When considering what corporate gifts to invest in, it is important to consider the tax implications of the various types of gifts before purchasing them as not all gifts are tax deductible.
We have compiled a short guide on when tax applies to various corporate gifts for clients and staff; however it is important to seek advice from your accountant or qualified tax professional.
ARE CLIENT GIFTS TAX DEDUCTIBLE?
In order to claim the tax deduction and for the GST to be claimed on gifts you give to your clients, both of the following conditions need to be met:
- The gift has a link with revenue generation – i.e. the gift is given with the expectation of continuing work or custom from the client; and
- The gift does not involve entertainment.
If the gift is considered to be entertainment, it is not tax deductible and you cannot claim the GST.
ARE GIFTS TO STAFF TAX DEDUCTIBLE?
The gift is tax deductible & the GST can be claimed if it is:
- A one-off gift, defined as ‘infrequent’
- Not classed as entertainment
- Under $300 (GST inclusive)
WHAT IS CONSIDERED ENTERTAINMENT BY ATO
According to the Australian Tax Office (ATO), providing entertainment means:
- providing entertainment by way of food, drink or recreation
- providing accommodation or travel in connection with such entertainment.
Some examples of gifts that would be considered entertainment and therefore not tax deductible and you cannot claim the GST for are:
- food and drinks at a restaurant
- tickets to sporting events, the theatre or movie tickets
- a cruise
- a game of golf
What types of corporate gifts are not considered to be entertainment?
Gifts that are not considered to be entertainment would include, but are not limited to:
- gift hampers
- bottle of champagne, wine or whisky
- flowers or plants
- gift voucher (for groceries, healty & wellness, books etc)
- computer, iPad or TV equipment
WHY GIVE CORPORATE GIFTS?
Saying thank you to your clients, suppliers and staff is important. It builds relationships, client retention, encourages referral business and improves staff retention, all of which improves your bottom line. For a safe, seamless and easy way to say thank you, corporate hampers are perfect. Browse our range of hampers, or create your own that represents your brand.
At Pamper Hamper Gifts, we offer corporate branded ribbons and cards, all produced in house with no set-up fee, no minimum order and no hassle.
WHAT ARE GOOD TAX DEDUCTIBLE CLIENT GIFTS?
Our corporate client hampers are beautifully presented to represent your business’ professional corporate image and make a lasting impression. Here are our top corporate gifts for thanking clients.