MAJOR BLOW TO SALARY PACKAGING OF CARS

simonwang

The government has announced this morning (Chris Bowen speaking in Townsville) that the fringe benefits tax (FBT) statutory formula method is to be abolished for all new contracts entered into from today. So only the log book (operating cost) method remains to calculate FBT on new arrangements.

He mentioned transitional rules through to April 2014, but we don’t have details yet.

This means the tax result for an employee from salary packaging a novated lease car will effectively be the same as paying for the car from after-tax dollars. Perhaps the only savings remaining for employees in relation to salary packaging cars will relate to GST credits, the ability to access discounted fuel, services, etc. and via associate leases.

Details to come.

LENNY_DONG

ellepopo

associate leases  

sunyu321

  >.<...

zhining

charmaine

已经买了的木有影响吧

simonwang

charmaine 发表于 2013-7-16 12:15
已经买了的木有影响吧

No impact till the end of lease. Once refinance or expire, then yes.

charmaine

simonwang 发表于 2013-7-16 14:20
No impact till the end of lease. Once refinance or expire, then yes.

典

Lease 公司会倒闭吧

iwillbeback

知道这样去年就把term选长一点的了。。。看来各种避税手段被要被一一封死 novated leasing 之后会不会搞ng啊

xinhang

还有什么招可以避税？high purchase?

charmaine

典 发表于 2013-7-16 15:02
Lease 公司会倒闭吧

怕是车行都要倒吧，工党真是绝顶呀，汽车业雪上加霜，真是服了

simonwang

Federal Governments have spent $5.4 billion over the past 10 years to protect the industry now the car industry more likely will be dead!

zxcity

simonwang 发表于 2013-7-16 16:10
Federal Governments have spent $5.4 billion over the past 10 years to protect the industry now the c ...

Good luck mate

maru_han

simonwang 发表于 2013-7-16 16:10
Federal Governments have spent $5.4 billion over the past 10 years to protect the industry now the c ...

尾大不掉，还不如痛快点

simonwang

zxcity 发表于 2013-7-16 22:29
Good luck mate

I'm not working in the car industry. Anyway, good luck to those who will be impacted.

KKei

simonwang 发表于 2013-7-16 14:20
No impact till the end of lease. Once refinance or expire, then yes.

The reform will remove the statutory formula method for both salary-sacrificed and employer-provided car fringe benefits. All car fringe benefits provided under new contracts/leases (i.e. entered into after today's announcement) will be calculated using the operating cost method with effect from 1 April 2014. In addition, existing contracts materially varied after 16 July 2013 will also fall under the new arrangements. Existing contracts that are not varied will continue to have access to the existing statutory rate throughout the contract.

如果novated lease 有大变动的话.还是按照OP法.

这个大变动不知道是否包括,变更employer. 如果是的话.你跳槽后新的lease就必须换OP法来算了.

simonwang

haidai

ford已经宣布关厂。看看本地holden能撑多久

wlu

以前看过Simon关于税的文章。写的非常好，很专业。

公司现在要分析该政策对公司salary package revenue 的impact.

我想问问salary package revenue指的是employee after tax contribution 吗？公司salary package 是对职工的福利，公司有什么revenue呢？

simonwang

One evidence the decision makers don't really understand or try to understate the impact:

Federal Treasurer Chris Bowen told media earlier in the week: "Within the first 12-month period the individual concerned can pick the three months they want to maximise their chances of getting the maximum tax concession … we would like some evidence that the car is being used for business purposes."

However, the ATO website says: "A log book must be maintained for a representative period of 12 consecutive weeks during the applicable FBT year, the log book year.

simonwang

wlu 发表于 2013-7-24 21:32
以前看过Simon关于税的文章。写的非常好，很专业。

公司现在要分析该政策对公司salary package revenue 的 ...

Not sure if your company is doing salary packaging or leasing business. Otherwise what I think is the total employment cost will go up and the employer tries to find out how much exactly it will cost to hire an employee especially high level ones who normally receive company cars.

I am doing quite a few jobs right now as lots of employers have the same concerns.

wlu

simonwang 发表于 2013-7-25 08:47
Not sure if your company is doing salary packaging or leasing business. Otherwise what I think is  ...

My company is not in lease business, we have other car lease company called A,B,C to organised the novated lease.
But following if posted for the impact which I do not understand. Could you be able to help?


Below are two tables that outline the potential losses from novated leasing from a GST and revenue perspective.

This information is in relation to novated leases (actual data) settled in the past six months from January 2013 to June 2013. Revision of leases are not counted towards the revenue loss, however there would be some loss that is unaccounted for.  

Settlement of Novated Lease (January 2013 to June 2013)                           
        New Leases                          Revisions                 GST Claimed
        A        B        C        A         B        C         
                                                               
Jan-13        1        2        2        11        0        0        $    15,376.26
Feb-13        6        2        0        17        1        0        $    33,023.14
Mar-13        5        0        0        7        0        0        $    28,479.63
Apr-13        8        3        1        7        1        0        $    39,153.83
May-13        12        2        1        8        0        0        $    53,839.50
Jun-13        3        4        0        6        0        0        $    27,504.59
Total        35        13        4                                   $  197,376.95

This table represents the potential revenue loss based on the the toal number of leases settled during the above period which is equivalent to 4 leases per month.


Loss of REVENUE (ANNUAL)                  
                  
FBT Share (Annual)        48 Leases X $1170        $    56,160.00
GST Loss (Annual)        48 Leases X $948        $    45,504.00
                  
        Grand Total        $  101,664.00

simonwang

It seems a forecast of impact for the leasing business not the normal estimation of increasing employment costs. Or it could be the case, your employer count input tax credit and the employee payment towards FBT liability/taxable value as revenue. It would be so strange if the later case as there will be no impact on existing leases and you would not predict the employees lease more vehicles as they did before to count revenue, again, unless you are forecasting the leasing business.

Maybe a bit more background information will help me understanding the situation. Sorry.