Better practices for the administration of FBT

Introduction

This information outlines five better practices to help entities better administer their fringe benefits tax (FBT) obligations:

1. Identify FBT risks.
2. Establish and maintain an effective FBT control environment.
3. Plan each year’s FBT return.
4. Communicate with stakeholders.
5. Prepare and review the FBT return and supporting processes.

The information is designed to meet the needs of Chief Executives, Chief Financial Officers (CFOs) and FBT Risk Managers who are responsible for governance and control arrangements (including implementing appropriate risk and control arrangements), and managing resource requirements.

Each better practice includes a documentation checklist that provides examples of practices that might indicate the existence of better practice.

Relevant legislation

FBT legislation comprises:

• Fringe Benefits Tax Assessment Act 1986 which establishes the rules for assessment and collection of FBT.
• Fringe Benefits Tax Act 1986 that imposes FBT on the taxable value of the fringe benefits (any change to the rate of FBT is effected by amending this Act).
• Fringe Benefits Tax (Application to the Commonwealth) Act 1986 which applies the FBT laws to Australian Government authorities and departments.
• Fringe Benefits Tax Regulations 1992.
• Fringe Benefits Tax (Application to the Commonwealth) Regulations.

This information has not been prepared as a technical reference on FBT. Therefore, it is important that you use it in conjunction with, not as a substitute for, FBT legislation and Tax Office guidance.

Last Modified: Tuesday, 27 October 2009