Edited version of private advice

Authorisation Number: 1052222509959

Date of advice: 14 March 2024

Ruling

Subject: FBT - rebate

Question

Commencing from 1 April 20YY for the FBT year ending 31 March 20YY, is the Applicant entitled to the FBT rebate as a FBT rebatable employer under section 65J (1) item 5 of the Fringe Benefits Tax Assessment Act 1986 (Act)?

Answer

Yes.

This ruling applies for the following period:

Year ending 31 March 20YY

Year ending 31 March 20YY

Year ending 31 March 20YY

Year ending 31 March 20YY

The scheme commenced on:

1 April 20YY

Relevant facts and circumstances

The Entity was incorporated in Australia as a company limited by guarantee and provides services.

The Entity's constitution has been provided and includes clauses restricting the way in which income and property can be applied and dealt with upon winding up.

Assumption

The entity will comply with the substantive requirements of its governing rules.

Relevant legislative provisions

Fringe Benefits Tax Assessment Act 1986, item 5 of subsection 65J(1)

Fringe Benefits Tax Assessment Act 1986, subsection 65J(5)

Income Tax Assessment Act 1997, item 2.1 of section 50-10

Reasons for decision

Summary

The Entity is entitled to the FBT rebate as it is a FBT rebatable employer under item 5 of the table in subsection 65J(1).

Detailed reasoning

An employer is a rebatable employer for a year of tax under subsection 65J(1) if the employer:

•         is exempt from income tax at any time during the year of tax under any of the provisions set out in the table in that subsection, and

•         it satisfies the special conditions (if any) set out in that table.

The type of employer referred to under item 5 of the table in subsection 65J(1) is exempt from income tax as:

a society, association or club:

(a)          established for community service purposes (except political or lobbying purposes); and

(b)          covered by item 2.1 of the table in section 50-10 of the Income Tax Assessment Act 1997 and satisfies the special condition in subsection 65J(5).

An entity covered by item 2.1 of the table in section 50-10 of the ITAA 1997 is a society, association or club established for community service purposes (except political or lobbying purposes) that satisfies the special conditions of section 50-70 of the ITAA 1997.

The Commissioner has concluded that Entity is an association established for community service purposes that is covered by item 2.1 of the table in section 50-10 of the ITAA 1997.

The special condition in subsection 65J(5) provides that:

A society, association or club is not covered by table item 4, 5, 8, 9, 10, 11 or 12 in subsection (1) of a year of tax if it is:

(a)          an incorporated company where all the stock or shares in the capital of the company is or are beneficially owned by:

                i.                 the Commonwealth, a State or Territory, or

                ii.                an authority or institution of the Commonwealth, a State or a Territory, or

(b)          an incorporated company where the company is limited by guarantee and the interests and rights of the members in or in relation to the company are beneficially owned by:

                i.                 the Commonwealth, a State or Territory, or

                ii.                an authority or institution of the Commonwealth, a State or a Territory.

The Entity satisfies subsection 65J(5) of the FBTAA as it is not beneficially owned by the government.

In summary the Entity is an entity established for community service purposes, is covered by item 2.1 of the table in section 50-10 of the ITAA 1997 and meets the special conditions in subsection 65J(5). Therefore, the Entity meets the requirements of subsection 65J(1) and is a rebatable employer.