How Changes To Australian FBT Will Impact Smartphones And Tablets

New rules will soon apply to apply to how fringe benefits tax (FBT) is calculated for businesses. But just how will that change the way companies buy smartphones, tablets and other devices for their staff?

Tablet picture from Shutterstock

The planned changes were announced in this year’s Federal Budget. Here’s the relevant paragraph, as explained by the ATO:

In the 2015-16 Budget, the Government announced that it will allow a fringe benefits tax (FBT) exemption from 1 April 2016 for small businesses with an aggregated annual turnover of less than $2 million that provide employees with more than one qualifying work-related portable electronic device, even where the items have substantially similar functions. Currently, an FBT exemption can apply to more than one portable electronic device used primarily for work purposes, but only where the devices perform substantially different functions. Removing the restriction that a tax exemption is only provided for one work-related portable electronic device of each type will remove confusion where there is a function overlap between different products (such as between a tablet and a laptop).

That seems a logical move, but note the restrictions. This only applies from April 2016, so this year isn’t affected. Like many other new tax concessions, it only applies to small businesses with a sub-$2 million turnover; larger firms will still have to factor in FBT. And it only applies when the business itself supplies the device (and hence might have to pay FBT), which is becoming a rarer scenario in an increasingly BYOD (bring your own device)-centric world.

In other words: don’t go assuming that it’s a tablet free-for-all for everyone. The legislation also needs to pass Parliament, although relative to other Budget ambitions this one seems relatively likely to be accepted.

Reminder: For specific tax advice relating to your individual situation, consult a registered professional.

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