Taxation Ruling
TR 2001/2A3  Addendum
Fringe benefits tax: the operation of the new fringe benefits tax grossup formula to apply from 1 April 2000

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FOI status:
may be releasedAddendum
This Addendum amends Taxation Ruling TR 2001/2 to take account of the changes in the FBT rate from 1 April 2006 and consequential adjustments to the type 1 and type 2 grossup rates.
Taxation Ruling TR 2001/2 is amended as follows:
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 grossup rate changes from 2.1292 to 2.0647; and
 ·
 lower grossup 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 grossup rates as listed above. This will necessitate substituting those rates with the new grossup rates when establishing the fringe benefits tax payable from 1 April 2006.
After:
(48.5%).
insert:
From 1 April 2006, the FBT rate will be 46.5%.
After:
(10%).
insert:
From 1 April 2006 when the FBT rate is 46.5%, this will result in a type 1 grossup rate of 2.0647.
After:
(48.5%).
insert:
From 1 April 2006 when the FBT rate is 46.5%, this will result in a type 2 grossup rate of 1.8692.
After:
The higher grossup rate is therefore 2.1292.
insert:
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))
= (0.565/0.2736525)
= 2.0647
After:
$14,521
insert:
( Note : All examples below for both type 1 and type 2 benefits have been calculated on the former grossup rates, using an FBT rate of 48.5%.)
After:
The lower grossup rate is therefore 1.9417.
insert:
Where the FBT rate is 46.5% the formula becomes:
1/(10.465)
= 1/0.535
= 1.8692
Commissioner of Taxation
12 July 2006
References
ATO references:
NO 2005/18404
Related Rulings/Determinations:
TR 2001/2A
TR 2001/2A2
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