People are always concerned with making sure they are in top form when in social situations, pleasant smelling breath being one criteria for being in top form. People are also very concerned about making the wrong impression or offending someone when telling them they have bad breath.
Really it comes down to a simple concept: How well you know the person and how comfortable you are with the person should determine how and when to tell someone they have bad breath.
Case in point: My girlfriend does not hesitate to tell me when I have bad breath and usually makes a joke about it, therefore disarming any feelings of offense I may have.
If you don’t know someone that well or don’t feel comfortable telling them, an easy way to do it subtly (and in fact possibly without them even knowing what your saying) is to offer a piece of gum or mint, Since it is polite to offer these items when you yourself are indulging in them, just take out the pack even if you don’t want a stick of gum or mint, take one anyways and offer one to your friend. The friend will see it as a kind gesture and even if they say “Hey are you telling me I have bad breath?” you can disarm any offense by seeing this as a joke or just by saying you were offering them gum to be polite.