FBT exemptions to keep in mind during the COVID-19 pandemic

Posted on 30 April '20 by , under tax.

In emergency situations like the COVID-19 pandemic, there are certain benefits you can provide your employees or their associates which may be exempt from fringe benefits tax (FBT).

The fringe benefits tax is a tax which employers must pay on certain benefits they provide for their employees, their employees’ families and associates. However, with emergency circumstances such as the pandemic-level coronavirus, the ATO is providing FBT emergency assistance exemptions which apply to many common scenarios that your business may be experiencing.

In the case of COVID-19, the FBT emergency assistance exemption applies to:

  • Help businesses which have had to relocate their employees who needed to self-isolate and are from a high-risk area.
  • Paying for emergency meals and accommodation for employees who are stranded overseas due to travel restrictions.
  • Paying for flights for overseas employees returning to Australia.
  • Exempting transport fees for an employee to seek medical assistance from their workplace.
  • Exempting equipment purchased to provide to work-from-home employees such as laptops, portable printers or other portable electronic devices.
  • The minor benefits exemptions may apply for minor, infrequent and irregular benefits of under $300.

With all these exemptions to keep in mind, remember that your FBT return is due 21 May 2020 unless the ATO accepts your request for an extension on lodgement time, you have been granted a deferral or you lodged electronically through a registered tax agent.

Your FBT returns can only be lodged through the practitioner lodgement service (PLS) which requires a Standard Business Reporting (SBR) enabled software from a digital provider. Your digital service provider should be partnered with the ATO in integrating tax and superannuation services into your practice management software.