Commonwealth of Australia Bills Commonwealth of Australia Bills[Index] [Search] [Download] [Related Items] [Help]
This is a Bill, not an Act. For current law, see the Acts databases.
1998-1999-2000
The Parliament
of the
Commonwealth of
Australia
HOUSE OF
REPRESENTATIVES
Presented and read a first
time
A New Tax
System (Fringe Benefits) Bill 2000
No.
, 2000
(Treasury)
A
Bill for an Act to amend the law relating to the taxation of fringe benefits,
and for related purposes
ISBN: 0642 429804
Contents
A Bill for an Act to amend the law relating to the
taxation of fringe benefits, and for related purposes
The Parliament of Australia enacts:
This Act may be cited as the A New Tax System (Fringe Benefits) Act
2000.
This Act commences on the day on which it receives the Royal
Assent.
Each Act that is specified in a Schedule to this Act is amended or
repealed as set out in the applicable items in the Schedule concerned, and any
other item in a Schedule to this Act has effect according to its
terms.
1 Subsection 5B(1)
After “for a year of tax”, insert “earlier than the year
of tax beginning on 1 April 2000”.
Note: Before subsection 5B(1) insert the heading
“Years of tax before year of tax 2000-2001”.
2 After subsection 5B(1)
Insert:
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:
(a) the employer is a public hospital that is a public benevolent
institution; or
(b) the employer is a government body and the duties of the employment of
one or more employees of the employer are exclusively performed in, or in
connection with, a public hospital that is a public benevolent
institution;
subtract $17,000 from the individual grossed-up non-exempt amount for each
employee of the employer referred to in paragraph (a), 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, subtract $25,000 from the individual grossed-up non-exempt
amount for each such employee for the year of tax. However, if the individual
grossed-up non-exempt amount for such an employee is equal to or less than
$25,000, the amount calculated under this step for the employee is
nil.
Step 4. Add together the amounts calculated under steps 2 and 3 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
involved the provision of goods or services where, on their acquisition by the
person who provided them, that person was entitled to input tax
credits.
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
involved the provision of goods or services where, on their acquisition by the
person who provided them, that person was entitled to input tax
credits.
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.
3 Subsection 5B(2)
Omit “Subsection (1)”, substitute “This
section”.
Note: Before subsection 5B(2) insert the heading
“Using aggregate fringe benefits amount for most recent base
year”.
4 At the end of section 5B
Add:
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).
5 Section 5C
After “for a year of tax”, insert “earlier than the year
of tax beginning on 1 April 2000”.
6 Section 5C (note)
Repeal the note.
7 At the end of section 5C
Add:
(2) An employer’s aggregate fringe benefits amount for
the year of tax beginning on 1 April 2000 or a later year of tax is the sum of
the employer’s type 1 aggregate fringe benefits amount and the
employer’s type 2 aggregate fringe benefits amount for the year of
tax.
(3) Work out an employer’s type 1 aggregate fringe benefits
amount for a year of tax as follows.
Method statement
Step 1. Identify the fringe benefits in respect of each of the
employer’s employees that involved the provision of goods or services
where, on their acquisition by the person who provided them, that person was
entitled to input tax credits, and work out under Division 3 for each of those
employees the individual fringe benefits amount for the year of tax in relation
to those fringe benefits.
Step 2. Add up all the individual fringe benefits amounts worked out
under step 1.
Step 3. Identify the excluded fringe benefits for the year of tax in
respect of each of the employer’s employees that involved the provision of
goods or services where, on their acquisition by the person who provided them,
that person was entitled to input tax credits, and add up the taxable values of
all those excluded fringe benefits.
Note: Subsection 5E(3) explains what is an excluded fringe
benefit.
Step 4. Add the total from step 2 to the total from step 3. The
total amount is the employer’s type 1 aggregate fringe benefits
amount for the year of tax.
(4) Work out an employer’s type 2 aggregate fringe benefits
amount for a year of tax as follows.
Method statement
Step 1. Identify the fringe benefits in respect of each of the
employer’s employees that involved the provision of goods or services
where, on their acquisition by the person who provided them, that
person:
(a) did not pay GST; or
(b) was not entitled to input tax credits;
and work out under Division 3 for each of those employees the individual
fringe benefits amount for the year of tax in relation to those fringe
benefits.
Step 2. Add up all the individual fringe benefits amounts worked out
under step 1.
Step 3. Identify the excluded fringe benefits for the year of tax in
respect of each of the employer’s employees that involved the provision of
goods or services where, on their acquisition by the person who provided them,
that person:
(a) did not pay GST; or
(b) was not entitled to input tax credits;
and add up the taxable values of all those excluded fringe
benefits.
Note: Subsection 5E(3) explains what is an excluded fringe
benefit.
Step 4. Add the total from step 2 to the total from step 3. The
total amount is the employer’s type 2 aggregate fringe benefits
amount for the year of tax.
Note: Other provisions may affect the aggregate fringe
benefits amount. For example, see section 67 (about arrangements to avoid or
reduce tax), section 135L (about reducing the aggregate fringe benefits amount
of an employer who is in business for only part of a year of tax) and section
152B (about entertainment facility leasing expenses).
8 Paragraph 5E(3)(d)
Repeal the paragraph.
9 Subsection 26(1)
Omit “(not being a remote area housing fringe
benefit)”.
10 Sections 29 and 29A
Repeal the sections.
11 Section 58ZA
Repeal the section.
12 At the end of Division 13 of Part
III
Add:
Remote area housing benefit to be exempt
(1) A housing benefit that is a remote area housing benefit is an exempt
benefit.
What constitutes remote area housing benefit
(2) For the purposes of this section, a housing benefit in relation to an
employer for a year of tax and for a unit of accommodation, being a benefit
provided to an employee of the employer in respect of the employee’s
employment, is a remote area housing benefit if:
(a) during the whole of the tenancy period, the unit of accommodation was
located in a State or internal Territory and was not at a location in, or
adjacent to, an eligible urban area; and
(b) during the whole of the tenancy period, the recipient was a current
employee of the employer and the usual place of employment of the recipient was
not at a location in, or adjacent to, an eligible urban area; and
(c) it is customary for employers in the industry in which the recipient
was employed during the tenancy period to provide residential accommodation for
their employees without charge or for a rent or other consideration that is less
than the market value of the right to occupy or use the accommodation concerned;
and
(d) it would be concluded that it was necessary for the employer, during
the year of tax, to provide, or to arrange for the provision of, residential
accommodation for employees of the employer because:
(i) the nature of the employer’s business was such that employees of
the employer were liable to be frequently required to change their places of
residence; or
(ii) there was not, at or near the place or places at which the employees
of the employer were employed, sufficient suitable residential accommodation for
those employees (other than residential accommodation provided by or on behalf
of the employer); or
(iii) it is customary for employers in the industry in which the recipient
was employed during the tenancy period to provide residential accommodation for
their employees free of charge or for a rent or other consideration that is less
than the market value of the right to occupy or use the accommodation concerned;
and
(e) the recipients overall housing right was not granted to the recipient
under:
(i) a non-arm’s length arrangement; or
(ii) an arrangement that was entered into by any of the parties to the
arrangement for the purpose, or for purposes that included the purpose, of
enabling the employer to obtain the benefit of the application of this
section.
Discretion to treat accommodation or place of employment as being
remote
(3) For the purposes of subsection (2):
(a) if a unit of accommodation:
(i) is at a location in, or adjacent to, an eligible urban area;
and
(ii) is adjacent to, or in close proximity to, another unit of
accommodation that is occupied or used and is not at a location in, or adjacent
to, an eligible urban area;
the Commissioner may, if the Commissioner considers that it is
appropriate to do so having regard to all the circumstances, treat the
first-mentioned unit of accommodation as not being at a location in, or adjacent
to, an eligible urban area; and
(b) if the usual place of employment of a person:
(i) is at a location in, or adjacent to, an eligible urban area;
and
(ii) is adjacent to, or in close proximity to, another location at which
people are employed, being another location that is not in, or adjacent to, an
eligible urban area;
the Commissioner may, if the Commissioner considers that it is
appropriate to do so having regard to all the circumstances, treat that place of
employment of the first-mentioned person as not being at a location in, or
adjacent to, an eligible urban area.
If:
(a) an employer is carrying on a business of primary production for the
purposes of the Income Tax Assessment Act 1997; and
(b) the business is carried on at a location in a State or internal
Territory that is not in, or adjacent to, an eligible urban area; and
(c) a benefit consisting of a meal that is ready for consumption is
provided on a working day to a person; and
(d) the benefit is not, or does not include, the provision of meal
entertainment as defined in section 37AD; and
(e) the benefit is:
(i) a board benefit; or
(ii) a property benefit; or
(iii) an expense payment benefit; or
(iv) a residual benefit; and
(f) the person to whom the benefit is provided is:
(i) an employee of the employer, being an employee who is employed in the
business and is primarily so employed at a location referred to in paragraph
(b); or
(ii) if the benefit is a board benefit—an associate of an employee
referred to in subparagraph (i); and
(g) the benefit is provided in respect of the employment of an employee
referred to in subparagraph (f)(i);
the benefit is an exempt benefit.
13 Subsection 59(1)
Repeal the subsection, substitute:
(1) If:
(a) residential fuel is for use:
(i) in connection with the recipients unit of accommodation; and
(ii) during the subsistence of the recipients overall housing
right;
in relation to a remote area housing benefit, in relation to an employer
in relation to a year of tax; and
(b) any of the following conditions are satisfied:
(i) the recipients expenditure in relation to an expense payment fringe
benefit in relation to the employer in relation to the year of tax or a
subsequent year of tax is in respect of the supply of that residential
fuel;
(ii) the recipients property in relation to a property fringe benefit in
relation to the employer in relation to the year of tax is that residential
fuel;
(iii) the recipients benefit in relation to a residual fringe benefit in
relation to the employer in relation to the year of tax is the benefit of the
consumption of that residential fuel;
the amount that, apart from this subsection and section 62, would be the
taxable value of the fringe benefit referred to in paragraph (b) in relation to
the year of tax is reduced by 50%.
14 Subsection 65J(1)
After “if the employer”, insert “is not a public
benevolent institution and”.
15 Subsection 65J(2)
After “year of tax” (first occurring), insert “earlier
than the year of tax beginning on 1 April 2000”.
16 After subsection 65J(2)
Insert:
Rebate for year of tax 2000-2001 and later years
(2A) If an employer is a rebatable employer for the year of tax beginning
on 1 April 2000 or a later year of tax, the employer is entitled to a rebate of
tax in the employer’s assessment for the year of tax concerned equal to
the amount worked out using the formula:
where:
gross tax means the amount of tax payable on the fringe
benefits taxable amount of the employer of the year of tax (assuming that this
section had not been enacted).
rebatable days in year means the number of whole days in the
year of tax when the employer engaged in activities as an employer covered by
any of paragraphs (1)(a) to (l) (inclusive).
total days in year means the number of days in the year of
tax excluding the days on which the employer did not engage in activities as an
employer.
How to work out aggregate non-rebatable amount
(2B) An employer’s aggregate non-rebatable amount for
the year of tax is the amount worked out as follows.
Method statement
Step 1. For each employee, add:
(a) the individual grossed-up type 1 non-rebatable amount (see subsection
(2C)) in relation to the employer for the year of tax; and
(b) the individual grossed-up type 2 non-rebatable amount (see subsection
(2D)) in relation to the employer for the year of tax.
The result is the individual grossed-up non-rebatable amount
for the employee.
Step 2. If the employer is an employer referred to in paragraph
65J(1)(c) or (d), subtract $17,000 from the individual grossed-up non-rebatable
amount for each employee of the employer for the year of tax. However, if the
individual grossed-up non-rebatable 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 the employer is not an employer referred to in paragraph
65J(1)(c) or (d), subtract $25,000 from the individual grossed-up non-rebatable
amount for each employee of the employer for the year of tax. However, if the
individual grossed-up non-rebatable amount for an employee is equal to or less
than $25,000, the amount calculated under this step for the employee is
nil.
Step 4. Add together the amounts calculated under steps 2 and 3 in
relation to the employees of the employer.
Step 5. Multiply the total amount calculated under step 4 by the FBT
rate. The result is the employer’s aggregate non-rebatable
amount for the year of tax.
Individual grossed-up type 1 non-rebatable amount
(2C) For the purposes of step 1 in the method statement in subsection
(2B), the individual grossed-up type 1 non-rebatable amount of an
employee in relation to the employer for the year of tax is:
Individual grossed-up type 2 non-rebatable amount
(2D) For the purposes of step 1 in the method statement in subsection
(2B), the individual grossed-up type 2 non-rebatable amount of an
employee in relation to the employer for the year of tax is:
Working out the type 1 individual base non-rebatable
amount
(2E) An employee’s type 1 individual base non-rebatable
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
(2G) and step 3 of the method statement in subsection (2H).
Working out the type 2 individual base non-rebatable
amount
(2F) An employee’s type 2 individual base non-rebatable
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
(2G) and step 4 of the method statement in subsection (2H).
Working out the subsection (2G) amounts
(2G) An employee’s subsection (2G) amounts for the year of tax are
worked out as follows.
Method statement
Step 1. Work out under section 5E for each of the employer’s
employees the employee’s individual fringe benefits amount (if any) for
the year of tax in respect of the employee’s employment by the
employer.
Step 2. Identify the benefits taken into account in step 1 that
involved the provision of goods or services where, on their acquisition by the
person who provided them, that person was entitled to input tax
credits.
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 (2G)
amount for the individual.
Step 4. The remainder of the amount is the step 4 of
subsection (2G) amount for the individual.
Working out the subsection (2H) amounts
(2H) An employee’s subsection (2H) 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
taxable values of the excluded fringe benefits for the year of tax in respect of
the employee’s employment by the employer, 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
involved the provision of goods or services where, on their acquisition by the
person who provided them, that person was entitled to input tax
credits.
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 (2H)
amount for the individual.
Step 4. The remainder of the amount is the step 4 of
subsection (2H) amount for the individual.
17 At the end of section
65J
Add:
Definitions
(6) 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.
18 Subsection 136(1)
Insert:
aggregate non-exempt amount has the meaning given by
subsection 5B(1E).
19 Subsection 136(1)
Insert:
aggregate non-rebatable amount has the meaning given by
subsection 65J(2B).
20 Subsection 136(1) (definition of remote
area housing fringe benefit)
Repeal the definition.
21 Subsection 136(1) (definition of tenancy
period)
Repeal the definition, substitute:
tenancy period, in relation to a housing benefit in relation
to a year of tax, means the period during the year of tax when the housing right
to which the benefit relates subsisted.
22 Application
The amendments made by this Schedule apply in respect of the FBT year
beginning on 1 April 2000 and in respect of all later FBT years.
1 At the end of section
9-75
Add:
(3) In working out under subsection (1) the value of a
*taxable supply made in a
*tax period, being a supply that is a
*fringe benefit, the price is taken to be the
sum of:
(a) to the extent that, apart from this subsection, paragraph (a) of the
definition of price in subsection (1) would be
applicable:
(i) if the fringe benefit is a car fringe benefit—so much of the
amount that would be worked out under that paragraph as represented the
*recipient’s payment made in that period;
or
(ii) if the fringe benefit is a benefit other than a car fringe
benefit—so much of the amount that would be worked out under that
paragraph as represented the *recipients
contribution made in that period; and
(b) to the extent that, apart from this subsection, paragraph (b) of the
definition of price in subsection (1) would be
applicable:
(i) if the fringe benefit is a car fringe benefit—so much of the
amount that would be worked out under that paragraph as represented the
recipient’s payment made in that period; or
(ii) if the fringe benefit is a benefit other than a car fringe
benefit—so much of the amount that would be worked out under that
paragraph as represented the recipients contribution made in that
period.
2 Section 195-1
Insert:
fringe benefit has the meaning given by section 995-1 of the
*ITAA 1997 but includes a benefit within the
meaning of subsection 136(1) of the Fringe Benefits Tax Assessment Act
1986 that is an exempt benefit for the purposes of that Act.
3 Section 195-1
Insert:
recipients contribution has the meaning given by subsection
136(1) of the Fringe Benefits Tax Assessment Act 1986 but includes any
consideration paid in respect of the provision of a benefit that is an exempt
benefit for the purposes of that Act.
4 Section 195-1
Insert:
recipient’s payment has the meaning given by paragraph
9(2)(e) or 10(3)(c) of the Fringe Benefits Tax Assessment Act
1986.
1 Paragraph 8D(4)(b)
Omit “$13,389”, substitute “the family surcharge
threshold”.
2 Application
The amendment made by item 1 applies in respect of the 1999-2000 year of
income and all later years of income.