Giving gifts to clients, customers, and employees is a thoughtful way to strengthen relationships, but it’s essential to understand the tax and GST implications. The Australian Taxation Office (ATO) outlines clear rules for gift deductibility, FBT exemptions, and GST claims.
Gifts to Employees (minor benefits under $300 inclusive of GST)
Non-entertainment gifts (e.g., gift cards, hampers):
- Tax Deductible: Yes, if they are infrequent and non-entertainment related.
- FBT-Exempt: Yes, if the gift meets the minor benefits criteria.
- GST Claimable: Yes, for non-entertainment items.
Entertainment Gifts (e.g., holidays, tickets to a movie or sporting event):
- Tax Deductible: No, Entertainment-related gifts, even if FBT-exempt, are generally not deductible.
- FBT-Exempt:Yes, if the entertainment gift qualifies as a minor benefit.
- GST Claimable: No.
Gifts to Clients and Customers
Non-entertainment gifts (e.g., hampers, chocolates, or branded merchandise):
- Tax Deductible:Yes, if the gifts are aimed at promoting your business or maintaining goodwill
- GST Claimable: Yes, you can claim GST credits if the supplier is registered for GST, and you have a valid tax invoice.
Entertainment Gifts (e.g., holidays or leisure activities, tickets to a concert or sporting event):
- Tax Deductible: No.
- GST Claimable: No, GST cannot be claimed on entertainment gifts.
For further clarification, visit the ATO’s FBT and gift-giving guidelines. Thoughtful, well-planned gifts can boost goodwill while keeping your business tax compliant.
