Extending the FBT exemption for fly-in/fly-out arrangements

On 3 November 2011 legislation was enacted that extends the exemption from fringe benefits tax (FBT) for travel between home and work sites for fly-in/fly-out employees working overseas and their employers (subject to certain conditions being met).

The change removes the possibility of double taxation of fly-in/fly-out benefits received by Australians working in remote locations overseas. It also ensures those workers are taxed consistently and provides certainty regarding the FBT implications for Australian residents employed overseas.

The changes apply from 1 July 2009.

Media release

See the Assistant Treasurer's media release no. 011 - Providing certainty for the taxation of fly-in/fly-out employees working overseas - issued on 18 November 2010.

Legislation and supporting material

The measure is contained in Tax Laws Amendment (2011 Measures No. 6) Act 2011.

Administrative treatment We accepted tax returns as lodged during the period up until enactment of the legislation on 3 November 2011. We processed assessments in accordance with the law as it applied before enactment of the new law. Now that the new law is enacted, employers (with a sufficient connection to Australia) employing Australian resident taxpayers in a remote area overseas under a fly-in/fly-out arrangement will need to review their positions: Those taxpayers who have not paid FBT, which accords with the new law, do not need to do anything more. Those taxpayers who have paid FBT can seek amendments and if a reduction in liability results, interest on overpayment will be paid. With regards to Australian resident taxpayers who are employed in a remote area overseas under a fly-in/fly-out arrangement, these taxpayers will need to review their positions: Those taxpayers who have not received a payment summary from their employer, and consequently have not reported reportable fringe benefits on their individual tax returns, do not need to do anything more. Those taxpayers who have received a payment summary from their employer, and have reported reportable fringe benefits on their individual tax returns, can request us to amend their reportable fringe benefits.

More information For more information on: exempt benefits see chapter 20 of Fringe benefits tax - a guide for employers remote and non-remote overseas locations see FBT exemption for fly-in/fly-out arrangements.