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As of 1 April, 2013, the ATO have indicated that the cost of Christmas Parties where the cost per employee or their associate is $300 or less will be non-deductible.
Where the cost is $300 or less per employee, including gifts, these are considered minor exempt benefits ie exempt from Fringe Benefits Tax. However, they will also be non-deductible for tax purposes.
Where the cost per employee including gifts exceeds $300, the amounts are subject to Fringe Benefits Tax and are tax deductible.
Expenditure for non-employees remain non-deductible.
Where you have held a Christmas party this last Christmas, and for all future years, please ensure that your tax records adequately record the costs per employee, associate and / or non-employee. These will need to be provided to our office for Fringe Benefits Tax purposes and for year end tax return purposes.
For further information, please refer to this link.
http://www.ato.gov.au/General/Fringe-benefits-tax/In-detail/Fact-sheets/FBT-and-Christmas-parties/?page=2
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