Fringe Benefits Tax exemption extended to ride sharing services

Christopher Heyes

The Federal Government recently announced changes relating to Fringe Benefits Tax (FBT) with the exemption for travel being extended to ride sharing.

What has changed?

The Treasury Laws Amendment (2019 Measures No 3) Act 2020 has been enacted to amend the FBT exemption for certain taxi travel to include a broader range of transport services. This includes ride sharing services to align with the definition of "taxi travel" in the A New Tax System (Goods and Services Tax) Act 1999 (GST Act).

This means travel providers including Uber and other ride sourcing services now qualify for the FBT exemption if the travel is a single trip, beginning or ending at the employee's place of work. Any benefit arising from taxi travel including Uber and other ride sourcing services by an employee is an exempt benefit. Any benefit arising from taxi travel by an employee is also an exempt benefit if the travel is both:

  • A result of sickness of, or injury to, the employee; and
  • All or part of the journey is directly between any of the following:

- The employee's place of work;
- The employee's place of residence; or
- Any other place that it is necessary, or appropriate, for the employee to go as a result of the sickness or injury.

The amendments apply to the 2019-20 FBT year onwards and if an employer has paid FBT in respect of the provision of ride sourcing benefits in its 2020 FBT return, it will be entitled to a refund.

For prior FBT years, the exemption was limited to travel in a vehicle licensed by the relevant state or territory to operate as a taxi. It did not extend to ride-sourcing vehicles that were not licensed to operate as a taxi.

In addition, the due date for lodgement and payment of the 2020 NSW payroll tax annual reconciliation has been extended to 30 October 2020.

If you would like to discuss what these FBT changes may mean for you, please get in touch with your Adviser or speak to one of the experts in our Tax Advisory team.