Taxation Laws Amendment (Fringe Benefits and Substantiation) Act 1987

Act No. 139 of 1987 as amended

This compilation was prepared on 29 September 2010
taking into account amendments up to Act No. 75 of 2010

The text of any of those amendments not in force
on that date is appended in the Notes section

The operation of amendments that have been incorporated may be
affected by application provisions that are set out in the Notes section

Prepared by the Office of Legislative Drafting and Publishing,
Attorney-General’s Department, Canberra

TABLE OF PROVISIONS

PART I - PRELIMINARY

Section

1. Short title [see Note 1]

2. Commencement [see Note 1]

PART II - AMENDMENT OF THE FRINGE BENEFITS TAX ASSESSMENT ACT 1986

3. Principal Act

4. Exempt car benefits

5. Taxable value of car fringe benefits - statutory formula

6. Taxable value of car fringe benefits - cost basis

7. Insertion of new sections:

10A. No reduction of operating cost in a log book year of tax unless

log book records and odometer records are maintained

10B. No reduction of operating cost in a non-log book year of tax

unless log book records and odometer records are maintained in

log book year of tax

10C. Nominated business percentage to be reduced if it exceeds

business percentage established during applicable log book

period or if it is unreasonable

8. Calculation of depreciation and interest

9. Taxable value of debt waiver fringe benefits

10. Exempt loan benefits

11. Taxable value of loan fringe benefits

12. Reduction of taxable value - ''otherwise deductible'' rule

13. Exempt accommodation expense payment benefits

14. Exempt car expense payment benefits

15. Insertion of new section:

22A. Taxable value of in-house expense payment fringe benefits

16. Taxable value of external expense payment fringe benefits

17. Reduction of taxable value - ''otherwise deductible'' rule

18. Taxable value of non-remote housing fringe benefits

19. Indexation factor for valuation purposes - non-remote housing

20. Taxable value of remote area accommodation

21. Insertion of new section:

29A. Indexation factor for valuation purposes - remote area

accommodation

22. Living-away-from-home allowance benefits

23. Taxable value of living-away-from-home allowance fringe benefits

24. Reduction of taxable value - ''otherwise deductible'' rule

25. Reduction of taxable value - ''otherwise deductible'' rule

26. Taxable value of tax-exempt body entertainment fringe benefits

27. Reduction of taxable value - ''otherwise deductible'' rule

28. Exempt residual benefits

29. Reduction of taxable value - ''otherwise deductible'' rule

30. Heading to Division 13 of Part III

31. Exempt benefits - employees of religious institutions

32. Repeal of section 57A and substitution of new section:

57A. Exempt benefits - public benevolent institutions

33. Exempt benefits - live-in residential care workers

34. Insertion of new sections and heading:

58A. Exempt benefits - employment interviews and selection tests

58B. Exempt benefits - removals and storage of household effects

as a result of relocation

58C. Exempt benefits - sale or acquisition of dwelling as a result of

relocation

58D. Exempt benefits - connection or re-connection of certain

utilities as a result of relocation

58E. Exempt benefits - leasing of household goods while living away

from home

58F. Exempt benefits - relocation transport

58G. Exempt benefits - motor vehicle parking

58H. Exempt benefits - newspapers and periodicals used for business

purposes

58J. Exempt benefits - compensable work-related trauma

58K. Exempt benefits - in-house health care facilities

58L. Exempt benefits - certain travel to obtain medical treatment

58M. Exempt benefits - work-related medical examinations,

work-related medical screening, work-related preventative health

care, work-related counselling, migrant language training

58N. Exempt benefits - emergency assistance

58P. Exempt benefits - minor benefits

58Q. Exempt benefits - long service awards

58R. Exempt benefits - safety awards

58S. Exempt benefits - trainees engaged under Australian Traineeship

System

58T. Exempt benefits - live-in domestic workers employed by religious

institutions or by religious practitioners

58U. Exempt benefits - live-in help for elderly and disadvantaged

persons

58V. Exempt benefits - food and drink for non-live-in domestic

employees

Division 14 - Reduction of Taxable Value of Miscellaneous Fringe

Benefits

35. Reduction of taxable value - remote area residential fuel

36. Reduction of taxable value - remote area housing

37. Insertion of new section:

60A. Reduction of taxable value - remote area holiday transport

fringe benefits subject to ceiling

38. Reduction of taxable value - remote area holiday transport fringe

benefits not subject to ceiling

39. Insertion of new sections:

61A. Reduction of taxable value - overseas employment holiday

transport

61B. Reduction of taxable value of certain expense payment fringe

benefits in respect of relocation transport

61C. Reduction of taxable value - temporary accommodation relating to

relocation

61D. Reduction of taxable value of temporary accommodation meal

fringe benefits

61E. Reduction of taxable value of certain expense payment fringe

benefits in respect of employment interviews or selection tests

61F. Reduction of taxable value of certain expense payment fringe

benefits associated with work-related medical examinations,

work-related medical screening, work-related preventative health

care, work-related counselling or migrant language training

40. Reduction of aggregate taxable value of certain fringe benefits

41. Reduction of taxable value of living-away-from-home food fringe

benefits

42. Insertion of new sections and Division:

65A. Reduction of taxable value - education of children of overseas

employees

65B. Reduction of taxable value of certain fringe benefits - section

23AF of the Income Tax Assessment Act 1936

65C. Reduction of taxable value of certain fringe benefits - section

23AG of the Income Tax Assessment Act 1936

Division 15 - Car Substantiation Rules for Otherwise Deductible

Provisions

65D. Car substantiation rules

65E. No compliance with substantiation rules in log book year of tax

unless log book records and odometer records are maintained

65F. No compliance with substantiation rules in non-log book year of

tax unless log book records kept in previous log book year of

tax

65G. Car deduction percentage

65H. Nominated business percentage to be reduced if it exceeds

business percentage established during applicable log book

period or if it is unreasonable

43. Application of payments of instalments of tax

44. Notional tax amount

45. Insertion of new section:

115A. Penalty tax for over-estimating business percentage applicable

to car

46. Retention of statutory evidentiary documents

47. Insertion of new section:

124A. Assessment on assumption

48. Interpretation

49. Insertion of new sections:

138A. Benefit provided in respect of a year of tax

138B. Benefit provided in respect of the employment of an employee

138C. Application or use of benefit

50. Housing loans, prescribed interests in land or stratum units and

proprietary rights in respect of dwellings

51. Insertion of new section:

141A. Benefits incidental to acquisition or sale of prescribed

interests in land or stratum units and proprietary rights in

respect of dwellings

52. Remote area housing

53. Insertion of new sections:

142A. Benefits relating to transport

142B. Employee's new place of employment

142C. Eligible shared accommodation in a house, flat or home unit

142D. Eligible accommodation in an employees hostel

54. Remote area holiday transport

55. Insertion of new sections:

143A. Relocation transport

143B. Overseas employees

143C. Overseas employment holiday transport

143D. Employment interviews and selection tests

143E. Work-related medical examinations, work-related medical

screening, work-related preventative health care, work-related

counselling, migrant language training

56. Residual benefits to include provision of property in certain

circumstances

57. Associates and relatives

58. Business journeys in car

59. Holding of car

60. Insertion of new sections:

162B. When car used for the purpose of producing assessable income

162C. Holding period of car

162D. Deemed specification of matters in employer's return

162E. Unsigned or fraudulent entries in log book records

162F. Reasonable estimate of underlying business percentage

162G. Log book year of tax

162H. Applicable log book period

162J. Business percentage established during log book period

162K. Replacement cars - car fringe benefits

162L. Replacement cars - otherwise deductible provisions

162M. Re-acquisition etc. of cars

162N. Registration of motor vehicle

61. Application of amendments

62. Amendment of assessments

PART III - AMENDMENT OF THE INCOME TAX ASSESSMENT ACT 1936

63. Principal Act

64. Deductions not allowable for entertainment expenses

65. Deductions not allowable where expenses incurred by employee are

reimbursed

66. Insertion of new section:

51AJ. Deductions not allowable for private component of contributions

for fringe benefits etc.

67. Interpretation

68. Insertion of new section:

82KTAA. Definition of ''eligible expense'' - extent to which transport

expenses relate to eligible transport payments

69. Log book year of income

70. Deduction for car expenses where income-producing use does not exceed

5,000 kilometres - statutory formula

71. Elections

72. Aggregate claims not exceeding a certain amount

73. Insertion of new sections:

82KZBA. No substantiation required for eligible expenses relating to

eligible transport payments in certain circumstances

82KZBB. Relief from certain substantiation requirements where taxpayer

had a reasonable expectation that substantiation would not be

required

74. Application of amendments

TAXATION LAWS AMENDMENT (FRINGE BENEFITS AND SUBSTANTIATION) ACT 1987

No. 139 of 1987 - LONG TITLE

An Act to amend the law relating to taxation

PART I - PRELIMINARY

TAXATION LAWS AMENDMENT (FRINGE BENEFITS AND SUBSTANTIATION) ACT 1987

No. 139 of 1987

- SECT 1

Short title [see Note 1]

1. This Act may be cited as the Taxation Laws Amendment (Fringe Benefits

and Substantiation) Act 1987.

TAXATION LAWS AMENDMENT (FRINGE BENEFITS AND SUBSTANTIATION) ACT 1987

No. 139 of 1987

- SECT 2

Commencement [see Note 1]

2. This Act shall come into operation on the day on which it receives the

Royal Assent.

PART II - AMENDMENT OF THE FRINGE BENEFITS TAX ASSESSMENT ACT 1986

TAXATION LAWS AMENDMENT (FRINGE BENEFITS AND SUBSTANTIATION) ACT 1987

No. 139 of 1987

- SECT 3

Principal Act

3. In this Part, "Principal Act" means the Fringe Benefits Tax Assessment

Act 1986*1*.

*1* No. 39, 1986, as amended. For previous amendments, see Nos. 48 and 112,

1986; and No. 23, 1987.

TAXATION LAWS AMENDMENT (FRINGE BENEFITS AND SUBSTANTIATION) ACT 1987

No. 139 of 1987

- SECT 4

Exempt car benefits

4. Section 8 of the Principal Act is amended:

(a) by omitting paragraph (2) (b) and substituting the following

paragraph:

"(b) there was no private use of the car during the year of tax and at a

time when the benefit was provided other than:

(i) work-related travel of the employee; and

(ii) other private use by the employee or an associate of the

employee, being other use that was minor, infrequent and irregular."; and

(b) by adding at the end the following subsection:

"(3) Where:

(a) a car benefit relating to a particular car is provided by a

particular person (in this subsection called the 'provider') in a year of tax

in respect of the employment of a current employee of an employer;

(b) at all times during the year of tax when the car was held by the

provider, the car was unregistered; and

provider, the car was wholly or principally used directly in connection with

business operations of:

(i) the employer; or

(ii) if the employer is a company-the employer or a company that is

related to the employer;

the car benefit is an exempt benefit in relation to the year of tax.".

TAXATION LAWS AMENDMENT (FRINGE BENEFITS AND SUBSTANTIATION) ACT 1987

No. 139 of 1987

- SECT 5

Taxable value of car fringe benefits-statutory formula

5. Section 9 of the Principal Act is amended:

(a) by omitting from subsection (1) "Subdivision" and substituting "Part";

(b) by omitting from subparagraph (2) (e) (i) "and";

subparagraph:

"(ia) in a case where car expenses in respect of fuel or oil for the car

were incurred during the holding period by recipients of the car fringe

benefits and:

(A) the persons incurring those expenses give to the employer, before

the declaration date, declarations, in a form approved by the Commissioner, in

respect of those expenses; or

(B) documentary evidence of those expenses is obtained by the persons

incurring the expenses and given to the employer before the declaration date;

the amount of those expenses paid by the recipients less any amount

paid

or payable to the recipients by way of reimbursement of those expenses; and";

and

(d) by inserting in sub-subparagraph (2) (e) (ii) (A) "(other than car

expenses in respect of fuel or oil for the car)" after "in respect of the

car".

TAXATION LAWS AMENDMENT (FRINGE BENEFITS AND SUBSTANTIATION) ACT 1987

No. 139 of 1987

- SECT 6

Taxable value of car fringe benefits-cost basis

6. Section 10 of the Principal Act is amended:

(a) by omitting from subsection (2) "Where" and substituting "Subject to

this Part, where";

(b) by omitting from subsection (2) "continuously";

and substituting the following:

"in accordance with the formula:

(C X (100%-BP))-R

where:

C is the operating cost of the car during the holding period;

BP is:

(a) if, under section 10A or 10B, the employer is not entitled to a

reduction in the operating cost of the car on account of business journeys

undertaken in the car during the holding period-nil;

(b) if, under section 10A or 10B, the employer is entitled to such a

reduction and the percentage calculated in accordance with the formula:

N-U

where:

N is the percentage applicable to the car specified in the

employer's return for the year of tax as mentioned in section 10A or 10B; and

U is the percentage (in this paragraph called the 'reasonable

percentage') that represents a reasonable estimate of the underlying business

percentage applicable to the car in relation to the provider for the holding

period;

is a percentage that:

(i) if either of the following sub-subparagraphs applies:

(A) the year of tax is a log book year of tax of the employer in

relation to the car;

(B) the year of tax is not a log book year of tax of the

employer

in relation to the car and the car is a low business kilometre car of the

provider in relation to the year of tax;

exceeds nil; or

(ii) in any other case-exceeds 10%;

the reasonable percentage; or

the employer's return for the year of tax as mentioned in section 10A or 10B;

and

R is the amount (if any) of the recipient's payment.";

(d) by inserting in subparagraph (3) (a) (i) "insured repair expenses or"

after "other than";

(e) by omitting from subparagraphs (3) (a) (iii), (iv) and (vi) "year of

tax" (wherever occurring) and substituting "holding period";

(f) by adding at the end of paragraph (3) (a) "and";

(g) by omitting paragraph (3) (b);

(h) by omitting from subparagraph (3) (c) (i) "and";

(j) by inserting after subparagraph (3) (c) (i) the following

subparagraph:

"(ia) in a case where car expenses in respect of fuel or oil for the car

were incurred during the holding period by recipients of the car fringe

benefits and:

(A) the persons incurring those expenses give to the employer, before

the declaration date, declarations, in a form approved by the Commissioner, in

respect of those expenses; or

(B) documentary evidence of those expenses is obtained by the persons

incurring the expenses and given to the employer before the declaration date;

the amount of those expenses paid by the recipients less any amount

paid

or payable to the recipients by way of reimbursement of those expenses; and";

(k) by inserting in sub-subparagraph (3) (c) (ii) (A) "(other than car

expenses in respect of fuel or oil for the car)" after "in respect of the

car";

(m) by inserting after subsection (3) the following subsections:

"(3A) A reference in subparagraph (3) (a) (i) to an insured repair

expense

relating to a car is a reference to:

(a) so much of an expense incurred in respect of repairs to the car as

does not exceed an amount:

(i) received by way of insurance in respect of the repairs by the

person incurring the expense;

(ii) paid by way of insurance in respect of the repairs in

discharge

of the obligation of the insured to pay the expense;

(iii) received by way of compensation in respect of the repairs by

the person incurring the expense from the person legally responsible for the

damage to the car; or

(iv) paid by way of compensation in respect of the repairs by the

person legally responsible for the damage to the car in discharge of the

obligation of the person incurring the expense to pay the expense; or

(b) an expense incurred in respect of repairs to the car:

(i) by an insurer under a contract of insurance; or

(ii) by way of compensation by the person legally responsible for

the

damage to the car.

"(3B) Where, in accordance with subsection 162K (2), the identity of a

car

changes one or more times during the period (in this subsection called the

'overall holding period') that, apart from that subsection, would be the

holding period, the operating cost of the car during each period (in this

subsection called a 'statutory holding period') that is a holding period in

relation to the car when the car had a separate identity is so much of the

amount that would have been the operating cost of the car during the overall

holding period (assuming that the identity of the car had not changed during

the overall holding period) as is attributable to the statutory holding

period.

"(3C) Where, in accordance with subsection 162K (2), the identity of a

car

changes one or more times during the period (in this subsection called the

'overall holding period') that, apart from that subsection, would be the

holding period, the recipient's payment in relation to each period (in this

subsection called a 'statutory holding period') that is a holding period in

relation to the car when the car had a separate identity is so much of the

amount that would have been the recipient's payment in relation to the overall

holding period (assuming that the identity of the car had not changed during

the overall holding period) as is attributable to the statutory holding

period.

"(3D) In determining, for the purposes of this section, whether:

(a) an expense is paid or payable in respect of the registration of, or

insurance in respect of, a car;

(b) a charge is paid or payable under a lease agreement in respect of a

car; or

relation

to sales tax or customs duty in respect of a transaction by which the lessor

purchased the car;

a change, in accordance with subsection 162K (2) or 162M (2), to the

identity of the car shall be disregarded."; and

(n) by omitting subsections (5) and (6) and substituting the following

subsections:

"(5) Where:

(a) an employer elects that this section apply in relation to all the

car

fringe benefits in relation to the employer in relation to a year of tax that

relate to a particular car; and

(b) the taxable value, or the aggregate of the taxable values, as the

case requires, of the car fringe benefits that relate to the car ascertained

under subsection (2) of this section exceeds the taxable value, or the

aggregate of the taxable values, as the case requires, that would have been

ascertained under section 9 if that election had not been made;

this Act (other than section 162G) applies, and shall be deemed always to

have applied, for the purposes of ascertaining that taxable value, or the

aggregate of those taxable values, as the case requires, as if that election

had not been made.

"(6) Nothing in section 74 prevents the amendment of an assessment for

the

purpose of giving effect to subsection (5).".

TAXATION LAWS AMENDMENT (FRINGE BENEFITS AND SUBSTANTIATION) ACT 1987

No. 139 of 1987

- SECT 7

7. After section 10 of the Principal Act the following sections are

inserted:

No reduction of operating cost in a log book year of tax unless log book

records and odometer records are maintained

"10A. Where one or more car fringe benefits in relation to an employer in

relation to a year of tax relate to a car while it was held by a particular

person (in this section called the 'provider') during a particular period (in

this section called the 'holding period') in a year of tax that is a log book

year of tax of the employer in relation to the car, the employer is entitled

to a reduction in the operating cost of the car on account of business

journeys undertaken in the car during the holding period if, and only if:

(a) if either of the following subparagraphs applies:

(i) the provider commenced to hold the car during the last 12 weeks of

the year of tax;

(ii) the Commissioner is satisfied, having regard to the provider's

circumstances, that it would be unreasonable to expect log book records and

odometer records in relation to the car to have been maintained by or on

behalf of the provider for an applicable log book period in relation to the

car;

the employer, in his or her return for the year of tax, specifies a

percentage as the nominated business percentage applicable to the car in

relation to the provider for the holding period; or

(b) in any other case-both of the following conditions are satisfied:

(i) log book records and odometer records are maintained by or on

behalf

of the provider for the applicable log book period in relation to the car and,

if the provider is not the employer, are given to the employer before the

declaration date; and

(ii) the employer, in his or her return for the current year of tax,

specifies a percentage as the nominated business percentage applicable to the

car in relation to the provider for the holding period, not being a percentage

that exceeds the business percentage established during the applicable log

book period.

No reduction of operating cost in a non-log book year of tax unless log book

records and odometer records are maintained in log book year of tax

"10B. Where one or more car fringe benefits in relation to an employer in

relation to a year of tax relate to a car while it was held by a particular

person (in this section called the 'provider') during a particular period (in

this section called the 'holding period') in a year of tax that is not a log

book year of tax of the employer in relation to the car, the employer is

entitled to a reduction in the operating cost of the car on account of

business journeys undertaken during the holding period in the car if, and only

if:

(a) odometer records are maintained by or on behalf of the provider in

relation to the car for the holding period and, if the provider is not the

employer, are given to the employer before the declaration date; and

(b) the employer, in his or her return for the year of tax, specifies

whichever of the following percentages is applicable:

(i) the percentage that was:

(A) the nominated business percentage applicable to the car in

relation

to the provider for the period that was the holding period in the year of tax

that was the last log book year of tax of the employer in relation to the car;

and

(B) specified in the employer's return for that last log book year of

tax;

(ii) if the percentage referred to in subparagraph (i) would otherwise

be applicable but the employer is of the opinion that the percentage

calculated in accordance with the formula:

N-U

where:

N is the percentage referred to in subparagraph (i); and

U is the percentage that represents a reasonable estimate of the

underlying business percentage applicable to the car in relation to the

provider for the holding period;

is a percentage that:

(A) if the car is a low business kilometre car of the provider in

relation to the year of tax-exceeds nil; or

(B) in any other case-exceeds 10%;

a percentage as the nominated business percentage applicable to the

car

in relation to the provider for the holding period.

Nominated business percentage to be reduced if it exceeds business percentage

established during applicable log book period or if it is unreasonable

"10C. (1) Where:

(a) an employer, in his or her return for a year of tax, specifies, or

purports to specify, a percentage (in this subsection called the 'excessive

percentage') of the kind mentioned in subparagraph 10A (b) (ii) in respect of

a car held by the provider of a car fringe benefit in relation to the employer

in respect of the car during a period (in this subsection called the 'holding

period') in the year of tax; and

(b) the excessive percentage exceeds the percentage (in this subsection

called the 'reduced percentage') that is the lesser of the following

percentages:

(i) the business percentage applicable to the car that was established

during the applicable log book period referred to in subparagraph 10A (b)

(ii);

(ii) the percentage that represents a reasonable estimate of the

underlying business percentage applicable to the car in relation to the

provider for the holding period;

the following provisions have effect:

specified, in respect of the car, the reduced percentage instead of the

excessive percentage;

(d) if the employer, in his or her return for a subsequent year of tax,

specifies, or purports to specify, in respect of the car, the excessive

percentage in accordance with the condition set out in subparagraph 10B (b)

(i)-the employer shall be treated as if he or she had, in the return for

that subsequent year of tax, specified, in respect of the car, the reduced

percentage instead of the excessive percentage.

"(2) For the purposes of this Act, where:

(a) subparagraph 10B (b) (ii) applies in relation to a car held by a

provider of a car fringe benefit during a period (in this subsection called

the 'holding period') in a year of tax; and

(b) the employer concerned fails to specify, in his or her return for the

year of tax, a percentage as the nominated business percentage applicable to

the car in relation to the provider for the holding period;

the employer shall be treated as if he or she had, in the return, specified,

in respect of the car, as that nominated business percentage, the percentage

that represents a reasonable estimate of the underlying business percentage

applicable to the car in relation to the provider for the holding period.".

TAXATION LAWS AMENDMENT (FRINGE BENEFITS AND SUBSTANTIATION) ACT 1987

No. 139 of 1987

- SECT 8

Calculation of depreciation and interest

8. Section 11 of the Principal Act is amended:

(a) by inserting before subsection (1) the following subsection:

"(1A) For the purposes of this Subdivision, the amount of depreciation

that is deemed to have been incurred by a person in respect of a car in

respect of the period (in this subsection called the 'holding period') during

a year of tax while the car was held by the person is the amount calculated in

accordance with the formula:

DEP X DHP

DEP X DCO

where:

DEP

is the amount of depreciation that is deemed to have been

incurred by the person in respect of the car in respect of

the

year of tax;

DHP

is the number of days in the holding period during which the

car

was owned by the person; and

DCO

is the number of days in the period in the year of tax during

which the car was owned by the person.''; and

(b) by inserting after subsection (1) the following subsection:

"(1B) For the purposes of this Subdivision, the amount of interest that

deemed to have been incurred by a person in respect of a car in respect of the

period (in this subsection called the 'holding period') during a year of tax

while the car was held by the person is the amount calculated in accordance

with the formula:

INT X DHP

INT X DCO

where:

INT

is the amount of interest that is deemed to have been

incurred

by the person in respect of the car in respect of the year of

tax;

DHP

is the number of days in the holding period during which the

car

was owned by the person; and

DCO

is the number of days in the period in the year of tax during

which the car was owned by the person.''.

TAXATION LAWS AMENDMENT (FRINGE BENEFITS AND SUBSTANTIATION) ACT 1987

No. 139 of 1987

- SECT 9

Taxable value of debt waiver fringe benefits

9. Section 15 of the Principal Act is amended by omitting "The taxable" and

substituting "Subject to this Part, the taxable".

TAXATION LAWS AMENDMENT (FRINGE BENEFITS AND SUBSTANTIATION) ACT 1987

No. 139 of 1987

- SECT 10

Exempt loan benefits

10. Section 17 of the Principal Act is amended:

(a) by omitting from subparagraph (3) (b) (i) "his or her" and substituting

"that"; and

(b) by adding at the end the following subsection:

"(4) Where:

(a) the making of a loan consisting of an advance by an employer to an

employee of the employer constitutes a benefit in respect of the employment of

the employee in respect of a year of tax (in this subsection called the

'current year of tax');

(b) the sole purpose of the making of the loan is to enable the

employee

to pay any of the following amounts payable by the employee in respect of

accommodation:

(i) a rental bond;

(ii) a security deposit in respect of electricity, gas or telephone

services;

(iii) any similar amount;

the loan not later than 12 months after the loan is made;

(d) any of the following benefits is provided in, or in respect of, any

year of tax to the employee in respect of that employment:

(i) an expense payment benefit where the recipients expenditure is

respect of a lease or licence in respect of that accommodation;

(ii) a housing benefit where the housing right is in respect of that

accommodation;

(iii) a residual benefit where the recipients benefit is constituted

by the subsistence of a lease or licence in respect of that accommodation;

and

(e) either of the following subparagraphs apply:

(i) by virtue of section 21 or subsection 47 (5), the benefit

referred to in paragraph (d) is an exempt benefit in relation to the year of

tax referred to in that paragraph;

(ii) the benefit referred to in paragraph (d) is a fringe benefit in

relation to the year of tax referred to in that paragraph and, under section

61C, the taxable value of the fringe benefit is reduced by the extent to which

that taxable value is attributable to the subsistence of a lease or licence in

respect of the accommodation during a particular period in that year of tax;

the making of the loan is an exempt benefit in relation to the current

year

of tax.".

TAXATION LAWS AMENDMENT (FRINGE BENEFITS AND SUBSTANTIATION) ACT 1987

No. 139 of 1987

- SECT 11

Taxable value of loan fringe benefits

11. Section 18 of the Principal Act is amended by omitting subsection (2).

TAXATION LAWS AMENDMENT (FRINGE BENEFITS AND SUBSTANTIATION) ACT 1987

No. 139 of 1987

- SECT 12

Reduction of taxable value-''otherwise deductible'' rule

12. Section 19 of the Principal Act is amended:

(a) by omitting paragraph (1) (b) and substituting the following

paragraphs:

"(b) if the recipient had, on the last day of the period (in this

subsection called the 'loan period') during the year of tax when the recipient

was under an obligation to repay the whole or any part of the loan, incurred

and paid unreimbursed interest (in this subsection called the 'gross

interest'), in respect of the loan, in respect of the loan period, equal to

the notional amount of interest in relation to the loan in relation to the

year of tax-both of the following conditions would have been satisfied:

(i) a once-only deduction (in this subsection called the 'gross

deduction') would, or would but for section 82A, and Subdivisions F and G of

Division 3 of Part III, of the Income Tax Assessment Act 1936, have been

allowable to the recipient under that Act in respect of the gross interest;

(ii) in the case of the transitional year of tax-the gross deduction

would not be:

(A) a deduction in respect of rental property loan interest within

the meaning of Subdivision G of Division 3 of Part III of that Act; or

(B) an eligible rental property deduction within the meaning of

Subdivision G of Division 3 of Part III of that Act;

(ba) the amount (in this subsection called the 'notional deduction')

calculated in accordance with the formula:

GD - RD

where:

GD is the gross deduction; and

RD is:

(i) if no interest accrued on the loan in respect of the loan

period-nil; or

(ii) if interest accrued on the loan in respect of the loan

period-the amount (if any) that would, or that would but for section 82A, and

Subdivisions F and G of Division 3 of Part III, of the Income Tax Assessment

Act 1936, have been allowable:

(A) as a once-only deduction; and

(B) in the case of the transitional year of tax-otherwise than

a deduction in respect of rental property loan interest within the meaning of

Subdivision G of Division 3 of Part III of that Act and otherwise than as an

eligible rental property deduction within the meaning of Subdivision G of

Division 3 of Part III of that Act;

to the recipient under that Act in respect of that interest if

that interest had been incurred and paid by the recipient on the last day of

the loan period;

exceeds nil;";

(b) by omitting paragraph (1) (c) and substituting the following

paragraphs:

"(c) except where the fringe benefit is:

(i) an employee credit loan benefit in relation to the year of

tax;

(ii) an employee share loan benefit in relation to the year of

tax;

the recipient gives to the employer, before the declaration date, a

declaration, in a form approved by the Commissioner, in respect of the loan

concerned;

(ca) where:

(i) in the case of the transitional year of tax or the first

standard

year of tax-the loan was used by the recipient to purchase a car held by the

recipient during a period (in this subsection called the 'holding period') in

the year of tax;

(ii) in the case of the second standard year of tax or a subsequent

year of tax-the loan fringe benefit is a car loan benefit in respect of a car

held by the recipient during a period (in this subsection also called the

'holding period') in the year of tax; and

(iii) the substantiation rules set out in Division 15 have been

complied with in relation to the car in relation to the holding period;

the following conditions are satisfied:

(iv) the recipient gives to the employer, before the declaration

date,

a car substantiation declaration for the car for the year of tax;

(v) in a case where the substantiation rules require log book

records

or odometer records to be maintained by or on behalf of the recipient in

relation to the car-the car substantiation declaration is accompanied by a

copy of those documents; and";

"where the loan" to "declaration date -" and substituting the following:

"where paragraph (ca) does not apply and:

(ia) in the case of the transitional year of tax or the first

standard

year of tax-the loan was used by the recipient to purchase a car held by the

recipient during a period (in this subsection also called the 'holding

period') in the year of tax; or

(ib) in the case of the second standard year of tax or a subsequent

year of tax-the loan fringe benefit is a car loan benefit in respect of a car

held by the recipient during a period (in this subsection also called the

'holding period') in the year of tax;

the recipient gives to the employer, before the declaration date:";

(d) by omitting from subsection (1) "section 60" (first occurring) and

substituting "Division 14";

(e) by omitting from subsection (1) all the words after "the amount

calculated" and substituting the following words and paragraphs:

"in accordance with the formula:

TV - ND

where:

TV is the amount that, but for this subsection and Division 14, would

the taxable value of the loan fringe benefit in relation to the year of tax;

and

ND is:

(e) if neither paragraph (ca) nor (d) applies-the notional

deduction;

(f) if paragraph (ca) applies-whichever of the following amounts is

applicable:

(i) if it would be concluded that the amount of interest that

has

accrued on the loan in respect of the loan period would have been the same

even if the loan fringe benefit were not applied or used in producing

assessable income of the recipient-the car deduction percentage, ascertained

under section 65G, of the amount that, but for this subsection and Division

14, would be the taxable value of the loan fringe benefit in relation to the

year of tax;

(ii) if subparagraph (i) does not apply-the car deduction

percentage, ascertained under section 65G, of the notional amount of interest

in relation to the loan in relation to the year of tax;

(g) where:

(i) paragraph (d) applies; and

(ii) a declaration referred to in subparagraph (d) (i) has been

given to the employer;

whichever of the following amounts is the least:

(iii) the notional deduction;

(iv) if it would be concluded that the amount of interest that

has

accrued on the loan in respect of the loan period would have been the same

even if the loan fringe benefit were not applied or used in producing

assessable income of the recipient-331/3% of the amount that, but for this

subsection and Division 14, would be the taxable value of the loan fringe

benefit in relation to the year of tax;

(v) if subparagraph (iv) does not apply-331/3% of the notional

amount of interest in relation to the loan in relation to the year of tax; or

(h) where:

(i) subparagraph (d) (ii) applies; and

(ii) a declaration referred to in subparagraph (d) (i) has not

been

given to the employer;

whichever of the following amounts is applicable:

(iii) if it would be concluded that the amount of interest that

has

accrued on the loan in respect of the loan period would have been the same

even if the loan fringe benefit were not applied or used in producing

assessable income of the recipient-331/3% of the amount that, but for this

subsection and Division 14, would be the taxable value of the loan fringe

benefit in relation to the year of tax;

(iv) if subparagraph (iii) does not apply-331/3% of the notional

amount of interest in relation to the loan in relation to the year of tax.";

and

(f) by omitting subsection (2) and substituting the following subsections:

"(2) Where a part of a loan to which a loan fringe benefit relates is

used

by an employee to:

(a) in all cases-purchase a particular car; or

(b) in the case of the second standard year of tax or a subsequent year

of tax-pay a car expense within the meaning of Subdivision F of Division 3 of

Part III of the Income Tax Assessment Act 1936;

subsection (1) and the definition of 'car loan benefit' in subsection 136

(1) apply as if that part of the loan had been a separate loan.

"(3) Where:

(a) apart from this subsection, paragraph (1) (ca) applies in relation

a fringe benefit in relation to an employer in respect of a car held by the

recipient during a period in the year of tax; and

(b) whichever of the following amounts is the greater exceeds the

amount

that, apart from this subsection, would be ascertained under paragraph (1) (f)

as representing the component ND in the formula in subsection (1):

(i) in all cases-the amount that would have been ascertained under

paragraph (1) (g) as representing that component if:

(A) paragraph (1) (d) had applied in relation to the fringe

benefit;

and

(B) a declaration of the kind referred to in subparagraph (1) (d)

(i) had been given to the employer;

(ii) in a case where the average number of business kilometres per

week travelled by the car during the holding period exceeded 96-the amount

that would have been ascertained under paragraph (1) (h) as representing that

component if:

(A) subparagraph (1) (d) (ii) had applied in relation to that

fringe

benefit;

(B) a declaration of the kind referred to in subparagraph (1) (d)

(i) had not been given to the employer; and

(d) (ii) (B) had been given to the employer;

this Act applies, and shall be deemed always to have applied, as if the

amount represented by that component had been calculated as mentioned in

whichever of subparagraphs (b) (i) or (ii) of this subsection is applicable.

"(4) Nothing in section 74 prevents the amendment of an assessment for

the

purpose of giving effect to subsection (3).".

TAXATION LAWS AMENDMENT (FRINGE BENEFITS AND SUBSTANTIATION) ACT 1987

No. 139 of 1987

- SECT 13

Exempt accommodation expense payment benefits

13. Section 21 of the Principal Act is amended:

(a) by omitting from paragraph (b) "and is not expenditure to which

paragraph 24 (1) (b) applies";

(b) by inserting after paragraph (b) the following paragraph:

"(ba) the accommodation is not provided while the employee is

undertaking

travel in the course of performing the duties of that employment;"; and

"that employment".

TAXATION LAWS AMENDMENT (FRINGE BENEFITS AND SUBSTANTIATION) ACT 1987

No. 139 of 1987

- SECT 14

Exempt car expense payment benefits

14. Section 22 of the Principal Act is amended by omitting paragraph (c) and

substituting the following paragraphs:

"(c) the benefit is not in respect of relocation transport;

(ca) the benefit is not in respect of an employment interview or selection

test;

(cb) the benefit is not associated with:

(i) a work-related medical examination of the employee;

(ii) work-related medical screening of the employee;

(iii) work-related preventative health care of the employee;

(iv) work-related counselling of the employee or of an associate of the

employee; or

(v) migrant language training of the employee or of an associate of the

employee;

(cc) neither of the following subparagraphs applies in relation to the

transport to which the benefit relates:

(i) the transport was provided wholly or partly to enable the

employee,

or an associate of the employee, to have a holiday;

(ii) the transport was provided at a time when the employee had ceased

perform the duties of that employment; and".

TAXATION LAWS AMENDMENT (FRINGE BENEFITS AND SUBSTANTIATION) ACT 1987

No. 139 of 1987

- SECT 15

15. Before section 23 of the Principal Act the following section is inserted

in Subdivision B of Division 5 of Part III:

Taxable value of in-house expense payment fringe benefits

"22A. (1) Subject to this Part, the taxable value in relation to a year of

tax of an in-house property expense payment fringe benefit (in this subsection

called the 'actual fringe benefit') provided during the year of tax is the

amount that, if:

(a) the provision of property to which the actual fringe benefit relates

were an in-house property fringe benefit (in this subsection called the

'notional fringe benefit'); and

(b) the recipients contribution in relation to the notional fringe benefit

were equal to the recipients expenditure reduced by whichever of the following

amounts is applicable:

(i) the amount of the payment referred to in paragraph 20 (a) reduced

the amount of the recipients contribution in relation to the actual fringe

benefit;

(ii) the amount of the reimbursement referred to in paragraph 20 (b);

would have been calculated under section 42 as the taxable value, but for

section 44 and Division 14, of the notional fringe benefit in relation to the

year of tax.

"(2) Subject to this Part, the taxable value in relation to a year of tax of

an in-house residual expense payment fringe benefit (in this subsection called

the 'actual fringe benefit') provided during the year of tax is the amount

that, if:

(a) the provision of the residual benefit to which the actual fringe

benefit relates were an in-house residual fringe benefit (in this subsection

called the 'notional fringe benefit'); and

(b) the recipients contribution in relation to the notional fringe benefit

were equal to the recipients expenditure reduced by whichever of the following

amounts is applicable:

(i) the amount of the payment referred to in paragraph 20 (a) reduced

the amount of the recipients contribution in relation to the actual fringe

benefit;

(ii) the amount of the reimbursement referred to in paragraph 20 (b);

would have been calculated under whichever of sections 48 and 49 is applicable

as the taxable value, but for section 52 and Division 14, of the notional

fringe benefit in relation to the year of tax.

"(3) For the purposes of subsection (2), section 49 has effect as if:

(a) 'the current identical benefit in relation to' were omitted from

paragraph 49 (a);

(b) the reference in paragraph 49 (b) to the recipients current benefit

were a reference to the recipients overall benefit; and

from section 49.

"(4) Where the recipients expenditure in relation to each of 2 or more

in-house expense payment fringe benefits (whether or not in relation to the

same year of tax) is the same expenditure, this Act applies, and shall be

deemed to have applied, as if all the payments or reimbursements to which

those fringe benefits relate had been made at the time when the first of those

payments or reimbursements was made and not otherwise.

"(5) Nothing in section 74 prevents the amendment of an assessment for the

purpose of giving effect to subsection (4).".

TAXATION LAWS AMENDMENT (FRINGE BENEFITS AND SUBSTANTIATION) ACT 1987

No. 139 of 1987

- SECT 16

Taxable value of external expense payment fringe benefits

16. Section 23 of the Principal Act is amended by inserting "external"

before "expense".

TAXATION LAWS AMENDMENT (FRINGE BENEFITS AND SUBSTANTIATION) ACT 1987

No. 139 of 1987

- SECT 17

Reduction of taxable value-''otherwise deductible'' rule

17. Section 24 of the Principal Act is amended:

(a) by omitting paragraph (1) (b) and substituting the following

paragraphs:

"(b) if the recipient had, at the time when the recipients expenditure

was

incurred, incurred and paid unreimbursed expenditure (in this subsection

called the 'gross expenditure'), in respect of the same matter in respect of

which the recipients expenditure was incurred, equal to:

(i) in the case of an in-house expense payment fringe benefit-the

amount that, but for this subsection and Division 14 and the recipients

contribution, would be the taxable value of the expense payment fringe benefit

in relation to the year of tax; or

(ii) in the case of an external expense payment fringe benefit-the

amount of the recipients expenditure;

both of the following conditions would have been satisfied:

(iii) a once-only deduction (in this subsection called the 'gross

deduction') would, or would but for section 82A, and Subdivisions F and G of

Division 3 of Part III, of the Income Tax Assessment Act 1936, have been

allowable to the recipient under that Act in respect of the gross

expenditure;

(iv) in the case of the transitional year of tax-the gross deduction

would not be:

(A) a deduction in respect of rental property loan interest within

the meaning of Subdivision G of Division 3 of Part III of that Act; or

(B) an eligible rental property deduction within the meaning of

Subdivision G of Division 3 of Part III of that Act;

(ba) the amount (in this subsection called the 'notional deduction')

calculated in accordance with the formula:

GD-RD

where:

GD is the gross deduction; and

RD is:

(i) if there is no recipients portion in relation to the expense

payment fringe benefit-nil; or

(ii) if there is a recipients portion in relation to the expense

payment fringe benefit-the amount (if any) that would, or that would but for

section 82A, and Subdivisions F and G of Division 3 of Part III, of the Income

Tax Assessment Act 1936, have been allowable:

(A) as a once-only deduction; and

(B) in the case of the transitional year of tax-otherwise than

a deduction in respect of rental property loan interest within the meaning of

Subdivision G of Division 3 of Part III of that Act and otherwise than as an

eligible rental property deduction within the meaning of Subdivision G of

Division 3 of Part III of that Act;

to the recipient under that Act in respect of the recipients

expenditure (assuming that any payment of that expenditure by the recipient

had been paid by the recipient at the time when the recipients expenditure was

incurred);

exceeds nil;";

(b) by inserting before subparagraph (1) (c) (i) the following

subparagraph:

"(ia) where the recipients expenditure is in respect of fuel or oil for

motor vehicle owned by, or leased to, the recipient:

(A) where the fringe benefit is an eligible small expense payment

fringe benefit or an undocumentable expense payment fringe benefit-substitute

documentary evidence of the recipients expenditure is maintained by or on

behalf of the provider and, if the provider is not the employer, that

documentary evidence, or a copy, is given to the employer before the

declaration date;

(B) in any case-documentary evidence of the recipients expenditure

obtained by the recipient and that documentary evidence, or a copy, is given

to the employer before the declaration date; or

declaration date, a declaration, in a form approved by the Commissioner, in

respect of the recipients expenditure;";

apply and" after "where";

(d) by inserting in subparagraph (1) (c) (i) "an undocumentable expense

payment fringe benefit or" before "an eligible";

(e) by inserting in subparagraph (1) (c) (i) "fringe" before "benefit"

(last occurring);

(f) by omitting from paragraph (1) (e) "and";

(g) by inserting after paragraph (1) (e) the following paragraph:

"(ea) where:

(i) the expense payment fringe benefit is a car expense payment

benefit in respect of a car held by the recipient during a period (in this

section called the 'holding period') in the year of tax; and

(ii) the substantiation rules set out in Division 15 have been

complied with in relation to the car in relation to the holding period;

the following conditions are satisfied:

(iii) the recipient gives to the employer, before the declaration

date, a car substantiation declaration for the car for the year of tax;

(iv) in a case where the substantiation rules require log books or

odometer records to be maintained by or on behalf of the recipient in relation

to the car-the car substantiation declaration is accompanied by a copy of

those documents; and";

(h) by omitting from paragraph (f) "the expense" and substituting

"paragraph (ea) does not apply and the expense payment";

(j) by omitting from paragraph (1) (f) "owned by, or leased to," and

substituting "held by";

(k) by omitting from paragraph (1) (f) "in this paragraph referred to as"

and substituting "in this subsection also called";

(m) by omitting from subsection (1) all the words after "and Division" and

substituting the following words and paragraphs:

"14, of the expense payment fringe benefit in relation to the year of tax

shall be reduced by:

(g) if neither paragraph (ea) nor paragraph (f) applies-the notional

deduction;

(h) if paragraph (ea) applies-whichever of the following amounts is

applicable:

(i) if it would be concluded that the amount of the providers

portion

would have been the same even if the recipients expenditure were not incurred

in producing assessable income of the recipient-the car deduction percentage,

ascertained under section 65G, of the amount that, but for this subsection and

Division 14, would be the taxable value of the expense payment fringe benefit

in relation to the year of tax;

(ii) if subparagraph (i) does not apply:

(A) in the case of an in-house expense payment fringe benefit-the

car deduction percentage, ascertained under section 65G, of the amount that,

but for this subsection and Division 14 and the recipients contribution, would

be the taxable value of the expense payment fringe benefit in relation to the

year of tax; or

(B) in the case of an external expense payment fringe benefit-the

car deduction percentage, ascertained under section 65G, of the recipients

expenditure;

(j) where:

(i) paragraph (f) applies; and

(ii) a declaration referred to in subparagraph (f) (i) has been

given

to the employer;

whichever of the following amounts is the least:

(iii) the notional deduction;

(iv) if it would be concluded that the amount of the providers

portion

would have been the same even if the recipients expenditure were not incurred

in producing assessable income of the recipient-331/3% of the amount that, but

for this subsection and Division 14, would be the taxable value of the expense

payment fringe benefit in relation to the year of tax;

(v) if subparagraph (iv) does not apply:

(A) in the case of an in-house expense payment fringe

benefit-331/3%

of the amount that but for this subsection and Division 14 and the recipients

contribution, would be the taxable value of the expense payment fringe benefit

in relation to the year of tax; or

(B) in the case of an external expense payment fringe

benefit-331/3%

of the recipients expenditure;

(k) where:

(i) subparagraph (f) (ii) applies; and

(ii) a declaration referred to in subparagraph (f) (i) has not been

given to the employer;

whichever of the following amounts is applicable:

(iii) if it would be concluded the amount of the providers portion

would have been the same even if the recipients expenditure were not incurred

in producing assessable income of the recipient-331/3% of the amount that, but

for this subsection and Division 14, would be the taxable value of the expense

payment fringe benefit in relation to the year of tax;

(iv) if subparagraph (iii) does not apply:

(A) in the case of an in-house expense payment fringe

benefit-331/3%

of the amount that, but for this Subdivision and Division 14 and the

recipients contribution, would be the taxable value of the expense payment

fringe benefit in relation to the year of tax; or

(B) in the case of an external expense payment fringe

benefit-331/3%

of the recipients expenditure.";

(n) by inserting after subsection (3) the following subsection:

"(3A) For the purposes of this section, where the Commissioner is

satisfied, having regard to the nature of the recipients expenditure in

respect of an expense payment fringe benefit, that it would be unreasonable to

expect the recipient to have obtained documentary evidence of the recipients

expenditure, the expense payment fringe benefit shall be deemed to be, and

always to have been, an undocumentable expense payment fringe benefit."; and

(p) by adding at the end the following subsections:

"(6) For the purposes of the application of this section to an in-house

expense payment fringe benefit, a reference to the recipients contribution in

relation to the fringe benefit is a reference to the amount ascertained under

whichever of paragraphs 22A (1) (b) or (2) (b) is applicable.

"(7) Where:

(a) apart from this subsection, paragraph (1) (ea) applies in relation

a fringe benefit in relation to an employer in respect of a car held by the

recipient during a period in a year of tax; and

(b) whichever of the following amounts is the greater exceeds the

amount

that, apart from this subsection, would be ascertained under paragraph (1) (h)

as the amount (in this subsection called the 'reducing amount') by which the

taxable value, but for subsection (1) and Division 14, of the fringe benefit

is reduced under subsection (1):

(i) in all cases-the amount that would have been ascertained under

paragraph (1) (j) as the reducing amount if:

(A) paragraph (1) (f) had applied in relation to the fringe

benefit;

and

(B) a declaration of the kind referred to in subparagraph (1) (f)

(i) had been given to the employer;

(ii) in a case where the average number of business kilometres per

week travelled by the car during the holding period exceeded 96-the amount

that would have been ascertained under paragraph (1) (k) as the reducing

amount if:

(A) subparagraph (1) (f) (ii) had applied in relation to that

fringe

benefit;

(B) a declaration of the kind referred to in subparagraph (1) (f)

(i) had not been given to the employer; and

(f) (ii) (B) had been given to the employer;

this Act applies, and shall be deemed always to have applied, as if the

reducing amount had been calculated as mentioned in whichever of

subparagraphs (b) (i) or (ii) of this subsection is applicable.

"(8) Nothing in section 74 prevents the amendment of an assessment for

the

purpose of giving effect to subsection (7).".

TAXATION LAWS AMENDMENT (FRINGE BENEFITS AND SUBSTANTIATION) ACT 1987

No. 139 of 1987

- SECT 18

Taxable value of non-remote housing fringe benefits

18. Section 26 of the Principal Act is amended:

(a) by omitting from subsection (1) "The taxable" and substituting "Subject

to this Part, the taxable".

(b) by inserting in subparagraph (1) (b) (iii) "identical or similar

caravans or mobile homes or in respect of" after "in respect of";

"(aa) the employer elects that the current year of tax be treated as a

base year of tax in relation to the recipients overall housing right or an

equivalent housing right;"; and

(d) by adding at the end the following subsection:

"(7) An election by an employer under paragraph (3) (aa) in relation to

year of tax:

(a) shall be made by notice in writing to the Commissioner; and

(b) shall be lodged with the Commissioner on or before the declaration

date in relation to the year of tax.".

TAXATION LAWS AMENDMENT (FRINGE BENEFITS AND SUBSTANTIATION) ACT 1987

No. 139 of 1987

- SECT 19

Indexation factor for valuation purposes-non-remote housing

19. Section 28 of the Principal Act is amended by omitting from subsection

(1) "this Subdivision" and substituting "section 26".

TAXATION LAWS AMENDMENT (FRINGE BENEFITS AND SUBSTANTIATION) ACT 1987

No. 139 of 1987

- SECT 20

Taxable value of remote area accommodation

20. Section 29 of the Principal Act is amended:

(a) by omitting subsections (1), (2) and (3) and substituting the following

subsections:

"(1) Subject to this Part, the taxable value of a remote area housing

fringe benefit in relation to an employer in relation to a year of tax (in

this subsection called the 'current year of tax') is:

(a) if the employer has made an election under subsection (2) in

relation

to the recipients unit of accommodation in relation to the current year of

tax-the amount calculated in accordance with the formula:

DTP

SA X---

DYT

where:

SA is:

(i) if the recipients unit of accommodation is:

(A) eligible shared accommodation in a house, flat or home unit

relation to the year of tax;

(B) accommodation in a bunkhouse, dormitory or similar living

quarters; or

the year of tax;

the single quarters statutory amount in relation to the year of

tax;

(ii) in any other case-the standard statutory amount in relation to

the year of tax;

DTP is the number of whole days in the tenancy period; and

DYT is:

(iii) in the case of the transitional year of tax-365; and

(iv) in any other case-the number of days in the current year of

tax;

reduced by the recipients rent;

(b) where:

(i) paragraph (a) does not apply; and

(ii) if the housing fringe benefit were not a remote area housing

fringe benefit, the taxable value of the fringe benefit would be calculated

under paragraph 26 (1) (b);

the amount that would be calculated under that paragraph if component

in the formula in that paragraph were 0.5; or

paragraph

26 (1) (c) if the amount represented by component A in the formula in that

paragraph were reduced by 50%.

"(2) An employer may elect that paragraph (1) (a) be applied in

determining the taxable values of all remote area housing fringe benefits in

relation to the employer in relation to a particular unit of accommodation in

relation to a year of tax.

"(3) An election by an employer under subsection (2) in relation to a

year

of tax:

(a) shall be made by notice in writing to the Commissioner; and

(b) shall be lodged with the Commissioner on or before the declaration

date in relation to the year of tax.

"(3A) For the purposes of this section:

(a) the single quarters statutory amount in relation to a year of tax

(in

this paragraph called the 'current year of tax') is:

(i) in the case of the transitional year of tax-$780; or

(ii) in the case of a standard year of tax-the amount calculated:

(A) by multiplying the single quarters statutory amount in

relation

to the immediately preceding year of tax by the indexation factor for the

current year of tax; or

(B) if the amount ascertained in accordance with sub-subparagraph

(A) is not a number of whole dollars-by increasing or decreasing the

amount to the nearest number of whole dollars or, if the amount is a number of

whole dollars plus 50 cents, by increasing the amount by 50 cents; and

(b) the standard statutory amount in relation to a year of tax (in this

paragraph called the 'current year of tax') is:

(i) in the case of the transitional year of tax-$3,120; or

(ii) in the case of a standard year of tax-the amount calculated:

(A) by multiplying the standard statutory amount in relation to

the

immediately preceding year of tax by the indexation factor for the current

year of tax; or

(B) if the amount ascertained in accordance with sub-subparagraph

(A) is not a number of whole dollars-by increasing or decreasing the

amount to the nearest number of whole dollars or, if the amount is a number of

whole dollars plus 50 cents, by increasing the amount by 50 cents."; and

(b) by omitting subparagraph (4) (e) (i) and substituting the following

subparagraph:

"(i) a non-arm's length arrangement; or".

TAXATION LAWS AMENDMENT (FRINGE BENEFITS AND SUBSTANTIATION) ACT 1987

No. 139 of 1987

- SECT 21

21. After section 29 of the Principal Act the following section is inserted

in Division 6 of Part III:

Indexation factor for valuation purposes-remote area accommodation

"29A. (1) For the purposes of section 29, the indexation factor in respect

of a year of tax (in this subsection called the 'current year of tax') is the

number (calculated to 3 decimal places) ascertained, as at the date on which

the rent index number for Australia for the December quarter immediately

preceding the current year of tax was first published, by dividing the sum

of:

(a) the rent index number for Australia in respect of the December quarter

immediately preceding the current year of tax; and

(b) the rent index number for Australia in respect of the 3 quarters that

immediately preceded that quarter;

by the sum of:

immediately preceding the year of tax that next preceded the current year of

tax; and

(d) the rent index number for Australia in respect of the 3 quarters that

immediatley preceded the last-mentioned quarter.

"(2) Subject to subsection (3), if at any time, whether before or after the

commencement of this section, the Australian Statistician has published or

publishes a rent index number in respect of a quarter in substitution for a

rent index number previously published by the Australian Statistician in

respect of that quarter, the publication of the later rent index number shall

be disregarded for the purposes of this section.

"(3) If at any time, whether before or after the commencement of this

section, the Australian Statistician has changed or changes the reference base

for the rent sub-group of the Consumer Price Index, then, for the purposes of

the application of this section after the change took place or takes place,

regard shall be had only to the index numbers published in terms of the new

reference base.

"(4) Where the factor ascertained in accordance with subsection (1) in

relation to a year of tax would, if it were calculated to 4 decimal places,

end with a number greater than 4, the factor ascertained in accordance with

that subsection in relation to that year of tax shall be taken to be the

factor calculated to 3 decimal places in accordance with that subsection and

increased by 0.001.".

TAXATION LAWS AMENDMENT (FRINGE BENEFITS AND SUBSTANTIATION) ACT 1987

No. 139 of 1987

- SECT 22

Living-away-from-home allowance benefits

22. Section 30 of the Principal Act is amended by omitting from paragraph

(b) "his or her employment" and substituting "that employment".

TAXATION LAWS AMENDMENT (FRINGE BENEFITS AND SUBSTANTIATION) ACT 1987

No. 139 of 1987

- SECT 23

Taxable value of living-away-from-home allowance fringe benefits

23. Section 31 of the Principal Act is amended by omitting "The taxable" and

substituting "Subject to this Part, the taxable".

TAXATION LAWS AMENDMENT (FRINGE BENEFITS AND SUBSTANTIATION) ACT 1987

No. 139 of 1987

- SECT 24

Reduction of taxable value-''otherwise deductible'' rule

24. Section 34 of the Principal Act is amended:

(a) by omitting paragraph (1) (b) and substituting the following

paragraphs:

"(b) if the recipient had, at the comparison time, incurred and paid

unreimbursed expenditure (in this subsection called the 'gross expenditure'),

in respect of the provision of the recipients transport, equal to the amount

that, but for this subsection and Division 14 and the recipients contribution,

would be the taxable value of the airline transport fringe benefit in relation

to the year of tax-a once-only deduction (in this subsection called the 'gross

deduction') would, or would but for section 82A, and Subdivision F of Division

3 of Part III, of the Income Tax Assessment Act 1936, have been allowable to

the recipient under that Act in respect of the gross expenditure;

(ba) the amount (in this subsection called the 'notional deduction')

calculated in accordance with the formula:

GD-RD

where:

GD is the gross deduction; and

RD is:

(i) if there is no recipients contribution in relation to the

airline transport fringe benefit-nil; or

(ii) if there is a recipients contribution in relation to the

airline transport fringe benefit equal to, or calculated by reference to, an

amount of consideration paid by the recipient to the provider or to the

employer in respect of the provision of the recipients transport-the amount

(if any) that would, or that would but for section 82A, and Subdivision F of

Division 3 of Part III, of the Income Tax Assessment Act 1936, have been

allowable as a once-only deduction to the recipient under that Act in respect

of that consideration if that consideration had been incurred and paid by the

recipient at the comparison time;

exceeds nil; ";

(b) by omitting from subsection (1) "Division 13" and substituting

"Division 14"; and

occurring) and substituting "notional deduction".

TAXATION LAWS AMENDMENT (FRINGE BENEFITS AND SUBSTANTIATION) ACT 1987

No. 139 of 1987

- SECT 25

Reduction of taxable value-''otherwise deductible'' rule

25. Section 37 of the Principal Act is amended:

(a) by omitting from paragraph (a) "and";

(b) by omitting paragraph (b) and substituting the following paragraphs:

"(b) if the recipient had, at the time when the benefit was provided,

incurred and paid unreimbursed expenditure (in this section called the 'gross

expenditure'), in respect of the provision of the recipients meal, equal to

the amount that, but for this subsection and Division 14 and the recipients

contribution, would be the taxable value of the board fringe benefit in

relation to the year of tax-a deduction (in this subsection called the 'gross

deduction') would, or would but for section 82A, and Subdivision F of Division

3 of Part III, of the Income Tax Assessment Act 1936, have been allowable to

the recipient under section 51 of that Act in respect of the whole or a part

of the gross expenditure; and

calculated in accordance with the formula:

GD-RD

where:

GD is the gross deduction; and

RD is:

(i) if there is no recipients contribution in relation to the

board fringe benefit-nil; or

(ii) if there is a recipients contribution in relation to the

board

fringe benefit equal to, or calculated by reference to, an amount of

consideration paid by the recipient to the provider or to the employer in

respect of the provision of the recipients meal-the amount (if any) that

would, or that would but for section 82A, and Subdivision F of Division 3 of

Part III, of the Income Tax Assessment Act 1936, have been allowable to the

recipient under section 51 of that Act in respect of the whole or a part of

that consideration if that consideration had been incurred and paid by the

recipient at the time when the benefit was provided;

exceeds nil;";

section and Division 14"; and

(d) by omitting "deductible percentage" (last occurring) and substituting

"notional deduction".

TAXATION LAWS AMENDMENT (FRINGE BENEFITS AND SUBSTANTIATION) ACT 1987

No. 139 of 1987

- SECT 26

Taxable value of tax-exempt body entertainment fringe benefits

26. Section 39 of the Principal Act is amended by omitting "The taxable" and

substituting "Subject to this Part, the taxable".

TAXATION LAWS AMENDMENT (FRINGE BENEFITS AND SUBSTANTIATION) ACT 1987

No. 139 of 1987

- SECT 27

Reduction of taxable value-''otherwise deductible'' rule

27. Section 44 of the Principal Act is amended:

(a) by omitting paragraph (1) (b) and substituting the following

paragraphs:

"(b) if the recipient had, at the provision time, incurred and paid

unreimbursed expenditure (in this subsection called the 'gross expenditure'),

in respect of the purchase of the recipients property, equal to the amount

that, but for this subsection and Division 14 and the recipients contribution,

would be the taxable value of the property fringe benefit in relation to the

year of tax-both of the following conditions would have been satisfied:

(i) a once-only deduction (in this subsection called the 'gross

deduction') would, or would but for section 82A, and Subdivisions F and G of

Division 3 of Part III, of the Income Tax Assessment Act 1936, have been

allowable to the recipient under that Act in respect of the gross

expenditure;

(ii) in the case of the transitional year of tax-the gross deduction

would not be an eligible rental property deduction within the meaning of

Subdivision G of Division 3 of Part III of that Act;

(ba) the amount (in this subsection called the 'notional deduction')

calculated in accordance with the formula:

GD-RD

where:

GD is the gross deduction; and

RD is:

(i) if there is no recipients contribution in relation to the

property fringe benefit-nil; or

(ii) if there is a recipients contribution in relation to the

property fringe benefit equal to, or calculated by reference to, an amount of

consideration paid by the recipient to the provider or to the employer in

respect of the provision of the recipients property-the amount (if any) that

would, or that would but for section 82A, and Subdivisions F and G of Division

3 of Part III, of the Income Tax Assessment Act 1936, have been allowable:

(A) as a once-only deduction; and

(B) in the case of the transitional year of tax-otherwise than

an eligible rental property deduction within the meaning of Subdivision G of

Division 3 of Part III of that Act;

to the recipient under that Act in respect of that consideration

if that consideration had been incurred and paid by the recipient at the

provision time;

exceeds nil;";

(b) by omitting from paragraph (1) (d) "and";

"(da) where:

(i) the property fringe benefit is a car property benefit in

respect

of a car held by the recipient during a period (in this section called the

'holding period') in the year of tax; and

(ii) the substantiation rules set out in Division 15 have been

complied with in relation to the car in relation to the holding period;

the following conditions are satisfied:

(iii) the recipient gives to the employer, before the declaration

date, a car substantiation declaration for the car for the year of tax;

(iv) in a case where the substantiation rules require log books or

odometer records to be maintained by or on behalf of the recipient in relation

to the car-the car substantiation declaration is accompanied by a copy of

those documents; and";

(d) by inserting in paragraph (1) (e) "paragraph (da) does not apply and"

after "where" (first occurring);

(e) by omitting from paragraph (1) (e) "owned by, or leased to," and

substituting "held by";

(f) by omitting from paragraph (1) (e) "referred to as" and substituting

"also called";

(g) by omitting from subsection (1) "Division 13" (first occurring) and

substituting "Division 14";

(h) by omitting from subsection (1) all the words after "the amount

calculated" and substituting the following words and paragraphs:

"in accordance with the formula:

TV-ND

where:

TV is the amount that, but for this subsection and Division 14,

would

be the taxable value of the property fringe benefit in relation to the year of

tax; and

ND is:

(f) if neither paragraph (da) nor paragraph (e) applies-the

notional deduction;

(g) where paragraph (da) applies-whichever of the following

amounts

is applicable:

(i) if it would be concluded that the amount of the

recipients

contribution would have been the same even if the property fringe benefit were

not applied or used in producing assessable income of the recipient-the car

deduction percentage, ascertained under section 65G, of the amount that, but

for this subsection and Division 14, would be the taxable value of the

property fringe benefit in relation to the year of tax;

(ii) if subparagraph (i) does not apply-the car deduction

percentage, ascertained under section 65G, of the amount that, but for this

subsection and Division 14 and the recipients contribution, would be the

taxable value of the property fringe benefit in relation to the year of tax;

(h) where:

(i) paragraph (e) applies; and

(ii) a declaration referred to in subparagraph (e) (i) has

been

given to the employer;

whichever of the following amounts is the least:

(iii) the notional deduction;

(iv) if it would be concluded that the amount of the

recipients

contribution would have been the same even if the property fringe benefit were

not applied or used in producing assessable income of the recipient-331/3% of

the amount that, but for this subsection and Division 14, would be the taxable

value of the property fringe benefit in relation to the year of tax;

(v) if subparagraph (iv) does not apply-331/3% of the amount

that, but for this subsection and Division 14 and the recipients contribution,

would be the taxable value of the property fringe benefit in relation to the

year of tax; or

(j) where:

(i) subparagraph (e) (ii) applies; and

(ii) a declaration referred to in subparagraph (e) (i) has not

been given to the employer;

whichever of the following amounts is applicable:

(iii) if it would be concluded that the amount of the

recipients

contribution would have been the same even if the property fringe benefit were

not applied or used in producing assessable income of the recipient-331/3% of

the amount that, but for this subsection and Division 14, would be the taxable

value of the property fringe benefit in relation to the year of tax;

(iv) if subparagraph (iii) does not apply-331/3% of the amount

that, but for this subsection and Division 14 and the recipients contribution,

would be the taxable value of the property fringe benefit in relation to the

year of tax."; and

(j) by adding at the end the following subsections:

"(3) Where:

(a) apart from this subsection, paragraph (1) (da) applies in relation

a fringe benefit in relation to an employer in respect of a car held by the

recipient during a period in a year of tax; and

(b) whichever of the following amounts is the greater exceeds the

amount

that, apart from this subsection, would be ascertained under paragraph (1) (g)

as representing the component ND in the formula in subsection (1):

(i) in all cases-the amount that would have been ascertained under

paragraph (1) (h) as representing that component if:

(A) paragraph (1) (e) had applied in relation to the fringe

benefit;

and

(B) a declaration of the kind referred to in subparagraph (1) (e)

(i) had been given to the employer;

(ii) in a case where the average number of business kilometres per

week travelled by the car during the holding period exceeded 96-the amount

that would have been ascertained under paragraph (1) (j) as representing that

component if:

(A) subparagraph (1) (e) (ii) had applied in relation to that

fringe

benefit;

(B) a declaration of the kind referred to in subparagraph (1) (e)

(i) had not been given to the employer; and

(e) (ii) (B) had been given to the employer;

this Act applies, and shall be deemed always to have applied, as if the

amount represented by that component had been calculated as mentioned in

whichever of subparagraphs (b) (i) or (ii) of this subsection is applicable.

"(4) Nothing in section 74 prevents the amendment of an assessment for

the

purpose of giving effect to subsection (3).".

TAXATION LAWS AMENDMENT (FRINGE BENEFITS AND SUBSTANTIATION) ACT 1987

No. 139 of 1987

- SECT 28

Exempt residual benefits

28. Section 47 of the Principal Act is amended:

(a) by omitting from sub-subparagraph (1) (a) (i) (B) "his or her" and

substituting "that";

(b) by omitting from subsection (3) ", on a working day, of property that

is" and substituting "of property (other than a motor vehicle) that is

ordinarily";

"(4A) For the purposes of subsection (3), a building site, construction

site or any similar place where a person carries on business operations shall

be taken to be business premises of the person.";

(d) by omitting from paragraph (5) (b) "his or her employment" and

substituting "that employment";

(e) by omitting paragraphs (5) (c) and (d) and substituting the following

paragraphs:

"(c) the accommodation is not provided while the employee is

undertaking

travel in the course of performing the duties of that employment; and

(d) either of the following conditions is satisfied:

(i) subsection (7) applies in relation to the provision of

transport

for the employee in connection with travel in the period in the year of tax

when the lease or licence subsisted, being travel between the employee's usual

place of residence and the employee's usual place of employment;

(ii) the employee gives to the employer, before the declaration date,

a declaration, in a form approved by the Commissioner, purporting to set out:

(A) the employee's usual place of residence; and

(B) the place at which the employee actually resided while living

away from his or her usual place of residence;";

(f) by omitting from paragraph (6) (a) "and";

(g) by inserting after paragraph (6) (a) the following paragraph:

"(aa) in the case of a standard year of tax-the motor vehicle is not:

(i) a taxi let on hire to the provider; or

(ii) a car, not being:

(A) a panel van or utility truck; or

(B) any other road vehicle designed to carry a load of less than

tonne (other than a vehicle designed for the principal purpose of carrying

passengers); and";

(h) by omitting paragraph (6) (b) and substituting the following

paragraph:

"(b) there was no private use of the motor vehicle during the year of

tax

and at a time when the benefit was provided other than:

(i) work-related travel of the employee; and

(ii) other private use of the motor vehicle by the employee or an

associate of the employee, being other use that was minor, infrequent and

irregular;"; and

(j) by inserting after subsection (6) the following subsections:

"(6A) Where:

(a) a residual benefit consisting of the provision or use of a motor

vehicle is provided by a particular person (in this subsection called the

'provider') in a year of tax in respect of the employment of a current

employee of an employer;

(b) at all times during the year of tax when the motor vehicle was held

by the provider, the motor vehicle was unregistered; and

held

by the provider, the motor vehicle was wholly or principally used directly in

connection with business operations of:

(i) the employer; or

(ii) if the employer is a company-the employer or a company that is

related to the employer;

the benefit is an exempt benefit in relation to the year of tax.

"(6B) A reference in subsection (6A) to a motor vehicle held by a

provider

is a reference to:

(a) a motor vehicle owned by the provider;

(b) a motor vehicle leased to the provider; or

person.".

TAXATION LAWS AMENDMENT (FRINGE BENEFITS AND SUBSTANTIATION) ACT 1987

No. 139 of 1987

- SECT 29

Reduction of taxable value-''otherwise deductible'' rule

29. Section 52 of the Principal Act is amended:

(a) by omitting paragraph (1) (b) and substituting the following

paragraphs:

"(b) if the recipient had, at the comparison time, incurred and paid

unreimbursed expenditure (in this subsection called the 'gross expenditure'),

in respect of the provision of the recipients benefit, equal to the amount

that, but for this subsection and Division 14 and the recipients contribution,

would be the taxable value of the residual fringe benefit in relation to the

year of tax-both of the following conditions would have been satisfied:

(i) a once-only deduction (in this subsection called the 'gross

deduction') would, or would but for section 82A, and Subdivisions F and G of

Division 3 of Part III, of the Income Tax Assessment Act 1936, have been

allowable to the recipient under that Act in respect of the gross

expenditure;

(ii) in the case of the transitional year of tax-the gross deduction

would not be an eligible rental property deduction within the meaning of

Subdivision G of Division 3 of Part III of that Act;

(ba) the amount (in this subsection called the 'notional deduction')

calculated in accordance with the formula:

GD-RD

where:

GD is the gross deduction; and

RD is:

(i) if there is no recipients contribution in relation to the

residual fringe benefit-nil; or

(ii) if there is a recipients contribution in relation to the

residual fringe benefit equal to, or calculated by reference to, an amount of

consideration paid by the recipient to the provider or to the employer in

respect of the provision of the recipients benefit-the amount (if any) that

would, or that would but for section 82A, and Subdivisions F and G of Division

3 of Part III, of the Income Tax Assessment Act 1936, have been allowable:

(A) as a once-only deduction; and

(B) in the case of the transitional year of tax-otherwise than

an eligible rental property deduction within the meaning of Subdivision G of

Division 3 of Part III of that Act;

to the recipient under that Act in respect of so much of that

consideration as was taken into account for the purposes of section 48, 49, 50

or 51 if that consideration had been incurred and paid by the recipient at the

comparison time;

exceeds nil;";

(b) by omitting from paragraph (1) (d) "and";

"(da) where:

(i) the fringe benefit is a car residual benefit in respect of a

car

held by the recipient during a period (in this section called the 'holding

period') in the year of tax; and

(ii) the substantiation rules set out in Division 15 have been

complied with in relation to the car in relation to the holding period;

the following conditions are satisfied:

(iii) the recipient gives to the employer, before the declaration

date, a car substantiation declaration for the car for the year of tax;

(iv) in a case where the substantiation rules require log books or

odometer records to be maintained by or on behalf of the recipient in relation

to the car-the car substantiation declaration is accompanied by a copy of

those documents; and";

(d) by inserting in paragraph (1) (e) "paragraph (da) does not apply and"

after "where" (first occurring);

(e) by omitting from paragraph (1) (e) "owned by, or leased to," and

substituting "held by";

(f) by omitting from paragraph (1) (e) "referred to as" and substituting

"also called";

(g) by omitting from subsection (1) "Division 13" (first occurring) and

substituting "Division 14";

(h) by omitting from subsection (1) all the words after "the amount

calculated" and substituting the following words and paragraphs:

"in accordance with the formula:

TV-ND

where:

TV is the amount that, but for this subsection and Division 14, would

be the taxable value of the residual fringe benefit in relation to the year of

tax; and

ND is:

(f) if neither paragraph (da) nor paragraph (e) applies-the

notional deduction;

(g) where paragraph (da) applies-whichever of the following

amounts

is applicable:

(i) if it would be concluded that the amount of the

recipients

contribution would have been the same even if the residual fringe benefit were

not applied or used in producing assessable income of the recipient-the car

deduction percentage, ascertained under section 65G of the amount that, but

for this subsection and Division 14, would be the taxable value of the

residual fringe benefit in relation to the year of tax;

(ii) if subparagraph (i) does not apply-the car deduction

percentage, ascertained under section 65G, of the amount that, but for this

subsection and Division 14 and the recipients contribution, would be the

taxable value of the residual fringe benefit in relation to the year of tax;

(h) where:

(i) paragraph (e) applies; and

(ii) a declaration referred to in subparagraph (e) (i) has

been

given to the employer;

whichever of the following amounts is the least:

(iii) the notional deduction;

(iv) if it would be concluded that the amount of the

recipients

contribution would have been the same even if the residual fringe benefit were

not applied or used in producing assessable income of the recipient-331/3% of

the amount that, but for this subsection and Division 14, would be the taxable

value of the residual fringe benefit in relation to the year of tax;

(v) if subparagraph (iv) does not apply-331/3% of the amount

that, but for this subsection and Division 14 and the recipients contribution,

would be the taxable value of the residual fringe benefit in relation to the

year of tax; or

(j) where:

(i) subparagraph (e) (ii) applies; and

(ii) a declaration referred to in subparagraph (e) (i) has not

been given to the employer;

whichever of the following amounts is applicable:

(iii) if it would be concluded that the amount of the

recipients

contribution would have been the same even if the residual fringe benefit were

not applied or used in producing assessable income of the recipient-331/3% of

the amount that, but for this subsection and Division 14, would be the taxable

value of the residual fringe benefit in relation to the year of tax;

(iv) if subparagraph (iii) does not apply-331/3% of the amount

that, but for this subsection and Division 14 and the recipients contribution,

would be the taxable value of the residual fringe benefit in relation to the

year of tax."; and

(j) by adding at the end the following subsections:

"(3) Where:

(a) apart from this subsection, paragraph (1) (da) applies in relation

a fringe benefit in relation to an employer in respect of a car held by the

recipient during a period in a year of tax; and

(b) whichever of the following amounts is the greater exceeds the

amount

that, apart from this subsection, would be ascertained under paragraph (1) (g)

as representing the component ND in the formula in subsection (1):

(i) in all cases-the amount that would have been ascertained under

paragraph (1) (h) as representing that component if:

(A) paragraph (1) (e) had applied in relation to the fringe

benefit;

and

(B) a declaration of the kind referred to in subparagraph (1) (e)

(i) had been given to the employer;

(ii) in a case where the average number of business kilometres per

week travelled by the car during the holding period exceeded 96-the amount

that would have been ascertained under paragraph (1) (j) as representing that

component if:

(A) subparagraph (1) (e) (ii) had applied in relation to that

fringe

benefit;

(B) a declaration of the kind referred to in subparagraph (1) (e)

(i) had not been given to the employer; and

(e) (ii) (B) had been given to the employer;

this Act applies, and shall be deemed always to have applied, as if the

amount represented by that component had been calculated as mentioned in

whichever of subparagraphs (b) (i) or (ii) of this subsection is applicable.

"(4) Nothing in section 74 prevents the amendment of an assessment for

the

purpose of giving effect to subsection (3).".

TAXATION LAWS AMENDMENT (FRINGE BENEFITS AND SUBSTANTIATION) ACT 1987

No. 139 of 1987

- SECT 30

Heading to Division 13 of Part III

30. The heading to Division 13 of Part III of the Principal Act is amended

by adding at the end "Exempt Benefits".

TAXATION LAWS AMENDMENT (FRINGE BENEFITS AND SUBSTANTIATION) ACT 1987

No. 139 of 1987

- SECT 31

Exempt benefits-employees of religious institutions

31. Section 57 of the Principal Act is amended by omitting paragraph (b) and

substituting the following paragraph:

"(b) the employee is a religious practitioner;".

TAXATION LAWS AMENDMENT (FRINGE BENEFITS AND SUBSTANTIATION) ACT 1987

No. 139 of 1987

- SECT 32

32. Section 57A of the Principal Act is repealed and the following section

is substituted:

Exempt benefits-public benevolent institutions

"57A. (1) Where the employer of an employee is a public benevolent

institution, a benefit provided in respect of the employment of the employee

is an exempt benefit.

"(2) Where:

(a) the employer of an employee is a government body; and

(b) the duties of the employment of the employee are exclusively performed

in, or in connection with, a public hospital that is a public benevolent

institution;

a benefit provided in respect of the employment of the employee is an exempt

benefit.".

TAXATION LAWS AMENDMENT (FRINGE BENEFITS AND SUBSTANTIATION) ACT 1987

No. 139 of 1987

- SECT 33

Exempt benefits-live-in residential care workers

33. Section 58 of the Principal Act is amended:

(a) by inserting in paragraphs (1) (a), (c) and (d) "elderly persons or"

before "disadvantaged persons";

(b) by omitting paragraph (1) (b) and substituting the following

paragraph:

"(b) the duties of the employment of the employee consist of, or

consist

principally of:

(i) caring for elderly persons and any children of those elderly

persons who reside with those elderly persons; or

(ii) caring for disadvantaged persons and any children of those

disadvantaged persons who reside with those disadvantaged persons;";

(d) by adding at the end of paragraph (1) (f) "or";

(e) by inserting after paragraph (1) (f) the following paragraphs:

"(g) meals provided on those premises to the employee or to a spouse

child of the employee who resides in those premises with the employee;

(h) food or drink (other than meals) for consumption during that period

by the employee or by a spouse or child of the employee who resides in those

premises with the employee;";

(f) by omitting from subsection (2) the definition of "disadvantaged

person"; and

(g) by omitting paragraph (a) of the definition of "residential premises"

in subsection (2) and substituting the following paragraph:

"(a) elderly persons or disadvantaged persons and children of elderly

persons or disadvantaged persons;".

TAXATION LAWS AMENDMENT (FRINGE BENEFITS AND SUBSTANTIATION) ACT 1987

No. 139 of 1987

- SECT 34

34. After section 58 of the Principal Act the following sections and heading

are inserted:

Exempt benefits-employment interviews and selection tests

"58A. Where:

(a) a car benefit, an expense payment benefit, a property benefit or a

residual benefit is provided in, or in respect of, a year of tax in respect of

the employment of an employee of an employer;

(b) the benefit is in respect of an employment interview or selection test;

and

(i) the benefit is not constituted by the reimbursement of the

recipient, in whole or in part, in respect of an amount of a car expense,

within the meaning of Subdivision F of Division 3 of Part III of the Income

Tax Assessment Act 1936, incurred by the recipient in relation to a car owned

by, or leased to, the recipient, being a reimbursement calculated by reference

to the distance travelled by the car; and

(ii) documentary evidence of the recipients expenditure is obtained by

the recipient and that documentary evidence, or a copy, is given to the

employer before the declaration date;

the benefit is an exempt benefit in relation to the year of tax.

Exempt benefits-removals and storage of household effects as a result of

relocation

"58B. (1) Where:

(a) either of the following benefits is provided in, or in respect of, a

year of tax in respect of the employment of an employee:

(i) an expense payment benefit where the recipients expenditure is in

respect of the removal or storage of household effects of the employee;

(ii) a residual benefit where the recipients benefit consists of the

removal or storage of household effects of the employee;

(b) the removal or storage is required solely because:

(i) the employee is required to live away from his or her usual place

residence in order to perform the duties of that employment;

(ii) the employee, having lived away from his or her usual place of

residence in order to perform the duties of that employment, is required to

return to his or her usual place of residence:

(A) in order to perform those duties; or

(B) because the employee has ceased to perform those duties; or

(iii) the employee is required to change his or her usual place of

residence in order to perform the duties of that employment;

(i) if subparagraph (b) (i) applies-take up residence, or to continue

reside, at or near the place where the employee performs the duties of that

employment while living away from his or her usual place of residence;

(ii) if subparagraph (b) (ii) applies-take up residence at the

employee's

usual place of residence; or

(iii) if subparagraph (b) (iii) applies-take up residence, or to

continue

to reside, at the employee's new usual place of residence;

(d) if subparagraph (b) (iii) applies:

(i) the removal takes place, or the storage commences to be provided,

within 12 months after the day on which the employee commenced to perform the

duties of that employment at the employee's new place of employment; and

(ii) the benefit is not provided under a non-arm's length arrangement;

(e) if subparagraph (a) (i) applies-documentary evidence of the recipients

expenditure is obtained by the recipient and that documentary evidence, or a

copy, is given to the employer before the declaration date; and

(f) the removal or storage was not provided in connection with travel

undertaken by the employee in the course of performing the duties of that

employment;

the benefit is an exempt benefit in relation to the year of tax.

"(2) For the purposes of this section:

(a) a reference to the household effects of an employee is a reference to

tangible property (whether or not owned by a family member) kept primarily for

the personal use of family members; and

(b) without limiting the generality of an expression used in subsection

(1), the recipients expenditure shall be taken to be in respect of, and the

recipients benefit shall be taken to consist of, the removal or storage of

household effects if the expenditure or benefit is in respect of, or consists

of, the transport, packing, unpacking or insurance of the household effects in

connection with the removal or storage of the household effects.

Exempt benefits-sale or acquisition of dwelling as a result of relocation

"58C. (1) Where:

(a) during a particular period (in this subsection called the 'former home

holding period'), an employee of an employer, or an associate of an employee

of an employer, holds:

(i) a prescribed interest in land on which:

(A) there is a building constituting or containing a dwelling;

(B) the employee or associate proposes to construct, or complete the

construction of, a building constituting or containing a dwelling;

(ii) a prescribed interest in a stratum unit in relation to a dwelling;

(iii) a proprietary right in respect of a dwelling, being a flat or

home

unit;

(b) the employee or associate sells the interest or right solely because

the employee is required to change his or her usual place of residence in

order to perform the duties of his or her employment;

called the 'notice time') during the former home holding period that the

employee is required to perform the duties of that employment at the

employee's new place of employment;

(d) at the notice time, the employee occupied, or proposed to occupy, the

dwelling, or proposed to occupy the proposed dwelling, as his or her usual

place of residence; and

(e) the employee or associate entered into a contract for the sale of the

interest or right within 2 years after the day on which the employee commenced

to perform the duties of that employment at the employee's new place of

employment;

the following subsections have effect.

"(2) Where:

(a) either of the following benefits is provided in respect of that

employment of the employee in, or in respect of, a year of tax:

(i) an expense payment benefit where the recipients expenditure is

incidental to the sale of that interest or right;

(ii) a residual benefit where the recipients benefit is incidental to

the

sale of that interest or right;

(b) if, apart from this paragraph, this subsection would apply in relation

to 2 or more dwellings or proposed dwellings in relation to the change in the

employee's usual place of residence-the employer of the employee elects that

this subsection apply in relation to only one of those dwellings or proposed

dwellings;

proposed dwelling in respect of which the election is made;

(d) if subparagraph (a) (i) applies-documentary evidence of the recipients

expenditure is obtained by the recipient and that documentary evidence, or a

copy, is given to the employer before the declaration date; and

(e) the benefit is not provided under a non-arm's length arrangement;

the benefit is an exempt benefit in relation to the year of tax.

"(3) Where:

(a) at a particular time, the employee or an associate of the employee

acquires:

(i) a prescribed interest in land on which:

(A) there is a building constituting or containing another dwelling;

(B) the employee or associate proposes to construct, or complete the

construction of, a building constituting or containing another dwelling;

(ii) a prescribed interest in a stratum unit in relation to another

dwelling; or

(iii) a proprietary right in respect of another dwelling, being a flat

home unit;

(b) the employee or associate acquires the interest or right solely because

the employee is required to change his or her usual place of residence in

order to perform the duties of that employment at the employee's new place of

employment;

of the interest or right within 4 years after the day on which the employee

commenced to perform the duties of that employment at the employee's new place

of employment;

(d) immediately after the completion of the acquisition, the employee

occupied the other dwelling, or proposed to occupy the other proposed

dwelling, as his or her usual place of residence;

(e) any of the following benefits is provided in respect of that employment

of the employee in, or in respect of, a year of tax:

(i) an expense payment benefit where the recipients expenditure is

incidental to the acquisition of that interest or right;

(ii) a residual benefit where the recipients benefit is incidental to

the

acquisition of that interest or right;

(iii) an expense payment benefit where the recipients expenditure is in

respect of the act of connecting or re-connecting a telephone service to the

other dwelling or proposed dwelling;

(iv) a residual benefit where the recipients benefit is constituted by

the act of connecting or re-connecting a telephone service to the other

dwelling or proposed dwelling;

(v) an expense payment benefit where the recipients expenditure is in

respect of the act of re-connecting gas or electricity to the other dwelling

or proposed dwelling;

(vi) a residual benefit where the recipients benefit is constituted by

the act of re-connecting gas or electricity to the other dwelling or proposed

dwelling;

(f) if subparagraph (e) (iii) or (iv) applies-immediately before the

change, a telephone service was provided to the unit of accommodation that was

the employee's usual place of residence before the change;

(g) if subparagraph (e) (i), (iii) or (v) applies-documentary evidence of

the recipients expenditure is obtained by the recipient and that documentary

evidence, or a copy, is given to the employer before the declaration date;

and

(h) the benefit is not provided under a non-arm's length arrangement;

the benefit is an exempt benefit in relation to the year of tax.

"(4) An election by an employer under subsection (2) in relation to a year

of tax:

(a) shall be made by notice in writing to the Commissioner; and

(b) shall be lodged with the Commissioner on or before the declaration

date.

Exempt benefits-connection or re-connection of certain utilities as a result

relocation

"58D. (1) Where:

(a) either of the following benefits is provided in, or in respect of, a

year of tax in respect of the employment of an employee of an employer:

(i) an expense payment benefit where the recipients expenditure is in

respect of the act of connecting or re-connecting a telephone service to a

unit of accommodation;

(ii) a residual benefit where the recipients benefit is constituted by

the act of connecting or re-connecting a telephone service to a unit of

accommodation;

(b) the unit of accommodation is for the accommodation of family members;

(i) the employee is required to live away from his or her usual place

residence in order to perform the duties of that employment; or

(ii) the employee is required to change his or her usual place of

residence in order to perform the duties of that employment;

(d) if subparagraph (a) (i) applies-documentary evidence of the recipients

expenditure is obtained by the recipient and that documentary evidence, or a

copy, is given to the employer before the declaration date; and

(e) if subparagraph (c) (ii) applies:

(i) the telephone service is connected or re-connected not later than

months after the day on which the employee commenced to perform the duties of

that employment at the employee's new place of employment;

(ii) immediately before the change, a telephone service was provided to

the unit of accommodation that was the employee's usual place of residence

before the change; and

(iii) the benefit was not provided under a non-arm's length

arrangement;

the benefit is an exempt benefit in relation to the year of tax.

"(2) Where:

(a) either of the following benefits is provided in, or in respect of, a

year of tax in respect of the employment of an employee of an employer:

(i) an expense payment benefit where the recipients expenditure is in

respect of the act of re-connecting gas or electricity to a unit of

accommodation;

(ii) a residual benefit where the recipients benefit is constituted by

the act of re-connecting gas or electricity to a unit of accommodation;