Fringe Benefits Tax Stakeholder Group key messages 16 February 2022

Introduction

The Chair opened the meeting with an acknowledgement of country.

Program of work update

The status of the following program of work items were discussed:

• Minimum residual for an 8 year lease. ATO preliminary position is that a property fringe benefit may result if value is reduced to zero, in line with Taxation Determination TD 95/63. Further submissions on this topic have been invited.
• Car fringe benefits – calculation of home electricity costs attributable to the 'fuel' for electric vehicles. Options are being explored and will be discussed further at the next meeting.
• Car fringe benefits – Draft Chapter 7, Fringe benefits tax – a guide for employers. Stakeholder Group feedback has been received and is under consideration. Further updates to the group will follow.

Rapid antigen tests

The ATO website has the FBT position on rapid antigen tests for COVID-19.

The government announced on 7 February that it will ensure rapid antigen tests are tax deductible for testing taken to attend a place of work, and employers will not incur fringe benefits tax if they provide COVID-19 tests to their employers for this purpose.

The ATO has updated guidance to refer to the announcement and link to the Hon Michael Sukkar MP, Assistant Treasurers press release, Tax deductibility of COVID-¬19 test expensesExternal Link.

This measure is not yet law and the ATO will provide more detailed advice and guidance once the measure is enacted.

Keeping record, detailing, at a minimum, both costs and recipients is essential.

Salary sacrifice

It was noted that the decision in Hartley v Commissioner of Taxation [2021] AATA 2622 is consistent with the Commissioner’s view that for a salary sacrifice agreement to be effective it has to be in place prior to the salary or wages being sacrificed having accrued and that the onus of proof for proving its existence rests with the taxpayer.

Action item update