Entertainment facility leasing expenses: hire of a marquee

Where an employee hires a marquee for use at the employee's home for the purpose of the provision of entertainment, is the marquee a 'facility' as that term is used in the definition of 'entertainment facility leasing expenses' under subsection 136(1) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)?

Yes. The marquee is a 'facility' as that term is used in the definition of 'entertainment facility leasing expenses' under subsection 136(1) of the FBTAA.

The employer of the employee is a public hospital.

The employee has incurred expenses on hiring a marquee to be constructed at the employee's home for a family wedding celebration.

The expenses are incurred 'for the purpose of the provision of entertainment' as those words are used in the definition of 'entertainment facility leasing expenses' under subsection 136(1) of the FBTAA.

The employer reimburses the employee for the expenses incurred in hiring the marquee, which includes the costs of set-up and removal. This reimbursement is not provided under a salary packaging arrangement.

No part of the expenses incurred is for the provision of food, drink or advertising.

For employers that are public hospitals subject to the provisions of section 57A of the FBTAA, benefits provided to employees whose taxable values are wholly or partly attributable to entertainment facility leasing expenses are not subject to fringe benefits tax. This is provided the benefits have been not provided to an employee under a salary packaging arrangement. Refer also to ATO Interpretative Decision ATO ID 2009/45.

Under the definition of 'entertainment facility leasing expenses' in subsection 136(1) of the FBTAA, expenses incurred by a person must be the hire or lease of a corporate box, boat, plane or other premises or facilities for the purpose of the provision of entertainment.

A marquee is a temporary structure which can be used to accommodate people for dining and other purposes. In the current example a marquee is used to hold a wedding reception at the employee's home. Other examples might include a marquee used for entertaining corporate guests at a sports event; for the display of goods at a trade show; to house guests and staff at a fashion show.

Whilst the term 'facility' is not defined in the FBTAA it is used in conjunction with other definitions such as: • 'child care facility' in subsection 136(1) of the FBTAA means 'a facility....for the purpose of minding, caring for or educating....' • 'in-house health care facility' in subsection 136(1) of the FBTAA means '....a clinic, surgery, first-aid station or similar facility...on premises of the employer....'

Similarly, the term 'facility' is used in the Income Tax Assessment Act 1997 (ITAA 1997) including instances where a facility is used for recreation purposes. • A 'facility' used for recreation on the employer's property and operated for employees is described in section 32-30 Item 1.5 of the ITAA 1997. A facility used for recreation in section 32-30 would include a drink vending machine or a pool table in a staff dining room. By exclusion, section 32-30 also is indicative that a facility can be for accommodation. • A 'leisure facility' as defined in subsection 26-50(2) of the ITAA 1997 is 'land, a building, or part of a building or other structure, that is used (or held for use) for holidays or recreation. Examples of buildings or other structures which fall within the definition of 'leisure facility' would be ski-lodges, fishing shacks, holiday cottages, swimming pools and amenity buildings used in connection with tennis, bowling, golfing or swimming.

The word 'facility' is defined in the Macquarie Dictionary (Multimedia version 5.0.0) to mean: facility noun (plural facilities) 1. something that makes possible the easier performance of any action; advantage: transport facilities; to afford someone every facility for doing something . 9. a building or complex of buildings, designed for a specific purpose, as for the holding of sporting contests.

The word 'facility' is also defined in the Butterworths Encyclopaedic Australian Legal Dictionary , (Online Edition), LexisNexis Australia: Facility A building or appliance, designed for a specific purpose, which has the effect of making possible the easier performance of an action

The word facility, as described in each dictionary definition above, and as used in the income tax and fringe benefits tax definitions above is of wide meaning. It is accepted that the term 'facility' as it is used in the definition of 'entertainment facility leasing expenses' also has a wide meaning that includes buildings, part of buildings or other structures that is used for the purpose of the provision of entertainment.

In the present case the marquee is a temporary structure that has been hired and used for a wedding reception. The marquee is used for the purpose of the provision of entertainment.

The marquee is a 'facility' as that term is used in the definition of 'entertainment facility leasing expenses' under subsection 136(1) of the FBTAA

Note - The Tax and Superannuation Laws Amendment (2015 Measures No. 5) Act 2015 made changes to the FBTAA to limit the concessional fringe benefits tax treatment of entertainment benefits provided under a salary packaging arrangement. These amendments provide that from 1 April 2016 the method statement in subsection 5B(1L) no longer disregards the provision of meal entertainment or entertainment facility leasing expenses provided under a salary packaging arrangement.

However, the amendments also introduced a separate cap for employers subject to the provisions of section 57A such that salary packaged entertainment benefits will continue to be exempt from fringe benefits tax where the grossed-up taxable value of these benefits do not exceed $5,000 for an employee in a FBT year. The amount of those benefits exceeding that separate cap will be included in calculating if the value of all benefits an employee receives exceeds the general exemption or rebate caps.

See Chapter 6.5 of the Fringe Benefits Tax - A Guide for Employers (QC 71122) for information.

Date of Amendment Part Comment 27 March 2026 Business line Updated to correct business line 20 April 2017 All Amended to take into account legislative changes to the provision of entertainment facility leasing expenses under a salary packaging arrangement applying from 1 April 2016.

Date of Amendment | Part | Comment

27 March 2026 | Business line | Updated to correct business line

20 April 2017 | All | Amended to take into account legislative changes to the provision of entertainment facility leasing expenses under a salary packaging arrangement applying from 1 April 2016.