ATO Interpretative Decision

ATO ID 2004/14

Fringe Benefits Tax

• This ATO ID has been amended by including a note which explains changes to the subsection 58X(2) of the FBTAA.
  This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Issue

Is a PDA considered to be an electronic diary or similar item, and therefore an exempt benefit, under paragraph 58X(2)(g) of the Fringe Benefits Tax Assessment Act (1986) (FBTAA)?

Decision

Yes. A PDA is an item that is considered to be similar to an electronic diary and is exempt under paragraph 58X(2)(g) of the FBTAA.

Facts

An employer provides an employee with a PDA, as part of the employee's salary package.

The PDA provided to the employee:

•

is used to record appointments, 'to do' lists, and store contact information

•

is able to be connected to the internet

•

contains 'cut-down' versions of word processing and spreadsheet programs

•

can operate games, and

•

can play music

The PDA is marketed to the public as a business tool that complements the user's laptop or notebook computer.

Reasons for Decision

Subsection 58X(1) of the FBTAA exempts from FBT certain work related items. Subsection 58X(2) provides a list of 'eligible work related items', including at paragraph (g) 'an electronic diary or similar item'. There is no definition of 'electronic diary' in the FBTAA, therefore it takes on its ordinary meaning.

The Australian Concise Oxford Dictionary, (1997), 3rd edn, Oxford University Press, South Melbourne, defines 'diary' as:

1.

a daily record of events or thoughts;

2.

a book for this or for noting future engagements, usu. printed and with a calendar and other information.

In producing an electronic version of a diary the terms 'personal organiser' or 'electronic organiser' have also been used. The term 'personal organiser' is also defined in the Australian Concise Oxford Dictionary as:

1.

a looseleaf notebook with sections for various kinds of information, including a diary etc.

2.

a handheld microcomputer serving the same purpose. [emphasis added]

The PDA is also a handheld microcomputer that is considered to be a further development of electronic diaries and organisers.

It is considered that the best way of determining the classification of any particular item is to identify its primary function. The primary function of an electronic diary or similar item is that it can be used to record appointments, establish 'to do' lists, and store contact information. Whilst a PDA may have many other features, such as the ability to connect to the internet or a personal computer (PC), and be able to perform limited word processing and spreadsheet functions, or play music; these would be considered to be ancillary to the primary function as a diary/organiser.

By way of comparison, a notebook or laptop computer has far greater capacity than a PDA and is specifically designed to perform the functions of a PC whilst the user is away from the office environment. Although a PDA may be able to perform some of the functions of a notebook or laptop computer, they do so without the use of a hard drive and with restricted ability to type/input information. PDAs should not be seen as similar to notebook or laptop computer, but designed to complement these computers.

It is therefore considered that a PDA is exempt from FBT as 'an electronic diary or similar item' under paragraph 58X(2)(g) of the FBTAA.

Year of income:  Year ending 31 March 2004

Legislative References:
Fringe Benefits Tax Assessment Act 1986
   section 58X
   subsection 58X(1)
   subsection 58X(2)
   paragraph 58X(2)(g)

Related ATO Interpretative Decisions
ATO ID 2003/894

Other References:
The Australian Concise Oxford Dictionary, (1997), 3rd edn, Oxford University Press, South Melbourne

Keywords
Exempt benefits
Fringe benefits tax

Business Line:  Business and Personal Taxes Centre of Expertise

Date of publication:  16 January 2004

ISSN: 1445-2782