Division 2 - Conditions  


An FBT year is a base year of an employer if:

(a) the employer carries on business operations throughout the FBT year; and

(b) the employer lodges an FBT return for the FBT year within the time allowed for doing so under section 68; and

(c) as at the declaration date for the FBT year, the employer has kept and retained all the records that are (ignoring section 135E) required to be kept and retained under subsection 132(1) in relation to the employer's liability under this Act for the FBT year; and

(d) the employer's aggregate fringe benefits amount for the FBT year does not exceed the exemption threshold (see subsections (2) and (3)) for the year; and

(e) section 135G does not apply to the employer for the FBT year (that section allows employers to work out their liability to pay tax using their aggregate fringe benefits amount from a previous base year, instead of the current FBT year).

135C(2)   Exemption threshold for 1996-97 FBT year.  

The exemption threshold for the FBT year beginning on 1 April 1996 is $5,000.

135C(3)   Exemption threshold for later FBT years.  

The exemption threshold for a later FBT year is the amount worked out using the formula:

Exemption threshold × Indexation factor


exemption threshold
is the exemption threshold for the previous FBT year.

indexation factor
is the number worked out, to 3 decimal places (rounding up if the fourth decimal place is 5 or more), under subsection (4) for the later FBT year.

135C(4)   Indexation factor.  

The indexation factor for an FBT year is the greater of:

(a) 1; and

(b) the number worked out using the formula:

Sum of index numbers for quarters in most recent December year
Sum of index numbers for quarters in earlier December year

In subsection (4):

earlier December year
means the period of 12 months immediately before the most recent December year.

index number,
for a quarter, means the All Groups Consumer Price Index number for the quarter (being the weighted average of the 8 capital cities) first published by the Australian Statistician for the quarter.

most recent December year
means the period of 12 months ending on 31 December immediately before the FBT year for which the threshold is being worked out.

135C(6)   Disregard new publications.  

If the Australian Statistician publishes an index number for a quarter in substitution for an index number previously published for that quarter, disregard the later publication.

Changed index reference period


However, if the Australian Statistician changes the index reference period for the Consumer Price Index, take into account only the index numbers published in terms of the new index reference period.

135C(8)   Rounding down to whole dollar amount.  

Round the subsection (3) result down to the nearest whole dollar (if the result is not already a number of whole dollars).

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