• Declarations and other documentation

    The taxable value of some benefits can be reduced if entities hold a declaration that complies with ATO requirements.

    Set out below are three commonly used pro forma declarations that incorporate RFBA notifications and certification processes to make them consistent with Australian Government practices. These declarations substantiate the extent to which the employee would have been able to claim an income tax deduction in relation to the benefit.

    The otherwise deductible declaration, as shown at Figure 1 below is the most common form of declaration used to substantiate the amount that is otherwise deductible. There are a number of situations where this declaration is not required, including where:

    • the benefit is incurred or used exclusively in the course of performing employment related duties
    • the provision of the fringe benefit is covered by a recurring fringe benefit declaration (as shown at Figure 2 below)
    • the employer has completed a no private use declaration (as shown at Figure 3 below)
    • there is a requirement to keep a travel diary
    • the requirement to keep a travel diary is waived because the employee is a member of an international aircrew.

    The second declaration at Figure 2 below is a recurring fringe benefit declaration. It is completed by the employee but is not required on an annual basis. It can apply to an expense payment, property or residual fringe benefit if:

    • the fringe benefit is provided no later than five years after the day the declaration was made
    • the deductible proportion of the benefit is not significantly less than the deductible proportion of the benefit for which the declaration was first provided (a difference of more than 10 percentage points is regarded as being significant)
    • is identical to the fringe benefit for which the declaration was first made.

    The third declaration at Figure 3 below is a no private use declaration that applies to certain expense payment fringe benefits and residual fringe benefits. This declaration may be used where an entity reimburses only employment-related expenses, or enforces a policy that benefits be used only for employment-related purposes. Unlike the other two declarations this declaration is completed by the employer.

    Figure 1: otherwise deductible declaration

    Otherwise deductible declaration

    I, [full name and employee AGS/ID number] declare that [show the nature of the expense, property benefit or residual fringe benefit] was provided to me by or on behalf of my employer during the period from [dd/mm/yyyy] to [dd/mm/yyyy] and I incurred the expenses/used the property for the following purpose(s):

    [Please give sufficient information to demonstrate the extent to which you used the item for the purpose of earning your assessable income.]

    I also declare that, had I purchased the item myself, I would have been entitled to an income tax deduction for [00]% of the value of the benefit.

    Signed:               Date:

    Note: Benefits may result in a reportable fringe benefit amount being reported on your payment summary. For details on reportable fringe benefit amounts, refer to [FBT manual/Reportable fringe benefit amount declaration].

    Please return this form to [FBT contact]

    Figure 2: recurring fringe benefit declaration

    Recurring fringe benefit declaration

    I, [full name and employee AGS/ID number] declare that [show the nature of the expense, property benefit or residual fringe benefit] was provided to me by or on behalf of my employer during the period from [dd/mm/yyyy] to [dd/mm/yyyy] and I incurred the expenses/used the property for the following purpose(s):

    [Please give sufficient information to demonstrate the extent to which you used the item for the purpose of earning your assessable income.]

    I also declare that, had I purchased the item myself, I would have been entitled to an income tax deduction for [00]% of the value of the benefit.

    I understand that this declaration is to apply to the above stated benefit and to any identical benefit for a period of up to five years from the date of this declaration or until the stated percentage decreases by more than 10 percentage points. This declaration will also be revoked if another recurring fringe benefit declaration is provided in respect of a subsequent identical benefit.

    Signed:               Date:

    Note: Expense reimbursements may result in a reportable fringe benefit amount being reported on your payment summary. For details on reportable fringe benefit amounts refer to [FBT manual/Reportable fringe benefit amount notification].

    Figure 3: no private use declaration

    No private use declaration

    I, [name of person authorised to make declaration] on behalf of [entity name] declare that the benefits described below and provided during the FBT year 1 April [yyyy] to 31 March [yyyy] are benefits that, under the otherwise deductible rule would have a taxable value of nil because they are not used for any private purpose.

    [Show sufficient detail to enable identification of the benefit, for example, name of employee(s) and type of benefit.]

    Signed:               Date:

    Other declarations may be required to enable a reduction in the taxable value of other fringe benefits. Examples include reimbursement for an employee who uses their car for:

    • business purposes
    • overseas employment holiday transport
    • remote area holiday transport
    • employee interviews
    • employee medical tests.

    Proformas for these and other declarations can be found at www.ato.gov.au/fbt

      Last modified: 17 Jul 2012QC 21998