If you provide a gift to a client, depending on the type of gift, you may be able to claim a tax deduction. It may be completely deductible or only 50% deductible.
If the gift is in the nature of ‘entertainment’, such as food and wine, it will be 50% deductible.
If gifts consist of food or drink, you can only claim 50% of the expense as a tax deduction.
If gift baskets or hampers contain food or drink as well as other treats, the food or drink items are 50% deductible, but the other gift items are 100% deductible.
Keep these examples handy to help determine whether gifts to clients are completely deductible or only 50% deductible:
|Client Gift||50% deductible||100% deductible|
|Bottle of wine or six pack of beer||Yes|
|Basket of gourmet food||Yes|
|Box of chocolates/biscuits||Yes|
|Book or gift voucher||Yes|
|Tickets to a rugby game|
(but not corporate box entertaining)
|Presents (not food or drink)||Yes|
When you claim tax deductions for client gifts, you need to apportion the expense between the 100% deductible items and the 50% deductible items. We can help with this.
Please contact us should you wish to discuss any of the above in more detail.