C019/04
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.”