Private ruling: Fringe Benefit Tax
Published: June 2013

Ruling: Section 135X Agreement

Relevant facts and circumstances: A State or Territory body seeks written agreement with the Commissioner that following a transfer of employees from one State or Territory body to another State or Territory body, the new employers can: treat a year which would have been a log book year for the previous employer as a log book year for the purpose of using section 10 of the FBTAA to calculate the taxable value of a car fringe benefit treat a year of tax that would have been a base year of tax for the previous employer as a base year for the purpose of calculating the taxable value of a housing fringe benefit under section 26 of the FBTAA treat a register that would have been a valid register for the previous employer as a valid register for the purpose of using the 12 week record keeping method in Subdivision D of Division 10A of the FBTAA to calculate the taxable value of car parking fringe benefits treat a benefit relating to the relocation of an employee that would have been an exempt benefit under sections 58B, 58C or 58D of the FBTAA as an exempt benefit treat a benefit relating to trainees engaged under the Australian traineeship system that would have been an exempt benefit for the previous employer under section 58S of the FBTAA as an exempt benefit use the end date that would have been used by the previous employer for the purpose of calculating the amortisation of the taxable value of fringe benefits relating to a remote area home ownership scheme under section 65CA of the FBTAA, and use a recurring fringe benefit declaration which would have applied if the employer had not changed.

Relevant legislative provisions: Fringe Benefits Tax Assessment Act 1986 section 135S | Fringe Benefits Tax Assessment Act 1986 section 135U | Fringe Benefits Tax Assessment Act 1986 section 135X

Reasons for decision: Summary: Section 135X of the FBTAA enables the Commissioner to enter into a written agreement with a State or Territory regarding the application of certain provisions in certain circumstances. The Explanatory Memorandum to Taxation laws Amendment Bill (No. 2) 2001 which inserted section 135X into the FBTAA stated the section had 2 objects: The first is to ensure the calculation of certain fringe benefits is not affected as a result of a break in the continuity of certain record keeping requirements solely because of a 'transitional event'. The second is to preserve the character of certain benefits where the character would otherwise be lost solely because of a 'transitional event'. Subsection 135X(2) of the FBTAA states a transitional event occurs if: (a) a State or Territory makes a nomination under section 135S; or (b) a State or Territory varies a nomination under section 135S; or (c) a State or Territory revokes a nomination under section 135S; or (d) a nominated State or Territory body ceases to exist. In the circumstances provided, it is considered appropriate to enter into a section 135X agreement. Therefore, the Commissioner agrees to enter into an agreement with the State or Territory body under section 135X of the FBTAA to enable the State or Territory nominated bodies to treat: · a year of tax currently being treated as a log book year by the previous employers as a log book year for the purposes of calculating the taxable value of a car fringe benefit using the cost basis · a year of tax currently treated as a base year of tax by the previous employers as a base year for the purpose of calculating the taxable value of a housing fringe benefit · a register kept by the previous employers in relation to the value of car parking fringe benefits as a valid register · a benefit currently being treated by the previous employers as an exempt benefit as a result of the relocation of an employee as an exempt benefit · a benefit currently being treated by the previous employers as an exempt benefit in relation to trainees engaged under the Australian Traineeship systems as an exempt benefit · a fringe benefit currently being treated by the previous employers as an amortised fringe benefit relating to remote are home schemes as an amortised fringe benefit, and · a recurring fringe benefit declaration which would have been applied if the employer had not changed.

This advice applies for the following period: This agreement applies for the year ended 31 March 2013 and subsequent years in which the previous employers would have been able to use the relevant records.