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  • FBT States and Territories Industry Partnership key messages April 2019

    1. Opening of meeting

    The chair opened the meeting and welcomed members and guests.

    2. Confirmation of minutes

    Minutes of the previous meeting were confirmed without changes. Refer to FBT States and Territories Industry Partnership minutes from 20 September 2018.

    3. Action items

    From 21 March 2018

    Action item


    TR96/26 - Fringe benefits tax: car parking fringe benefits.

    Status: Rewrite of this ruling is currently awaiting approval. Item completed

    From 20 September 2018

    Action item


    To provide technical updates focusing on key changes in relation to FBT.

    Status: creation of new standing agenda item. Item completed.


    Action item


    Members were to provide details of circumstances in which exempt vehicles are a part of a genuine car pool arrangement and available for private use.

    Status: item completed.


    Action item


    Arrangements for future meetings were to consider alternative platforms for attendance.

    Status: WebEx facility to be trialled again. Item completed.

    4. ATO technical update

    The ATO presented a range of technical updates to members covering the following topics:

    Public advice and guidance

    TR 2018/7 - Income tax: employee remuneration trusts. Published on 31 October 2018 and outlines where the contribution is not is in respect of a particular identifiable employee, FBT doesn’t apply and the contribution is assessable as income.

    Advice under development

    TR 96/26 - Fringe benefits tax: car parking fringe benefits. Rewrite is progressing after the ruling received technical signoff. Release of this ruling for targeted consultation will be subject to caretaker provisions.

    TR 2018/D2 - Fringe benefits tax: benefits provided to religious practioners. No comments in fundamental disagreement with the draft were received following consultation. The ATO aims to finalise the ruling by mid 2019.

    TR 2017/D6 - Income tax and fringe benefits tax: when are deductions allowed for employees’ travel expenses? This TR replaces MT 2030 (withdrawn).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.

    ATO Consultation

    Single Touch Payroll. Consultation groups are progressing with an expected completion date of July 2019.

    Board of Taxation FBT Compliance Cost Review. The Board is conducting a comprehensive review of the compliance costs associated with obligations under FBT legislation.

    Website updates

    What attracts our attention page. Members were referred to the ATO website for issues attracting our attention.

    Media release

    Natural disasters. Assistance is being provided to those affected by floods in North Queensland by way of additional time to deal with their tax affairs. Refunds are also being fast-tracked.

    Member requests for updates

    Practical Compliance Guide (PCG) 2018/3 - Exempt car benefits and exempt residual benefits: compliance approach to determining private use of vehicles. A member asked for clarification concerning the application of this PCG. The ATO confirmed that the PCG is to be applied per employee and per vehicle in respect of journeys undertaken for a private purpose.

    Remote areas review. A member asked if the remote areas review was interconnected with the review being undertaken by the Productivity Commission. The ATO advised that the Productivity Commission is an independent body and their review is being independent of the ATO. Those wishing to contribute to the Productivty Commission review were advised they could do so until 29 April 2019.

    Taxi travel. A member asked if the exemption of certain taxi travel from FBT is still warranted given the licensing requirements of Uber drivers in the ACT and the deregulation of the taxi industry in Victoria. The ATO advised that the current ATO view is that in the Fringe benefits tax - a guide for employers.

    Technical issues

    Revoking elections – Car parking elections. The method used to calculate the taxable value of car parking fringe benefits cannot be changed once the election has been made.

    Accessing exemptions – Remote area housing and salary sacrifice arrangements. In certain circumstances, the taxable value of certain benefits arising from housing assistance provided to an employee in a remote area can be reduced by 50%: section 60 of the FBTAA. 

    Tax Time

    Members were advised that the website was updated on 22 March 2019 and provides updated forms and information for 2019 FBT obligations.

    5. Issues raised by the States and Territories

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

    Meal entertainment associated with an eligible seminar


    A full-day industry training conference runs from 8am to 4pm. Food and drink included during the conference is morning tea, lunch and afternoon tea. The conference program also includes a gala dinner following the completion of the conference later that evening, however the conference registration fee does not include complimentary entry to the gala dinner. Individuals wishing to attend the gala dinner are required to purchase a separate ticket, at an additional cost. A person may attend the gala dinner even if they did not register and attend the earlier conference (and vice versa). The tickets for the conference and gala dinner are priced at $250 and $200 respectively. Both the conference and gala dinner are held at the same convention centre.

    An employer (a tax-exempt body) pays for an employee to attend both the conference and gala dinner, tickets to both events are purchased together at the same time.

    Members asked various questions regarding the interaction of the FBT and income tax provisions in respect of the gala dinner.

    ATO response

    Relevant legislative provisions:

    The general income tax provision that relates to the deductibility of the expenses is section 8-1 of the ITAA 1997.

    Section 8-1 of the ITAA 1997 states you can deduct from your assessable income any loss or outgoing to the extent that (a) it is incurred in gaining or producing your assessable income; or (b) it is necessarily incurred in carrying on a business for the purpose of gaining or producing your assessable income.

    In addition, you cannot deduct a loss or outgoing under this section to the extent that the loss or outgoing is of a capital, private or domestic nature.

    However, this general provision is subject to section 32-5 of the ITAA 1997.

    Section 32-5 of the ITAA 1997 prevents an income tax deduction being claimed under section 8-1 for expenditure that is a loss or outgoing in respect of providing entertainment, unless the loss or outgoing comes within Subdivision 32-B of the ITAA 1997.

    Section 32-10(1) of the ITAA defines entertainment as:

    (a) entertainment by way of food, drink or recreation; or

    (b) accommodation or travel to do with providing entertainment by way of food, drink or recreation.

    Section 32-10(2) of the ITAA 1997 confirms that you are taken to provide entertainment even if business discussions or transactions occur.

    The relevant exceptions within Subdivision 32-B are contained in:

    (a) section 32-20 which enables a deduction to be claimed for expenses incurred in providing entertainment where the entertainment results in a fringe benefit; and

    (b) section 32-35 which enables a deduction to be claimed for expenses incurred in providing entertainment that is reasonably incidental to attending a seminar that goes for at least 4 hours.

    In these situations members are required to determine what is 'reasonably incidental' to attendance at the seminar, and the nature of the dinner/entertainment provided.

    Tax exempt body entertainment fringe benefit


    An external third party holds an evening function on its own premises to launch/promote a new product. Employees from a government department attend as part of their employment duties. Finger food and alcohol are provided during the event. The government department does not incur any costs resulting from the employees attending the event as all invited guests receive complimentary entry.

    An external third party organiser of an event (e.g. sporting, performances) may provide complimentary tickets to a government department. The government agency then provides the tickets to their staff at no charge.

    Members discussed various scenarios that could arise from the facts outlined above.

    ATO response

    A fringe benefit may arise where a benefit is provided by a third party ie. a person other than the employer or an associate of the employer.

    In the case of a benefit provided by a third party, there is no fringe benefit unless either the employer or an associate of the employer is a party to an arrangement for the provision of the benefit. An arrangement means an agreement, understanding, promise or undertaking, whether express or implied, and whether or not enforceable, or intended to be enforceable by legal proceedings. This is intended to limit fringe benefits to benefits provided under some form of agreement between the employer and a third party.

    Reference was made to Explanatory Memorandum paragraph 2.43.

    In such situations, members should refer to the third party arranger provisions and understand the relationship between all parties, including who is the 'provider' of the benefit.

    If a fringe benefit does arise in respect of the food and drink provided, it would be a tax-exempt body entertainment fringe benefit as the employer is a tax-exempt body.

    Recreational entertainment includes amusement, sport and similar leisure time pursuits. The provision of tickets to sporting or other events by an employer to an employee is recreational entertainment. Despite the event organiser providing the tickets at no cost to the employer, a benefit is provided when the employer gifts the tickets to employees. This is because a benefit is provided by an employer to an employee and the benefit is in respect of the employment of the employee.

    Recreational entertainment will fall into one of the following categories depending upon the circumstances in which it is provided:

    • expense payment benefits
    • property benefits
    • residual benefits, or
    • tax-exempt body entertainment benefits.

    LAFHA: Reliability of employee declaration in relation to LAFHA location advice


    Section 31D of the FBTAA limits the concessions available for employees receiving LAFHA benefits to 12 months at any one location. Where an employee has already lived away from home in one location for 12 months, a separate 12 month period can only be started where the employee is living at another location.

    The definition of associate for the purposes of the FBTAA includes other Government entities. This means that the 12 month time limit at a particular location applies to all periods of employment in the Commonwealth, State or Territory Governments in accordance with section 318 of the Income Tax Assessment Act (ITAA) 1997.

    To qualify for the reduction in the taxable value of a LAFH benefit in section 31(1) of the FBTAA, among a number of other conditions, the employee must meet the requirements of section 31D of the FBTAA. Section 31D(1) requires that the employee satisfies this section if the fringe benefit relates only to all or part of the first 12 months that the duties of that employment require the employee to live away from the place in Australia where he or she usually resides when in Australia.

    This raises a challenge for government entities who are seeking to apply a reduction in the taxable value of a LAFH benefit as they need to consider whether the employee has already lived away from home at the particular location whilst employed with another government entity. The government entity is not likely to have access to Human Resource records from other related government entities to confirm any previous periods of living away from home at the particular location.

    Can employers rely on a question in the declaration from a staff member that they have not been posted to a particular location by another government entity when determining eligibility to apply a reduction in the taxable value of Living Away from Home Benefits provided?

    ATO Response

    Employers need to take a practical approach to this issue.

    Broadly, an employer is required to keep records that identify and explain all transactions and acts relevant for the purpose of ascertaining the employer’s FBT liability.

    The employer must consider whether they have made all reasonable efforts to obtain the information, and whether it is reasonable to expect the employer to have known the information. If the question is asked of the employee by the employer, and a written declaration provided regarding prior postings to a particular location, this would be adequate for the purpose of applying section 31D of the FBTAA.

    6. General business

    Topics were raised by members that will require consideration outside this forum. Those with questions were encouraged to contact us via the FBT mailbox for assistance.

    Members discussed their experience utilising the technology incorporated for the meeting and have agreed that they are supportive of using multiple platforms such as telepresense and WebEx.

    Next meeting will be hosted in Darwin. The proposed dates for this meeting are September 18 and 19, 2019.


    Organisation and name of attendees.




    Christine Havas

    Home affairs

    Alice Walker

    ACT Government

    Desley Crocker

    ACT Government

    Robert Enright

    NSW Treasury

    Henriette Prego


    Joan Cram

    NSW Treasury

    Amuthini Premadas

    NT Government

    Harold Glenwright

    NT Government

    Joanne Staples

    NT Government

    Michael Kwong

    QLD Treasury

    Giles Wilmer

    SA Government

    Justyna Carlier

    TAS Treasury

    Rachel Johnston


    Mike Hogan

    WA Treasury

    Anthony Smith

    WA Treasury

    John Watts

    WA Treasury

    Christine Crasto-Carvalho

    SSO WA

    Brad Prentice


    Jeremy Ooi


    Anthony Bach


    John Churchill


    Andrea Ross


    Roberta Odorizzi


    Nicole Richards


    Amber Ibbott


    Vivian Sewell


    Jeff Stevenson





    Peter Sibbard

    SA Government

    Tracey Scott

    QLD Treasury

    Daniel Fielding

    QLD Treasury

    Liza Gordon


    Michelle Maffia


    Anna Longley

      Last modified: 20 Jun 2019QC 59393