Are meals all business entertainment expenses? The answer is not necessarily. What accounting subjects should be included in the expenses incurred by enterprises such as reception fee, business trip fee and conference fee? Mande Enterprise Service has prepared a detailed explanation for you today.

Myth 1:

All meals are business entertainment expenses.

The correct way: In the normal operation of enterprises, the reasons for meal expenses are different, and many enterprises equate meal expenses with business entertainment expenses. In fact, business entertainment expenses include meals, but meals are not necessarily business entertainment expenses.

For example:

◎ Entertain customers for meals due to business development, and list "hospitality" in accounting;

◎ For employees who eat on business, the "travel expenses" shall be listed in the meal expense accounting within the standard;

◎ "Staff welfare expenses" are accounted for in staff canteens and overtime dinners;

◎ Enterprises organize employees' vocational and technical training, have meals during the training, and account for "employee education funds";

◎ When an enterprise holds a meeting in a hotel and eats during the meeting, the "meeting fee" is listed in the accounting;

◎ The meal expenses incurred during the preparation of the enterprise are listed as "organization expenses" in accounting;

◎ Employees' meals paid in cash are listed as "wages and salaries" in accounting;

◎ Trade unions organize staff activities, and the meal expenses incurred during the activities are listed as "trade union funds" in accounting;

◎ "Directors' dues" are listed in the accounting of meals incurred during the board meeting;

◎ During the filming process, film and television enterprises include "meals in film and television dramas" in their accounting.

Myth 2:

Be sure to open a catering invoice after dinner, and be sure to send out an invoice list.

Correct practice: The seller of catering service industry can issue an invoice according to the commodity code 307040 10000000000 (catering service). The list of dishes does not need to be issued through the list of the tax control system, and consumers can use the receipt and invoice of clearing fees as tax payment vouchers.

Myth 3:

Special VAT invoices obtained for travel expenses can be deducted.

Correct practice: The meals in the travel expenses shall not be deducted from the input tax regardless of whether the special VAT invoice is obtained.

Relevant basis: Caishui (2016) No.36 Document: The input tax generated from the purchase of passenger services, loan services, catering services, residents' daily services and entertainment services shall not be deducted from the output tax.

Special reminder: Since meals can't be deducted from the input tax, meals in other related expenses, such as staff education expenses, meeting expenses and board members' fees, need to be accounted for separately or listed separately.

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