Entertainment
a) provision of food, drink, recreation or hospitality of any kind or
b) provision of accommodation or travel
Recreation and hospitality
- Trip to a theme park or a recreation centre; a stay at a holiday resort; ticket to a show or theatre; gift and give-aways
Subsection 33(1)
An expenses wholly and exclusively incurred in the production of gross income is allowable as a deduction against gross income from that source
Determine whether the expenses:-
1. falls within the definition of entertainment under S.18 of ITA
2. wholly and exclusively incurred in the production of gross income under S.33(1)
3. included under any of the categories of entertainment expenses specified under proviso (i) to (viii) to paragraph 39(1)(l) of ITA
Provisio (i) to (viii) to Paragraph 39(1)(l)
(i) Entertainment to employees
- Free meals & refreshment, annual dinners, outings, family day, club membership provided to employees except where the expenditure is incidental to entertainment for others
(ii) Entertainment for payment in the ordinary course of business
- Cultural shows provided by restaurant or meal provided by airline
(iii) Promotional gifts at trade/industrial fairs/exhibitions outside Malaysia
- Samples, souvenirs etc to visitor at trade fair held outside Malaysia
(iv) Promotional samples of products of the business
- Promotional samples for advertising purposes
(v) Entertainment for cultural or sporting events open to public wholly to promote the business
- Cost of passage, food, accommodation, sport attire, equipment for artistes/sportsmen
(vi) Promotional gifts within Malaysia of articles incorporating the logo of the business
- Promotional gifts with company’s logo given to public
(vii) Entertainment related wholly to sales arising from the business
- Redemption/cash/discount voucher, free gifts, lucky draw prizes, incentive trips
(viii) Leave passage benefit provided by an employer to its employees
- Leave passage to employees and family to facilitate a yearly event within Malaysia
Entertainment expense which qualifies for a fifty percent (50%) deduction -
- Wholly & exclusively incurred in production of gross income under S33(1) but does not fall within the provisos (i) to (viii) to Paragraph 39(1)(l) of ITA
Effective from the Ya2008 and subsequent years of assessment
Source: summarised from
http://www.hasil.gov.my/pdf/pdfam/PR3_2008.pdf
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