Our company’s business is conference or event management for academic organizations. The revenue is registration fees paid by attendants. In the conference program, there is a banquet dinner (Expense A) and cruise hire fee (Expense B) for every attendant. There will be some delicate dinners for VIP attendants only (Expense C). We also paid hotel fees and flights fees for 4 or 5 VIP attendants only (Expense D). We will give key rings to every attendant and wool cover as VIP attendants only as gifts (Expense E).
I know generally entertainment expenses can not be deductible for GST and Income Tax purposes. However, due to the nature of this conference or event management business, I think these entertainment expense is the necessary cost to complete the operation and should be recorded as cost of sales, thus can be deductible for GST and Income Tax purposes. Can any person or tax professionals give me any advice on this? It will be really appreciated that you can respond to my questions.
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