Purpose and Objectives
This policy outlines how our company manages fringe benefits and complies with the relevant taxation laws in relation to Fringe Benefit Tax (FBT).
Policy Scope/Coverage
This policy applies to all our company staff involved in FBT-related transactions.
Policy Statement
All transactions entered into by our company must be analysed to determine the correct application of FBT.
The total cost of providing the fringe benefits must be considered prior to the provision and payment of the fringe benefits.
our company recognises FBT in accordance with:
- Fringe Benefits Tax Assessment Act 1986 (FBTAA);
- Fringe Benefits Tax Act 1986;
- Fringe Benefits Tax Regulation 1992; and
- ATO FBT rulings, guidelines, and interpretations.
Our company is required to:
- Record the value of fringe benefits provided to all employees within the FBT year;
- Obtain a declaration, travel diary, or other relevant supporting documentation to reduce the taxable value of fringe benefits and to substantiate the amount of FBT payable shown on the FBT return;
- Report and pay the FBT liability to the ATO as part of the quarterly BAS lodgement;
- Report and pay the FBT liability to the ATO as part of the lodgement of the annual FBT return by 21 May; and
- Report the grossed-up amount of fringe benefits on the employee’s annual payment summary when applicable.
Application of FBT
Our company is liable to pay FBT on the grossed-up taxable value of all fringe benefits provided to employees or to associates of employees.
Where an employee contributes (from after-tax income, not the salary sacrifice component) to the cost of the benefit, this contribution generally reduces the taxable value of the benefit. However this reduction is not available for entertainment benefits provided by our company.
Our company does not accept after-tax contributions from employees for salary sacrificed benefits.
Our company must keep adequate records for its self-assessment of FBT liability for five (5) years that shows:
- The taxable value of each fringe benefit provided to each employee and how it was determined; and
- The justification of claims for exemptions or concessions that reduce the FBT liability.