'Tis the season to be jolly!  Not if the tax office has anything to do with it.

If you are providing something such as entertainment (Christmas Parties) and Gifts to staff members, Fringe Benefits Tax is likely to apply.

What?  It is true.  There are rules around whether you can claim the expense as a tax deduction, claim the GST, or possibly a tax exemption. The following table can give you a guide to how to treat common expenses at this time of year.  To ensure you are not paying more Fringe Benefits Tax than you should, contact us to discuss your personal situation.

CHRISTMAS ENTERTAINMENT GUIDE
Description  Employee Associate (eg Spouse) Spouse)Non-Employee  (eg Client)
1. Christmas party on business premises      
a) Social functions - food & drink (with or without alcohol) - under $300 Non-Deductible Non-Deductible Non-Deductible
GST not claimable GST not claimable GST not claimable
No FBT No FBT No FBT
       
b) Social functions - food & drink (with or without alcohol) - more than $300 Non-Deductible Deductible Non-Deductible
 GST not claimable GST claimable  GST not claimable
No FBT FBT No FBT
       
2. Christmas party on external premises      
a) Hotel, restaurant or club - under $300 Non-Deductible Non-Deductible Non-Deductible
GST not claimable GST not claimable GST not claimable
No FBT No FBT No FBT
       
b) Hotel, restaurant or club - more than $300 Deductible Deductible Non-Deductible
GST GST GST not claimable
FBT FBT No FBT
       
3. Christmas Gifts      
a) Under $300, irregularly provided and not entertainment (ie flowers ok, but wine or movie tickets considered entertainment) Deductible Deductible Deductible
GST claimable GST claimable GST claimable
No FBT No FBT No FBT
       
b) $300 and over (no entertainment) or regularly provided Deductible Deductible  Deductible
GST GST  GST
FBT FBT No FBT
       
c) Gift consists of entertainment $300 and over Deductible Deductible Non-Deductible
GST GST GST not claimable
FBT FBT No FBT