Edited version of private advice

Authorisation Number: 1052255399796

Date of advice: 2 August 2024

Ruling

Subject: Taxable value of travel expenses

Question1

Can the taxable value of transport expenses paid for or reimbursed by the Employer be reduced under section 52 or section 24 of the Fringe Benefits Tax Assessment Act 1986 (FBTAA) (the 'otherwise deductible rule') when an employee that resides outside XXX is required to travel on an infrequent basis to the head office at the direction of the Employer?

Answer

Yes.

Question2

Can the taxable value of the accommodation and food and drink expenses paid for or reimbursed by the Employer be reduced under section 52 or section 24 of the FBTAA (the 'otherwise deductible rule') when an employee that resides outside XXX is required to travel and stay away from their usual residence overnight on an infrequent basis to the head office at the direction of the Employer?

Answer

Yes.

This ruling applies for the following periods:

Year ended 31 March 2024

Year ended 31 March 2025

Year ended 31 March 2026

Year ended 31 March 2027

Year ended 31 March 2028

The scheme commenced on:

1 April 20XX

Relevant facts and circumstances

Background

1.    The Employer and its subsidiaries employ staff from multiple states across Australia, including XXX, XXX, XXX, XXX and XXX.

2.    By default, most employees work from home and are provided office equipment owned by the Employer to use for the period they remain an employee. However, some employees also regularly work from a co-working space provided by the Employer.

3.    In addition to enabling all employees to work from home, the Employer also rents four designated short-term co-working spaces from a provider.

4.    The co-working spaces are in the following locations, with the following capacities:

•         XXX - 20 spaces

•         XXX - 14 spaces

•         XXX - 1 space

•         XXX - 1 space.

5.    The Employer does not have any permanent office spaces.

6.    The postal address and head office for physical meetings is the XXX location.

7.    Employees can elect to work in the co-working office spaces at their discretion.

8.    The Employer does not rent sufficient co-working office space to enable the entire workforce to be accommodated at these locations.

9.    A recent headcount of employees exceeded XXX staff.

10.  Not all employees have the option to work from a co-working space due to the privacy requirements of their roles.

11.  Under an arrangement with the provider, the Employer is able to house all staff on a short-term basis when staff are required to travel to the XXX office to attend compulsory work events.

12.  The employment contract outlines the working terms as follows:

Your primary place of work is set out in item 4 of Schedule A, or at your home, or another suitable location of your choice as agreed with your Manager. You may be required to work from the Company's office, or other places as may be designed by the Company, from time to time. During your employment you may be required to undertake some interstate travel on occasions.

13.  Item 4 of Schedule A of the employment contract states the primary place of work as being the City and State the employee resides in.

Travel

14.  The Employer infrequently directs employees that reside outside XXX to travel to the co-working location in XXX approximately 4 times per year to attend events and strategy days.

15.  Employees that reside outside XXX are required to stay overnight in XXX, with an average duration of the stay being 2 to 3 days.

16.  The Employer pays directly or reimburses the employees that reside outside XXX for the transport costs from their homes to the XXX co-working location, and for accommodation and, food and drink expenses incurred during the travel.

Relevant legislative provisions

Fringe Benefits Tax Assessment Act 1986 section 20

Fringe Benefits Tax Assessment Act 1986 section 20A

Fringe Benefits Tax Assessment Act 1986 section 23

Fringe Benefits Tax Assessment Act 1986 section 24

Fringe Benefits Tax Assessment Act 1986 section 52

Fringe Benefits Tax Assessment Act 1986 subsection 136(1)

Fringe Benefits Tax Assessment Act 1986 subsection 148(1)

Income Tax Assessment Act 1997 section 8-1

Reasons for decision

Question1

Can the taxable value of transport expenses paid for or reimbursed by the Employer be reduced under section 52 or section 24 of the Fringe Benefits Tax Assessment Act 1986(FBTAA) (the 'otherwise deductible rule') when an employee that resides outside XXX is required to travel on an infrequent basis to the Sydney head office at the direction of the Employer?

Answer

Yes.

Question 2

Can the taxable value of the accommodation and food and drink expenses paid for or reimbursed by the Employer be reduced under section 52 or section 24 of the FBTAA (the 'otherwise deductible rule') when an employee that resides outside XXX is required to travel and stay away from their usual residence overnight on an infrequent basis to the head office at the direction of the Employer?

Answer

Yes.

Detailed reasoning

General principles

1.      A 'fringe benefit' is defined in subsection 136(1) of the FBTAA. Broadly, a 'fringe benefit' arises when the following conditions are satisfied:

•         A benefit is provided at any time during the year of tax.

•         The benefit is provided to an employee or an associate of the employee.

•         The benefit is provided by:

(i) their employer; or

(ii) an associate of the employer; or

(iii) a third party other than the employer or an associate under an arrangement between the employer or associate of the employer and the third party; or

(iv) a third party other than the employer or an associate of the employer, if the employer or an associate of the employer:

(A) participates in or facilitates the provision or receipt of the benefit; or

(B) participates in, facilitates or promotes a scheme or plan involving the provision of the benefit; and the employer or associate knows, or ought reasonably to know, that the employer or associate is doing so;

•         The benefit is provided in respect of the employment of the employee.

•         The benefit is not one that is specifically excluded as per paragraphs (f) to (s) of the definition of a 'fringe benefit' in subsection 136(1).

Is a benefit provided?

2.         Subsection 136(1) of the FBTAA provides the definition of a 'benefit' as including:

any right (including a right in relation to, and an interest in, real or personal property), privilege, service or facility and, without limiting the generality of the foregoing, includes a right, benefit, privilege, service or facility that is, or is to be, provided under:

•         an arrangement for or in relation to:

(i)     the performance of work (including work of a professional nature), whether with or without the provision of property; ...

3.         In this case, the Employer provides a range of benefits, including transport, accommodation and food and drink, to the employees that resides outside XXX. Each is a 'benefit' as defined in subsection 136(1) of the FBTAA. Therefore, this condition in the definition of a 'fringe benefit' in subsection 136(1) is satisfied.

Is the benefit provided to an employee or an associate of an employee?

4.         An employee is defined in subsection 136(1) of the FBTAA to include a current, future and former employee. Subsection 136(1) defines a 'current employee' to mean 'a person who receives, or is entitled to receive, salary or wages'.

5.         'Salary or wages', as defined in subsection 136(1) of the FBTAA, means payments from which an amount must be withheld under section 12-35 of Schedule 1 to the Taxation Administration Act 1953.

6.         The Employer pays each of its staff amounts which constitute 'salary or wages' as defined in the FBTAA. The staff are therefore the Employer's current employees. Therefore, this condition in the definition of a 'fringe benefit' in subsection 136(1) of the FBTAA is satisfied.

Is the benefit provided by the employer, an associate of the employer or a third party in a situation that comes within either paragraph (e) or (ea) of the 'fringe benefit' definition?

7.         Paragraphs (e) and (ea) of the definition of a 'fringe benefit' in subsection 136(1) of the FBTAA provide:

(e)          a person (in this paragraph referred to as the arranger) other than the employer or an associate of the employer under an arrangement covered by paragraph (a) of the definition of arrangement between:

(i) the employer or an associate of the employer; and

(ii) the arranger or another person; or

(ea) a person other than the employer or an associate of the employer, if the employer or an associate of the employer:

(i) participates in or facilitates the provision or receipt of the benefit; or

(ii) participates in, facilitates or promotes a scheme or plan involving the provision of the benefit;

8.         Furthermore, the definitions of 'provide' and 'provider' in subsection 136(1) of the FBTAA are as follows:

provide:

•         in relation to a benefit - includes allow, confer, give, grant or perform; and

•         ...

provider, in relation to a benefit, means the person who provides the benefit.

9.         The Employer provided the benefits to the employees that reside outside XXX. Therefore, this condition in the definition of a 'fringe benefit' in subsection 136(1) of the FBTAA is satisfied.

Is the benefit provided in respect of the employee's employment?

10.      In considering whether a benefit is provided to an employee 'in respect of' their employment, subsection 136(1) of the FBTAA defines 'in respect of', in relation to the employment of an employee, to include 'by reason of, by virtue of, or for or in relation directly or indirectly to, that employment.'

11.      Subsection 148(1) of the FBTAA stipulates that a benefit will be provided in respect of the employment of an employee:

•         whether or not the benefit also relates to some other matter or thing

•         whether the employment is past, present or future

•         whether or not the benefit is surplus to the recipient's requirements

•         whether or not the benefit is also provided to another person

•         whether or not the benefit is offset by any inconvenience or disadvantage

•         whether or not the benefit is provided or used, or required to be provided or used, in connection with any employment

•         whether or not the provision of the benefit is in the nature of income, and

•         whether or not the benefit is provided as a reward for services rendered, or to be rendered, by the employee.

12.      In J & G Knowles & Associates Pty Ltd v Federal Commissioner of Taxation (2000) 96 FCR 402; 2000 ATC 4151; (2000) 44 ATR 22 (Knowles), the full Federal Court - in examining the meaning of 'in respect of' an employee's employment - held that the phrase required a 'nexus, some discernible and rational link, between the benefit and employment', though noted that 'what must be established is whether there is a sufficient or material, rather than a causal, connection or relationship between the benefit and the employment'. A similar view was also held in Essenbourne Pty Ltd v FC of T 2002 ATC 5201 and Starrim Pty Ltd v FCT (2000) 102 FCR 194; [2000] FCA 952; 2000 ATC 4460; (2000) 44 ATR 487.

13.      The full Federal Court in Knowles also suggested that it would be useful to ask 'whether the benefit is a product or incident of the employment'.

14.      To establish whether a sufficient or material connection exists between the provision of the benefits (transport, accommodation and food and drink) and the employment of the employees, it is necessary to consider the circumstances in which the benefits have been provided. The employees have been provided with these benefits in order to conduct their employment duties (i.e. to attend compulsory work meetings at the head office).

15.      Therefore, the connection between the benefits received by the employees and the employees' employment is considered to be material and sufficient, and not merely causal. If it were not for the employment relationship between the Employer and the employees, the employees would not have received the benefits.

16.      Given this connection between the benefits provided and the employees' duties, it is considered that the benefits are provided 'in respect of the employees' employment'.

17.      Therefore, this condition in the definition of a 'fringe benefit' in subsection 136(1) of the FBTAA is satisfied.

Is the benefit excluded from the definition of a fringe benefit?

18.      A benefit which comes within paragraphs (f) to (s) of the definition of a 'fringe benefit' in subsection 136(1) of the FBTAA is excluded from being a fringe benefit.

19.      Paragraph (g) of the definition of 'fringe benefit' excludes 'a benefit that is an exempt benefit'.

20.      In considering whether the benefits provided by the Employer fall within any of the exempt benefits listed in Part III of the FBTAA, it is necessary to initially determine the types of fringe benefits that may be applicable under the FBTAA. In the present circumstances, the benefits being provided are considered to be either 'expense payment fringe benefits' or 'residual fringe benefits'.

Expense payment and residual fringe benefits

21.      An 'expense payment fringe benefit' is defined in subsection 136(1) of the FBTAA as 'a fringe benefit that is an expense payment benefit'.

22.      Under section 20 of the FBTAA, an 'expense payment benefit' arises where a provider:

•         makes a payment in discharge, in whole or in part, of an obligation of a recipient to pay an amount to a third person in respect of expenditure incurred by the recipient; or

•         reimburses a recipient in whole or in part, in respect of an amount of expenditure incurred by the recipient.

23.      A 'residual fringe benefit' is defined in subsection 136(1) of the FBTAA as 'a fringe benefit that is a residual benefit'. 'Residual benefit'means a benefit that is a residual benefit by virtue of section 45 of the FBTAA.

24.      Under section 45 of the FBTAA, a benefit is a residual benefit it is not a benefit by virtue of a provision of Subdivision A of Divisions 2 to 11 (inclusive).

25.      In this case, the Employer directly pays for or reimburses employees that reside outside XXX for transport, accommodation and food and drink expenses when the employees are directed by the Employer to travel to the XXX location. An expense payment benefit is being provided pursuant to section 20 of the FBTAA when the employees are invoiced for those expenses and are liable for paymentwhereas a residual benefit is being provided pursuant to section 45 of the FBTAA when the Employer is invoiced for those expenses and are liable for payment.

26.      As no exemptions are applicable in the circumstances, the benefits provided by the Employer meet the definition of a 'fringe benefit' as defined in subsection 136(1) of the FBTAA.

Question 1: Can the taxable value of transport expenses paid for or reimbursed by the Employer be reduced under section 52 or section 24 of the Fringe Benefits Tax Assessment Act 1986 (FBTAA) (the "otherwise deductible rule") when an employee that resides outside XXX is required to travel on an infrequent basis to the XXX head office at the direction of the Employer?

Summary

27.   If the expenses for transport had been incurred by the employees that reside outside XXX, they would be regarded as having been incurred in gaining and producing assessable income and would therefore be deductible. Accordingly, the taxable value of the expense payment or residual fringe benefit may be reduced in accordance with the 'otherwise deductible rule' (ODR) under section 52 or section 24 of the FBTAA.

Detailed reasoning

28.   The ODR in section 24 of the FBTAA operates to reduce the taxable value of an expense payment fringe benefit where the recipient of the benefit is an employee and the employee would have been entitled to a once-only deduction under either the Income Tax Assessment Act 1936 (ITAA 1936) or the Income Tax Assessment Act 1997 (ITAA 1997) for the expense had they personally incurred it. A similar ODR reduction is available under section 52 of the FBTAA for benefits that are residual fringe benefits.

29.   The taxable value of expense payment fringe benefits is calculated in accordance with section 23 of the FBTAA because they are 'external expense payment fringe benefits'. This taxable value is reduced where the ODR in section 24 of the FBTAA applies.

30.   The taxable value of residual fringe benefits is calculated in accordance with section 51 of the FBTAA because they are 'period residual fringe benefits'. This taxable value is reduced where the ODR in section 52 of the FBTAA applies.

31.   The relevant conditions in sections 24 and 52 of the FBTAA are considered in further detail below.

Reduction of taxable value - otherwise deductible rule

32.   Paragraphs 24(1)(a) and 52(1)(a) of the FBTAA applies where:

the recipient of an expense payment or residual fringe benefit in relation to an employer in relation to a year of tax is an employee of the employer, ...

33.   As concluded above, the benefit of transport expenses paid for or reimbursed by the Employer is an 'expense payment fringe benefit' or a 'residual fringe benefit' as defined in subsection 136(1) of the FBTAA. The recipient of these benefits is an employee of the Employer. Accordingly, it is considered that paragraph 24(1)(a) or 52(1)(a) of the FBTAA will be satisfied.

Deductibility of transport expenses

34.   Paragraphs 24(1)(b) and 52(1)(b) of the FBTAA applies where, if the employee had, at the time the employee's expenditure was incurred, incurred and paid that expenditure (the gross expenditure), they would have been entitled to a once-only deduction in respect of the gross expenditure.

35.   Section 8-1 of the ITAA 1997 allows a deduction for a loss or outgoing incurred in gaining or producing assessable income. However, no deduction is allowed for losses or outgoings to the extent to which they are of a capital, private or domestic nature, or are incurred in gaining or producing exempt income, or are otherwise prevented from being deductible by a specific provision of the ITAA 1997.

36.   For any deduction to be allowable under section 8-1 of the ITAA 1997, an employee must be able to demonstrate that there is a real and direct connection between an outgoing (in this case, the transport expense) and the gaining of assessable income, so that the outgoing is incidental and relevant to the actual activities that gain assessable income.

37.   Taxation Ruling TR 2021/1 Income tax: when are deductions allowed for employees' transport expenses? (TR 2021/1) sets out when an employee can deduct transport expenses under section 8-1 of the ITAA 1997.

38.   While expenses for travel will only be deductible if they satisfy the requirements of section 8-1, the following factors (based on relevant case law) would support a characterisation of transport expenses as being incurred in gaining or producing assessable income:

•         the travel fits within the duties of employment, that is, the obligation to incur transport expenses arises out of the employment itself and not the employee's personal circumstances;

•         the travel is relevant to the practical demands of carrying out the employee's work duties or role, that is, the transport expenses are a necessary consequence of the employee's income-producing activity.

39.   With limited exceptions, an employee's cost of travelling between home and a regular place of work are not deductible as such costs are not incurred in the course of gaining or producing an employee's assessable income. Further, transport costs incurred when travelling between an employee's home and their regular place of work are private in nature. Lunney v Commissioner of Taxation [1958] HCA 5 (Lunney) is the leading judicial decision on this matter.

40.   Most employees have a regular place of work, being a usual or normal place where an employee starts and finishes their work duties. In most cases, identifying an employee's regular place of work is clear. In circumstances where it isn't clear, it may be necessary to consider in more depth the contract of employment, customary practice, the nature of the work duties, where these duties commence and at what point in time the employee is under the direction and control of their employer in order to determine where the employee's regular place of work is.

41.   In some employment arrangements there may be more than one regular workplace. This may be written into an employment agreement, or it may arise as a matter of practice in the relationship between employee and employer. This second or subsequent place of work would be a regular place of work if it is a normal or routine place where the employee works.

42.   In this case, the employees that reside outside XXX are infrequently requested by the Employer to attend the XXX location for events and strategy days approximately four times per year. This requirement is included in the employment contract. Therefore, the transport expenses that arise due to this request are attributable to the employment itself and not the employee's personal circumstances.

43.   Further, it is not normal or routine for employees that reside outside of XXX to travel to the XXX location. Therefore, the XXX location is not considered a subsequent regular place of work for the employees that reside outside XXX.

44.   The expenses for transport to the XXX location for employees that reside outside of XXX are considered to be incurred in gaining or producing assessable income and would be deductible under section 8-1 of the ITAA 1997 if the employees had incurred those expenses themselves.

45.   The deduction would be a 'once-only deduction' as defined in subsection 136(1) of the FBTAA as no percentage of the expense would be allowable as a deduction in any other year of income. Accordingly, it is considered that paragraph 24(1)(b) or 52(1)(b) of the FBTAA is satisfied.

Reduction of taxable value

46.   Paragraphs 24(1)(ba) and 52(1)(ba) of the FBTAA requires the notional deduction to exceed nil and provides the formula for calculating it:

•         GD (gross deduction) which is the amount of the expense that an employee would be entitled to under section 8-1 of the ITAA 1997 if they incurred the expenses (in this case, being the entire amount of the expenses for travel); minus

•         RD, which in the present case is nil, given that there is no recipient's portion in relation to the expense payment.

47.   In this case, the notional deduction is the entire amount of the expenses for travel as there is no recipient's portion. Therefore, as the notional deduction exceeds nil, paragraph 24(1)(ba) or 52(1)(ba) of the FBTAA is satisfied.

Employee Declaration Requirement

48.   Subparagraphs 24(1)(c) - (f) and 52(1)(c) - (e) outline the employee declaration requirements that must be met under various scenarios before the taxable value of an expense payment fringe benefits or a residual fringe benefit can be reduced.

49.   An exemption from the employee declaration requirements is available for exclusive employee expense payment benefits and exclusive employee residual benefits under subparagraphs 24(1)(c)(i) and 52(1)(c)(1) of the FBTAA. Under subsection 136(1) of the FBTAA, an 'exclusive employee expense payment benefit' means an expense payment fringe benefit where the recipient's expenditure is exclusively incurred in gaining or producing salary or wages of the recipient in respect of the employment to which the fringe benefit relates and is not expenditure in respect of interest. Similarly, an 'exclusive employee residual benefit' is defined as a residual fringe benefit where, if the recipient had incurred expenditure in respect of the provision of the recipients benefit, that expenditure would have been exclusively incurred in gaining or producing salary or wages of the recipient in respect of the employment to which the fringe benefit relates.

50.   In this case, the expenses incurred by the employees that reside outside XXX in relation to the transport to the head office are wholly work-related. That is, the travel is undertaken exclusively in gaining or producing the employee's salary or wages and therefore, an employee declaration is not required before the taxable value of expense payment fringe benefits or residual fringe benefits can be reduced.

Calculating Taxable Value

51.   Once the requirements of subparagraphs 24(1)(a) - (f) or 52(1)(a) - (e) of the FBTAA are satisfied, the taxable value of the expense payment fringe benefit or residual fringe benefit is calculated in accordance with the formula that appears beneath paragraphs 24(1)(f) and 52(1)(e) of the FBTAA.

52.   In this case, subparagraph 24(1)(g) or 52(1)(f) of the FBTAA applies, that is, the notional deduction calculated at subparagraph 24(1)(ba) or 52(1)(ba) of the FBTAA (the entire amount of the transport expenses) is subtracted from the taxable value of the expense payment fringe benefit or residual fringe benefit provided (the value of the transport expenses being provided) resulting in the taxable value of the benefits being reduced to nil.

Question 2: Can the taxable value of the accommodation and food and drink expenses paid for or reimbursed by the Employer be reduced under section 52 or section 24 of the FBTAA (the "otherwise deductible rule") when an employee that resides outside XXX is required to travel and stay away from their usual residence overnight on an infrequent basis to the XXX head office at the direction of the Employer?

Summary

53.   If the expenses for accommodation and food and drink had been incurred by the employees that reside outside XXX, they would be regarded as having been incurred in the gaining and producing of assessable income and would therefore be deductible. Accordingly, the taxable value of the expense payment fringe benefit may be reduced in accordance with the "otherwise deductible rule" (ODR) under section 52 or section 24 of the FBTAA.

Detailed reasoning

54.   As detailed above, where the Employer pays for or reimburses the employee for accommodation and food and drink expenses incurred while undertaking travel as directed by the Employer, it is considered an 'expense payment fringe benefit' or a 'residual fringe benefit' as defined in subsection 136(1) of the FBTAA.

55.   The taxable value of the expense payment fringe benefit or residual fringe benefit can be reduced, potentially to nil, if the ODR requirements are satisfied.

56.   Where an employee would not be able to claim a deduction under section 8-1 of the ITAA 1997 for the hypothetical expenditure, the Employer will not be able to use the ODR in section 52 or section 24 of the FBTAA to reduce the taxable value of the expense payment fringe benefit.

Reduction of taxable value - otherwise deductible rule

57.   Similar to paragraph 33, the benefit of accommodation and food and drink expenses paid for or reimbursed by the Employer is an 'expense payment fringe benefit' or a 'residual fringe benefit' as defined in subsection 136(1) of the FBTAA. The recipient of these benefits is an employee of the Employer. Accordingly, it is considered that paragraph 24(1)(a) or 52(1)(a) of the FBTAA will be satisfied.

Deductibility of expenses for accommodation and food and drinks

58.   Similar to paragraph 34, paragraphs 24(1)(b) and 52(1)(b) of the FBTAA applies where, if the employee had, at the time the employee's expenditure was incurred, incurred and paid that expenditure (the gross expenditure), they would have been entitled to a once-only deduction in respect of the gross expenditure.

59.   Entitlement to an income tax deduction is determined by section 8-1 of the ITAA 1997. Taxation Ruling TR 2021/4: Income tax and fringe benefits tax: employees: accommodation and food and drink expenses, travel allowances, and living-away-from-home allowance (TR 2021/4) sets out the deductibility of accommodation and food and drink expenses.

60.   An employee can only deduct accommodation and food and drink expenses under section 8-1 of the ITAA 1997 to the extent that:

•         they incur the expenses in gaining or producing their assessable income

•         the expense is not of a capital, private or domestic nature

•         the expense is not incurred in gaining or producing exempt income or non-assessable non-exempt income, and

•         a provision of the ITAA 1997 does not prevent it from being deducted.

61.   Accommodation and food and drink expenses are ordinarily private or domestic in nature and are generally not deductible under section 8-1 of the ITAA 1997. This includes the costs an employee incurs to maintain their usual residence and of consuming food and drink to go about their daily activities. For the purposes of TR 2021/4, such expenses are referred to as 'living expenses'.

62.   However, where an employee travels and stays away from their usual residence overnight in the course of performing their income-producing activities and incurs accommodation and food and drink expenses, these expenses will generally be deductible under section 8-1 of the ITAA 1997. For the purposes of TR 2021/4, an employee who stays away from their usual residence overnight in the course of performing their income-producing activities will be referred to as 'travelling on work'.

63.   The employees that reside outside XXX are infrequently directed to travel to the XXX Location requiring them to stay away from their usual residences overnight. The travel is relevant and necessary to the employees performing their duties. Therefore, the expenses for accommodation and food and drink are considered incurred in gaining or producing the employee's assessable income and would be deductible under section 8-1 of the ITAA 1997 if the employees had incurred those expenses themselves.

64.   The deduction would be a 'once-only deduction' as defined in subsection 136(1) of the FBTAA as no percentage of the expense would be allowable as a deduction in any other year of income. Accordingly, it is considered that paragraph 24(1)(b) or 52(1)(b) of the FBTAA is satisfied.

Reduction of taxable value

65.   Similar to paragraph 47, as the notional deduction exceeds nil, paragraph 24(1)(ba) or 52(1)(ba) of the FBTAA is satisfied

Employee Declaration Requirement

66. Similar to paragraph 50, expenses incurred by the employees that reside outside XXX in relation to the accommodation and food and drink expense when working at the XXX location are wholly work-related. That is, the accommodation and food and drink expenses are incurred exclusively in gaining or producing the employee's salary or wages and therefore, an employee declaration is not required before the taxable value of expense payment fringe benefits or residual fringe benefits can be reduced.

Calculating Taxable Value

67. Similar to paragraph 52, subparagraph 24(1)(g) or 52(1)(f) of the FBTAA applies, that is, the notional deduction calculated at subparagraph 24(1)(ba) or 52(1)(ba) of the FBTAA (the entire amount of the accommodation and food and drink expenses) is subtracted from the taxable value of the expense payment fringe benefit or residual fringe benefit provided (the value of the accommodation and food and drink expenses being provided) resulting in the taxable value of the benefits being reduced to nil.

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