Part 12: Entertainment expenses in e-Invoicing

1.0 Introduction

Entertainment expenses poses challenges and difficulties in e-Invoicing regime as deduction is only available upon validation by IRB through MyInvois system.

 

The nature and scope of entertainment expenses varies wide in range and density. Entertainment expenses are essential, may be incurred by business entrepreneurs or employees, provided to trade customers, suppliers, and employees themselves.

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 require 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 and etc carrying on business are mandatory to monthly submit consolidated e-Invoice to IRB to account on the sales being cash or directly bank 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

The Covid pandemic escalate the transformation of digitalisation economy, making the business transparency, promoting tax harmonisation and fair trading a solid foundation of Malaysia tax system.

 

E-invoicing possess both business and tax risks, the concept methodology and its working mechanism must be carefully comprehended, guided by IRB for every success.

Get in touch:

📧 einvoice.smcm@gmail.com 

📞 603 – 7733 6770

🔗https://www.facebook.com/smc_matahari/

⌨ https://www.instagram.com/smc_matahari/

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