Consultation
Fringe Benefits Tax (FBT) Reform living-away-from-home benefits
Name
Mr Christopher Paulson
Organisation
Danfoss Australia Pty Ltd
Email
cspaulson@gmail.com
Are you submitting on behalf of your Company
No
Do you want your submission to be confidential
No
Accessibility Statement
Yes
Submission files
Support files
Submission text
Dear Treasury, 

I am writing with regards to the recently proposed changes to the LAFHA legislation put forward by Mr. Wayne Swan in a draft exposure this past week. 

I believe the proposed legislation breaches Article 23 (Non-Discrimination) of the US/Australia Income Tax Treaty, which states that: 

(1) Each Contracting State in enacting tax measures shall ensure that: 
(a) citizens of a Contracting State who are residents of the other Contracting State shall 
not be subjected in that other State to any taxation or any requirement connected therewith 
which is more burdensome than the taxation or connected requirements to which citizens of that other State who are residents of that other State in the same circumstances are or may be 
subjected... 

With regards to the phase out of existing LAFHA arrangements, the proposed legislation explicitly discriminates between Australian and non-Australians (mot notably 457 Visa Holders) as to who is eligible for the two year transition arrangement, despite the fact that these two classes of workers might otherwise be in the exact same working conditions and are all considered from an ATO perspective to be "resident for tax purposes". 

I believe the proposed distinction between these two groups to be fundamentally discriminatory. I also believe the legislation intentionally targets a working class of foreign nationals for special taxation in contravention of Australia's treaty obligations. 

I urge you to reconsider the proposed legislation and ensure that all parties considered "resident for tax purposes" are treated equally under law. 

Best Regards- 

Chris Paulson