Meal Expense that can be expensed fiscally by the company are expenses that meet certain criteria in accordance with applicable tax regulations in Indonesia. These expenses can be recognized as a deduction from gross income in the calculation of corporate income tax. Not all meal expense incurred by the corporate can necessarily be recognized as a deduction from gross income that can reduce the corporate income tax. Based onArticle 6 Paragraph (1) of The Harmonization of Tax Regulations Law, the expenses that can be charged fiscally to calculate taxable income are expenses. Expenses that can be charged fiscally are costs that must have a direct or indirect relationship with the company’s business activities in the context of obtaining, collecting, and maintaining income. The requirement for meal expenses to be fiscally deductible is that they are provided to all employees, meaning that the cost of food or drink is provided equally to all employees, not only to certain employees or management. Meals are provided in kind, not in cash (free office canteen or catering). The purpose is to support the company’s operational activities and the welfare of all employees. Then reimbursement or compensation in the form of food and beverage coupons for outside service employees, but there is a maximum limit per month, which is IDR 2,000,000 for each employee. There must be proof of expenditure (invoices, receipts, catering contracts, etc.) to support fiscal charging. However, there are also meal expense that can not be expensed, such as meals given in cash to employees. This cannot be recognized as a fiscal expense because it is considered as employee income subject to income tax article 21 then there are also meals that are only given to certain employees.
By Olina Rizki Arizal – Partner TBrights
TBrights is a tax consultant in Indonesia which is currently an integrated business service in Indonesia that can provide comprehensive tax and business services.
Reference:
- The Harmonization of Tax Regulations Law Article 6 Paragraph 1
- The Regulation Of The Minister of Finance Regulation Number 66 Of 2023 Concerning Income Tax Treatment of Reimbursement or Reward in Relation to Work or Services Received or Obtained in the Form of Natura and/or Enjoyment
