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Edited version of your written advice
Authorisation Number: 1051486115465
Date of advice: 27 February 2019
Subject: Fringe benefits tax – remote area location
Question
Is Location X in regional Australia a ‘remote area’ for the purposes of the Fringe Benefits Assessment Act 1986?
Answer
Yes.
This ruling applies for the following period:
Year ending 31 March YYYY
The scheme commences on:
1 April XXXX
This ruling applies for the following period:
Year ending 31 March YYYY
The scheme commences on:
1 April XXXX
Relevant facts and circumstances
1. The applicant, Individual A, resides at Location X in regional Australia.
2. The applicant has commenced work for an employer based in a nearby regional town (Location Y), which is listed on the ATO website as being a ‘remote area’ for FBT purposes.
3. Location X has the same post code as another nearby regional location (Location Z), which is listed on the ATO website as being a ‘remote area’ for FBT purposes.
4. Location X is not listed on the ATO website as being either a ‘remote area’ or ‘non-remote area’ for FBT purposes.
5. The applicant is seeking a determination in writing on whether Location X is a ‘remote area’ for the purposes of the FBAA.
Relevant legislative provisions
Fringe Benefits Assessment Act 1986 Section 140
Fringe Benefits Assessment Act 1986 Subsection 140(1)
Fringe Benefits Assessment Act 1986 Paragraph 140(1)(a)
Fringe Benefits Assessment Act 1986 Paragraph 140(1)(b)
Fringe Benefits Assessment Act 1986 Subparagraph 140(1)(b)(i)
Fringe Benefits Assessment Act 1986 Subparagraph 140(1)(b)(ii)
Income Tax Assessment Act 1936 Schedule 2
Reasons for decision
6. A unit of accommodation will be treated as being in a remote area if it is not located in, or adjacent to, an eligible urban area.
7. Pursuant to paragraph 140(1)(a) of the Fringe Benefits Assessment Act 1986 (FBTAA), an ‘eligible urban area’ is an area that is either:
● situated in Zone A or Zone B for income tax purposes (as described in Parts I and II respectively in Schedule 2 to the Income Tax Assessment Act 1936 (ITAA 1936)) and is an urban centre with a 1981 census population of not less than 28,000, or
● not situated in Zone A or Zone B for income tax purposes and is an urban centre with a 1981 census population of not less than 14,000.
8. Location X is not stipulated in either Part I or Part II of Schedule 2 to the ITAA 1936 as being situated in Zone A or Zone B for income tax purposes.
9. The ATO used to produce lists of remote and non-remote towns for the purposes of subsection 140(1) of the FBTAA in Law Administration Practice Statement PS LA 2000/6 Fringe benefits tax: what is considered to be remote for the purposes of the remote area housing benefit. However, that Practice Statement was withdrawn on 11 June 2013, as the ATO now maintains a list of eligible urban areas on its website.
10. The applicant’s residence at Location X is not situated in any of the eligible urban areas listed on the ATO’s website and is not situated in an area listed in Schedule 2 to the ITAA 1936.
11. Therefore, the applicant does not reside in an eligible urban area under paragraph 140(1)(a) of the FBTAA.
12. According to paragraph 140(1)(b) of the FBTAA, an area that is ‘adjacent to an eligible urban area’ is an area that is situated either:
● less than 40 kilometres by the shortest practicable surface route from the centre of an eligible urban area with a 1981 census population of less than 130,000, or
● less than 100 kilometres by the shortest practicable surface route from the centre of an eligible urban area with a 1981 census population of 130,000 or more.
13. The ATO’s website does not specifically classify Location X as a ‘remote area’.
14. The distance between each of the eligible urban areas in the relevant state / territory relevant to this case (by the shortest practical surface route) have been calculated.
15. As the shortest practical surface route from Location X and all of the relevant listed (on the ATO website) eligible urban centres with a 1981 census population of greater than 130,000, is greater than 100 kilometres, Location X is not adjacent to any of these eligible urban areas pursuant to subparagraph 140(1)(b)(ii) of the FBTAA.
16. As the shortest practical surface route from Location X and the eligible urban area listed as being the closest eligible urban centre with a 1981 census population of less than 130,000 is 40.1 km, which is greater than 40km, Location X is not adjacent to eligible urban centre with a 1981 census population of less than 130,000, and therefore not adjacent to an eligible urban area pursuant to subparagraph 140(1)(b)(i) of the FBTAA.
Conclusion
17. As the applicant’s residence at Location X is not situated in, or adjacent to, an eligible urban area, it is accepted that it is a remote area for the purposes of the FBTAA.