Australian Government Lauches Consultation On Fringe Benefits Tax

by Mary Swire, Tax-News.com, Hong Kong

30 July 2008

Australian Assistant Treasurer Chris Bowen, has announced the launch of a consultation by the federal government into certain aspects of new Fringe Benefits Tax rules.

The new rules were announced by Treasurer Wayne Swan as part of the 2008-09 Budget, and are designed to improve the integrity of the Fringe Benefits Tax (FBT) law.

One of these changes was an amendment to the FBT law to ensure that FBT applies appropriately to employee arrangements involving jointly held investment assets.

The changes will generally apply to new arrangements from 7.30 pm (AEST) on 13 May 2008. For existing salary sacrifice arrangements employers and employees will have until 31st March 2009 (the end of the FBT year) to unwind existing arrangements.

The government has also advised that transitional arrangements for employees who have entered into a loan arrangement (such as the arrangement that was the subject of the National Australia Bank Ltd v Federal Commissioner of Taxation ruling) will be put in place. These arrangements will be the subject of consultation.

Submissions are invited on transitional arrangements that may be required in respect of employees with existing loans, in particular, whether the transitional period that is available for salary sacrifice arrangements until 31st March 2009 will provide sufficient time for employees with existing loans to alter their arrangements. The submission period closes on 18th August.

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