FRINGE BENEFITS TAX ASSESSMENT ACT 1986

PART III - FRINGE BENEFITS  

Division 5 - Expense payment fringe benefits  

Subdivision B - Taxable value of expense payment fringe benefits  

SECTION 24   REDUCTION OF TAXABLE VALUE - OTHERWISE DEDUCTIBLE RULE  

24(1)  


Where:


(a) the recipient of an expense payment fringe benefit in relation to an employer in relation to a year of tax is an employee of the employer; and


(b) if the recipient had, at the time when the recipients expenditure was incurred, incurred and paid unreimbursed expenditure (in this subsection called the gross expenditure ), in respect of the same matter in respect of which the recipients expenditure was incurred, equal to:


(i) in the case of an in-house expense payment fringe benefit - the amount that, but for this subsection and Division 14 and the recipients contribution, would be the taxable value of the expense payment fringe benefit in relation to the year of tax; or

(ii) in the case of an external expense payment fringe benefit - the amount of the recipients expenditure;
a once-only deduction (in this subsection called the gross deduction ) would, or would if not for section 82A of the Income Tax Assessment Act 1936 , and Divisions 28 and 900 of the Income Tax Assessment Act 1997 , have been allowable to the recipient under either of those Acts in respect of the gross expenditure; and


(ba) the amount (in this subsection called the notional deduction ) calculated in accordance with the formula:


GD   -   RD


where:
  • GD is the gross deduction; and
  • RD is:
  • (i) if there is no recipients portion in relation to the expense payment fringe benefit - nil; or
  • (ii) if there is a recipients portion in relation to the expense payment fringe benefit - the amount (if any) that would, or that would but for section 82A of the Income Tax Assessment Act 1936 , and Divisions 28 and 900 of the Income Tax Assessment Act 1997 , have been allowable as a once-only deduction to the recipient under either of those Acts in respect of the recipients expenditure (assuming that any payment of that expenditure by the recipient had been paid by the recipient at the time when the recipients expenditure was incurred);

  • exceeds nil; and


    (c) in the case of an expense payment fringe benefit that is not an eligible incidental travel expense payment benefit or an eligible overtime meal expense payment benefit:


    (ia) where the recipients expenditure is in respect of fuel or oil for a motor vehicle owned by, or leased to, the recipient:

    (A) where the fringe benefit is an eligible small expense payment fringe benefit or an undocumentable expense payment fringe benefit - substitute documentary evidence of the recipients expenditure is maintained by or on behalf of the provider and, if the provider is not the employer, that documentary evidence, or a copy, is given to the employer before the declaration date; or

    (B) in any case - documentary evidence of the recipients expenditure is obtained by the recipient and that documentary evidence, or a copy, is given to the employer before the declaration date; or

    (C) in any case - the recipient gives to the employer, before the declaration date, a declaration, in a form approved by the Commissioner, in respect of the recipients expenditure; or

    (i) where subparagraph (ia) does not apply and the fringe benefit is an undocumentable expense payment fringe benefit or an eligible small expense payment fringe benefit:

    (A) documentary evidence of the recipients expenditure is obtained by the recipient and that documentary evidence, or a copy, is given to the employer before the declaration date; or

    (B) substitute documentary evidence of the recipients expenditure is maintained by or on behalf of the provider and, if the provider is not the employer, that documentary evidence, or a copy, is given to the employer before the declaration date; or

    (ii) in any other case - documentary evidence of the recipients expenditure is obtained by the recipient and that documentary evidence, or a copy, is given to the employer before the declaration date; and


    (d) where the expense payment fringe benefit is an extended travel expense payment benefit (other than an international aircrew expense payment benefit) - the recipient gives to the employer, before the declaration date, a travel diary in relation to the travel undertaken by the recipient to which the fringe benefit relates; and


    (e) except where the expense payment fringe benefit is:


    (i) an exclusive employee expense payment benefit; or

    (ia) covered by a recurring fringe benefit declaration (see section 152A ); or

    (ii) an eligible overtime meal expense payment benefit; or

    (iii) an eligible incidental travel expense payment benefit; or

    (iv) an extended travel expense payment benefit; or

    (v) a car expense payment benefit;
    the recipient gives to the employer, before the declaration date, a declaration, in a form approved by the Commissioner, in respect of the recipients expenditure; and


    (ea) where:


    (i) the expense payment fringe benefit is a car expense payment benefit in respect of a car held by the recipient during a period (in this section called the holding period ) in the year of tax; and

    (ii) the substantiation rules set out in Division 15 have been complied with in relation to the car in relation to the holding period;
    the following conditions are satisfied:

    (iii) the recipient gives to the employer, before the declaration date, a car substantiation declaration for the car for the year of tax;

    (iv) in a case where the substantiation rules require log book records or odometer records to be maintained by or on behalf of the recipient in relation to the car - the car substantiation declaration is accompanied by a copy of those documents; and


    (f) if:


    (i) paragraph (ea) does not apply; and

    (ii) the expense payment fringe benefit is a car expense payment benefit in respect of a car held by the recipient during a period (the holding period ) in the year of tax;
    the recipient gives a declaration to the employer, before the declaration date and in a form approved by the Commissioner, that purports to set out:

    (iii) the holding period; and

    (iv) the number of whole business kilometres travelled by the car during the holding period; and

    (v) the number of whole kilometres travelled by the car during the holding period;

    the taxable value, but for Division 14 , of the expense payment fringe benefit in relation to the year of tax is the amount calculated in accordance with the formula:


    TV - ND

    where:

    TV
    is the amount that, but for this subsection and Division 14 , would be the taxable value of the expense payment fringe benefit in relation to the year of tax; and

    ND
    is:


    (g) if neither paragraph (ea) nor paragraph (f) applies and paragraph (l) does not apply - the notional deduction; or


    (h) if paragraph (ea) applies and paragraph (l) does not apply - whichever of the following amounts is applicable:


    (i) if it would be concluded that the amount of the providers portion would have been the same even if the recipients expenditure were not incurred in producing assessable income of the recipient - the business use percentage of the amount that, but for this subsection and Division 14 , would be the taxable value of the expense payment fringe benefit in relation to the year of tax;

    (ii) if subparagraph (i) does not apply:

    (A) in the case of an in-house expense payment fringe benefit - the business use percentage of the amount that, but for this subsection and Division 14 and the recipients contribution, would be the taxable value of the expense payment fringe benefit in relation to the year of tax; or

    (B) in the case of an external expense payment fringe benefit - the business use percentage of the recipients expenditure; or


    (j) where:


    (i) paragraph (f) applies; and

    (ii) (Repealed by No 162 of 2015)

    (iia) paragraph (l) does not apply;
    whichever of the following amounts is the least:

    (iii) the notional deduction;

    (iv) if it would be concluded that the amount of the providers portion would have been the same even if the recipients expenditure were not incurred in producing assessable income of the recipient - 33 1/3 % of the amount that, but for this subsection and Division 14 , would be the taxable value of the expense payment fringe benefit in relation to the year of tax;

    (v) if subparagraph (iv) does not apply:

    (A) in the case of an in-house expense payment fringe benefit - 33 1/3 % of the amount that but for this subsection and Division 14 and the recipients contribution, would be the taxable value of the expense payment fringe benefit in relation to the year of tax; or

    (B) in the case of an external expense payment fringe benefit - 33 1/3 % of the recipients expenditure; or


    (k) (Repealed by No 162 of 2015)


    (l) if, under subsection 138(3) , the expense payment fringe benefit is deemed to have been provided to the recipient only - the amount calculated in accordance with subsection (9).

    24(2)  
    For the purposes of the application of this section in relation to a fringe benefit, where the recipient:


    (a) while undertaking travel referred to in paragraph (1)(d), engages in an activity in the course of producing assessable income of the recipient; and


    (b) does not make, as mentioned in the definition of travel diary in subsection 136(1) , an entry relating to the activity, being an entry of the kind referred to in that definition;

    the activity shall be deemed not to have been engaged in by the recipient in the course of producing assessable income.

    24(3)  
    Where the sum of:


    (a) the recipients expenditure in respect of a small expense payment fringe benefit in relation to an employee in relation to an employer in relation to a year of tax; and


    (b) the total of the recipients expenditure in respect of all other small expense payment fringe benefits in relation to the employer in relation to the employee in relation to the year of tax, being fringe benefits provided before the fringe benefit referred to in paragraph (a);

    does not exceed $200, the fringe benefit referred to in paragraph (a) is an eligible small expense payment fringe benefit.

    24(3A)  


    For the purposes of this section, where the Commissioner is satisfied, having regard to the nature of the recipients expenditure in respect of an expense payment fringe benefit, that it would be unreasonable to expect the recipient to have obtained documentary evidence of the recipients expenditure, the expense payment fringe benefit shall be deemed to be, and always to have been, an undocumentable expense payment fringe benefit.

    24(4)  


    For the purposes of paragraph (1)(c), the part of a petty cash book or similar document that sets out the particulars that would be set out in documentary evidence of the recipients expenditure (other than particulars of the date on which the documentary evidence was made out) is taken to be substitute documentary evidence of the recipients expenditure. The entry must be in English.

    24(5)  
    Where:


    (a) the recipients expenditure in relation to each of 2 or more expense payment fringe benefits (whether or not in relation to the same year of tax) is the same expenditure; and


    (b) paragraph (1)(b) applies in relation to the recipients expenditure;

    this Act applies, and shall be deemed always to have applied, as if all the payments or reimbursements to which those fringe benefits relate had been made at the time when the first of those payments or reimbursements was made and not otherwise, and nothing in section 74 prevents the amendment of an assessment for the purpose of giving effect to this subsection.

    24(6)  


    For the purposes of the application of this section to an in-house expense payment fringe benefit, a reference to the recipients contribution in relation to the fringe benefit is a reference to the amount ascertained under whichever of paragraphs 22A(1)(b) or (2)(b) is applicable.

    24(7)  
    (Repealed by No 162 of 2015)

    24(8)  
    (Repealed by No 162 of 2015)

    24(9)  


    For the purposes of paragraph (1)(l) (which applies to an expense payment fringe benefit that, under subsection 138(3) , is deemed to have been provided to an employee only), the amount is calculated in accordance with the formula:


    Unadjusted ND × Employee ' s percentage of interest

    where:

    employee ' s percentage of interest
    :

  • (a) is the percentage of the interest held by the employee, during a period (in this subsection called the holding period ) in the year of tax, in the asset or other thing that:
  • (i) relates to the matter in respect of which the expense payment fringe benefit is provided; and
  • (ii) is applied or used for the purpose of producing assessable income of the employee; and
  • (b) does not include the percentage of the interest held in that asset or other thing by the employee ' s associate or associates during the holding period.
  • unadjusted ND
    is the amount that would be ascertained as representing the component ND in the formula in subsection (1) if paragraph (1)(l) did not apply in relation to the expense payment fringe benefit.




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