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Individual tax deduction for gifts to clients

Newbie

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Replies 4

I am an employee at an accounting firm and last year I gave several gifts to major clients of the firm as a "thankyou" for their loyalty throughout the year. I would not consider these people to be close friends of mine. In total the gifts cost less than $300 and consisted of boxes of chocolates, christmas hampers and 1 x bottle of champagne. I was not reimbursed for these gifts. 

 

I have noted that in TD 2016/14 a taxpayer who carries on a business is entitled to a deduction under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) for an outgoing incurred on a gift made to a former or current client if the gift is characterised as being made for the purpose of producing future assessable income. However, because I am an individual I am unsure if this also applies to me.

 

In summary, am I able to deduct these gifts as work related expenses in my individual tax return? 

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

Taxicorn

Replies 3

No, because you are not carrying on a business, you merely work for one.

 

It is your decision to gift clients and not requested by the business owners.

 

If they didn't come back, it would be the business loss and not yours.

 

 

4 REPLIES 4

Most helpful response

Taxicorn

Replies 3

No, because you are not carrying on a business, you merely work for one.

 

It is your decision to gift clients and not requested by the business owners.

 

If they didn't come back, it would be the business loss and not yours.

 

 

Newbie

Replies 2

I understand your train of thought but what sources have you found to substantiate this? So far I have not been able to find any sources to give me a definite answer 

Taxicorn

Replies 1

Ring the ATO and ask them directly.

 

Giving gifts to clients of your boss is not related to earning your assessable income, therefore, can not be used as deductions.

 

If you are looking for a source, you found it and it said you had to be carrying on a business, which you are not.

 

 

Newbie

Replies 0

Okay, thankyou for your help!