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Taxation Laws Amendment Bill (No. 2) 2001
Schedule 1 Amendment of the Fringe Benefits Tax Assessment Act 1986

Part 1 Exempt benefits

Fringe Benefits Tax Assessment Act 1986

1  After subsection 47(1)

Insert:

          (1A)  Where:

                     (a)  a person is an employee of a government body; and

                     (b)  the person’s duties of employment are performed in a police service; and

                     (c)  the person is provided with a residual benefit consisting of the provision of travel on public transport; and

                     (d)  the benefit is provided for the purpose of travel between:

                              (i)  the person’s place of residence; and

                             (ii)  the person’s primary place of employment;

the benefit is an exempt benefit .

2  Application

The amendment made by item 1 applies in relation to the year of tax starting on 1 April 2000 and later years of tax.



 

Part 2 Application of the Fringe Benefits Tax Assessment Act 1986 to nominated State or Territory bodies

Fringe Benefits Tax Assessment Act 1986

3  After Part XIB

Insert:

Part XIC Application of the Act to nominated State or Territory bodies

   

135R   Application of this Part

                   This Part applies in relation to the year of tax starting on 1 April 2001 and later years of tax.

135S   Nomination of eligible State or Territory bodies

             (1)  The following:

                     (a)  a State; or

                     (b)  the Australian Capital Territory; or

                     (c)  the Northern Territory;

may nominate an eligible State or Territory body for the purposes of this Part.

Form and content etc. of nomination

             (2)  The nomination:

                     (a)  must be in the approved form; and

                     (b)  must specify the first year of tax in relation to which the nomination is to have effect; and

                     (c)  may specify that a class or classes of employees are to be taken to have a sufficient connection with the body for the purposes of subsection 135U(3); and

                     (d)  must be given to the Commissioner on or before 21 May in the year of tax specified under paragraph (b).

When nomination has effect

             (3)  Subject to subsection (5), the nomination has effect in relation to the body in relation to the first year of tax as specified in the nomination and in relation to all later years of tax.

Avoidance of doubt

             (4)  To avoid doubt:

                     (a)  the State or Territory may nominate more than one eligible State or Territory body; and

                     (b)  the State or Territory may make nominations at different times (including in different years of tax); and

                     (c)  if the State or Territory nominates more than one eligible State or Territory body, it need not specify the same first year of tax for them.

Variation or revocation of nomination

             (5)  The nomination may be varied or revoked, but a variation or revocation:

                     (a)  must be in the approved form; and

                     (b)  must specify the first year of tax in relation to which the variation or revocation is to have effect; and

                     (c)  must be given to the Commissioner on or before 21 May in that first year of tax.

Nominated State or Territory bodies

             (6)  For each year of tax during which the nomination has effect in relation to an eligible State or Territory body, the body is a nominated State or Territory body .

135T   Eligible State or Territory bodies

             (1)  Each of the following is an eligible State or Territory body :

                     (a)  a department within the meaning of section 3 of the Public Sector Management Act 1988 of New South Wales;

                     (b)  an agency within the meaning of section 4 of the Public Sector Management and Employment Act 1998 of Victoria;

                     (c)  an office referred to in subsection 16(1) of the Public Sector Management and Employment Act 1998 of Victoria;

                     (d)  a department within the meaning of section 7 of the Public Service Act 1996 of Queensland;

                     (e)  a department within the meaning of section 3 of the Public Sector Management Act 1994 of Western Australia , as extended by subsection 3(2) of the Financial Administration and Audit Act 1985 of Western Australia;

                      (f)  a subsidiary body as defined in paragraphs (aa) and (b) of the definition of that term in subsection 3(1) of the Financial Administration and Audit Act 1985 of Western Australia;

                     (g)  an administrative unit within the meaning of section 3 of the Public Sector Management Act 1995 of South Australia;

                     (h)  a government department within the meaning of section 3 of the Tasmanian State Service Act 1984 of Tasmania;

                      (i)  a department within the meaning of section 3 of the Financial Management Act 1996 of the Australian Capital Territory;

                      (j)  an agency within the meaning of section 3 of the Financial Management Act 1995 of the Northern Territory;

                     (k)  a government business division within the meaning of section 3 of the Financial Management Act 1995 of the Northern Territory;

                      (l)  a department of a Parliament of a State;

                    (m)  a department of a Legislative Assembly of a Territory.

             (2)  However, a government body that pays, or is liable to pay, salary or wages is not an eligible State or Territory body .

             (3)  The regulations may make modifications to subsection (1).

             (4)  In subsection (3), modifications includes additions, omissions and substitutions.

135U   Consequences of nomination

Change in employer

             (1)  Subject to subsection (4), a nominated State or Territory body, instead of the governing body otherwise applicable, is taken, for the purposes of the Act, to be the employer of each employee of the State or Territory that has a sufficient connection with the body.

Meaning of sufficient connection

             (2)  An employee of the State or Territory has a sufficient connection with the body if the employee performs his or her duties of employment wholly or principally in the body.

             (3)  An employee of the State or Territory is taken to have a sufficient connection with the body if:

                     (a)  the employee does not perform his or her duties of employment wholly or principally in any other nominated State or Territory body; and

                     (b)  the employee is of a class of employees that the State or Territory has specified under paragraph 135S(2)(c) is to be taken to have a sufficient connection with the body.

Obligations etc. still fall on State or Territory

             (4)  Any right that would be conferred, or obligation that would be imposed, on the nominated State or Territory body as a consequence of subsection (1) is instead conferred or imposed on the State or the Territory.

Other consequences

             (5)  Also, for the purposes of this Act:

                     (a)  the nominated State or Territory body is taken to be a company; and

                     (b)  the following are taken to be companies related to the nominated State or Territory body:

                              (i)  each other nominated State or Territory body of the State or Territory concerned; and

                             (ii)  the State or Territory concerned; and

                            (iii)  each authority of the State or Territory that is not a related company of the nominated State or Territory body under subparagraph (i) or (ii); and

                     (c)  the nominated State or Territory body is taken to be a government body.

Where nominated State or Territory body ceases to exist

             (6)  If the nominated State or Territory body ceases to exist during a year of tax:

                     (a)  the State or Territory is taken, from the time the body ceases to exist, to be the employer of all employees who had a sufficient connection with the body immediately before it ceased to exist; and

                     (b)  the State or Territory is taken to have revoked the nomination of the body, with effect from the start of the next year of tax.

135V   Working out the notional tax amount where nominations have been made, varied or revoked

When section applies

             (1)  This section applies if a State or Territory does any one or more of the following under section 135S:

                     (a)  makes one or more nominations;

                     (b)  varies one or more nominations;

                     (c)  revokes one or more nominations;

with effect from the start of the same year of tax (the year of the change ).

State or Territory to apportion prior year’s assessed tax for instalment purposes

             (2)  If this section applies, the State or Territory must, in accordance with this section, specify the amounts of the tax that are to be taken for the purposes of subsection 110(1) to be assessed in respect of the following in respect of the year of tax (the prior year of tax ) immediately preceding the year of the change:

                     (a)  each body that is a nominated State or Territory body of the State or Territory for the year of the change (even if that year is not the first year of tax for that body);

                     (b)  the State or Territory.

             (3)  The sum of the amounts specified under subsection (2) must equal the sum of the tax that was assessed in respect of the following in respect of the prior year of tax:

                     (a)  the State or Territory;

                     (b)  if there were nominated State or Territory bodies of the State or Territory for the prior year of tax—those bodies.

Form etc. of apportionment

             (4)  The State or Territory must:

                     (a)  specify the amounts after it makes the last of the nominations, variations or revocations; and

                     (b)  do so in the approved form; and

                     (c)  give the approved form to the Commissioner on or before 21 May in the year of the change.

Effect of apportionment

             (5)  For the purposes of subsection 110(1), the amounts specified in the approved form have effect to replace the amounts that would otherwise be the tax assessed for the prior year of tax in respect of the nominated State or Territory bodies and the State or Territory.

Consequences of failure to apportion

             (6)  If the requirements of this section are not complied with:

                     (a)  any making, variation or revocation of a nomination to which this section applies has no effect in relation to any year of tax; and

                     (b)  all existing nominations of the State or Territory under section 135S cease to have effect at the start of the year of the change; and

                     (c)  the amount of the tax that is taken for the purposes of subsection 110(1) to have been assessed in respect of the State or Territory in respect of the prior year of tax is equal to the sum of the amounts of tax assessed in respect of that year of tax in respect of the following:

                              (i)  the State or Territory;

                             (ii)  if there were nominated State or Territory bodies for that year of tax—those bodies.

135W   Notional tax amount where a nominated State or Territory body ceases to exist

                   If a nominated State or Territory body ceases to exist during a year of tax (other than because of subsection 135V(6)), then, for the purposes of subsection 110(1), the amount of the tax that was assessed, in respect of the immediately preceding year of tax in respect of the State or Territory that nominated the body, is taken to be an amount worked out using the following formula:

where:

amount actually assessed means the amount of the tax assessed in respect of the State or Territory in respect of the immediately preceding year of tax.

notional tax amount of the State or Territory body means the notional tax amount of the nominated State or Territory body in respect of the year of tax, as at the end of the last day of the last quarter before the body ceased to exist.

previous credits of the State or Territory body means the total of any credits claimed under section 112A in relation to one or more instalments of tax of the nominated State or Territory body for that year of tax.

previous instalments by the State or Territory body means the total of any instalments of tax of the nominated State or Territory body for that year of tax that became due and payable before it ceased to exist.

135X   Application of certain provisions by agreement with the Commissioner

Object

             (1)  The object of this section is:

                     (a)  to ensure that the calculation of the taxable value of certain fringe benefits is not affected where continuity in the fulfilment of certain record-keeping provisions is broken solely because of a transitional event; and

                     (b)  to preserve the character of certain benefits where that character would otherwise be lost solely because of a transitional event.

Meaning of transitional event

             (2)  A transitional event occurs if:

                     (a)  a State or Territory makes a nomination under section 135S; or

                     (b)  a State or Territory varies a nomination under section 135S; or

                     (c)  a State or Territory revokes a nomination under section 135S; or

                     (d)  a nominated State or Territory body ceases to exist.

Agreement about consequences of transitional events

             (3)  The Commissioner may enter into a written agreement with a State or Territory about what is to happen in respect of the following when a transitional event occurs:

                     (a)  whether a register kept by the State or Territory, or a nominated State or Territory body, is to be treated as a valid register for the purposes of Subdivision D of Division 10A of Part III of the Act (which deals with the 12 week record keeping method for car parking fringe benefits) and the employees and FBT years in relation to which the register is to be treated as valid;

                     (b)  whether a benefit that would otherwise lose its character as an exempt benefit under section 58B, 58C, 58D or 58S is to be treated as an exempt benefit;

                     (c)  whether a benefit that would otherwise lose its character as an amortised fringe benefit under section 65CA is to be treated as an amortised fringe benefit;

                     (d)  whether a benefit that would not otherwise be covered by a recurring fringe benefit declaration under section 152A is to be treated as being covered by the declaration;

                     (e)  whether a year of tax is to be treated as a log book year of tax of the State or Territory, or a nominated State or Territory body, for the purposes of the application of section 10 in relation to a car fringe benefit in relation to that State or Territory, or that nominated State or Territory body, in relation to a particular car or class of cars (however described).

             (4)  So far as the agreement is inconsistent with this Act, the agreement prevails.