Show download pdf controls
  • FBT States and Territories Industry Partnership key messages 19 September 2019

    Opening of meeting

    The Chair opened the meeting and welcomed members and guests after an acknowledgement of country.

    Confirmation of minutes

    Minutes of the previous meeting were confirmed without changes. Refer to FBT States and Territories Industry Partnership (STIP) key messages from 4 April 2019.

    Action items

    • From 21 March 2018
      • Action item 3
      • Taxation Ruling TR 96/26 Fringe benefits tax: car parking fringe benefits
      • Status: Rewrite of this ruling is currently awaiting approval. Item completed. This item will form part of the FBT update in meetings until the matter is finalised.

    STIP Charter

    The Chair presented the final SES endorsed STIP Charter for the 2019–2020 year after considering feedback from members.

    FBT update

    The ATO presented an update covering a range of FBT topics to members covering the following.

    Public advice and guidance

    Advice under development

    • TR 96/26 Fringe benefits tax: car parking fringe benefits. A draft ruling to update TR96/26 is in its final stage of approval. Targeted consultation will be undertaken prior to publishing.
    • TR 2017/D6 Income tax and fringe benefits tax: when are deductions allowed for employees’ travel expenses? This TR replaces Miscellaneous Taxation Ruling MT 2030 (withdrawn). Feedback was received during consultation and this is currently being considered. TR 2017/D6 represents the current ATO view of the law.

    Recently released

    TR 2018/D2 Fringe benefits tax: benefits provided to religious practitioners. Released on 19 June 2019 this ruling provides the Commissioner’s view as to when benefits provided by a registered religious institution to a religious practitioner are exempt from FBT.

    Recently withdrawn

    Miscellaneous Taxation Ruling MT 2022 withdrawn with effect from 31 July 2019. There are legislative changes since the implementation of this MT which were incorporated into FBT - A guide for employers. The information in the guide provides more detailed information in relation to this issue and is reflective of the current operation of the law.

    Newsroom articles

    • FBT – home phone and internet expenses
      • Referring to Chapter 9 of Fringe benefits tax – a guide for employers clarifies how to work out the taxable value of the fringe benefit and evidence you need to support it.
    • Correcting FBT returns mistakes
      • If you realise you’ve made a mistake on an FBT return there are various ways to correct it including using Standard Business Reporting (SBR) enable software, requesting an amended assessments or seeking assistance from a registered taxation agent.

    Board of Taxation update

    Board of Taxation FBT compliance cost reviewExternal Link

    The Board has undertaken a comprehensive study of FBT compliance costs and is now in the process of finalising its report, which is expected to be provided to Government early in the new financial year. The Board highlights that their report will provide an invaluable tool for policy-makers seeking to reduce red tape and simplify the operation of the FBT law, as well as help shape the future direction of the FBT system.

    Productivity commission

    Remote area tax assistance - Productivity Commission reviewExternal Link

    The Productivity Commission consulted in selected remote areas across Australia from March to May 2019 on remote tax assistance, in particular the FBT remote area concessions. The Commission is seeking feedback following the release of a draft report in September 2019. The Commission is due to report to Government in February 2020 providing recommendations on the appropriate form and function of such assistance into the future.

    Treasury exposure draft bill

    On 6 September 2019, Treasury released an Exposure Draft of Treasury Laws Amendment (Measures for a Later Sitting) Bill 2019: Miscellaneous AmendmentsExternal Link. Part 2 of the Bill contains a proposal to replace references to “taxi” in the FBT Act with “a car used for taxi travel (other than a limousine)”. Submissions are due by 27 September 2019.

    Annual Taxation Determinations

    We have issued the following annual taxation determinations.

    • TD 2019/3 Fringe benefits tax: what are the rates to be applied on a cents per kilometre basis for calculating the taxable value of a fringe benefit arising from the private use of a motor vehicle other than a car for the fringe benefits tax year commencing on 1 April 2019?
    • TD 2019/4 Fringe benefits tax: for the purposes of section 135C of the Fringe Benefits Tax Assessment Act 1986, what is the exemption threshold for the fringe benefits tax year commencing on 1 April 2019?
    • TD 2019/5 Fringe benefits tax: for the purposes of section 28 of the Fringe Benefits Tax Assessment Act 1986 what are the indexation factors for valuing non-remote housing for the fringe benefits tax year commencing on 1 April 2019?
    • TD 2019/6 Fringe benefits tax: what is the benchmark interest rate to be used for the fringe benefits tax year commencing on 1 April 2019?
    • TD 2019/7 Fringe benefits tax: reasonable amounts under section 31G of the Fringe Benefits Tax Assessment Act 1986 for food and drink expenses incurred by employees receiving a living-away-from-home allowance fringe benefit for the fringe benefits tax year commencing on 1 April 2019
    • TD 2019/9 Fringe benefits tax: for the purposes of section 39A of the Fringe Benefits Tax Assessment Act 1986, what is the car parking threshold for the fringe benefits tax year commencing on 1 April 2019?
    • TD 2019/11 Income tax: what are the reasonable travel and overtime meal allowance expense amounts for the 2019–20 income year?

    We recently sought feedback on our proposal to replace annual TDs with content published on the ATO website. After considering the feedback received during consultation on this proposal, eight annual taxation determinations will no longer be published and the relevant information will instead be available solely on our website. The last published annual taxation determination of its series have (or will be) annotated to provide a link to its corresponding website content. Two annual determinations will continue to be published in respect of FBT (as currently covered this year in TD 2019/3 and in TD 2019/7).


    Nominate or revoke an eligible state or territory body

    The form to nominate or revoke an eligible state or territory body has been reviewed and has recently received SES endorsement. The revised form will be circulated in the coming months.

    Issues raised by the States and Territories

    The ATO presented responses to issues raised by the members on the following issues.

    Application of section 57A of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)


    The Pathology Department of a public hospital undertakes paid pathology work for non-public hospital based pathology providers in the private sector. Employees undertaking this work remain public hospital employees and aren’t paid any additional amounts for the work, which is undertaken as part of their normal work duties, using hospital equipment.

    In some cases they may be unaware when their work is for a non-government employer.

    ATO response

    It will be a question of fact as to whether the employee is exclusively performing their duties in a public hospital (refer to paragraphs 43-51 of TD 2015/12)Footnote1 or in connection with a public hospital (refer to paragraphs 52-61 of TD 2015/12). As noted in paragraph 3 of TD 2015/12, the presence of the word 'exclusively' requires that all of the duties of the employment of the employee must be performed for the required purposes, being 'in, or in connection with' a hospital.

    Where an employer is the public hospital, under subsection 57A(3), a benefit provided in respect of the employment of an employee is an exempt benefit. There is no requirement under subsection 57A(3) for the duties of employment of the employee to be exclusively performed in connection with a public hospital (unlike for employees of government bodies).

    An employer who requires binding advice about the application of subsection 57A(2) should seek the advice by way of a private ruling in which all of the relevant facts can be considered.

    Application of section 162K of the FBTAA


    The practice within the insurance industry of providing replacement new for old goods has extended to cars, with some insurers offering replacement cars up to three years into a car lease (subject to model availability).

    Base and residual values are set at the start of the lease, based on the cost price and estimated market price at the end of the lease.

    Section 162K(2)(b) of the FBT Act allows the replacement car shall be treated, from the election date, as the same as the original car, but does not cover the event of loss of the car due to theft or accident.

    ATO response

    Subsection 162K(1) of the FBTAA states that section 162K has effect for the purpose of the application of section 10 in relation to car fringe benefits. Therefore, it will not apply unless the benefit is a car fringe benefit. The definition of a car benefit in subsection 7(1) of the FBTAA provides that a car benefit will not arise unless a person holds the car. If the employer continues to hold the replacement car, then section 162K may apply to the replacement car. The circumstances in which the car is replaced (whether it is because it is damaged or due to theft) does not bear on the application of section 162K unless the replacement car is only let on hire for a short term basis.

    In general terms section 162K enables an employer who is using the operating cost method to treat the replacement car as though it was the replaced car for the purposes of calculating the business use percentage. That is, an employer who maintained log books and odometer records during the year or in a previous year for a car that has been replaced may be able to use the business use percentage that applied to the replaced car in calculating the taxable value of the car fringe benefit that relates to the replacement car.

    The original car is only treated as a different car, and the replacement car treated as if it were the original car, because of section 162K for the purposes of section 10 (operating cost method). Section 162K does not impact on the operation of subparagraph 9(2)(a)(i) (statutory formula method) in determining the base value of that car. Accordingly, for the purposes of the statutory formula method the base value of the car changes when a replacement car is provided. In determining the base value of the replacement car, it will be the cost price or leased car value of the car at the time the replacement car was purchased or the new lease is entered into.

    In utilising the operating cost method to determine a car fringe benefits taxable value, the base value of the car is not taken into account. Rather it is the operating cost that is relevant. Where a nomination is made in accordance with section 162K for the replacement car, subsection 10(3B) sets out how to ascertain the operating cost of the combined car for the total holding period.

    Section 162K does not change the base value of the car. Where the replacement car has been held for four years (as at the beginning of the FBT year) the base value is reduced by one-third of the cost price or leased car value of the car is the holding period. The one-third reduction is therefore only made with reference to the date when the replacement car was first held (not the original car).

    Employee declaration forms


    Our current study reimbursement forms include all of the information as per the ATO form but it in a different format (provided); information is inserted in different areas. These forms are also used for purposes other than FBT. We want to include the declaration on one form to capture other required information as well.

    ATO response

    A list of Commissioner approved employee declarations including expense payments can be found on our website.

    Section 25C of the Acts Interpretation Act 1901 states that, ‘Where an Act prescribes a form, then strict compliance with the form is not required and substantial compliance is sufficient. ‘Substantial compliance’ does not have a statutory definition and it’s a matter of judgment in the specific circumstance.

    Essentially an Expense payment fringe benefit employee declaration form will be in the approved form if it includes the following information:

    • name of employee
    • nature of expenses incurred (for example, telephone rental)
    • dates the expenses were provided by or on behalf of the employer
    • purpose of the expenses incurred (that is, sufficient information to demonstrate the extent to which the expenses were incurred by the employee for the purpose of earning their assessable income)
    • the percentage that those expenses incurred relate to earning the employee’s assessable income
    • inclusion of the statement ‘I understand that any work expenses reimbursed by my employer are not deductible in my personal income tax return’
    • signed declaration that the information provided is true and correct
    • the date the declaration is signed
      • it can also be sent electronically but will require an electronic signature.

    In comparing the information contained in our forms to the form that was provided, it is missing the following information:

    • purpose of the expenses incurred
    • inclusion of the statement ‘I understand that any work expenses reimbursed by my employer are not deductible in my personal income tax return’.

    Special topic - superannuation

    Superannuation Guarantee Ruling SGR 2009/2 was discussed to present the meaning of 'ordinary time earnings' (OTE) as defined in subsection 6(1) of the Superannuation Guarantee (Administration) Act 1992 (SGAA).

    The definition of 'ordinary time earnings' is relevant to employers for the purpose of calculating the minimum level of superannuation support required for individual employees under the SGAA.

    General business

    The next meeting will be held 29-30 April 2020.


    Attendees are listed below.




    Andrea Ross (Chair), Superannuation and Employer Obligations


    Nicole Richards (Secretariat), Superannuation and Employer Obligations


    Amber Ibbott, Superannuation and Employer Obligations


    Anthony Bach, Tax Counsel Network


    Roberta Odorizzi, Superannuation and Employer Obligations


    Vivian Sewell, Superannuation and Employer Obligations

    ACT Government

    Desley Crocker

    ACT Government

    Robert Enright

    Australian Federal Police

    Christine Havas

    Department of Treasury and Finance

    Mike Hogan

    Home affairs

    Alice Walker

    NSW Treasury

    Amu Premadas

    NT Government

    Joanne Staples

    NT Government

    Michael Kwong

    NT Government

    Michael Smid

    NT Government

    Stephanie Peters

    SA Government

    Justyna Carlier

    State Solicitor's Office WA

    Brad Prentice

    TAS Treasury

    Rachel Johnston

    QLD Treasury

    Daniel Fielding

    QLD Treasury

    Giles Wilmer

    QLD Treasury

    Liza Gordon

    WA Treasury

    Anthony Smith

    WA Treasury

    Christine Crasto-Carvalho


    Apologies are listed below.



    Department of Education and Training NSW

    Joan Cram

    Department of Treasury and Finance

    Peter Sibbard

    NSW Treasury

    Henriette Prego

    NT Government

    Harold Glenwright

    SA Government

    Tracey Scott

    QLD Treasury

    Daniel Fielding

    Footnote 1
    In particular, refer to paragraph 48 where it is noted that there may be uncertainty as to whether locations at a hospital facility such as a pathology collection room are places where activities of the hospital are being conducted. Paragraph 49 highlights the evidence that would be required in order to form a conclusion as to whether an employee of the pathology department is performing their duties exclusively in a hospital.

    Return to footnote 1 referrer

      Last modified: 28 Oct 2019QC 60479