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  • Fringe benefits tax

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    A fringe benefit is, generally speaking, a benefit provided in respect of employment. Fringe benefits are provided to employees (or associates of the employees) in place of or in addition to salary or wages. Benefits include any right, privilege, service or facility - for example, the use of a car for private purposes.

    Fringe benefits tax (FBT) is the tax paid by employers on fringe benefits. The benefit does not have to be provided directly by the employer for FBT to apply. FBT may still apply if the benefit is provided by an associate of the employer or by a third party under an arrangement with the employer or an associate of the employer.

    Employees generally do not pay income tax on the fringe benefits they receive. FBT is paid by employers, irrespective of whether they are sole traders, partnerships, trusts, corporations, unincorporated associations or government bodies, and irrespective of whether they are liable to pay other taxes such as income tax. The rate of FBT for the 2006-07 FBT year decreased by 2% from the 2005-06 FBT year to 46.5%.

    Employers can generally claim an income tax deduction for the cost of providing fringe benefits. FBT paid by an employer may also be an allowable income tax deduction.

    The FBT year runs from 1 April to 31 March each year, rather than from 1 July to 30 June as is the case for other tax types. For example, the 2006-07 FBT year runs from 1 April 2006 to 31 March 2007. FBT returns must be lodged by 21 May each year, which is a shorter lodgment period than for other tax types. These features of the FBT system enable the reporting of FBT statistics that are one year more recent than the statistics based on other income year return forms - for example, for personal tax.

    This chapter primarily reports and discusses FBT statistics for the 2006-07 FBT year.

    OVERVIEW

    For the 2006-07 fringe benefits tax (FBT) year:

    • FBT payable was $3.4 billion (excluding FBT payable by Australian Government departments)
    • FBT rebates of $95.3 million were claimed, a 7% decrease from 2005-06, and
    • employee contributions reached $452 million (excluding those made by employees of Australian Government departments).
     
      Last modified: 18 Mar 2008QC 20124