In the context of business, meals provided as entertainment for customers refer to expenses incurred by a company for food and beverages consumed with existing or potential clients, business partners, or other non-employee associates.
The primary purpose of these meals is to foster business relationships, discuss business opportunities, express gratitude, or facilitate negotiations, ultimately aiming to generate or maintain income for the company. This can include meals at restaurants, cafes, or even catered events.
General Criteria CIT Deductibility
- Generally tax deductible.
- Business purpose (=clear and direct business relationship or objective behind the entertainment).
- Not for employees.
- Reasonable and necessary
- Cost of food and beverages must not exceed THB 2,000 per person per occasion.
- Overall cap on entertainment expenses 0.3% of the revenue or paid- up capital (whichever is greater). The overall cap is 10m Baht.
Documentation Needed For CIT Deduction
- Proper tax invoice, or for smaller amounts (i.e. below 1,000 Baht per purchase) a normal receipt (ใบรับ)
- Form (i.e. expense claim) containing
- Date and time of the meal
- Detailed description of purpose (i.e. “Dinner with Mr. A from ABC Co. to discuss Q3 sales targets“)
- Names and positions of
- Guests (customers or potential customers)
- Company Representatives (=employees as hosts)
- Location/venue
- Total cost of the meal
- Authorization/approval
- Proof of payment (i.e. credit card statement)
- Any other supporting documents, such as
- Assignment/Order from the Management
- Related documents are to be presented to Company’s Board of Directors
- Monthly report to Company
