As Christmas rolls in so do the vertiginous festivities of the ‘Silly Season’: organising the annual Christmas party, posting company Christmas cards, and hand selecting the most thoughtful gifts for your family, friends… and employees! But there is no need to become the next Scrooge; so long as you can navigate your way around the Fringe Benefits Tax (FBT), Goods and Services Tax (GST), and Income Tax Deductions that may be claimable on those hand-picked gifts for your staff!
Non-entertainment gifts to employees & associates are generally tax deductible and GST credits may be claimed regardless of amount spent. The same treatment will apply to or whether these are gifted to non-employees such as suppliers or clients. This could include items such as hampers, bottles of wines & alcohol, fine cheese, foods, flowers, gift vouchers or books. Fringe benefits tax will not apply to these non-entertainment gifts provided they are under the $300 FBT Minor Benefits Exemption threshold.
Gifts that are considered entertainment have a slightly different effect on tax. Generally entertainment gifts will not be tax deductible and its GST credits non-claimable. Should it be considered a Fringe Benefit, normally being gifts of $300 in value or more to employees or associates, it will be subject to FBT. When FBT applies you will always be entitled to tax deductions and GST credits. Entertainment gifts will include like tickets to sporting events, theatre, musicals, cinemas, club memberships, travel accommodation or holiday tickets. Check out our gift entertainment tables below for your convenience.
Get tax savvy this festive season, make your gift giving tax effective, avoid fringe benefits tax where possible and seek advice from your Business Adviser at Marvel Consulting.
Disclaimer: The information contained in this article is current at time of writing. Information contained within is general in nature and is intended to provide general guidance only. It may be limited in scope and not consider alternative methods or rules. It is not intended to be taken as a substitute for seeking professional advice in relation to your specific circumstances and the full application of applicable laws and regulations.