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Income Tax Act 2007

Deductions - Entertainment expenditure

DD 4: Employment-related activities

You could also call this:

“Rules for deducting food and drink expenses related to work”

You can deduct the cost of food and drink you eat while travelling for work or business. But there are some exceptions. You can’t deduct these costs if your trip is mainly for fun, or if you’re eating with a business contact as a guest, or if you’re at a party or celebration.

If you go to a conference, course, or similar event, you can deduct the cost of light snacks. If the event lasts at least 4 hours (not counting meal times), you can also deduct the cost of meals. But if the event is mainly for entertainment, you can’t deduct these costs.

You can deduct some costs related to your employees. This includes money that your employees don’t have to pay tax on, like some moving expenses and meal costs. These are covered in sections CW 17B, CW 17C, and CW 17CB of the law.

You can also deduct the cost of a light meal that your employee eats as part of their job. This is only if the meal is in an area of your business that’s just for senior employees and their guests, not open to all employees.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1513817.

Topics:
Money and consumer rights > Taxes
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“Exceptions to the limitation rule for certain deductions”

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“When you can claim full deductions for promoting your business”

Part D Deductions
Entertainment expenditure

DD 4Employment-related activities

  1. The limitation rule does not apply to a deduction for expenditure on food or drink consumed by a person while travelling in the course of business or for their employment duties. However, the limitation rule applies if—

  2. the travel is mainly for the purpose of enjoying entertainment; or
    1. the food or drink is consumed at a meal or function involving an existing or potential business contact as a guest; or
      1. the food or drink is consumed at a celebration meal, party, reception, or other similar social function.

        1. The limitation rule does not apply to a deduction for expenditure on light refreshments at a conference or educational course or similar event, nor to food or drink consumed at such an event lasting for at least 4 consecutive hours, excluding meal times. However, the limitation rule applies if the event is mainly for the purpose of entertainment.

        2. The limitation rule does not apply to a deduction for expenditure on—

        3. an amount that is exempt income of an employee under sections CW 17B, CW 17C, and CW 17CB (which relate to relocation expenses and expenditure on meals):
          1. a light meal consumed as part of the employee’s employment duties in an area of the person’s business premises that at the time is reserved for senior employees and their guests to use and is not open to all the person’s employees working in the premises.

            Compare
            Notes
            • Section DD 4(3) heading: substituted (with effect on 1 April 2008), on , by section 84(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
            • Section DD 4(3)(a): substituted (with effect on 1 April 2008), on , by section 84(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
            • Section DD 4(3)(a): amended, on , by section 51 of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).
            • Section DD 4 list of defined terms amount: inserted (with effect on 1 April 2008), on , by section 84(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).