Business Entertainment: does FBT apply?
When an employer provides entertainment to their clients or employees then income tax and FBT need to be taken into consideration. Entertainment can include all types of parties (including Christmas and birthday parties) as well as events such as golf days, the use of a corporate box, business lunches with clients, farewell functions or attending a live music event. The critical issue is to determine if the activity falls within the definition of entertainment and if it does to be able to record and account for the income tax and fringe benefits tax treatment. If you know the tax rules then you are equipped to ensure that tax will not spoil your fun.
Senior Lecturer in Taxation Law
University Of Southern Queensland