Yes, gifts to clients, customers, and business partners are generally 100% deductible as business expenses (typically categorized as advertising or promotional expenses). Unlike employee gifts which have the $500 threshold, client gifts have no specific dollar limit — but they must be "reasonable" in value and given for a genuine business purpose.

The CRA expects client gifts to be appropriate for the business relationship. A $50 branded tumbler for year-end appreciation is clearly reasonable, while a $5,000 luxury watch might raise questions unless you can justify it based on the client's value to your business.

No. Cash and near-cash gifts (including gift cards, prepaid cards, and gift certificates) are ALWAYS taxable to employees, regardless of the amount or occasion. These must be reported as taxable benefits on the employee's T4 slip.

If you want to provide tax-free gifts to employees, you must give tangible, non-cash items (like custom drinkware, gift baskets, tech accessories, etc.) and stay within the $500 annual threshold per employee. The business can still deduct cash gifts as expenses, but the employee will pay tax on them.

If the combined value of non-cash gifts and awards to an employee exceeds $500 in a calendar year, the ENTIRE amount becomes a taxable benefit — not just the amount over $500. For example, if you give an employee $600 worth of gifts, the full $600 is taxable to them.

Exception: Employees with long-service milestones (5+ years, given no more than once every 5 years) can receive an additional $500 in tax-free awards, bringing their total potential tax-free amount to $1,000 for that year. The business can still deduct gifts as expenses even when they're taxable to the employee.

For employee gifts, there's no difference — both branded and non-branded items count toward the $500 annual threshold and must be non-cash to be tax-free.

For client gifts, branded items actually strengthen your deduction claim because they have a clear promotional/advertising purpose. A custom LAMOSE tumbler with your company logo is obviously a business expense for marketing purposes, making it easier to defend the deduction. Branded items also provide ongoing advertising value, which supports the "income-earning purpose" requirement for business expense deductions.

Employee gifts: Generally no GST/HST is charged to employees on gifts, but the business may need to self-assess and remit GST/HST on taxable benefits depending on the situation. Consult your accountant on this.

Client gifts: If you're giving away free promotional items, you typically don't charge GST/HST to the recipient. However, if the gifts are substantial, there may be GST/HST implications. You can usually claim Input Tax Credits (ITCs) on the GST/HST you paid when purchasing the gifts.

Yes, gifts to suppliers, vendors, and other business partners are deductible under the same rules as client gifts — they must have a business purpose, be reasonable in value, and be properly documented. These gifts help maintain business relationships and can be categorized as business relationship expenses or promotional expenses.

The CRA requires businesses to keep supporting documents for at least 6 years from the end of the tax year they relate to. This includes receipts, invoices, gift logs, and any documentation showing the business purpose of gifts. Store these records in an organized system (physical or digital) that you can easily access if the CRA requests them during an audit.

Gifts distributed at social events (like holiday parties) are still subject to the $500 annual threshold and count toward each employee's total. However, the