022 Sales incentives
Sales incentives are the amount of money paid to retailers
from manufacturers, which is basically included in nontaxable
expenses. However, this expense would be regarded as
“donation” if its purpose is to fill the deficit of your clients
even though it is expensed as sales incentives at first. And
it would be an “entertainment expense” if you invite your
clients on a trip or to go see a play as an incentives. Therefore,
its nature differs depending on its purpose. This is where
you have to be careful because it is also regarded as an
entertainment expense in the case you are not making the
purpose of paying sales incentives clear enough. As a result
the entertainment expense would be excluded from nontaxable
expenses, and they would ask you to pay penalty tax, which
is in fact what happened before.
