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March 30—A number of rulings for the 2016-17 fringe benefit tax (FBT) year commencing April 1 were released by the Australian Tax Office in three separate March 30 Tax Determinations.
The fringe benefits tax is a tax employers pay on certain benefits they provide to employees. The benefit may be in addition to, or part of, salary or wage packages. The FBT year runs from April 1 to March 31.
The rulings include: reasonable amounts of food and drink expenses incurred by employees receiving a living-away-from-home allowance, the benchmark interest rate used to calculate the taxable value of a car fringe benefit and the indexation factors for valuing non-remote housing.
The amounts considered reasonable for food and drink expenses incurred by employees receiving a living-away-from-home allowance fringe benefit include rates for various family sizes living away from home both within Australia and overseas. Under the new rates, the weekly amount determined to be reasonable for food and drink expenses by one adult within Australia is A$242 ($185).
The benchmark interest rate for the FBT year will remain the same as 2015 at 5.65 percent. The rate is used to calculate the taxable value of a fringe benefit provided by way of a loan as well as a car fringe benefit where an employer chooses to value the benefit using the operating cost method.
The indexation factors for the purpose of valuing non-remote housing vary by state. For the 2016-17 FBT year, the rates range from 0.978 for the Australian Capital Territory to 1.025 in New South Wales.
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The indexation factors for valuing non-remote housing can be found at http://law.ato.gov.au/atolaw/view.htm?docid=%22TXD%2FTD20161%2FNAT%2FATO%2F00001%22.
The food and drink expense allowances can be found at http://law.ato.gov.au/atolaw/view.htm?docid=%22TXD%2FTD20164%2FNAT%2FATO%2F00001%22.
The benchmark interest rate can be found at http://law.ato.gov.au/atolaw/view.htm?docid=%22TXD%2FTD20165%2FNAT%2FATO%2F00001%22
More information on payroll issues in Australia can be found in the Australia country primer.
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