Taxation Ruling

IT 2094

Income tax : entertainment expenses - council employee

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FOI status:

PREAMBLE

The question in issue in 84 ATC Case R41 and 27 CTBR(NS) Case 95 concerned the deductibility of entertainment expenses claimed by a health surveyor and building inspector for a shire council.

FACTS

2. The taxpayer claimed a deduction for the cost of providing an annual Christmas Party for his staff to help improve their morale. Family and friends of the taxpayer were expressly excluded from attending. The Deputy Shire Clerk gave evidence that since the taxpayer joined the Council there had not been any industrial problems at any staff level which was contrary to the usually high incidence of industrial disputes in many local government areas. He went on to say that in considering an applicant for such a position he would take into consideration the person's history of industrial problems. Taxation Board of Review No. 3 held that the entertainment was an essential element in the proper discharge of the taxpayer's duties.

RULING

3. The decision reached by the Board was open to it on the evidence adduced at the hearing. The decision should be applied in similar factual situations. It will, of course, be necessary to confirm that the facual sitaution in such cases is really comparable with the case before the Board.

COMMISSIONER OF TAXATION
26 July 1984

References

ATO references:
NO J35/500
BO (Parra)

Date of effect:
Immediate

Date original memo issued:
6 July 1984

Related Rulings/Determinations:

IT 2094W

Subject References:
ENTERTAINMENT EXPENSES - COUNCIL EMPLOYEE

Legislative References:
51

Case References:
Case R41
84 ATC 355