Is entertainment expenses tax deductable


FOR income tax purposes, any expenses incurred in the course of a business will only be eligible for tax deduction if the expenses are solely incurred in producing the business income. It is important to establish the deductibility of an expense as in the event of a field audit which results in the Inland Revenue Board (IRB) discovering an understatement of tax due to claims on expenses which are not tax deductible, a taxpayer will not only suffer additional tax but also a 45% penalty. With effect from year of assessment 2004, entertainment expense will only be eligible for 50% tax deduction except for specific circumstances where it will qualify for full deduction. This article will explain the three steps to determine the amount of entertainment expenses allowable as a deduction.

It is important to establish the deductibility of an expense as in the event of a field audit which results in the Inland Revenue Board (IRB) discovering an understatement of tax due to claims on expenses which are not tax deductible, a taxpayer will not only suffer additional tax but also a 45% penalty.

Get 30% off with our ads free Premium Plan!

Monthly Plan

RM13.90/month
RM9.73 only

Billed as RM9.73 for the 1st month then RM13.90 thereafters.

Annual Plan

RM12.33/month
RM8.63/month

Billed as RM103.60 for the 1st year then RM148 thereafters.

1 month

Free Trial

For new subscribers only


Cancel anytime. No ads. Auto-renewal. Unlimited access to the web and app. Personalised features. Members rewards.
Follow us on our official WhatsApp channel for breaking news alerts and key updates!
   

Next In Business News

Malaysia implements MPSO 2.0 to boost sustainable palm oil standards
Malaysia's economic momentum to continue into 2025, GDP to grow 6%
Permaju in capital reduction bid
Calls for EU to seek ‘win-win’ tariff position
Retailers face higher costs from hike in power rates
New energy dominates Inner Mongolia’s power supply
CBH Engineering set to capitalise on chip sector
Hong Kong’s billionaire Cheng family aims to sell China toll roads
JS Solar eyes ACE Market IPO
Oxford Innotech eyes ACE Market listing

Others Also Read