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  • FBT Working Group key messages 17 July 2019

    Update on action items

    Proposed changes to Chapter 9 - Fringe benefits tax - a guide for employers

    The ATO informed the members that changes to Chapter 9 of the Fringe benefits tax - a guide for employers (the Guide) regarding home office expenses were published. The ATO will issue communications regarding these changes.

    Action item

    ATO to provide link to the articles

    Due date

    When published

    Responsibility

    ATO

    Lease residuals and FBT

    The ATO is conducting internal consultation as there are income tax consequences to be taken into account as well. The ATO will keep members updated on the progress.

    Action item

    ATO will provide an update with the progress

    Due date

    Next meeting

    Responsibility

    ATO

    Road tolls

    The ATO consulted with the group and sought feedback on proposed changes on FBT and road tolls contained in Chapter 20 of the Guide and associated factsheet.

    Action item

    Members to provide final feedback and ATO to publish final changes

    Due date

    31 August 2019

    Responsibility

    ATO and members

    Tax-exempt body entertainment

    A new agenda item was tabled by a member seeking further guidance from the ATO to on how tax-exempt body entertainment fringe benefit should be calculated and valued in the context of commercial activities.

    The members proposed additional examples to be included in the Guide or in a factsheet to present scenarios where tax exempt bodies run commercial facilities (such as dining or function rooms) and organise events for members, clients and staff.

    The ATO agreed to explore improving the guidance and is working on examples to be included in our web content.

    Action item

    Members to provide any common scenarios on this issue by 31 July 2019 and ATO to circulate draft examples

    Due date

    31 August 2019

    Responsibility

    ATO and members

    ATO guidance updates

    Taxi travel

    The ATO has recently confirmed the existing view that the FBT taxi travel exemption only applies to travel undertaken in vehicles licensed to operate as a taxi by the relevant state or territory. This means that travel in a ride source vehicle is not exempted by the taxi travel exemption. Following the Federal Court decision in Uber B.V. v Commissioner of Taxation [2017] FCA 110 which considered the meaning of ‘taxi travel’ for GST purposes, the ATO issued a discussion paper (TDP 2017/2 Fringe Benefits Tax - definition of taxi) that considered the reach of the FBT exemption for taxi travel.

    After extensive consideration of feedback received, the ATO position has not changed. This is because the framing of the GST laws (that include ride source vehicles within the provisions that also apply to taxis) are materially different to the definition of taxi in the FBT laws. For the FBT taxi-travel exemption to apply, the travel must be undertaken in a ‘taxi’. ‘Taxi’ is specifically defined in the FBT laws to be ‘a motor vehicle that is licensed to operate as a taxi’.

    For GST purposes, the law refers to ‘taxi travel’, without any reference to a licensing regime. The ATO believes that this is a critical distinction and means that the approach to the GST laws does not easily apply to the FBT meaning of taxi. ATO’s recent communication as to the limits of the taxi travel exemption reflects a view that was always held, and is consistent with ATO’s publications on FBT more generally. Refer to Chapter 20 of the Guide.

    Whilst the specific taxi travel exemption does not extend to travel in ride source vehicles, other exemptions may apply. For example, if an employer pays for an employee’s travel in a ride source vehicle, and the travel is between two work locations whilst the employee is on duty, such a benefit would not be subject to FBT.

    Further, if an employer pays for an employee’s travel in a ride-source vehicle only once or twice a year on an ad hoc basis, and the value of the benefit is less than $300, then such travel may be exempt from FBT as a minor benefit.

    Draft Taxation Ruling

    In response to feedback received, the Draft Taxation Ruling TR 2017/D6 Income tax and fringe benefits tax: when are deductions allowed for employees' travel expenses? is being rewritten and its scope has been altered to better suit the needs of the taxpayers. The rewritten ruling will be reissued as a draft for public comment, but this will be preceded by some targeted consultation which is expected to occur in the next few weeks. Taxpayers can continue to rely on a range of current ATO views on these matters, including TR 2017/D6, until it is replaced.

    Car parking

    The draft ruling to rewrite Taxation Ruling TR 96/26 Fringe benefits tax: car parking fringe benefits is in its final stage of approval. The ATO intends to undertake targeted consultation, before publishing the document for broader community feedback.

    Published

    Taxation Ruling TR 2019/3 Fringe benefits tax: benefits provided to religious practitioners was published on 19 June 2019.

    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

    Jeremy Ooi, Superannuation and Employer Obligations

    ATO

    Louise Ellis, Superannuation and Employer Obligations

    ATO

    Michelle Maffia, Superannuation and Employer Obligations

    Chartered Accountants Australia and New Zealand

    Don Collins

    Chartered Accountants Australia and New Zealand

    Michael Crocker

    Chartered Accountants Australia and New Zealand

    Murray Nicholls

    Corporate Tax Association

    Fiona Ritchard

    CPA Australia

    Mark Morris

    Guest

    Mark Reynolds

    National Tax and Accountants Association

    Rodney Wilson

    Salary Packaging Industry

    Paul Mather

    Apologies

    Apologies are listed below.

    Organisation

    Members

    National Tax and Accountants Association

    Andrew Gardiner

    The Tax Institute

    Elizabeth Lucas

      Last modified: 20 Aug 2019QC 59949