FRINGE BENEFITS TAX ASSESSMENT ACT 1986

PART IIIA - REBATES OF TAX  

SECTION 65J   REBATE FOR CERTAIN NOT-FOR-PROFIT EMPLOYERS ETC.  

Rebatable employer

65J(1)  


An employer is a rebatable employer for a year of tax if the employer:


(a) is exempt from income tax at any time during the year of tax under any of the provisions set out in the following table; and


(b) satisfies the special conditions (if any) set out in the following table.


Rebatable employer
Item Column 1 Column 2
Type of employer Special conditions
1 a registered charity covered by item 1.1 of the table in section 50-5 of the Income Tax Assessment Act 1997 The registered charity is not a rebatable employer for the year of tax if it:
(a) is a registered public benevolent institution; or
(b) is a registered health promotion charity; or
(c) is an institution of the Commonwealth, a State or a Territory; or
(d) has not been endorsed under subsection 123E(1) ; or
(e) is not an institution.
2 a scientific institution covered by item 1.3 of the table in section 50-5 of the Income Tax Assessment Act 1997 The institution is not an institution of the Commonwealth, a State or a Territory unless it:
(a) is an institution established by a law of the Commonwealth, a State or a Territory; and
(b) is not conducted by or on behalf of the Commonwealth, a State or a Territory; and
(c) is engaged solely in research into the causes, prevention or cure of diseases in humans.
3 a public educational institution covered by item 1.4 of the table in section 50-5 of the Income Tax Assessment Act 1997 The institution is not an institution established by a law of the Commonwealth, a State or a Territory unless it:
(a) is not conducted by or on behalf of the Commonwealth, a State or a Territory; and
(b) is a preschool or school (other than a tertiary institution).
4 a society, association or club: See subsection (5) of this section.
(a) established for the encouragement of science; and
(b) covered by item 1.7 of the table in section 50-5 of the Income Tax Assessment Act 1997
5 a society, association or club: See subsection (5) of this section.
(a) established for community service purposes (except political or lobbying purposes); and
(b) covered by item 2.1 of the table in section 50-10 of the Income Tax Assessment Act 1997
6 an employer association or an employee association covered by item 3.1 of the table in section 50-15 of the Income Tax Assessment Act 1997 None.
7 a trade union covered by item 3.2 of the table in section 50-15 of the Income Tax Assessment Act 1997 None.
8 a society or association: See subsection (5) of this section.
(a) established for the purpose of promoting the development of:
(i) aviation; or
(ii) tourism; and
(b) covered by item 8.1 of the table in section 50-40 of the Income Tax Assessment Act 1997
9 a society or association: See subsection (5) of this section.
(a) established for the purpose of promoting the development of any of the following Australian resources:
(i) agricultural resources;
(ii) horticultural resources;
(iii) industrial resources;
(iv) manufacturing resources;
(v) pastoral resources;
(vi) viticultural resources;
(vii) aquacultural resources;
(viii) fishing resources; and
(b) covered by item 8.2 of the table in section 50-40 of the Income Tax Assessment Act 1997
10 a society or association: See subsection (5) of this section.
(a) established for the purpose of promoting the development of Australian information and communications technology resources; and
(b) covered by item 8.3 of the table in section 50-40 of the Income Tax Assessment Act 1997
11 a society, association or club: See subsection (5) of this section.
(a) established for the encouragement of any of the following:
(i) animal racing;
(ii) art;
(iii) a game or sport;
(iv) literature;
(v) music; and
(b) covered by item 9.1 of the table in section 50-45 of the Income Tax Assessment Act 1997
12 a society, association or club: See subsection (5) of this section.
(a) established for musical purposes; and
(b) covered by item 9.2 of the table in section 50-45 of the Income Tax Assessment Act 1997

Note:

Subsection (3) affects the kind of employers that may be considered to be an institution of government.

65J(1A)  
(Repealed by No 124 of 2013)

65J(2)  
(Repealed by No 124 of 2013)

65J(2A)   Rebate for year of tax 2000-2001 and later years.  

If an employer is a rebatable employer for the year of tax beginning on 1 April 2000 or a later year of tax, the employer is entitled to a rebate of tax in the employer ' s assessment for the year of tax concerned equal to the amount worked out using the formula:

formula

where:

gross tax
means the amount of tax payable on the fringe benefits taxable amount of the employer of the year of tax (assuming that this section had not been enacted).

rebatable days in year
means the number of whole days in the year of tax when the employer engaged in activities as an employer covered by any of the table items in subsection (1).

total days in year
means the number of days in the year of tax excluding the days on which the employer did not engage in activities as an employer.

65J(2B)   How to work out aggregate non-rebatable amount.  

An employer ' s aggregate non-rebatable amount for the year of tax is the amount worked out as follows. Method statement


Step 1.

For each employee, add:

(a) the individual grossed-up type 1 non-rebatable amount (see subsection (2C)) in relation to the employer for the year of tax; and

(b) the individual grossed-up type 2 non-rebatable amount (see subsection (2D)) in relation to the employer for the year of tax.

The result is the individual grossed-up non-rebatable amount for the employee.


Step 2.

Reduce the individual grossed-up non-rebatable amount for each employee of the employer by $30,000, but not below zero.


Step 2A.

If the amount calculated under step 2 in relation to an employee is positive, reduce that amount (but not below zero) by the lesser of:

(a) $5,000; and

(b) so much of the employee ' s individual grossed-up non-rebatable amount as relates to benefits covered by subsection (2J) (about salary packaged meal entertainment and entertainment facility leasing benefits).


Step 3.

Add up the results of step 2A for all the employer ' s employees.


Step 4.

Multiply the sum from step 3 by the FBT rate. The result is the employer ' s aggregate non-rebatable amount for the year of tax.

65J(2C)   Individual grossed-up type 1 non-rebatable amount.  

For the purposes of step 1 in the method statement in subsection (2B), the individual grossed-up type 1 non-rebatable amount of an employee in relation to the employer for the year of tax is:


Type 1
individual base
non-rebatable amount
×                                         FBT rate + GST rate                                        
(1 - FBT rate) × (1 + GST rate) × FBT rate

65J(2D)   Individual grossed-up type 2 non-rebatable amount.  

For the purposes of step 1 in the method statement in subsection (2B), the individual grossed-up type 2 non-rebatable amount of an employee in relation to the employer for the year of tax is:


Type 2
individual base
non-rebatable amount
×       1      
  (1 - FBT rate)

65J(2E)   Working out the type 1 individual base non-rebatable amount.  

An employee ' s type 1 individual base non-rebatable amount in relation to the employer for the year of tax is worked out by adding the amounts worked out under step 3 of the method statement in subsection (2G) and step 3 of the method statement in subsection (2H).

65J(2F)   Working out the type 2 individual base non-rebatable amount.  

An employee ' s type 2 individual base non-rebatable amount in relation to the employer for the year of tax is worked out by adding the amounts worked out under step 4 of the method statement in subsection (2G) and step 4 of the method statement in subsection (2H).

65J(2G)   Working out the subsection (2G) amounts.  

An employee ' s subsection (2G) amounts for the year of tax are worked out as follows. Method statement


Step 1.

Work out under section 5E for each of the employer ' s employees the employee ' s individual fringe benefits amount (if any) for the year of tax in respect of the employee ' s employment by the employer.


Step 2.

Identify the benefits taken into account in step 1 that are GST-creditable benefits (see section 149A ).


Step 3.

So much of the amount worked out under step 1 that relates to the benefits identified under step 2 is the step 3 of subsection (2G) amount for the individual.


Step 4.

The remainder of the amount is the step 4 of subsection (2G) amount for the individual.

65J(2H)   Working out the subsection (2H) amounts.  

An employee ' s subsection (2H) amounts for the year of tax are worked out as follows. Method statement


Step 1.

Work out for each employee his or her share (if any) of the taxable values of the excluded fringe benefits for the year of tax in respect of the employee ' s employment by the employer, but disregarding benefits:

(a) that constitute the provision of meal entertainment as defined in section 37AD (whether or not the employer made an election under section 37AA ); or

(b) that are car parking fringe benefits; or

(c) whose taxable values are wholly or partly attributable to entertainment facility leasing expenses.


Step 2.

Identify the benefits taken into account in step 1 that are GST-creditable benefits (see section 149A ).


Step 3.

So much of the amount worked out under step 1 that relates to the benefits identified under step 2 is the step 3 of subsection (2H) amount for the individual.


Step 4.

The remainder of the amount is the step 4 of subsection (2H) amount for the individual.

Salary packaged meal entertainment and entertainment facility leasing benefits

65J(2J)  


This subsection covers a benefit that is provided under a salary packaging arrangement if:


(a) the benefit is constituted by the provision of meal entertainment (as defined in section 37AD , whether or not the employer has elected that Division 9A of Part III apply to the employer); or


(b) the benefit is wholly or partly attributable to entertainment facility leasing expenses.

65J(3)  
For the purposes of this section, an institution established by a law of the Commonwealth, a State or a Territory is taken to be an institution of the Commonwealth, the State or the Territory, as the case requires.

65J(4)  
(Repealed by No 52 of 2000)

65J(5)  


A society, association or club is not covered by table item 4, 5, 8, 9, 10, 11 or 12 in subsection (1) for a year of tax if it is:


(a) an incorporated company where all the stock or shares in the capital of the company is or are beneficially owned by:


(i) the Commonwealth, a State or a Territory; or

(ii) an authority or institution of the Commonwealth, a State or a Territory; or


(b) an incorporated company where the company is limited by guarantee and the interests and rights of the members in or in relation to the company are beneficially owned by:


(i) the Commonwealth, a State or a Territory; or

(ii) an authority or institution of the Commonwealth, a State or a Territory.

65J(6)   Definitions.  

In this section:

FBT rate
means the rate of fringe benefits tax for the year of tax.

GST rate
means the rate of goods and services tax payable under the A New Tax System (Goods and Services Tax) Act 1999 for the year of tax.




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