Client Gift Expenses and their Tax Deductibility

Questions around gifts often come up when you want to celebrate special milestones in your relationships with valued customers or at Christmas time when you are planning events and thinking about ways to say thanks and spread some festive cheer with clients.

If you provide a gift to a client, depending on the type of gift, you may be able to claim a tax deduction. That may be completely deductible or only 50% deductible.

If gifts consist of food or drink, you can only claim 50% of the expense as a tax deduction. If gift baskets or hampers contain some food or drink and some other goodies, the food or drink items are 50% deductible, but the other gift items are 100% deductible.

When you claim the tax deduction, you need to apportion the expense between the 100% deductible items and the 50% deductible items. We can help.

Download the guide to client gift expenses & tax deductibility