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Business 2 Business column: Christmas parties and tax law

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When providing food and drink, your business needs to consider Fringe Benefits Tax (FBT), Goods and Services Tax (GST) and Income Tax.

There are also different tax treatments if the entertainment you are providing is for employees, associates, clients or suppliers.

And it may differ depending on where you decide to hold your event.

Taxing Christmas parties at your workplace on a work day:

  • If you’re holding a Christmas party at your workplace and providing food and drink (including alcohol) on a work day, there may be no FBT payable for employees, clients, contractors or suppliers. These costs are FBT-exempt.
  • Unfortunately, that means that there will be no income tax deduction and no GST credits to be claimed for your Christmas party, either.
  • FBT exemptions may apply if the cost is less than $300. This amount is considered a ‘minor exempt benefit’.

Taxing Christmas parties held at a restaurant, bar or other venue:

  • If you’re holding your Christmas party at a location other than your workplace and providing food and drink (including alcohol) to employees and associates, FBT may be payable unless the costs of the party are less than $300 per employee.

Katrina Brennan, Principal, SRJ Walker Wayland Business Growth Advisors, Accountants and Auditors, Level 2/2 Innovation Parkway, Birtinya, 5301 9957, srjww.com.au

This column is part of our Business 2 Business (B2B) series featuring industry leaders sharing their expertise. For more great articles, SUBSCRIBE to our FREE news feed, direct to your inbox daily. All you need to do is enter your name and email below.

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