Key Takeaways
- Non-entertainment gifts are 100% tax-deductible for business use.
- Hampers, wine, and flowers are generally safe to claim.
- Apportionment is mandatory for personal vs work travel.
- Gifts of "entertainment" (e.g., tickets or dinners) are NOT deductible.
The Short Answer
A Big Yes! The ATO recognizes that giving gifts to clients is a legitimate form of marketing and relationship management for many Australian businesses. Whether you're sending a thank-you hamper or a bottle of wine at Christmas, you can claim a deduction for the full cost of your client gifts.
Who CAN Claim?
A deduction is only available if there is a direct connection between your job and the client gifts. This includes any business where there is a "sufficient link" to the promotional value of the gift, such as:
- Sole traders and small business owners (e.g., hampers or branded gifts)
- Consultants and freelancers (e.g., flowers or professional books)
- Real estate agents (e.g., settlement gifts or gift vouchers)
- Anyone who needs to gift their clients for their daily business
Wait—What is NOT Deductible?
A deduction is NOT available for gifts of "entertainment." The ATO is very strict on this. If you give a client tickets to a football match, a show, or a voucher for a luxury dinner, those are considered entertainment and are NOT deductible, even if they are for business relationship management.
Supporting Evidence 2026
Keep your tax invoice for all client gift purchases. If the gift involves a branded item or a specialized service (e.g., professional flowers or hampers), keep digital copies of these items to prove the genuine nature of the gift.
The 2026 Audit Ready Tip
Differentiate between "Gifts" (deductible) and "Entertainment" (not deductible). Gifts of non-entertainment items like hampers, wine, or books are fully deductible, while gifts of entertainment like tickets or restaurant vouchers are not.
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