Edited version of private advice

Authorisation Number: 1052334760359

Date of advice: 4 April 2025

Ruling

Subject: Fringe benefit tax - living-away-from-home allowance

Question 1

Is FBT payable by the organisation on the following benefits provided to employees who work on short term assignments under the organisation's 'Deployment Program':

a)            Accommodation, flights and other transport (collectively, Program Benefits), and

b)            Subsistence Travel Allowance.

Answer 1

a)            Yes

b)            Yes

Question 2

Is FBT payable on alternate types of accommodation provided to employees who work on short-term assignments under the organisation's 'Deployment Program' where there are limited types of accommodation available in regional or rural locations in Australia?

Answer 2

Yes.

Question 3

Is FBT payable by the organisation on the Program Benefits and the Subsistence Travel Allowance provided to employees under the 'Deployment Program' who are on subsequent deployments at the same location?

Answer 3

Yes.

Question 4

Is FBT payable by the organisation on the Accommodation, Flights and Other Transport Benefits, and Subsistence Travel Allowance (collectively referred to as, 'general business travel benefits') provided to employees required to undertake short-term travel as part of the routine business needs of the organisation, under the same rules and conditions as the 'Deployment Program'?

Answer 4

No.

Question 5

If the employees on short term assignments under the organisation's 'Deployment Program' are not considered to be "travelling on work" in Questions 1-4:

a)            Are the daily subsistence allowances paid to employees living-away-from-home allowance (LAFHA) benefits under subsection 30(1) of the FBTAA?

b)            Is the provision of accommodation to these employees an exempt fringe benefit under section 21 or section 47(5) of the FBTAA?

Answer 5

a)            Yes

b)            Yes

This ruling applies for the following periods:

FBT Year Ending 31 March 20XX

FBT Year Ending 31 March 20XX

FBT Year Ending 31 March 20XX

FBT Year Ending 31 March 20XX

FBT Year Ending 31 March 20XX

The scheme commenced on:

1 April 20XX

Relevant facts and circumstances

This private ruling is based on the facts and circumstances set out below. If your facts and circumstances are different from those set out below, this private ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.

The organisation recently launched the Program to provide support to entities that are experiencing a shortage of workers, especially those covering regional and rural areas.

A dedicated team of staff arrange travel of personnel to fill short term worker vacancies.

The team is also responsible for arranging all benefits to be provided to employees (accommodation and transport) and coordinates the calculation, processing and payment of the subsistence travel allowance to each employee while on deployment under this Program.

Deployment Request: Where insufficient resources are available within an entity, they can request the team to arrange for an employee to be made available to provide services for a short-term fixed period. Current deployment opportunities are then listed on the Program's website where applicants can then apply for the deployment position. The team selects an employee with the skills required, to travel on work and perform their employment duties at the entity as agreed upon. Further, the team will be responsible for organising the Program Benefits and Subsistence Travel Allowance for each and every employee on deployment under the Program. The team is also responsible for tracking and monitoring employees while they are on placement.

Conditions of Deployment: Employees are required to travel from their usual place of residence and usual place of employment. The team selects the location where the employee is needed and will send the selected employee on placement to that location. Per policy, thirteen weeks or up to 91 days is the maximum allowed length of time for a deployment. Furthermore, employees on placement are generally not accompanied by family members and the organisation does not reimburse any costs associated to family members.

A 'Welcome Letter' is provided to each successful candidate that they are being deployed to. A 'Deployment Information' guide is also provided to each worker who accepts a deployment position.

Accommodation in hotels or motels is arranged on behalf of employees on placement for the fixed period of placement. This is paid for by the team and will not require the employee to incur out-of-pocket expenses for accommodation. Where this is unavailable, the accommodation will be serviced apartments and Airbnb or accommodation owned or leased by the entity.

Flights to and from the placement location (where required) will be arranged for and booked on behalf of the employees with fixed dates for departure and return.

Employees may be provided with a hire car to enable the employee to drive to the deployment location or for use while on placement. Car hire will be arranged by the team for an employee.

In some deployment locations, the organisation may provide one of their fleet vehicles to the employee for them to use while they are working within their Program.

Employees may be reimbursed where they use their own vehicle to travel to the deployment location. This rate is governed by the organisation's Travel Policy.

Subsistence Travel Allowance: A daily subsistence travel allowance will be provided to cover the cost of breakfast, lunch and dinner, and incidentals of an employee whilst on placement. The eligibility and amount of allowance to be provided to an employee is governed by the organisation's Travel Policy.

Assumptions

In order to meet the substantiation requirements, you will obtain Living-away-from-home declaration - employees who maintain an Australian home - section 31 (NAT 74716) from employees by the relevant declaration due date.

Relevant legislative provisions

Fringe Benefit Tax Assessment Act 1986, section 7

Fringe Benefit Tax Assessment Act 1986, section 20

Fringe Benefit Tax Assessment Act 1986, section 24

Fringe Benefit Tax Assessment Act 1986, section 30

Fringe Benefit Tax Assessment Act 1986, section 52

TR 2021/1 Income tax: when are deductions allowed for employees' transport expenses?

TR 2021/4 Income tax and fringe benefits tax: employees: accommodation and food and drink expenses travel allowances, and living-away-from-home allowances

PCG 2021/3 Determining if allowances or benefits provided to an employee relate to travelling on work or living at a location - ATO compliance approach

Issue

Fringe Benefits Tax - Living-away-from-home allowance

Question 1

Is FBT payable by the organisation on the following benefits provided to employees who work on short term assignments under the 'Deployment Program':

a)            Accommodation, flights and other transport (collectively, Program Benefits), and

b)            Subsistence Travel Allowance.

Summary

Yes,FBT is payable by the organisation on benefits provided to employees who work on short term assignments under the 'Deployment Program.'

Detailed reasoning

Question 1(a). Treatment of the program benefits whilst on deployment

Under the Program, the organisation will make a payment on behalf of an employee to a third party, directly incur expenses or reimburse the employee for their accommodation, flight expenses and other travel expenses in respect of their short-term deployment.

Where an employer pays a third party to satisfy a debt incurred by an employee or reimburses an employee for expenses they incur, an expense payment benefit arises under section 20 of the Fringe Benefits Tax Assessment Act 1986 (Cth) (FBTAA). Therefore, the payment or reimbursement of an employee's accommodation, flights and other transport expenses would constitute an expense payment fringe benefit.

Where an employer provides a benefit directly to an employee, this will be considered to be a residual fringe benefit as per section 45 of the FBTAA. As such, the direct payment by the organisation to provide accommodation, flights and other transport benefits to an employee would constitute a residual fringe benefit.

The taxable value of an expense payment fringe or residual fringe benefit may be reduced in accordance where the expense is considered 'otherwise deductible' (ODR). It must therefore be determined whether the nature of the travel is deductible for income tax purposes.

Paragraph 42 of TR 2021/4 Income tax and fringe benefits tax: employees: accommodation and food and drink expenses, travel allowances, and living-away-from-home allowances sets out key indicators which would indicate whether an employee is living at a location away from their usual residence or travelling on work:

•                     Whether there is a change in the employee's regular place of work.

•                     The length of the overall period the employee will be away from their usual residence

•                     The nature of the accommodation

•                     Whether the employee is, or can be, accompanied by or visited by family or friends.

Each of these factors is considered in further detail below.

Change in the employee's regular place of work

Paragraph 45 of TR 2021/4 outlines that where there is a change in the employee's regular place of work and the employee incurs accommodation and meal expenses to be closer to their new regular place of work, the employee will be living at that new location away from their usual residence.

Conversely, where there is no change in the employee's regular place of work and the employee incurs accommodation and food and drink expenses when they temporarily attend and stay overnight at another location in the course of carrying out their income-producing activities, the employee will not be living at the location they visit and work at temporarily (paragraph 46 of TR 2021/4).

The Commissioner's view of the concept of 'regular place of work' is outlined in paragraphs 24 - 38 of Taxation Ruling TR 2021/1: Income tax: when are deductions allowed for employees' transport expenses? which states:

25.          Most employees have a regular place of work, being a usual or normal place where the employee starts and finishes their work duties with a particular employer.

26.          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.

32.          ...In situations where it is difficult to conclude whether a second or subsequent place of work is also a regular place of work, an actual or anticipated duration of three months or more at the location would usually be sufficient for the location to amount to a regular place of work.

The length of the period away

Paragraph 48 explains that the 'length of period away' means the overall period of time the employee spends living at a particular location for work. Where an employee is living at one location for work for an extended period, that period is not broken by short trips they take from that location, for example travelling back to their usual residence on weekends or when travelling on work from that location. Generally, the longer an employee spends away from their usual residence for work, the more likely the employee is living at the location.

In relation to the 'length of period away' from their usual place of residence and the amount of time spent at the placement location is not indicative of the employee relocating to establishing residence at the location of the placement. An employee generally will not establish residence and be living at a location away from their usual residence where the overall period that they stay away from their usual residence in the course of performing their income-producing activities is reasonably short.

The nature of the accommodation

Paragraphs 56 and 58 explains that the nature of an employee's accommodation is relevant but does not determine whether the employee is living at a location away from their usual residence. Generally, where an employee works away from home for a considerable period and, for that period, stays in accommodation generally used for longer term accommodation (such as a house, unit, apartment or caravan), this would support a view that they are living at a location away from their usual residence.

Paragraph 59 of TR 2021/4 notes that the use of short-term accommodation such as hotels and motels located close to the temporary work location is generally an indication that the employee is travelling on work.

Whether the employee is, or can be, accompanied by family or visited by family and friends

Paragraph 60 provides that an employee who is living at a location away from their usual residence can generally be accompanied or visited by their family and friends. However, if an employee cannot be accompanied by family or visited by family and friends, this tends to indicate that the employer retains a degree of control over the employee outside their standard workday and which may contribute to an overall impression that the employee is travelling on work during this period.

Application to your circumstances

There is a change in the employee's regular place of work when undertaking a deployment at a regional location. The deployment program was advertised and employees voluntarily applied to undertake the roles. A welcome letter was provided on commencement of the program outlining the specific role of the employees. The employees incur accommodation and meal expenses to be closer to their new regular place of work, the employees are living at that new location away from their usual residence.

An individual deployment will be for a maximum of up to 91 days, which is considered to be a relatively long period.

The employees stay in short term accommodation and families do not accompany employees on the deployment program. These factors are indicative of travel not living away from home.

Weighing up the four factors above and considering their application to the facts, it is our view that employees deployed under the Program are living at a location away from their usual residence and are not travelling on work.

Therefore, the taxable value of any expense reimbursements, payments made or benefits provided in respect of accommodation and transport that has been incurred by an employee whilst traveling on business for the organisation under the Program cannot be reduced to nil by the otherwise deductible rule under Section 24 or Section 52 of the FBTAA.

Practical Compliance Guideline 2021/3

Under PCG 2021/3, The Commissioner will accept that an employee is travelling on work and will generally not apply compliance resources to determine if benefits received relate to expenses for living at a location when all of the following circumstances are satisfied:

Table 1: Conditions of Deployment Program

Based on the PCG 2021/3 factors above, the Commissioner will accept that employees deployed as part of the Deployment Program will be travelling on work if the deployment is for 21 days or less or less than 90 days in total in an FBT year.

Question 1(b). Treatment of the Subsistence Travel Allowance whilst on deployment

Is the allowance a Living Away From Home Allowance (LAFHA) and subject to FBT?

A daily subsistence travel allowance will be provided to cover the cost of meals (breakfast, lunch and dinner) and incidentals of an employee whilst on placement.

TR 2021/4 explains the criteria for determining whether an allowance is a travel allowance or a living-away-from home allowance (LAFHA) fringe benefit. Specifically, a:

•                     travel allowance is included in an employee's assessable income under the ITAA 1997, and

•                     LAFHA is a fringe benefit which is non-assessable non-exempt income in the hands of the employee and may give rise to FBT which is paid by the employer.

Subsection 30(1) of the FBTAA sets out the circumstances in which an allowance paid by an employer to an employee will qualify as a LAFHA benefit, and states:

Where:

(a)           at a particular time, in respect of the employment of an employee of an employer, the employer pays an allowance to the employee; and

(b)           it would be concluded that the whole or a part of the allowance is in the nature of compensation to the employee for:

(i)            additional expenses (not being deductible expenses) incurred by the employee during a period; or

(ii)           additional expenses (not being deductible expenses) incurred by the employee, and other additional disadvantages to which the employee is subject, during a period; by reason that the duties of that employment require the employee to live away from his or her normal residence; the payment of the whole, or of the part, as the case may be, of the allowance constitutes a benefit provided by the employer to the employee at that time.

In summary, there are three conditions that must be met for a payment to an employee to be considered a LAFHA benefit:

The payment is an allowance an employer pays an employee in respect of the employment of that employee.

The duties of their employment require the employee to live away from their normal residence.

The whole or part of the allowance is in the nature of compensation to the employee for:

•                     non-deductible additional expenses an employee might be expected to incur, or

•                     non-deductible additional expenses an employee might be expected to incur and other disadvantages suffered, because the duties of an employee's job require them to live away from their normal residence.

Each of these conditions is considered further below.

Is the payment an allowance you make to the employees in respect of their employment?

A payment is an allowance when a person is paid a definite predetermined amount to cover an estimated expense. It is paid regardless of whether the recipient incurs the expected expense. The recipient has the discretion whether or not to expend the allowance[1].

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

'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.

Based on the information provided, the employees meet the definition of current employee because they receive salary or wages from you from which an amount must be withheld.

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'.

In J & G Knowles v Commissioner of Taxation [2000] FCA 196, 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'.

In this situation, payment of the allowances to the employees is sufficiently and materially connected to the employment of the respective employees, and as such, would be considered to have been provided 'in respect of' their employment'

Therefore, payment of the allowances to the employees was made in respect of their employment, thus satisfying the first condition (paragraph (a) of subsection 30(1) of the FBTAA).

Do the duties of employment require the employees to live away from their normal residences at the time the allowance is paid?

'Normal residence'

'Normal residence' is defined in subsection 136(1) of the FBTAA as the employee's usual place of residence, when the employee's usual place of residence is in Australia.

The FBTAA does not provide a separate definition of the term 'usual place of residence'.

However, subsection 136(1) of the FBTAA defines 'place of residence' to mean:

(a)           a place at which the person resides; or

(b)           a place at which the person has sleeping accommodation;

whether on a permanent or temporary basis and whether or not a shared basis.

In the absence of a legislative reference, it is relevant to refer to the ordinary meaning of the word 'usual'. The Macquarie Dictionary defines 'usual' to mean 'habitual or customary...'.

'Living away from usual residence'

Question 1(a) required an analysis of the various factors in paragraph 42 of TR 2021/4, where we concluded that the duties of the employees' employment require them to live away from their normal residence. As such, the second condition in subsection 30(1) of the FBTAA is satisfied.

Is the allowance paid wholly or partly to compensate the officers for additional, non-deductible expenses incurred because of the requirement to live away from their normal residence?

The third condition requires that an allowance should be paid to compensate for additional non-deductible expenses. 'Therefore, we need to determine whether the allowances paid to the employees are tax deductible expenses.

Subsection 136(1) of the FBTAA provides the definition of deductible expenses as:

deductible expenses, in relation to an allowance paid to an employee, means expenses incurred by the employee in respect of which a deduction is allowable to the employee under section 8-1 of the Income Tax Assessment Act 1997 (ignoring Divisions 28, 32 and 900 of that Act).

According to section 8-1 ITAA 1997, you can deduct a loss or outgoing if it is incurred in producing your assessable income except where the outgoing is of a capital, private or domestic nature.

Paragraph 7 of TR 2021/4 outlines that the term 'incurred in gaining or producing assessable income' means incurred 'in the course of gaining or producing assessable income'. For an expense to be incurred in gaining or producing assessable income it is both sufficient and necessary that the occasion of the expense should be found in whatever is productive of assessable income.

Paragraph 8 of TR 2021/4 states that when determining what is productive of an employee's assessable income, consideration should be given to the scope of the employee's income-producing activities.

Paragraphs 9 and 10 of TR 2021/4 differentiate 'living expenses' and expenses incurred while 'travelling on work'

Accommodation and food and drink expenses are ordinarily private or domestic in nature and are generally not deductible under section 8-1. 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 this Ruling, such expenses will be referred to as 'living expenses.

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. For the purposes of this Ruling, 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'.

When the employees are required to travel, the organisation provides a daily subsistence travel allowance. It is stated that the travel allowance is in the nature of compensation for additional expenses of food expenses incurred because the employees are required to live away from his or her usual place of residence to perform the duties of employment. The employees will not be able to claim an income tax deduction for their meal expenses as these types of expenses are private in nature; that is, they are non-deductible expenses and they do not come within the definition of deductible expenses in subsection 136(1) of the FBTAA.

As a result, it is concluded that the allowances are paid to compensate for additional 'non-deductible' expenses and therefore the third condition in subsection 30(1) of the FBTAA is satisfied.

Conclusion

Based on consideration of the above factors, the Commissioner considers that the employees are living at a location away from their usual residence. Therefore, the meal expenses incurred are living expenses and not deductible. Further, these expenses were incurred because the duties of employment of the deployment program required them to live away from their usual residence.

As all three conditions outlined in subsection 30(1) of the FBTAA have been met, the daily subsistence allowance that is paid to an employee while on deployment under this Program are considered LAFHA benefits.

Question 2

Is FBT payable on alternate types of accommodation provided to employees who work on short-term assignments under the 'Deployment Program' where there are limited types of accommodation available in regional or rural locations in Australia?

Summary

Yes, FBT is payable on alternate types of accommodation provided to employees who work on short-term assignments under the 'Deployment Program' where there are limited types of accommodation available in regional or rural locations in Australia.

Detailed reasoning

Serviced apartments, Airbnb or accommodation owned or leased by the entity are 'longer term' accommodation which further supports the conclusion in Question 1 that the employees are living at a location away from their usual residence when undertaking the Deployment Program. The employees are not travelling on work.

Question 3

Is FBT payable by the organisation on the Program Benefits and the Subsistence Travel Allowance provided to employees under the 'Deployment Program' who are on subsequent deployments at the same location?

Summary

Yes, FBT is payableon the Program Benefits and the Subsistence Travel Allowance provided to employees under the 'Deployment Program' who are on subsequent deployments at the same location.

Detailed reasoning

The Program does allow an employee to apply for another deployment opportunity, but this application and any subsequent deployment would only occur after the employee returns back to their home location. There is no extension of the deployment past the 13 weeks as the entity would need to offer a permanent position to the relevant employee.

A subsequent deployment to the same location based on the same facts as outlined in Question 1 would result in a conclusion consistent with the reasoning in Question 1. FBT would be payable on the Program Benefits and Subsistence Travel Allowance as the employees are living away from their usual residence and not travelling on work.

The exception would be if the requirements of PCG 2021/3 are satisfied and the period(s) of the deployment were less than 21 continuous days or less than 90 days in total in the FBT year the deployment would be accepted as travel on work.

Question 4

Is FBT payable by the organisation on the Accommodation, Flights and Other Transport Benefits, and Subsistence Travel Allowance (collectively referred to as, 'general business travel benefits') provided to employees required to undertake short-term travel as part of the routine business needs of the organisation, under the same rules and conditions as the 'Deployment Program'?

Summary

FBT would not be payable on general business travel benefits provided to employees required to undertake short-term travel as part of the routine business needs of the organisation, where the travel is required by the organisation as part of the duties of the employee's employment.

Detailed reasoning

You advised 'general business travel benefits' are provided to support employees while travelling for work as required by the organisation as part of the duties of their employment.

Paragraph 16 of TR 2021/1 provides that the following factors 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.

Whether the travel is relevant to the practical demands of carrying out the employee's work duties or role must be determined on a case by case basis considering the role, duties and nature of the travel.

Where employees are travelling 'on work' the accommodation, flights, and other transport expenses provided or reimbursed to the employees are 'otherwise deductible.' The taxable value of any expense reimbursements, payments made or benefits provided in respect of accommodation and transport that has been incurred by an employee whilst traveling on business for the organisation would be reduced to nil under section 24 or section 52 of the FBTAA.

The subsistence travel allowance paid to an employee while travelling 'on work' would constitute a Travel Allowance, which would be assessable income of the employee and will not fall under the FBT regime.

Question 5

If the employees on short term assignments under the Program are not considered to be "travelling on work" in Questions 1-3:

a.            Are the daily subsistence allowances paid to employees a living-away-from-home allowance (LAFHA) benefits under subsection 30(1) of the FBTAA?

b.            Is the provision of accommodation to these employees an exempt fringe benefit under section 21 or section 47(5) of the FBTAA?

Reason for decision

Question 5(a) Daily subsistence allowance

As considered in Question 1(b) all three conditions outlined in subsection 30(1) of the FBTAA have been met, therefore the daily subsistence allowance that is paid to an employee while on deployment under the Program are considered LAFHA benefits.

Question 5(b) Accommodation

Where the organisation pays a third party to satisfy a debt incurred by an employee in relation to their accommodation or reimburses an employee for expenses they incur in respect of their accommodation, an expense payment benefit arises under section 20 of the FBTAA. Alternatively, where the organisation makes a direct payment to provide accommodation to an employee, this would constitute a residual fringe benefit as per section 45 of the FBTAA. As such, depending on how the accommodation is provided to an employee under the Program, either section 21 or section 47(5) of the FBTAA are the relevant provisions to consider, when assessing if there is a FBT exemption that applies to the provision of this accommodation.

Where an employee does not satisfy the conditions under either section 21 or section 47(5) of the FBTAA, the accommodation provided to employees under the Program would be a taxable expense payment or taxable residual fringe benefit.

Section 21 of the FBTAA provides that accommodation provided by an employer to an employee is an exempt fringe benefit where the following conditions are met:

(a)           an expense payment benefit is provided in a year of tax to a current employee of an employer in respect of his or her employment; and

(b)           the recipients expenditure is in respect of accommodation for eligible family members; and

(ba)        (ba) the accommodation is not provided while the employee is undertaking travel in the course of performing the duties of that employment; and

(c)           the accommodation is required solely because the duties of that employment require the employee to live away from his or her normal residence; and

(d)           the employee satisfies:

(i)            sections 31C (about maintaining an Australian home) and 31D (about the first 12 months); or

(ii)           section 31E (about fly-in fly-out and drive-in drive-out requirements); and

(e)           the employee gives to the employer, before the declaration date, a declaration, in a form approved by the Commissioner, purporting to set out:

(i)            if the employee satisfies sections 31C and 31D--- the matters in subparagraphs 31F(1)(a)(i) to (iii); or

(ii)           if the employee satisfies section 31E--the matters in subparagraphs 31F(1)(b)(i) to (iii)

We consider each of these conditions in further detail below.

Paragraph 21(a)

The reimbursement to an employee or the payment to a third party for expenses in relation accommodation for an employee is an expense payment benefit. As this accommodation is provided to an employee by their employer, the organisation, while the employee undertakes duties of their employment, this accommodation is provided in respect of their employment.

Paragraph 21(b)

Based on section 136 of the FBTAA, where accommodation is being provided in relation to an employee whose duties of employment require the employee to live away, for a period, from his or her normal residence, the term 'eligible family members' includes the employee.

As family are not allowed to travel with an employee under the Program, the accommodation is provided solely to the employee, who is an 'eligible family member'.

Paragraph 21(ba)

The Commissioner's view is that employees are not travelling in the course of performing the duties of their employment when on the Deployment Program, therefore this requirement is satisfied.

Paragraph 21(c)

The duties of employment of an employee deployed under this Program, require the employee to live away from their normal place of residence for a finite period of time (i.e. up to 91 days/13 weeks). The accommodation that is provided to an employee while on deployment under this Program is solely required to enable the employee to live at or near the location where they are required to provide their duties of employment during their temporary assignment. Therefore this requirement is satisfied.

Paragraph 21(d)

Paragraph 21(d) states that the employee must satisfy section 31C and 31D, or section 31E of the FBTAA. In this case, section 31C and 31D are the relevant sections that need to be satisfied.

In relation to section 31C, this requires an employee to maintain a home in Australia in which the employee (or their spouse) has an ownership interest in and there is an expectation that the employee will resume living at that place once the duties of their employment no longer require the employee to live away from it. This must be determined on a case by case basis, however, is assumed to be satisfied for the purpose of this ruling. Where an employee does not satisfy this requirement, the accommodation is a taxable fringe benefit.

In relation to section 31D, this requires that the accommodation provided relates to the first 12 months that the duties of employment require the employee to live away from their normal residence. As discussed in the "Facts Describing the Scheme or Circumstance," thirteen weeks or up to 91 days is the maximum allowed length of time an employee would be deployed under the Program. As such, the accommodation arrangements would relate to the first 12 months that the duties of employment require an employee to live away from their normal residence, so the section 21(d) requirements would be satisfied.

Paragraph 21(e)

Paragraph 47(5)(d)(ii) requires a declaration to be given to the employer before the declaration date.

Where the organisation obtains the relevant declaration from each relevant employee by the required declaration date paragraph 21(e) will be satisfied.

In conclusion, on the basis that all of the requirements under section 21 of the FBTAA would be met, the provision of accommodation to employees who meet these requirements would be exempt from FBT.

Subsection 47(5) of the FBTAA operates to treat a residual fringe benefit as an exempt fringe benefit in the same way as section 21 does for expense payment fringe benefits. As such, where the provision of accommodation to employees under the Program is a residual fringe benefit and the requirements under subsection 47(5) of the FBTAA are met, the provision of accommodation to employees who meet these requirements would be exempt from FBT.

[1] Taxation Ruling TR 1992/15 (Paragraph 2).

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