Question:
Fringe benefits tax rules tightened for not-for-profits
Answer:
Recent changes are outlined below:
July 1, 2022
- Loss carry back for eligible companies extended to cover 2023 income year.
- Professional firm profits diverted to the professional's spouse or other associates to be reviewed under new Tax Office guidance.
- Corporate collective investment vehicle legislative regime introduced.
- Temporary full expensing of depreciating assets extended to include 2023 income year.
- Depreciable assets of a company joining a tax consolidation group have tax costs setting rules modified for assets depreciated under temporary full expensing rules.
December 9, 2021
- Reduced Pandemic leave disaster payment of $750 per week made available through to 30 June 2022.
August 5, 2021
- COVID-19 Disaster Payments are non-assessable non-exempt income in 2021 income year and later. Payments phasing out as vaccination rates increase.
July 1, 2021
- New Investment Engagement Service launched for businesses planning significant new investments in Australia.
- Tax Office small business independent review service made permanent for businesses with turnover < $10m, for income tax, GST, exercise, luxury car tax, wine equalisation tax and fuel tax credits. Requested before amended assessment issued.
- Small business income tax offset for individuals increased to provide a reduction of 16% for a tax payable up to $1,000.
- Self-managed superannuation funds can now have six members, increased from four members previously.
July 1, 2021
- Some COVID -19 state and territory business grants received by small and medium enterprises are non-assessable, non-exempt income for 2021 and 2022 income years.
- Certain state, territory and local government financial support for individuals and businesses suffering COVID-19 impacts made exempt where businesses have turnover less than $50 million and only in eligible programs.
March 31, 2021
- JobKeeper payments scheme ended.
October 5, 2020
- Boosting apprenticeship commencements subsidy (up to 50% of apprentice's wages) is assessable income.
June 4, 2020
- Homebuilder grant for new home or substantial renovation construction is not subject to income tax.
April 1, 2020
- COVID-19 cash flow boost payments are not subject to income tax
Currently, employees of certain not-for-profits can salary sacrifice entertainment benefits. If they do so, no FBT is payable by the employer nor does it have to be reported. Those not-for-profits which are not exempt, but rebateable, would receive a partial FBT rebate.
The 2015/16 Budget included a provision for this benefit to be substantially reduced. From 1 April 2016, there will be a separate, single, grossed-up cap of $5,000 for salary packaged meal entertainment and entertainment facility leasing expenses provided to employees of public benevolent institutions, health promotion charities, public and not-for-profit hospitals and public ambulance services.
The charges are subject to draft legislation passing through the parliamentary process
For other fringe benefits, employees of public benevolent institutions and health promotion charities have an exemption cap currently at $31,177, whilst employees of public and not-for-profit hospitals and public ambulance services have a current exemption of $17,677
