Notices of Addendum, Notice of Withdrawal

Overview

The Commissioner of Taxation has issued an addendum to certain tax rulings to provide clarity and update the information regarding fringe benefits tax. This legislative update was introduced to address issues surrounding the interpretation and application of fringe benefits tax provisions, particularly concerning the availability of employer-provided cars for private use and the calculation of the taxable value of such benefits. The Addendum removes references to the withdrawn ruling MT 2021, which previously provided guidance on these matters but has now been integrated into other public advice products. The changes outlined in the addendum apply from 16 March 2016, aiming to ensure taxpayers have access to the most current and comprehensive guidance on fringe benefits tax. The enacting body responsible for these rulings is the Australian Taxation Office, under the authority of the Commissioner of Taxation.

Scope and Application

The Commissioner of Taxation has issued an Addendum to certain rulings regarding the Fringe Benefits Tax, impacting the application of the Fringe Benefits Tax Assessment Act 1986. Specifically, the Addendum addresses the circumstances under which a car provided to an employee by their employer, and kept in safe storage such as a commercial garage while the employee is travelling, would be considered available for private use. This ruling affects employers and employees within the scope of the Fringe Benefits Tax, focusing on the valuation of car fringe benefits. The Addendum removes references to the withdrawn ruling MT 2021, which was issued to respond to questions from the primary industry sector. The Addendum is applicable from 16 March 2016, providing updated guidance on the interpretation of the law for calculating the taxable value of car fringe benefits. The Commissioner’s rulings serve to clarify the application of the Fringe Benefits Tax Assessment Act 1986 to ensure compliance across relevant industries and entities.

Key Provisions

The Commissioner of Taxation has issued an addendum to two pre-existing rulings that address fringe benefits tax (FBT). The first addendum, TD 94/16, concerns the circumstances under which a car provided by an employer to an employee and kept in safe storage, such as a commercial garage, while the employee is travelling, is considered to be available for private use, as outlined in section 7 of the Fringe Benefits Tax Assessment Act 1986. The addendum removes references to the previously withdrawn MT 2021 and applies from 16 March 2016. The second addendum, TR 2011/3, addresses the meaning of the 'cost price' of a car for the purposes of calculating the taxable value of car fringe benefits. Similarly, it removes references to MT 2021 and applies from the same date, 16 March 2016. The obligations imposed by these rulings are primarily on employers who provide cars to their employees. Employers must determine whether the car is available for private use and, if so, calculate the appropriate taxable value for the FBT purposes. This determination is crucial for ensuring compliance with the Fringe Benefits Tax Assessment Act 1986 and avoiding potential penalties for non-compliance. Accurate record-keeping and reporting of these benefits are essential to meet the legislative requirements. Breaches of the obligations set out in these rulings could lead to civil or criminal consequences, including penalties. Under the Fringe Benefits Tax Assessment Act 1986, employers who fail to report car fringe benefits correctly may be subject to penalties. The penalties can include fines up to 100% of the amount of the FBT that should have been paid but was not. Additionally, in cases of deliberate or reckless disregard of the tax obligations, criminal charges could be pursued, leading to further penalties and potential imprisonment. The severity of these consequences underscores the importance of adhering to the provisions outlined in the rulings.