Volume 17, Issue 1 – Boccabella

RECONCILING THE OVERLAP OF CHARGING PROVISIONS IN REGARD TO NON-CASH BENEFITS FROM EMPLOYMENT, PERONAL EXERTION AND BUSINESS

By Dale Boccabella

Australia’s income tax regime contains a number of charging provisions that may apply to non-cash proceeds of personal exertion and business. There is overlap in the operation of these provisions, which in turn requires priority of application rules and anti-double taxation rules. The fact that one of these charging provisions (i.e. fringe benefits tax) is in a separate piece of legislation adds complexity. Further difficulty is added because the various charging provisions contain different valuation rules. This article highlights the problematic areas and anomalies concerning charging provisions as they apply to non-cash benefits, with the aim of attaining some clarity to the operation of the rules. The approach is to use a tabular summary (table) to identify the relevant charging provision (e.g. ss 6-5 and 15-2 of the Income Tax Assessment Act 1997(‘ITAA 1997’)) that applies in regard to various economic activities (e.g. personal exertion that is not employment), and to reconcile the charging provisions where overlap exists. For completeness, the table also identifies circumstances where no charging provision applies to common non-cash benefits obtained by taxpayers (e.g. mere gifts).

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