Christmas gifts for your clients and employees
Are gifts to your employees, clients, and suppliers claimable as a business expense? Some gifts may be classified as “entertainment” and are not tax deductible.
If your gift is less than $300 inclusive of GST, no FBT is payable. You can also make a tax deduction for "non-entertainment gifts".
Non entertainment gifts include wine, food, hampers, vouchers, etc.
Gift vouchers although claimable as a tax deduction, are not subject to GST because there are no goods or services exchanged. A gift voucher is just another form of money.
Gifts such as a holiday, membership to a club, or tickets to a theatre, sporting or musical event are considered to be entertainment. These gifts are not tax deductible.
Giving your clients a gift at Christmas is a personal choice that you as the business owner can make. Be aware that some clients may not be allowed to accept gifts due to their business’s Code of Conduct (e.g., government workers).
We remind you that the topic of entertainment, tax deductibility and fringe benefits tax is complex and not always straight forward and may require the guidance of your tax agent