3. FBT Flashcards
What is the FBT rate for year ending 31 March 2019?
47%
Is an Australian resident exempt from FBT?
No, the company is if they are not an Australian company. But the resident must pay tax on their income and benefits. but this anomaly is being looked into.
What are the common categories of Fringe Benefits in FBTAA 1986?
Car fringe benefits Debt waiver fringe benefits Loan fringe benefits Expense payment fringe benefit Living away from home allowance (LAFHA) Meal entertainment fringe benefits Car parking Property (giving an employee tools to keep) Residual (providing a tool kit to use)
If FBT applies to something is it deductible for income tax?
FBT applies – Deductible for income tax.
No FBT – Non-deductible for income tax.
Is entertainment deductible?
A deduction for entertainment is generally denied. However, a deduction will be allowed where an employer provides entertainment by way of a ‘fringe benefit’: s. 32-20 ITAA 1997
What categories of employers in FBT and how does it apply?
Wholly FBT Exempt - Religious institutions
Partially FBT Exempt - Category A (Hospitals) Category B (Charities, etc)
Rebatable - Non-government non-profit organisations etc
Fully-taxable - Private and public sector employers
Steps when determining whether FBT applies
- Is there a benefit?
- Is the benefit a ‘fringe benefit’
- Determine the category
- Does the benefit quality as an exemption?
- Determine the taxable value and reductions
- Calculate taxable amount
- Calculate FBT Payable
(Good coverage in CSG)
What are the two ways of calculating car fringe benefits?
Statutory (default) and Operating cost method
What is the difference between an allowance and a reimbursement from an employer to an employee?
Allowances are a predetermined amount and included in assessable income s. 6-5
Reimbursement is when the employee is compensated for the expense of the exact amount. This is an expense payment fringe benefit
What is the difference between in-house benefits and external benefits?
in-house has a $1000 concession and is reduced by otherwise deductible amounts
once the category is determined in FBT how is the taxable amount calculated?
Identify each fringe benefit as either a Type 1 or Type 2 benefit.
Multiply the taxable value of each fringe benefit by the applicable gross-up factor.
What are some types of taxes that arise between Employers and Employees?
PAYG FBT ESS (Employee Share Schemes) ETP (Employment Termination Payments) Payroll Tax
