ATO Interpretative Decision

ATO ID 2004/935

Fringe Benefits Tax

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Issue

In determining whether the employer's ordinary and statutory income for the income tax year ending most recently before the start of the fringe benefits tax (FBT) year is less than $10 million, for the purposes of subparagraph 58GA(1)(d)(i) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA), is the $10 million threshold calculated on a GST inclusive basis?

Decision

Yes. The employer's ordinary and statutory income for the income tax year for the purposes of subparagraph 58GA(1)(d)(i) of the FBTAA, the $10 million threshold is calculated on a GST inclusive basis.

Facts

The employer provides 'car parking benefits' in respect of the employment of employees as defined in subsection 136(1) of the FBTAA.

The parking is not provided in a commercial car park.

The employer is neither a government body, nor a listed public company, nor a subsidiary of a listed public company.

The employer carries on an enterprise and is registered for GST.

The employer's ordinary and statutory income includes amounts of GST.

Reasons for Decision

Section 58GA of the FBTAA exempts from fringe benefits tax car parking benefits provided by small business employers. The exemption will apply to a car parking benefit provided in respect of the employment of an employee if all of the conditions of subsection 58GA(1) of the FBTAA are satisfied.

Paragraph 58GA(1)(d) of the FBTAA specifies that the employer's ordinary and statutory income for the income tax year ending most recently before the start of the FBT year must be less than $10 million; or that the employer is a small business entity for the year of income ending most recently before the start of the FBT year.

Subsection 58GA(3) of the FBTAA defines 'ordinary income', 'statutory income' and 'small business entity' to have the same meaning as in the Income Tax Assessment Act 1997 (ITAA 1997).

'Ordinary income' has the meaning given in subsection 6-5(1) of the ITAA 1997. 'Statutory income' has the meaning given in subsection 6-10(2) of the ITAA 1997. 'Small business entity' has the meaning given to it by subsection 995-1 of the ITAA 1997.

Ordinary and statutory income includes exempt income (subsection 6-1(2) of the ITAA 1997).

The GST amount payable on a taxable supply in the absence of paragraph 17-5(a) of the ITAA 1997 would be ordinary or statutory income. Paragraph 17-5(a) of the ITAA 1997 however specifically excludes the GST payable on a taxable supply from being included in the assessable income or exempt income of a taxpayer.

Subparagraph 58GA(1)(d)(i) of the FBTAA refers to the sum of the employer's ordinary and statutory income for the income year. This is not the employer's assessable income. Therefore although the GST payable on a taxable supply would not form part of the employer's assessable income it would constitute its ordinary or statutory income.

Accordingly in determining whether the sum of the employer's ordinary and statutory income for the income year is less than $10 million for the purposes of subparagraph 58GA(1)(d)(i) of the FBTAA, the $10 million threshold is calculated on a GST inclusive basis.

Year of income:  Year ended 31 March 2005

Legislative References:
Fringe Benefits Tax Assessment Act 1986
   section 58GA
   subsection 58GA(1)
   paragraph 58GA(1)(d)
   subsection 58GA(3)

Related ATO Interpretative Decisions
ATO ID 2002/793
ATO ID 2003/25
ATO ID 2004/296

Keywords
Car parking fringe benefits
Exempt benefits
Fringe benefits
Fringe benefits tax
Small business

Siebel/TDMS Reference Number:  4243990; 1-6CKNFYR

Business Line:  Private Groups and High Wealth Individuals

Date of publication:  26 November 2004
Date reviewed:  16 March 2015

ISSN: 1445-2782