ATO Interpretative Decision

ATO ID 2013/43

Fringe Benefits Tax

Living-away-from-home allowance fringe benefits: fly in fly out and drive in drive out requirements
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CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

This ATOID provides you with the following level of protection:

If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.

Issue

Will the requirements of subparagraph 31E(a)(i) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA) be satisfied where an employee during the period of their employment tenure works for five and half days and remains on call on the seventh day?

Decision

No. The requirements of subparagraph 31E(a)(i) of the FBTAA specify that the employee must, on a regular and rotational basis work for a number of days and have a number of days off.

Facts

An employee who is in receipt of a living-away-from-home allowance is seconded to Australia.

The employee's working conditions are such that for a period of 6 months they work from 7am to 5pm for five days and on the sixth day from 8am to 2.00pm.

On the seventh day the employee is required to be on call so that they can monitor e-mails and be available to deal with issues that may arise from overseas projects.

No other employee performs the duties of their employment on the seventh day.

At the completion of the 6 month period they return to their normal country of residence for a period of 15 days and then return to Australia for another period of 6 months.

The employee is not working in a remote area meaning that the principles of Taxation Determination TD94/96 do not apply.

Reasons for Decision

The requirements to be met for an employee to be considered to be a fly-in fly-out and drive-in drive-out employee are set out in section 31E of the FBTAA.

Subparagraph 31E(a)(i) states:    


The employee satisfies this section if:

(a)
the employee, on a regular and rotational basis:

(i)
works for a number of days and has a number of days off (but not the same days in consecutive weeks); and
(ii)
...

The meaning of 'regular and rotational basis' is not defined in the FBTAA. Therefore, it is relevant to consider the ordinary meanings of the terms 'regular' and 'rotational' in the context in which they are used in the FBTAA.

The Macquarie Dictionary [Multimedia], version 5.0.0, 01/10/01 (Macquarie Dictionary), defines 'regular' as:    


usual; normal; customary; conforming in form or arrangement; characterised by fixed principle, uniform procedure, etc; recurring at fixed times; periodic; adhering to rule or procedure.

The word "rotational" in the employment context is defined in the Cambridge Dictionaries Online as:    


relating to a system in which the person who does a particular job is regularly changed: The shifts work on a rotational basis. Depending on the department, some recruits will participate in rotational placements.

The employee performs the duties of their employment on the basis that they alone are responsible for the day to day operations for which they are employed. The employee does not job share nor does anyone else perform the duties of that employee's employment when they are on call on the seventh day.

For the time that they are in receipt of a living-away-from-home allowance, the employee remains solely responsible for performing the duties of their employment, and as such is not working on a regular and rotational basis.

Accordingly the requirements of subparagraph 31E(a)(i) of the FBTAA have not been met.

Amendment History

Date of Amendment Part Comment
7 August 2018 All Corrected case reference.
All Other minor grammatical errors.

Date of decision:  15 July 2013

Year of income:  Year ending 31 March 2014

Legislative References:
Fringe Benefits Tax Assessment Act 1986
   section 31E
   paragraph 31E(a)
   subparagraph 31E(a)(i)

Other References:
The Macquarie Dictionary [Multimedia], version 5.0.0, 01/10/01
Cambridge Dictionaries Online, Cambridge Business English Dictionary, Cambridge University Press 2013

Keywords
Fringe benefits tax
FBT living-away-from-home
Living-away-from-home allowance fringe benefits

Siebel/TDMS Reference Number:  1-4UBQN41; 1-4UBQN1M

Business Line:  Private Groups and High Wealth Individuals

Date of publication:  2 August 2013
Date reviewed:  11 May 2018

ISSN: 1445-2782

history
  Date: Version:
  15 July 2013 Original statement
You are here 7 August 2018 Updated statement