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
|
Summary of key topics discussed at the Fringe Benefits Tax Working Group meeting 5 February 2020