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  • Entertainment-related fringe benefits

    While there is no specific 'entertainment fringe benefit' category as such, a fringe benefit may arise from providing employees or their associates with:

    • entertainment by way of food, drink or recreation
    • accommodation or travel in connection with such entertainment.

    Entertainment includes, for example:

    • meals and drinks including staff social functions such as Christmas parties and farewells
    • sporting or theatrical events, sightseeing tours and holidays
    • entertaining employees and non-employees (such as clients) over a weekend at a tourist resort or providing them with a holiday.

    Recreation includes amusement, sport and similar leisure pursuits (such as a game of golf, theatre or movie tickets, a joy flight or a harbour cruise).

    For tax and reporting purposes, providing entertainment may amount to specific types of fringe benefits. For example:

    You can generally claim an income tax deduction and GST credits for the cost of providing entertainment that is a fringe benefit (see FBT – a guide for employers: Chapter 14 Entertainment – 14.15 Income tax deductibility). If you can claim GST credits, you claim the GST-exclusive amount as an income tax deduction.

    Note that exempt benefits are not fringe benefits. Employers generally can't claim an income tax deduction or GST credits for the cost of providing exempt benefits.

    Entertainment benefits provided to people other than employees or their associates (to clients for example) are not subject to FBT and are generally not income tax deductible for employers.

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    Last modified: 29 Mar 2019QC 43856