Minister for Revenue and Assistant Treasurer
26 November 2001 - 17 July 2004
1 April 2004
ONE MORE YEAR FOR TRANSITION TO FBT EXEMPTION FOR PAYMENTS TO WORKER ENTITLEMENT FUNDS
Employers will now have until 31 March 2005 to comply with the Fringe Benefits Tax (FBT) exemption for payments made into worker entitlement funds, Minister for Revenue and Assistant Treasurer, Senator Helen Coonan, announced today.
The one year extension to transitional arrangements helps address concerns that the emerging interpretation of the law would deny many employers access to the FBT exemption.
“The FBT exemption for payments into worker entitlement funds is an important measure to ensure that leave and redundancy payments made by employers into approved worker entitlement trust funds are not taxed twice — first, in the hands of employers and again in the hands of employees,” Senator Coonan said.
“The extension of transitional arrangements will ensure FBT will not be payable by employers on worker entitlement payments made in accordance with existing industrial practice over the next year, nor will it be payable by employers who have restructured their worker entitlement arrangements to comply with the existing law.
“During the extended transitional period, the Government will consult with industry to address concerns that worker entitlement payments made under industrial instruments such as Awards may not meet the existing criteria for the FBT exemption.
“It is important that tax law and tax administration do not inhibit employers from protecting workers’ entitlements to leave and redundancy pay. Tax law and tax administration must be flexible and responsive to the legitimate needs of businesses and individual taxpayers.
“There are strong integrity measures built into the FBT
exemption and these will be retained. I look forward to working with employer
representatives to achieve a workable outcome.”