Fringe Benefits Tax – Don’t get caught out this silly season

December 4, 2014 10:13 am

chlogoComing into the festive season, many people are planning the all-important Christmas party, and while it is the time for celebration, it pays to be aware of the possible tax implications of lavish celebrations.

Fringe Benefits Tax (FBT) applies where an employer provides a benefit to an employee other than their regular salary or wage.

At first instance a Christmas party could be considered such a benefit, depending on the circumstances of the party. However, the Christmas party could be exempt from FBT if its value is less than $300 per employee.

Due Diligence before decking the halls…

We’ve put together a few different scenarios to help you understand FBT implications for Christmas parties and should you have specific questions regarding your circumstances please contact your local Crowe Horwath advisor.

Christmas party held on the business premises

Your business decides to have a party on its premises on a working day before Christmas and you provide food, beer and wine.

The implications would be as follows:

1214-5

Christmas party held off the business premises

You decide to hold your Christmas function at a restaurant on a working day before Christmas and provide meals, drinks and entertainment.

The implications would be as follows:

1214-4

Christmas gifts

The following table briefly summarises the general FBT (and other tax) consequences for an employer providing Christmas gifts, based on the ATO’s guidelines.

1214-3

Determining the best approach in which entertainment may be treated for FBT purposes can be complex. Contact your local Crowe Horwath advisor to discuss possible tax implications.

Categorised in: , , ,

Published by