Can I Claim Meals and Entertainment (New Zealand) as a Business Expense in New Zealand?
Most business meals and entertainment are 50% deductible under the Income Tax Act 2007. Exceptions allow 100% deduction for meals consumed on business premises by staff working late, working lunches for employees on the employer's premises, and food and drink at overseas conferences attended solely by employees.
What Inland Revenue (IRD / Te Tari Taake) says
Section DB 6 of the Income Tax Act 2007: entertainment expenses are 50% deductible unless an exception applies. Section DB 7 exceptions (100% deductible): employer-provided food or drink consumed on the employer's premises as part of employment; entertainment at a business conference where all attendees are employees; working meals for staff working late; entertainment that is not social in nature.
When you can claim
- Client lunches, business dinners, and hospitality events — 50% of the cost is deductible
- Staff Christmas parties and team events at a hired venue — 50% deductible
- Working lunches for employees on the company's own premises — 100% deductible
- Meals consumed at an overseas conference attended only by employees — 100% deductible
When you cannot claim
- The remaining 50% of entertainment costs subject to the Section DB 6 limitation — this cannot be recovered regardless of business purpose
- Entertainment where the primary beneficiary is the owner or director personally rather than the business
Good to know
Pro tip: Hold working lunches on the company's own premises rather than at a restaurant when possible — this shifts the deductibility from 50% to 100% under Section DB 7.
Important: Alcohol is subject to the 50% entertainment limitation even when consumed at what would otherwise be a 100% event. GST input tax credits on entertainment are also restricted to 50%, matching the income tax deductibility rule.
Stop guessing what you can claim in New Zealand
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