Entertainment expenses can be divided into “business” (deductible) and “private” (non-deductible). Deductible expenses must have been incurred in carrying on a business to gain gross income. (IR 268)

Private entertainment expenditure is not deductible.

Fully deductible entertainment expenses:

  • Meals while travelling on business
  • Food and drink at conferences/staff training or business course
  • Meal allowances
  • Executive dining room
  • Morning and afternoon teas
  • Promotions open to the public and trade displays
  • Off-shore entertainment
  • Monetary sponsorship
  • General entertainment provided
  • Samples for advertising or promotion
  • Charitable entertainment for the public
  • Providing entertainment to reviewers
  • Taxable entertainment benefit allowance
  • Entertainment liable for FBT
  • Licensed premises operators providing a special offer

Entertainment expenses that are 50% deductible:

  • Corporate boxes and similar exclusive areas at recreational away from your business premises
  • Accommodation in a holiday home, time-share apartment or similar
  • Pleasure-craft, e.g., a corporate yacht
  • Food and drink provided or consumed in specific premises

If you need help in understanding this or any other tax topic, and how it relates to your business please contact us.