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  • End of financial year party for employees, associates and clients after hours

    A federal government agency hosts an end of financial year party to thank clients who have provided them with excellent services throughout the previous year. The party is held on the business premises of the agency after close of business and clients, a number of senior employees and their spouses attend. Finger food including drinks (non-alcoholic) are provided by the agency at a cost of $25 per head.

    Is entertainment being provided?

    Yes.

    Employees

    Does an exemption apply?
    Yes. The minor benefits exemption applies because the provision of the entertainment was incidental to the provision of entertainment to outsiders.

    Input tax credits
    The agency cannot claim input tax credits for the cost of the food and drink provided.

    Associates

    Does an exemption apply?
    Yes. The minor benefits exemption applies as the food and drink provided is incidental to the provision of entertainment to outsiders.

    Input tax credits
    The agency cannot claim input tax credits for food or drink.

    Clients

    There is no FBT on benefits provided to clients.

    Input tax credits
    The agency cannot claim GST input tax credits for the cost of the food and drink provided.

      Last modified: 20 Dec 2017QC 19918