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Meal Entertainment

his is a complex area and if you are uncertain as to the tax treatment you should seek direction from the client's accountant.

While travelling for work purposes, meals will often be consumed by clients and their employees which are paid for by the business. The treatment of these meals depends on whether they constitute “meal entertainment”. In the many cases where they do not constitute meal entertainment (such as where a business owner or employee has an evening meal by themselves at a hotel while travelling overnight for work), GST and an income tax deduction can be claimed. However, in other cases, such as dinners with clients at a restaurant (while not on travel),  the meal will generally constitute entertainment, in which case FBT may apply.  This is a complex area and if you are uncertain as to the tax treatment you should seek direction from the client’s accountant.  ABN members can consult Bookkeeper Knowledge Base Edition 20 and 93 for further detailed information, as well as Bookkeeper Radio episode Meal Entertainment – A Bookkeeper Guide.

Category
ABA
Published
17 Sep 2019
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