Expenses of Negotiations with Individual Customers May Be Recognised as Representation Expenses

05.06.2009

Letter by the Finance Ministry of the RF No. 03-03-06/2/64 of 27.03.2009 “On accounting of representation expenses incurred in negotiations with individuals”

Referring to an individual query the Finance Ministry authorised recognition of expenses of negotiations with individuals as representation expenses for profit tax purposes (with regard to the limits in effect). This authorisation shall be treated with care since pursuant to Article 264 of the RF Tax Code representation expenses include, among others, costs of negotiations with representatives of organisations only.