All in the spirit of Christmas
The Australian Taxation Office yesterday announced that it “is reminding businesses that while staff Christmas parties can attract fringe benefits tax (FBT) there may be exemptions available depending on the venue and cost per employee.”
The two main exemptions to FBT that could apply to Christmas parties, according to the ATO, are exempt property benefits and exempt minor benefits.
Exempt property benefits as defined by the Tax Office are –
* Christmas party costs include things like food and drinks served for employees as part of a Christmas party
* The cost to provide these goods is exempt from FBT if they are provided on a working day on business premises and consumed by current employees of that business.
If the property benefits exemption doesn’t apply because the party is held at a restaurant or separate venue, the Taxation Office said the costs may be considered minor benefits and FBT exempt.
Exempt minor benefits as defined by the ATO are -
* cost per employee must be less than $300
* the exemption also applies to associates of employees such as spouses and children, provided the cost is less than $300 per associate
* gifts are also considered separately from the Christmas party so, provided the cost of a gift and the party are each less than $300, then both would be exempt from FBT.
The Tax Office has a fact sheet Fringe benefits tax and Christmas parties which explains the FBT implications of company’s Christmas celebrations.
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