Member Q&A: How many years back will the ATO review FBT compliance?

Question

If the ATO were to undertake a review of our FBT compliance, how many FBT years back would they go?

Answer

Ignoring fraud or evasion, as a general rule the ATO is able to amend a prior year FBT return for up to  3 years after when an FBT assessment is made (e.g. the date date of lodging the FBT return).

Practically, an ATO compliance review is likely to take this into account meaning we expect the ATO would look at the current FBT year and previous FBT years within the general 3 year amendment period.

Where the ATO is of the view there has not been a full and true disclosure resulting in an avoidance of tax it can extend the period to up to 6 years.

Where the ATO considers there has been fraud or evasion it can go back an unlimited number  of FBT years (subject of course to availability of records etc).

It is advantageous to lodge an FBT return, even where no FBT is payable, to ensure an ‘assessment date’ exists which sets the general 3 year period.

Section 74 of the FBT law sets out the rules.

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