Christmas is almost upon us so we thought it would be worthwhile running through some common business expenses and their tax treatment.
For staff Christmas parties, if you are heading out and the cost is <$300 per head, Fringe Benefits Tax (FBT) will not apply, however the expense won't be tax deductible and you can't claim any input tax credits.
If you take a client out for lunch, the cost won't be tax deductible and you can't claim any input tax credits.
If you buy non-entertainment type gifts (ie gift vouchers, hampers, bottles of wine) for clients they will be tax deductible, input tax credits can be claimed and they will not be subject to GST. Entertainment type gifts for clients such as holidays, sporting events and movie tickets are not tax deductible, not subject to FBT and you can't claim input tax credits.
Finally, gifts for staff costing less than $300 are not subject to FBT, not tax deductible and no input tax credits can be claimed.
These rules can be quite confusing, so if you have any queries feel free to contact our office on 9387 5637.