TR 2001/2A3 - Addendum
Fringe benefits tax: the operation of the new fringe benefits tax gross-up formula to apply from 1 April 2000
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FOI status:may be released
After the paragraph insert:
5A. The numbers and examples which use the FBT rate of 48.5% throughout this Ruling are relevant for the FBT years from 1 April 2000 to 31 March 2006. The changes with effect from 1 April 2006, are as follows:
- FBT rate changed from 48.5% to 46.5%;
- higher gross-up rate changes from 2.1292 to 2.0647; and
- lower gross-up rate changes from 1.9417 to 1.8692.
5B. The examples that appear in this Ruling for both type 1 and type 2 benefits have been calculated on the former gross-up rates as listed above. This will necessitate substituting those rates with the new gross-up rates when establishing the fringe benefits tax payable from 1 April 2006.
From 1 April 2006, the FBT rate will be 46.5%.
From 1 April 2006 when the FBT rate is 46.5%, this will result in a type 1 gross-up rate of 2.0647.
From 1 April 2006 when the FBT rate is 46.5%, this will result in a type 2 gross-up rate of 1.8692.
The higher gross-up rate is therefore 2.1292.
Where the FBT rate is 46.5% and GST rate is 10% the formula becomes:
(0.465 + 0.1)/((1 - 0.465) x (1 + 0.1) x (0.465))
( Note : All examples below for both type 1 and type 2 benefits have been calculated on the former gross-up rates, using an FBT rate of 48.5%.)
The lower gross-up rate is therefore 1.9417.
Where the FBT rate is 46.5% the formula becomes:
Commissioner of Taxation
12 July 2006