Taxation Ruling

IT 2675A

Income tax and fringe benefits tax: entertainment - morning and afternoon teas; light meals and in house dining facilities

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FOI status:

may be released

Addendum

Since this ruling was issued, the Income Tax Assessment Act 1997 has been enacted meaning that section 51AE of the Income Tax Assessment Act 1936 does not have any effect after the 1997-98 year of income. In its place, Division 32 of the Income Tax Assessment Act 1997 deals with the deductibility of entertainment expenses from this date. This Addendum updates Taxation Ruling IT 2675 as follows:

1. Paragraph 1

(a) Omit the text of subparagraph (i); and substitute:

"'in respect of the provision of entertainment' and therefore precluded by section 32-5 of the Income Tax Assessment Act 1997 from being an allowable deduction in terms of section 8-1; or".

(b) In paragraph (b), omit 'subsection 51AE(1) of the ITAA'; substitute: 'section 32-55 of ITAA97'.

2. Paragraph 2

(a) Omit 'subsection 51AE(4) of the ITAA'; substitute: 'section 32-5 of the ITAA97'.

(b) Omit 'subsection 51(1) of the ITAA'; substitute 'section 8-1 of the ITAA97.

3. Paragraph 3

Omit 'subsection 51(1)'; insert: 'section 8-1 of ITAA97'.

4. Paragraph 8

(a) In subparagraph (a), omit 'subsection 51AE(4)'; substitute 'section 32-5 of ITAA97'.

(b) In subparagraph (b), omit 'subsection 51AE(5)'; substitute: 'subdivision 32-B of the ITAA97'.

5. Paragraph 11

Omit 'subsection 51AE(1) of the ITAA'; substitute: 'section 32-55 of ITAA97'.

6. Paragraph 13

(a) Omit 'subsection 51AE(4) of the ITAA'; substitute: 'section 32-5 of ITAA97'.

(b) Omit 'section 51 of that Act'; substitute: 'section 8-1 of ITAA97.'

7. Paragraph 14

Omit 'subsection 51AE(3) of the ITAA'; substitute: 'section 32-10 of ITAA97'.

8. Paragraph 17

Omit 'subsection 51(1) of the ITAA'; substitute: 'section 8-1 of the ITAA97'.

9. Paragraph 18

(a) Omit 'subsection 51AE(5) of the ITAA'; substitute: 'subdivision 32-B of ITAA97"

(b) Omit 'subsection 51AE(4); substitute: 'section 32-5 of ITAA97'.

(c) Omit 'subsection 51(1); substitute: 'section 8-1 of ITAA97'.

10. Paragraph 21

(a) Omit 'sub sub paragraph 51AE(5)(f)(i) or 51AE(5)(f)(ii)'; substitute: 'section 32.30 item 1.1 of ITAA97'.

(b) Omit 'subsection 51AE(4)'; substitute: 'section 32-5 of ITAA97".

11. Paragraph 22

(a) Omit 'subsection 51AE(1) of the ITAA'; substitute: 'section 32.55 of ITAA97'.

(b) Omit subparagraphs (a) (b) & (c); substitute:

(a)

is on property you occupy; and

(b)

is operated mainly for providing food and drink to your employees; and

(c)

is not open to the public'.

12. Paragraph 25

Omit 'wholly or principally'; substitute: 'mainly'.

13. Paragraph 26

Omit the the text of the paragraph; and substitute:

'Whether a facility is operated "mainly" for a required purpose is determined by fact degree or impression.'

14. Paragraph 28

(a) Omit 'subsection 51AE(1) of the ITAA'; substitute: 'section 32-55 of ITAA97'.

(b) Omit 'wholly or principally'; substitute: 'mainly'.

Commissioner of Taxation
4 October 2006

References

ATO references:
NO 2005/18404

Related Rulings/Determinations:

IT 2675