Private ruling: Fringe benefits tax religious practitioner exemption
Date of advice: 30 September 2016
Published: November 2016
Ruling period: Year ended 31 March 2016 | Year ended 31 March 2017 | Year ended 31 March 2018 | Year ended 31 March 2019 | Year ended 31 March 2020
Date scheme commenced: 1 April 2015

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 expenses rather than provide the Class A, B and C employees with the use of a corporate credit card, is that reimbursement 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 third 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 or the reimbursement of expenses. 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 other duties relating to the practice, study, teaching or propagation of religious beliefs). The exemption is explained in detail in Taxation Ruling TR 92/17 Income tax and fringe benefits tax: exemptions for 'religious institutions and in respect of what is a 'religious institution' and paragraphs 5 and 6 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. 6.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 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 religious institution. 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. 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.