| FBT - GST Interaction |
| FBT - GST Interaction |
The Tax Office has issued a ruling concerning the interaction of FBT and GST, and which gross-up factor should be used. Broadly, the higher gross-up factor must be used when the employer is entitled to claim an input tax credit in relation to the supply of the fringe benefit. Input tax credits will not be available where, for example, the supply to the employer is input taxed or GST-free. Examples include education and international travel. In such cases, the lower gross-up factor would apply.
The ruling also confirms that the GST inclusive value is to be used when determining the taxable value of benefits, the value of employee contributions and the effect of the otherwise deductible rule.
7th-August-2001 |
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