Fringe Benefits Tax Amendment (Temporary Budget Repair Levy) Act 2014
No. 42, 2014
An Act to amend the Fringe Benefits Tax Act 1986, and for related purposes
Contents
1 Short title
2 Commencement
3 Schedule(s)
Schedule 1—Temporary budget repair levy
Fringe Benefits Tax Act 1986
Fringe Benefits Tax Amendment (Temporary Budget Repair Levy) Act 2014
No. 42, 2014
An Act to amend the Fringe Benefits Tax Act 1986, and for related purposes
[Assented to 25 June 2014]
The Parliament of Australia enacts:
1 Short title
This Act may be cited as the Fringe Benefits Tax Amendment (Temporary Budget Repair Levy) Act 2014.
2 Commencement
(1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.
Commencement information |
Column 1 | Column 2 | Column 3 |
Provision(s) | Commencement | Date/Details |
1. Sections 1 to 3 and anything in this Act not elsewhere covered by this table | The day this Act receives the Royal Assent. | 25 June 2014 |
2. Schedule 1 | At the same time as Schedule 1 to the Tax Laws Amendment (Temporary Budget Repair Levy) Act 2014 commences. | 25 June 2014 |
Note: This table relates only to the provisions of this Act as originally enacted. It will not be amended to deal with any later amendments of this Act.
(2) Any information in column 3 of the table is not part of this Act. Information may be inserted in this column, or information in it may be edited, in any published version of this Act.
3 Schedule(s)
Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.
Schedule 1—Temporary budget repair levy
Fringe Benefits Tax Act 1986
1 After section 6
Insert:
6A Temporary budget repair levy
(1) This section applies to the temporary budget repair levy years for FBT.
(2) Increase the rate of tax mentioned in section 6 by 2 percentage points.
(3) In this section, each of the following is a temporary budget repair levy year for FBT:
(a) the year of tax starting on 1 April 2015;
(b) the year of tax starting on 1 April 2016.
[Minister’s second reading speech made in—
House of Representatives on 13 May 2014
Senate on 16 June 2014]
Overview
The Fringe Benefits Tax Amendment (Temporary Budget Repair Levy) Act 2014 was enacted by the Parliament of Australia to amend the Fringe Benefits Tax Act 1986 by introducing a temporary budget repair levy. This Act aims to address a specific fiscal gap by temporarily increasing the rate of Fringe Benefits Tax (FBT) to generate additional revenue during the specified years. Commencing on 25 June 2014, the Act imposes a 2 percentage point increase in the FBT rate for the years of tax starting on 1 April 2015 and 1 April 2016. The policy objective behind this amendment is to contribute to the budget repair efforts of the Commonwealth during these particular financial years. The levy is designed to be temporary, reflecting its purpose to address a short-term fiscal need.
Scope and Application
The Fringe Benefits Tax Amendment (Temporary Budget Repair Levy) Act 2014 amends the Fringe Benefits Tax Act 1986 to introduce a temporary budget repair levy for the Fringe Benefits Tax (FBT) for two specific years. This Act applies to employers and businesses that are subject to the FBT and specifically targets the financial years beginning on 1 April 2015 and 1 April 2016. The Act increases the rate of FBT by 2 percentage points for these designated years, effectively imposing a higher tax burden during this period. The geographic reach of this Act is national, as it pertains to the Commonwealth's tax laws, thus affecting all entities within Australia that are liable for FBT. There are no stated exclusions, exemptions, or thresholds within the Act itself, but it is subject to the broader provisions of the Fringe Benefits Tax Act 1986. The Act does not explicitly mention the use of subordinate instruments to extend or restrict its application, but such provisions would typically be covered under the primary FBT Act.
Key Provisions
The main operative sections of the Fringe Benefits Tax Amendment (Temporary Budget Repair Levy) Act 2014 (section 1(2)) require the insertion of a new section 6A into the Fringe Benefits Tax Act 1986 (section 6). This new section 6A stipulates a temporary increase in the Fringe Benefits Tax (FBT) rate by 2 percentage points for the temporary budget repair levy years, which are defined as the years of tax starting on 1 April 2015 and 1 April 2016. This amendment applies specifically to the FBT rate and not to other aspects of the tax.
The Act imposes obligations on employers to calculate and remit the increased FBT rate for the specified temporary budget repair levy years. Employers are required to ensure that the FBT is correctly calculated on fringe benefits provided to employees during these years and that the appropriate tax is paid to the Australian Taxation Office (ATO). The Act does not explicitly detail the process for calculating the FBT but implies that employers must adhere to the modified rate during the levy years.
The Act does not explicitly state any offences, penalties, or civil/criminal consequences for breach. However, the general FBT provisions in the Fringe Benefits Tax Act 1986 would apply, which typically include penalties for underpayment or non-payment of FBT. These penalties can include interest on the unpaid amount and additional penalties for persistent non-compliance. The maximum penalties could vary based on the severity and frequency of the breach but would typically be outlined in the Fringe Benefits Tax Act 1986, which is not altered by this specific Act.