Can I Claim Client Entertainment as a Business Expense in Thailand?
Partly. Entertainment is deductible only up to 0.3% of gross receipts, capped at 10 million baht, and its input VAT is not claimable.
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What Revenue Department (กรมสรรพากร) says
The Revenue Department caps entertainment at 0.3% of gross receipts and never more than 10 million baht a year. Anything above the cap is added back to taxable profit. Section 82/5 of the Revenue Code denies input VAT on entertainment. Entertainment means hosting or gifts given for the business, such as meals with clients. The cost must still relate to the business and be backed by a receipt or invoice, even when it is within the cap.
When you can claim
- Meals with clients to discuss business, within the 0.3% cap
- Gifts to clients for business purposes, within the cap
- Hosting a client visit at the company's premises, within the cap
- Small gifts to clients at New Year or Songkran, within the cap
- Tickets to an event attended with a client, within the cap
When you cannot claim
- Entertainment above 0.3% of gross receipts
- The VAT on any entertainment
- Private meals and parties
- Staff parties presented as client entertainment
- Entertainment with no record of who attended
- Entertainment for a director's friends or family
Good to know
Pro tip: Note who was entertained and why on each receipt. Finn tracks the running total against the 0.3% cap. Book client entertainment to its own category rather than to meals or travel, so the running total against the cap is right.
Important: Entertainment is a cost in the books even when part of it is not deductible. Your accountant adds the excess back in the P.N.D.50 tax computation.
Related expenses
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