It's well known that tax law in Israel is different from French tax law.
As a result, certain expenses that are "professional" in France will not be recognized in Israel.
Today, we've decided to take a closer look at expense accounts, and more specifically at restaurant bills in Israel.
Restaurant bills in Israel
In recent days, during inspections carried out by the tax authorities in Israel, special attention has been paid to restaurant expense accounts. As a reminder, and unlike in France, restaurant expenses in Israel are not recognized as professional expenses.
The exception: when you invite a foreign guest.
The only way to have a restaurant bill recognized in Israel is when you invite a foreign guest for a business meal. In this case, you'll need a photocopy of the guest's passport. You'll also need to be able to provide proof of a contract or business activity between you and the guest.ALSO READ: What expenses are recognized in Israel?
The amounts must be consistent.
Of course, even this type of invitation must be "reasonable and consistent". For example: You can't invite a foreign client for whom you charge 5,000 shekels a year, to a restaurant that will have cost you 8,000 shekels. So, to avoid any trouble in the event of a tax audit, we recommend that you take a cautious approach to expense claims.
As the French saying goes, "un homme averti en vaut deux" ("an informed man is worth two").
Refreshments are recognized ... in part.
Finally, as a reminder, we'd like to remind you of the law for כיבודים - refreshments served in the workplace:In Israel, refreshments are recognized at 80%.
It is important to note that you will not be able to recover the Maam - VAT on refreshments served in the workplace.
Example of refreshments: hot and cold drinks, cookies, etc., provided they are served at the place of work.
Your questions - our advice
- What happens when I invite my employees to a team restaurant?
- I invited a foreign customer but he didn't accept my business proposal. Can I still have the expense recognized?
- Can I reimburse my employee if he or she buys company refreshments?
The tax authorities like to monitor business expenses in Israel. Proper preparation and accounting will help you avoid unpleasant surprises.