06 Mar 09
NTLG FBT Subcommittee
Elizabeth Lucas (Grant Thornton) represented the Taxation Institute at the NTLG FBT Subcommittee meeting on Thursday 26 February 2009. Salary sacrificing for donations to bushfire and other appeals was a major area of discussion. The ATO currently takes the view that FBT applies, due to the operation of s 148(2) of the FBTAA, and that the ("notional") value of the benefit is not nil. This view gave rise to the Assistant Treasurer’s recent announcement (see 2009 TAXVINE No 7
(27 February 2009)) of a proposed law change to overcome this problem. Members raised various issues that need addressing in the legislation such as:
- will donations to bushfire appeals only be covered, or any natural disaster appeals, or any deductible gift recipient;
- will any changes be retrospective (keeping in mind that salary packaging arrangements are currently in place for donations to various gift deductible recipients on the understanding that no FBT would apply); and
- would a deduction be available to the employer making the donation due to the cost being a donation, or being a cost of employment?
Other issues discussed included:
- the need for travel diaries where the employee is away from home for more than five nights, regardless of whether any of this time was spent "in transit";
- application of the s 58X exemption where a portable electronic device is provided to an employee;
- application of the otherwise deductible rule in respect of an employee's share of joint benefits provided to the employee and associate; and
- application of the minor benefit exemption and the frequency and regularity of benefits.