• Minor benefits exemption

    There are a limited number of situations in which food and drink entertainment will be an exempt minor benefit. The steps below will help you determine if the benefit qualifies for the minor benefits exemption.

    Step

    Action

    1

    Determine whether the taxable value of the benefit is less than $300.

    If the taxable value:

    • is $300 or more, the minor benefits exemption does not apply
    • is less than $300, continue to step 2.
     

    2

    Determine whether the benefit is a tax-exempt body entertainment fringe benefit.

    If the benefit:

    • is a tax-exempt body entertainment benefit, continue to step 3
    • is not a tax-exempt body entertainment benefit, go to step 4.
     

    3

    If it is a tax-exempt body entertainment benefit, the minor benefits exemption will only be available in certain circumstances.

    These circumstances are when either:

    • the provision of the entertainment is incidental to the provision of entertainment to outsiders, and does not consist of a meal other than light refreshments
    • a function held on the entity's business premises solely as a means of recognising the special achievement of their employee in a matter relating to the employment of the employee. Where the benefit is provided in this circumstance, the minor benefits exemption only applies to the employee in question and his or her associates.

    If the tax-exempt body entertainment fringe benefit is:

    • not provided in these circumstances, the minor benefits exemption does not apply
    • provided in these circumstances, continue to step 4.
     

    4

    Determine whether it is unreasonable to treat the minor benefit as a fringe benefit.

    If:

    • it is unreasonable to treat the benefit as a fringe benefit, the minor benefits exemption applies
    • it is not unreasonable to treat the benefit as a fringe benefit, the minor benefits exemption does not apply.
     
      Last modified: 17 Jul 2012QC 21998