ATO Interpretative Decision
ATO ID 2006/52
Fringe Benefits Tax
Expense Payment Fringe Benefit: reduction of taxable value - education of children of overseas employeesFOI status: may be released
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This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
Status of this decision: Decision Current
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 employer pays for additional tuition costs of children of overseas employees, will this be considered to be expenditure 'in respect of the full time education of a child' and thus eligible for reduction under section 65A of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)?
Decision
Yes. The expenditure in question is in respect of the full-time education of the child in terms of section 65A of the FBTAA.
Facts
An employer decides to employ an expatriate employee on a temporary visa in Australia. As part of this arrangement, the employee's family, including a school age child are relocated to Australia for the duration of the appointment.
The employee's child is enrolled in a Development & Coaching Centre which specialises in teaching school subjects to support school study needs.
The child attends this Centre one afternoon a week after normal school hours.
The employer pays the tuition fees. This would be an expense payment fringe benefit as defined in subsection 136(1) of the FBTAA.
Reasons for Decision
In accordance with subparagraph 65A(a)(ii) of the FBTAA, in order to qualify for a reduction in the taxable value of the expense payment fringe benefit otherwise provided, the recipient's expenditure must be in respect of the full-time education of the child of the employee.
Although the attendance of a child at this Coaching Centre is not of itself 'full time education', it needs to be considered whether the additional tuition is 'in respect of the full-time education' of a child.
As held in the Full Federal Court decision of J & G Knowles v. Federal Commissioner of Taxation (2000) 96 FCR 402; 2000 ATC 4151 (2000) 44 ATR 22, the words 'in respect of' have no fixed meaning. However, 'the words must be given a meaning that depends on the context in which the words are found'. It was also held by the Court that there must be a 'sufficient or material connection or relationship' between the benefit and employment.
The words 'in respect of the full-time education of the child', requires that any expense, whilst not necessarily directly incurred on full-time education, must have a sufficient or material connection to the full-time education of the child.
It is considered that the extra tuition provided to the employee's child at the Development & Coaching Centre, in supporting the study needs of the child in practical areas of their normal education and not being in the area of general interest pursuits, has a sufficient or material connection to the child's full-time education. Accordingly, the recipient's expenditure is 'in respect of the full-time education' of a child of the employee and thus eligible for reduction under section 65A of the FBTAA.
Amendment History
| Date of Amendment | Part | Comment |
|---|---|---|
| 7 August 2026 | Decision & Reason for decision | Minor punctuation amendments |
| 19 December 2014 | Reason for decision | Punctuation |
Year of income: Year ended 31 March 2006
Legislative References:
Fringe Benefits Tax Assessment Act 1986
section 65A
subparagraph 65A(a)(ii)
Case References:
J & G Knowles v. Federal Commissioner of Taxation
(2000) 96 FCR 402
2000 ATC 4151
(2000) 44 ATR 22
Keywords
FBT employees
FBT expense payment fringe benefit
Fringe benefits tax
Overseas employees
Reductions of taxable value
Date reviewed: 30 July 2026
ISSN: 1445-2782
| Date: | Version: | |
| 17 February 2006 | Original statement | |
| 19 December 2014 | Updated statement | |
| You are here → | 7 August 2026 | Updated statement |