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CHRISTMAS AND FRINGE BENEFITS TAX IMPLICATIONS

It is coming to that time when planning a Christmas Party needs to happen. What are the Fringe Benefit Tax (FBT) consequences of work Christmas activities and are they tax deductible?

Physical Gifts (wine, flowers, Christmas hampers)

  • Clients/contractors/suppliers etc – these are all tax deductible. What’s more, they do not incur any FBT
  • Employees and associates – these are subject to FBT rules. However, if they incur FBT, they are tax deductable

Tickets as gifts (sporting event, movies, theatre)

  • Clients/contractors/suppliers etc – these do not incur any FBT, and are not tax deductable
  • Employees and associates – these are subject to FBT, and if they incur FBT, they are tax deductable

The Christmas Party (or any social event off work premises)

  • Employees and associates – these are subject to FBT, and if they incur FBT, they are tax deductable
  • Clients/contractors/suppliers etc – these do not incur any FBT, and are not tax deductable

A one-off amount under $300 is considered a minor and infrequent occurrence, this is therefore FBT free, but is also not tax deductable. This just scratches the surface of the intricacies of Fringe Benefit Tax and tax deduction consequences.

You can find more at:

https://www.ato.gov.au/General/fringe-benefits-tax-(fbt)/

Please contact our office to speak to one of our accountants if you would like to discuss your FBT or tax position further. Langley McKimmie Chartered Accountants (03) 5427 8100.

 

The content within these articles was correct at the time of writing. Please contact us for updated information and advice. 

We provide accounting and wealth management services to clients in Woodend, Gisborne and Macedon Ranges areas within Victoria Australia.

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