What is a tax-exempt body entertainment fringe benefit?

It 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, and determining whether the expenditure is deductible for income tax purposes, you are treated as though you are a taxable entity.

The benefit may arise from entertainment expenses incurred by an employer who is wholly or partially exempt from income tax or who does not derive assessable income from the activities to which entertainment relates.

    Last modified: 13 Apr 2011QC 18530