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  • Public benevolent institutions and health promotion charities

    A public benevolent institution is a charity whose main purpose is to relieve poverty, sickness, suffering or disability.

    A health promotion charity is a charitable institution whose principal activity is to promote the prevention or the control of diseases in human beings.

    If your organisation is a public benevolent institution or health promotion charity, the organisation must be endorsed by us to access the FBT exemption. From 3 December 2012, your organisation must also be registered with the ACNC as a charity. A condition of our endorsement is that public benevolent institutions and health promotion charities must be registered with the Australian Charities and Not-for-profits Commission as a public benevolent or health promotion charity.

    Organisations that were endorsed by us to access the FBT exemption for public benevolent institutions or health promotion charities immediately before 3 December 2012 are automatically registered with the ACNC – they don't need to re-register.

    For more about eligibility for this concession, including endorsement, phone us on 1300 130 248.

    For more information about endorsement and registering, go to ato.gov.au/Non-profit.

    14 Calculated fringe benefits taxable amounts

    You must complete only item 14C (and not items 14A and 14B).

    14C Aggregate non-exempt amount

    Write at item 14C your aggregate non-exempt amount.

    Your aggregate non-exempt amount is the grossed-up taxable value of fringe benefits you provide to an individual employee that exceeds $31,177. You only pay FBT on your aggregate non-exempt amount.

    For the year ending 31 March 2017, the provision of salary packaged meal entertainment and entertainment facility leasing benefits form part of your aggregate non-exempt amount where the grossed-up taxable value of such benefits exceeds $5,000.

    The following steps will assist you in calculating your aggregate non-exempt amount.

    Step

    Action

    1

    Establish what the employee's individual fringe benefits amount would be if the capping concession was not available.

    The individual fringe benefits amount is the value of all benefits other than excluded benefits. For a list of excluded benefits, visit ato.gov.au and search for 'excluded fringe benefits'.

    2

    Identify the amount of GST-creditable fringe benefits included in the amount for step 1.

    The result from this step is 'amount 1'.

    3

    Identify those fringe benefits not taken into account in the calculation for step 2 (that is, the result for step 1 minus the result for step 2).

    The result from this step is 'amount 2'.

    4

    Determine the employee’s share of the benefits that would be excluded fringe benefits. For a list of excluded benefits, visit ato.gov.au and search for 'excluded fringe benefits'.

    The following excluded fringe benefits specifically not included in this calculation are :

    • meal entertainment benefits not provided under a salary packaged arrangement
    • car parking fringe benefits
    • entertainment facility leasing benefits not provided under a salary packaged arrangement.

     

    5

    Identify the GST-creditable fringe benefits included in step 4.

    The result from this step is 'amount 3'.

    6

    Identify those excluded fringe benefits that are not taken into account under step 5 (that is, the result for step 4 minus the result for step 5).

    The result from this step is 'amount 4'.

    7

    Add amount 1 and amount 3 (that is, the result from step 2 plus the result from step 5).

    8

    Multiply the result from step 7 by 2.1463 (the type 1 gross-up rate).

    This is the individual grossed-up type 1 non-exempt amount. Do not write this amount at item 14A.

    9

    Add amount 2 and amount 4 (that is, the result from step 3 plus the result from step 6).

    This is the type 2 individual base non-exempt amount. Do not write this amount at item 14B.

    10

    Multiply the result from step 9 by 1.9608 (the type 2 grossed-up rate).

    This is the individual grossed-up type 2 non-exempt amount.

    11

    For each employee add:

    • the individual grossed-up type 1 non-exempt amount for the year ending 31 March 2017 (that is, the result from step 8)
    • the individual grossed-up type 2 non-exempt amount for the year ending 31 March 2017 (that is, the result from step 10).

    The result is the individual grossed-up non-exempt amount for the employee.

    12

    Subtract $31,177 from the individual grossed-up non-exempt amount for each employee (that is, the result from step 11 minus the capping threshold for registered public benevolent institutions and health promotion charities).

    If the individual grossed-up non-exempt amount for an employee is equal to or less than $31,177, the amount calculated under this step is nil.

    If you have not provided meal entertainment or entertainment facility leasing benefits under a salary packaging arrangement for the year ending 31 March 2017:

    • Step 13: Add together the amounts calculated at step 12 for each employee. This is your aggregate non-exempt amount.
    • Step 14: Multiply the total amount calculated under step 13 by 49% (the tax rate). Write this amount at item 17.

    If you have provided meal entertainment or entertainment facility leasing benefits under a salary packaging arrangement for the year ending 31 March 2017, continue with the steps in the below table.

    Step

    Action

    13

    Determine how much of the employee’s individual fringe benefits amount relates to salary packaged meal entertainment and entertainment facility leasing benefits.

    14

    Determine how much of the employee’s individual fringe benefits amount relates to GST creditable salary packaged meal entertainment and entertainment facility leasing benefits.

    Multiply the result by 2.1463 (the type 1 gross-up amount).

    15

    Determine how much of the individual grossed-up non-exempt amount relates to non-GST creditable salary packaged meal entertainment and entertainment facility leasing benefits (that is, the result for step 13 minus the result for step 14).

    Multiple the result by 1.9608 (the type 2 gross-up amount).

    16

    Add the amounts calculated at steps 14 and 15. This is the individual grossed-up salary packaged meal entertainment and entertainment facility leasing benefits.

    17

    Subtract from the amount calculated at step 12 by the lesser of:

    • $5,000 and
    • the amount calculated at step 16.

     

    18

    Add together the amounts calculated at step 17 for each employee.

    Multiply the result by 49% (the FBT tax rate). Write this amount at item 17. This is your aggregate non-exempt amount.

     

    Example 7: Aggregate non-exempt amount for a public benevolent institution

    You are a public benevolent institution that is registered for GST and provide your employees with the following fringe benefits:

    • car fringe benefits to Louise and Wendy valued at $2,000 and $25,000 respectively (type 1 benefits as you are entitled to input tax credits for the provision of these benefits)
    • entertainment facility leasing benefits to Louise under a salary package arrangement to enable her to hire a room for $5,000 at Fantasy Wedding receptions (type 2 benefit as you are not entitled to an input tax credit for the provision of this benefit)
    • entertainment facility leasing benefits to Wendy by reimbursing her $15,000 for the amount of rent she paid on hiring a houseboat on her holiday (type 2 benefit as you are not entitled to an input tax credit for the provision of this benefit).

    Louise's grossed-up type 1 amount is

    • car fringe benefit = $4,292.60 ($2,000 x 2.1463)

    Louise's grossed-up type 2 amount is:

    • salary packaged entertainment facility leasing benefit = $9,804 ($5,000 x 1.9608).

    As the separate cap for salary packaged meal entertainment and entertainment facility leasing benefits has been exceeded (the grossed-up salary packaged meal entertainment and entertainment facility leasing benefits is $9,804), this amount is included in determining whether the capping threshold has been exceeded for benefits you provided to Louise. The aggregate exempt amount for Louise is:

    = $9,096.60 ($4,292.60 + $9,804 - $5,000), which is less than the cap of $31,177.

    Louise does not have a grossed-up non-exempt amount. You are not liable for FBT on the benefits you provide to Louise.

    Wendy's grossed-up type 1 amount is:

    car fringe benefit = $53,657.50 ($25,000 x 2.1463)

    As the reimbursement of rent for the houseboat is not provided under a salary packaged arrangement it is not included in determining Wendy's individual grossed-up non-exempt amount. The capping threshold for Wendy has been exceeded and your aggregate non-exempt amount would be:

    $53,657.50 - $31,177 = $22,480.50.

    You would write your aggregate non-exempt amount at item 14C on your return as:

    Item 14C

    End of example

    15 Fringe benefits taxable amount

    Write the amount you wrote at item 14C even if the amount is nil.

    You must complete this item because it forms the basis of self-assessing any FBT liability.

    16 Amount of tax payable

    Multiply the amount you wrote at item 15 by 49% (the tax rate for the year ending 31 March 2017) and write the total at item 16 even if the amount is nil. This is the total FBT amount you are liable to pay.

    You must complete this item because it forms the basis of self-assessing any FBT liability.

    17 Aggregate non-rebatable amount

    You must leave item 17 blank.

    18 Amount of rebate

    You must leave item 18 blank.

    19 Sub-total

    Write the amount you wrote at item 16 even if the amount is nil.

    You must complete this item because it forms the basis of self-assessing any FBT liability.

    20 to 25

    Complete these items in the same way as a taxable employer would – see Taxable employers.

    However, at item 23, you must include the taxable value of benefits provided (not the aggregate non-exempt amount) if you are any of the following:

    • an eligible public benevolent institution
    • an eligible health promotion charity
    • public hospital
    • non-profit hospital
    • public ambulance service.

    The information you include in the 'Taxable value of benefits' column is based on the total of the individual base non-exempt amounts for all employees calculated at steps 3 and 5 of item 14C in the table above.

    The figures you place in the 'Taxable value of benefits' column must be the amounts before they are grossed-up and before the $31,177 capping amounts are deducted

    Illustration 3: Public benevolent institution FBT return 2017

    These figures are from examples 5 and 7.

    Illustration 3: Public benevolent institution FBT return 2017

    End of example

    Last modified: 22 Mar 2017QC 51524