Commonwealth Numbered Regulations - Explanatory Statements

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FRINGE BENEFITS TAX AMENDMENT REGULATIONS 2004 (NO. 2) 2004 NO. 50

Section 135 of the Fringe Benefits Tax Assessment Act 1986 (the Act) provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing all matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.

The purpose of the amending Regulations is to prescribe approved child tuition assistance that is provided for the child of an Australian Defence Force (ADF) member where the child is required to change schools as a result of the ADF member being directed to change residence by the Department of Defence, as an 'excluded' fringe benefit for fringe benefits reporting purposes only. Child tuition assistance benefits will continue to be subject to fringe benefits tax (FBT).

Employers are generally required to report the grossed-up taxable value of fringe benefits where the benefits attributable to an employee exceed $1,000 in a fringe benefits tax year (from 1 April to 31 March).

However, subsection 5E(2) of the Act provides that the individual fringe benefits amount to be reported for an employee does not include the value of a fringe benefit that is an 'excluded' fringe benefit. Paragraph 5E(3)(i) of the Act defines excluded fringe benefits to include benefits prescribed by regulations for the purposes of that paragraph.

The amending Regulations commence on 1 April 2003, and apply for the 2003-2004 FBT year and later years.

However, the reduced value of eligible ADF members' fringe benefits would not be reported until their group certificates are issued in July 2004.