ATO Interpretative Decision
ATO ID 2001/294
Fringe Benefits Tax
Fringe Benefits Tax : Status of A Cemetery TrustFOI status: may be released
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This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Whether an income tax exempt trust employer that operates a cemetery/crematorium under the Cemeteries Act (Vic) is a rebatable employer pursuant to the provisions of paragraph 65J(1)(j) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA).
Decision
No. The relevant employer is not a rebatable employer pursuant to the provisions of paragraph 65J(1)(j) of the FBTAA.
Facts
The employer is an income tax exempt trust that operates a cemetery/crematorium. It is constituted under the Cemeteries (Incorporation of Trust) Regulations 1995 (Vic) and is shown in the schedule accompanying the Regulations as being responsible for a number of different facilities. The trust cannot distribute any profits generated to any third party; profits are simply retained and reinvested back into the facilities necessary to provide a satisfactory level of care and understanding to the community at large. The trust provides services at no charge to those persons deemed "poor" as prescribed under the Cemeteries Act 1958 (Vic).
Reasons for Decision
The trust applied for recognition as a rebatable employer on the basis that it is a non-profit association established for community service purposes. In order to qualify as a rebatable employer, the trust must meet the additional tests contained in subsection 65J(5) of the FBTAA. Whilst the trust meets the community service requirement in paragraph 65J(1)(j), it does not meet the test in subparagraph 65J(5)(b)(ii). The Cemeteries Act 1958 (Vic) clearly stipulates that the employer must be an incorporated body whereby the company is limited by guarantee. It is also apparent that the interests and rights of the members in or in relation to the employer are beneficially owned by the State Government.
The trust fails the extended definition of a non-profit association and is not entitled to be classified as a rebatable employer due to its close links with government.
This view is consistent with Taxation Determination TD 95/56 which states that a body which is formed and controlled by government and performs functions on behalf of government is not an 'association' for the purposes of paragraph 65J(1)(j) of the FBTAA.
Date of decision: 31 May 2001
Legislative References:
Fringe Benefits Tax Assessment Act 1986
Subsection 65J(5)
Paragraph 65J(1)(j)
Subparagraph 65J(5)(1)(j)
Subparagraph 65J(5)(b)(ii)
the Act Cemeteries (Incorporation of Trust) Regulations 1995 (Vic)
the regs
Related Public Rulings (including Determinations)
TD 95/56
Keywords
FBT rebatable employers
Association
Non- profit Association
Income Tax exempt trust
Cemetery Trust
ISSN: 1445-2782
| Date: | Version: | |
| You are here | 31 May 2001 | Original statement |
| 17 June 2005 | Archived |