28 June 2013

 

Client Gifts and Greeting Cards

 

Many people believe that client meetings at a restaurant or cafe are tax deductible. In fact, this is considered by the ATO as 'entertainment' and is therefore NOT Tax Deductible. If you want to impress your clients to advertise your business or seal-a-deal, then give a gift instead!

 

If you are an employee:

 

You can only claim a deduction for client gifts or greeting cards if you receive your income from commission or from commission and retainer, not if you are on a fixed salary.

 

If you are a business:

 

You can claim client gifts as long as it is with the purpose of advertising the business and generating goodwill and future business opportunities. But be careful when choosing what gift to give your client as only some gifts are tax deductible.

 

Gifts such as Christmas hampers, bottles of wine, perfume and gift cards (but not entertainment gift cards such as movie tickets, bowling etc) are tax deductible.

 

Client gifts that are a form of entertainment such as movie tickets, taking your clients out for lunch or dinner and tickets to sporting activities are NOT tax deductible.

 

Please contact us for further information or to discuss your situation.