15.9 Taxable value of food and drink that is tax-exempt body entertainment

The taxable value of the food and drink, and the associated accommodation or travel is the amount of the actual expenditure you incur for the benefit of the employee. In calculating the taxable value of a tax-exempt body entertainment fringe benefit, there is no reduction for contributions that may be made by an employee.

If you cannot easily work out the actual expenditure, you can use a 'per head' basis of apportionment.

You may elect to value the food, drink and associated accommodation or travel as 'meal entertainment'. If you make this election, you cannot use the per head basis of apportionment.

Example: Per head basis of apportionment

Mary entertains three of her employer's clients at a local restaurant. Her employer is a tax-exempt body who has not elected to treat entertainment as 'meal entertainment'. Mary pays, and is reimbursed, for the full cost of the meals. The benefit provided to Mary is a tax-exempt body entertainment fringe benefit. The taxable value of that benefit is 25% of the amount reimbursed to Mary.

End of example
    Last modified: 09 Aug 2016QC 17811