translators who are not on the taxpayer’s staff to provide translation during entertainment events.

Entertainment expenses do not include expenses for organizing entertainment, recreation, prevention or treatment of diseases.

Considering the above, expenses for a buffet table, a ship and artists as part of the entertainment program organized after the official part of the seminar, as well as the cost of accommodation for guests do not reduce the tax base for corporate income tax, since these expenses are not provided for by the provisions of paragraph 2 of Article 264 of the Code.”

2. Expenses for dinners with counterparties late at night, including expenses for dinners on business trips during negotiations, can be taken into account as entertainment expenses for tax accounting purposes.

To account for such expenses, they must be properly recorded and documented.

Such clarifications were given by the Ministry of Finance in its Letter dated November 1, 2010. No. 03-03-06/1/675:

“If the events held (dinner in a restaurant) are not of an official nature or there are no documents confirming the conduct of official business negotiations, the costs of conducting them are not taken into account for profit tax purposes.

As for conducting negotiations within the framework of business trips, in our opinion, a similar procedure for recognizing such expenses should be applied.

Considering the above, the corresponding expenses are included in entertainment expenses according to paragraph 2 of Article 264 of the Code in the presence of formalized within the framework of current legislation primary documents, confirming expenses for holding business dinners as part of negotiations with clients, including potential ones, during business trips, subject to their compliance with the requirements of paragraph 1 of Article 252 of the Code.”

3. When accounting for entertainment expenses for events, it is necessary to ensure the possibility of separating accepted expenses for tax accounting purposes from those not accepted:

3.1. Expenses for organizing an official meeting with clients, including food and alcoholic beverages, are included in entertainment expenses.

3.2. Expenses for the purchase of prizes, the production of diplomas, and the decoration of the hall cannot be taken into account as expenses for tax accounting purposes.

This position is adhered to by the Ministry of Finance in its Letter dated March 25, 2010. No. 03-03-06/1/176: “Representation expenses during the reporting (tax) period are included in other expenses in an amount not exceeding 4 percent of the taxpayer’s expenses for wages for this reporting (tax) period.

Taking into account the above, the taxpayer’s expenses for organizing an official meeting with clients to discuss issues related to concluding contracts for 2010 in accordance with paragraph 2 of Article 264 of the Tax Code of the Russian Federation are taken into account in terms of expenses for the purchase of food products, including alcoholic beverages.

Expenses for the purchase of prizes, the production of diplomas, and the decoration of the hall are not provided for in paragraph 2 of Article 264 of the Tax Code of the Russian Federation and, therefore, cannot be taken into account as part of entertainment expenses for profit tax purposes.”

PROCEDURE FOR REGISTRATION OF REPRESENTATION EXPENSES

In accordance with paragraph 1 of Article 252 of the Tax Code, for the purpose of income taxation, the taxpayer reduces the income received by the amount of expenses incurred.

At the same time, the following are recognized as expenses for tax accounting purposes:

• justified,
• documented

costs incurred by the taxpayer.

Justified expenses mean economically justified expenses, the assessment of which is expressed in monetary form.

Documented expenses mean expenses supported by documents:

• formalized in accordance with the legislation of the Russian Federation,
• executed in accordance with business customs applied in the foreign country in whose territory the relevant expenses were incurred,
• indirectly confirming expenses incurred (including a customs declaration, business trip order, travel documents, report on work performed in accordance with the contract).

Any expenses are recognized as expenses, provided that they are incurred to carry out activities aimed at generating income.

Thus, economic justification and documentary evidence are required for all types of expenses.

And in order to recognize entertainment expenses in tax accounting, you need to be especially careful in documenting them.

In accordance with the provisions of Article 313 of the Tax Code of the Russian Federation, tax accounting data must reflect:

• the procedure for forming the amount of income and expenses,
• the procedure for determining the share of expenses taken into account for tax purposes in the current tax (reporting) period,
• the amount of the balance of expenses (losses) to be attributed to expenses in the following tax periods,
• the procedure for forming the amounts of created reserves,
• the amount of debt for settlements with the budget for taxes.

Tax accounting data is confirmed by:

1. Primary accounting documents (including an accountant’s certificate);
2. Analytical tax accounting registers;
3. Calculation of the tax base.

Forms of analytical tax accounting registers for determining the tax base, which are documents for tax accounting, must necessarily contain the following details:

• register name;
• period (date) of compilation;
• transaction meters in kind (if possible) and in monetary terms;
• name of business transactions;
• signature (decryption of signature) of the person responsible for compiling these registers.

So, let's look at what documents are needed to process entertainment expenses.

“According to Article 313 of the Code, the basis for determining the tax base for income tax is the data of primary documents grouped in the manner prescribed by the Code.

Tax accounting data is confirmed by:

1) primary accounting documents (including an accountant’s certificate);

2) analytical tax accounting registers;

3) calculation of the tax base.

Documents used to confirm entertainment expenses may be, in particular:

- order (instruction) of the head of the organization on the implementation of expenses for these purposes;

- estimate of entertainment expenses;

- primary documents, including in the case of using any goods purchased externally for entertainment purposes, payment for services of third-party organizations;

- a report on entertainment expenses for entertainment events held, which reflects:

- the purpose of representative events, the results of their implementation;

- other necessary information about the event, as well as the amount of expenses for entertainment purposes.

Moreover, all expenses listed in the report must be confirmed by relevant primary documents.”

Entertainment costs continue to be one of the most controversial areas. Such is their legal nature. What does this mean? How are they normalized? We will help you reduce tax risks, tell you how to register in 2019 and provide a sample of transactions.

Events

Representation expenses include expenses for official reception and service of representatives of other organizations or members of the board of directors, business owners.

For tax purposes, entertainment expenses can be taken into account. Documentation in 2019 continues to be a necessity. This category includes the costs of the following activities:

1. Negotiating with company partners or clients. This also includes counterparties - potential or currently cooperating with the company.
2. Meetings of the organization's top management bodies - the board of directors, chairmen of the board, supervisory board.

Generally Allowed Costs

When making entertainment expenses, documentation is necessary only for official expenses, which include the following:

1. Conducting official receptions, meetings and meetings (breakfasts, lunches and other similar expenses are taken into account), taking place both on the territory of the organization and outside it (restaurants, hotels). This category includes spending on alcoholic beverages.
2. Transportation costs for transporting guests to and from the event venue.
3. Buffet services and costs.
4. Payment for the work of translators who are not on the company’s staff.

Stop costs

When taxing, the following expense items cannot be taken into account:

1. Any entertainment (excursions, bowling, billiards, etc.) and health (swimming pools, fitness rooms, saunas) events for employees, clients, business partners.
2. Accommodation and travel costs for persons arriving from other localities.
3. Purchasing presents, gifts, awards and diplomas awarded to participants.

Documentation 2019

A specific list of documents that need to be used to confirm entertainment expenses is not established in paragraph 2 of Article 264 of the Tax Code of the Russian Federation. However, every fact of economic life must be documented with primary accounting documents. Moreover, they must contain all the mandatory details listed in Part 2 of Article 9 of the Law of December 6, 2011 No. 402-FZ (Part 1 of Article 9 of the Law of December 6, 2011 No. 402-FZ, Article 313 of the Tax Code of the Russian Federation).

To confirm entertainment expenses, preparation of primary accounting documents is necessary for tax purposes. This includes all invoices and acts. In addition, a report on the event should be drawn up, which is approved by the head of the company. The report contains the following points:

1. Place and date of the event.
2. The program according to which the event was held.
3. Full composition of participants from the hosts and invitees.
4. The cost of holding the event.

Read also Income tax rates for legal entities in 2019: table

When registering entertainment expenses, the document must indicate whether any transactions were concluded with partners during the process. Such a document will serve as confirmation of the fact that all costs were associated with organizing the executive reception.

Before you issue entertainment expenses consisting of the above reports, it is advisable to take care of two additional documents:

1. An order for holding a representative event, signed by the head. It should clearly reflect the purpose of the event that caused such costs, as well as a list of company employees who will take part in it.
2. Cost estimate confirmed by the personal signature of the manager.

The presented samples demonstrate how to properly process hospitality expenses. They can be used at any enterprise in the Russian Federation.

Business travel expenses

The entertainment expenses of a seconded employee include the following expenses:

• for an official reception and (or) service (including a buffet) for representatives of other organizations, as well as officials of the organization itself;
• for transport support for delivery to the venue of the representative event and (or) meeting of the governing body and back;
• to pay for the services of translators (not on staff of the organization) during entertainment events.
  Entertainment expenses do not include expenses for organizing entertainment, recreation, prevention or treatment of diseases.

Such rules are established by paragraph 2 of Article 264 of the Tax Code of the Russian Federation.

The Tax Code of the Russian Federation allows the costs of holding official receptions to be taken into account as entertainment expenses, without specifying the list of such expenses (clause 2 of Article 264 of the Tax Code of the Russian Federation). Therefore, costs for alcoholic products can be taken into account without applying additional limits (taking into account only the restrictions established in the legislation for entertainment expenses).

To justify entertainment expenses on a business trip, two documents are sufficient:

• a report on entertainment expenses, which was approved by the head of the organization;
• advance report.

Many organizations sooner or later are faced with the concept of entertainment expenses. In this article we will figure out what these expenses are, what applies to them and how to take them into account in accounting and tax accounting.

Let's start by deciding what expenses can be classified as entertainment expenses? Everything is simple here, open Article 264, Part 2 of the Tax Code of the Russian Federation (by the way, you can download it) and read. Brief conclusions from this article:

TO entertainment expenses expenses for official reception and service include:

• representatives of other organizations with which negotiations are being held for the purpose of further cooperation;
• members of the board of directors or other governing body;

In particular, entertainment expenses include:

• expenses for breakfast, lunch, dinner for the above-mentioned persons and official representatives of the taxpayer;
• transportation of the above persons to and from the venue of negotiations, receptions, dinners and other official events;
• buffet service during negotiations;
• translation services if provided by a third party.

Entertainment expenses do NOT include expenses for organizing recreation, entertainment, as well as the prevention and treatment of diseases.

Also, Article 264, paragraph 2 of the Tax Code of the Russian Federation stipulates that entertainment expenses for the purpose of calculating the base for income tax are not accepted in full, but only in an amount not exceeding 4% of labor costs in the reporting period to which the entertainment expenses relate .

Like any other expenses, entertainment expenses must be documented.

Accounting for entertainment expenses in accounting

Entertainment expenses are expenses for ordinary activities. For a trading enterprise they are written off to the debit of account 44 “Sales expenses”, for a manufacturing enterprise to the debit of account 26 “General business expenses”.

Postings for accounting for entertainment expenses (account 26)

If payment for entertainment expenses is made personally by a representative of the organization, then he is given funds for reporting, and an entry is drawn up D26 (44) K71.

Services of third parties are documented by posting D26 (44) K60, D26 (44) K76.

Entertainment expenses relate to the reporting period in which they were approved, regardless of their payment.

Tax accounting of entertainment expenses

This group of expenses refers to other expenses associated with production and sales. As mentioned above, for tax purposes you can only take into account the amount of expenses not exceeding 4% of the amount of labor costs. Entertainment expenses above this 4% are not taken into account when determining. When comparing the amount of entertainment expenses with the amount of expenses for, data obtained on an accrual basis from the beginning of the tax period is taken.

The main difficulty in accounting for entertainment expenses is that in accounting they are taken into account in full, and in taxation their amount is limited to 4% of wages. That is, differences arise in determining profit in accounting and tax accounting. To understand this point, consider an example of accounting for entertainment expenses.

Example of calculation of hospitality expenses

In May 2013, the organization met its partners, the following events were planned on this occasion: an official dinner in a restaurant, a cultural event - a visit to the sauna. In this regard, the organization had the following expenses: delivery of partners to the restaurant and back - 4,000 rubles; lunch in a restaurant - 20,000 rubles; delivery of partners to the sauna and back - 4000 rubles; sauna services - 30,000 rub. According to the Tax Code of the Russian Federation, we cannot recognize expenses for visiting the sauna as entertainment expenses, as well as transporting partners to the sauna and back. The total amount of entertainment expenses was 24,000 rubles. To organize all the events, the responsible employee was given money on account in the amount of 60,000 rubles. At the end of the event, the employee submitted to the accounting department, in which he reported on the amount spent; all the necessary documents confirming the expenses were attached to the advance report. The services of the transport company were paid by the organization from the current account.

Accounting for entertainment expenses (account 26)

60,000 D71 K50 - funds were issued to the employee for reporting.

50,000 D44 K71 - advance report on entertainment expenses accepted.

10,000 D50 K71 - the accountable person handed over the balance of the advance to the cash desk of the enterprise.

8000 D44 K76 - an invoice for payment was received from the transport company that delivered the partners.

8000 D76 K51 - the invoice of the transport company has been paid.

Reporting period- half a year.

Since the beginning of the year, the amount of labor costs amounted to 350,000 rubles.

The maximum amount of entertainment expenses that can be taken into account for tax purposes is 350,000 * 4% = 14,000 rubles. In our example, the amount of entertainment expenses is 24,000 rubles. That is, when calculating income tax, we can reduce the tax base by only 14,000 rubles. The remaining 10,000 rubles. will not be taken into account.