In a commercial world, we always encounter entertainment in business but feeling unsure on which are expenses deductable. So, I wrote this simple blog of 7 types of entertainment expenses where your accounting staff will allow you for full deduction:
1.Entertainment to staff. As we used to say, staff are assets and therefore the expenses are tax deductible: expenses on free meals & refreshment, annual dinners, outings, corporate family day or club membership for staff.
2.Entertainment expenses in having ordinary course of business; For example, like organizing a cultural event (Malay dance, Lion dance or musical equipment) in town hall, hotels or restaurants in entertaining the customers or clients.
3.Promotional samples of products of your business; Examples like distributing free samples of products during a trade show at MATRADE (http://www.matrade.gov.my/), schools or corporate open house.
4.Promotional GIFTS within Malaysia or articles incorporating the corporate logo.
5.Entertainment related wholly to sales arising from the trade.
6.Entertainment for cultural or sport events which is open to public in way of promoting the business. For example, the invitation cost of a band musicians as such accommodation cost and food and beverage. If the business invites a professional sport star like Dato Nicol David, then the company may claim on sponsorship for food and drink, sports attire and equipment like squash ball or shoes.
7. Promotional gifts at trade fairs or exhibitions outside Malaysia. For example, expenditure incurred on samples of company products, small souvenirs, logo printed bags or travel tickets as gifts to clients in attending company trade exhibition outside Malaysia.
Entertainment expenses in summary:
100% Deduction 50% Deduction Non-Deductable
Staff Gifts-new outlet Government
Ordinary course of trade Existing suppliers Taxman, auditors/bankers
Gifts for overseas trade fair Existing clients Potential buyers
Sponsoring cultural/ sports Hampers, gift, festive Cash contribution (angpow)
Gifts with logo N/A Gifts during AGM
Lucky draw prizes N/A Staff of related company
Incentive vacation for distributors N/A N/A
Sales happening N/A N/A