Meals Deduction Barely Covers Price of Coffee

If you think American tax laws are tough on meals and entertainment, read this story recently reported by Chelm on the Web.

The Israel Tax Authority finally updated the amount that the independently employed can put down on their tax returns as expenditures for wining and dining a business associate. It took a High Court of Justice order from the Israel Supreme Court to get pokey pencil-pushers to change the deductible expenses for breakfast, lunch and dinner out with a client.The limit has not been adjusted since…1985.

Until recently the income tax people recognized a maximum ceiling of 1 (one!) NIS (New Israeli Shekel) for breakfast (less than 27 cents in $US), 4 NIS for lunch (just over one $US dollar), and 2 NIS – (about 53 cents $US for dinner). Of course this is only if you have duly-submitted restaurant receipts.

With great generosity, the government raised the ceiling to 12 NIS (about three $US ), 46 NIS (about 11.5 $US) and 23 NIS (about 6 $US) respectively.

Although it’s a push in the right direction, the 12 NIS ceiling will barely pay for a small cup of Turkish coffee and 23 NIS will at most buy a tuna sandwich at a run-of-the-mill Israeli cafe.