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  • Fringe Benefits Tax Working Group key messages 5 February 2020

    The chair welcomed the Fringe Benefits Tax Working Group and reviewed action items.

    Update on action items

    Review of Taxation Determination TD 93/142

    The ATO confirmed that to continue the possible review of TD 93/142 additional responses were required to confirm the details of the contractual arrangements.

    Action item

    Members to provide additional information for the review

    Due date

    Prior to next meeting

    Responsibility

    Members

    Examples on tax-exempt body entertainment

    Examples on tax-exempt body entertainment were re-worked following members' feedback from the last working group session. We are receiving final internal review, and will be circulated to the members before publication.

    Action item

    ATO to share examples on tax exempt body entertainment fringe benefits before publication

    Due date

    When internal review is completed

    Responsibility

    ATO

    Associate leases and employee contributions

    The ATO confirmed feedback was received from the members and ATO will report back at the next meeting.

    Action item

    ATO to provide view on associate leases and employee contributions at the next meeting

    Due date

    Next meeting

    Responsibility

    ATO

    Share rewritten Chapter 7 Fringe Benefits Tax Guide

    The ATO is continuing work on the review of Chapter 7 - Car fringe benefits of Fringe benefits tax - a guide for employers .The ATO will share the Chapter with the members before publication.

    Additional payment for balancing FBT liability

    The ATO shared the suggestion with the relevant area for consideration for any legislative reform.

    Proposal to include additional paragraph in Taxation Ruling TR 2011/3

    Members expressed general concerns regarding large upfront payments being made by employees to reduce the cost of a car when entering certain salary packaging arrangements, with the aim of reducing Fringe benefit tax (FBT) liability for the employers.

    Members asked for clearer guidance to ensure clients understand the operation of the law in these circumstances.

    Action item

    ATO to publish a warning against entering into these arrangements. Provide draft to the group for feedback prior to publication.

    ATO to consider appropriate review of TR 2011/3 or alternative form of binding guidance.

    Due date

    To provide update at next meeting

    Responsibility

    ATO

    50/50 valuation method for the entertainment industry

    One of the members suggested the development of a practical compliance guideline to assist employers in the entertainment industry with the record keeping requirements relating to meal entertainment.

    Businesses operating a bar or restaurant are required to include all the cost of goods sold (COGS) if they were to use the 50/50 valuation method. The member asked whether it would be possible to have an approach were COGS could be excluded without the need for the employer to adopt the actual valuation method.

    Action item

    Members to provide additional ideas regarding 50/50 meal entertainment valuation method for employers in the entertainment industry.

    Due date

    Next meeting

    Responsibility

    Members

    Extending the due date for payment of an employer’s FBT liability

    Two members asked whether the ability to provide an extension for payment of an FBT liability is provided in section 255–10 of Schedule 1 to the Taxation Administration Act 1953 (TAA). This section allows taxpayers using the services of a tax agent to obtain an extension until 28 May to pay the balance of the FBT liability.

    Action item

    ATO to consider whether s255-10 should be used to allow a deferral of the payment date from 28 May to 25 June

    Due date

    Next meeting

    Responsibility

    ATO

    Policy Advice and Guidance update

    The draft car parking ruling - TR 2019/D5 was published on 13 November 2019. A large number of submissions were received and were currently being worked through.

    TR 2019/D7: Income tax and fringe benefits tax: when are deductions allowed for employees’ travel expenses? This new draft ruling is relevant for FBT for the purpose of the application of the otherwise deductible rule. The draft partially replaces draft Taxation Ruling TR 2017/D6 Income tax and fringe benefits tax: when are deductions allowed for employees' travel expenses? Separate products are being developed to update our view regarding the additional topics currently included in TR 2017/D6 (meal, accommodation and other incidentals).

    Attendees

    Attendees are listed below.

    Organisation

    Members

    ATO

    Anthony Bach, Tax Counsel Network

    ATO

    Andrea Ross (Chair), Superannuation and Employer Obligations

    ATO

    Ben Murphy, Superannuation and Employer Obligations

    ATO

    Roberta Odorizzi, Small Business

    ATO

    Sean Bielanowski, Public Groups International

    ATO

    Simon Weiss, Tax Counsel Network

    Chartered Accountants Australia and New Zealand

    Don Collins

    Chartered Accountants Australia and New Zealand

    Murray Nicholls

    Corporate Tax Association

    Fiona Ritchard

    CPA Australia

    Mark Morris

    EY

    Amanda Spinks

    National Tax and Accountants Association

    Andrew Gardiner

    Salary Packaging Industry

    Paul Mather

    The Tax Institute

    Elizabeth Lucas

    Apologies

    Apologies are listed below.

    Organisation

    Member

    Chartered Accountants Australia and New Zealand

    Michael Croker

      Last modified: 19 Mar 2020QC 61850