# Can I claim Meals and Entertainment (New Zealand) as a business expense in New Zealand?

**Partially claimable.** Entertainment is generally 50% deductible where there is a private element. Some food and drink is fully deductible, such as meals an employee buys while travelling on business, and food and drink at a conference or course lasting at least 4 hours.

Typical amount: Client lunch NZD 200: NZD 100 deductible. Staff Christmas party at a venue NZD 3,000: NZD 1,500 deductible. A conference lasting 4 hours or more with NZD 400 of food and drink: NZD 400 deductible (100%).

## What Inland Revenue (IRD / Te Tari Taake) says

The entertainment limitation sits in subpart DD of the Income Tax Act 2007. Section DD 1 cuts the deduction to half where there is both a business and a private benefit. Section DD 4 disapplies the limit for food and drink consumed while travelling for business or employment duties, though the limit still applies to meals with business contacts. IRD lists the following as 100% deductible and outside FBT: employee travel meals (except with a business contact or at a celebration), food and drink at conferences or courses of at least 4 hours, light meals for senior managers during duties, entertainment that promotes the business and is open to the public, and entertainment enjoyed outside New Zealand. 50% applies to sports or cultural events such as a corporate box, hiring a boat with food and drink, social events like parties, and gifts of food or drink enjoyed privately.

## When you can claim

- Client lunches, business dinners and hospitality events: 50% of the cost is deductible
- Staff Christmas parties and social events: 50% deductible
- Meals an employee buys while travelling on business: 100% deductible, unless the meal is with a business contact or a celebration
- Food and drink at a conference or course lasting at least 4 hours: 100% deductible
- Entertainment given to employees because of their work, such as a restaurant voucher as a reward: 100% deductible but subject to fringe benefit tax

## When you cannot claim

- The remaining 50% of entertainment costs that are subject to the limit: it 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:** Keep the reason for each meal on the receipt: who attended, whether any business contact was present, and the length of the event. The treatment turns on those facts, and IRD publishes the IR268 guide on entertainment for the detail.

**Important:** GST follows the income tax treatment. A GST-registered business claims the expense GST-exclusive and a business that is not registered uses the GST-inclusive figure. Alcohol is generally within the 50% limit when it is part of a 50% event.

Source: https://www.ird.govt.nz/income-tax/income-tax-for-businesses-and-organisations/types-of-business-expenses/entertainment-expenses

## Related expenses

- [Business Travel (New Zealand)](https://accounts-os.com/nz/expenses/travel-nz)
- [Advertising and Marketing (New Zealand)](https://accounts-os.com/nz/expenses/advertising-nz)