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FBT and Entertainment (Australia) Procedures

Parent Policy

Fringe Benefits Tax (Australia) Policy

Entertainment provided to an employee or an associate of an employee by an income tax-exempt employer is a tax-exempt body entertainment benefit. Such a benefit will generally be a fringe benefit and subject to FBT at the current rate of tax.

Definition of terms

FBT: Fringe Benefits Tax
ATO: Australian Taxation Office
Associate: widely defined and includes relatives, partners, spouses and children of the employee or partner
In House Dining Facility: A facility located on the premises used principally for providing food and drink to employees on work days
On Campus Dining Facility: A facility located on the premises from which both employees and others can purchase food and drink
Employee: a current employee, a future employee; or a former employee.
Travel: An employee is considered to be travelling on business when the travel involves an overnight stay
Locally: A conference is held locally when there is no overnight stay involved.
Eligible Seminar: As defined by the Income Tax Assessment Act 1997, Section 32-65. A conference, convention, lecture, meeting, award presentation, speech, question-and-answer session, training session or educational course - the content of which must be relevant to the employees' employment. It must have a continuous duration of four hours or more. Meals, rest or recreation breaks are not to be included in determining its duration. Business discussions undertaken in the normal course of the day do not constitute
Eligible Training Seminar: Must meet all the criteria of an “eligible seminar” as well as being organised by or on behalf of Monash University solely for the training of staff in matters relevant to Monash University business, and/or discussion of general policy issues relevant to internal management and be conducted in conference facilities operated by a business operation unrelated to Monash University.

Department Responsibility

  • Where an invoice or Claim Form is for the provision of entertainment, FBT will be charged on the whole amount unless, the number of employees and non employees who attended the function is clearly indicated.

Responsibility

Departmental Finance Officer

  • All expenses relating to entertainment - food and drink, and entertainment - recreation are to be processed using the Monash Corporate MasterCard, Petty Cash or via an Entertainment Claim Form. Purchase orders should NEVER be used when processing entertainment expenses.

Responsibility

Departmental Finance Officer

Provision of Food and Drink (Meal entertainment)

  • The cost of food and drink provided to an employee at an off campus venue is the provision of meal entertainment and is subject to FBT except when travelling or at an eligible seminar. The fact that business was discussed at the time does not exempt the food and drink from FBT.

Responsibility

Employee dining

  • The cost of food and drink provided to an employee's associates will always be subject to FBT

Responsibility

Employee dining

  • Food and drink consumed by employees whilst attending business meetings and training sessions at all campus sit-down restaurants is FBT exempt when the food and drink is paid for directly by Monash (e.g. Monash Corporate Card). Where employees are reimbursed for this type of expenditure (i.e. Claim Form through Accounts Payable), the exemption does not apply and the food and drink will incur FBT.

Responsibility

Employee dining

  • All meals served to employees (including those with alcohol) are exempt when served in an "in-house dining facility" during business hours, other than those which are considered to be social functions. All meals provided to an associate of an employee are subject to FBT.

Responsibility

Employee dining

  • The ATO has ruled that consumption of alcohol creates a "social environment" and therefore may change an otherwise exempt entertainment benefit into a taxable entertainment benefit.

Responsibility

Employee dining

  • The cost of providing food and drink to an employee while travelling on Monash University business does not amount to meal entertainment and is not subject to FBT. However if there was entertainment other than the food and drink provided (e.g., a floor show, dancing, live band, etc) the cost of the meal would be subject to FBT.

Responsibility

Employee travelling

  • The provision of tea, coffee, soft drinks, finger food etc. that are intended to be consumed on University premises does not attract FBT provided that alcohol is not consumed.

Responsibility

Departmental Finance Officer

  • Where the cost of meal entertainment for both employees and their clients or associates is paid for from University funds, the total cost of the food and drink should be divided into taxable and non- taxable portions on a cost per head basis. FBT is only ever payable on the employees and their associate's portion and not the client's portion of the cost of meal entertainment.

Responsibility

Departmental Finance Officer

Social functions

  • The cost of providing a social function to employees and their associates is always subject to FBT. This would include all parties, receptions, farewells, retirement functions, etc. Any social function held in one of Monash University's "in-house dining facilities" IS subject to FBT.

Responsibility

Employee dining

Conferences & Seminars

  • Food and drink that is "reasonably incidental" to a person's attendance at an eligible seminar shall be exempted from FBT.

Responsibility

Employee attending seminar

  • Where an invoice or Claim Form includes the cost of food and drink that is part of an eligible seminar, a copy of the program must be attached. FBT will be charged on the whole amount unless it can be substantiated that the seminar meets the eligible seminar requirements

Responsibility

Departmental Finance Officer

  • A dinner held at the conclusion of a conference held locally is to be regarded as a social function and the cost of such a dinner is subject to FBT.

Responsibility

Employee attending conference

  • The cost of recreation (i.e. visit to a tourist attraction, theatre tickets, river cruise) provided in connection with an eligible seminar is subject to FBT.

Responsibility

Departmental Finance Officer

Employee Contributions

  • Employee contributions do not reduce the taxable value of entertainment expenses. These funds must not be banked in the University account but used to pay directly for the expense. If funds are banked, FBT will still be assessed and charged in line with ATO rules.

Responsibility

Employee contributing

Provision of Recreational Entertainment

  • Where an employee's recreation expenses are paid for by their employer FBT will always be applicable. Recreation includes the cost of recreational events forming part of conference agenda, sporting events, theatre tickets etc.

Responsibility

Employee participating

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