GST and Gifts to Clients
The rule of thumb with gifts is that if they consist of food or drink, you can only claim 50% of the expense as a tax deduction. If you are giving out gift baskets or hampers and some of the contents are food or drink, but not all, the food or drink items are 50% deductible but the other gift items are 100% deductible. When you come to claim the tax deduction, you will need to apportion the expense between the 100% deductible items and the 50% deductible items.
If your Christmas giving includes gifts to clients, remember that some gifts will be fully deductible while others will be only 50% deductible. Use these examples as a guide.
50% deductible
- Bottle of wine or six pack of beer
- Meal Voucher
- Basket of gourmet food
- Box of chocolates/biscuits
- Christmas ham
100% deductible
- Calendar
- Book or gift voucher
- Tickets to a rugby game (but not corporate box entertaining)
- Movie tickets
- Presents (not food or drink)