• 14.7 Meal entertainment fringe benefits

    Where expense payment fringe benefits, property fringe benefits, residual fringe benefits or tax-exempt body entertainment fringe benefits arise from the provision of meal entertainment, you may be eligible to elect to classify these fringe benefits as meal entertainment fringe benefits. You are not eligible to make an election if benefits are provided under salary packaging arrangements on or after 1 April 2016.

    An election cannot include meal entertainment provided by someone other than you (that is, someone who is not the employer). If a fringe benefit arises from meal entertainment provided by someone other than you, you must value the fringe benefit according to the rules for that type of fringe benefit. It could, for example, be an expense payment fringe benefit, a property fringe benefit, a residual fringe benefit or a tax-exempt body entertainment fringe benefit.

    If you choose to classify a fringe benefit as a meal entertainment fringe benefit, you have to classify all fringe benefits arising from the provision of meal entertainment during the FBT year as meal entertainment fringe benefits.

    Specifically, the provision of meal entertainment means:

    • providing entertainment by way of food or drink
    • providing accommodation or travel in connection with, or to facilitate the provision of, such entertainment
    • paying or reimbursing expenses incurred by the employee for the above.

    Example: reimbursement of car parking fees

    An employer makes a meal entertainment election for the current FBT year. During that year, an employee is provided with meal entertainment at a restaurant. The employee drove their car from home to the restaurant, parked next door and paid for parking. The employee was reimbursed by their employer for the car parking fees.

    In this case, the car parking fees reimbursed by the employer are expenses incurred in providing the employee with travel in connection with, or to facilitate the provision of the meal entertainment.

    The provision of meal entertainment does not include the provision of entertainment by way of recreation.

    If you elect to classify the provision of meal entertainment as a meal entertainment fringe benefit, the meal entertainment provided does not give rise to an expense payment fringe benefit, property fringe benefit, residual fringe benefit or tax-exempt body entertainment fringe benefit.

    End of example
      Last modified: 09 Aug 2016QC 17828