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FRINGE BENEFITS TAX ASSESSMENT ACT 1986 - NOTES

Act No. 39 of 1986 as amended

This compilation was prepared on 9 July 2008
taking into account amendments up to Act No. 59 of 2008

Volume 1 includes:       Table of Contents
                                    Sections 1 -- 78A

The text of any of those amendments not in force
on that date is appended in the Notes section

The operation of amendments that have been incorporated may be
affected by application provisions that are set out in the Notes section

Volume 2 includes:       Table of Contents
                                    Sections 90 -- 167
                                    Schedule
                                    Note 1
                                    Table of Acts
                                    Act Notes
                                    Table of Amendments
                                    Table A

Prepared by the Office of Legislative Drafting and Publishing,
Attorney‑General's Department,
Canberra

 

 

 


Contents

Part I--Preliminary                                                                                                                 1

1............ Short title [see Note 1] ....................................................................... 1

2............ Commencement [see Note 1] .............................................................. 1

2A......... Application of the Criminal Code ...................................................... 1

Part II--Administration                                                                                                        2

3............ General administration of Act ............................................................ 2

4............ Annual report ..................................................................................... 2

5............ Secrecy ................................................................................................ 2

Part IIA--Core provisions                                                                                                  5

Division 1--Working out an employer's fringe benefits taxable amount              5

5A......... Simplified outline of this Division ...................................................... 5

5B......... Working out an employer's fringe benefits taxable amount ............... 5

Division 2--Working out an employer's aggregate fringe benefits amount        12

5C......... Aggregate fringe benefits amount ...................................................... 12

Division 3--Employee's individual fringe benefits amount                    15

5D......... Simplified outline .............................................................................. 15

5E.......... Employee's individual fringe benefits amount ................................. 15

5F.......... Working out the employee's share ................................................... 17

Part III--Fringe benefits                                                                                                   19

Division 1--Preliminary                                                                                             19

6............ Part not to limit generality of benefit ................................................ 19

Division 2--Car fringe benefits                                                                              20

Subdivision A--Car benefits                                                                                    20

7............ Car benefits ....................................................................................... 20

8............ Exempt car benefits .......................................................................... 22

Subdivision B--Taxable value of car fringe benefits                                           24

9............ Taxable value of car fringe benefits--statutory formula .................. 24

10.......... Taxable value of car fringe benefits--cost basis ............................... 27

10A....... No reduction of operating cost in a log book year of tax unless log book records and odometer records are maintained .......................................................................................................... 32

10B....... No reduction of operating cost in a non‑log book year of tax unless log book records and odometer records are maintained in log book year of tax .................................................... 32

11.......... Calculation of depreciation and interest ........................................... 33

12.......... Depreciated value ............................................................................. 35

13.......... Expenditure to be increased in certain circumstances ....................... 36

Division 3--Debt waiver fringe benefits                                                           38

Subdivision A--Debt waiver benefits                                                                      38

14.......... Debt waiver benefits ......................................................................... 38

Subdivision B--Taxable value of debt waiver fringe benefits                             38

15.......... Taxable value of debt waiver fringe benefits ..................................... 38

Division 4--Loan fringe benefits                                                                           39

Subdivision A--Loan benefits                                                                                  39

16.......... Loan benefits .................................................................................... 39

17.......... Exempt loan benefits ........................................................................ 41

Subdivision B--Taxable value of loan fringe benefits                                         43

18.......... Taxable value of loan fringe benefits ................................................. 43

19.......... Reduction of taxable value--otherwise deductible rule ..................... 43

Division 5--Expense payment fringe benefits                                               49

Subdivision A--Expense payment benefits                                                            49

20.......... Expense payment benefits ................................................................ 49

20A....... Exemption--no‑private‑use declaration ........................................... 49

21.......... Exempt accommodation expense payment benefits ......................... 49

22.......... Exempt car expense payment benefits ............................................. 50

Subdivision B--Taxable value of expense payment fringe benefits                   51

22A....... Taxable value of in‑house expense payment fringe benefits ............. 51

23.......... Taxable value of external expense payment fringe benefits .............. 52

24.......... Reduction of taxable value--otherwise deductible rule ..................... 53

Division 6--Housing fringe benefits                                                                   61

Subdivision A--Housing benefits                                                                            61

25.......... Housing benefits ............................................................................... 61

Subdivision B--Taxable value of housing fringe benefits                                  61

26.......... Taxable value of non‑remote housing fringe benefits ........................ 61

27.......... Determination of market value of housing right ............................... 65

28.......... Indexation factor for valuation purposes--non‑remote housing ...... 66

Division 7--Living‑away‑from‑home allowance fringe benefits            68

Subdivision A--Living‑away‑from‑home allowance benefits                              68

30.......... Living‑away‑from‑home allowance benefits ..................................... 68

Subdivision B--Taxable value of living‑away‑from‑home allowance fringe benefits           69

31.......... Taxable value of living‑away‑from‑home allowance fringe benefits . 69

Division 8--Airline transport fringe benefits                                                 70

Subdivision A--Airline transport benefits                                                            70

32.......... Airline transport benefits ................................................................. 70

Subdivision B--Taxable value of airline transport fringe benefits                   70

33.......... Taxable value of airline transport fringe benefits .............................. 70

34.......... Reduction of taxable value--otherwise deductible rule ..................... 71

Division 9--Board fringe benefits                                                                        73

Subdivision A--Board benefits                                                                                73

35.......... Board benefits ................................................................................... 73

Subdivision B--Taxable value of board fringe benefits                                       73

36.......... Taxable value of board fringe benefits .............................................. 73

37.......... Reduction of taxable value--otherwise deductible rule ..................... 73

Division 9A--Meal entertainment                                                                       75

Subdivision A--Meal entertainment                                                                       75

37A....... Key principle .................................................................................... 75

37AA.... Division only applies if election made ............................................. 75

37AB.... Employee contributions to be excluded ............................................ 75

37AC.... Meal entertainment benefits ............................................................. 75

37AD.... Meaning of provision of meal entertainment .................................... 75

37AE..... Fringe benefits only arise if employer is provider ............................ 76

37AF..... No other fringe benefits arise if election made .................................. 76

37AG.... Some benefits still arise .................................................................... 76

Subdivision B--50/50 split method of valuing meal entertainment                  77

37B....... Key principle .................................................................................... 77

37BA.... Taxable value using 50/50 split method ............................................ 77

                                                            77

37C....... Key principle .................................................................................... 77

37CA.... Election by employer ....................................................................... 77

37CB..... Taxable value using 12 week register method ................................... 78

37CC..... Choosing the 12 week period for a register ...................................... 78

37CD.... FBT years for which register is valid ............................................... 79

37CE..... Matters to be included in register ..................................................... 79

37CF..... False or misleading entries invalidate register ................................... 80

Division 10--Tax‑exempt body entertainment fringe benefits             81

Subdivision A--Tax‑exempt body entertainment benefits                                   81

38.......... Tax‑exempt body entertainment benefits ......................................... 81

Subdivision B--Taxable value of tax‑exempt body entertainment fringe benefits                81

39.......... Taxable value of tax‑exempt body entertainment fringe benefits ..... 81

Division 10A--Car parking fringe benefits                                                     82

Subdivision A--Car parking benefits                                                                    82

39A....... Car parking benefits .......................................................................... 82

39AA.... Anti‑avoidance--fee on first business day not representative ......... 84

39AB.... When fees are not representative ...................................................... 84

39B....... When commercial parking stations are located within a 1 km radius of business premises or associated premises .......................................................................................................... 84

Subdivision B--Taxable value of car parking fringe benefits                           84

39C....... Taxable value of car parking fringe benefits--commercial parking station method                 84

39D....... Taxable value of car parking fringe benefits--market value basis .... 85

39DA.... Taxable value of car parking fringe benefits--average cost method 86

39E........ Fees charged by commercial parking stations for all‑day parking .... 87

Subdivision C--Statutory formula method--spaces                                            88

39F........ The key principle ............................................................................. 88

39FA..... Spaces method of calculating total taxable value of car parking fringe benefits        88

39FB..... Number of spaces exceeds number of employees ............................ 89

39FC..... Meaning of daily rate amount ........................................................... 91

39FD..... Meaning of availability period .......................................................... 91

39FE..... Meaning of relevant recipients contribution ..................................... 91

                                                92

39G....... The key principle ............................................................................. 92

39GA.... Employer may elect to use 12 week record keeping method ........... 92

39GB.... Value of fringe benefits for year ....................................................... 92

39GC.... Meaning of total value of car parking benefits (register) ................. 92

39GD.... Meaning of car parking availability period ...................................... 93

39GE..... Choosing the 12 week period for a register ...................................... 93

39GF..... FBT years for which register is valid ............................................... 93

39GG.... Matters to be included in register ..................................................... 94

39GH.... Fraudulent entries invalidate register ................................................ 95

Division 11--Property fringe benefits                                                                96

Subdivision A--Property benefits                                                                           96

40.......... Property benefits .............................................................................. 96

41.......... Exempt property benefits ................................................................ 96

Subdivision B--Taxable value of property fringe benefits                                  97

42.......... Taxable value of in‑house property fringe benefits .......................... 97

43.......... Taxable value of external property fringe benefits ........................... 98

44.......... Reduction of taxable value--otherwise deductible rule ..................... 99

Division 12--Residual fringe benefits                                                              105

Subdivision A--Residual benefits                                                                         105

45.......... Residual benefits ............................................................................. 105

46.......... Year of tax in which residual benefits taxed .................................... 105

47.......... Exempt residual benefits ................................................................. 106

47A....... Exemption--no‑private‑use declaration ......................................... 111

Subdivision B--Taxable value of residual fringe benefits                                112

48.......... Taxable value of in‑house non‑period residual fringe benefits ........ 112

49.......... Taxable value of in‑house period residual fringe benefits ............... 112

50.......... Taxable value of external non‑period residual fringe benefits ......... 113

51.......... Taxable value of external period residual fringe benefits ................ 113

52.......... Reduction of taxable value--otherwise deductible rule ................... 114

Division 13--Miscellaneous exempt benefits                                              120

53.......... Motor vehicle fringe benefit fuel etc. to be exempt in certain cases 120

54.......... Provision of food or drink to be exempt benefit in certain cases .... 120

55.......... Benefits provided by certain international organisations to be exempt 121

56.......... Preservation of diplomatic and consular immunities ...................... 121

57.......... Exempt benefits--employees of religious institutions ................... 121

57A....... Exempt benefits--public benevolent institutions, health promotion charities, some hospitals and public ambulance services ........................................................................................... 122

58.......... Exempt benefits--live‑in residential care workers ......................... 123

58A....... Exempt benefits--employment interviews and selection tests ...... 124

58AA.... Exempt benefits--engagement of relocation consultant ................. 125

58B....... Exempt benefits--removals and storage of household effects as a result of relocation            126

58C....... Exempt benefits--sale or acquisition of dwelling as a result of relocation               128

58D....... Exempt benefits--connection or re‑connection of certain utilities as a result of relocation     132

58E........ Exempt benefits--leasing of household goods while living away from home          133

58F........ Exempt benefits--relocation transport .......................................... 134

58G....... Exempt benefits--motor vehicle parking ....................................... 135

58GA.... Exempt benefits--small business car parking ................................ 136

58H....... Exempt benefits--newspapers and periodicals used for business purposes           137

58J........ Exempt benefits--compensable work‑related trauma .................... 138

58K....... Exempt benefits--in‑house health care facilities ............................ 139

58L........ Exempt benefits--certain travel to obtain medical treatment ......... 139

58LA..... Exempt benefits--compassionate travel ........................................ 141

58M...... Exempt benefits--work‑related medical examinations, work‑related medical screening, work‑related preventative health care, work‑related counselling, migrant language training ............... 143

58N....... Exempt benefits--emergency assistance ........................................ 145

58P........ Exempt benefits--minor benefits ................................................... 145

58PA..... Exempt benefits--worker entitlement contributions ..................... 148

58PB..... Meaning of approved worker entitlement funds ............................. 148

58PC..... Exempt benefits--existing worker entitlement funds ..................... 150

58Q....... Exempt benefits--long service awards ........................................... 151

58R....... Exempt benefits--safety awards .................................................... 153

58S........ Exempt benefits--trainees engaged under Australian Traineeship System              153

58T....... Exempt benefits--live‑in domestic workers employed by religious institutions or by religious practitioners        154

58U....... Exempt benefits--live‑in help for elderly and disadvantaged persons 155

58V....... Exempt benefits--food and drink for non‑live‑in domestic employees   156

58W...... Exempt benefits--deposits under the Small Superannuation Accounts Act 1995    156

58X....... Exempt benefits--provision of certain work related items ............ 157

58Y....... Exempt benefits--membership fees and subscriptions .................. 158

58Z....... Exempt benefits--taxi travel .......................................................... 158

58ZB..... Exempt benefits--approved student exchange programs ............... 159

58ZC..... Exempt benefits--remote area housing benefits ............................. 159

58ZD.... Exempt benefits--meals on working days ..................................... 161

Division 14--Reduction of taxable value of miscellaneous fringe benefits          162

59.......... Reduction of taxable value--remote area residential fuel ............... 162

60.......... Reduction of taxable value--remote area housing .......................... 164

60AA.... Guideline price for repurchase of remote area residential property 167

60A....... Reduction of taxable value--remote area holiday transport fringe benefits subject to ceiling 168

61.......... Reduction of taxable value--remote area holiday transport fringe benefits not subject to ceiling           171

61A....... Reduction of taxable value--overseas employment holiday transport 173

61B....... Reduction of taxable value of certain expense payment fringe benefits in respect of relocation transport              176

61C....... Reduction of taxable value--temporary accommodation relating to relocation        176

61D....... Reduction of taxable value of temporary accommodation meal fringe benefits        180

61E........ Reduction of taxable value of certain expense payment fringe benefits in respect of employment interviews or selection tests ................................................................................................ 181

61F........ Reduction of taxable value of certain expense payment fringe benefits associated with work‑related medical examinations, work‑related medical screenings, work‑related preventative health care, work‑related counselling or migrant language training ................................................................. 182

61G....... Reduction of taxable value of fringe benefits if certain deductions relating to payments to associates are not allowed ........................................................................................................ 184

62.......... Reduction of aggregate taxable value of certain fringe benefits ....... 184

63.......... Reduction of taxable value of living‑away‑from‑home food fringe benefits             185

63A....... Reduction of taxable value in respect of entertainment component of certain fringe benefits 186

65A....... Reduction of taxable value--education of children of overseas employees              186

Division 14A--Amortisation of taxable value of fringe benefits relating to remote area home ownership schemes                                                                                                  189

65CA.... Amortisation of taxable value of fringe benefits relating to remote area home ownership schemes         189

65CB..... Amendment of assessments ........................................................... 192

Division 14B--Reducible fringe benefits relating to remote area home repurchase schemes                 193

65CC..... Reducible fringe benefits relating to remote area home repurchase schemes            193

Division 15--Car substantiation rules for otherwise deductible provisions        194

65D....... Car substantiation rules .................................................................. 194

65E........ No compliance with substantiation rules in log book year of tax unless log book records and odometer records are maintained ....................................................................................... 194

65F........ No compliance with substantiation rules in non‑log book year of tax unless log book records kept in previous log book year of tax ....................................................................................... 194

Part IIIA--Rebates of tax                                                                                              196

65J........ Rebate for certain non‑profit employers etc. ................................. 196

Part IV--Liability to tax                                                                                                   204

66.......... Liability to pay tax ......................................................................... 204

67.......... Arrangements to avoid or reduce fringe benefits tax ....................... 204

Part V--Returns and assessments                                                                            207

Division 1--Returns                                                                                                   207

68.......... Annual returns ................................................................................ 207

69.......... Further returns ................................................................................ 207

70.......... Keeping records of indirect tax transactions ................................... 207

70D....... Tax agent to give taxpayer copy of notice of assessment .............. 207

Division 2--Assessments                                                                                       209

72.......... First return deemed to be an assessment ........................................ 209

73.......... Default assessments ....................................................................... 209

74.......... Amendment of assessments ........................................................... 210

75.......... Refund of amounts overpaid .......................................................... 211

76.......... Amended assessment to be an assessment ..................................... 211

77.......... Notice of assessment ...................................................................... 212

78.......... Validity of assessment .................................................................... 212

78A....... Objections ....................................................................................... 212


An Act relating to the assessment and collection of the tax imposed by the Fringe Benefits Tax Act 1986, and for related purposes

  

  

Notes to the Fringe Benefits Tax Assessment Act 1986

Note 1

The Fringe Benefits Tax Assessment Act 1986 as shown in this compilation comprises Act No. 39, 1986 amended as indicated in the Tables below.

The Fringe Benefits Tax Assessment Act 1986 was amended by the Workplace Relations Amendment (Work Choices) (Consequential Amendments) Regulations 2006 (No. 1) (SLI 2006 No. 50). The amendment is incorporated in this compilation.

The Fringe Benefits Tax Assessment Act 1986 was modified by the Bankruptcy Rules (1968 No. 2 as amended). The modifications are not incorporated in this compilation.

The Fringe Benefits Tax Assessment Act 1986 was modified by the Banking (State Bank of South Australia and Other Matters) Act 1994. The modifications are not incorporated in this compilation.

The Fringe Benefits Tax Assessment Act 1986 was modified by the Bankruptcy Regulations (1996 No. 263 as amended). The modifications are not incorporated in this compilation.

For application, saving or transitional provisions made by the Corporations (Repeals, Consequentials and Transitionals) Act 2001, see Act No. 55, 2001.

All relevant information pertaining to application, saving or transitional provisions prior to 18 December 1996 is not included in this compilation. For subsequent information see Table A.

Table of Acts

Act

Number
and year

Date
of Assent

Date of commencement

Application, saving or transitional provisions

Fringe Benefits Tax Assessment Act 1986

39, 1986

24 June 1986

24 June 1986

 

Taxation Boards of Review (Transfer of Jurisdiction) Act 1986

48, 1986

24 June 1986

S. 31 and Parts VII, VIII (ss.
45--56): (a)
Remainder: 1 July 1986

--

Taxation Laws Amendment Act (No. 3) 1986

112, 1986

4 Nov 1986

4 Nov 1986

S. 46

Jurisdiction of Courts (Miscellaneous Amendments) Act 1987

23, 1987

26 May 1987

S. 3: 1 Sept 1987 (see Gazette 1987, No. S217) (b)

S. 4

Taxation Laws Amendment (Fringe Benefits and Substantiation) Act 1987

139, 1987

18 Dec 1987

18 Dec 1987

Ss. 61 and 62

as amended by

 

 

 

 

Taxation Laws Amendment Act 1988

11, 1988

26 Apr 1988

Part IX (ss. 49, 50): 18 Dec 1987 (c)

--

Taxation Laws Amendment Act (No. 2) 1988

78, 1988

24 June 1988

(see 78, 1988 below)

--

Petroleum Resource Rent Tax (Miscellaneous Provisions) Act 1987

145, 1987

18 Dec 1987

15 Jan 1988 (see s. 2)

--

Australian Airlines (Conversion to Public Company) Act 1988

6, 1988

9 Mar 1988

S. 69(1): Royal Assent (d)

--

Taxation Laws Amendment Act (No. 2) 1988

78, 1988

24 June 1988

Part II (ss. 3--6), Ss. 37, 39--53 and 55(15)--(25): 1 Nov 1988 (see Gazette 1988, No. S331)
S. 14(2): 1 July 1988
S. 15: 22 Dec 1986
Part VI (ss.
62--64): 22 July 1986
Part VII (ss. 65, 66): 18 Dec 1987
Remainder: Royal Assent

--

Taxation Laws Amendment Act (No. 4) 1988

95, 1988

24 Nov 1988

Ss. 44(a) and 54(11): (e)
Remainder: Royal Assent

S. 2 (am. by 107, 1989, s. 30)
Ss. 9 and 10

as amended by

 

 

 

 

Taxation Laws Amendment Act (No. 3) 1989

107, 1989

30 June 1989

(see 107, 1989 below)

--

Taxation Laws Amendment (Tax File Numbers) Act 1988

97, 1988

25 Nov 1988

S. 12: 1 July 1989 (see Gazette 1989, No. S159)
Remainder: 1 Jan 1989 (see s. 2(1) and Gazette 1988, No. S399)

--

Taxation Laws Amendment Act (No. 5) 1988

153, 1988

26 Dec 1988

Div. 6 of Part III (s. 43): 1 Jan 1989
Remainder: Royal Assent

S. 7

Higher Education Funding Act 1988

2, 1989

6 Jan 1989

Ss. 86 and 87: Royal Assent (f)

--

Taxation Laws Amendment Act 1989

11, 1989

16 Mar 1989

16 Mar 1989

Ss. 19 and 20

Taxation Laws Amendment Act (No. 2) 1989

97, 1989

30 June 1989

30 June 1989

S. 17

Taxation Laws Amendment Act (No. 3) 1989

107, 1989

30 June 1989

Part 6 (ss. 29, 30): (g)

Remainder: Royal Assent

S. 7

Petroleum (Australia‑Indonesia Zone of Cooperation) (Consequential Provisions) Act 1990

37, 1990

7 June 1990

18 Feb 1991 (see s. 2 and Gazette 1991, No. S47)

--

Taxation Laws Amendment Act (No. 3) 1990

58, 1990

16 June 1990

S. 11: 16 June 1990 (see s. 2(2)) S. 23: 4 Dec 1989 Part 5 (ss. 36--38): 11 May 1989
Remainder: Royal Assent

Ss. 7 and 8

Training Guarantee (Administration) Act 1990

60, 1990

16 June 1990

S. 43 and Part 10 (ss. 88--95): 31 Oct 1990 (see Gazette 1990, No. S272)
Remainder: 1 July 1990

--

Taxation Laws Amendment Act (No. 5) 1990

135, 1990

28 Dec 1990

Part 2 (ss. 3--5): Royal Assent (h)

S. 5

Taxation Laws Amendment Act 1991

48, 1991

24 Apr 1991

Part 2 (ss. 3--7): Royal Assent (I)

S. 7

Taxation Laws Amendment Act (No. 2) 1991

100, 1991

27 June 1991

Ss. 3, 5, 7, 10, 12 and 13: Royal Assent (j)
Ss. 4, 6, 8, 9 and 11: 28 June 1991 (j)

Ss. 12 and 13

Taxation Laws Amendment Act (No. 3) 1991

216, 1991

24 Dec 1991

Ss. 5--8, 88, 123 and 124: Royal Assent (k)
Ss. 113 and 114: 1 Mar 1992 (see Gazette 1992, No. GN7) (k)

Ss. 8, 114 and 124

Taxation Laws Amendment Act 1992

35, 1992

25 May 1992

25 May 1992

S. 5

Superannuation Guarantee (Consequential Amendments) Act 1992

92, 1992

30 June 1992

1 July 1992

--

Taxation Laws Amendment (Self Assessment) Act 1992

101, 1992

30 June 1992

30 June 1992