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Accounting & Tax > FBT > Flashcards

FBT Flashcards

1
Q

Tax rate 2019

A

47%

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2
Q

Fringe benefit

A

Benefit provided to an employee under arrangement in respect of the employment
S136(1) FBTAA 1986

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3
Q

Partially fbt exempt

Category A employers

A

Public or not for profit hospitals, public ambulance services

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4
Q

Partially fbt exempt

Category b employers

A

Charities and public benevolent institutions

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5
Q

Benefits outside the scope of fbt

A 
Salary and wages
Benefits under employee share schemes
SGC 
Termination payments
Benefits deemed dividends under div7a
Capital payments for restraint of trade or personal injury
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6
Q

General exemptions

A

Div 13 FTAA 1986

  • car running costs
  • minor and infrequent (< $300)
  • work related (laptops,software, clothing, briefcase, tools of trade
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7
Q

Car fringe benefits

A

Division 2

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8
Q

Debt waiver fringe benefits

A

Division 3

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9
Q

Loan fringe benefits

A

Division 4

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10
Q

Expense payment fringe benefits

A

Division 5

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11
Q

Living away from home allowance

A

Division 7

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12
Q

Meal entertainment

A

Division 9A

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13
Q

Car parking

A

Division 10A

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14
Q

Property fringe benefits

A

Division 10A

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15
Q

Property fringe benefits

A

Division 11A

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16
Q

Residual fringe benefits

A

Division 12

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17
Q

Car available to private use

A

Not at business premises

Garaged at home

18
Q

Not car fringe benefits

A

Taxi hire / rental car / utes

Vehicle owned by employee and used for work where reimbursed for expenses (may be expense payment fb)

19
Q

Statutory formula method

Car

A

Taxable value = stat fraction (20%) * base value of car * days/days yr - payments

20
Q

Base value

A 
Cost price (costs directly attributable to the purchase (delivery, customs, cost of fitted no business accessories) 
S9(2)(a)(i) FBTAA
21
Q

Operating cost method (mv)

A

Taxable value = operating costs * (100% - business use %) - payments

S10 FTBAA

22
Q

Operating costs

A

Fuel, service, repairs, rego, insurance, depreciation

23
Q

Debt waiver fb

A

Amount of payment or repayment waived

S15 FBTAA

24
Q

Loan fb

A

Difference between statutory interest rate and interest paid

25
Q

Statutory interest rate 2019

A

5.37%

26
Q

Otherwise deductible rule

A

S19 FBTAA
Taxable amount reduced by the otherwise deductible amount

Doesn’t apply if benefit is paid for spouse

Substantiation required (travel diary, expense payment declaration)

27
Q

Expense payment fb

A

Taxable value
Exception
- cents per km reimbursement
- where no private use declaration is signed

(Allowances excludes TR92/15)

28
Q

In house benefit

A

Property or residual expense

Expenditure paid for that is purchase of goods or services the employee provides to customers

29
Q

LAFHA

A

No deduction under income tax, expenses inherently private

TR2017/D6

Reduction in taxable value for exempt accomodation and food components

  • reasonable compensation for cost of accomodation
  • component of allowance that is reasonable compensation for increased expenditure on food (because of the live away from home)
  • reasonable amounts TD ??

Special rules for oil and gas rig workers

Reduction in taxable value for fly in fly out scenarios

30
Q

Car parking fb

A

S39A
Employee parks in parking facility on business premises for more than 4 hours (7am-7pm)

Commercial parking within 1km that charges more

Car parked in vicinity of work

Car used to travel from home to work?

Car parking threshold 2019 $

(FCT v Qantas)

31
Q

Car park fb exemptions

A

Employees of religious, charitable, public education institutions and not for profit scientific institutions

Employees of SBEs where employees car is not parked at a commercial parking station and not a public company

Disabled permits

32
Q

Carl parking fb formula

A

Statutory
Taxable value = daily rate amount * days / year days * 228

12 week log book
Taxable value = total value of car parking * 52/12 * days/year days

33
Q

Property fringe benefits

A

S40 FTBAA 1986

Includes entertainment and any other kind of property

Exempt benefit
- food and drink consumed by employee on working days at employers premises

$1000 concession for in house benefits (per employee)

In house 75% or arms length purchase price paid by employer (see further details - depends on property)

34
Q

Residual fb

A

Any other benefit not covered by divisions 2 to 11

Eg. tax return free
50% free fees etc…

Number of exemptions s47 FBTAA

  • employee transport where that is their business
  • childcare on premises
  • use of property (not mv) on business premises (kitchen, bathroom)
  • mv not intended for private use

$1000 concession for in house benefits

35
Q

Meal entertainment fb

A

Employer must elect to chose meal entertainment option rather than expense or property

Once elected all entertainment must be provision of meal entertainment

Entertainment

  • staff social functions
  • amusements
  • sport and similar leisure
  • business lunches and drinks (doesn’t include gifts of wine etc TD 94/55 timeliness and direct connection)

Who? What? When? Why? Where?

Morning tea and afternoon tea in the office etc are generally excluded. But if alcohol is provided it becomes entertainment.

Where meal entertainment elected.. property benefit exemption of food and drink at work doesn’t apply

Minor and infrequent exemption applies when using 12 week register method
- doesn’t apply when using 50:50 method

Calculation

  • 50:50 method taxable value is 50% of expense
  • 12 week register method taxable value is the % of employers total meal entertainment expenditure
36
Q

FBT v Income Tax

A

Direct links

Meal entertainment link - where using 50:50 or 12 week register same must be used for income tax deduction

Portion subject to fbt is deductible for income tax purposes
Portion not subject to fbt is not deductible for income tax
So where it is considered an exempt benefit the employer can not claim a deduction in their tax return

37
Q

Type 1 benefit

A

Employer is entitled to an input tax credit for gst paid

2.0802

38
Q

Type 2 benefit

A

Employer is NOT entitled to an input tax credit for gst paid

1.8868

39
Q

Interaction with Income tax

A

FBT is a tax deductible expense

Fringe benefit is non assessable non exempt income for employee

Exempt benefits are not fringe benefits
- exempt benefit for fbt is included in assessable income

40
Q

FBT and GST

Employer provides benefit

A

GST credits available for most expense payment fb (division 111 GST act)

No GST input taxes credits arises where reimbursing a non deductible expense (client portion of meal)

Taxable value of benefit for fbt is GST inclusive (TR 2001/2)

Any amount assessable to employer doesn’t include GST
GST component of cost of fb is not deductible if employer is eligible for input tax credit
Employer can deduct fbt as a labour cost
GST paid by employer is not deductible

41
Q

Payment due date

A

28 May

42
Q

Lodgement Due date

A

25 June

Accounting & Tax (9 decks)

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