ATO Interpretative Decision

ATO ID 2008/127

Fringe Benefits Tax

Exempt Benefits: work related items - primarily for use in the employee's employment
FOI status: may be released
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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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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, who regularly visits clients, is provided with a laptop computer by their employer, is that laptop computer primarily for use in the employee's employment as required by subsection 58X(2) of the Fringe Benefits Tax Assessment Act (1986) (FBTAA)?

Decision

Yes. In view of the information available to the employer at the time the benefit is provided to the employee, the laptop computer is primarily for use in the employee's employment, as required by subsection 58X(2) of the FBTAA.

Facts

The employer has provided a laptop computer to the employee to assist the employee to undertake duties of employment.

The employee's main employment duty is visiting clients on a regular basis, which requires ready access to a laptop computer for producing and updating work reports between client visits.

The employer anticipates there may be incidental personal use of the laptop computer.

The employer does not have a written policy restricting this personal use.

A laptop computer is a portable electronic device for the purposes of subsection 58X(2) of the FBTAA.

Reasons for Decision

Section 58X of the FBTAA provides an exemption for benefits relating to the provision of certain work related items. Subsection 58X(1) of the FBTAA states that the provision of an expense payment benefit, a property benefit or a residual benefit in respect of an eligible work related item will be an exempt benefit.

Subsection 58X(2) of the FBTAA includes a list of items that, if provided primarily for use in an employee's employment, can be considered as eligible work related items. The list of items in subsection 58X(2) of the FBTAA includes '(a) a portable electronic device'.

The word primarily is not defined in the FBTAA therefore it takes on its ordinary meaning. The Macquarie Dictionary, [Multimedia], version 5.0.0, 1/10/01 defines primarily as:    


1. in the first place; chiefly; principally.

The employer in applying section 58X of the FBTAA is required to have a basis for concluding that the laptop computer is primarily for use in the employee's employment. This conclusion is based on intended use at the time the benefit is provided to the employee that is, why the laptop computer was provided to an employee 'in the first place'.

There is no requirement to reach this conclusion by reference to usage which can only be ascertained retrospectively. Rather this conclusion is determined by reference to the available evidence at the time the benefit is provided.

Generally, an employer will know whether a laptop computer is being provided chiefly or principally to enable the employee to undertake their employment duties. For example, the employee's job description, duty statement or employment contract can provide a basis for concluding that the laptop computer was primarily for business use.

Alternatively or in cases where it is evident that there are competing uses, in order to determine if the laptop computer is primarily for use in the employee's employment an employer could document such factors as:

·
the reason or reasons the laptop computer was provided to the employee
·
the type of work to be performed by the employee
·
how the use of the laptop computer relates to the employee's employment duties and
·
the employer's policy and any conditions relating to the use of a laptop computer.

As the employer provides the employee with a laptop computer for use by the employee in their main employment duty that is, regularly visiting clients which requires ready access to a laptop computer for producing and updating work reports between client visits, any personal use of the laptop computer is considered to be incidental to business use.

Accordingly, the laptop computer is primarily for use in the employee's employment as required by subsection 58X(2) of the FBTAA.

Note: Before a conclusion can be reached as to whether or not the benefit relating to the provision of the laptop computer is an exempt benefit under section 58X of the FBTAA, consideration of the other requirements stipulated in subsections 58X(3) and 58X(4) of the FBTAA would be needed.

Amendment History

Date of Amendment Part Comment
13 February 2015 Issue Minor punctuation amendment
Decision Minor punctuation amendment
Facts Minor punctuation amendment
Reason for Decision Minor punctuation and style amendments

Date of decision:  28 August 2008

Year of income:  Year ended 31 March 2009

Legislative References:
Fringe Benefits Tax Assessment Act (1986)
   section 58X
   subsection 58X(1)
   subsection 58X(2)
   subsection 58X(3)
   subsection 58X(4)

Other References:
The Macquarie Dictionary, [Multimedia], version 5.0.0, 1/10/01

Keywords
Exempt benefits
Fringe benefits
Fringe benefits tax

Siebel/TDMS Reference Number:  6079822; 1-5T2SHPP; 1-CVJNHHL

Business Line:  Private Groups and High Wealth Individuals

Date of publication:  3 October 2008
Date reviewed:  12 June 2018

ISSN: 1445-2782

history
  Date: Version:
  28 August 2008 Original statement
You are here 13 February 2015 Updated statement

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