HOTEL ROOM HIRE - EXEMPT FOR HOSPITAL AND PBIs
13 December 2009
When an employee incurs expenses in hiring or leasing a private function room or a hotel room those expenses are incurred for the purposes of the provision of entertainment as entertainment is defined in subsection 136(1) of the FBTAA 1986 and section 32-10 of the ITAA 1997.
As required in the definition of 'entertainment facility leasing expenses' those expenses are not attributable to food or drink, or advertising.
The expenses incurred by the employee on hiring or leasing the private function room and the hotel room are 'entertainment facility leasing expenses' as defined in subsection 136(1) of the FBTAA.
As the employer has reimbursed the employee's expenses, the expense payment benefits would have a taxable value (but for section 57A of the FBTAA) which is wholly or partly attributable to entertainment facility leasing expenses. As a result the expense payment benefits are disregarded for the purposes of subsection 5B(1L) of the FBTAA.