Can You Claim Christmas Trees and Decorations on Tax?

A Simple Guide for Aussie Business Owners

Every year, many businesses across Australia go the extra mile to make their stores, offices or customer-facing spaces feel festive. But can the cost of all that holiday cheer—like Christmas trees, decorations, gifts, and parties—be claimed on tax?

The answer: sometimes. Below is a straightforward breakdown of what you can and can’t claim according to the Australian Taxation Office (ATO).

Are Christmas Trees and Decorations Tax-Deductible?

Yes, if they’re for your business.

If you purchase Christmas trees, garlands, lights, wreaths, or other decorations to use in your business premises (such as a retail store, salon, or office), these are generally considered business operating expenses.

• ✅ Claimable as a tax deduction

• ✅ GST credits can usually be claimed

• ❌ Not claimable for home use, even if you work from home

Can You Claim Gifts at Christmas?

It depends on who the gift is for and what kind of gift it is.

Gifts for Clients or Suppliers
If the gift is given to maintain or build business relationships and it’s not entertainment-related, it’s usually claimable.

• ✅ Tax deductible

• ✅ GST credits can be claimed

• ❌ Entertainment gifts (like concert tickets) are not claimable

Gifts for Employees
Gifts for staff are subject to Fringe Benefits Tax (FBT) rules.

• 🎁 Under $300 per person (non-entertainment gifts)

  • ✅ No FBT

  • ✅ Tax deductible

  • ✅ GST credits can be claimed

• 🎉 Over $300 or entertainment-related gifts

  • ✅ FBT may apply

  • ✅ Tax deductible

  • ❌ No GST credits

What About Christmas Parties?

Christmas parties can be a little tricky when it comes to deductions due to FBT rules.

Parties for Employees

• 🎉 Held on business premises during work hours and under $300 per head

  • ✅ No FBT

  • ❌ Not tax deductible

  • ❌ No GST credits

• 🍽️ Off-site, after hours, or involving alcohol, and over $300 per head

  • ✅ FBT applies

  • ✅ Tax deductible

  • ✅ GST credits can be claimed

Parties for Clients or Customers

• ❌ Not tax deductible

• ❌ No GST credits

• ✅ FBT does not apply
  
  

  Quick Summary Chart

  Expense Type	Tax Deductible	GST Credit	FBT Applies
  Business decorations (e.g. tree)	✅ Yes	✅ Yes	❌ No
  Gifts to clients (non-entertainment)	✅ Yes	✅ Yes	❌ No
  Gifts to employees under $300	✅ Yes	✅ Yes	❌ No
  Gifts to employees over $300	✅ Yes	❌ No	✅ Yes
  Staff party under $300 (on-site)	❌ No	❌ No	❌ No
  Staff party over $300 (off-site)	✅ Yes	✅ Yes	✅ Yes
  Client entertainment (e.g. events)	❌ No	❌ No	❌ No

Final Tips

• If an expense doesn’t trigger FBT, it often isn’t deductible

• Business-use decorations are generally safe to claim

• Always keep itemised receipts and accurate records

• For anything unclear, consult a registered tax agent or refer to the ATO

Source:
Australian Taxation Office – Common entertainment scenarios

This blog is general in nature and should not be taken as financial advice. Always seek professional advice tailored to your situation.