Private ruling: fringe benefits tax religious practitioner exemption
Date of advice: 23 July 2020
Published: August 2020
Ruling period: FBT year ending 31 March 2021 | FBT year ending 31 March 2022 | FBT year ending 31 March 2023 | FBT year ending 31 March 2024 | FBT year ending 31 March 2025
Date scheme commenced: 1 April 2020

Ruling: Q1: Is the use of a corporate credit card given by the employer to a Class A employee exempt under section 57 of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)? | A1: Yes | Q2: Is the use of a corporate credit card given by the employer to a Class B employee exempt under section 57 of the FBTAA? | A2: Yes | Q3: Is the use of a corporate credit card given by the employer to a Class C employee exempt under section 57 of the FBTAA? | A3: Yes | Q4: If the employer reimburses or pays expenses, rather than provide the Class A, B and C employees with the use of a corporate credit card, is that reimbursement or payment exempt under section 57 of the FBTAA? | A4: Yes

Relevant facts and circumstances: The employer is registered by the Australian Charities and Not-for-profits Commission (ACNC) as a charity with a purpose of advancing religion. It is also endorsed with the Australian Taxation Office (ATO) as a charity and receives the following tax concessions: · Goods and services tax (GST) concession · Fringe benefits tax (FBT) rebate; and · Income tax exemption Prior to the introduction of the ACNC the employer was endorsed by the ATO as a 'charitable institution' for the purposes of the tax concessions listed above. This ruling is the fourth ruling being provided in respect of the application of section 57 of the FBTAA to the three classes of employees The benefits that might be provided are either the use of a corporate credit card, the reimbursement of expenses or payment of expenses on behalf of the employees. Documentation which explains the roles of each class of employee was provided.

Relevant legislative provisions: FBTAA Section 20 | FBTAA Section 40 | FBTAA Section 45 | FBTAA Section 57 | FBTAA Subsection 136(1)

Reasons for decision: Summary: The use of a corporate credit card by an employee is either a property benefit under section 40 of the FBTAA, or a residual benefit under section 45 of the FBTAA. Where an employee has an expense reimbursed by their employer that benefit is an expense payment benefit under section 20 of the FBTAA. Under section 57 of the FBTAA these benefits will be exempt where it can be concluded that they are provided: · by religious institutions · to a religious practitioner; and · principally in respect of pastoral duties or directly related religious activities. The exemption is explained in detail in Taxation Ruling TR 2019/3 Fringe benefits tax: benefits provided to religious practitioners. Regarding 'registered religious institution' paragraph 7 states: 7. In considering whether a benefit is provided by a registered religious institution, administration by the ATO is limited to determining that the entity is an institution that maintains current ACNC registration with a subtype 'advancing religion'. It does not matter if the entity is also registered under another subtype, provided one of the subtypes is 'advancing religion'. The employer is registered by the ACNC as a charity with a sub-type of 'advancing religion'. Prior to the introduction of the ACNC the employer was endorsed by the ATO as a charitable institution. Therefore, the employer is a registered religious institution. A religious practitioner is defined in subsection 136(1) of the FBTAA to include relevantly, a Minister of Religion. Paragraph 14 of Taxation Ruling TR 2019/3 states: Except in rare cases, a minister of religion would have all of these characteristics: · is a member of a religious institution · is recognised by ordination or other admission or commissioning, or has authority from the religious institution to carry out the duties of a minister based on theological training or other relevant experience · is officially recognised as having authority on doctrine or religious practice · is distinct from ordinary adherents of the religion · is an acknowledged leader in spiritual affairs of the institution, and · is authorised to act as a minister or spiritual leader, including the conduct of religious worship and other religious ceremonies. In applying paragraph 14 of Taxation Ruling TR 2019/3 to the information provided it can be concluded that the three classes of employees are all Ministers of Religion and are therefore religious practitioners for the purpose of the definition contained in subsection 136(1) of the FBTAA. The activities undertaken by the three classes of employees are pastoral duties or directly related religious activities. Therefore, benefits provided to these 3 classes of employees in are being provided principally in respect of their pastoral duties or directly related religious activities and are exempt under section 57 of the FBTAA.