If your business is not a tax-exempt organisation and do not use the 50-50 split method for meal entertainment, your Christmas function expenses may be subject to fringe benefits tax (FBT). The tax implications for the employer are outlined below in the following tables
Employers who give employees non-entertainment type gifts that cost less than $300 (inclusive of GST) per employee are fully tax deductible, with no FBT payable and GST credits can be claimed. Gifts classified as entertainment, including recreation, are non-deductible and GST credits cannot be claimed. A tax deduction and GST credits can only be claimed on entertainment or recreation gifts where Fringe Benefit Tax applies.
If you have any questions relating to the tax implications of your business Christmas function or the provision of gifts, contact the office 9584 2277.