Taxation Laws Amendment (FBT Cost of Compliance) Act 1995

(145 of 1995)

An Act to amend the law relating to taxation

Assented to 12 December 1995

The Parliament of Australia enacts:

1 Short title

This Act may be cited as the Taxation Laws Amendment (FBT Cost of Compliance) Act 1995.

2 Commencement

this Act commences on the day on which it receives the Royal Assent.

3 Schedules

The Acts specified in the Schedules to this Act are amended in accordance with the applicable items in the Schedules, and the other items in the Schedules have effect according to their terms.

Schedule 1 MEAL ENTERTAINMENT AND ENTERTAINMENT FACILITIES

Part 1 AMENDMENT OF THE FRINGE BENEFITS TAX ASSESSMENT ACT 1986

1 After Division 9 of Part III

Insert:

"Division 9A-Meal entertainment

"Subdivision A-Meal entertainment

Key principle

"37A.

An employer may elect that this Division will apply to the employer for

an FBT year. If the employer does this, the taxable value of meal

entertainment fringe benefits provided to the employer's employees and

associates of those employees by the employer will either be half the

expenses incurred for the FBT year by the employer in providing meal

entertainment benefits or, if the employer makes a further election, an

amount worked out based on a 12 week register kept by the employer.

Division only applies if election made

"37AA. An employer may elect that this Division applies to the

employer for an FBT year.

Employee contributions to be excluded

"37AB. For the purposes of this Division any reference to expenses or

expenditure in relation to meal entertainment or meal entertainment

benefits excludes any contribution from an employee or an associate of

an employee that is not subject to reimbursement by the employer.

Meal entertainment benefits

"37AC. Where at a particular time an employer (the provider) to whom

this Division applies provides meal entertainment to another person

(the recipient) the provision of the meal entertainment is taken to

constitute a meal entertainment benefit provided by the provider to the

recipient at that time.

Meaning of provision of meal entertainment

"37AD. A reference to the provision of meal entertainment is a

reference to the provision of:

(a) entertainment by way of food or drink; or

(b) accommodation or travel in connection with, or for the purpose of

facilitating, entertainment to which paragraph (a) applies; or

something covered by paragraph (a) or (b);

whether or not:

(d) business discussions or business transactions occur; or

(e) in connection with the working of overtime or otherwise in

connection with the performance of the duties of any office or

employment; or

(f) for the purposes of promotion or advertising; or

(g) at or in connection with a seminar.

Fringe benefits only arise if employer is provider

"37AE. No meal entertainment fringe benefit arises where the employer

in relation to whom the benefit would otherwise arise is not the

provider of the benefit.

No other fringe benefits arise if election made

"37AF. If a meal entertainment fringe benefit arises in respect of

the provision of meal entertainment, no other fringe benefit arises in

relation to any person in respect of the provision of the meal

entertainment.

Some benefits still arise

"37AG. To avoid doubt, sections 37AE and 37AF do not prevent a fringe

benefit in relation to an employer arising under any provision of this

Act where the employer is not the provider of the benefit.

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

Key principle

"37B.

If an employer elects that this Division applies, then (unless the

employer elects that Subdivision C applies) the taxable value of meal

entertainment fringe benefits provided to the employer's employees and

associates of those employees by the employer is half the expenses

incurred for the FBT year by the employer in providing meal

entertainment benefits.

Taxable value using 50/50 split method

"37BA. If this Division applies to an employer for an FBT year then,

unless the employer elects that Subdivision C applies, the total

taxable value of meal entertainment fringe benefits of the employer for

the FBT is 50% of the expenses incurred by the employer in providing

meal entertainment for the FBT year.

Note: This means that the employer's aggregate fringe benefits amount

(see subsection 136(1)) for the FBT year will include 50% of the total

expenses incurred by the employer for the provision of meal

entertainment to all persons in the FBT year.

"Subdivision C-12 week register method

Key principle

"37C.

If an employer elects that this Subdivision applies, the taxable value

of meal entertainment fringe benefits is to be calculated by reference

to a 12 week register kept by the employer.

Election by employer

"37CA. An employer who elects that this Division applies may elect

also that this Subdivision applies to meal entertainment provided by

the employer for an FBT year if the employer has a valid meal

entertainment register for that year.

Taxable value using 12 week register method

"37CB.(1) If the employer elects that this Subdivision applies for an

FBT year then, despite any other provision of this Act, the taxable

value of meal entertainment fringe benefits for the employer for the

FBT year is worked out using the formula:

Total meal entertainment expenditure X Register percentage

Note: This means that the employer's aggregate fringe benefits amount

(see subsection 136(1)) for the FBT year will include a proportion of

the expenses incurred by the employer for the provision of meal

entertainment for all persons in the FBT year. The proportion is

worked out on the basis of the 12 week register.

"(2) The register percentage is the percentage worked out using the

formula:

[(Total value of meal entertainment fringe benefits)/(Total value of meal entertainment)] * 100%

where:

total value of meal entertainment fringe benefits means the total value

of meal entertainment fringe benefits that are provided by the employer

in the 12 week period covered by the employer's register.

total value of meal entertainment means the total value of meal

entertainment provided by the employer during the 12 week period

covered by the register.

"(3) The total meal entertainment expenditure is the total of

expenses incurred by the employer in providing meal entertainment for

the FBT year.

Choosing the 12 week period for a register

"37CC.(1) The register must be kept for a continuous period of at

least 12 weeks throughout which meal entertainment is provided by the

employer.

"(2) The period for which the register is kept must be representative

of the first FBT year for which it is valid.

"(3) If the register does not meet these conditions it is not valid.

FBT years for which register is valid

12 week period in one FBT year

"37CD.(1) If the 12 week period begins and ends in the same FBT year,

the register is valid for that FBT year and, subject to subsection (3),

for each of the 4 FBT years immediately following that year.

12 week period over 2 FBT years

"(2) If the 12 week period begins in one FBT year and ends in another

FBT year, the register is only valid for the second FBT year and,

subject to subsection (3), for each of the 4 FBT years immediately

following that year.

When register ceases to be valid

"(3) A register that is valid for an FBT year ceases to be valid at

the end of that FBT year if the total of expenses incurred by the

employer in providing meal entertainment for that FBT year is more than

20% higher than the corresponding total for the first FBT year for

which the register was valid. A register also ceases to be valid for

an FBT year if there is a later valid register for that FBT year.

Matters to be included in register

"37CE.(1) The register must include the details of the following:

(a) the date the employer provided meal entertainment;

(b) for each recipient of meal entertainment-whether the recipient is

an employee of the employer or an associate of the employer;

(d) the kind of meal entertainment provided;

(e) where the meal entertainment is provided;

(f) if the meal entertainment is provided on the employer's premises-

whether it is provided in an in-house dining facility within the

meaning of subsection 51AE(1) of the Income Tax Assessment Act 1936.

"(2) A person responsible for making entries in the register must

make the entry as soon as practicable after he or she knows the details

required by subsection (1).

Fraudulent entries invalidate register

"37CF. For the purposes of this Act, a register is not valid if the

particular.".

2 Subsection 136(1) (definition of business premises)

Omit all the words after "business operations", substitute, "of the

person, but does not include:

(a) premises, or a part of premises, used as a place of residence of

an employee of the person or an employee of an associate of the person;

(b) a corporate box; or

entertainment unless the boat or plane is used in the person's business

of providing entertainment; or

(d) other premises used primarily for the purpose of providing

entertainment unless the premises are used in the person's business of

providing entertainment.

In this definition, provision of entertainment has the same meaning as

in section 51AE of the Income Tax Assessment Act 1936.".

3 Subsection 136(1)

Insert:

"entertainment facility leasing expenses, for a person, means

expenses incurred by the person in hiring or leasing:

(a) a corporate box; or

(b) boats, or planes, for the purpose of the provision of

entertainment; or

of entertainment;

but does not include so much of any of such expenses that is

attributable to:

(d) the provision of food or beverages; or

(e) is attributable to advertising and is an allowable deduction for

the person under the Income Tax Assessment Act 1936.

meal entertainment benefit means a benefit that is a meal entertainment

benefit because of section 37AC.

meal entertainment fringe benefit means a fringe benefit that is a meal

entertainment benefit.".

4 Before section 153

Insert:

Employer may elect 50/50 split method for entertainment facility

leasing costs

"152B. If:

(a) the taxable value of one or more fringe benefits of an employer

for an FBT year is attributable, in whole or in part, to entertainment

facility leasing expenses incurred by the employer in the FBT year; and

(b) the employer elects that this section applies for the FBT year;

then:

year is to be reduced by so much of the total taxable value of all

fringe benefits as is attributable to entertainment facility leasing

expenses; and

(d) the aggregate fringe benefit amount for the employer for the FBT

year is to then be increased by 50% of the total of entertainment

facility leasing expenses incurred by the employer in the FBT year

(including expenses not taken into account under paragraph (a)).

Note: The effect of this is that the employer's aggregate fringe

benefits amount (see subsection 136(1)) for the FBT year will include

50% of the entertainment facility leasing expenses incurred by the

employer for the FBT year.".

5 Application

The amendments made by this Part apply to assessments of the fringe

benefits taxable amount of an employer of the FBT year beginning on 1

April 1995 and of all later FBT years.

Part 2 AMENDMENT OF THE INCOME TAX ASSESSMENT ACT 1936

6 After section 51AE

Insert:

Meal entertainment-election under section 37AA of Fringe Benefits Tax

Assessment Act 1986 to use 50/50 split method

"51AEA.(1) If a meal entertainment fringe benefit arises for a

taxpayer for an FBT year and the taxpayer elects that Division 9A of

Part III of the Fringe Benefits Tax Assessment Act 1986 applies to the

taxpayer for the FBT year, and has not elected that Subdivision C of

that Division applies:

(a) for each expense incurred in the FBT year by the taxpayer in

providing meal entertainment, a deduction equal to 50% of that expense

is allowable to the taxpayer for the year of income in which it is

incurred; and

(b) no other deduction under any provision of this Act is allowable

to the taxpayer for the expense.

"(2) Expressions used in this section have the same meaning as in the

Fringe Benefits Tax Assessment Act 1986.

Meal entertainment-election under section 37CA of Fringe Benefits Tax

Assessment Act 1986 to use the 12 week register method

"51AEB.(1) If a taxpayer has made an election under section 37CA of

the Fringe Benefits Tax Assessment Act 1986:

(a) for each expense incurred in the FBT year by the taxpayer in

providing meal entertainment, a deduction equal to the amount worked

out using the following formula is allowable to the taxpayer for the

year of income in which it is incurred:

Amount of expense * Register percentage

(b) no other deduction under any provision of this Act is allowable

to the taxpayer for the expense.

"(2) The register percentage is the percentage worked out using the

formula:

[(Total deductions for register meal entertainment)/(Total register meal entertainment expenses)]*100%

where:

Total deductions for register meal entertainment means the total of

deductions that would (but for this section and section 51AEA) be

allowable to the taxpayer for expenses incurred by the taxpayer in

providing meal entertainment in the 12 week period covered by the

Fringe Benefits Tax Assessment Act 1986.

Total register meal entertainment expenses means the total of expenses

incurred by the taxpayer in providing meal entertainment during that 12

week period.

"(3) Expressions used in this section have the same meaning as in the

Fringe Benefits Tax Assessment Act 1986.

Entertainment facility-election under section 152B of Fringe Benefits

Tax Assessment Act 1986 to use 50/50 split method

"51AEC.(1) If a taxpayer has made an election under section 152B of

the Fringe Benefits Tax Assessment Act 1986:

(a) for each entertainment facility leasing expense incurred in the

FBT year by the taxpayer, a deduction equal to 50% of that expense is

allowable to the taxpayer for the year of income in which it is

incurred; and

(b) no other deduction under any provision of this Act is allowable

to the taxpayer for entertainment facility leasing expenses incurred in

the FBT year.

"(2) Expressions used in this section have the same meaning as in the

Fringe Benefits Tax Assessment Act 1986.".

Schedule 2 CAR PARKING

Part 1 AMENDMENT OF THE FRINGE BENEFITS TAX ASSESSMENT ACT 1986

Division 1 Additional test to be satisfied in relation to a car parking benefit

1 Paragraph 39A(a)

Add at the end:

"and (iii) the lowest fee charged by the operator of any such

commercial parking station in the ordinary course of business to

members of the public for all-day parking on the first business day of

the FBT year is more than the car parking threshold;".

2 Section 39A

Add at the end:

"(2) For the purposes of this section:

(a) the carparking threshold for the FBT year beginning on 1 April 1999 is $5.00; and

(b) for later years the carparking threshold is the threshold for the

previous FBT year as adjusted on the first business day of the later

FBT year by a factor equivalent to the movement in the preceding twelve

months in the All Groups Consumer Price Index number (being the

weighted average of the 8 capital cities) published by the Australian

Statistician.

"(3) Subject to subsection (4), if at any time, whether before or

after the commencement of this Act, the Australian Statistician has

published or publishes an index number in respect of a quarter in

substitution for an index number previously published by the Australian

Statistician in respect of that quarter, the publication of the later

index number is to be disregarded for the purposes of this section.

"(4) If at any time, whether before or after the commencement of this

section, the Australian Statistician has changed or changes the

reference base for the Consumer Price Index, then, for the purposes of

the application of this section after the change, regard is to be had

only to the index numbers published in terms of the new reference

base.".

3 After section 39A

Insert:

Anti-avoidance-fee on first business day not representative

"39AA. For the purposes of subparagraph 39A(a)(iii), any fee charged

on the first business day of an FBT year that is not representative is

to be disregarded.

When fees are not representative

"39AB. A fee charged by an operator of a commercial parking station

on a particular day is not representative if the fee is substantially

greater or less than the average of the lowest fee charged by the

operator in the ordinary course of business to members of the public

for all-day parking on each of the days in whichever of the following

periods is chosen by the employer:

(a) the 4 week period beginning on the day; or

(b) the 4 week period ending on the day.".

Division 2 Valuation of car parking benefits

4 After section 39D

Insert:

Taxable value of car parking fringe benefits-average cost method

Election

"39DA.(1) An employer may elect that this section applies to any or

all of the employer's car parking fringe benefits for a particular FBT

year.

Taxable value

"(2) Subject to this Part, if an election covers a car parking fringe

benefit, the taxable value of the fringe benefit is the average cost

worked out under subsection (3) reduced by the recipients contribution.

Method of working out average cost

"(3) The average cost is:

A + B

where:

A is the lowest fee charged in the ordinary course of business to

members of the public for all-day parking by any operator of a

commercial parking station located within a 1 km radius of any of the

relevant parking premises on the day on which a car parking benefit is

first provided in that FBT year in relation to the employer in

connection with any of those premises.

B is the lowest fee charged in the ordinary course of business to

members of the public for all-day parking by any operator of a

commercial parking station located within a 1 km radius of any of the

relevant parking premises on the day on which a car parking benefit is

last provided in that FBT year in relation to the employer in

connection with any of those premises.

relevant parking premises means the premises referred to in paragraph

39A(a).

Fees must be representative

"(4) An election is of no effect if the fees referred to in

subsection (3) are not representative (see section 39AB).".

Division 3 Alternative methods of valuing car parking benefits

5 After Subdivision B of Division 10A of Part III

Insert in Division 10A:

"Subdivision C-Statutory formula method-spaces

The key principle

"39F. Under this Subdivision, an employer may elect to calculate the

value of certain car parking fringe benefits by using a statutory

formula based on the number and value of spaces available to employees

covered by the election.

Spaces method of calculating total taxable value of car parking fringe

benefits

Election

"39FA.(1) If a provider provides one or more car parking benefits in

respect of one or more employees of an employer in a particular FBT

year, the employer may elect that this Subdivision applies to the

employer's car parking fringe benefits for some or all of the employees

for that FBT year.

Employer must specify employees covered by election

"(2) The employer must specify that the election covers:

(a) all the employees; or

(b) all employees of a particular class; or

Total value of car parking fringe benefits

"(3) Despite any other provision of this Act (other than section

39FB) the total taxable value of the employer's car parking fringe

benefits for employees covered by the election for the FBT year is the

amount worked out using the spaces method under subsection (4).

Note: Section 39FB covers the situation where the number of spaces

available to employees exceeds the number of employees.

Method

"(4) The spaces method is:

Step 1: Work out an amount using the following formula, for each space

for which there is, in the FBT year, at least one car parking benefit

for an employee covered by the election:

Number of days in

availability periods in

relation to space

Daily rate amount X X 228

366

Step 2: Work out the total of all the amounts calculated under Step 1

(the total statutory benefit).

Step 3: Subtract from the total statutory benefit the sum of all

relevant recipients contributions.

Note 1: Section 39FC defines daily rate amount.

Note 2: Section 39FD defines availability period.

Note 3: Section 39FE defines relevant recipients contribution.

"(5) The election is of no effect if, in working out the daily rate

for a space, the fees referred to in subsection 39DA(3) are not

representative (see section 39AB).

Number of spaces exceeds number of employees

"39FB.(1) This section applies if, throughout the parking period (see

subsection (5)), the average number of employees covered by the

election is less than the average number of spaces (eligible spaces)

for which there is an availability period.

Formula to reduce total statutory benefits

"(2) If this section applies, the total statutory benefit (see Step 2

in subsection 39FA(4)) is multiplied by the following fraction:

Average number of employees

Average number of eligible spaces

"(3) The average number of employees is:

Number of employees covered Number of employees

by election at the beginning + covered by election at the end

of the parking period of the parking period

"(4) The average number of eligible spaces is:

Number of eligible spaces at

the beginning of the parking + Number of eligible spaces at

period the end of the parking period

"(5) The parking period is the period:

(a) beginning on the first day in the FBT year on which the parking

of a car in any space referred to in subsection 39FA(4) gives rise to a

car parking fringe benefit of the employer for an employee covered by

the election; and

(b) ending on the last day in the FBT year on which the parking of a

car in any space referred to in subsection 39FA(4) gives rise to a car

parking fringe benefit of the employer for an employee covered by the

election.

Number of employees and number of spaces must be representative

"(6) This section does not apply if the number of employees or the

number of eligible spaces referred to in subsections (3) and (4) are

not representative (see subsection (7)).

Meaning of not representative

"(7) A number of employees, or a number of eligible spaces, as the

case requires, is not representative if the number of employees, or

eligible spaces, as the case requires, is substantially greater or less

than the average number throughout whichever of the following periods

is chosen by the employer:

(a) the 4 week period ending on the first day of the parking period;

(b) the 4 week period beginning on the last day of the parking

period.

Meaning of daily rate amount

"39FC. The daily rate amount for a space is the amount that would be

worked out using whichever of the following methods that the taxpayer

chooses:

(a) the commercial parking station method;

(b) the market value method;

as the taxable value of the car parking fringe benefit for the space,

if there were no recipients contribution.

Meaning of availability period

"39FD. An availability period for a space begins on the first day in

the FBT year on which there is a car parking benefit for the space for

an employee covered by the election and ends on the last day in the FBT

year on which there is a car parking benefit for the space for an

employee covered by the election.

Meaning of relevant recipients contribution

"39FE. A relevant recipients contribution is a recipients

contribution in respect of any car parking fringe benefit provided in

respect of the employment of an employee covered by the election for

the FBT year.

"Subdivision D-12 week record keeping method The key principle

"39G.

Under this Subdivision, an employer may keep a 12 week register of car

parking provided to employees. An employer who keeps such a register

may elect that the total value of certain car parking fringe benefits

for an FBT year for which the register is valid is to be determined in

accordance with the register.

Employer may elect to use 12 week record keeping method

"39GA.(1) An employer may elect that this Subdivision applies to the

employer's car parking fringe benefits for some or all of the

employer's employees for that FBT year if the employer has a valid

"(2) The employer must specify that the election covers:

(a) all the employees; or

(b) all employees of a particular class; or

Value of fringe benefits for year

"39GB. Despite any other provision of this Act (other than this

section), the total taxable value of the employer's car parking fringe

benefits for employees covered by the election for the FBT year is the

amount worked out using the formula:

((Total value of car ) Number of days

((parking benefits (register) X 52) car parking

( 12) availability periods

X 366

Meaning of total value of car parking benefits (register)

"39GC. The total value of car parking benefits (register), in

relation to the FBT year, means the amount that would be the total

taxable value of car parking fringe benefits for employees covered by

the election for the 12 week period for which a register is kept,

assuming that:

(a) the register had been kept in that FBT year; and

(b) the value of the benefits were calculated in accordance with the

information in the register; and

following methods that the taxpayer chooses:

(i) the commercial parking station method;

(ii) the market value method;

(iii) the average cost method.

Meaning of car parking availability period

"39GD. The car parking availability period is the period:

(a) beginning on the first day in the FBT year on which there is a

car parking benefit for an employee covered by the election; and

(b) ending on the last day in the FBT year on which there is a car

parking benefit for an employee covered by the election.

Choosing the 12 week period for a register

"39GE.(1) The register must be kept for a continuous period of at

least 12 weeks throughout which car parking benefits are provided to

employees covered by the election.

"(2) The period for which the register is kept must be representative

of usage for the first FBT year for which it is valid.

"(3) If subsection (1) or (2) is not satisfied, the register is not

valid.

FBT years for which register is valid

12 week period in one FBT year

"39GF.(1) If the 12 week period begins and ends in the one FBT year,

the register is valid for that FBT year and, subject to subsections (3)

and (4), for each of the 4 FBT years immediately following that year.

12 week period over 2 FBT years

"(2) If the 12 week period begins in one FBT year and ends in another

FBT year, the register is only valid for the second FBT year and,

subject to subsections (3) and (4), for each of the 4 years immediately

following that year.

When register ceases to be valid-increase in benefits

"(3) A register that is valid for an FBT year ceases to be valid at

the end of that FBT year if the number of car parking fringe benefits

for the employer for employees covered by the election increases by

more than 10% on any day in that FBT year.

Note: This means that if the number of car parking fringe benefits

increases by more than 10%, the employer will have to keep a new

employer wants to use the method in this Subdivision for that following

year.

When a register ceases to be valid-later register

"(4) A register that is valid for an FBT year ceases to be valid if

there is a later valid register for that FBT year that covers the same

employee.

Matters to be included in register

"39GG.(1) The register must include details of the following:

(a) the date on which each car covered by subsection (4) was parked;

(b) whether the car was parked for a total that exceeds 4 hours;

employee covered by the election and his or her primary place of

employment on that day;

(d) the place where the car was parked.

"(2) The person responsible for making entries in the register must

make the entry as soon as practicable after he or she knows the details

required by subsection (1).

"(3) If subsection (1) or (2) is not satisfied, the register is not

valid.

"(4) A car is covered by this subsection if:

(a) a car benefit relating to the car is provided on a day during the

12 week period to an employee covered by the election in respect of the

employee's employment; or

(b) the car is owned by, or leased to, an employee covered by the

election at any time during the 12 week period; or

covered by the election at any time during the 12 week period where:

(i) the other person is not the employee's employer; and

(ii) the other person did not make the car available under an

arrangement to which the employee's employer is a party.

Fraudulent entries invalidate register

"39GH. For the purposes of this Act, a register is not valid if the

particular.".

Division 4 Consequential amendments

6 Sections 39C and 39D

Omit "a year of tax", substitute "an FBT year".

7 Sections 39C and 39D

Omit "the year of tax" (wherever occurring), substitute "the FBT year".

8 Subsection 39D(1)

Omit "a particular year of tax", substitute "a particular FBT year".

9 Subsection 39E(1)

Omit "Subdivision", substitute "Division".

Division 5 Application and Transitional

10 Application

The amendments made by this Part apply to assessments of the fringe

benefits taxable amount of an employer of the FBT year beginning on 1

April 1995 and of all later FBT years.

11 Transitional

A register is taken to have been kept under Subdivision D of Division 10 of Part III of the Fringe Benefits Tax Assessment Act 1986 if:

(a) before the commencement of this item, an employer kept the

(b) the register satisfies subsections 39GE(1) and (2) and 39GG(1)

and (2) of that Act.

Part 2 AMENDMENT OF THE INCOME TAX ASSESSMENT ACT 1936

Division 1 Insertion of new Division dealing with car parking

12 After Division 4 of Part III

Insert:

"Division 4A-Car parking for certain self-employed persons,

partnerships and trusts

"Subdivision A-Key principle, overview and coverage of Division

The key principle

"89A.

No deduction is allowable under this Act to a self-employed person, a

partnership or a trust for certain parking expenditure unless the

amount that would otherwise be deductible is reduced by the amount

calculated using one of the approved valuation methods.

Overview of Division

"89AA. The following table summarises the contents of this Division:

OVERVIEW

Subdivision Coverage

A Key principle, overview and coverage of Division

B The basic requirement that the deduction must be

calculated using an approved valuation method

C The commercial parking station method

D The market value method

E The average cost method

F The statutory formula (spaces) method

G The 12 week record keeping method

H Special provisions-2 anti-avoidance provisions

J Definitions (many terms have the same meaning as in

the Fringe Benefits Tax Assessment Act 1986)

Deductions to which Division applies

"89AB.(1) This Division applies to any deduction that would otherwise

be allowable to a taxpayer who is a natural person (including a person

in the capacity of trustee) or a partnership if all of the conditions

set out in this section are satisfied.

The first condition

"(2) The first condition is that the deduction (the gross deduction)

would, apart from this Division, be allowable to the taxpayer under

this Act in respect of expenditure to the extent to which it is

incurred in respect of the provision of car parking facilities for a

car on a day (the parking day) on or after 1 July 1995.

The second condition

"(3) The second condition is that, on the parking day, the taxpayer

or a partner in the taxpayer (if the taxpayer is a partnership) has a

primary place of self-employment and the car is used in connection with

travel by the taxpayer or partner between his or her place of residence

and that primary place of self-employment.

The third condition

"(4) The third condition is that:

(a) on the parking day, the car is parked on particular premises (the

parking premises) for one or more daylight periods exceeding 4 hours in

total; and

(b) the parking premises are at, or in the vicinity of, the primary

place of self-employment; and

the parking premises; and

(d) the lowest fee charged by the operator of any such commercial

parking station in the ordinary course of business to members of the

public for all-day parking on the first business day of the year of

income is more than $5.00.

Note: An anti-avoidance provision applies to paragraph (4)(d)-see

section 89HA.

The final condition

"(5) The final condition is that the expenditure is in respect of the

provision of the parking facilities to which that parking relates.

Regulations may exclude certain cases

"89AC. This Division does not apply to a deduction if the provision

of parking facilities for the car during the period or periods to which

the deduction relates is taken, under the regulations, to be excluded

from this Division.

"Subdivision B-Deduction to be calculated using an

approved valuation method

Deduction to be calculated using an approved valuation method

"89B.(1) If this Division applies to a gross deduction, the gross

deduction is not allowable to the taxpayer, unless the taxpayer elects

to use an approved valuation method in calculating the amount of the

deduction.

"(2) The following are the approved valuation methods:

(a) the commercial parking station method;

(b) the market value method;

(d) the statutory formula (spaces);

(e) the 12 week record keeping method.

"Subdivision C-The commercial parking station method

What an election to use this method covers

"89C. A taxpayer may elect to use the commercial parking station

method to cover all gross deductions for the taxpayer that relate to:

(a) a particular car; and

(b) particular parking premises; and

Amount of deduction using this method

"89CA.(1) The amount of the deduction worked out using this method

is:

Gross deduction amount - Commercial parking station amount.

"(2) The gross deduction amount is:

(a) if only one gross deduction is covered by the election-the amount

of that gross deduction; or

(b) if more than one gross deduction is covered by the election-the

sum of the amounts of those gross deductions.

"(3) The commercial parking station amount is equal to the lowest fee

charged by any operator of commercial parking stations within a 1 km

radius of the parking premises in the ordinary course of business to

members of the public for all-day parking on the parking day.

"Subdivision D-The market value method

What an election to use this method covers

"89D. A taxpayer may elect to use the market value method to cover

all gross deductions for the taxpayer that relate to:

(a) a particular car; and

(b) particular parking premises; and

Amount of deduction using this method

"89DA.(1) The amount of the deduction worked out using this method

is:

Gross deduction amount - Market value amount.

"(2) The gross deduction amount is:

(a) if only one gross deduction is covered by the election-the amount

of that gross deduction; or

(b) if more than one gross deduction is covered by the election-the

sum of the amounts of those gross deductions.

"(3) The market value amount is the amount that the taxpayer could

reasonably be expected to have been required to pay in respect of the

provision of the parking facilities for the car on the parking day if:

(a) those facilities had been provided by another person; and

(b) the parties to the transaction were dealing with each other at

arm's length.

Valuer's report needed if method is used

"89DB. An election to use the market value method in relation to one

or more days in a year of income has no effect unless:

(a) a suitably qualified valuer gives to the taxpayer a report, in a

form approved by the Commissioner, about the valuation of the provision

of the car parking facilities; and

(b) the valuer is at arm's length in relation to the valuation; and

relates to the market value method, is based on the report.

"Subdivision E-The average cost method

What an election to use this method covers

"89E. A taxpayer may elect to use the average cost method to cover

all gross deductions for the taxpayer that relate to:

(a) a particular car; and

(b) particular parking premises; and

Amount of deduction using this method

"89EA.(1) The amount of the deduction worked out using this method

is:

Gross deduction amount - Average cost amount.

"(2) The gross deduction amount is:

(a) if only one gross deduction is covered by the election-the amount

of that gross deduction; or

(b) if more than one gross deduction is covered by the election-the

sum of the amounts of those gross deductions.

"(3) The average cost amount is equal to:

A + B

where:

A is the lowest fee charged in the ordinary course of business to

members of the public for all-day parking by any operator of a

commercial parking station located within a 1 km radius of the parking

premises on the first parking day for the taxpayer or the partner (as

the case requires) for those premises in that year of income.

B is the lowest fee charged in the ordinary course of business to

members of the public for all-day parking by any operator of a

commercial parking station located within a 1 km radius of any of the

parking premises on the last parking day for the taxpayer or the

partner (as the case requires) for those premises in that year of

income.

Fees must be representative if method is used

"89EB. An election to use the average cost method is of no effect if

the fees referred to in subsection 89EA(3) are not representative.

"Subdivision F-Statutory formula (spaces) method

The key principle

"89F. Under this Subdivision, a taxpayer may elect to reduce the

amount of certain deductions by an amount calculated using a statutory

formula based on the number and value of spaces available to the

taxpayer, or, if the taxpayer is a partnership, to partners in the

taxpayer who are covered by the election.

Spaces method of calculating total deduction for car parking expenses

Election

"89FA.(1) A taxpayer, other than a partnership, may elect to use the

statutory formula (spaces) method to cover all of the gross deductions

for the taxpayer for a year of income.

Election-partnerships

"(2) A partnership may elect to use the statutory formula (spaces)

method to cover all of the gross deductions for the taxpayer for a year

of income that relate to one or more partners in the taxpayer.

Partnership must specify partners covered by election

"(3) The partnership must specify that the election covers gross

deductions that relate to:

(a) all the partners; or

(b) all partners of a particular class; or

Total value of deductions

"(4) Despite any other provision of this Act (other than section

89FB) the total amount of deductions covered by the election for the

year of income is the amount worked out using the spaces method under

subsection (5).

Note: Section 89FB covers the situation where the number of spaces

available to partners exceeds the number of partners.

Method

"(5) The spaces method is:

Step 1: Work out an amount using the following formula, for each space

for which there is, in the year of income, at least one gross deduction

for the taxpayer, or for a partner covered by the election (as the case

requires):

Number of days in

availability periods in

Daily rate amount X relation to space X 240

366

Step 2: Work out the total of all the amounts calculated under Step 1

(the total statutory deduction).

Step 3: Subtract the total statutory deduction from the gross deduction

amount.

Note 1: Section 89FC defines daily rate amount.

Note 2: Section 89FD defines availability period.

Note 3: Subsection (6) defines gross deduction amount.

"(6) The gross deduction amount is:

(a) if only one gross deduction is covered by the election-the amount

of that gross deduction; or

(b) if more than one gross deduction is covered by the election-the

sum of the amounts of those gross deductions.

"(7) The election is of no effect if, in working out the daily rate

for a space, the fees referred to in subsection 89EA(3) are not

representative (see section 89JB).

Number of spaces exceeds number of partners

"89FB.(1) This section applies if the taxpayer is a partnership and,

throughout the parking period (see subsection (5)), the average number

of partners covered by the election is less than the average number of

spaces (eligible spaces) for which there is an availability period.

Formula to reduce total statutory benefits

"(2) If this sectionapplies, the total statutory deduction (see Step

2 in subsection 89FA(5)) is multiplied by the following fraction:

Average number of partners

Average number of eligible spaces

"(3) The average number of partners is:

Number of partners covered Number of partners

by election at the beginning + covered by election at the

of the parking period end of the parking period

"(4) The average number of eligible spaces is:

Number of eligible spaces at Number of eligible spaces at

the beginning of the parking + the end of the parking

period period

"(5) The parking period is the period:

(a) beginning on the first day in the year of income on which the

parking of a car in any space referred to in subsection 89FA(5) gives

rise to a gross deduction of the taxpayer that relates to a partner

covered by the election; and

(b) ending on the last day in the year of income on which the parking

of a car in any space referred to in subsection 89FA(5) gives rise to a

such a gross deduction.

Number of partners and number of spaces must be representative

"(6) This section does not apply if the number of partners or the

number of eligible spaces referred to in subsections (3) and (4) are

not representative (see subsection (7)).

Meaning of not representative

"(7) A number of partners, or a number of eligible spaces, as the

case requires, is not representative if the number of partners, or

eligible spaces, as the case requires, is substantially greater or less

than the average number throughout whichever of the following periods

is chosen by the employer:

(a) the 4 week period ending on the first day of the parking period;

(b) the 4 week period beginning on the last day of the parking

period.

Meaning of daily rate amount

"89FC. The daily rate amount for a space is the amount that would be

worked out under section 89EA as the gross deduction amount for the

space.

Meaning of availability period

"89FD. An availability period for a space:

(a) begins:

(i) in the case of a taxpayer other than a partnership-on the first

day in the year of income on which the parking of a car in the space

gives rise to a gross deduction of the taxpayer; or

(ii) in the case of a partnership-on the first day in the year of

income on which the parking of a car in the space gives rise to a gross

deduction of the taxpayer that relates to a partner covered by the

election; and

(b) ends on the last day in the year of income on which the parking

of a car in the space gives rise to such a gross deduction.

"Subdivision G-The 12 week record keeping method

The key principle

"89G.

Under this Subdivision, a taxpayer may keep a 12 week register of car

parking. A taxpayer who keeps such a register may elect that the total

amount of gross deductions for years of income for which the register

is valid is to be determined in accordance with the register.

What an election to use this method covers

"89GA.(1) A taxpayer may elect to use the 12 week record keeping

method to cover all gross deductions for the taxpayer for a year of

income.

"(2) A partnership may, alternatively, elect to use the 12 week

record keeping method to cover all gross deductions for the partnership

that relate to a particular partner, or particular partners, for a year

of income.

Amount of deduction using this method

"89GB. The total amount of the deductions covered by the election is:

( Allowable ) Number of days in

(deductions (register) X 52) X car parking

( 12) availability periods

366

Meaning of allowable deductions (register)

"89GC.(1) The allowable deductions (register), in relation to a year

of income, means the amount that would be the total allowable

deductions for the taxpayer for the 12 week period for which a register

is kept, assuming that:

(a) the register had been kept in that year of income; and

(b) the amount of the deductions were calculated in accordance with

the information in the register; and

following methods that the taxpayer chooses:

(i) the commercial parking station method;

(ii) the market value method;

(iii) the average cost method.

"(2) In working out the allowable deductions (register) for a

partnership, only those deductions that are attributable to the

partners covered by the election are to be taken into account.

Meaning of car parking availability period

"89GD. The car parking availability period is the period:

(a) beginning on the first parking day for the taxpayer or a partner

covered by the election (as the case requires) in that year of income;

and

(b) ending on the last parking day for the taxpayer or a partner

covered by the election (as the case requires) in that year of income.

Choosing the 12 week period for a register

"89GE.(1) The register must be kept for a continuous period of at

least 12 weeks.

"(2) The period over which the register is kept must be

representative of usage for the first year of income for which it is

valid.

"(3) If subsection (1) or (2) is not satisfied, the register is not

valid.

Years of income for which register is valid

12 week period in one year of income

"89GF.(1) If the 12 week period begins and ends in the one year of

income, the register is valid for that year of income and, subject to

subsections (3), (4) and (5), for each of the 4 years of income

immediately following that year.

12 week period over two years of income

"(2) If the 12 week period begins in one year of income and ends in

another year of income, the register is only valid for the second year

of income and, subject to subsections (3), (4) and (5), for each of the

4 years of income immediately following that year.

When register ceases to be valid

"(3) A register that is valid for a year of income ceases to be valid

at the end of that year if before the end of that year of income, the

Commissioner gives the taxpayer a notice advising the taxpayer that the

Note: This means that if the Commissioner notifies the taxpayer, the

taxpayer will have to keep a new register in the following year of

income if the taxpayer wants to use this method.

"(4) A register kept by a taxpayer other than a partnership that is

valid for a year of income ceases to be valid if there is a later valid

"(5) A register kept by a taxpayer that is a partnership that is

valid for a year of income ceases to be valid if there is a later valid

Matters to be included in register

"89GG.(1) The register must include the following details:

(a) the date on which each car covered by subsection (4) was parked;

(b) whether the car was parked for a total that exceeds 4 hours;

between his or her place of residence and his or her primary place of

self-employment on that day;

(d) the place where the car was parked.

"(2) The person responsible for making entries in the register must

make the entry as soon as practicable after he or she knows the details

required by subsection (1).

"(3) If subsection (1) or (2) is not satisfied, the register is not

valid.

"(4) A car is covered by this subsection if the car was used in

connection with travel by the taxpayer, or a partner covered by the

election, between his or her place of residence and his or her primary

place of self-employment on any day in the 12 week period.

Fraudulent entries invalidate register

"89GH. For the purposes of this Act, a register is not valid if the

particular.

"Subdivision H-Special provisions

Anti-avoidance-commercial parking stations

"89H. If either or both of the following apply:

(a) a transaction between the operator of a commercial parking

station and a customer is not at arm's length;

(b) the operator of a commercial parking station sets the level of a

fee for the sole or dominant purpose of enabling one or more taxpayers

to avoid, in whole or in part, the application of this Division;

then, for the purposes of this Division:

the fee that would have been payable if the operator and the customer

had been dealing with each other at arm's length in relation to the

transaction; and

(d) if only paragraph (b) applies-it is to be assumed that the fee is

the fee that would have been payable if it had been set without that

purpose in mind; and

(e) if both paragraphs (a) and (b) apply-it is to be assumed that the

fee is the fee that would have been payable if:

(i) the operator and the customer had been dealing with each other

at arm's length in relation to the transaction; and

(ii) it had been set without that purpose in mind.

Anti-avoidance-fee on first business day after 31 March not

representative

"89HA. For the purposes of paragraph 89AB(4)(d), any fee on the first

business day after 31 March in a year that is not representative is

taken to be more than $5.00.

"Subdivision J-Interpretation

When a commercial parking station is within 1 km

"89J. A commercial parking station is taken to be located within a 1

km radius of particular parking premises if, and only if, a car

entrance to the commercial parking station is situated less than 1 km,

by the shortest practicable route, from a car entrance to those

premises.

Daily rate equivalent for periodic parking arrangements

"89JA. If the operator of a commercial parking station provides

all-day parking in the ordinary course of business to members of the

public on a weekly, monthly, yearly or other periodic basis, the

operator is taken to charge a fee for all-day parking on a particular

day during the period equal to the amount worked out using the formula:

Total fee

Numberof business days in period

where:

Total fee is the total fee charged by the operator in respect of

all-day parking on days in that period.

When fees are not representative

"89JB. A fee charged by an operator of a commercial parking station

on a particular day is not representative if the fee is substantially

greater or less than the average of the lowest fee charged by the

operator in the ordinary course of business to members of the public

for all-day parking on each of the days in whichever of the following

periods is chosen by the taxpayer:

(a) the 4 week period beginning on the day; or

(b) the 4 week period ending on the day.

Definitions

"89JC. In this Division:

all-day parking has the same meaning as in the Fringe Benefits Tax

Assessment Act 1986.

business day has the same meaning as in the Fringe Benefits Tax

Assessment Act 1986.

car has the same meaning as in the Fringe Benefits Tax Assessment Act

1986.

commercial parking station has the same meaning as in the Fringe

Benefits Tax Assessment Act 1986.

daylight period has the same meaning as in the Fringe Benefits Tax

Assessment Act 1986.

expenditure does not include expenditure of a capital nature.

income-producing activity, for a person, means an activity (including

an investment activity) carried on for the purpose, or purposes that

include the purpose, of producing:

(a) in any case-assessable income (other than salary or wages) of the

person of any year of income; or

(b) if the person is a partner in a partnership-assessable income of

the partnership of any year of income; or

of the trust estate of any year of income.

place of residence has the same meaning as in the Fringe Benefits Tax

Assessment Act 1986.

primary place of self-employment, for a person on a day, means premises

where:

(a) if the person carried on income-producing activities on that day-

on that day; or

(b) in any other case-on the most recent day before that day on which

the person carried on income-producing activities;

those premises are or were the sole or primary place from which, or at

which, the person carried on income-producing activities.

salary or wages has the same meaning as in section 221A.".

Division 2-Consequential amendments

13 Paragraph 51AGB(1)(i)

Add at the end "and before 1 July 1995.".

14 Subsection 262A(4AK)

After "subsection 51AGB(7)" insert "or section 89DB".

Division 3-Transitional

15 Transitional

(1) A register is taken to have been kept under Subdivision G of

Division 4A of Part III of the Income Tax Assessment Act 1936 if:

(a) before the commencement of this item, a taxpayer kept a register;

and

(b) the register satisfies sections 89GE and 89GG of that Act.

(2) Regulations made for the purposes of paragraph 51AGB(1)(h) of the

Income Tax Assessment Act 1936 are taken to have been made also for the

purposes of section 89AC of that Act.

Schedule 3 AMENDMENTS OF THE FRINGE BENEFITS TAX ASSESSMENT ACT 1986 RELATED TO EXEMPT BENEFITS

1 Section 58G

Add at the end:

"(3) If:

(a) the employer of an employee is a government body; and

(b) the employee is exclusively employed in, or in connection with, a

public educational institution;

the following benefits provided in respect of the employment of the

employee are exempt benefits:

(d) a car parking benefit.".

2 After section 58W

Insert in Division 13:

Exempt benefits-provision of certain work related items

"58X.(1) Any of the following benefits provided by an employer to an

employee of the employer in respect of the employee's employment is an

exempt benefit:

(a) an expense payment benefit where the recipients expenditure is in

respect of an eligible work related item;

(b) a property benefit where the recipients property is an eligible

work related item;

making available of an eligible work related item.

"(2) Subject to subsections (3) and (4), each of the following is an

eligible work related item:

(a) a mobile phone or a car phone;

(b) an item of protective clothing that is required for the

employment of the employee;

(d) a calculator;

(e) a tool of trade;

(f) an item of computer software for use in the employee's

employment;

(g) an electronic diary or similar item;

(h) a notebook computer, a laptop computer or a similar portable

computer.

"(3) A mobile phone or a car phone is only an eligible work related

item if the phone is primarily for use in the employee's employment.

"(4) A notebook computer, a laptop computer or a similar portable

computer is not an eligible work related item if, earlier in the FBT

year, an expense payment benefit or a property benefit of the employee

has arisen in relation to another notebook computer, laptop computer or

similar portable computer.

Exempt benefits-membership fees and subscriptions

"58Y.(1) Either of the following benefits provided by an employer to

an employee of the employer in respect of the employee's employment is

an exempt benefit:

(a) an expense payment benefit where the recipients expenditure is in

respect of an eligible membership or subscription;

(b) a property benefit where the recipients property is an eligible

membership or subscription.

"(2) Each of the following is an eligible membership or subscription:

(a) a subscription to a trade or professional journal;

(b) an entitlement to use a corporate credit card;

Exempt benefits-taxi travel

"58Z.(1) Any benefit arising from taxi travel by an employee is an

exempt benefit if the travel:

(a) is the whole or a part of the journey directly between the

employee's place of residence and the employee's place of work; and

(b) commences between 7.00 p.m. and 7.00 a.m.

"(2) Any benefit arising from taxi travel by an employee is an exempt

benefit if the travel:

(a) is as a result of sickness of, or injury to, the employee; and

(b) is the whole or a part of the journey directly between any of the

following:

(i) the employee's place of work; or

(ii) the employee's place of residence; or

(iii) any other place that it is necessary, or appropriate, for

the employee to go as a result of the sickness or injury.".

3 After paragraph 65J(1)(a)

Insert:

"(aa) a non-profit scientific institution that:

(i) is engaged solely in research into the causes, prevention or

cure of diseases in humans; and

(ii) is established by a law of the Commonwealth, a State or a

Territory; and

(iii) is not conducted by or on behalf of the Commonwealth, a State

or a Territory;".

4 Application

(1) The amendments made by item 1 of this Schedule apply to

assessments of the fringe benefits taxable amount of an employer of the

FBT year beginning on 1 April 1993 and of all later FBT years.

(2) The amendments made by item 2 of this Schedule apply:

(a) in relation to expense payment fringe benefits where the

recipients expenditure in relation to the benefit was incurred on or

after 1 April 1995; and

(b) in relation to any other fringe benefit where the benefit is in

relation to the FBT year beginning on 1 April 1995 or a later FBT year.

(3) The amendments made by item 3 of this Schedule apply to

assessments of the fringe benefits taxable amount of an employer of the

FBT year beginning on 1 April 1994 and of all later FBT years.

Schedule 4 AMENDMENTS OF THE FRINGE BENEFITS TAX ASSESSMENT ACT 1986 RELATED TO DECLARATIONS

1 After section 20

Insert:

Exemption-no-private-use declaration

"20A.(1) An expense payment fringe benefit that is covered by a

no-private-use declaration is an exempt benefit.

"(2) An employer may make a no-private-use declaration that covers

all the employer's expense payment fringe benefits for an FBT year for

which the employer will only pay or reimburse so much of the expense

that is the subject of the benefit as would result in the taxable value

of the benefit being nil.

"(3) The declaration must be in a form approved in writing by the

Commissioner and be made by the declaration date.".

2 After subparagraph 24(1)(e)(i)

Insert:

"(ia) covered by a recurring fringe benefit declaration (see section

152A);".

3 After subparagraph 44(1)(c)(i)

Insert:

"(ia) covered by a recurring fringe benefit declaration (see section

152A);".

4 After section 47

Insert in Subdivision A of Division 12 of Part III:

Exemption-no-private-use declaration

"47A.(1) A residual fringe benefit that is covered by a no-private-

use declaration is an exempt benefit.

"(2) An employer may make a no-private-use declarationthat covers

all the employer's residual fringe benefits for an FBT year that are

covered by a consistently enforced policy in relation to the use of the

property that is the subject of the benefit that would result in the

taxable value of the benefit being nil.

"(3) The declaration must be in a form approved in writing by the

Commissioner and be made by the declaration date.".

5 After subparagraph 52(1)(c)(i)

Insert:

"(ia) covered by a recurring fringe benefit declaration (see section

152A);".

6 Subsection 136(1) (definition of statutory evidentiary document)

Add at the end:

"and (d) a no-private-use declaration or a recurring fringe benefit

declaration that covers benefits provided in the current year of tax.".

7 After section 152

Insert:

Recurring fringe benefit declaration

Recipient may make recurring fringe benefit declaration

"152A.(1) If a person is provided with a benefit (the declaration

benefit), the person may make a recurring fringe benefit declaration in

relation to the declaration benefit.

Expense payment fringe benefits covered by declaration

"(2) If the recurring fringe benefit declaration covers another

benefit (the later benefit) that is an expense payment fringe benefit:

(a) the recurring fringe benefit declaration is taken to have been

made under paragraph 24(1)(e) in respect of the recipients expenditure

for that benefit; and

(b) the gross deduction in subparagraph 24(1)(b)(iii) in relation to

the later benefit is taken to be the amount worked out using the

formula:

Gross expenditure (later benefit) X Deductible proportion of

declaration benefit

where:

Gross expenditure (later benefit) is the gross expenditure mentioned in

paragraph 24(1)(b) in relation to the later benefit.

Deductible proportion of declaration benefit is the deductible

proportion of the declaration benefit as worked out under subsection

(9).

Note: The gross deduction is used as component GD in the formula in

paragraph 24(1)(ba).

Property fringe benefits covered by declaration

"(3) If the recurring fringe benefit declaration covers another

benefit (the later benefit) that is a property fringe benefit:

(a) the recurring fringe benefit declaration is taken to have been

made under paragraph 44(1)(c) in respect of the recipients property for

that benefit; and

(b) the gross deduction in subparagraph 44(1)(b)(i) in relation to

the later benefit is taken to be the amount worked out using the

formula:

Gross expenditure (later benefit) X Deductible proportion of

declaration benefit

where:

Gross expenditure (later benefit) is the gross expenditure mentioned in

paragraph 44(1)(b) in relation to the later benefit.

Deductible proportion of declaration benefit is the deductible

proportion of the declaration as worked out under subsection (9).

Note: The gross deduction is used as component GD in the formula in

paragraph 44(1)(ba).

Residual fringe benefits covered by declaration

"(4) If the recurring fringe benefit declaration covers another

benefit (the later benefit) that is a residual fringe benefit:

(a) the recurring fringe benefit declaration is taken to have been

made under paragraph 52(1)(c) in respect of the recipients benefit for

that benefit; and

(b) the gross deduction in subparagraph 52(1)(b)(i) in relation to

the later benefit is taken to be the amount worked out using the

formula:

Gross expenditure (later benefit) X Deductible proportion of

declaration benefit

where:

Gross expenditure (later benefit) is the gross expenditure mentioned in

paragraph 52(1)(b) in relation to the later benefit.

Deductible proportion of declaration benefit is the deductible

proportion of the declaration benefit as worked out under subsection

(9).

Note: The gross deduction is used as component GD in the formula in

paragraph 52(1)(ba).

"(5) The declaration must be in a form approved in writing by the

Commissioner and be made, and given to the employer, by the declaration

date for the employer for the FBT year in which the declaration benefit

is provided.

What benefit declaration covers

"(6) The declaration covers all benefits that are identical to the

declaration benefit received by the person before the earlier of:

(a) the time when the person revokes the declaration; and

(b) the end of 5 years starting when the declaration is made.

"(7) The declaration does not cover a benefit if the deductible

proportion of the benefit is more than 10 percentage points less than

the deductible proportion of the declaration benefit.

"(8) If a taxpayer makes a declaration for a benefit that is an

identical benefit to a benefit covered by an earlier declaration, the

earlier declaration is revoked.

Meaning of deductible proportion

"(9) The deductible proportion of a benefit is the percentage worked

out using the formula:

Gross Deduction X 100%

Gross Expenditure

where:

gross deduction means the gross deduction mentioned in whichever of

subparagraph 24(1)(b)(iii), 44(1)(b)(i) or 52(1)(b)(i) applied to the

benefit.

gross expenditure means the gross expenditure mentioned in whichever of

paragraph 24(1)(b), 44(1)(b) or 52(1)(b) applied to the benefit.".

Meaning of identical

"(10) A benefit is identical to another benefit if the benefits are

the same in all respects except for any differences:

(a) that are minimal or insignificant; or

(b) that relate to the value of the benefits; or

8 Application

The amendments made by this Schedule apply to assessments of the fringe

benefits taxable amount of an employer of the FBT year beginning on 1

April 1995 and of all later FBT years.

Schedule 5 OTHER AMENDMENTS OF THE FRINGE BENEFITS TAX ASSESSMENT ACT 1986

1 Subparagraph 8(2)(a)(i)

After "truck" insert ", designed to carry a load of less than 1 tonne".

2 Sub-subparagraph 9(2)(c)(ii)(A)

Omit "0.06", substitute "0.07".

3 Sub-subparagraph 9(2)(c)(ii)(B)

Omit "0.1", substitute "0.11".

4 Sub-subparagraph 9(2)(c)(ii)(C)

Omit "0.18", substitute "0.20".

5 Sub-subparagraph 9(2)(c)(ii)(D)

Omit "0.24", substitute "0.26".

6 Subsection 10(2) (paragraph (a) of the definition of BP)

Add at the end "or".

7 Subsection 10(2) (paragraph (b) of the definition of BP)

Omit the paragraph.

8 Subsection 10(2) (paragraph (c) of the definition of BP)

Omit all the words after "case -", substitute "the business use

percentage applicable to the car for the holding period; and".

9 Paragraphs 10A(a) and (b)

Omit the paragraphs, substitute:

"(a) log books and odometer records are maintained by or on behalf of

the provider for an applicable log period in relation to the car; and

(b) odometer records are maintained by or on behalf of the provider

for the holding period; and

records are given to the employer before the declaration date; and

(d) the employer specifies the employer's estimate of the number of

business kilometres travelled by the car during the holding period; and

(e) the employer specifies a percentage as the business use

percentage applicable to the car in relation to the provider for the

holding period.".

10 Paragraph 10B(b)

Omit the paragraph, substitute:

"(b) the employer specifies the employer's estimate of the number of

business kilometres travelled by the car in the holding period; and

the car in relation to the provider for the holding period.".

11 Section 10C

Repeal the section.

12 Subparagraphs 19(1)(f)(i) and (ii)

Omit "car deduction percentage, ascertained under section 65G,"

substitute "business use percentage".

13 Subparagraph 24(1)(h)(i)

Omit "car deduction percentage, ascertained under section 65G,"

substitute "business use percentage".

14 Sub-subparagraphs 24(1)(h)(ii)(A) and (B)

Omit "car deduction percentage, ascertained under section 65G,"

substitute "business use percentage".

15 Subsection 24(4)

Omit the subsection, substitute:

"(4) For the purposes of paragraph (1)(c), the part of a petty cash

book or similar document that sets out the particulars that would be

set out in documentary evidence of the recipients expenditure (other

than particulars of the date on which the documentary evidence was made

out) is taken to be substitute documentary evidence of the recipients

expenditure. The entry must be inEnglish.".

16 Subparagraphs 44(1)(g)(i) and (ii)

Omit "car deduction percentage, ascertained under section 65G,"

substitute "business use percentage".

17 Subparagraphs 52(1)(g)(i) and (ii)

Omit "car deduction percentage, ascertained under section 65G,"

substitute "business use percentage".

18 Paragraphs 65E(a) and (b)

Omit the paragraphs, substitute:

"(a) log books and odometer records have been maintained by or on

behalf of the recipient for an applicable log period in relation to the

car; and

(b) odometer records are maintained by or on behalf of the provider

for the holding period; and

business kilometres travelled by the car during the holding period; and

(d) the employer specifies a percentage as the business use

percentage applicable to the car in relation to the recipient for the

holding period.".

19 Paragraph 65F(b)

Omit the paragraph, substitute:

"(b) the employer specifies the employer's estimate of the number of

business kilometres travelled by the car in the holding period; and

percentage applicable to the car in relation to the recipient for the

holding period.".

20 Section 65G

Repeal the section.

21 Section 65H

Repeal the section.

22 Section 115A

Repeal the section, substitute:

Penalty tax for making unreasonable estimate of business kilometres

"115A. If:

(a) the number of kilometres specified by an employer as the

employer's estimate of the number of business kilometres travelled by a

car during a period in an FBT year is not a reasonable estimate of the

number of business kilometres travelled in that period; and

(b) the tax that would be payable by the employer if a reasonable

estimate of the number of business kilometres was substituted for the

employer's estimate exceeds the tax that would be payable if the

employer's estimate was used;

then:

business kilometres; and

(d) the Commissioner's estimate is to be used in calculating the

business use percentage applicable to the car for the period; and

(e) the employer is liable to pay, by way of penalty, additional tax

equal to double the amount of the excess referred to in paragraph

(b).".

23 Paragraph 123(4)(b)

Omit the paragraph, substitute:

"(b) the employer has a document (the substitute document) that:

(i) is a copy of the original document; or

(ii) properly records all of the matters as set out in the original

document and was in existence when the original document was lost or

destroyed;".

24 Subparagraph 123(5)(b)(i)

Add at the end "and".

25 Subparagraphs 123(5)(b)(ii) and (iv)

Omit the subparagraphs.

26 Subparagraph 123(6)(c)(i)

Add at the end "and".

27 Subparagraphs 123(6)(c)(ii) and (iv)

Omit the subparagraphs.

28 Section 123A

Repeal the section, substitute:

When business use percentage and estimate of business kilometres must

be specified

"123A. If a provision requires a business use percentage or an

estimate of the number of business kilometres to be specified, it must

be specified in writing on or before the declaration date for the FBT

year.".

29 Subsections 123B(1) and (2)

Omit the subsections, substitute:

"(1) The substantiation rules do not apply in relation to a benefit

if the nature and quality of evidence that a person has satisfies the

Commissioner that the taxable value of the benefit is not greater than

the amount specified in the taxpayer's return for the FBT year as the

taxable value of that benefit.".

30 Paragraph 132(1)(b)

Omit "7 years", substitute"5 years".

31 Paragraph 132(2)(c)

Omit "7 years", substitute "5 years".

32 After section 132

Insert:

Written evidence not available when return lodged

"132A.(1) This section applies if:

(a) a provision of this Act requires documentary evidence of an

expense to be given to, or obtained by, an employer before the

declaration date for an employer for an FBT year; and

(b) at the date of lodgment of the employer's return of the fringe

benefits taxable amount for the FBT year:

(i) the employer has not been given, or has not obtained, the

documentary evidence;

but:

(ii) the employer has good reason to expect that he or she will be

given, or will obtain, that evidence within a reasonable time.

"(2) If this section applies:

(a) the employer may complete his or her return as if the documentary

evidence had been given to, or obtained by, him or her by the date of

lodgment; and

(b) if the evidence is given to, or obtained by, the employer within

a reasonable time-this Act applies as if the documentary evidence had

been given to, or obtained by, the employer before the declaration

date; and

within a reasonable time-the employer must notify the Commissioner in

writing that the evidence has not been obtained.".

33 Subsection 136(1)

Insert:

"business use percentage, for a car held by a person during a period

(the holding period) in an FBT year, means the percentage worked out

using the formula:

Number of business kilometres travelled by

the car during the holding period

X 100%

Total number of kilometres travelled by the

car during the holding period ".

34 Subsection 136(1) (paragraph (a) of the definition of car)

After "vehicle", insert, ", designed to carry a load of less than 1

tonne".

35 Subsection 136(1) (definition of car records)

Omit the definition.

36 Subsection 136(1) (paragraph (a) of the definition of extended

travel airline transport benefit):

After "route" insert "and involves the recipient being away from the

recipient's usual place of residence for a continuous period including

more than 5 nights".

37 Subsection 136(1) (paragraph (a) of the definition of extended

travel expense payment benefit):

After "Australia" insert "and involves the recipient being away from

the recipient's usual place of residence for a continuous period

including more than 5 nights".

38 Subsection 136(1) (paragraph (a) of the definition of extended

travel property benefit):

After "Australia" insert "and involves the recipient being away from

the recipient's usual place of residence for a continuous period

including more than 5 nights".

39 Subsection 136(1) (paragraph (a) of the definition of extended

travel residual benefit):

After "Australia" insert "and involves the recipient being away from

the recipient's usual place of residence for a continuous period

including more than 5 nights".

40 Subsection 136(1)

Insert:

"FBT year means a year beginning on 1 April.".

41 Subsection 136(1) (paragraphs (c), (d), and (e) of the definition

of log book records):

Add at the end "and".

42 Subsection 136(1) (paragraphs (g), (h) and (j) of the definition of

log book records):

Omit the paragraphs.

43 Subsection 136(1) (definition of log book records)

Omit all the words after "end of the journey".

44 Subsection 136(1) (definition of low business kilometre car)

Omit the definition.

45 Subsection 136(1) (definition of nominated business percentage)

Omit the definition.

46 Subsection 136(1) (paragraphs (a) and (b) of the definition of

odometer records):

Omit all the words after "period" (first occurring), substitute ";

and".

47 Subsection 136(1) (paragraphs (d) and (e) of the definition of

odometer records):

Omit the paragraphs.

48 Subsection 136(1) (definition of odometer records)

Omit ", and that is signed by the person or persons referred to in

paragraph (e)".

49 Subsection 136(1) (subparagraph (b)(ii) of the definition of

retention period):

Omit "6", substitute "5".

50 Subsection 136(1) (paragraph (a) of the definition of statutory

evidentiary document):

Add at the end "and".

51 Subsection 136(1) (paragraph (aa) of the definition of statutory

evidentiary document):

Omit "car records", substitute "records of a nomination under section 162 or 162L".

52 Subsection 136(1) (after paragraph (aa) of the definition of

statutory evidentiary document):

Insert:

"(ab) a record of the business use percentage specified by the

employer for the current year of tax; and".

53 Subsection 136(1) (paragraph (b) of the definition of statutory

evidentiary document):

Omit "paragraph 10A(b) or", substitute "section 10A or paragraph".

54 Subsection 136(1) (paragraph (c) of the definition of travel

diary):

Omit the paragraph.

55 Subsection 136(1) (definition of underlying business percentage)

Omit the definition.

56 Sections 162D and 162E

Repeal the sections.

57 Section 162F

Omit "the percentage that represents a reasonable estimate underlying

business percentage", substitute " the number of kilometres that

represents a reasonable estimate of the number of business kilometres".

Note: The heading to section 162F is altered by omitting "underlying

business percentage" and substituting "number of business kilometres".

58 Paragraph 162G(1)(a)

Omit the paragraph, substitute:

"(a) none of the previous 4 years was a log book year of tax of the

employer in relation to the car;

Note: This paragraph will apply if it is the first year that the

employer uses the cost basis Note: method.".

59 Paragraph 162G(1)(b)

Add at the end "or".

60 Paragraphs 162G(1)(c), (d), (e), (f) and (g)

Omit the paragraphs.

61 Paragraph 162G(2)(a)

Omit the paragraph, substitute:

"(a) none of the previous 4 years was a log book year of tax of the

employer in relation to the car;".

62 Paragraph 162G(2)(b)

Add at the end "or".

63 Paragraphs 162G(2)(c), (d), (e), (f) and (g)

Omit the paragraphs.

64 Subsection 162G(3)

Omit the subsection, substitute:

"(3) An election under this section is to be in writing.".

65 Section 162H

Add at the end:

"(3) The applicable log book period must be specified in the log book

records for the period at, or as soon as possible after, the end of the

period.".

66 Subsections 162H(1) and (2)

Before "in a year of tax" insert "starting or ending".

67 Paragraphs 162H(1)(b) and (2)(b)

Omit the paragraphs, substitute:

"(b) in any other case-a continuous period of not less than 12 weeks

that begins and ends during the holding period.".

68 Section 162J

Repeal the section.

69 Subsection 162K(2)

Omit ", in the employer's car records for the current year of tax,".

70 After subsection 162K(2)

Insert:

"(2A) A nomination shall be made in writing on or before the

declaration date for the current year of tax.".

71 Subsection 162L(2)

Omit ", in the employer's car records for the current year of tax,".

72 After subsection 162L(2)

Insert:

"(2A) A nomination shall be made in writing on or before the

declaration date for the current year of tax.".

73 Section 162M

Repeal the section.

74 Application

The amendments made by this Schedule apply to assessments of the fringe

benefits taxable amount of an employer of the FBT year beginning on 1

April 1995 and of all later FBT years.