Coffee with a client, morning tea for the team, or a flat white on your own between jobs: three different answers. Pick your situation and see what you can claim for income tax and GST in New Zealand.
Checked against IRD guidance on 2026-10-11
Food and drink away from your business premises is entertainment, and IRD sets it at half — for the whole bill, your own coffee included. It does not matter whether the chat was 90% business.
Income tax: Claim 50% of the GST-exclusive cost. You cannot argue the split up or down: IRD fixes it at half even if you think the private element was smaller.
GST: You claim the GST in full when you buy it, then once a year hand back the GST on the half you could not deduct (15% of the non-deductible amount, in Box 9). The net result: half the GST is yours.
What to do: Keep the receipt and note who you met and why — IRD asks for the people, the date and the reason. Code it as entertainment, not as a general expense.
Worked example: Two flat whites, $11.50
Categorise it as Meals & Entertainment and LedgerMind counts half the cost and half the GST from that day on, so there is no year-end adjustment to remember.
Light refreshments at your own workplace — coffee, tea, morning or afternoon tea — are an ordinary business cost, not entertainment.
Income tax: Claim the full GST-exclusive cost. The 50% rule for food and drink at work only bites at a social event (a party, a celebration meal) or in an area reserved for senior staff.
GST: Claim the GST in full. No yearly adjustment.
What to do: Keep the receipt. Code it as a general office or staff expense rather than entertainment, or half of it will be held back.
Worth asking an accountant: "Light" is a judgement IRD leaves to you. Coffee and biscuits clearly are; a catered lunch with wine clearly is not. If you are somewhere in between, ask.
Categorise it as General Business Expenses and the full amount and full GST go through. From the Starter plan up, scan the receipt and the evidence is stored against the entry.
Food and drink at a social event — a party, a celebration meal, a reception — is 50% deductible even when it is held at work and only staff are there.
Income tax: Claim 50% of the GST-exclusive cost, including supporting costs such as hired glasses or wait staff.
GST: Claim the GST in full when you buy, then return the GST on the non-deductible half once a year in Box 9.
What to do: Keep the receipts and a note of the occasion and who came.
Categorise it as Meals & Entertainment and LedgerMind counts half the cost and half the GST from that day on.
Entertainment enjoyed outside New Zealand is fully deductible — the 50% limit stops at the border (which includes the waters around New Zealand).
Income tax: Claim the full cost, as long as the trip itself was for the business.
GST: There is usually no New Zealand GST on an overseas café bill, so there is nothing to claim.
What to do: Keep the receipt and a note of who you met, and convert the amount to NZ dollars.
Categorise it as International Work Travel Expenses rather than Meals & Entertainment, so the 50% rule is not applied to it.
Your own coffee is a private cost, even bought between jobs and even paid from the business account. Everyone has to eat and drink; IRD does not treat that as a cost of earning income.
Income tax: No deduction. IRD lists "meals and coffee while working at different places around town" as not deductible for the self-employed — and the same for meals while away overnight on business.
GST: No GST claim, because it is not a business purchase.
What to do: If the business account paid, record it as drawings (money you took out for yourself), not as an expense.
Worth asking an accountant: There is a narrow exception for extra meal costs you have no choice but to incur — working in a remote location or at unusual hours. If that is you, it is worth a conversation.
Categorise it as Personal Drawings and it stays out of your profit and out of your GST return.
Through a company the answer changes, because you are an employee of it. A meal the company reimburses while you are travelling on business is deductible to the company and not taxable to you. A daily coffee near the office is much harder to justify.
Income tax: Travelling on business: the company can deduct 100% of your meal, unless a business contact is your guest or it is a celebration — then 50%. An everyday coffee on an ordinary working day is generally a private cost.
GST: The company can claim GST only on the part that is a genuine business cost.
What to do: Keep the receipt and note the trip or the reason. A private coffee paid by the company goes to your shareholder current account, not to expenses.
Worth asking an accountant: This is one where the facts decide it: how often, where, and whether you were genuinely away from your normal place of work. Worth asking before it becomes a habit in the books.
Private amounts go to the shareholder current account, which LedgerMind keeps as a running balance of what you and the company owe each other.