key changes in fringe benefit tax australia 2016
TRANSCRIPT
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KeyChanges
• FBTratetemporarily increased
• Capping thresholdsalsotemporarily increased
• FBTexemption forentertainmentexpensescutto$5,000(separategrossedupcap)from1April2016.Excessentertainmentexpensescanfallintothegeneralcapsifthereisroom
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KeyRatesandThresholds
• 49%FBTrate
• 49%FBTrebate(2016and2017FBTyears)
• Capping threshold$17,667(hospitalsandambulance)and$31,177 (PBIandHPC)(2016and2017FBTyears)
• Type1grossuprate– 2.1463(2.0802in2015)
• Type2grossuprate– 1.9608(1.8868in2015)
KeyDates
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• EndofFBTyear– 31March2016
• FBTreturnandpaymentdue– 21May2016
• FBTreturndue– 25June2016(iflodgedbytaxagent)
• FBTpaymentduedate– 28May2016(iflodgedbytaxagent)
ImportantConcepts– SalarySacrificing
• Effectivesalarysacrificearrangements(employeeforgoingfutureentitlement)
• Consequencesofineffectivearrangements– subjecttoincometax
• Cansaveemploymenton-costse.g.,nopayrolltaxonFBTexemptandnoFBTtaxablevalues
• Similarsavingsforworkerscompensationbutcheckeachstateandterritory
• Taxsavingscanbemadeevenforemployeesearningbelow$180,000.Askforananalysis
• Documentation/declarations
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PotentialComplianceActivity
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• LAFHAclaimsforemployees fromoverseas
• LAFHAclaimslimitedto12months
• Useofoutsourcedsalarypackagingproviders andincorrectinformation
• FailuretolodgenilFBTreturns– anoticeofnon-lodgement doesnotstarttheclock
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ReportableFringeBenefits
• Wherethetotalvalueofcertainfringebenefitsprovidedperemployeeexceeds$2,000, theemployer isrequired todisclosethegrossed-up taxablevalueontheemployee’spayment summary
• Usetype-2grossup rateof1.9608
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Not-for-profitOrganisations
• TheFBTrebateisanentitlement toarebateequalto49%ofthegrossFBTpayable,subjecttoa$31,177 (grossedup)capperemployeeperFBTyear.49%FBTrebate(2016and2017FBTyears)
• Rebatableemployers include:
• Registered charities
• Certainscientific orpubliceducation institutions
• Certainnon-profitorganisations
• Regularlyreviewyourstatus
WhatistheFBTrebate?
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ExamplesofFBTRebateandSalarySacrifice
• Anemployeeofaschoolsalarysacrifices$8,000ofsalaryfor theirchildtoattendtheschool
• ThetaxablevalueofthefeesforFBTpurposes wouldbeasfollows:
TaxableValue $8,000
Grossedupvalue: $8,000 x1.9608 $15,686
FBT: $15,686 x49% $7,686
Less: 49%rebate $(3,766)
FBT Payable $3,920
• $1,000annualreductionabolishedon22October2012
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ExamplesofFBTRebateandSalarySacrifice
• Organisationswherethetotalgrossed-upvalueofcertainbenefitsprovided toeachemployee isequaltoorlessthanthecapping thresholdareexemptfromFBT
• Whatentitiesqualify fortheFBTexemption?
• Publicbenevolentinstitutions ($31,177peremployeecap)
• Healthpromotioncharities ($31,177peremployeecap)
• Publicandnon-profithospitals ($17,667peremployeecap)
• Publicambulance service ($17,667peremployeecap)
• Regularlyreviewyourstatus
WhatistheFBTexemption?
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CommonBenefits
• Cars(statutorymethodoroperatingcostmethod)
• Becarefulwithutilities, panelvansanduteswhenusedforprivatetravelthatisnotminororinfrequent e.g.dropping kidsoffatschool.Policy ofemployerisimportant
• Superannuation contributions (noFBTanddeductible toemployer)
• Exemptbenefits (portableelectronicdevices, toolsoftradeetc.).From1April2016smallbusiness entitieswontbelimitedtooneperyear
• Benefitswithnotaxablevalue, e.g.afterapplication of‘otherwisedeductible rule’
• Minorbenefits ($300)
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CommonBenefits
• Mealentertainmentü Restaurantü ChristmasPartyü ClientEntertaining
x Sustenancex Lightmealsx WorkingLunchx Mealswhilsttravelling
• LAFHAalternative• Exemptrelocation
• Removalandstoragecosts
• Incidental costsofsale
• Incidental costsofacquiringnewresidence
• Connectingutilities
• Reasonableaccommodation expenses6– 12months
Aboutthespeaker
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Andrew is both a chartered tax adviser and a solicitor having worked with leading taxationadvisory teams in chartered accounting firms (both big 4 and mid-tier) and a top tier law firm.
Andrew’s expertise lies in
• providing tax advice
• leading tax due diligence assignments
• general tax planning and
• providing tax compliance services.
His clients include family groups, private and public companies (including listed entities) and notfor profit groups.
AndrewLam- Director,BCom,LLM,CTA
Services:Taxation, LargeCorporate,CorporateAdvisory,Not-For-Profit
t:+61292325111d:+61292200381e:[email protected]:www.hillrogers.com.au
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