formal Entertainment Allowance, as we knew it over the past number of
years, does not exist anymore and can not be used as a deduction against
your taxable income.
may then ask how can I still benefit? The answer is very simple. To utilize the
Entertainment Allowance, one needs to talk to your employer to restructure
your salary package NOT
to include any entertainment allowance, and not to add it to the
cash component of your salary either.
South African Revenue Service does allow the deduction of entertainment
expenses, only as a tax deductible business expense. SARS does allow
employee entertainment expenses to be deducted by a business on a
reimbursement basis. This means that you can incur entertainment
expenses and claim it from your employer, who can refund you and then
can claim it as a tax deduction.
can reach an agreement with your employer on the amount what you can
claim per month or the total amount for the year. Also what type of
entertainment expenses you can claim and what you can’t claim.
cut your nose to spoil your face, by trying to claim everything from
your daily milk and bread to your monthly booze bill. Play it safe and
only claim your genuine entertainment expenses, like your monthly date
with your partner for a dinner for two by candle light to your annual
Christmas Party for your clients.