The charging standard of business hospitality before enterprise income tax is: compare the extra 60% with five thousandths of income, and take the minimum value to charge before enterprise income tax. The difference between other amounts and this amount is an increase and cannot be charged before enterprise income tax.

Basis: According to Article 43 of the Regulations for the Implementation of the Enterprise Income Tax Law of People's Republic of China (PRC) (the State Council Order No.512): "The business entertainment expenses incurred by an enterprise related to production and business activities shall be deducted according to 60% of the amount incurred, but the maximum amount shall not exceed 5‰ of the sales (business) income of the current year."

Take the reimbursement documents brought back by colleagues as an example. Among them, the transportation, meals and accommodation of colleagues are all part of the travel expenses, while the meals for entertaining customers and the expenses for buying gifts for customers are business entertainment expenses. Similarly, the cost of company dinners or meetings is not business entertainment! It belongs to welfare expenses and meeting expenses payable!

Simply put, only the entertainment expenses paid for the reasonable needs of business operation belong to business entertainment expenses, such as business negotiation, product promotion, external liaison, public relations exchange, conference reception, guest reception, etc.