Gifts of Food & Drink

IRD have recently clarified their position on gifts of food and drink, ie hampers, Christmas ham etc, and these gifts now fall under the Entertainment rule and are only 50% deductible as there is a private benefit. It makes no difference whether the gift is to staff, suppliers or customers. Gifts other than food and drink are still 100% deductible as long as it’s business related, keep in mind FBT for staff. As before, any meals, drinks and entertainment are only 50% deductible, unless it is morning or afternoon tea or meals while travelling, however not if accompanied by a potential or existing business contact in which case it is only 50% deductible.

 

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