Notice of Rulings 29 March 2023

Overview

The Notice of Rulings issued on 29 March 2023 under the Taxation Administration Act 1953, by the Commissioner of Taxation, Chris Jordan, outlines new public rulings and the withdrawal of several previous rulings related to fringe benefits tax. This notifiable instrument aims to provide clarity and updated rates for the financial year commencing 1 April 2023, addressing the need for current and accurate tax guidance for employers and employees alike. The rulings establish specific rates for the taxable value of fringe benefits from private use of motor vehicles other than cars, as well as the reasonable amounts for food and drink expenses for employees receiving a living-away-from-home allowance. Simultaneously, several previous rulings from the 2017 financial year have been withdrawn to ensure that taxpayers are guided by the most current legislative and fiscal information.

Scope and Application

The Commissioner of Taxation, Chris Jordan, has issued public rulings and withdrawn certain previous rulings regarding fringe benefits tax under the Taxation Administration Act 1953, effective from 1 April 2023. These rulings apply to employers, employees, and businesses within Australia, affecting their compliance with fringe benefits tax obligations for the relevant financial year. Specifically, the rulings concern the rates for calculating the taxable value of fringe benefits related to the private use of motor vehicles other than cars and the reasonable amounts for food and drink expenses for employees receiving a living-away-from-home allowance. The rulings provide clarity and guidance on these matters, ensuring taxpayers are aware of the correct rates and amounts applicable for the specified period. Some earlier rulings from 2017 have been withdrawn, reflecting updates and changes in the tax landscape. These provisions are part of the Commonwealth’s legislative framework, governing taxation practices across Australia.

Key Provisions

The Notice of Rulings issued under the Taxation Administration Act 1953 sets forth the rates and allowances for the calculation of taxable fringe benefits, specifically for the fringe benefits tax year starting on 1 April 2023. Two primary rulings have been issued under this notice: TD 2023/1, which outlines the rates for calculating the taxable value of a fringe benefit from the private use of a motor vehicle other than a car (section 358-5(4)); and TD 2023/2, which establishes reasonable amounts for food and drink expenses incurred by employees receiving a living-away-from-home allowance fringe benefit (section 358-20(1)). These rulings apply from 1 April 2023 to 31 March 2024. The obligations imposed by these rulings require employers and employees to adhere to the specified rates and amounts for calculating taxable fringe benefits. Employers must accurately determine the taxable value of fringe benefits provided to employees, particularly in relation to the use of motor vehicles and living-away-from-home allowances. Employees, on the other hand, must ensure that any claims for reimbursement of food and drink expenses are within the reasonable amounts set by the Commissioner. Breach of these obligations could result in a variety of consequences. If employers fail to correctly apply the rates and allowances, they may be subject to penalties under the Fringe Benefits Tax Assessment Act 1986. The penalties for non-compliance can be significant and may include fines or additional tax liabilities. Employees who claim excessive expenses might also face scrutiny and be required to repay any overclaimed amounts. The specific penalties are not detailed in the notice but are governed by the broader tax legislation, which can include substantial fines and interest on unpaid taxes.