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  • Fringe Benefits Tax Working Group key messages 16 October 2019

    Update on action items

    Action items completed

    • The ATO provided links to home office communications.
    • The ATO published additional guidance regarding fringe benefits tax (FBT) and road tolls in the FBT a guide for employers and web content on 30 August 2019.
    • Examples on tax-exempt body entertainment were circulated with the members.
    • The members were provided with Single Touch Payroll (STP) links and more information on visibility of roles.

    Open action item – lease residuals and FBT

    The original idea of updating Taxation Ruling IT 28 Leasing arrangements of plant and machinery and ATO Interpretative Decision ATO ID 2002/1004 Income tax: car lease residual values was considered by the ATO and it was decided that it could not be progressed. The ATO is consulting internally on the possible update of Taxation Determination TD 93/142 Income tax: in calculating the residual value of a leased item, may a lower residual value than those outlined in IT 28 be adopted in light of the more generous depreciation rates?

    Action item

    ATO will provide an update with the progress of the review.

    Due date

    Next meeting

    Responsibility

    ATO

    Discussion on examples tax exempt body entertainment fringe benefits

    The members identified three items that required consideration:

    • the correct treatment of the entertainment expenses in an all-inclusive package and whether the cost is to be apportioned
    • when the provision of alcohol during business travel is entertainment
    • whether the mere provision of alcohol leads to entertainment being provided.

    Action item

    Members to provide additional feedback by 15 November 2019 and ATO to progress review after feedback received.

    Due date

    Next meeting

    Responsibility

    ATO/Members

    Idea relating to additional payment for balancing of FBT liability

    A member raised the challenges faced by tax agents in trying to meet the payment due date of 28 May. The identification of correct balancing payment requires a lot of work. The suggestion was to include an additional instalment to be determined by reference to other FBT instalments.

    Action item

    ATO to add to proposal for legislative changes.

    Due date

    Next meeting

    Responsibility

    ATO

    Clarity regarding ATO view on associate leases and employee contributions

    A member asked to clarify whether the costs paid by the associate under an associate lease arrangement can be regarded as employee contributions in circumstances where the associate is also the recipient of the benefit. The member referred to a private ruling that looked at this issue and it was concluded that the maintenance costs paid by the lessor are regarded as recipient's payments.

    Action item

    Members to provide additional comments by 15 November 2019. ATO to determine if additional guidance is required.

    Due date

    Next meeting

    Responsibility

    ATO

    Record keeping requirements for certain public transport travel – proposed simplification

    The discussion was deferred to the next meeting as the member presenting the topic was not in attendance.

    Action item

    Item carried over to next meeting.

    Due date

    Next meeting

    Responsibility

    ATO

    Public Advice and Guidance (PAG) update

    • Draft Taxation Rulings – an updated ruling on fringe benefits tax and car parking fringe benefits to replace Taxation Ruling TR 96/26 Fringe benefits tax: car parking fringe benefits has been part of a targeted consultation. As part of the same process Chapter 16 - Car parking fringe benefits of Fringe benefits tax - a guide for employers has been substantially rewritten. Both items will soon be issued in draft form for public comment.
    • Draft Taxation Ruling TR 2017/D6 Income tax and fringe benefits tax: when are deductions allowed to pay for employees' travel expenses? has been rewritten to take into account the comments received during the consultation. The ruling will be issued firstly for targeted consultation and then realised as a draft for broader public comment.
    • The ATO will seek input from the members on the rewrite version of Chapter 7 - Car fringe benefits of Fringe benefits tax - a guide for employers. This chapter was updated to merge some views contained in some ATO Interpretative Decisions (IDs).

    Attendees

    Attendees are listed below.

    Organisation

    Members

    ATO

    Andrea Ross (Chair), Superannuation and Employer Obligations

    ATO

    Roberta Odorizzi (Secretariat), Superannuation and Employer Obligations

    ATO

    Amber Ibbott, Superannuation and Employer Obligations

    ATO

    Anthony Bach, Tax Counsel Network

    ATO

    Simon Weiss, Tax Counsel Network

    Corporate Tax Association

    Fiona Ritchard

    Chartered Accountants Australia and New Zealand

    Don Collins

    Chartered Accountants Australia and New Zealand

    Murray Nicholls

    CPA Australia

    Mark Morris

    National Tax and Accountants Association

    Andrew Gardiner

    Salary Packaging Industry

    Paul Mather

    The Tax Institute

    Elizabeth Lucas

    Apologies

    Apologies are listed below.

    Organisation

    Members

    Chartered Accountants Australia and New Zealand

    Michael Crocker

      Last modified: 19 Nov 2019QC 60610