How much of entertainment expenses can NZ sole traders claim?

Entertainment expenses have specific rules in New Zealand — you can only deduct 50% of most entertainment costs, regardless of how business-focused the event was. **50% deductible entertainment includes:** - Client meals and drinks at restaurants - Business lunches or dinners - Corporate hospitality - Staff functions (with some exceptions) - Sports events and recreational activities **100% deductible (not entertainment):** - Working meals where the primary purpose is work (e.g., a working lunch with colleagues in the office) - Meals where no food/drink is provided beyond light refreshments at a business meeting To claim entertainment expenses, you need to keep clear records including the receipt, who attended, the business purpose, and the relationship to your business. Without these records, IR may disallow the entire amount. Importantly, the 50% limit applies even if the entertainment is entirely business-related — it's a policy rule, not an apportionment based on actual private use.

• 50% limit on most client meals and entertainment
• Applies regardless of how business-focused the event was
• Keep receipts showing: who attended, business purpose, relationship
• Working lunches at the office may be 100% deductible
• Staff functions: generally 50% unless specific rules apply