Under such circumstances, there are no grounds for recognizing expenses for organizing a business meeting as representative expenses. Let's assume that the organization's client was offered hot or cold drinks, cookies, etc. during the negotiations.
The Russian Ministry of Finance in its letter dated November 24, 2005, No. 03-03-04/2/119, directly states that the costs of acquiring them are not representative. These may include economically justified expenses aimed at generating profit and confirmed by relevant documents (clause 1, article 252 of the Tax Code of the Russian Federation).
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Travel and accommodation of representatives
There are many disputes between physician data package tax authorities and organizations regarding the procedure for accounting for transportation costs and payment for hotel rooms for event participants.
As a rule, the sending party recognizes such expenses as travel expenses. But if the initiator of the negotiations is the receiving party, it is the receiving party that bears the costs of travel and accommodation.
Regulatory authorities believe that hotel expenses for participants from other cities are not considered representative expenses if the negotiations take more than one day. This position is set out in the letters of the Ministry of Finance of Russia dated April 16, 2007 No. 03-03-06/1/235, the Federal Tax Service of Russia for the city of Moscow dated December 6, 2007 No. 21-11/116748, dated April 12, 2007 No. 20-12/034115.
The host party should not pay for breakfasts, lunches and dinners unless they have the status of an official event. These expenses are borne by the representatives of the other organization who arrive for the negotiations at their own expense or at the expense of the per diem issued to them (letter of the Ministry of Finance of Russia dated April 5, 2005 No. 03-03-01-04/1/157).
Expenses for paying for air and railway tickets en route from abroad to the border with the Russian Federation and across its territory are not considered entertainment expenses. The cost of a visa also does not reduce the taxable base (letters of the Federal Tax Service of Russia for the city of Moscow dated December 6, 2007 No. 21-11/116748, dated November 11, 2004 No. 26-12/73173).
In this case, arbitration courts take the side of taxpayers who want to prove the right to recognize the entertainment expenses for the hotel accommodation of invited participants in negotiations as expenses. Such decisions were made, in particular, by the FAS of the West Siberian District in the ruling of March 1, 2007 in case No. F04-9370/2006(30552-A81-27), the FAS of the Moscow District (ruling of December 23, 2004 in case No. КА-А40/12097-04) and the FAS of the Northwestern District (ruling of May 17, 2004 in case No. А56-21571/03).
Entertainment expenses also include the cost of purchasing alcoholic beverages that are served at official receptions.