FBT and Tax Planning for End-of-Year Parties and Gifts   (Dec 24 Tax Update)

Relevant For:

Business owners, employers and HR managers planning year-end celebrations and gifts.

Key Points:

• Business premises parties during work hours for employees may be FBT-free for food and drinks.
• Off-site events may attract FBT, unless costs are under $300 per person (minor benefits).
• Client-related event expenses are not subject to FBT, but, also not tax-deductible.
• Exempt events typically disallow GST credits.

Full Article:

As the end of the year approaches, businesses often celebrate with employees and express gratitude through gifts and gatherings. While these gestures are great for morale, it’s crucial to navigate the fringe benefits tax (FBT) rules carefully to avoid unexpected liabilities.

Understanding FBT:

FBT applies to non-cash benefits provided to employees or their associates. Year-end events and gifts often fall under its scope, but, there are exemptions to help reduce your tax obligations.

Key Considerations for Parties: