Compliance program 2011-12

Fringe benefits tax

We regularly receive information from the states and territories, including data on motor vehicle registrations, boat registrations and real property.

Areas of concern that have carried over from last year's program include employers:

• failing to identify taxable fringe benefits
• failing to correctly value fringe benefits
• failing to lodge fringe benefits tax returns
• inappropriately accessing concessions and exemptions.

We will contact around 5,000 employers regarding these concerns as part of a broader employer obligations strategy. We have found some taxpayers mistakenly assuming their motor vehicle is exempt from fringe benefits tax without considering the private usage requirements of the vehicle. We will focus on this issue when contacting employers. We will contact employers who have stopped lodging fringe benefits tax returns to determine whether non-lodgment is appropriate.

We are seeing increasing use of exempt living-away-from-home allowances to remunerate employees. In many cases, these claims may be legitimate. However, we believe a growing population is using these exempt fringe benefits incorrectly to provide tax-free payments to their employees. Our data matching has also highlighted taxpayers who appear to be claiming excessive exempt amounts of fringe-benefits-tax exempt income. We will use reviews and audits to clarify these situations.

In the 2011-12 federal budget, the government announced reforms to the current 'statutory formula' method for determining the taxable value of car fringe benefits. The reforms will replace the current statutory rates with a single rate of 20% that applies regardless of the distance travelled. We will support employers in understanding and applying the new rate.

We are also increasing our level of engagement with employers, salary package advisors/promoters and tax practitioners to provide guidance and help them comply with fringe benefits tax obligations.

Sections within Small-to-medium enterprises

• Private groups
• Highly wealthy individuals
• Wealthy Australians
• $100 million - $250 million segment
• Employer obligations
• Lodgment compliance
• Trusts
• Phoenix arrangements
• Overseas interests and international dealings
• Division 7A
• Capital gains tax
• Foreign residents
• Capital and revenue losses
• Restructuring by professional firms
• Fringe benefits tax
• Taxation of financial arrangements (TOFA)
• Small business and general business tax break
• Goods and services tax (GST)
• Refund integrity
• Property
• Retirement villages
• Integrity of business systems
• Financial supplies
• International and cross-border transactions
• GST serious evasion
• Excise
• Excise equivalent goods
• Tax reporting of exports including excisable goods
• Wine equalisation tax
• Alternative fuels
• Superannuation
• Managing business tax debt