Christmas celebrations: A cocktail party
A Christmas party hosted by a state minister's office is held at City Hall. Representatives from the host department and other state government departments and their spouses attend. Gourmet finger food and alcoholic cocktails are provided.
Is entertainment being provided?
Yes, where you provide your employees and your employees' associates with a Christmas party, it will be entertainment. This is regardless of whether the Christmas party is held on your premises or at another venue. Food and drink has been provided in a social situation where the purpose of the function is for employees to enjoy themselves.
Employees
Does an exemption apply?
No, the minor benefits exemption does not apply because the provision of the entertainment was not incidental to the provision of entertainment to outsiders. The property exemption does not apply because the entertainment provided in this circumstance is a tax-exempt body entertainment fringe benefit.
A state is deemed to be an associate of each authority of the state. For a disaggregated state government, each nominated body is an employer.
GST credits
Yes, the state ministers office can claim input tax credits for the GST paid on the proportion of such entertainment that is subject FBT in this situation.
Associates
Does an exemption apply?
No, food and drink is not exempt from FBT in this circumstance. The minor benefits exemption does not apply because the provision of the entertainment was not incidental to the provision of entertainment to outsiders.
GST credits
Yes, the state minister's office can claim input tax credits for the GST paid on the proportion of such entertainment that is subject FBT in this situation.
Sections within Common entertainment scenarios
Last Modified: Friday, 6 June 2008