Before or after you enjoy that Christmas or year end party, you better check this tax deductions on entertainment and gifts. If you want to know more about this, read it here: http://bit.ly/2g8DfWD

1. TAX DEDUCTIONS ON
ENTERTAINMENT & GIFTS
PAUL MARTIN CHARTERED ACCOUNTANT

2. ENTERTAINMENT
There are rules and
conditions when it comes to
tax deductions with
Christmas parties, year-end
functions and other
client/customer or employee
entertainment expenses.
Some entertainment
expenses are fully deductible,
while some are not.

3. TAX DEDUCTIONS
If your client/customer,
employees or anyone
associated with the
business has a greater
opportunity to enjoy the
entertainment than the
general public, you can
only deduct 50% of the
costs.
These include
entertainment expenses
that are supplied for
charity and
entertainment enjoyed
outside New Zealand.
Taking your family or
any relatives who do not
work in your company
out for dinner or for a
holiday vacation within
or outside New Zealand.
50% 100% 0%

4. Examples of tax
deductions on
entertainment
• Christmas drinks for team members or
clients/customers in the office
• Christmas drinks for team members or
clients/customers in the pub
• Hiring of a launch to entertain
clients/customers
• Restaurants providing food and drinks to
team members at a social function in their
restaurant
• Staff Christmas party on or off the
business premises
• Function hosted in a marquee at the races
(or in a corporate box at the rugby).
Includes the cost of tickets and any food
and drink provided
• A weekend away for the team at holiday
accommodation in New Zealand, including
any food and drink provided
50%

5. Examples of tax
deductions on
entertainment
• Donating food to a
Christmas party in a
children's hospital
• Providing
entertainment, including
food and drink at your
promotional stand for
the Cracker Christmas
Festival
• Holding the Christmas
party in Fiji
100%

6. REMEMBER
THIS
If you claim a 50%
deduction for a business
entertainment expense
you need to make
necessary GST
adjustments. These
adjustments will be
required to be made at the
time your income tax
return is filed.

7. GIFTS
If you are planning to give
your employees, suppliers,
clients/customers, or
prospective clients/customers
gifts this season, you need to
know that some gift items are
not fully tax deductible as
they are counted as
entertainment expenditure.

8. Examples of tax
deductions on
gifts
• Bottle of wine or six
pack of beer
• Meal voucher
• Basket of gourmet food
• Box of
chocolates/biscuits
• Christmas ham
50%

9. Examples of tax
deductions on
gifts
• Calendar
• Book or gift voucher
• Tickets to a rugby game
(but not corporate box
entertaining)
• Movie tickets
• Any presents that are
not food or drink
100%

10. REMEMBER
THIS
You may claim the full cost
of your employee gifts if
they do not fall within the
business entertainment
rules. However, you may
have to pay Fringe Benefit
Tax (FBT) if the cost
exceeds more than the
general employee
exemption and maximum
employer exemption.

11. This is just a quick guide to tax deductions on
gifts and entertainment. If you are still unsure
about your holiday plans and expenses or
want advice on your specific circumstances,
we are a trusted team of chartered
accountants in Auckland that can help you.
PAUL MARTIN CHARTERED ACCOUNTANT

12. Call us today
(09) 576 4166
OR REQUEST AN APPOINTMENT @
WWW. PMARTINCA. COM

13. ABOUT
PAUL MARTIN
CHARTERED
ACCOUNTANTWe are an accounting firm in Auckland,
that offers small business accounting
services such as annual accounts, tax
returns, GST and more. We use the best
online accounting software in New
Zealand and have business advisors that
can help you create your business plans
and business strategy.