This flowchart will help businesses work out the general tax implications of the year-end Christmas party.
- Minor benefit exemption must be less than $300 per benefit, provided on an Irregular and infrequent basis, and satisfy other relevant conditions.
- Income tax treatment for entertainment expenses determined under tax law.
- An associate of an employee is widely defined. It normally includes family members.
NOTE. This flowchart does not apply if you use the 50 /50 split or 12 week register in calculating FBT for meal entertainment.
Christmas Party Examples from the ATO
EXAMPLE 1
A small manufacturing company decides to have a party on its business premises on a working day before Christmas. The company provides food, beer and wine.
The implications for the employer in this situation would be as follows.
EXAMPLE 2
Another company decides to hold its Christmas party function at a restaurant on a working day before Christmas and provides meals, drinks and entertainment.
The implications for the employer in this situation would be as follows.
This is a complex area of tax law, so please contact Taxwise on 08 9248 8124 for further guidance.
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