The deductibility of dinners, trips and parties

Entertainment expenses and therefore deductible by the IRS: a new circular of the Revenue Agency explains the changes to the deductibility of entertainment expenses from business income, in the 2008 Budget.

All eyes in particular on the criteria and new quantitative limits on the deductibility of expenses incurred from the year of 2008 tax obligations and declarative documents required and the effects of the new rules governing VAT.

The amount of deductible expenses is calculated according to revenues and other operating income, which means that if the amount of the expenses incurred during the year was below the limit of fairness, the gap can not be used to raise the roof and cover expenses in subsequent years. The costs incurred by businesses in start-up phase, in which the revenues are zero, are excluded. In this case, the deductibility of costs can be deferred even a year after the attainment of the first revenues.

Expenses related to trade fairs, exhibitions and similar events, in which they are exposed as the goods and services produced by, or visits to offices, business or production unit, have full deductibility, because it is special events, in which the company is involved exposing their goods and services and where buyers and meet other people with strong commercial interest and therefore these activities are directly related to obtaining revenues. To exclude the full deductibility of expenses incurred for board and lodging for business journalists or agents, who are not customers.

 

15/07/2009

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Translated via software

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Source:

Italian version of ReteArchitetti.it