Division 7A and Fringe Benefits Tax (FBT)

About this fact sheet

This fact sheet discusses whether Division 7A or fringe benefits tax (FBT) applies where a private company makes a payment or a loan, or forgives a debt in relation to a shareholder or an associate of a shareholder, where the shareholder or their associate is also an employee or an associate of an employee of the private company.

For an overview of the provisions of Division 7A and the meaning of 'associate', refer to the fact sheet Division 7A - Overview.

The overview fact sheet includes a summary of the amendments made to Division 7A with effect for the income year in which 1 July 2006 has occurred and for later years.

This fact sheet also covers the interaction between Division 7A and FBT following legislative changes which took effect for FBT from 1 April 2007.

Note: In this fact sheet a reference to a shareholder or their associate is also a reference to: an entity that has been a shareholder, or an entity that has been an associate of a shareholder.