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  • What is a tax-exempt body entertainment fringe benefit?

    Tax-exempt body entertainment fringe benefit is non-deductible entertainment provided to employees by a tax-exempt body. Only entertainment expenditure that is non-deductible for income tax purposes can give rise to this benefit.

    Where entertainment is deductible, it will not constitute a tax-exempt body entertainment fringe benefit.

    For the purpose of identifying a tax-exempt body entertainment fringe benefit, you are treated as though you are a taxable entity.

    Expenses incurred by a taxable entity in providing a Christmas party to their employees would be non-deductible.

    What is entertainment?

    The provision of:

    • entertainment by way of food, drink or recreation
      • recreation includes amusement, sport and similar leisure time pursuits - for example, a game of golf, theatre or movie tickets, a joy flight or a harbour cruise.
       
    • accommodation or travel in connection with such entertainment.

    Providing a Christmas party to your employees, and your employees' associates, is entertainment.

    Taxable value

    The taxable value of a tax-exempt body entertainment fringe benefit is the expenditure incurred in providing the entertainment to the employee, or the employee's associate.

    As a tax-exempt body employer, you may elect to value the meal entertainment component according to the rules discussed below.

    You may also elect to value the hiring or leasing of entertainment facilities according to the rules discussed below.

      Last modified: 22 Dec 2016QC 18530