LI 2024/14 - Explanatory statement

Fringe Benefits Tax Assessment Act 1986

Explanatory Statement

General outline of instrument

1. This instrument is made under section 123AA of the Fringe Benefits Tax Assessment Act 1986 (FBTAA).

2. The instrument specifies records the Commissioner of Taxation will accept as an alternative to an employee declaration in respect of expense payment fringe benefits where:

the employer seeks to reduce the taxable value of a benefit in respect of travel to an employment interview or selection test (section 61E of the FBTAA),
the benefit consists in whole or part of a reimbursement of a 'Division 28 car expense' incurred by the employee in relation to a car they own or lease, and
the reimbursement is calculated on a cents per kilometre basis.

3. The instrument is a legislative instrument for the purposes of the Legislation Act 2003.

Date of effect

4. This instrument commences on 1 April 2024.

Effect of this instrument

5. This instrument may reduce compliance costs for employers by allowing them to rely on adequate alternative records (rather than employee declarations) to meet their FBT record keeping obligations.

6. Section 123AA of the FBTAA allows the Commissioner to make a legislative instrument that specifies alternative documents or records that employers can rely on, in lieu of statutory evidentiary documents, for FBT record keeping purposes.

7. The instrument applies for the FBT year ending 31 March 2025, and all subsequent FBT years (paragraph 5(1)(a) of the instrument). It allows an employer to which the instrument applies to accept adequate alternative records instead of a declaration referred to in paragraph 61E(c) of the FBTAA (paragraph 5(1)(b)).

8. The instrument applies to the class of employers specified in subsection 5(2) - that is, employers reducing the taxable value of an expense payment fringe benefit described in section 61E of the FBTAA, in certain circumstances.

9. Section 6 of the instrument sets out what records are adequate alternative records that can be accepted instead of a relevant employee declaration. It stipulates that the alternative records must be written in English and contain, at a minimum, the following information:

the name of the employee who received the benefit,
the address of the departure location,
the address of the arrival location,
the dates of travel, and
the total number of whole kilometres travelled between the address of the departure location and the address of the arrival location (inclusive of any return trip, and excluding any kilometres travelled whilst at the destination).

10. There is no limit on the number of records that may, in aggregate, meet the minimum information requirements. Further, there is no prescribed type or form of record that the required information must be contained in. If multiple different records collectively contain the minimum information when viewed together, the records will be accepted in aggregate as satisfying the requirements. For example, records can be stored electronically or in paper form, and the required information could be contained in various types of documents such as employment contracts, payroll records, job descriptions, employer and employee correspondence (for example, emails or text messages), log books, employer policies, and calculations of private travel.

11. Records can only be accepted as an alternative to the declaration if they are obtained and held by the employer by the employer's declaration date. This is the date of lodgment of their FBT return for the relevant year, or such later date as the Commissioner allows. This is because section 123AA of the FBTAA deems the employee to have the declaration at the time that they hold the records, and the underlying declaration is required to be obtained by the declaration date.


Alex is an employee of G Co. He applies for a promotion within the company and is successful in gaining an interview. Alex drives his car to the interview, and G Co agrees to reimburse him on a cents per kilometre basis for the cost of the travel in his car.
G Co's human resources (HR) records show that the interview process is being conducted out of their central office, and notes the date of Alex's interview. On the day of the interview, Alex advises his manager by email that he was working from the company's suburban office and travelled to the interview from there. He also noted the readings on his car's odometer before leaving the suburban office, after arriving at the interview location and parking his car, and upon return to the suburban office after the interview.
G Co organises for the trips to and from the interview to be reimbursed by reference to the distance travelled with the car in accordance with the 'cents per kilometre' method outlined in Division 28 of the Income Tax Assessment Act 1997.
This reimbursement constitutes an expense payment fringe benefit. Under section 61E of the FBTAA, G Co is entitled to reduce the taxable value of the fringe benefit if the requirements of that section are met. Instead of obtaining the declaration required by paragraph 61E(c), G Co seeks to rely on section 123AA of the FBTAA.
G Co has obtained records containing, in aggregate, the minimum information to be relied upon as an alternative to the declaration. All of the required information was obtained and recorded before the due date for lodgment of G Co's FBT return. The relevant records are as follows:
Table 1: G Co records that contain the required minimum information
Required minimum information Records held by G Co
• The name of the employee receiving the benefit

• The date or dates of travel

• The address of arrival location

G Co's HR records
• The address of the departure location

• The total number of kilometres travelled between the address of departure and arrival locations

Email sent by Alex
G Co can reduce the taxable value of the expense payment fringe benefit in accordance with section 61E of the FBTAA. Due to the operation of subsection 123AA(1) of the FBTAA, G Co is taken to have kept and retained the relevant declaration and accordingly has satisfied the requirements in paragraph 61E(c).

Compliance cost assessment

12. Minor - there will be no additional regulatory impacts as the instrument is minor and machinery in nature (The Office of Impact Assessment reference: OIA23-04483).


13. Section 61E of the FBTAA allows an employer to reduce the taxable value of certain expense payment fringe benefits that are provided in respect of an employment interview or selection test for the employee. The reduction is available to the employer where:

they reimburse the recipient for a Division 28 car expense (as defined in subsection 136(1) of the FBTAA),
the reimbursement is calculated on a cents per kilometre basis, and
the recipient used their own car (that is, a car that they own or lease).

14. The transport must be required solely because the employee is required to attend an employment interview or selection test connected with employment with a new employer, or a promotion or a job transfer with their existing employer. The benefit must also be provided under an arm's length arrangement. This is provided for in section 143D of the FBTAA.

15. The reduction is limited to the amount the employer would have reimbursed based on the rate which applied on a cents per km basis for that amount of travel.

16. In accordance with paragraph 61E(c) of the FBTAA, the employer needs to obtain a signed employee declaration in the approved form by the declaration date to reduce the taxable value. This instrument prescribes alternative records an employer can use instead of the declaration to reduce the taxable value for the relevant FBT year.


17. Subsection 17(1) of the Legislation Act 2003 requires that the Commissioner undertake appropriate and reasonably practicable consultation before making a legislative instrument.

18. For this instrument, broad public consultation was undertaken from 20 February 2023 to 22 March 2023.

19. The draft instrument and draft explanatory statement were published to the ATO Legal database on the 'What's new' page. They were also advertised on the website on the 'Open Consultation' page. Major tax and superannuation publishers and associations monitor these pages and include the details in the daily and weekly alerts and newsletters to their subscribers and members.

20. The legislative instrument and explanatory statement were amended to reflect feedback received through consultation and the enactment of related amendments to the primary law. A key change to the instrument was the removal of the requirement for information about the particulars of the car.

Statement of compatibility with human rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Fringe Benefits Tax Assessment (Adequate Alternative Records - Car Travel to Employment Interview or Selection Test) Determination 2024

This legislative instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the legislative instrument

The instrument specifies records that the Commissioner of Taxation will accept from an employer, in certain circumstances, as an alternative to an employee providing a declaration for an expense payment fringe benefit in respect of car travel to an employment interview or selection test.

Human rights implications

This legislative instrument does not engage any of the applicable rights or freedoms because it merely provides employers with an option to use acceptable alternative records instead of an employee declaration. Importantly, it will help reduce employers' record keeping compliance costs in relation to the fringe benefits tax law and provide them with certainty regarding their record keeping obligations.


This legislative instrument is compatible with human rights as it does not raise any human rights issues.

29 February 2024

Ben Kelly
Deputy Commissioner of Taxation

Legislative References:
Acts Interpretation Act 1901
The Act

Fringe Benefits Tax Assessment Act 1986
The Act

Human Rights (Parliamentary Scrutiny) Act 2011
The Act

Legislation Act 2003
The Act

Related Legislative Determinations:
LI 2024/14 - Legislative Instrument