The Government has announced that it will impose restrictions on the availability of tax concessions related to the provision of LAFHA benefits that extend those announced last year as part of Mid Year Economic and Fiscal Outlook 2011 12 (MYEFO). In addition, a change to the valuation rule in respect of airline transport fringe benefits was announced.
The proposed measures will:
- Limit access to the LAFHA tax concession to employees who, because of work commitments, are living away from a home they maintain for their own use in Australia (including employees who permanently reside in Australia)
- Limit the provision of the tax concession to a maximum period of 12 months in respect of an individual employee for any particular work location.
These restrictions are additional to those previously announced as part of the MYEFO. Those restrictions involved the imposition of a requirement for temporary resident employees to maintain a home in Australia that they are living away from for work before they could access the concession. Those changes also required substantiation of LAFHA expenses for all employees.
The measure will not affect the tax concession for ‘fly-in fly-out’ arrangements or the tax treatment of travel and meal allowances.
The additional restrictions will apply from 1 July 2012 for arrangements entered into after the Budget announcement, and from 1 July 2014 for arrangements entered into prior to 8 May 2012.
– See more at: http://www.bdo.com.au/resources/publications/federal-budget-2012/6#sthash.pd4TH2gF.dpuf
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