Tax-exempt Body Entertainment Fringe Benefits

An employer which is wholly or partly exempt from income tax is a ‘tax exempt body’.

Because income tax is not paid, there are specific FBT rules which apply to tax-exempt bodies.

The ‘tax-exempt body entertainment fringe benefit’ only applies to non-deductible entertainment. To determine this, a non-taxable entity has to consider whether the expense would be deductible, if the organisation was not tax exempt.

[Update] Cap on entertainment: From 1 April 2016 – a separate grossed-up cap of $5,000 will apply for salary-sacrificed meal entertainment benefits, with the excess to be counted in calculating the existing FBT exemption or rebate cap. Meal entertainment benefits will be reportable. See: Enabling legislation – passed 25 November 2015

An ‘entertainment‘ benefit may be any of

  • food, drink or recreation
  • accommodation or travel in connection with such entertainment, or
  • paying or reimbursing expenses incurred in obtaining something covered by the above

For more about what is entertainment see Entertainment Fringe Benefits

Further information

 

This page was last modified on 29 February 2016