Can I Claim Client Entertainment as a Business Expense in Uganda?
Rarely. Entertainment and personal hospitality are usually not deductible; check before claiming.
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What Uganda Revenue Authority (URA) says
Only expenses incurred wholly in producing business income are deductible. Personal costs are not deductible. We have not confirmed the exact Income Tax Act rule on entertainment from an official URA page, so confirm the treatment with your accountant before claiming any of it. A cost is still recorded in the books when it is not deductible. The question is only whether it reduces chargeable income, which your accountant settles in the tax computation.
When you can claim
- Staff refreshments at business meetings, if your accountant agrees
- Water and refreshments for staff at the office, if your accountant agrees
- Meals during a documented business trip, if your accountant agrees
When you cannot claim
- Meals and drinks with friends or family
- Gifts to clients without a clear business purpose
- Personal travel dressed as business
- Parties for the owner's family paid by the business
- Alcohol and entertainment with no record of who attended
- Gifts to officials
- Meals bought for staff on personal occasions such as birthdays, unless your accountant agrees
Good to know
Pro tip: Record the business purpose and who attended for every meal you pay from the business account. Book client meals to their own category rather than to travel or office costs, so they are easy to review at year end. If in doubt, pay a personal meal from your own money. It keeps the company's books clean and saves a question at year end.
Important: Finn marks entertainment for review rather than posting it as a deductible cost. If you treat a meal as a business cost, keep a note of the client and the business discussed. It is the first thing your accountant will ask for.
Related expenses
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