​​There may be tax implications to the season’s festivities​ 

Nexis | Tax
November 1, 2023

‘Tis the season, but before you get carried away with presents and end of year parties, there may be tax implications when it comes to the season’s festivities.  

Are you aware that fringe tax benefits (FBT) may actually apply to the fun you’ll have at your Christmas party and gift giving? 

If you do not have an FBT exemption or concession endorsed by the ATO, and do not use the 50/50 split method for meal entertainment, the following explanations may help you determine whether FBT implications will arise from your Christmas party. 

  • The cost of food and drink associated with your Christmas festivities are likely to be exempt from FBT if they are provided on a working day, on the business premises, and consumed by current employees.  
  • A Christmas party or a Christmas gift to employees may be a minor benefit and exempt if the cost is less than $300 per employee and is considered minor, infrequent, and irregular.  
  • The cost of providing a Christmas party to your employees is income tax deductible only to the extent that is subject to FBT. You may also claim GST credits on the cost associated with the party as well on the same basis.  
  • The costs of entertaining clients are likely not subject to FBT, not income tax deductible, and not available to claim input tax credits unless the 50/50 split method for entertainment is used.  

If you’re unsure about how you might be affected speak to Jacklyn for more information.

Your Link to Growth

A long time vision for us, Your Link to Growth reflects our approach and aspirations to assist our clients, staff and community to reach their goals. We do this through holistic and innovative financial solutions for businesses and individuals. Founded in 2004, we are a well established business based in Canberra and Brisbane.

Learn more about Nexis

Get in touch with Nexis

Talk to our friendly team today about all your tax needs.

Other news

Meet Michelle Suwignjo

Meet Michelle Suwignjo

Meet Michelle Suwignjo, one of our newest graduate accountants, who started in the Nexis Canberra office in June 2023. Michelle supports the bookkeeping team preparing BAS and IAS, TPAR, STP finalisations, payroll tax, payroll and general bookkeeping tasks. We...

read more
Is it time for a new accountant?

Is it time for a new accountant?

Were you left unsatisfied with your accountant after this year’s tax time? Was your tax return not quite what you were expecting? Has your business grown/evolved but your accountant’s approach hasn’t grown and evolved with it? Was your accounting firm once great, but...

read more
Meet Louisa Lupari

Meet Louisa Lupari

Meet Louisa Lupari, one of our newest Graduate Accountants. Louisa started with our Nexis Canberra office in June 2023. Louisa’s role involves assisting with individual tax returns, helping clients navigate the tax system, minimising clients' tax liability and...

read more