SBA

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

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