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Update on Fringe Benefits Tax
Dear Members
On the 23 rd June 2005 , the Government passed the Tax Laws Amendment (2005 Measures No2) Bill 2005. Section 8 dealt with FBT on payments to Worker Entitlement Funds (redundancy contributions). Some amendments were included which eases the burden imposed by the previous wording.
Unfortunately the major amendment sought, in submissions presented by WACIRF, was not made. That amendment would have ensured that all contributions that an employer agreed to contribute to WACIRF would have been FBT-exempt whether or not made to satisfy a registered or un-registered agreement redundancy entitlement. However, the Government has extended the moratorium on imposing FBT on redundancy contributions until the 31 st March 2006 to give time for further consideration of the anomaly in the legislation that will otherwise impose FBT on contributions made to satisfy an employee's non-registered agreement entitlements.
This will give all employers adequate time to arrange their affairs so as to avoid having to pay FBT on redundancy contributions if they choose the route of moving their employee's entitlements into a registered EBA or workplace agreement.
In the meantime WACIRF will continue to lobby the Government for further amendments to remove the anomalous requirement of FBT-exemption being dependent upon employers having to enter into such a registered agreement, which will otherwise apply, after the 31 March 2006 expiration of the 1-year moratorium.
We will keep you advised of the outcome of our endeavours in order that you have time to re-arrange your affairs, if necessary, to come within the registered agreement FBT-exemption from 1 April 2006 .
Yours faithfully
Murray M Rzepecki
Chief Executive Officer
WA Construction Industry Redundancy No.2 Fund
