At the meeting, the ATO gave the group an update on recently released and soon to be released ATO rulings and other FBT products. The ATO also provided the group with an overview of FBT compliance statistics and focus areas.
The group also discussed a number of technical issues including application of the 50/50 method to entertainment facility leasing expenses and the interaction between the non commercial loss rules and the otherwise deductible rule. In relation to the latter issue, the ATO noted that as the issues involved were complicated, taxpayers who were unsure of the correct tax outcome should obtain a private binding ruling in relation to their circumstances.
The ATO also updated the group on its view in relation to the application of the otherwise deductible rule to FIFO arrangements. The ATO will be publicly releasing its view on this issue in due course. Treasury officials present at the meeting noted that the Minister is also aware of this issue.
The Taxation Institute raised the issue of the time consumed in submitting applications for lodgment date extensions (for FBT returns) by tax agents outside the ‘big 4' accounting practices who do not have access to automatic extensions. On the ATO's recommendation at this meeting, the Taxation Institute will be speaking to this issue at the upcoming Lodgment Working Group meeting on 26 November 2010.