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This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

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Edited version of your private ruling

Authorisation Number: 1012419632145

Ruling

Subject: Fringe benefits tax; exempt benefits; work related items

Question 1

Is a laptop computer or tablet device a 'portable electronic device' for the purposes of subsection 58X(2) of the Fringe Benefits Tax Assessment Act 1986?

Answer

Yes

Question 2

Where the employer provides an employee with a laptop computer or tablet device under a salary sacrifice arrangement, will that laptop computer or tablet device be 'primarily for use in the employee's employment' as required by subsection 58X(2) of the Fringe Benefits Tax Assessment Act 1986?

Answer

Yes

Question 3

Where the employer provides an employee with a laptop computer or tablet device under a salary sacrifice arrangement that is primarily for use in the employee's employment, will the laptop computer or tablet device be an exempt benefit by virtue of section 58X of the Fringe Benefits Tax Assessment Act 1986?

Answer

Yes

This ruling applies for the following fringe benefit tax years:

Year ended 31 March 2013

Year ended 31 March 2014

Year ended 31 March 2015

Year ended 31 March 2016

Year ended 31 March 2017

Relevant facts and circumstances

The employer will provide laptop computers or tablet devices to employees under salary sacrifice arrangements (SSA) on the basis that the employees require a laptop computer or tablet device for work purposes.

The employer has an arrangement with certain retailers whereby employees may only salary sacrifice laptop computers or tablet devices and accompanying accessories from their participating stores. An employee is limited to the provision of one laptop computer or tablet device per fringe benefits tax (FBT) year. The employer's salary sacrifice policy provides an outline of this arrangement including eligibility, procedure, conditions and responsibility of both employee and employer.

The employees require access to a computer for operational and administrative purposes of the employer.

Relevant legislative provisions

Fringe Benefits Tax Assessment Act 1986 section 58X

Reasons for decision

Question 1

Summary

A laptop computer or tablet device is a 'portable electronic device' for the purposes of subsection 58X(2) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA).

Detailed reasoning

Certain work related items that are provided by an employer to an employee in respect of the employee's employment may be exempt benefits under section 58X of the Fringe Benefits Tax Assessment Act 1986 (FBTAA).

The exemption applies for work related items listed in subsection 58X(2) of the FBTAA as follows:

The ATO has considered the meaning of 'a portable electronic device' and provided an explanation of the phrase in Chapter 20 of the publication Fringe benefits tax: a guide for employers.

A portable electronic device is a device that:

Examples of devices that satisfy this description include mobile phones, calculators, personal digital assistants, laptop computers, portable printers and global positioning system (GPS) navigation receivers.

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

Question 2

Summary

A laptop computer or tablet device that will be provided by the employer to an employee under a SSA will be primarily for use in the employee's employment as required by subsection 58X(2) of the FBTAA.

Detailed reasoning

The exemption under section 58X of the FBTAA applies for work related items listed in subsection 58X(2) of the FBTAA that are primarily for use in the employee's employment.

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:

In Chapter 20 of the publication Fringe benefits tax: a guide for employers there is an explanation of how to determine whether an item is primarily for use in the employee's employment.

The decision is based on the employee's intended use at the time the benefit is provided to them. You do not have to look at the employee's actual usage over the FBT year to determine whether the item is used primarily in the employee's employment.

The employee's job description, duty statement or employment contract can be used as a basis for concluding that an item is being provided chiefly or principally to enable the employee to undertake their employment duties.

Alternatively, where there may be private use of an item, factors such as those listed below can be used to determine whether the item is primarily for use in the employee's employment:

The employer will provide employees with a laptop computer or tablet device that is intended to be used in their employment for operational matters and administration tasks.

The nature of their employment requires employees to have ready access to a laptop computer or tablet device and any personal use of the laptop computer or tablet device will be incidental to business use.

Question 3

Summary

The benefit that will arise from the provision of a laptop computer or tablet device by the employer to an employee under the SSA will be exempt benefits under section 58X of the FBTAA.

Detailed reasoning

The exemption under section 58X of the FBTAA applies to an 'eligible work related item' and is limited by subsection 58X(3) of the FBTAA to one item per fringe benefits tax year, unless the item is a replacement item as allowed by subsection 58X(4) of the FBTAA.

A 'portable electronic device' is an eligible work related item under subsection 58X(2) of the FBTAA if it is primarily for use in the employee's employment.

As explained in the reasons for the answers to Questions 1 and 2, a laptop computer or tablet device is a 'portable electronic device' and the laptop computers or tablet devices that will be provided to employees will be primarily for use in their employment.

This means that the laptop computers or tablet devices to be provided to employees are 'eligible work related items' and, as the employer will only provide employees with one laptop computer or tablet device per FBT year under the SSA, the benefits that arise from the provision of the laptop computers or tablet devices will be exempt benefits under section 58X of the FBTAA.

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