Only 50% of net. expense but 100% of tax

In certain cases you are only allowed to claim half of the net amount as an expense but the full tax. This is quite common for restaurant bills here in Austria.

For example:

A restaurant bill of 100€ net + 20€ tax -> you can claim 50€ as an expense but the full 20€ taxes.
How can I use this logic in

You should use Manager to record the full expense. Whether all, a portion, or none is deductible depends on local tax laws. For most countries, Manager has no built-in tax calculation capability, because that would be too complex to maintain. However, there may be some small exception(s) for Australia.

Your best choice would be to create a Tax Code at double the rate and use that for the 50%

If only half is expense, what’s the other half? I mean from accounting point of view, it is all expense (whole 100 EUR). Maybe you are talking about tax-deductible expenses but that’s something you mention in tax return, not in your accounting program.

That true, but you can use the accounting program to track such expenses throughout the year and then do a year end adjustment to clear out the tracking accounts

You can but in that case, you could just have two expense accounts:

  • Entertainment (tax deductible)
  • Entertainment (non-tax deductible)

Split the dinner bill in half between those two accounts and use 20% tax code on both accounts since whole tax amount can be claimed back.

This is how I’d handle it.

1 Like

Makes perfect sense - such simplicity

Also, you should consider how your taxes are being calculated and filed. Some tax programs and/or accountants ask for the full amount spent on partially deductible expenses (such as meals and entertainment) and make the adjustment for you. Trying to perform the allocation during the year could result in confusion and possibly missed deductions.

And, as @lubos pointed out, the expense is real from the accounting standpoint, just not fully deductible.

Thanks! So if I get you right you mean I have two expense accounts for “Dinner”.
One counts as an expense, the other one does not?
If so - where can I declare that expenses on this account are “ignored”?

Both are expense accounts. You should just call one of those expense accounts non-tax deductible so your accountant has it easier to calculate your income taxes at the end of financial year.