2023 FBT instructions
On 6 March 2023, the ATO published instructions for completing the 2023 Fringe benefits tax (FBT) return, including examples.
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The instructions include:
- What’s new in FBT
- FBT rates and thresholds
- Completing your 2023 FBT return – all employers
- 2023 FBT return calculation details – taxable employers
- Not-for-profit employers – completing your 2023 FBT return
- Item 23 Fringe benefit categories
- Keeping records for FBT
- Calculation rates
- Worked examples – not-for-profit employers – completing your FBT return.
FBT electric vehicles
The ATO has released a fact sheet on fringe benefit tax (FBT) obligations where an employee is provided with an electric vehicle and associated items for their private use.
From 1 April 2025, private use of a plug-in hybrid electric vehicle is no longer eligible for the exemption, unless both of the following apply:
- use of the plug-in hybrid electric vehicle was exempt before 1 April 2025; and
- a financially-binding commitment exists to continue providing private use of that vehicle on or after 1 April 2025.
Five requirements must be met for the exemption to apply:
• the benefit is a car benefit;
the vehicle must be a car, which is a zero or low emissions vehicle (vehicle requirements);
the car was first held and used on or after 1 July 2022 (held and used date requirements);
• The car is used or available for private use by a current employee or their associate (including family members) (recipient requirements); and no amount of luxury car tax (LCT) has become payable on the supply or importation of the car (LCT requirements).
If the combined taxable value of certain benefits and fringe benefits provided to an employee exceeds $2,000 in an FBT year, the grossed-up value of those benefits must be reported on the employee’s payment summary or through Single Touch Payroll for the corresponding income year. This includes the value of car benefits arising from the private use of electric vehicles.
Carbon credit units
On 6 March 2023, Treasury released exposure draft legislation and explanatory material on tax changes to provide concessional tax treatment to certain primary producers that generate revenue from the sale of Australian Carbon Credit Units (ACCUs). This proposed measure was announced by the former government on 29 March 2022 as part of the Federal Budget 2022–23.
The exposure draft legislation proposes to enable eligible primary producers to treat the net proceeds from the sale of ACCUs they first held on or after 1 July 2022 as primary production income for the purposes of the Farm Management Deposit scheme and accessing income tax advice expert Sydney averaging.
The taxing point for ACCUs held by eligible primary producers will also be set to the point of sale, instead of being taxed based on changes in the value of their ACCUs each income year.
Failure to keep records
On 13 March 2023, the ATO updated PS LA 2005/2 Penalty for failure to keep or retain records (Practice Statement) to allow the Commissioner to issue a tax records education direction (direction to educate) to a business instead of imposing a penalty.
The purpose of the direction is to help educate businesses about their tax-related record-keeping obligations.
An entity that is given a direction must complete an ATO-approved online record-keeping course. Successful completion of the course by the due date means the entity is no longer liable for the penalty.
The Practice Statement has been updated as a result of the Treasury Laws Amendment (2022 Measures No. 2) Act 2022, which received Royal Assent on 12 December 2022.
Digital games tax offset
On 7 March 2023, the ATO released information on the Digital Games Tax Offset (DGTO). The measure is contained in Schedule 1 to the Treasury Laws Amendment (2022 Measures No. 4) Bill 2022 which is currently before the Senate.
The DGTO will provide eligible game developers with a 30% refundable tax offset for qualifying Australian development expenditure from 1 July 2022.
It will be available for completion, ongoing development or porting of digital games, subject to:
- eligibility criteria set out in Division 378 of the Income Tax Assessment Act 1997, including certification by the Arts Minister; and
- at least $500,000 of qualifying expenditure.
The offset is capped at $20 million per company (or group of companies where each other company
It is connected with or is an affiliate of the company) per income year. Reaching this cap would require approximately $66.7 million in eligible expenditure.
Applicants must be companies that are:
- Australian tax residents.
- Foreign tax residents with a permanent establishment in Australia.
The cents per work hour have increased from 52 cents to 67 cents and it covers energy expenses (electricity and gas), phone usage (mobile and home), internet, stationery, and computer consumables.
Expenses that can be claimed separately:
• Decline in value of assets and equipment used while WFH.The repairs and maintenance of these assets.
- The costs associated with cleaning a dedicated home office.
Taxpayers are not required to have a dedicated home office to claim WFH expenses under this method.
Taxpayers need to keep a record of all the hours worked from home for the entire income year. The ATO will not accept estimates, or a 4-week representative diary or similar document, under this method from 1 March 2023.
Records of hours worked from home can be in any form provided they are kept as they occur, for example, timesheets, rosters, logs of time spent accessing employer or business systems, or a diary for the full year.
Records must be kept for each expense that taxpayers have incurred which is covered by the fixed rate per hour.
Actual cost method
The actual cost method hasn’t changed. Taxpayers can claim the actual work-related portion of all running expenses.
Revised fixed rate method
The changes are:
On 6 March 2023, the Paid Parental Leave Amendment (Improvements for Families and Gender Equality) Bill 2022 (the Bill) was passed by the Senate without amendment and awaits Royal Assent.
The Bill amends the Paid Parental Leave Act 2010 (the PPL Act) to:
• Extend parental leave pay from 18 weeks to 20 weeks from 1 July 2023, with two weeks reserved on a ‘use it or lose it’ basis for each claimant. Dad and partner pay will be abolished.
• Remove the notion of ‘primary’, ‘secondary’ and ‘tertiary’ claimants and the requirement that the primary claimants of parental leave pay must be the birth parent, allowing families to decide who will claim first and how they will share the entitlement. The permission requirements for parents other than a birth parent will also be revised.
• Make paid parental leave consist of only flexible paid parental leave days, allowing claimants to take the payment in multiple blocks, as small as one day at a time, within two years of the birth or adoption, and remove the requirement to not return to work in order to be eligible.
• Introduce a $350,000 family income limit, under which families can be assessed if they do not meet the individual income test.
• Expand eligibility to allow an eligible father or partner to receive parental leave pay regardless of whether the birth parent meets the income test, residency requirements or is serving a newly arrived resident’s waiting period.
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