ATO Interpretative Decision
ATO ID 2006/236 (Withdrawn)
Fringe Benefits Tax
Exempt benefits: work related items - laptop computer or similar portable computer - computer softwareFOI status: may be released
-
This ATO Interpretative Decision is withdrawn from the database because it contains a view in respect of a provision of the Fringe Benefits Tax Assessment Act 1986 that doesn't apply after 13 May 2008. Despite its withdrawal from the database, the ATO ID continues to be a precedential view in respect of decisions with regards to the operation of this provision up to an including 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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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
Where an employee is reimbursed by their employer for the purchase of a laptop computer and some additional separate computer software, will the provision of the benefits in respect of the separate software constitute exempt benefits, pursuant to paragraph 58X(2)(h) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)?
Decision
No. The provision of the benefits in respect of the additional separate computer software are not exempt under paragraph 58X(2)(h) of the FBTAA, but can be considered for exemption under paragraph 58X(2)(f) of the FBTAA.
Facts
An employee purchased a laptop computer. The purchase price of the laptop computer included basic computer software, for example, an operating system, anti-virus trial software and a word processing application; which was not charged separately and had no clearly identifiable additional cost.
At the time of purchase of the laptop computer, the employee also purchased, at an extra cost, additional computer software for employment use. The laptop computer and the additional software were itemised on the one invoice.
The employer agreed to reimburse the employee for the cost of the laptop computer and the additional computer software, that is, the total invoiced amount.
The employer's reimbursement is an expense payment benefit for the purposes of paragraph 20(b) of the FBTAA.
Reasons for Decision
Section 58X of the FBTAA exempts from FBT the provision of certain eligible work related items. Subsection 58X(1) of the FBTAA, subject to subsections 58X(2) and 58X(3) of the FBTAA, provides that the provision of an expense payment benefit, a property benefit or a residual benefit by an employer to an employee 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' that may be subject to exemption. Included in this list is: paragraph (f) an item of computer software for use in the employee's employment;' and paragraph (h) 'a notebook computer, a laptop computer or a similar portable computer.'
Consequently, any computer software forming part of the overall laptop purchase price (that is, not charged separately and no clearly identifiable cost) would be included under the paragraph 58X(2)(h) exemption. This applies equally to pre-loaded software.
However, the purchase of additional separate computer software (even where it is charged by the retailer on the same invoice as the laptop computer) will not be exempt under paragraph 58X(2)(h). This additional software can be considered for exemption under paragraph 58X(2)(f) of the FBTAA. An item of computer software need only be for use in the employee's employment to be exempt under paragraph 58X(2)(f) of the FBTAA. This does not require a predominant or primary test to satisfy the exemption.
Accordingly, where an employee is reimbursed by their employer for the purchase of a laptop computer (which includes basic software as part of the purchase price) and additional separate computer software, the provision of the benefits in respect of the separate computer software, that has a clearly identifiable additional cost, are not exempt under paragraph 58X(2)(h) of the FBTAA.
Date of decision: 14 August 2006Year of income: Year ended 31 March 2007
Legislative References:
Fringe Benefits Tax Assessment Act 1986
section 58X
subsection 58X(1)
subsection 58X(2)
paragraph 58X(2)(f)
paragraph 58X(2)(h)
ATO ID 2005/149
ATO ID 2006/44
ATO ID 2006/237
Keywords
Exempt benefits
Expense payment fringe benefits
FBT reimbursements
Fringe benefits tax
ISSN: 1445-2782
| Date: | Version: | |
| 14 August 2006 | Original statement | |
| You are here | 3 October 2008 | Archived |