Fringe Benefits Tax Assessment Act 1986
No. 39, 1986
Compilation No. 97
Compilation date: 1 July 2026
Includes amendments: Act No. 49, 2026
This compilation is in 2 volumes
Volume 1: | Parts I to V |
| sections 1 to 78A |
Volume 2: | Parts VII to XII |
| sections 90 to 167 |
| Schedule |
| Endnotes |
Each volume has its own contents
About this compilation
This compilation
This is a compilation of the Fringe Benefits Tax Assessment Act 1986 that shows the text of the law as amended and in force on 1 July 2026 (the compilation date).
The notes at the end of this compilation (the endnotes) include information about amending laws and the amendment history of provisions of the compiled law.
Uncommenced amendments
The effect of uncommenced amendments is not shown in the text of the compiled law. The details of amendments made up to, but not commenced at, the compilation date are underlined in the endnotes. Any uncommenced amendments affecting the law are accessible on the Register (www.legislation.gov.au).
Application, saving and transitional provisions
If the operation of a provision or amendment of the compiled law is affected by an application, saving or transitional provision that is not included in this compilation, details are included in the endnotes.
Editorial changes
For more information about any editorial changes made in this compilation, see the endnotes.
Presentational changes
The Legislation Act 2003 provides for First Parliamentary Counsel to make presentational changes to a compilation. Presentational changes are applied to give a more consistent look and feel to legislation published on the Register, and enable the user to more easily navigate those documents.
Modifications
If the compiled law is modified by another law, the compiled law operates as modified but the modification does not amend the text of the law. Accordingly, this compilation does not show the text of the compiled law as modified. Any modifications affecting the law are accessible on the Register.
Self‑repealing provisions
If a provision of the compiled law has been repealed in accordance with a provision of the law, details are included in the endnotes.
Contents
Part I—Preliminary
1 Short title
2 Commencement
2A Application of the Criminal Code
2B Application
Part II—Administration
3 General administration of Act
4 Annual report
Part IIA—Core provisions
Division 1—Working out an employer’s fringe benefits taxable amount
5A Simplified outline of this Division
5B Working out an employer’s fringe benefits taxable amount
Division 2—Working out an employer’s aggregate fringe benefits amount
5C Aggregate fringe benefits amount
Division 3—Employee’s individual fringe benefits amount
5D Simplified outline
5E Employee’s individual fringe benefits amount
5F Working out the employee’s share
Part III—Fringe benefits
Division 1—Preliminary
6 Part not to limit generality of benefit
Division 2—Car fringe benefits
Subdivision A—Car benefits
7 Car benefits
8 Exempt car benefits
8A Exempt car benefits: cars that are zero or low emissions vehicles
Subdivision B—Taxable value of car fringe benefits
9 Taxable value of car fringe benefits—statutory formula
10 Taxable value of car fringe benefits—cost basis
10A
Overview
The Fringe Benefits Tax Assessment Act 1986 was enacted to provide a framework for the assessment and collection of fringe benefits tax, addressing the gap in the tax system related to the provision of fringe benefits by employers to their employees or associates. This Act was passed by the Australian Parliament and aims to ensure that fringe benefits provided by employers are appropriately taxed, thereby contributing to equitable taxation and preventing tax avoidance. The Act details the methods for calculating taxable amounts, outlines various types of fringe benefits and their tax implications, and establishes rules for the substantiation of claims and the reduction of taxable values under certain conditions. It also specifies the liability for tax, the process for making returns and assessments, and the administrative procedures for handling objections and amendments to assessments.
Scope and Application
The Fringe Benefits Tax Assessment Act 1986 applies to employers and employees throughout Australia, including its external territories, and to benefits provided outside Australia, unless expressly stated otherwise. This Commonwealth legislation governs the assessment and collection of Fringe Benefits Tax (FBT) imposed under the Fringe Benefits Tax Act 1986. It encompasses various types of fringe benefits provided by employers to employees, including car fringe benefits, loan fringe benefits, expense payment fringe benefits, housing fringe benefits, and others, while also specifying certain exemptions and reductions applicable under particular circumstances. The Act mandates the maintenance of records and declarations by employers and employees to substantiate the taxable value of fringe benefits, and it outlines the processes for assessment, objection, and amendment of FBT assessments. Additionally, the Act provides for rebates of tax for certain not-for-profit employers and establishes the procedures for the annual return of FBT by employers. The scope of the Act extends to both pre and post-commencement actions unless explicitly excluded. Certain entities, such as international organisations and diplomatic personnel, may be exempt from FBT under specific conditions. The Act's application can be extended or modified through subordinate instruments, allowing for the dynamic adjustment of FBT rules and regulations to reflect changes in the economic environment or legislative intent.
Key Provisions
- The Fringe Benefits Tax Assessment Act 1986 (Act) outlines the calculation of fringe benefits tax (FBT) payable by employers on fringe benefits provided to employees. The Act sets out the employer's fringe benefits taxable amount (section 5B) and how to determine the individual fringe benefits amount for each employee (section 5E). Employers must maintain records and make declarations to substantiate certain fringe benefits (sections 65D, 65E, 65F). The Act also details various types of fringe benefits that are taxable or exempt (sections 7-58).
- The Act imposes obligations on employers to calculate their FBT liability, determine the taxable value of fringe benefits provided, and maintain records and make declarations to substantiate certain fringe benefits. Employers must calculate their FBT liability based on the employee's individual fringe benefits amount and the employer's aggregate fringe benefits amount (sections 5B, 5E, 5C). Employers must also determine the taxable value of different types of fringe benefits and make any required declarations and substantiation (sections 9-58).
- Breaches of the Act may result in penalties. For example, failure to furnish a return where required (section 68) is an offence punishable by a penalty of 30 penalty units. The Commissioner may also increase an employer's FBT liability if an arrangement was entered into for the sole purpose of obtaining a tax benefit (section 67). Assessments may be amended if the employer did not make a full disclosure or if there was an avoidance of tax (section 74). An employer who objects to an assessment may do so under the Taxation Administration Act 1953 (section 78A). Failure to comply with substantiation rules for certain fringe benefits may also result in penalties (section 65D).
- In summary, the Act establishes the framework for calculating and paying FBT, imposes obligations on employers to determine their FBT liability and substantiate certain fringe benefits, and provides for penalties for non-compliance with the Act's requirements. The penalties range from fines for failing to furnish returns to increased FBT liability for arrangements entered into for the purpose of obtaining a tax benefit.
- Area of Law
- Taxation Law
- Commercial Law
- Instrument
- Act
- Concepts
- Commencement Provisions
- Licensing & Registration
- Reporting & Disclosure Obligations
- Enforcement Powers
- Exemptions & Exclusions
- Regulatory Standards
- Rebates of Tax