Can I claim gift card purchases as an expense?

According to the CRA, you may deduct all reasonable business expenses from your business income on your tax return.

Entertainment and meals qualify as business expenses if they are incurred in the pursuit of establishing or maintaining clients. For example, if you give a client a gift certificate to a restaurant or a pair of tickets to a hockey game, those gifts are considered to be meals and entertainment expenses. As a result, you may write off half of their value.

 

Keep the receipts for your records and a few notes indicating how the expense was business-related. In some cases, you may also be able to claim 100 percent of the cost of client gifts as an advertising or promotional expense.

For more information please refer to the following TurboTax article:

• Tax Implications of Client and Employee Gifting and Receiving

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