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28 Jun 12 2012 Measures No 4 Bill introduced

On 28 June 2012, Tax Laws Amendment (2012 Measures No 4) Bill 2012 was introduced into the House of Representatives.

The following is extracted from the Explanatory Memorandum.

SCHEDULE 1 to the Bill amends the Fringe Benefits Tax Assessment Act 1986 and the ITAA1997 to reform the taxation treatment of living-away-from-home (LAFH) allowances and benefits.

It will generally treat LAFH allowances as part of an employee’s assessable income rather than as fringe benefits, and better target the concessional treatment by allowing an income tax deduction:

  • for reasonable expenses incurred and substantiated for accommodation and food and drink (beyond ‘ordinary weekly food and drink expenses’);
  • to employees who maintain a home in Australia for their own personal and immediate use and enjoyment at all times while required to live away from home for their work; and
  • for a maximum period of 12 months in respect of an individual employee for a particular work location.

It will also tax employers on:

  • LAFH allowances to the extent they relate to ‘ordinary weekly food and drink expenses’ of employees who satisfy the requirements to claim an income tax deduction and have provided their employer with a declaration; and
  • LAFH benefits (that is, the provision of accommodation, food and expense payments) provided to employees who would not be eligible to claim an income tax deduction had they incurred the expenses directly.

These changes will apply from 1 October 2012. Transitional rules will also apply.


SCHEDULE 2 to the Bill amends the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) to ensure that in circumstances where a representative of an incapacitated entity is a creditor of that entity, the correct provision of the GST Act is applied. This measure applies from the first quarterly tax period on or after Royal Assent.


SCHEDULE 3 to the Bill amends Schedule 3 to the Tax Laws Amendment (2012 Measures No. 2) Act 2012 to ensure that:

  • no interest is payable if an overpayment of income tax arises because of a deduction under the pre-rules in Part 1 of Schedule 3 to that Act (which apply, broadly, to corporate acquisitions in the period before 12 May 2010); and
  • no shortfall interest or administrative penalty is payable if additional tax becomes payable because an amendment to an assessment is made, to the extent that the amendment is attributable to a deduction under the pre-rules in Part 1 of Schedule 3 to that Act or under the interim rules in Part 2 of Schedule 3 to that Act (which apply, broadly, to corporate acquisitions in the period between 12 May 2010 and 30 March 2011).

This measure commences on the day that the Tax Laws Amendment (2012 Measures No. 2) Act 2012 receives Royal Assent.

In media release No 2012/055, issued 28 June 2012, the Assistant Treasurer and Minister Assisting for Deregulation, David Bradbury, commented on the changes relating to living-away-from-home allowances and benefits.

 


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