There are four main areas where Entertainment is 50% deductible:

  1. Corporate boxes
  2. Holiday accommodation
  3. Pleasure craft
  4. Food and drink (as per the following rules)

Food and drink is 50% deductible when consumed at any of the above or in the following specific circumstances:

  • Business meals consumed away from the business premises
  • Food and drink consumed on the business premises at a party, reception, celebration meal or other social function (including after work drinks or a Christmas party) Note: this does not apply to everyday meals provided in a staff cafeteria.
  • Any event or function away from business premises for the purpose of staff morale or goodwill i.e. Friday night 'shouts' at the pub
  • In an area of the business premises reserved for use at the time by senior staff and not open to other staff (such as an executive dining room used to entertain clients).

Some examples of entertainment which is 100% deductible include:

  • Offshore entertainment (i.e. outside New Zealand)
  • Meals while travelling on business (so long as no business contacts are present)
  • Providing morning or afternoon tea for your team
  • Sandwiches provided to staff at a lunch time meeting or training session.
  • Gifts of say a bottle of wine or a box of chocolates at Christmas to thank your customers for their custom during the year.

The entertainment rules can be quite a grey area so please contact us if you would like clarification.