1.0 Introduction
Entertainment expenses are essential, may be incurred by business entrepreneurs or employees, provided to trade customers, suppliers, and employees themselves. The nature and scope of entertainment expenses vary wide in range and density.
Entertainment expenses poses challenges and difficulties in e-Invoicing regime as deduction is only available upon validation by IRB through MyInvois system. A validation link with QR code would be provided for verification.
2.0 E-Invoice is a must
Entertainment generally encompasses food and beverages, vacations, gifts provided to employees, customers, or suppliers. Validated e-Invoice in the name of company are required at each in the followings:
- Fine dining, F&B place;
- Luxury bags, perfumes, watches;
- Airline tickets for overseas trips;
- Giving away mobile phones in lucky draw events,
for the business expense to be eligible for tax deduction.
3.0 Staff welfare
The staff amenities on F&B at many times are provided with invoices, receipts, cash sales from Points of Sales system of the F&B operator, kopitiam, café and food court in shopping mall.
There can be instances of no receipts being issued as consumption at food stalls, night market, morning trader at streets etc.
These provision of foods, meals to employees would remain deducted upon:
- Claim forms by employees illustrating the nature of expense;
- Attachment of invoices, receipts, cash sales whenever possible & practical;
- Contract of employment is revised to incorporate the eligibility of meals of employees.
There is no requirement of e-Invoice in these categories of staff claims to be eligible for business deduction.
4.0 Petty trader, street seller
Micro business at kopitiam, petty trader, warong roti canai, pasar malam F&B operator, nano home cake maker, nano new year cookies maker, handyman services etc., carrying on business are required to register with SSM being carrying on business. With the given business registration number, they can register with IRB to access into MyInvois portal to issue e-Invoice to its trade customers upon request. On each month, these business operators are required mandatorily to monthly submit consolidated e-Invoice to IRB, with the exclusion of e-Invoice issued to individual customer to account on the sales being cash or e-wallet into the account.
This takes effect 1.7.2025 but it is advised to begin soonest possible as e-Invoicing kick start on 1.8.2024.
5.0 Conclusion
Entertainment expenses in e-Invoicing era are challenging. It has to be carefully examined on its nature, scope of expenses and recipient to incorporate the needed data fields and particulars with authenticity of the supplier information to be eligible on business expense deduction.
The initial analysis of the various categories of entertainment expenses during implementation ensures the complete compliance to e-Invoice data fields.
