03 November 2010


Providing tax effective christmas benefits

It's that time of the year again - festive season, family reunion, holiday or simply just Christmas.

Unfortunately, for most of us it is also a time of immense rushing and juggling between different and with all things at the same time.

As businesses, it is also the time for celebration and unwinding after a year's long hardwork. And as such the income tax law on the provision of fringe benefits to employees, your associates and clients can get a tad complex.

To alleviate some of the headaches and confusion, here are some helpful pointers:

1. Christmas parties constitute "entertainment benefits". The fringe benefits exemption threshold is $300 per person (including food and drinks).

2. Holding the Christmas party on the business premises on a working day is usually the most tax effective. Expenses such as food and drink (including alcohol), are exempt from FBT for employees with no dollar limit, but no tax deduction or GST credit can be claimed.

3. Non-entertainment gifts provided to employees are usually exempt from FBT where the total value is less than $300 inclusive of GST. A tax deduction and GST credit can also be claimed.

4. The provision of entertainment gifts has different tax implications (examples include theatre tickets, passes to attend a musical, live play, movie, tickets to a sporting event or providing a holiday). Where the cost for the employee and their associate is each less than $300 GST inclusive, FBT is not payable, and no tax deduction or GST credit can be claimed.

Please contact our office if you need any further information.

16 August 2010

Tax time 2010 Processing and refunds for your clients

Concerns have been raised that some of your clients have yet to received their refunds, despite 2010 income tax returns having been lodged in July.

Our aim is to process income tax returns in a way that balances the need to achieve good service standards, while maintaining the integrity of our tax and superannuation systems. Sometimes this necessitates delays in the issuing of refunds.

James O'Halloran
Deputy Commissioner
Tax Practitioner and Lodgment Strategy