These expenses are allowed to include in expenses, if the employees are not in the business.
Spending of companies on alcohol can be attributed to the representation expenses, and not pay taxes from them. The corresponding decision was taken by the Supreme court in case No. 826/15481/18. Analyzing his decision, the Department of tax and legal KPMG in Ukraine, made some key findings that are important to your business.
- Entertainment expenses are a form of administrative expenses related to General business, to service and enterprise management in understanding p. 18 P(C)BU № 16 “Expenses”.
- The costs incurred for the purchase of alcoholic beverages by an employee of the company for the Executive events are hospitality.
- The only exception is when the reimbursement of employee costs purchase of alcoholic beverages is included in taxable income, provided PP. 170.9.1 p. 170.9 article 170 of the Tax code, namely: in the taxable income of the taxpayer included the additional benefit received by the employee as a reimbursement for the purchase of alcoholic beverages purchased during the stay of the employee in business trip.
- The application of the tax rules on PP. 170.9.1 p. 170.9 article 170 of the tax code is erroneous, since the acquisition costs of alcohol incurred by the employee not during stay in business trip, and during the entertainment, so cannot be considered an additional benefit and not included in taxable income.
KPMG noted that earlier the tax authorities considered the costs of alcohol – an additional benefit and counted on their taxes. Probably looked at them as investments in hilling clients, with whom business made a profit.