Treatment of meal expenses

This statement covers the income tax and GST treatment of meal expenses incurred by self-employed persons. It also discusses the treatment of meal allowances paid to employees to illustrate the differences with the treatment of self-employed persons, and also the treatment of entertainment expenditure for the same reason.

EXPOSURE DRAFT – FOR COMMENT AND DISCUSSION ONLY

The GST input tax treatment of the meal expenses of the self-employed person follows the income tax deductibility of such expenses. That is, where it was concluded that the meal expenses were of a private or domestic nature for income tax purposes, and nondeductible, input tax on the expenses would also not be deductible for GST purposes.

The deductibility of input tax for GST purposes is dependent on at least three things:
 There is an amount of “input tax” as defined in s 3A of the GST Act;
 The person is a registered person for GST purposes, which requires they have a taxable activity; and
 Being able to satisfy the test in s 20(3C) of the GST Act.

Source: govt.nz

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