Where expense payment fringe benefits, property fringe benefits, residual fringe benefits or tax-exempt body entertainment fringe benefits arise from the provision of meal entertainment, you may be eligible to elect to classify these fringe benefits as meal entertainment fringe benefits. You are not eligible to make an election if benefits are provided under salary packaging arrangements on or after 1 April 2016.
If you choose to classify a fringe benefit as a meal entertainment fringe benefit, you have to classify all fringe benefits arising from the provision of meal entertainment during the year ending 31 March 2017 as meal entertainment fringe benefits.
Specifically, the provision of meal entertainment means:
- providing entertainment by way of food or drink
- providing accommodation or travel in connection with, or to facilitate the provision of, such entertainment
- paying or reimbursing expenses incurred by the employee for the above.
There are two methods you can use to calculate the taxable value of meal entertainment fringe benefits:
- 50-50 split method
- 12-week register method
You must decide to classify fringe benefits as meal entertainment by 21 May 2017 unless we have allowed you to lodge it later or you have a later due date.
Example 22: Taxable value of meal entertainment fringe benefits
You spend $4,000 on meal entertainment not provided under a salary packaged arrangement for the year ending 31 March 2017. You elect on 1 April 2017 to value the meal entertainment fringe benefits using the 50–50 split method.
The calculation of the taxable value for the meal entertainment fringe benefits is:
$4,000 x 50% = $2,000
You would write at item 23: