Private ruling: Rebate on fringe benefits tax
Published: January 2012
Ruling period: 1 April 2011 to 31 March 2012 | 1 April 2012 to 31 March 2013 | 1 April 2013 to 31 March 2014
Date scheme commenced: 1 April 2011

Ruling: Q1: Is the entity entitled, pursuant to paragraph 65J(1)(j) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA), to a rebate of the fringe benefits tax payable on fringe benefits it provides to its employees? | A1: Yes

Relevant facts and circumstances: The organisation is an incorporated association governed by a Board of Directors. A copy of the constitution was provided. The objects and activities of the organisation show that it is established for the purpose of promoting physical activity and recreation. The constitution has suitable non-profit and dissolution clauses. A copy of the organisation's Annual Report and Audited Statement of Finance for 2010-2011 were provided. These documents provide details about the organisation's funding, achievements, activities, services and products.

Relevant legislative provisions: Fringe Benefits Tax Assessment Act 1986 Paragraph 65J(1)(j).

Reasons for decision: Summary: Paragraph 65J(1)(j) of the FBTAA 1986 provides: "65J(1) Rebatable employer. For the purposes of this section, an employer is a rebatable employer for a year of tax if the employer is not a public benevolent institution, is not a health promotion charity, and is covered by any of the following paragraphs at any time during the year of tax: (j) a non-profit society, non-profit association, or non-profit club, established for community service purposes (not being political purposes or lobbying purposes); Paragraph 3 of Taxation Determination 93/190 states in part: "The term 'community service purposes' has a broader meaning than other purposes beneficial to the community which are also charitable". The Explanatory Memorandum to subparagraph 23(g)(v) confirms that the words 'community service purposes' are to be given a wide interpretation. Those words extend to a range of altruistic purposes that are not otherwise charitable, such as promoting, providing or carrying out activities, facilities or projects for the benefit or welfare of the community or any members of the community who have a particular need by reason of youth, age, infirmity or disablement, poverty, or social or economic circumstances." The organisation's objects include advocacy, identification of needs, and the provision of information literature in the area of recreation for older persons in the state. The objects also consist of also consist of providing a liaison, education and resource service between personnel in the field and various agencies, training for officers/leaders in recreation and developing physical activity and physical activity programs. The organisation's activities include providing training courses, projects, resources, information and education in the area of promoting recreation to the ageing community. It is clear from the information provided that the organisation is a community service organisation established for the purpose of promoting active recreational and physical activity opportunities for the ageing population in the state. This is reflected in the objects in the organisation's constitution and its activities. The organisation does not confer private benefits on its members and its activities are not of a political or lobbying purpose. It is therefore considered that the organisation operates for altruistic community service purposes directed to members of the community in need. Accordingly, the organisation is entitled to a rebate of the fringe benefits tax liability on benefits provided to its employees pursuant to subsection 65J(1) of the FBTAA. 1986.

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