Australian Capital Territory Numbered Acts Australian Capital Territory Numbered Actssubstitute
Division 1A.2 Benefits
3 Meaning of benefit
A reference in this Act to a "benefit"—
(a) is a reference to a fringe benefit within the meaning of the Fringe Benefits Tax Assessment Act 1986 (Cwlth); but
(b) does not include a reference to a superannuation benefit.
3A Value of benefit
(1) For this Act, the value of a benefit provided by an employer during a financial year is calculated as follows:
(2) In this Act, a reference to wages paid or payable as a benefit in a month is—
(a) a reference to the value of the benefit paid in the month; or
(b) if an election by the employer is in force under section 3B—a reference to an amount calculated in accordance with section 3B.
(3) In this Act, a reference to wages paid or payable as a benefit in a year is a reference to an amount calculated by adding the amounts under subsection (2) for the months of the year.
(4) In this section:
"FBT rate" means the rate of fringe benefits tax imposed by the Fringe Benefits Tax Assessment Act 1986 (Cwlth) that applies when the liability to payroll tax under this Act arises.
"TV" means the value that would be the taxable value of the benefit as a fringe benefit for the Fringe Benefits Tax Assessment Act 1986 (Cwlth).
3B Employer election for taxable value of benefits
(1) An employer who has paid or is liable to pay fringe benefits tax under the Fringe Benefits Tax Assessment Act 1986 (Cwlth) in relation to a period of not less than 15 months before 30 June in any year may elect to include as the value of the benefits paid or payable by the employer during a month—
(a) in a return lodged in relation to each of the first 11 months after 30 June in the year— 1 / 12 th of the amount determined in accordance with subsection (2), or the part of that amount that under section 2D (Wages to which this Act applies) consists of wages for the year of tax (within the meaning of the Fringe Benefits Tax Assessment Act 1986 (Cwlth)) ending on 31 March before the start of the current financial year; and
(b) in the return lodged in relation to the 12th month—the amount determined in accordance with subsection (2), or the part of that amount that under section 2D consists of wages for the year of tax (within the meaning of the Fringe Benefits Tax Assessment Act 1986 (Cwlth)) ending on 31 March before the month, less the total amounts of fringe benefits included in the returns for each of the earlier 11 months.
(2) An amount is determined in accordance with this subsection as follows:
(3) An election under subsection (1) takes effect when it is notified to the commissioner.
Note If a form is approved under the Taxation Administration Act 1999 , s 139C for this section, the form must be used.
(4) If an employer makes an election under subsection (1), the employer must lodge returns containing amounts calculated in accordance with the election unless the commissioner approves, by written notice given to the employer, the termination of the election and allows the employer to include the value mentioned in section 3A (2) (a) (Value of benefit).
(5) If an employer ceases to be liable to pay payroll tax, the value of taxable wages consisting of fringe benefits to be included in the employer's final return is (whether or not the employer has made an election under subsection (1)) the value of the benefits paid or payable by the employer for the period starting on the previous 1 July until the date on which the employer ceases to be liable to payroll tax, less the value of the benefits paid or payable by the employer during the period for which payroll tax has been paid.
(6) In this section:
"AFBA" means the aggregate fringe benefits amount within the meaning of the Fringe Benefits Tax Assessment Act 1986 (Cwlth), section 136.
"FBT rate" means the rate of fringe benefits tax imposed by the Fringe Benefits Tax Assessment Act 1986 (Cwlth) that applies when the liability to payroll tax under this Act arises.
Division 1A.3 Allowances as wages
3C Wages to which this Act applies—exempt component of motor vehicle allowances not included
(1) For this Act, "wages", for a financial year, does not include the exempt component of a motor vehicle allowance paid or payable for the year.
(2) If the total motor vehicle allowance paid or payable to an employee for a financial year does not exceed the exempt component, the motor vehicle allowance is not wages for this Act.
(3) If the total motor vehicle allowance paid or payable to an employee for a financial year exceeds the exempt component (if any), only the amount that exceeds the exempt component of the motor vehicle allowance is included as wages for this Act.
(4) The exempt component of a motor vehicle allowance paid or payable for a financial year is calculated as follows:
(5) In this section:
"E" means the exempt component.
"K" means the number of business kilometres travelled during the financial year.
R is the exempt rate.
(6) K is calculated using the continuous recording method, or the averaging method, selected and used by the employer in accordance with schedule 2 (Motor vehicle allowances).
(7) The commissioner may, in writing, approve the use by an employer of another method of determining K (including the use of an estimate).
Note Power to make a statutory instrument includes power to make different provision for different categories (see Legislation Act, s 48).
(8) If the commissioner approves the use of a method under subsection (7) for an employer for a financial year, the employer must use the method to calculate K.
(9) The Minister may determine the exempt rate for a financial year.
(10) If the Minister does not determine the exempt rate for a financial year, the exempt rate for the financial year is the rate prescribed by regulation under the Income Tax Assessment Act 1997 (Cwlth), section 28 - 25 for calculating a deduction for car expenses for a large car using the ‘cents per kilometre method' in the financial year immediately before the financial year in which the allowance is paid or payable.
(11) A determination under this section is a notifiable instrument.
Note A notifiable instrument must be notified under the Legislation Act.
3D Wages to which this Act applies—accommodation allowances not included
(1) For this Act, "wages", for a financial year, does not include an accommodation allowance paid or payable to an employee for a night's absence from the person's usual place of residence that does not exceed the exempt rate.
(2) If the accommodation allowance paid or payable to an employee for a night's absence from the person's usual place of residence exceeds the exempt rate, "wages" includes the allowance only to the extent that it exceeds the exempt rate.
(3) The Minister may determine the exempt rate for a financial year.
(4) If the Minister does not determine the exempt rate for a financial year, the exempt rate for the financial year is the total reasonable amount for daily travel allowance expenses using the lowest capital city for the lowest salary band for the financial year determined by the Commissioner of Taxation of the Commonwealth.
(5) A determination under this section is a notifiable instrument.
Note A notifiable instrument must be notified under the Legislation Act.
Division 1A.4 Grouping of employers
Subdivision 1A.4.1 Interpretation
3E Definitions—div 1A.4
In this division:
"associated person "means a person who is associated with another person in accordance with any of the following:
(a) people are associated people if they are related people;
(b) individuals are associated people if they are partners in a partnership to which the Partnership Act 1963 applies;
(c) private companies are associated people if common shareholders have a majority interest in each private company;
(d) trustees are associated people if any person is a beneficiary common to the trusts (not including a public unit trust scheme) of which they are trustees;
(e) a private company and a trustee are associated people if a related body corporate of the company is a beneficiary of the trust (not including a public unit trust scheme) of which the trustee is a trustee.
"business "includes any of the following, whether carried on by 1 person or 2 or more people together:
(a) a profession or trade;
(b) any other activity carried on for fee or reward;
(c) the activity of employing people to perform duties in connection with another business;
(d) the carrying on of a trust (including a dormant trust);
(e) the activity of holding any money or property used in connection with another business.
"entity" means—
(a) a person; or
(b) 2 or more people who are associated people.
"group" means a group under this division but does not include any member of the group for whom a determination under section 3Q (Exclusion from groups) is in force.
"private company" means a company that is not limited by shares, or whose shares are not quoted on the Australian Stock Exchange or any other exchange of the World Federation of Exchanges.
"related person "means a person who is related to another person in accordance with any of the following provisions:
(a) individuals are related people if—
(i) they are domestic partners, or they have been domestic partners and the partnership has ended (whether the partnership ended in Australia or elsewhere); or
Note The Legislation Act, s 169 defines domestic partner and domestic partnership .
(ii) the relationship between them is that of parent and child, brothers, sisters or brother and sister;
(b) private companies are related people if they are related bodies corporate under the Corporations Act;
(c) an individual and a private company are related people if the individual is a majority shareholder or director of the company or of another private company that is a related body corporate of the company under the Corporations Act;
(d) an individual and a trustee are related people if the individual is a beneficiary of the trust (other than a public unit trust scheme) of which the trustee is a trustee;
(e) a private company and a trustee are related people if the company, or a majority shareholder or director of the company, is a beneficiary of the trust (other than a public unit trust scheme) of which the trustee is a trustee.
3F Grouping provisions to operate independently
The fact that a person is not a member of a group under a provision of this division does not prevent the person from being a member of a group under another provision of this division.
Subdivision 1A.4.2 Business groups
3G Make up of groups
A group is made up of all the people or bodies forming a group that is not part of a larger group.
3H Groups of corporations
(1) Corporations make up a group if they are related bodies corporate under the Corporations Act.
(2) In assessing whether corporations are related bodies corporate under the Corporations Act, a corporation that is a trustee company is taken to carry on a business.
Note Section 3Q allows the commissioner to exclude people from a group, but not if the person is a body corporate that, under the Corporations Act, s 50 is related to another body corporate that is a member of the group.
3I Groups arising from the use of common employees
(1) If 1 or more employees of an employer perform duties in connection with 1 or more businesses carried on by the employer and 1 or more other people, the employer and each of the other people make up a group.
(2) If 1 or more employees of an employer are employed solely or mainly to perform duties in connection with 1 or more businesses carried on by 1 or more other people, the employer and each of the other people make up a group.
(3) If 1 or more employees of an employer perform duties in connection with 1 or more businesses carried on by 1 or more other people, and the duties are performed in connection with, or in fulfilment of the employer's obligation under, an agreement, arrangement or undertaking for the provision of services to any 1 or more of the other people in connection with the business or businesses, the employer and each of the other people make up a group.
(4) Subsection (3) applies to an agreement, arrangement or undertaking—
(a) whether the agreement, arrangement or undertaking is formal or informal, express or implied; and
(b) whether or not the agreement, arrangement or undertaking provides for duties to be performed by the employees or states the duties to be performed by them.
Note Section 3Q allows the commissioner to exclude people from a group in certain circumstances.
3J Groups of commonly controlled businesses
(1) If a person or set of people has a controlling interest in each of 2 businesses, the people who carry on the businesses make up a group.
Note Section 3Q allows the commissioner to exclude people from a group in certain circumstances.
(2) For this section, a person or set of people has a controlling interest in a business if 1 or more of the following applies:
(a) for 1 person—the person is the sole owner (whether or not as trustee) of the business;
(b) for a set of people—the people are together as trustees the sole owners of the business;
(c) for a business carried on by a corporation—
(i) the person or each of the set of people is a director of the corporation and the person or set of people is entitled to exercise more than 50% of the voting power at meetings of the directors of the corporation; or
(ii) a director or set of directors of the corporation that is entitled to exercise more than 50% of the voting power at meetings of the directors of the corporation is under an obligation, whether formal or informal, to act in accordance with the direction, instructions or wishes of the person or set of people;
(d) for a business carried on by a body corporate or unincorporated body—the person or set of people make up more than 50% of the board of management (however named) of the body or control the composition of the board;
(e) for a business carried on by a corporation that has a share capital—the person or set of people can, directly or indirectly, exercise, control the exercise of, or substantially influence the exercise of, more than 50% of the voting power attached to the voting shares, or any class of voting shares, issued by the corporation;
(f) for a business carried on by a partnership—the person or set of people—
(i) own (whether beneficially or not) more than 50% of the capital of the partnership; or
(ii) is entitled (whether beneficially or not) to more than 50% of the profits of the partnership;
(g) for a business carried on under a trust (the 1st trust )—the person or set of people (whether or not as a trustee of, or beneficiary under, another trust) is the beneficiary of more than 50% of the value of the interests in the first trust.
(3) If—
(a) 2 corporations are related bodies corporate under the Corporations Act; and
(b) 1 of the corporations has a controlling interest in a business;
the other corporation has a controlling interest in the business.
(4) If—
(a) a person or set of people has a controlling interest in a business; and
(b) a person or set of people who carry on the business has a controlling interest in another business (the 2nd business );
the person or set of people mentioned in paragraph (a) has a controlling interest in the 2nd business.
(5) If—
(a) a person or set of people is the beneficiary of a trust of more than 50% of the value of the interests in the trust; and
(b) the trustee of the trust (whether alone or together with another trustee or trustees) has a controlling interest in the business of another trust;
the person or set of people has a controlling interest in the business of the other trust.
(6) A person who may benefit from a discretionary trust because the trustee or another person, or the trustee and another person, exercises or fails to exercise a power or discretion, is taken, for this division, to be a beneficiary of more than 50% of the value of the interest in the trust.
(7) If—
(a) a person or set of people has a controlling interest in the business of a trust; and
(b) the trustee of the trust (whether alone or together with another trustee or trustees) has a controlling interest in the business of a corporation;
the person or set of people is taken to have a controlling interest in the business of the corporation.
(8) If—
(a) a person or set of people has a controlling interest in the business of a trust; and
(b) the trustee of the trust (whether alone or together with another trustee or trustees) has a controlling interest in the business of a partnership;
the person or set of people is taken to have a controlling interest in the business of the partnership.
3K Groups arising from tracing interests in corporations
(1) An entity and a corporation form part of a group if the entity has a controlling interest in the corporation.
Note Section 3Q allows the commissioner to exclude people from a group, but not if the person is a body corporate that, under the Corporations Act, s 50 is related to another body corporate that is a member of the group.
(2) For this section, an entity has a controlling interest in a corporation if the corporation has share capital and—
(a) the entity has a direct interest in the corporation and the value of the direct interest exceeds 50%; or
(b) the entity has an indirect interest in the corporation and the value of the indirect interest exceeds 50%; or
(c) the entity has an aggregate interest in the corporation and the value of the aggregate interest exceeds 50%.
(3) Subdivision 1A.4.3 applies to this section.
3L Smaller groups included in larger groups
If a person is a member of 2 or more groups, the members of all the groups together make up a group.
Note See also s 3G (Make up of groups).
Subdivision 1A.4.3 Business groups—tracing interests
3M Application—sdiv 1A.4.3
This subdivision applies to section 3K.
3N Direct interest
(1) An entity has a direct interest in a corporation if—
(a) for an entity that is a person—the person can directly or indirectly, exercise, control the exercise of, or substantially influence the exercise of, the voting power attached to any voting share issued by the corporation; or
(b) for an entity that is 2 or more people who are associated people—each of the associated people can, directly or indirectly, exercise, control the exercise of, or substantially influence the exercise of, the voting power attached to any voting share issued by the corporation.
(2) The value of the direct interest of the entity in the corporation is the proportion (expressed as a percentage) of the voting power of all voting shares issued by the corporation that—
(a) for an entity that is a person—the person can directly or indirectly exercise, control the exercise of, or substantially influence the exercise of, as mentioned in subsection (1); or
(b) for an entity that is 2 or more people who are associated people—the associated people can, if acting together, directly or indirectly exercise, control the exercise of, or substantially influence the exercise of, as mentioned in subsection (1).
3O Indirect interest
(1) An entity has an indirect interest in a corporation if the corporation is linked to another corporation (the directly controlled corporation ) in which the entity has a direct interest.
(2) A corporation is linked to a directly controlled corporation if the corporation is part of a chain of corporations—
(a) that starts with the directly controlled corporation; and
(b) in which a link in the chain is formed if a corporation has a direct interest in the next corporation in the chain.
Example
Corporation A (a directly controlled corporation) has a direct interest in corporation B. Corporations A and B form part of a chain of corporations, and corporation B is linked to corporation A. Accordingly, an entity that has a direct interest in corporation A also has an indirect interest in corporation B.
Corporation B also has a direct interest in corporation C. In this case, corporations A, B and C form part of a chain of corporations. Both corporations B and C are linked to corporation A. The entity that has a direct interest in corporation A has an indirect interest in both corporations B and C.
Corporation B also has a direct interest in corporation D. There are now 2 chains of corporations, one consisting of A, B and C, and one consisting of A, B and D. Corporations B, C and D are all linked to corporation A and an entity that has a direct interest in corporation A would have an indirect interest in corporations B, C and D. An entity that has a direct interest in corporation B would have an indirect interest in corporations C and D. However, an entity that has a direct interest in corporation C only would not have an indirect interest in corporation D, as corporation D is not linked to corporation C.
Note An example is part of the Act, is not exhaustive and may extend, but does not limit, the meaning of the provision in which it appears (see Legislation Act, s 126 and s 132).
(3) The value of the indirect interest of an entity in a corporation (an indirectly controlled corporation ) that is linked to a directly controlled corporation is calculated by multiplying together the following:
(a) the value of the direct interest of the entity in the directly controlled corporation;
(b) the value of each direct interest that forms a link in the chain of corporations by which the indirectly controlled corporation is linked to the directly controlled corporation.
Example
An entity has a direct interest (with a value of 80%) in corporation A. Corporation A has a direct interest (with a value of 70%) in corporation B. The value of the indirect interest of the entity in corporation B is 80% × 70% (that is, 56%). Accordingly, in this example, the entity has a controlling interest under section 3K in corporation B.
Corporation B also has a direct interest (with a value of 40%) in corporation C. The value of the indirect interest of the entity in corporation C is 80% × 70% × 40% (that is, 22·4%). Accordingly, in this example, the entity does not have a controlling interest in corporation C.
(4) It is possible for an entity to have more than 1 indirect interest in a corporation.
Examples
1 An entity may have more that 1 indirect interest in a corporation if the corporation is linked to more than 1 corporation in which the entity has a direct interest.
2 An entity may have more that 1 indirect interest in a corporation if the corporation is linked to only 1 corporation in which the entity has a direct interest, but is linked through more than 1 chain of corporations. In this case, the entity has an aggregate interest in the corporation (see s 3P).
3P Aggregation of interests
(1) An entity has an aggregate interest in a corporation if the entity—
(a) has a direct interest and 1 or more indirect interests in the corporation; or
(b) has more than 1 indirect interest in the corporation.
(2) The value of the aggregate interest of an entity in a corporation is calculated by adding together the following:
(a) the value of the direct interest (if any) of the entity in the corporation;
(b) the value of each indirect interest of the entity in the corporation.
Example
An entity has a direct interest (with a value of 40%) in corporation B.
The entity also has a direct interest (with a value of 25%) in corporation A, which in turn has a direct interest (with a value of 60%) in corporation B. Accordingly, the entity also has an indirect interest in corporation B with a value of 15% (that is, 25% × 60%).
The value of the entity's aggregate interest in corporation B is the total of the direct interest (40%) and the indirect interest (15%), which is 55%.
Accordingly, in this example, the entity has a controlling interest in corporation B under s 3K.
Note An example is part of the Act, is not exhaustive and may extend, but does not limit, the meaning of the provision in which it appears (see Legislation Act, s 126 and s 132).
Subdivision 1A.4.4 Groups—miscellaneous
3Q Exclusion from groups
(1) The commissioner may determine that a person who would, but for the determination, be a member of a group is not a member of the group.
(2) The commissioner may make a determination under subsection (1) only if satisfied, having regard to the nature and degree of ownership and control of the businesses, the nature of the businesses and any other matters the commissioner considers relevant, that a business carried on by the person is carried on independently of, and is not connected with the carrying on of, a business carried on by any other member of the group.
(3) The commissioner must not exclude a person from a group if the person is a corporation that, because of the Corporations Act, section 50 (Related bodies corporate) is related to another corporation that is a member of the group.
(4) This section extends to a group made up because of section 3L (Smaller groups included in larger groups).
(5) The commissioner may revoke a determination that applies to a person if satisfied that the circumstances in which the determination was made do not apply to the person.
(6) A determination under this section may provide for its commencement on or before the determination's notification day.
Note This subsection provides express authority for a determination to commence on or before its notification day (see Legislation Act, s 73 (2) (d)).
(7) A determination under this section is a notifiable instrument.
Note 1 A notifiable instrument must be notified under the Legislation Act.
Note 2 Power to make a statutory instrument includes power to amend or repeal the instrument (see Legislation Act, s 46).
3R Designated group employers
(1) The members of a group may, with the commissioner's approval, designate a qualified member of the group to be the designated group employer for the group for this Act.
(2) A member of a group is a qualified member if the member—
(a) has during the previous financial year paid wages exceeding the amount determined for the year for section 7 (Registration of employers); or
(b) is likely during the current financial year to pay wages exceeding the amount determined for section 7.
(3) The members of a group may, with the commissioner's approval, designate any member of the group to be the designated group employer for the group for the Act if none of the members of a group is a qualified member but the members together—
(a) have during the previous financial year paid wages exceeding the amount determined for the year for section 7; or
(b) are, in the commissioner's opinion, likely during the current financial year to pay wages exceeding the amount determined for section 7.
(4) If the members of a group do not designate a member as the designated group employer within 7 days after the last day of the month in which the group is established, the commissioner may (but is not obliged to) designate a member of the group as the designated group employer.
(5) The designated group employer of a group stops being the designated group employer on the earlier of—
(a) the first day of a return period when there is a change in the membership of the group; or
(b) the first day of a return period when the members of the group revoke the designation.
(6) The designation of a designated group employer under subsection (1) or (3) must be—
(a) by written notice; and
(b) executed by or on behalf of each member of the group; and
(c) served on the commissioner.