If you’re meeting a client in a cafe or restaurant, whether or not you can claim the bill as a tax deduction or claim any GST credits is a very grey area. The ATO may consider this as being “entertainment” and not a valid business expense – Even if the meeting was 100% business. The ATO have previously ruled that it isn’t so much the meal itself that makes it “entertainment” more so the environment (a cafe or restaurant).
If there’s alcohol involved the legitimacy of the claim will likely decrease substantially, you’ll probably have a hard time convincing the ATO it was a business meeting. It’s a little dry, but for further reading on the subject check out this article directly from the ATO.
So keep this in mind next time you think about splurging on a ritzy lunch with your client because the ATO may not come to the party.
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The content of this article is general in nature and not intended as advice. Please check with your accountant or financial advisor for advice specific to your circumstances.