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Edited version of your private ruling
Authorisation Number: 1012600327355
Ruling
Subject: Fringe benefits tax - Exemption for certain International Government Organisations
Question 1
Are benefits provided by an International Organisation to its employees exempt, pursuant to section 55 of the Fringe Benefits Tax Assessment Act 1986 (FBTAA 1986)?
Answer
Yes
This ruling applies for the following periods:
Year ending 31 March 2015
Year ending 31 March 2016
Year ending 31 March 2017
Year ending 31 March 2018
Year ending 31 March 2019
The scheme commences on:
1 April 2014
Relevant facts and circumstances
The International Government Organisation (IGO) is a partner agency of an international organisation. The IGO is a non-profit company limited by guarantee formed under the Corporations Law to represent and promote the interests of the international organisation in Australia.
The IGO has been represented in Australia, initially by an unincorporated association, subsequently by an incorporated association.
The work of IGO in Australia has been supported over time by committees in the various States and Territories of Australia. Most of those committees were originally unincorporated associations but, following the enactment of Associations Incorporation legislation, all Committees became incorporated associations.
The change in the structure of the IGO in Australia from unincorporated to incorporated, has given rise to the need for confirmation of the status of IGO Australia under the various Federal taxing statutes which are relevant to it.
Previous advice from the Australian Taxation Office
The Australian Taxation Office advised the representative of the IGO that it was exempt from liability to pay fringe benefits tax under section 55 of the FBTAA and that it was exempt from income tax, capital gains tax, fringe benefits tax and sales tax.
The Australian Committee for IGO has received Deductible Gift Recipient status for its overseas aid fund.
Australian representative for IGO has obtained a private ruling on the same matter.
The Australian representative for IGO advised in their application for a private ruling that there had been no material change since the previous private ruling was issued.
Assumption
This ruling is given on the bases of the facts stated in the description of the scheme as set above. Any material variation from these facts (including any matters not sated in the description above and any departure from these facts) will mean that the Commissioner will consider that the ruling will have no effect. No entity will then be able to rely on this ruling as the Commissioner will consider that the scheme has been implemented in a way that is materially different from the scheme described.
Relevant legislative provisions
Fringe Benefits Tax Assessment Act 1986 section 55
International Organisations (Privileges and Immunities) Act 1963
Reasons for decision
Question 1
Summary
Benefits provided by the International Government Organisation to its employees are exempt, pursuant to section 55 of the Fringe Benefits Tax Assessment Act 1986 (FBTAA 1986).
Detailed reasoning
Section 55 of the FBTAA 1986 states:
A benefit provided in respect of the employment of an employee of an employer is an exempt benefit if:
(a) the employer is an organisation that, but for subsections 66(2) and (3), would be exempt from a liability to pay tax in respect of the benefit by virtue of the operation of the International Organisations (Privileges and Immunities) Act 1963; or
(b) the employer is an organisation established by an agreement to which Australia is a party and which obliges Australia to grant the employer an exemption from a liability to pay tax in respect of the benefit.
The International Organisations (Privileges and immunities) Act 1963 (IOPI Act) applies to the international organisation, and therefore Section 55 of the FBTAA 1986 applies.
It is considered that the IGO is an organisation covered by the IOPI Act. Therefore, where the employer provides benefits to its employees, the benefits will be exempt benefits under section 55(a) of the FBTAA 1986.