The Australian Tax Office (ATO) has recently released new changes to Fringe Benefits Tax which will affect some in the mining and resources industry and the broader community.
The new fringe benefits tax year starts on April 1, 2016.
Car expense fringe benefits
The ATO says that the rules for individuals claiming car expense deductions have now changed.
As a result, if a company reimburses expenses relating to an employee’s use of their own car, only two methods will be available to calculate the taxable value of this fringe benefit (when you apply the ‘otherwise deductible’ rule).
The two methods are:
– The log book method
– The cents per kilometre method (a single rate of 66 cents per kilometre now applies).
Meal entertainment benefits
All salary packaged meal entertainment benefits will be reportable. They will also be subject to a separate cap of $5000. Benefits exceeding this cap will be counted towards an employee’s existing FBT exemption or rebate cap.
There is an impact also for workers across the industry. The changes to the rules for individuals claiming car expense deductions also impact on employers who pay car allowances. Employers now need to withhold tax if the car allowance exceeds $0.66 per kilometre.
What all this means is that it may be an opportune time for mining and resources companies to review these policies and align with the new rules.
Further information is available from www.ato.gov.au.
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