ATO Interpretative Decision
ATO ID 2005/149 (Withdrawn)
Fringe Benefits Tax
Exempt Benefits: laptop or similar portable computer - expense payment made earlier in the FBT yearFOI status: may be released
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This ATO Interpretative Decision is withdrawn from the database because it contains a view in respect of a provision of the Fringe Benefits Tax Assessment Act 1986 that does not apply after the 13 May 2008. Despite its withdrawal from the database, this ATO Interpretative Decision continues to be a precedential view in respect of decisions with regards to the operation of this provision up to, and including, the 13 May 2008.'This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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
If an employer reimburses an employee over a two year period, for the cost the employee incurred to purchase a laptop computer, can the employer provide another laptop computer to the employee in the second FBT year as an exempt benefit, under subsection 58X(1) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)?
Decision
No. Where there has been an expense payment benefit in relation to a laptop computer earlier in an FBT year, the provision of another laptop computer in that same year will not be an exempt benefit under subsection 58X(1) of the FBTAA.
Facts
An employee purchases a laptop computer.
The employer agrees to reimburse the employee for the cost of the laptop computer over a two year period.
Each of the employer's payments is an expense payment benefit for the purposes of paragraph 20(b) of the FBTAA.
Later in the second FBT year the employer provides the employee with another laptop computer.
Reasons for Decision
Section 58X of the FBTAA exempts from FBT the provision of certain work related items. Subsection 58X(1) of the FBTAA provides that the provision of an expense payment benefit, a property benefit or a residual benefit in respect of an eligible work related item will be an exempt benefit. Subsection 58X(2) of the FBTAA lists the items that are 'eligible work related items' and thus subject to exemption. Included in this list is: '(h) a notebook computer, a laptop computer or a similar portable computer.'
Subsection 58X(4) of the FBTAA then limits the exemption in relation to these computers by providing that they are not exempt if, 'earlier in the FBT year, an expense payment benefit or a property benefit of the employee has arisen in relation to another' one of these portable computers. The test under subsection 58X(4) does not simply limit the exemption to the provision of one portable computer per year, subsection 58X(4) in fact limits the exemption to the provision of expense payments for one computer or the provision of one computer (property benefit) per year.
This means that if an employer provides a number of expense payments with respect to one computer, over say a two year period, then another computer cannot be provided as an expense payment benefit or a property benefit in either the first or second year of payments. This is because there has already been expense payments made in each of those years in relation to a notebook computer, laptop computer or similar portable computer.
Therefore, where there has been an expense payment benefit in relation to a laptop computer earlier in an FBT year, the provision of another laptop computer in that same year will not be an exempt benefit under subsection 58X(1) of the FBTAA.
Date of decision: 20 April 2005Year of income: Year ended 31 March 2006
Legislative References:
Fringe Benefits Tax Assessment Act 1986
subsection 58X(1)
subsection 58X(2)
subsection 58X(4)
Keywords
Exempt benefits
Expense payment fringe benefits
FBT reimbursements
Fringe benefits tax
ISSN: 1445-2782
| Date: | Version: | |
| 20 April 2005 | Original statement | |
| You are here | 5 December 2008 | Archived |