First – what kind of expense it is. If it is hotel in the business trip, we can consider it as deductible. If it is the gift for the client, unfortunately this cost we can’t consider as deductible. If it is dinner with counterparty, I have one more question – in which Tax Office are you? It’s because each of them has other opinion about this, including what you were talking about during this lunch or supper.
Second – what kind of contract a President of the Board has. If it is labor contract, expenses such as hotel, diets, mobile phone, fuel to company car etc. are tax deductible. If the President of the Board has manager contract [type of contract based on Civil Law], we have to explore the details of the contract between the President of the Board and Company.
Third – if the President of the Board is at the same time a shareholder in this company. If the answer is no, we can stop our analysis in this moment. But if he is at the same time a shareholder in the company, the case is a little bit more complicated. Generally the expenses of the shareholders we can’t consider as a deductibles. That’s why all kind of costs of President-Shareholder which he assumed due to executing his function of the President of the Board, won’t be included in the base of taxation, but…
Fourth – if the President of the Board not hired on the labor contract is at the same time a shareholder, we have to look at the articles of association. If there is predicted that expenses of the President of the Board assumed due to executing his function are in the charge of the company, they will be deductible. But we have to remember to make a good documentation which justify this expense. The goal is to eliminate the accusation that it is unilateral benefit to the shareholder. Documentation of such expense is sometimes very difficult and makes problem for companies, but it’s worth to do it to avoid the problems with the Tax Office.