Accounting for entertainment expenses in 1C Accounting 8

In the interests of business, various meetings are held with investors, potential clients, creditors and other entities and, as you know, such meetings involve various expenses. The venue for events can be restaurants and various kinds of conference rooms, and all this requires money. Such expenses are financed from a budget specially allocated for such purposes and a clear and strict reporting procedure must be maintained for them for tax purposes. In this article we will consider the reflection of entertainment expenses in 1C and the procedure for their taxation.

What is included in entertainment expenses?

The concept itself is very broad and it may not be completely clear to the average person what exactly is meant. Therefore, before reflecting entertainment expenses in 1C, understand the meaning of the concept. The table below contains a list of possible costs that can be included here.

Accounting for entertainment expenses in 1C Accounting 8

Quite often, enterprises have expenses associated with receiving and servicing employees of other organizations; these expenses are called entertainment expenses. Let’s consider accounting for entertainment expenses in the 1C Accounting 8 rev.2 program.

The list of main expenses that can be classified as representative expenses is contained in paragraph 22, paragraph 1, article 264 of the Tax Code:

— organizing official receptions for negotiators;

— transportation costs for delivering guests to the meeting place and back;

— buffet service during negotiations;

— remuneration for translators hired for the duration of events and not on the company’s staff.

Entertainment expenses can be included in expenses only in an amount not exceeding 4% of the organization’s labor costs in the reporting period when the entertainment expenses took place. An amount exceeding 4% is not included in expenses for calculating the income tax base.

How to keep records of entertainment expenses in the 1C Accounting 8 program?

To reflect this operation, the document “Advance report” is intended, which is located on the Cash desk tab.

For example, employee of Veda LLC Ivanov I.I. 30,000 rubles were issued from the cash register for entertainment expenses. The employee submitted an advance report with the following documents: invoice No. 10 and invoice No. 10 for lunch from the Ufa restaurant in the amount of 25,000 rubles including VAT, and a receipt for translation services in the amount of 5,000 rubles.

Go to the “Cashier” tab and use the “Add” button to create a new document “Advance report”. We indicate an individual. On the first tab of this document – ​​“Advances” – you need to select the document by which funds were issued for entertainment expenses. In our example, this is an expense cash order in the amount of 30,000 rubles. At the bottom of the document we indicate the purpose of the advance - entertainment expenses and the number of documents that are attached to the advance report.

Let’s go to the “Other” tab, where hospitality expenses will be kept track of in the 1C Accounting 8 program.

Here you need to fill in the information on documents for hospitality expenses (invoices, receipts, etc.). Indicate their amount and the account to which these expenses will be debited. In our example, this is account 26 “General business expenses”. It is also necessary to indicate the division and subaccount - Entertainment expenses.

After this, we carry out the document, look at the postings and print out a printed form - an advance report. This is how hospitality expenses are recorded in the 1C Accounting 8 ed.2 program ; you can see how an advance report for other types of expenses is filled out here, about accounting for hospitality expenses in ed. 3.0 here.

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Tax nuances

In the interests of taxation of company profits, entertainment expenses are taken as standardized. The norms of the Tax Code of the Russian Federation state that during one tax period they are attributed to other expenses no more than 4% of the taxpayer’s expenses on payroll for the same period.

Value added tax deductions have their own nuances. The law stipulates that tax amounts on entertainment expenses related to the deduction when calculating the company’s income tax are deductible.

What about "physicists"?

As you understand, the above examples relate to legal entities or their representatives. However, in our country there are many companies that provide services or sell goods primarily to individuals. Is a business operating on the B2C plane deprived of the opportunity to spend money on hospitality expenses? Maybe it’s quite realistic. Based on the letters of the Ministry of Finance of the Russian Federation dated 06/03/2013 No. 03-03-06/2/20149, dated 05/27/2009 No. 03-03-06/1/351, the supplier company has the right to spend certain amounts for these purposes, provided that if it (the company) conducts official business negotiations with an individual with the aim of starting further cooperation. No matter how transparent this formulation may seem, practically nothing becomes clear from it. As Müller said in Twelve Moments of Spring: “Clarity is a form of complete fog.” This aphorism reflects the essence of what is written in the Tax Code of the Russian Federation about entertainment expenses. So, tell me, what does “official business negotiations” mean? Maybe they mean the obligation of an individual to put on a formal suit and go straight to the company’s office? Unfortunately, the regulatory framework does not give a direct answer on this matter, and judicial practice is so disjointed on this issue that there is no objective sense in even citing anything as an example. One way or another, the Federal Tax Service will almost never be able to find out who was wearing what during a business meeting, as well as the place where it was held. We will consider this a significant help for directors to spend money on such needs without regard to the Letter of the Law.

Registration procedure in 1C

It is always easiest to use an example to understand the nuances of conducting any accounting procedures. This question will be no exception. Let’s assume that the company in question selling plastic products is a member of the OSN and pays VAT. The company held a meeting of potential buyers with the involvement of a catering company. All services of a third party were provided on the basis of an invoice and act.

Expenses for this event should be included in the costs of core activities, that is, sales expenses. They are fully attributed to the period when the act was signed and provided. In this case, it is worth using accounting account 44.01.

The accountant should include the amount spent on the reception as entertainment expenses as part of other expenses, but by law no more than the four percent threshold of the total payroll for the specified period. The machine, according to the regulations, normalizes all such expenses automatically at each close of the reporting month. However, you should be extremely careful in order for the machine to perform such an action, you need to let it understand what cost item was used. Therefore, it is extremely important to include entertainment expenses as an expense for a cost item.

"Holy" goal

Directors or actual owners of enterprises withdraw capital for their personal needs through representative expenses, although their initial goal is different. From the point of view of generally accepted practice, entertainment expenses are those expenses that help improve the company’s image, as well as the speedy conclusion of transactions with new partners (something like this). Such expenses include the purchase of an expensive car for meetings of business partners from abroad, the purchase of paintings by famous artists for the exhibition hall, the ordering of an aquarium with goldfish - whatever you want. From the point of view of the Tax Code of the Russian Federation, in particular, subparagraph 22 of paragraph 1 of Article 264 of the Tax Code of the Russian Federation, entertainment expenses are identified as one of the types of other expenses associated with production and sales. The question arises, how will goldfish help in “production” and “sales”? In theory, this can be proven by verbal explanations from the director during a desk audit at the Federal Tax Service, however, being realistic, no one will swear or fine because of them. At the same time, if instead of goldfish there is a whole flock of reef sharks in a huge aquarium, then the inspectors of the Federal Tax Service will not go into their pockets for a word...

But it is not all that bad. In the Tax Code of the Russian Federation, we additionally found another footnote for entertainment expenses, displayed in paragraph 2 of Article 264 of the Tax Code of the Russian Federation, which states the following for certain:

“Representation expenses include expenses for official reception and service of persons.” The following is a list of these persons, including business partners, as well as members of the board of directors who came from different parts of the city or country for the next meeting.

How to reflect the costs of servicing receptions

It is extremely rare for companies to manage on their own in order to organize a decent reception for third parties. Yes, actually, and why. There are special companies that will help with organizing the event and finding a location for it, and will think about what to feed the guests and how to entertain them in between negotiations. The machine contains special functionality for displaying purchased services from the following companies:

• Receipt (acts, invoices);
• Specify the type of service operation;
• In the title, indicate the specific counterparty from whom the services were accepted and under what contract;
• In the table, enter the nomenclature of the service, its price and at what rate VAT is charged;
• Enter accounting account 44.01 with analytical detail as entertainment expenses.
• For taxes, use the 19.04 accounting account and it is recommended to use the same accounts in both types of accounting so as not to bring them into compliance later;
• Register the invoice received for services provided.

Documents required for registration of entertainment expenses

The laws of the Russian Federation do not have a clear list of documents required for processing entertainment expenses. However, to confirm the costs incurred, it is necessary to have documents confirming not only the fact of payment, but also the business nature of the event. In other words, it should be clear from the documents that the meeting was of an official nature for the purpose of negotiations regarding the activities of the company.

An approximate list of documents confirming hospitality expenses can be seen in the letters of officials. For example, the Letter of the Ministry of Finance of the Russian Federation dated March 22, 2010 No. 03-03-06/4/26 states that such documents can be:

• order from the director on organizing the event and making the necessary expenses;
• estimate or calculation of the amount of entertainment expenses;
• primary documentation when purchasing goods or paying for services for an event;
• report on entertainment expenses for the event. It records the purpose of the event, the results of its implementation, and the amount of entertainment expenses incurred.

Important! One advance report with checks is not enough to attribute expenses to entertainment. In the event of a trial, the court will side with the tax authorities if the company does not provide a complete package of documents regarding the event (Resolution of the Third Arbitration Court of Appeal dated November 27, 2012 in case No. A74-732/2012).

Experts advise avoiding formalities when preparing reporting documentation, that is, not indicating the same characteristics of the activities being carried out. Tax officials may see this as a formality, which will help them win the lawsuit (Resolution of the Fourteenth Arbitration Court of Appeal dated September 22, 2016 in case No. A66-17120/2015).

Tax accounting

After the document is processed by the machine to record the amounts of such expenses, it separates the total amount spent and the amount of tax. In the interests of forming a purchase book, the machine makes an entry in the special VAT accumulation register in the field of the tax presented. The admission form is shown in the figure.

Only that part of the VAT that is attributed to taxable profit in terms of entertainment expenses can be deducted. But at the moment the number of such losses is unknown.

In order to comply with this provision of the law, it is worth deactivating the flag in the received invoice that reflects the VAT deduction in the purchase book by the date of receipt, of course, in the case when it was marked.

Closing the period

When the accountant begins the period-closing procedure, the machine starts the routine process of calculating the share of write-off of indirect expenses. He greatly facilitates the accountant’s fate and takes on the responsibility of calculating the costs of profit taxation based on standardized expenses. You will not receive accounting records based on the results and simply request a certificate of calculation for it after closing and carrying out the procedure. In it you will see the position that interests us. The help reflects information on:

• The total amount of expenses for representation purposes;
• The amount that can be taken to reduce the tax base;
• The amount of the constant difference for the remaining amount.

Here you will not see the basis for rationing in the form of labor costs. You have the right to check the regulatory processes carried out by the machine through tax accounting registers.

According to the register, the data of the general payroll is visible to the user, and when subordinates make insurance contributions on their own initiative, then this information goes to the expense register. for voluntary insurance