Netizens asked: Should the gift expenditures given by the enterprise to customers be regarded as sales for calculation of value-added tax? How to calculate personal income tax? Can they be classified as business entertainment expenses? Lawyer's answer: 1. Value-added tax shall be paid as sales. Tax. Article 4 of the "Implementation Rules of the Interim Regulations on Value Added Tax" stipulates that the following behaviors of units or individual industrial and commercial households are deemed to be sales of goods: (8) Giving away self-produced, commissioned processing or purchased goods to other units or individuals for free Article 16 Article 11 stipulates that if a taxpayer has an obviously low price without justifiable reasons as mentioned in Article 7 of the Regulations or has an act deemed to be the sale of goods without a sales amount as listed in Article 4 of these detailed rules, the sales amount shall be determined in the following order: (1) Determined based on the average sales price of similar goods of the taxpayer in the most recent period; (2) Determined based on the average sales price of similar goods of other taxpayers in the most recent period; (3) Determined based on the component taxable price. The formula for the taxable price is: Taxable price = cost × (1 + cost profit rate) For goods subject to consumption tax, the amount of consumption tax should be added to the taxable price. The cost in the formula refers to: the actual production cost when selling self-produced goods, and the actual procurement cost when selling outsourced goods. The cost profit margin in the formula is determined by the State Administration of Taxation. 2. Personal income tax treatment. Article 2 of the "Notice of the Ministry of Finance and the State Administration of Taxation on Individual Income Tax Issues Concerning Gifts Given by Enterprises for Promotional Exhibitions" (Caishui [2011] No. 50) stipulates that if an enterprise gives gifts to individuals and falls under one of the following circumstances, the income obtained Individuals shall pay personal income tax in accordance with the law, and the tax shall be withheld and paid by the enterprise that gives the gift: 1. Enterprises randomly give gifts to individuals outside the unit during business promotion, advertising and other activities. The income from gifts obtained by individuals shall be treated in accordance with the following regulations: "Other income" items are subject to a personal income tax rate of 20% in full. 2. If an enterprise gives gifts to individuals outside the company at annual meetings, symposiums, celebrations and other activities, individual income from gifts shall be subject to the full personal income tax rate of 20% according to the "other income" item. 3. Enterprises will provide additional lottery opportunities to customers whose cumulative consumption reaches a certain amount. Individual winning income will be subject to a personal income tax rate of 20% in full according to the "accidental income" item. Article 3 stipulates that if the gifts given by the enterprise are self-produced products (services), the individual's taxable income shall be determined based on the market sales price of the product (service); if the gifts are purchased goods (services), the individual's taxable income shall be determined based on the market sales price of the product (service). The actual purchase price determines the individual's taxable income. Gifts given by enterprises must be treated as sales and subject to value-added tax and personal income tax according to the above regulations. 3. Referring to the "Notice of the Qingdao Local Taxation Bureau on Issuing the "2009 Corporate Income Tax Business Questions" (Qingdi Shuihan [2010] No. 2), business entertainment expenses refer to the reasonable expenses incurred by the enterprise for the needs of production and business activities. Expenses for entertainment are deducted in accordance with the relevant provisions of the tax law, but not all meal expenses are business entertainment expenses. The two are mainly distinguished from the reasons, nature, purpose, use, objects, etc. Meal expenses used to entertain customers should be treated as business entertainment expenses and shall not be broken down and included in other items. Article 46 of the "General Principles of Corporate Finance" Enterprises shall not bear the following expenditures belonging to individuals: (5) Other expenditures that should be borne by individuals. Therefore, business entertainment expenses refer to the entertainment expenses reasonably incurred by the enterprise for the production and operation of business activities. The supplements and accommodation expenses given to customers can be regarded as business entertainment expenses if they are indeed needed for production and operation of business activities. However, if travel and other expenses are What should be borne by the individual cannot be listed as an expense in the enterprise.