Fringe benefits provided to religious practitioners

The ATO has issued a draft tax ruling TR 2018/D2 expressing the Commissioner’s preliminary view of exempt fringe benefits provided to religious practitioners.  It replaces TR 92/17 immediately, but may be revised when the ruling is finalised. The law it considers prescribes that a benefit

  • provided by a registered religious institution
  • to an employee religious practitioner, or their spouse or child
  • in respect of the practitioner’s pastoral duties or directly related religious activities

is exempt from fringe benefit tax.  The ruling considers each of these requirements in sequence.

Registered Religious Institution

When the ACNC was introduced, the Fringe Benefit Tax Assessment Act was amended so that only ‘registered religious institutions’ (registered charities with a sub-type of advancing religion) could provide exempt fringe benefits to religious practitioners.  This is one of the key changes reflected in the ruling.

A charity is able to have multiple charitable purposes.  Where one of those purposes is ‘advancing religion’ this condition is met.

Religious Practitioner

The old ruling indicated that a minister of religion would have “many” of the following characteristics:

  • Is a member of a religious institution
  • Is recognised by ordination or other admission or commissioning, or …has the authority to carry out the duties of a minister based on theological training or experience
  • Is officially recognised as having authority on doctrine or religious practice
  • Is distinct from ordinary adherents of the religion
  • Is an acknowledged leader in spiritual affairs or the institution, and
  • Is authorised to act as a minister or spiritual leader, including the conduct of religious worship and other religious ceremonies.

Now the Commissioner has tightened his interpretation and considers that “except in rare cases, a minister of religion would have all of these characteristics.”

The old ruling directly referred to lay persons acting in the capacity of a minister of religion.  This reference has been removed, but an example indicates that they are still likely to be considered religious practitioners.

Pastoral duties or other directly related religious activities

The Commissioner’s view of pastoral duties has been expanded and now includes providing pastoral supervision to those engaged in pastoral duties.  This may offer greater security when providing fringe benefits to pastoral team leaders or executive leaders in para-church organisations.

a copy of the ruling TR 2018/D2 is available at

We would be glad to discuss the potential impact of this ruling with you.

The ATO is inviting public comment on the ruling by 24th August 2018.  We would encourage you to let us know of any concerns you may have with the ruling, but more importantly to communicate such concerns to the ATO via the submission process.

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