Today is Mid-Autumn Festival.

Your admin asks:
“Boss, this year order 100 boxes of mooncakes?”

You check the list.

10 for staff.
50 for customers.
40 for suppliers.

Same bakery.
Same mooncake.
Same price.

You approve.
Simple, right?

Not really. 😂

Because for tax purposes,
those 100 identical mooncakes may end up with very different deductions.

Staff … Potentially 100%.
Customers … Normally 50%.
Suppliers … Normally 50%.
Golf kaki? … Maybe 0%.

Welcome to Malaysian tax. 😂

The mooncake looks the same.
LHDN looks at who receives it and why you gave it.

First.
Your employees.
You give every staff one box.
“Happy Mid-Autumn Festival.”

Generally, entertainment provided to employees may qualify for 100% deduction.

Then comes your customers.
You send one premium box.
“Thank you for supporting us.”

Customer happy.
Tax deduction?
Normally 50%.

Then SME boss asks the famous question:
“Boss, if I put company logo, can claim 100%?”

Possible.
But please don’t start printing stickers tonight. 😂

A genuine promotional gift carrying a conspicuous company logo may qualify for 100%, if the conditions are met.

Another possible route is to tie the gift directly to sales.

For example:
“Spend RM2,000 and receive one mooncake gift box.”
That is very different from simply sending a courtesy gift.

Now your suppliers.
You send them the same mooncake.
“Thank you for supporting us.”

Normally?
50%, assuming the normal business deduction test is satisfied.

Why?
Because the special treatment for entertainment wholly related to sales focuses on customers, dealers and distributors.

Suppliers are excluded (Suppliers are specifically excluded. Why? That one you need to ask LHDN)

So now your accounts department has one invoice.
100 identical mooncakes.

But three possible tax treatments.
Staff … potentially 100%.
Customers … normally 50%.
Suppliers … normally 50%.

Then your secretary asks:
“Boss, this list got your golf kaki also. Company pay ah?”
Now we reach the dangerous category.
Maybe 0%.

Before asking whether something gets 50% or 100%,

Ask the more important question :
Was it genuinely for business?

If not,
no amount of creative bookkeeping will save it.

So please don’t put:

Mother-in-law.
Children’s teacher.
Golf kaki.
Old school friend.

under:
“Business Entertainment.”

😂😂😂

This is why the real tax issue is not the mooncake.

It is your documentation. Don’t dump everything into:
“Entertainment RM30,000.”

Then year end tell your accountant:
“Boss, you adjust lah.”

By then,
the mooncake is already eaten.
Nobody remembers who received what.
But the tax computation is still waiting.

For SME owners, the solution is simple.

Separate your list before you order.
Staff.
Customers.
Suppliers.
Prospects.
Private.

Keep the business purpose.
Keep the invoice or e-Invoice.

And if you want to rely on a promotional treatment, make sure it genuinely meets the conditions.

The tax saving from one mooncake box will not make you rich.
But poor documentation across hundreds of expenses can make a tax audit very painful.

Same mooncake.
Same price.
But
To LHDN, who receives it can change everything.

Technical reference : LHDN Public Ruling No. 4/2015, Entertainment Expense.

Read the full content in our blog
https://www.ktp.com.my/blog/moon-cake-tax-deductible