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Gifts to Clients, Suppliers & Contractors

In the lead up to Christmas 🎄, a common goodwill gesture as a business owner is to provide gifts to former or current clients. 🎁


Gift giving to clients is a great way to strengthen relationships and can help you get good reviews, referrals, and more of your client's business in the future.


Now you may wonder, if I give a gift to a client, can I claim a tax deduction for the cost of the gift? The answer to this question depends on the type of gift you are giving.


Where you are providing a gift for the purpose of producing future assessable income i.e. gaining client referrals, the gift will be tax deductible as long as the gift meets the ‘non-entertainment’ classification. You will also be able to claim any applicable GST credit on the cost.


There are a few choices here with 'non-entertainment' gifts including gift vouchers, a bottle of alcohol, hampers, books or novels, groceries, games, flowers, chocolates, beauty products, perfume or aftershave, a watch, jewellery, handbags or wallets and iPads, phones, tablets or computers.


You may be aware of the $300 limit that applies to employees for providing ‘non-entertainment’ gift. If your gift giving extends to your clients and suppliers the $300 limit does not apply.


For other 'entertainment' type gifts, you won't be able to claim a tax deduction or a GST credit for these, such as theatre or music concert tickets, sporting event tickets, movie vouchers, flights and accomodation for holidays, and club memberships.






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