ATO Interpretative Decision

ATO ID 2014/15

Fringe Benefits Tax

• This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Issue

For the purposes of section 37AD of the Fringe Benefits Tax Assessment Act 1986 (FBTAA), are an employee's car parking fees reimbursed by the employer an expense incurred in providing the employee with travel?

Decision

Yes. For the purposes of section 37AD of the FBTAA the car parking fees reimbursed by the employer are an expense incurred in providing the employee with travel as the fees were incurred as part of the employee's journey.

Facts

The employer made an election under section 37AA of the FBTAA that Division 9A of the FBTAA applies in respect of the current FBT year for any meal entertainment fringe benefits that may arise.

During the FBT year the employer provided entertainment by way of food and drink to an employee at a venue away from the employee's place of employment (the venue).

The employee drove to the venue in his car which he parked in a car park adjacent to the venue.

The employer reimbursed the employee for his car parking fees.

Reasons for Decision

All legislative references are to the FBTAA.

Provided a benefit is not provided under a salary packaging arrangement, Division 9A provides that an employer can elect to determine the taxable value of 'meal entertainment' provided by an employer to employees and their associates by one of two methods. These methods are the 50/50 split method or the 12 week register method.

For the purposes of Division 9A, section 37AD defines the expression 'provision of meal entertainment' as:

A reference to the provision of meal entertainment is a reference to the provision of:

(a)

entertainment by way of food or drink; or

(b)

accommodation or travel in connection with, or for the purpose of facilitating, entertainment to which paragraph (a) applies; or

(c)

the payment or reimbursement of expenses incurred in providing something covered by paragraph (a) or (b);

whether or not:

(d)

business discussions or business transactions occur; or

(e)

in connection with the working of overtime or otherwise in connection with the performance of the duties of any office or employment; or

(f)

for the purposes of promotion or advertising; or

(g)

at or in connection with a seminar.

The employer provided the employee with entertainment by way of food and drink. Therefore, the employee was provided with meal entertainment for the purposes of paragraph 37AD(a).

The question arises as to whether the car parking fees reimbursed by the employer are an expense incurred in providing travel. 'Travel' is not defined in section 37AD.

Relevantly, the Macquarie Dictionary, Sixth Edition, 1 October 2013, defines 'travel' as:

1. To go from one place to another; to make a journey; to travel for pleasure

The term 'journey' is defined as:

1. A course of travel from one place to another especially by land.

The relevant journey undertaken by the employee in connection with the provision of the entertainment by way of food or drink was the journey from his home to the venue.

The car parking fees were incurred as part of the employee's journey.

Accordingly, the car parking fees reimbursed by the employer are an expense incurred in providing the employee with travel for the purposes of section 37AD.

Amendment History

Year of income:  Years ended 31 March 2013 and 2014

Legislative References:
Fringe Benefits Tax Assessment Act 1986
   Division 9A
   section 37AA
   section 37AD
   paragraph 37AD(a)

Other References:
Macquarie Dictionary, Sixth Edition, 1 October 2013

Keywords
FBT entertainment
FBT meal entertainment
Fringe benefits tax

Siebel/TDMS Reference Number:  1-5EE0D8I

Business Line:  Private Groups and High Wealth Individuals

Date of publication:  24 April 2014

ISSN: 1445-2782