Notice of Rulings 3 March 2021

Overview

The Taxation Administration Act 1953, enacted by the Parliament of Australia, serves to provide the administrative framework for the collection and enforcement of taxation laws in Australia. This legislation was introduced to ensure that the tax system operates efficiently and effectively, providing clarity and certainty to taxpayers and tax administrators. The Act empowers the Commissioner of Taxation to issue public rulings and withdraw outdated or superseded rulings to maintain the relevance and accuracy of tax guidance. On 3 March 2021, the Commissioner, Chris Jordan, issued a notifiable instrument announcing new public rulings and the withdrawal of several older rulings related to fringe benefits tax. The policy objective is to provide clear and up-to-date guidance on various fringe benefits tax matters, ensuring taxpayers can comply with their obligations under the law.

Scope and Application

The notice of rulings issued by the Commissioner of Taxation under the Taxation Administration Act 1953 provides specific guidance on fringe benefits tax matters for the fringe benefits tax year commencing on 1 April 2021. These rulings apply to employers, employees, and businesses involved in fringe benefits tax assessments, particularly in relation to the reasonable amounts for food and drink expenses incurred by employees receiving a living-away-from-home allowance and the rates for calculating the taxable value of a fringe benefit arising from the private use of a motor vehicle other than a car. The rulings are effective from 1 April 2021 to 31 March 2022, providing a clear timeframe for compliance. Additionally, several previous rulings are withdrawn, indicating updates or changes in the legislative approach. The Commissioner of Taxation's authority to issue these rulings extends nationally under Commonwealth legislation, ensuring uniformity in the application of fringe benefits tax rules across Australia.

Key Provisions

The notice of rulings (NOTICE OF RULINGS) provided by the Commissioner of Taxation outlines the public rulings that have been made available for the fringe benefits tax (FBT) under the Fringe Benefits Tax Assessment Act 1986 (FBTAA). The Commissioner has issued two new rulings, TD 2021/3 and TD 2021/4, effective from 1 April 2021 to 31 March 2022. The first ruling, TD 2021/3, specifies the amounts the Commissioner considers reasonable for food and drink expenses incurred by employees receiving a living-away-from-home allowance fringe benefit. The second ruling, TD 2021/4, provides the rates to be applied on a cents per kilometre basis for calculating the taxable value of a fringe benefit arising from the private use of a motor vehicle other than a car. These rulings provide clarity on the FBT liabilities for employers and employees. The obligations imposed by the FBTAA on employers include the calculation and reporting of FBT for any fringe benefits provided to employees. Employers must also withhold and remit FBT to the Commissioner of Taxation in accordance with the FBTAA. The FBTAA also requires employers to provide employees with a statement of fringe benefits, detailing the FBT payable and any associated tax credits. These obligations are further clarified by the rulings provided, ensuring employers can accurately calculate and report FBT liabilities for the specified fringe benefits. The FBTAA outlines penalties and consequences for non-compliance or breaches of the Act. Employers who fail to report or withhold FBT may be subject to penalties, including fines and interest on the unpaid tax. Additionally, the Commissioner of Taxation has the authority to issue public and private rulings, which, if not followed, may result in penalties and interest charges. The Commissioner may also take legal action to recover unpaid tax and penalties. The maximum penalties for FBT non-compliance can be substantial, depending on the circumstances and extent of the breach.