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Q: If a company purchases gift voucher to be given as a reward to customers when the customers have purchased certain amount of product from the company, is this expense tax deductible?
A: If the reward is directly related to the sales or promotion campaign, this expense is considered as entertainment related wholly to sales arising from the business under proviso (vii) to paragraph 39(1)(l) of the Income Tax Act 1967 which will be allowed a 100% tax deduction.
Wishing you plentiful tax savings!
YYC Tax Guru