Private ruling: FBT religious practitioner exemption
Published: February 2012
Ruling period: Year ended 31 March 2012 | Year ended 31 March 2013 | Year ended 31 March 2014 | Year ended 31 March 2015
Date scheme commenced: 1 April 2011

Ruling: Q1: Is the use of a corporate credit card given by the church to employees class A exempt under section 57 of the FBTAA? | A1: Yes | Q2: Is the use of a corporate credit card given by the church to employees class B exempt under section 57 of the FBTAA? | A2: Yes | Q3: Is the use of a corporate credit card given by the church to its employees class C exempt under section 57 of the FBTAA? | A3: Yes

Relevant facts and circumstances: The employer is consider offering the use of corporate credit cards to three classes of employees. In providing the corporate credit cards these employees will be able to use the cards to pay living expenses up to a maximum amount per week. The amount each employee will be allowed to spend will depend on the employee's personal employment circumstances. The employer is endorsed by the Australian Taxation Office as a charitable institution whose charitable purpose is the advancement of religion. They also received an earlier private ruling which concluded that section 57 of the FBTAA applied to both class B and C employees. Documentation which explains the roles of each class of employee within the institution was provided

Relevant legislative provisions: FBTAA Section 57 | FBTAA Subsection 136(1)

Reasons for decision: Summary: Under section 57 of the FBTAA benefits provided by religious institutions to a religious practitioner are exempt benefits if the benefits are provided principally because of the practitioner's pastoral duties or any other duties relating to the practice, study, teaching or propagation of religious beliefs. How this exemption applies is explained in Taxation Ruling TR 92/17 Income tax and fringe benefits tax: exemptions for 'religious institutions'. In respect of what is a religious institution paragraphs 5 and 6 of TR 92/17 states: A body is a 'religious institution' if it is instituted for religious purposes. For a body to be regarded as a religious institution: (a) its objects and activities must reflect its character as a body instituted for the promotion of some religious object; and (b) the beliefs and practices of the members of that body must constitute a religion. The two most important factors for determining whether a particular set of beliefs and practices constitute a religion are: (a) belief in a supernatural Being, Thing or Principle; and (b) acceptance of canons of conduct which give effect to that belief, but which do not offend against the ordinary laws. The information provided and the fact that the entity is an endorsed charitable institution whose aim is the advancement of religion demonstrates that the entity is a religious institution. Therefore for the exemption under section 57 of the FBTAA to apply we need to be able to conclude that the three classes of employees are considered to be religious practitioners and that the use of the corporate credit card in each case is provided principally because of the practitioner's pastoral duties or any other duties relating to the practice, study, teaching or propagation of religious beliefs. For the purpose of the exemption a religious practitioner is defined in subsection 136(1) of the FBTAA to mean: · a minister of religion · a student at an institution who is undertaking a course of instruction in the duties of a minister of religion · a full-time member of a religious order · a student at a college conducted solely for training people to become a member of a religious order. In applying TR 92/17 to the information provided it can be concluded that the three classes of employees are all religious practitioners for the purpose of definition contained in subsection 136(1) of the FBTAA. We now need to determine if the benefits provided from the use of a corporate credit card in each case is provided principally because of the practitioner's pastoral duties or any other duties relating to the practice, study, teaching or propagation of religious beliefs. In respect of what are pastoral duties paragraph 21 of TR 92/17 states: Pastoral duties generally are duties associated with the spiritual care of the members of the congregation of a religious body. The following are examples of pastoral duties: (a) communication of religious beliefs; (b) teaching and counselling adherents and members of the surrounding community; (c) providing adherents and members of the surrounding community with spiritual guidance and support; (d) attendance at an in-service training seminar by a person or persons conducting the seminar, provided that the seminar is of a spiritual nature; and (e) meeting with and visiting adherents, the sick, the poor, or persons otherwise in need of emotional and spiritual support. The activities undertaken by the three classes of employees fall into those listed in paragraph 21 of TR 92/17 as being pastoral duties. Therefore benefits provided to these 3 classes of employees in are being provided principally in respect of pastoral duties and are exempt under section 57 of the FBTAA. This would include benefits provided through the use of a corporate credit card.

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