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FRINGE BENEFITS TAX ASSESSMENT ACT 1986 - SECT 5B

Working out an employer's fringe benefits taxable amount

Year of tax 2000-2001 and later years

          (1A)  Subject to subsection (1D), an employer's fringe benefits taxable amount for the year of tax beginning on 1 April 2000 or a later year of tax is the sum of the subsection (1B) amount and the subsection (1C) amount.

Note:          Other provisions affect the fringe benefits taxable amount. For example, see section 124 (about assessments).

Subsection (1B) amount

          (1B)  The subsection (1B) amount is the amount worked out using the formula:

                  

Subsection (1C) amount

          (1C)  The subsection (1C) amount is the amount worked out using the formula:

                  

Increase in fringe benefits taxable amount for year of tax 2000-2001 and later years

          (1D)  If any benefits provided in respect of the employment of an employee of an employer are exempt benefits under section 57A, the employer's fringe benefits taxable amount for the year of tax beginning on 1 April 2000 or a later year of tax as worked out under subsection (1A) is increased by the employer's aggregate non-exempt amount for the year of tax concerned.

How to work out aggregate non-exempt amount

          (1E)  An employer's aggregate non-exempt amount for the year of tax is worked out as follows.

Method statement

Step 1.   For each employee, add:

               (a)     the individual grossed-up type 1 non-exempt amount (see subsection (1F)) in relation to the employer for the year of tax; and

              (b)     the individual grossed-up type 2 non-exempt amount (see subsection (1G)) in relation to the employer for the year of tax.

              The result is the individual grossed-up non-exempt amount for the employee.

Step 2.   If:

              (b)     the employer is a government body and the duties of the employment of one or more employees are as described in paragraph 57A(2)(b) (which is about duties of employment being exclusively performed in or in connection with certain hospitals); or

               (c)     the employer is a public hospital; or

             (ca)     the employer provides public ambulance services or services that support those services and the employee is predominantly involved in connection with the provision of those services; or

              (d)     the employer is a hospital described in subsection 57A(4) (which is about hospitals carried on by societies and associations that are rebatable employers);

              subtract $17,000 from the individual grossed-up non-exempt amount for each employee of the employer referred to in paragraph (c), (ca) or (d), or each employee referred to in paragraph (b), for the year of tax. However, if the individual grossed-up non-exempt amount for such an employee is equal to or less than $17,000, the amount calculated under this step for the employee is nil.

Step 3.   If step 2 does not apply in respect of one or more employees of the employer, reduce the individual grossed-up non-exempt amount for each such employee by $30,000, but not below nil.

Step 4.   If the amount calculated under step 2 or 3 in respect of an employee is positive, reduce that amount (but not below nil) by the lesser of:

               (a)     $5,000; and

              (b)     so much of the employee's individual grossed-up non-exempt amount as relates to benefits covered by subsection (1M) (about salary packaged meal entertainment and entertainment facility leasing benefits).

Step 5.   Add together the amounts calculated under step 4 in relation to the employees of the employer. The total amount is the employer's aggregate non-exempt amount for the year of tax.

Individual grossed-up type 1 non-exempt amount

           (1F)  For the purposes of step 1 in the method statement in subsection (1E), the individual grossed-up type 1 non-exempt amount of an employee in relation to the employer for the year of tax is:

                  

Individual grossed-up type 2 non-exempt amount

          (1G)  For the purposes of step 1 in the method statement in subsection (1E), the individual grossed-up type 2 non-exempt amount of an employee in relation to the employer for the year of tax is:

                  

Working out the type 1 individual base non-exempt amount

          (1H)  An employee's type 1 individual base non-exempt amount in relation to the employer for the year of tax is worked out by adding the amounts worked out under step 3 of the method statement in subsection (1K) and step 3 of the method statement in subsection (1L).

Working out the type 2 individual base non-exempt amount

           (1J)  An employee's type 2 individual base non-exempt amount in relation to the employer for the year of tax is worked out by adding the amounts worked out under step 4 of the method statement in subsection (1K) and step 4 of the method statement in subsection (1L).

Working out the subsection (1K) amounts

          (1K)  An employee's subsection (1K) amounts for the year of tax are worked out as follows.

Method statement

Step 1.   Work out under subsection 135Q(3) for each of the employer's employees the amount that would be the employee's individual fringe benefit amount for the year of tax in respect of the employee's employment by the employer if subsection 135Q(1) were amended:

               (a)     by omitting "or 58"; and

              (b)     by omitting "one of those sections" from paragraph (b) and "those sections" from paragraph (c) and substituting in each case "that section".

Step 2.   Identify the benefits taken into account in step 1 that are GST-creditable benefits (see section 149A).

Step 3.   So much of the amount worked out under step 1 that relates to the benefits identified under step 2 is the step 3 of subsection (1K) amount for the individual.

Step 4.   The remainder of the amount is the step 4 of subsection (1K) amount for the individual.

Working out the subsection (1L) amounts

          (1L)  An employee's subsection (1L) amounts for the year of tax are worked out as follows.

Method statement

Step 1.   Work out for each employee his or her share (if any) of the amounts that, if section 57A did not apply, would be the taxable values of the excluded fringe benefits for the year of tax in respect of the employee's employment by the employer if those benefits were not excluded fringe benefits, but disregarding benefits:

               (a)     that constitute the provision of meal entertainment as defined in section 37AD (whether or not the employer made an election under section 37AA); or

              (b)     that are car parking fringe benefits; or

               (c)     whose taxable values are wholly or partly attributable to entertainment facility leasing expenses.

Step 2.   Identify the benefits taken into account in step 1 that are GST-creditable benefits (see section 149A).

Step 3.   So much of the amount worked out under step 1 that relates to the benefits identified under step 2 is the step 3 of subsection (1L) amount for the individual.

Step 4.   The remainder of the amount is the step 4 of subsection (1L) amount for the individual.

Salary packaged meal entertainment and entertainment facility leasing benefits

         (1M)  This subsection covers a benefit that is provided under a salary packaging arrangement if:

                     (a)  the benefit is constituted by the provision of meal entertainment (as defined in section 37AD, whether or not the employer has elected that Division 9A of Part III apply to the employer); or

                     (b)  the benefit is wholly or partly attributable to entertainment facility leasing expenses.

Using aggregate fringe benefits amount for most recent base year

             (2)  This section is subject to section 135G.

Note:          Section 135G allows the fringe benefits taxable amount to be worked out using the employer's aggregate fringe benefits amount from an earlier year of tax in special cases.

Definitions

             (3)  In this section:

"FBT rate " means the rate of fringe benefits tax for the year of tax.

"GST rate " means the rate of goods and services tax payable under the A New Tax System (Goods and Services Tax) Act 1999 for the year of tax.

type 1 aggregate fringe benefits amount means the employer's type 1 aggregate fringe benefits amount for the year of tax worked out under subsection 5C(3).

type 2 aggregate fringe benefits amount means the employer's type 2 aggregate fringe benefits amount for the year of tax worked out under subsection 5C(4).



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