Edited version of private ruling

Authorisation Number: 1011711577604

This edited version of your ruling will be published in the public Register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings 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.

Ruling

Subject: Exempt benefits - religious practitioner

Question 1

Are benefits provided to your trainee employee(s) exempt under section 57 of the Fringe Benefits Tax Assessment Act 1986?

Answer: Yes

This ruling applies for the following periods:

1 January 2011 to 31 December 2011

1 January 2012 to 31 December 2012

1 January 2013 to 31 December 2013

The scheme commences on

1 January 2011

Relevant facts and circumstances

You are a religious institution. You are proposing to provide benefits to your employee(s) under the cadetship training program to become religious practitioner(s). The cadetship training program is organised by an authorised organisation which provides the job description, sets out the conditions for work and the training curriculum for the religious practitioner(s).

Your employee(s) will be apprenticed on a full time basis. There will be no benefits provided to them which are not directly related to their duties, activities under/or apprenticing in the practice, study, teaching or propagation of religious beliefs.

In general, your employee will be:

· a member of a religious institution

· recognised by ordination of commissioning

· recognised officially as having a authority in matters of doctrine and religious practice

· distinct from that of ordinary adherence of the religion

· has acknowledged leadership in the special affairs of the religious institution

· authorised to discharge the duties of a Minister or spiritual leader, including the conduct of religious worship and other religious ceremonies.

Reasons for decision

Summary

Your employee(s) is considered as religious practitioner(s) for the purposes of section 57 of the Fringe Benefits Tax Assessment Act 1986 (FBTAA).

Detailed reasoning

For the purposes of claiming the exemption under section 57 of the FBTAA, the benefits provided to employees must meet the following criteria:

a) the employer of an employee is a religious institution;

b) the employee is a religious practitioner;

c) a benefit is provided to, or to a spouse or a child of, the employee; and

d) the benefit is not provided principally in respect of duties of the employee other than:

i. any pastoral duties; or

ii. any other duties or activities that are directly related to the practice, study, teaching or propagation of religious beliefs.

A The employer of an employee is a religious institution

You are a religious institution for the purposes of section 57 of the FBTAA. Therefore, this condition is met.

B The employee is a religious practitioner

Religious practitioner is defined in section 136(1) of the FBTAA to having the 'meaning given by subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997).

A 'religious practitioner' is defined in subsection 995-1(1) of the ITAA 1997 to mean:

a) a minister of religion;

b) a student at an institution who is undertaking a course of instruction in the duties of a minister of religion;

c) a full-time member of a religious order; or

d) a student at a college conducted solely for training persons to become members of religious orders.

Paragraph 13 of TR 92/17 states:

In determining whether a person is a minister of religion, many, if not all, of the following characteristics should be present:

a) person is a member of a religious institution;

b) person is recognised officially by ordination or other admission or commissioning, or, where the particular religion does not require a minister to be formally ordained, the person is authorised to carry out the duties of a minister based on a specified level of theological or other relevant training or experience;

c) person is recognised officially as having authority in matters of doctrine or religious practice;

d) person's position is distinct from that of the ordinary adherents of the religion;

e) person has acknowledged leadership in the spiritual affairs of the religious institution;

f) person is authorised to discharge the duties of a minister or spiritual leader, including the conduct of religious worship and other religious ceremonies.

Taking each of the above criteria in turn, you satisfy each of them as follows:

Criterion (a) - Is your employee a member of a religious institution?

Your employee(s) is required to be a member or adherent to an existing recognised religious institution.

Criterion 'a' is satisfied.

Criterion (b) - Is your employee recognised officially by ordination or other admission or commissioning, or, where the particular religion does not require a minister to be formally ordained, the person is authorised to carry out the duties of a minister based on a specified level of theological or other relevant training or experience?

Your employee(s) is being trained and is recognised by ordination of commissioning.

Criterion 'b' is satisfied.

Criterion (c) - Is your employee recognised officially as having authority in matters of doctrine or religious practice?

Your employee(s) is recognised officially commissioned. This commissioning is official recognition that the religious practitioner has authority in matters of doctrine and religious practice in the local religious institution.

Criterion 'c' is satisfied.

Criterion (d) - Is your employee's position is distinct from that of the ordinary adherents of the religion?

Your employee(s) is distinct in that he or she is recognised as qualified:

(a) to teach the beliefs of the local religious institution;

(b) to lead public religious worship and communication;

(c) to propagate the beliefs of the local religious institution; and

(d) to lead various ministries with different groups in the local religious institution, including young people and children.

Your employee(s) will have a demonstrated, clear sense of calling or vocation to minister in the local religious institution. The commissioning of an employee in the local religious institution is recognition that he or she is distinct. Your employee(s) is only recruited from those with significant experience in the practical and spiritual consequences of the particular religion. Your employee(s) is required to undertake ongoing training as outlined in the training curriculum.

Criterion 'd' is satisfied.

Criterion (e) - Is your employee(s) has acknowledged leadership in the spiritual affairs of the religious institution?

Your employee(s) appoints on the basis of him/her having a demonstrated gift of teaching and pastoral care, relevant training under the Curriculum and being active in the local religious institution. Your employee(s) will take a leadership role in the spiritual affairs of the religious institution by being one of the recognised and authorised spokes people on the religious doctrine in that environment. Your employee(s) will be providing practical leadership in the spiritual affairs, teaching and pastorally caring for the local religious institution's congregation.

Criterion 'e' is satisfied.

Criterion (f) - Is your employee(s) is authorised to discharge the duties of a minister or spiritual leader, including the conduct of religious worship and other religious ceremonies?

Your employee(s) would normally be required to discharge the duties of a spiritual leader at formal gatherings where a minister of religion is required, for example by leading such gatherings, public praying, teaching etc. The employee(s) will be authorised to conduct religious worship and other ceremonies, including administering sacramental rights, leading services of worship, preparing and delivering sermons.

Criterion 'f' is satisfied.

C Benefits to be provided to certain persons

Paragraph 'c' of section 57 of the FBTAA requires that the benefits provided are provided to either the employee themselves or to their spouse or child. The benefits are provided to your employee(s), this criterion will be satisfied.

D The benefit is provided principally in respect of the employee's pastoral duties or any other duties or activities that are directly related to the practice, study, teaching or propagation of religious beliefs

For a benefit to be exempt, section 57 of the FBTAA requires it must be provided principally in respect of the employee's pastoral duties or activities that are directly related to the practice, study, teaching or propagation of religious beliefs.

As your employee(s) are being apprenticed as full time religious practitioners, there will be no benefits provided to them which are not directly related to their duties, activities and /or apprenticing in the practice, study, teaching or propagation of religious beliefs. It is, therefore, the benefits to be provided your employee(s) will be exempt under section 57 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).