The rates are as follows:

If yes, Type 1 gross-up rate applies. If no, Type 2 gross-up rate applies.

Because the FBT rate changes for the year ending 31 March 2015 onwards, the gross-up rates also change. The rates are as follows:

Reportable fringe benefits are grossed-up using the Type 2 rate, regardless of the gross-up rate used in calculating the FBT payable on a benefit.

If yes, a car fringe benefit may arise.

If yes, a car fringe benefit may arise. If no, the fringe benefit may be a residual benefit.

The value of the benefit is reduced by the employee’s contribution if appropriate evidentiary documents have been maintained.

If yes, an exemption from FBT may apply if the private use is limited to: travel between home and work; travel incidental to travel in the course of performing employment-related duties; or non-work-related use that is minor, infrequent and irregular (eg occasional use of the vehicle to remove domestic rubbish).

The statutory formula method must be used unless an election has been made to use the operating costs method. However, even if such an election has been made, the statutory formula method applies if it results in a lower taxable value. 

If the statutory formula method was used in the previous year and the operating costs method has been elected in this current year, has a logbook been maintained?

The statutory percentage is 20%. Prior to 7.30 pm on 10 May 2011 AEST, there were four different rates, depending on the number of kilometres travelled. Transitional arrangements phased in the 20% rate over three FBT years (2011–2012, 2012–2013 and 2013–2014). See “Car fringe benefits statutory formula rates” on page 6.

If yes, the base value of the car is increased by the (GST-inclusive) cost price of the accessories.

If it has been owned for more than four years, the cost base of the vehicle is reduced by one-third. However, this reduction does not apply to non-business accessories fitted after the acquisition of the vehicle.

The taxable value of the car benefit is reduced by the number of days during the FBT year in which the vehicle was not used or available for private use by the employee (or the employee’s associate).

If yes, has a log book been kept for a minimum continuous period of 12 weeks?

The readings must be recorded to enable total kilometres travelled for the year to be calculated.

This must be in writing, which is normally evident by maintaining a log book.

If the vehicle was replaced, the previously established business percentage may be transferred to the replacement vehicle, provided the percentage had not changed.

The deemed depreciation and deemed interest is calculated based on the written-down value of the vehicle as at 1 April 2016.

Deemed depreciation and deemed interest must also be included in the operating costs of the vehicle.

An exemption from car parking fringe benefits arises if your business is a small business or an SBE and car parking is provided (ie not a commercial car park). A small business is a taxpayer with gross income of less than $10 million (other than government bodies for FBT purposes and listed public companies and their subsidiaries). An SBE is essentially an entity with an aggregated turnover of less than $2 million (note the proposed amendments to increase this threshold to $10 million with effect from 1 July 2016).

·         the car is parked at or near the employee’s primary place of employment;

·         the car is used by the employee to travel between home and work;

·         the car is parked for periods totalling more than four hours between 7.00am and 7.00pm; and

·         a commercial car parking station is located within one kilometre of the premises where the car is parked and the operator of the parking station charges more than $8.48 for all-day parking?

A car parking benefit potentially arises if the answer is yes.

If no election is made, the actual usage records method must be used.

The commercial parking station method will automatically apply if no election has been made.

A LAFHA benefit may arise if the answer is yes. Note the treatment of LAFH allowances and benefits has been significantly overhauled, narrowing the scope for eligibility. Among other things, there is an increased requirement to ensure LAFH payments are properly tracked, categorised and substantiated.

If yes, and provided the relevant conditions are satisfied, the taxable value of the LAFHA benefit is the value of the benefit reduced by any exempt accommodation component and any exempt food component.

If no election is made, the taxable value is based on actual expenditure incurred.

A register is only valid for the FBT year in which the register period ends and the next four FBT years, provided that the total GST-inclusive entertainment costs do not vary by more than 20% between each FBT year.

The taxable value of the benefit is reduced by any contributions.

Note that a grossed-up cap of $5,000 will apply from 1 April 2016 for salary packaged meal entertainment and entertainment facility leasing expense benefits for employees of public and not-for-profit hospitals, public ambulance services, public benevolent institutions and health promotion charities. In addition, all meal entertainment benefits will be reportable benefits from 1 April 2016.

A fringe benefit may potentially exist. A “loan” includes an advance of money, the provision of credit, the payment of money on account of another if there is an obligation to repay, or any other transaction that is a loan in substance.

The taxable value of the benefit is the amount by which the notional interest rate calculated on the loan for the year exceeds the amount of interest that has actually accrued on the loan during the year.

If interest is not paid at least every six months, a new loan equivalent to the deferred interest component will arise.

The taxable value of the benefit is reduced by the amount to which the employee would be entitled to a deduction, provided a declaration has been given setting out particulars of the use to which the loan was put.

Property includes all tangible and intangible property. Examples of property are goods, shares and real property. The ATO considers the provision of Bitcoin to be a property fringe benefit.

The taxable values for the former and latter are calculated differently.

The taxable value of in-house property fringe benefits may qualify for the general exemption of up to $1,000 for “in-house” benefits. However, the $1,000 reduction will not apply to an in-house benefit provided on or after 22 October 2012 under a salary packaging arrangement.

If an in-house property fringe benefit is provided on or after 22 October 2012 under a salary packaging arrangement, the taxable value of the benefit is an amount equal to the notional value of the benefit at the time it is provided. The notional value is the amount that the employee could reasonably be expected to pay under an arm’s length arrangement.

If the property is acquired under an arm’s-length transaction by the employer or an associate of the employer, the taxable value of the benefit is the cost price of the property reduced by the amount (if any) paid by the employee. This rule applies if the property is provided to the employee around the time it was acquired by the employer or associate etc.

The taxable value of the property fringe benefit is effectively reduced by the deductible amount (the “otherwise deductible” rule).

The otherwise deductible rule requires an employee declaration setting out details sufficient to establish the connection between the property provided and the income-producing activities of the employee. However, if the property was provided exclusively in the course of the employee’s employment, a declaration is not required.

There have been changes to the FBT law relating to airline transport fringe benefits. Under the changes, there is no longer a separate category of fringe benefit for airline transport fringe benefits. Airline transport fringe benefits are now taxed under the in-house benefit provisions and the way the taxable value is calculated has been changed.

Potentially, an expense payment fringe benefit arises. Examples include electricity, gas and telephone expenses, school fees, property rates, mortgage payments, and road tolls.

The taxable value of the expense payment fringe benefit is effectively reduced by the deductible amount (the “otherwise deductible” rule).

A declaration, in an approved form, setting out particulars of the expense and the extent to which expenditure would have been otherwise deductible in earning the employee’s income, is required to reduce the taxable value of the expense payment fringe benefit.

If yes, an exemption from FBT may be available.

Note that from the 2016-17 FBT year, a small business entity (SBE) will be able to provide more than one work-related portable electronic device to an employee and claim the FBT exemption for each device, even if the devices have substantially identical functions and are not replacement items.

. Note also there are different rules for items provided before 7.30pm AEST on 13 May 2008.

If yes, an exemption from FBT applies.

If yes and the additional item has substantially identical functions to the original item (and is not a replacement item), the additional item will not be exempt from FBT.

A benefit with a notional taxable value of less than $300 does not automatically attract an exemption from FBT unless it is infrequent and irregular.