Disclaimer This edited version will be removed from the Database after 30 September 2025. If you believe the issues detailed in this edited version warrant retention in an alternative form, email publicguidance@ato.gov.au This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of administratively binding advice
Authorisation Number: 1011544773949
This edited version of your advice will be published in the public Register of private binding rulings after 28 days from the issue date of the advice. The attached Tax Office advice fact sheet has more information
Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns.
Subject: Section 135X Agreement
Will the Commissioner agrees to enter into an agreement with the State Government under section 135X of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)?
The Commissioner agrees to enter into an agreement with the State Government under section 135X of the FBTAA.
This ruling applies for the following period:
Year ending 31 March 2011
The scheme commences on:
1 July 2009
Year(s) of income to which this advice applies:
Year ended 31 March 2010 and subsequent years in which the abolished nominated State or Territory body would have been able to use the relevant document, treat the relevant benefit as an exempt benefit, treat the relevant benefit as an amortised fringe benefit, or treat the relevant year as a base year.
Relevant legislative provisions:
Fringe Benefits Tax Assessment Act 1986 Section 135X.
Relevant facts:
A State or Territory seeks written agreement with the Commissioner that following a State or Territory body ceasing to exist:
1. the year of tax currently being treated by the abolished nominated State or Territory body as a log book year for the purposes of using Section 10 of the FBTAA in calculating the taxable value of car fringe benefits using the cost basis continues to be the log book year for the new employer following the transfer of employees to another State or Territory body
2. a year of tax being a base year of tax for the purposes of Section 26 of the FBTAA for the abolished nominated State or Territory body continues to be treated as a base year following the transfer of employees
3. a register kept in relation to the value of car parking fringe benefits by the abolished nominated State or Territory body continues to be a valid register for the purpose of using the 12 week record keeping method in Subdivision D of Division 10A following the transfer of employees
4. a benefit currently being treated as an exempt benefit as a result of the relocation of an employee of the abolished nominated State or Territory body continues to be an exempt benefit following the transfer of employees under Sections 58B, 58C or 58D of the FBTAA
5. a benefit currently being treated as an exempt benefit by the abolished nominated State or Territory body in relation to trainees engaged under the Australian Traineeship system continues to be an exempt benefit following the transfer of employees under Section 58S of the FBTAA, and
6. a fringe benefit currently being treated by the abolished nominated State or Territory body as an amortised fringe benefit relating to remote area home schemes continues to be an amortised fringe benefit following the transfer of employees under Section 65 of the FBTAA.
A nominated State or Territory body has ceased to exist as a result of a proclamation which resulted in the employees of the State or Territory body being transferred to other nominated State or Territory bodies.
As this change in employer will affect the calculation of the taxable value of certain fringe benefits the State or Territory is seeking to enter into a written agreement under section 135X of the FBTAA.
Reasons for decision:
The Commissioner agrees to enter into an agreement with the State or Territory under section 135X of the FBTAA to enable the nominated State or Territory bodies to treat:
1) a year of tax currently being treated as a log book year by the abolished nominated State or Territory body as a log book year for the purposes of calculating the taxable value of a car fringe benefit using the cost basis
2) a year of tax currently being treated as a base year of tax by the abolished nominated State or Territory body continues to be treated as a base year
3) a register kept in relation to the value of car parking fringe benefits by the abolished nominated State or Territory body continues to be a valid register for the purpose of using the 12 week record keeping
4) a benefit currently being treated as an exempt benefit as a result of the relocation of an employee of the abolished nominated State or Territory body continues to be an exempt benefit
5) a benefit currently being treated as an exempt benefit by the abolished nominated State or Territory body in relation to trainees engaged under the Australian Traineeship system continues to be an exempt benefit, and
6) a fringe benefit currently being treated by the abolished nominated State or Territory body as an amortised fringe benefit relating to remote area home schemes continues to be an amortised fringe benefit.
Section 135X of the FBTAA enables the Commissioner to enter into a written agreement with a State or Territory regarding the application of certain provisions in certain circumstances.
The Explanatory Memorandum to Taxation Laws Amendment Bill (No. 2) 2001 which inserted section 135X into the FBTAA stated the section had 2 objects.
· The first is to ensure the calculation of certain fringe benefits is not affected as a result of a break in the continuity of certain record keeping requirements solely because of a 'transitional event'.
· The second is to preserve the character of certain benefits where the character would otherwise be lost solely because of a 'transitional event'.
Subsection 135X(2) of the FBTAA states a transitional event occurs if:
· a State or Territory makes a nomination under section 135S of the FBTAA
· a State or Territory varies a nomination under section 135S of the FBTAA
· a State or Territory revokes a nomination under section 135S of the FBTAA, or
· a nominated State or Territory body ceases to exist.
As a transitional event has occurred, the nominated State or Territory Bodies may:
· treat a year which would have been a log book year of tax for the abolished nominated State or Territory body as a log book year for the purpose of using section 10 of the FBTAA to calculate the taxable value of a car fringe benefit
· treat a register that would have been a valid register for the abolished nominated State or Territory body as a valid register for the purpose of using the 12 week record keeping method to calculate the value of car parking fringe benefits
· treat a benefit relating to the relocation of an employee that would have been an exempt benefit for the abolished nominated State or Territory body under sections 58B, 58C or 58D of the FBTAA as an exempt benefit
· treat a benefit relating to trainees engaged under the Australian Traineeship System that would have been an exempt benefit for the abolished nominated State or Territory body under section 58S of the FBTAA as an exempt benefit
· use the end date which would have been used by the abolished nominated State or Territory body for the purpose of calculating the amortisation of the taxable value of fringe benefits relating to a remote area home ownership scheme under section 65CA of the FBTAA
· use a recurring fringe benefit declaration which would have applied if the employer had not changed from the abolished nominated State or Territory body to the nominated State or Territory bodies, and
· treat a year of tax that was a base year of tax for the abolished nominated State or Territory body as a base year for the purposes of section 26 of the FBTAA.
Copyright notice
© Australian Taxation Office for the Commonwealth of Australia
You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).