Fringe Benefits Tax Amendment Regulations 2000 (No. 2) 2000 No. 127
EXPLANATORY STATEMENT
STATUTORY RULES 2000 No. 127
Issued by authority of the Assistant Treasurer
Fringe Benefits Tax Assessment Act 1986
Fringe Benefits Tax Amendment Regulations 2000 (No. 2)
Section 13 5 of the Fringe Benefits Tax Assessment Act 1986 (the Act) provides that the Governor-General may make regulations for giving effect to the Act.
The regulations amend the Fringe Benefits Tax Regulations 1992 (the Regulations) to exclude certain ' housing fringe benefits from having to be reported on an employee's group certificate.
All employers are now required to report fringe benefits on their employees' group certificates. The Act identifies certain fringe benefits which do not need to be reported. These benefits are referred to as 'excluded fringe benefits' and currently include benefits such as meal entertainment and car parking fringe benefits. Paragraph 5E(3)(i) of the Act provides for other fringe benefits to be excluded in the future by way of regulation. The Regulations currently exclude from fringe benefits tax (FBT) reporting certain overseas medical costs, Commonwealth overseas living allowances and certain benefits provided to members of the Australian Defence Force.
The need for the regulations follows from FBT changes contained in the A New Tax System (Fringe Benefits) Act 2000. This legislation extends the current remote area housing exemption available to primary producers, to all employers who provide housing benefits to their remote area employees. The legislation also introduces a broader remote area test to ensure that housing benefits provided to employees of certain employers who operate in regional areas, will also qualify for this new exemption. Broadly, where the employer is a charity, a police service, or a public or not-for-profit hospital, a housing benefit provided to their regional employees will be treated as remote where it is located at least 100 kilometres from a town of 130,000 or more people.
Although the remote area housing exemption did not take effect until 1 April 2000, paragraph 5E(3)(d) of the Act ensures that remote area housing benefits provided during the FBT year commencing 1 April 1999 will not have to be reported on group certificates issued for the 1999/2000 year of income. However, housing benefits provided to regional employees of a charity, a police service, or a public or not-for-profit hospital will not fall within this exclusion for remote area housing benefits, as the broader remote area test only applies from 1 April 2000. Therefore, Regulation 3C prescribes housing benefits that satisfy the broader remote area provisions contained in subsection 140(1A) of the Act to be excluded fringe benefits, when provided during the FBT year commencing on 1 April 1999.
The changes ensure that housing benefits provided to regional employees of a charity, a police service, or a public or not-for-profit hospital will not be reported on an employee's group certificate. Therefore, the amounts will not be taken into account when determining the individual's liability for certain tax surcharges or other obligations, or eligibility for certain government payments and concessions.
The regulations commenced on gazettal and only apply to group certificates issued for the year of income ended. 3 0 June 2000.
Overview
The Fringe Benefits Tax Amendment Regulations 2000 (No. 2) were enacted to address gaps and issues that arose from the implementation of the A New Tax System (Fringe Benefits) Act 2000, particularly concerning the reporting of housing fringe benefits. This statutory rule, issued under the authority of the Assistant Treasurer, amends the Fringe Benefits Tax Regulations 1992 to exclude certain housing fringe benefits from mandatory reporting on an employee’s group certificate. The policy objective is to alleviate the administrative burden on employers by excluding specific housing benefits from the scope of fringe benefits tax (FBT) reporting, thereby simplifying compliance requirements. The regulations specifically extend the existing exemption for housing benefits provided to remote area employees to all employers and introduce a broader remote area test for certain employers operating in regional areas, ensuring that housing benefits provided to their regional employees also qualify for this exemption. This amendment ensures that such benefits are not reported on group certificates, thereby exempting them from FBT reporting and subsequent tax surcharges or eligibility assessments for government payments and concessions.
Scope and Application
The Fringe Benefits Tax Amendment Regulations 2000 (No. 2) applies to employers in Australia who provide housing fringe benefits to their employees, particularly those working in remote or regional areas. This legislation amends the Fringe Benefits Tax Regulations 1992 to exclude certain housing fringe benefits from being reported on an employee's group certificate, thereby exempting them from Fringe Benefits Tax (FBT) reporting. Specifically, the Act extends the remote area housing exemption to all employers who provide housing benefits to their remote area employees and introduces a broader remote area test to include certain employers operating in regional areas, such as charities, police services, and public or not-for-profit hospitals. The exemption applies to housing benefits provided to employees of these entities if the benefits are located at least 100 kilometres from a town of 130,000 or more people. These changes ensure that such housing benefits are excluded from FBT reporting, thereby reducing the individual's liability for certain tax surcharges or other obligations, and eligibility for certain government payments and concessions. The regulations came into effect upon gazettal and apply to group certificates issued for the year of income ended 30 June 2000.
Key Provisions
The Fringe Benefits Tax Amendment Regulations 2000 (No. 2) provide amendments to the Fringe Benefits Tax Regulations 1992, specifically relating to housing fringe benefits. Under section 135 of the Fringe Benefits Tax Assessment Act 1986, the Governor-General has the authority to make regulations for the Act. The regulations amend the Fringe Benefits Tax Regulations 1992 to exclude certain housing fringe benefits from having to be reported on an employee’s group certificate. These amendments extend the existing exemption for remote area housing benefits to all employers providing housing benefits to their remote area employees, as well as to certain employers operating in regional areas. This includes charities, police services, and public or not-for-profit hospitals, provided the housing benefit is located at least 100 kilometres from a town of 130,000 or more people.
Employers are required to report fringe benefits on their employees' group certificates, but the Act identifies certain fringe benefits which do not need to be reported, known as 'excluded fringe benefits'. These currently include meal entertainment and car parking fringe benefits. The regulations now also exclude certain housing benefits under specific conditions, such as being provided in a remote area or meeting the broader regional area criteria. The Act ensures that housing benefits provided to remote area employees or those meeting the regional criteria will not be reported on group certificates, thus exempting these benefits from certain tax surcharges, obligations, or eligibility for government payments and concessions.
The obligations imposed by these regulations include ensuring that employers accurately report fringe benefits on group certificates, while exempting specified housing benefits from this reporting. Employers must determine whether the housing benefits provided to their employees qualify for the remote area exemption or the broader regional area test. They must also ensure that these benefits are not reported on group certificates, as per the new regulatory provisions. This includes verifying the location of the housing benefit in relation to the relevant town population thresholds.
Breach of the requirements to correctly report or exclude fringe benefits can lead to civil or criminal consequences. While the explanatory statement does not specify penalties, the Fringe Benefits Tax Assessment Act 1986 generally provides for penalties for non-compliance. These can include fines for individuals and companies, with maximum penalties varying based on the severity and intent of the breach. In cases of deliberate or reckless disregard of the reporting requirements, criminal penalties may also apply, including fines and imprisonment. Accurate compliance with the new regulations is essential to avoid these potential consequences.