For tax purposes, a Christmas gift may also be considered as an entertainment. 

There are two kinds of gifts:

Entertainment gifts

Items such as movie tickets, concert, airline, theatre tickets may be subject to FBT and not deductible for tax purposes. 

Gifts that are more than $300 are subject to FBT. It is likely tax deductible if you are paying an FBT and you can claim the GST. Keep in mind that you will be paying the equivalent of 47% tax on it. If gifts are less than $300, then it’s not subject to FBT and we can’t claim the GST either.

Examples of entertainment:

  • Theme park tickets
  • Sport/golf
  • Leisure activities
  • Dinner/drinks
  • Movie/concert tickets
  • Cruise
  • Gift cards for the above things

Non-entertainment gifts

If your business sends chocolate, gift vouchers, pens, or Christmas hampers, this stuff falls outside of the entertainment criteria and you won’t have FBT on it, and it’s most likely tax deductible. 

Gifts for employees or clients under $300 are tax deductible without FBT.

Examples of non-entertainment:

  • Gift voucher (groceries, health & wellness, books etc)
  • Wine or champagne
  • Flowers
  • Hamper
  • Skincare/beauty products
  • Perfume
  • Computer/TV equipment

 

Watch the webinar replay, ‘Christmas Parties & Tax – How wine is tax deductible’ at https://www.facebook.com/InspireCA/videos/1544736652557674

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