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Fringe Benefits Tax Working Group key messages 3 February 2021

Summary of key topics discussed at the Fringe Benefits Tax Working Group meeting 3 February 2021.

Last updated 6 April 2021

Opening address

Chair opened the meeting and welcomed new members.

FBT and car parking

The group was informed that the three scenarios and their outcomes discussed at the November 2020 FBT working group meeting have been finalised and published:

In response to group member enquiries, ATO advised that feedback from the consultation process regarding Draft Taxation Ruling TR 2019/D5 is being considered prior to the ruling's finalisation. Transitional approaches may be considered, if required.

Cars parked at business premises

The group was informed that the content developed in relation to COVID-19 had been finalised and is now online at:

Employers guide to FBT

The group was advised that the revised chapters, chapter 7 and chapter 15, are to be sent out to group members for comment and feedback.

Journal entries

ATO confirmed that the view expressed in MT 2050 is unchanged, and that the issue for discussion is, in circumstances where there is an agreement in place prior to the end of year for an employee to repay a benefit received, can the amount of repayment be recorded by journal entry after 31 March?

It was determined that discussions regarding this issue would continue an out-of-sessions basis.

Employer contributions to employee car expense

This situation arises where an employee uses their own cars for work purposes, and the employer makes a contribution towards expenses, typically in payment of fuel expense.

The employee must take the reimbursement into account in determining the amount of deduction, pursuant to section 51AH Income Tax Assessment Act 1936, regardless of whether the cents/km or logbook methods are used. This is due to the link between the car expense and the reimbursement, found in the definition of 'car expenses' in section 28-13 Income Tax Assessment Act 1997.

The interpretation may have prospective application.

It was determined that discussions regarding this issue would continue an out-of-sessions basis.

Car leasing fringe benefits web page

Group members were informed that the web content for which they had provided feedback is now live online:

It was determined that group members could provide further comments or feedback on the new web content.

Term of a lease

A draft of Taxation Determination TD 93/142 is soon to be put out for public comment, and group members were invited to contribute to this feedback process.

Broadly, the 'term of a lease' becomes the 'total leased period', with the calculation based on the total number of years a car is leased for regardless of whether it is leased under the one lease agreement, or multiple lease agreements.

Action items

Action item

Draft chapter 7 and chapter 15 of Employers guide to FBT to be sent to working group members for comment

Due date

Upon completion of draft

Responsibility

Working group members

Action item details

Including feedback, suggestions, comments

 

Action item

Working group members to participate in out-of-sessions discussions regarding journal entries for recording employee contributions to benefits received

Due date

Next meeting

Responsibility

Working group members

Action item details

Feedback, comments, suggestions for further input

 

Action item

Working group members to participate in out-of-sessions discussions regarding employer contributions to car expenses

Due date

Next meeting

Responsibility

Working group members

Action item details

Feedback, comments, suggestions for further input

 

Action item

Working group members to provide feedback/comment on draft Tax Determination TD 93/142

Due date

Next meeting

Responsibility

Working group members

Action item details

Feedback, comments, suggestions for further input

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