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Income Tax Act 2007

Deductions - Entertainment expenditure

DD 9: Relationship with fringe benefit tax rules

You could also call this:

“How entertainment expense deductions and fringe benefit tax rules work together”

You should know that the rules about deductions for entertainment expenses are more important than the fringe benefit tax (FBT) rules. This means that the deduction rules come first. However, there’s an exception to this. The FBT rules become more important than the deduction rules in two situations:

  1. If you’re an employee and you can choose when to get or use the benefit.
  2. If you’re an employee and you don’t get or use the benefit as part of your job.

In these cases, the FBT rules will apply instead of the deduction rules.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1513827.

Topics:
Money and consumer rights > Taxes
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DD 8: Entertainment that is income or fringe benefit, or

“Entertainment expenses that count as income or employee benefits”

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DD 10: Interpretation: reimbursement and apportionment, or

“How to treat employee reimbursements and split costs for entertainment expenses”

Part D Deductions
Entertainment expenditure

DD 9Relationship with fringe benefit tax rules

  1. Sections DD 2 to DD 8 override the fringe benefit tax (FBT) rules. However, the FBT rules, as applied by section CX 29 (Entertainment), override sections DD 2 to DD 8 if an employee of the person providing the benefit—

  2. may choose when to receive or use the benefit:
    1. does not receive or use the benefit in the course of their employment duties.

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