Edited version of private ruling

Authorisation Number: 1011762741387

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Ruling

Subject: Exempt Benefits pursuant to sections 58P and 47 of the Fringe Benefits Tax Assessment Act 1986

Issue 1

Question 1

Whether food and drink provided to employee attendees at annual events held off business premises are exempt benefits under section 58P of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)?

Answer: Yes

Question 2

Whether food and drink provided to employee attendees at award presentations held off business premises are exempt benefits under section 58P of the FBTAA?

Answer: Yes

Question 3

Whether food and drink provided to employee attendees at award presentations held on business premises are exempt benefits under section 58P of the FBTAA?

Answer: Yes

Question 4;

Whether food and drink provided to employee attendees at graduation ceremonies held off business premises are exempt benefits under section 58P of the FBTAA?

Answer: Yes

Issue 2

Question

Whether the provision of new LCD televisions in lunch rooms on business premises are exempt benefits under section 47 of the FBTAA?'

Answer: Yes

This ruling applies for the following periods

1 April 2011 to 31 March 2012

1 April 2012 to 31 March 2013

1 April 2013 to 31 March 2014

1 April 2014 to 31 March 2015

1 April 2015 to 31 March 2016

The scheme commenced on

1 April 2011

Relevant facts

The employer is a tax-exempt body.

Scenario A - Annual Events

The annual events are held off business premises.

Attendees are current and retired employees and associates of current and former employees.

The food and drink provided usually comprises tea, coffee, orange juice, wraps and sandwiches.

The cost of the food and drink for each attendee is always less than $300.

The food and drink are provided in premises not belonging to the employer.

The events are held on a working day.

Scenario B - Award Presentations not held on employer premises

The award presentations are not be held on premises belonging to the employer.

The award presentations are held annually.

The awardees are presented with certificates.

Attendees are the awardees and other employees together with members of the families of the awardees.

The food and drink provided usually comprises tea, coffee, orange juice, wraps and sandwiches.

The cost of the food and drink for each attendee is always less than $300.

The food and drink are provided on premises not belonging to the employer.

The award presentations are held on a working day.

Scenario C - Award Presentations held on employer premises

The award presentations are held on premises belonging to the employer.

The award presentations are held annually.

The awardees are presented with certificates.

Attendees are the awardees and other employees together with members of the families of the awardees.

The food and drink provided usually comprises tea, coffee, orange juice, wraps and sandwiches.

The cost of the food and drink for each attendee is always less than $300.

The food and drink are provided on premises belonging to the employer.

The award presentations are held on a working day.

Scenario D - Graduation Ceremonies

The ceremonies are for graduates of the employer's training programs.

The graduation ceremonies are not be held on premises belonging to the employer.

The graduation ceremonies are held annually.

Attendees are the awardees and other employees together with members of the families of the awardees.

The food and drink provided comprises a morning tea.

The cost of the food and drink for each attendee is always less than $300.

The morning tea is provided on premises not belonging to the employer.

The graduation services are held on a working day.

Scenario E - LCD TV in Business Premises Lunch Room

New LCD televisions (TVs) are provided in some business premises lunch rooms by the employer for use by its employees.

The TVs remain the property of the employer.

Relevant legislative provisions

Fringe Benefits Tax Assessment Act 1986 Section 38

Fringe Benefits Tax Assessment Act 1986 Section 40

Fringe Benefits Tax Assessment Act 1986 Section 43

Fringe Benefits Tax Assessment Act 1986 Section 45

Fringe Benefits Tax Assessment Act 1986 Section 58P

Fringe Benefits Tax Assessment Act 1986 Subsection 136(1)

Fringe Benefits Tax Assessment Act 1986 Section 47

Detailed reasoning

Issue 1

Question 1

1. Section 58P of the Fringe Benefits Tax Assessment Act 1986 (FBTAA) provides exemption for 'minor benefits' that meet certain criteria.

2. Section 58P of the FBTAA states:

58P(1) [Tests for exemption]

Where:

(a) a benefit (in this section called a "minor benefit") is provided in, or in respect of, a year of tax (in this section called the "current year of tax") in respect of the employment of an employee of an employer;

(b) ...

(c) ...

(d) in the case of a tax-exempt body entertainment benefit where the provider incurs non-deductible exempt entertainment expenditure that is wholly or partly in respect of the provision of entertainment to the employee or an associate of the employee:

(i) the provision of entertainment to the employee or the associate of the employee, as the case may be:

(A) is incidental to the provision of entertainment to outsiders; and

(B) neither consists of, nor is provided in connection with, the provision of a meal (other than a meal consisting of light refreshments) to the employee or the associate of the employee, as the case may be; or

(ii) the entertainment is provided to the employee or the associate of the employee, as the case may be:

(A) on eligible premises of the employer; and

(B) solely as a means of recognising the special achievements of the employee in a matter relating to the employment of the employee;

(e) the notional taxable value of the minor benefit in relation to the current year of tax is less than $300; and

(f) having regard to:

(i) the infrequency and irregularity with which associated benefits, being benefits that are identical or similar to:

(A) the minor benefit; or

(B) benefits provided in connection with the provision of the minor benefit; have been or can reasonably be expected to be provided;

(ii) the amount that is, or might reasonably be expected to be, the sum of the notional taxable values of the minor benefit and any associated benefits, being benefits that are identical or similar to the minor benefit, in relation to the current year of tax or any other year of tax;

(iii) the amount that is, or might reasonably be expected to be, the sum of the notional taxable values of any other associated benefits in relation to the current year of tax or any other year of tax;

(iv) the practical difficulty for the employer in determining the notional taxable values in relation to the current year of tax of:

(A) if the minor benefit is not a car benefit - the minor benefit; and

(B) if there are any associated benefits that are not car benefits - those associated benefits; and

(v) the circumstances surrounding the provision of the minor benefit and any associated benefits including, but without limiting the generality of the foregoing:

(A) whether the benefit concerned was provided to assist the employee to deal with an unexpected event; and

(B) whether the benefit concerned was provided otherwise than wholly or principally by way of a reward for services rendered, or to be rendered, by the employee;

it would be concluded that it would be unreasonable to treat the minor benefit as a fringe benefit in relation to the employer in relation to the current year of tax;

the minor benefit is an exempt benefit in relation to the current year of tax.

History S 58P(1) amended by No 110 of 2006, s 3 and Sch 1 item 1, by substituting "$300" for "$100" in para (e), applicable in relation to the FBT year starting on 1 April 2007 and later FBT years. S 58P(1) amended by No 76 of 1996.

58P(2) [Associated benefit]

For the purposes of this section, a benefit is an associated benefit in relation to a minor benefit if, and only if:

(a) any of the following subparagraphs applies:

i. the benefit is identical or similar to the minor benefit;

ii. the benefit is provided in connection with the provision of the minor benefit;

iii. the benefit is identical or similar to a benefit provided in connection with the provision of the minor benefit;

(b) the benefit and the minor benefit both relate to the same employment of a particular employee; and

(c) the benefit is not an exempt benefit by virtue of a provision of this Act other than this section.

3. Taxation Ruling TR 2007/12, Fringe benefits tax: minor benefits, provides the following guidance on the application of section 58P of the FBTAA.

8. A minor benefit is an exempt benefit under section 58P where:

· the notional taxable value of the minor benefit is less than $300; and

· it would be concluded that it would be unreasonable, having regard to the specified criteria in paragraph 58P(1)(f), to treat the minor benefit as a fringe benefit.

9. In considering the application of the exemption under section 58P it is necessary to look to the nature of the benefit provided and give due weight to each of the criteria. The weight given to each criterion will also vary depending on the circumstances surrounding the provision of each benefit.

10. Section 58P does not apply to exempt all benefits that have a notional taxable value of less than $300.

11. ...

12. Secondly, where:

· tax-exempt body entertainment is provided, and

· the provider incurs non-deductible exempt entertainment expenditure that is wholly or partly in respect of the provision of entertainment to an employee or an associate of the employee,

such benefits are excluded from consideration for exemption under section 58P, except in two limited circumstances.

13. ...

14. ...

15. ...

16. ...

17. Paragraph 58P(1)(e) places a threshold of 'less than $300'⁵ on the notional taxable value of a minor benefit. This threshold test applies to each benefit provided to an individual employee, and/or each benefit provided to an associate of an employee, to which section 58P may apply. The threshold test is not an upper limit on the total value of minor benefits that any individual employee may receive.

18. ...

19. The words 'infrequency and irregularity' and 'identical or similar' are not defined in the FBTAA and therefore take on their ordinary meaning.

20. In having regard to the criteria contained in paragraph 58P(1)(f), the 'infrequency and irregularity' with which associated benefits have been or can reasonably be expected to be provided (subparagraph 58P(1)(f)(i)) is only one of the criteria that must be considered.

21. Even where identical or similar associated benefits have been provided infrequently and irregularly, it may nonetheless be concluded that it is reasonable to treat the minor benefit as a fringe benefit when consideration is given to the other specified criteria in paragraph 58P(1)(f).

22. In applying the 'infrequency and irregularity' criterion, it is not appropriate to stipulate the maximum number of times associated benefits that are identical or similar to a minor benefit, or benefits in connection with the minor benefit, can be provided before the criterion is not met. However, the more often and regularly those benefits are provided, the less likely it is that this criterion would be met.

4. Therefore, exemption under section 58P of the FBTAA will apply in this particular instance where all of the following requirements are met:

(a) the notional taxable value of the minor benefit is less than $300; and

(b) it is not tax-exempt body entertainment; or

(c) if it is tax-exempt body entertainment, it falls within one or more of the two limited circumstances; and

(d) it would be concluded that it would be unreasonable, having regard to the specified criteria in paragraph 58P(1)(f) of the FBTAA, to treat the minor benefit as a fringe benefit.

(a) notional taxable value less than $300

5. The term 'notional taxable value' is defined in subsection 136(1) of the FBTAA as meaning, as relevant here, the amount that would be the taxable value if it were assumed that the benefit was a fringe benefit. The provision of the food and drink in this particular case would, therefore, otherwise constitute property benefits under section 40 of the FBTAA and their taxable values as external property fringe benefits, as relevant here, would be determined under section 43 of the FBTAA as being, simply, their cost.

6. As the cost of food and drink for each attendee is always less than $300 this requirement is met.

(b) not tax-exempt body entertainment benefits

7. Section 38 of the FBTAA states what constitutes 'tax-exempt body entertainment benefits'. A tax-exempt body entertainment benefit is non-deductible entertainment provided to employees (and their associates) by a tax-exempt body. Only entertainment that is non-deductible for income tax purposes can give rise to this benefit.

8. Taxation Ruling TR 97/17, Income tax and fringe benefits tax: entertainment by way of food or drink, provides the following guidance both on what constitutes entertainment by way of food or drink and how this relates to tax-exempt body entertainment:

6. The definition of 'entertainment' contained in section 32-10 of the [Income Tax Assessment Act 1997], and adopted by the FBTAA in the definition of 'entertainment' in subsection 136(1) [of the FBTAA], does not prescribe that entertainment occurs every time food or drink is provided.

7. In order to determine when the provision of food or drink to a recipient results in the entertainment of that person, an objective analysis of all the circumstances surrounding the provision of the food or drink is required. In making this determination an employer should consider:

· why the food or drink is being provided;

· what type of food or drink is being provided;

· when that food or drink is being provided; and

· where the food or drink is being provided.

Food or drink which is determined by these criteria to constitute entertainment is taken to be 'meal entertainment'.

...

22. Taxation Determination TD 94/55, [Income tax: when does providing an item of property constitute the provision of entertainment within the meaning of [former] subsection 51AE(3) of the Income Tax Assessment Act 1936?, states that in determining whether providing an item of property constitutes entertainment, regard should be had to all the circumstances of the case. In particular, regard should be given to the character of the entertainment to be derived from the item of property provided. The provision of food or drink is the provision of property. However, an objective consideration of the circumstances in which that food or drink is provided is necessary to determine whether it constitutes entertainment.

23. It can be seen that the determination of whether or not the provision of food or drink constitutes entertainment requires an objective analysis of all the circumstances surrounding that provision. We are of the view that the following are relevant factors that should be considered in undertaking any objective analysis:

(a) Why is the food or drink being provided. This test is a 'purpose test'. For example, food or drink provided for the purposes of refreshment does not generally have the character of entertainment, whereas food or drink provided in a social situation where the purpose of the function is for employees to enjoy themselves has the character of entertainment.

(b) What food or drink is being provided. As noted above, morning and afternoon teas and light meals are generally not considered to constitute entertainment. However, as light meals become more elaborate, they take on more of the characteristics of entertainment. The reason for this is that the more elaborate a meal, the greater the likelihood that entertainment arises from the consumption of the meal.

For example, when an employer provides morning or afternoon teas or light meals, that food or drink does not usually confer entertainment on the employee...

(c) When is the food or drink being provided. Food or drink provided during work time, during overtime or while an employee is travelling is less likely to have the character of entertainment. This is because in the majority of these cases food provided is for a work-related purpose rather than an entertainment purpose. This, however, depends upon whether the entertainment of the recipient is the expected outcome of the provision of the food or drink. For example, a staff social function held during work time still has the character of entertainment.

(d) Where is the food or drink being provided. Food or drink provided on the employer's business premises or at the usual place of work of the employee is less likely to have the character of entertainment; refer to the reasons in (b) and (c) above. However, food or drink provided in a function room, hotel, restaurant, cafe, coffee shop or consumed with other forms of entertainment is more likely to have the character of entertainment. This is because the provision of the food or drink is less likely to have a work-related purpose.

...

33. Certain entertainment provided to employees of a tax-exempt employer gives rise to a separate category of fringe benefit known as a 'tax-exempt body entertainment fringe benefit'. It is only entertainment that is non-deductible for income tax purposes (e.g., a meal at a party) that gives rise to a tax-exempt body entertainment fringe benefit. Section 32-20 of the [Income Tax Assessment Act 1997] is ignored for the purposes of determining whether the entertainment expenditure is deductible.

34. ...It should be noted that the exemption from FBT for meals consumed by employees on the employer's business premises does not apply to a tax-exempt body entertainment benefit, as section 41 of the FBTAA only applies to property benefits. Furthermore, a tax-exempt body entertainment benefit that is considered 'minor' will only be exempt if the requirements of paragraph 58P(1)(d) of the FBTAA are met...

...

40. Food or drink that does not amount to meal entertainment does not give rise to tax-exempt body entertainment fringe benefits as described in paragraph 33 above...

9. Further guidance is also provided by Taxation Ruling IT 2675, Income tax and fringe benefits tax: entertainment - morning and afternoon teas; light meals; and in-house dining facilities, which states:

10. If an employer is an income tax-exempt body, expenditure on morning and afternoon tea and light meals is not a fringe benefit under section 38 (income tax-exempt body entertainment benefits) of the FBTAA.

...

16. The provision of biscuits and drinks such as tea, coffee, soft drinks and fruit juices to employees or their associates on a working day for morning or afternoon tea cannot be said to provide amusement or even to be an agreeable occupation. It is merely the provision of refreshments to enable the employees or associates to complete the working day in comfort. The same may be said of light meals provided by a taxpayer to employees or their associates on a working day.

10. The food and drink being provided in this particular case comprises tea, coffee, orange juice, wraps and sandwiches. It is considered that their provision is the provision of refreshment rather than meal entertainment. It is also considered that albeit the fact that they are provided not on the employer's premises and also on a 'social occasion' does not alter this view.

11. Therefore, the tea, coffee, orange juice, wraps and sandwiches being provided in this particular instance would not constitute tax-exempt body entertainment benefits for the purposes of section 38 of the FBTAA and this requirement is met.

(c) tax exempt body entertainment benefits limited circumstances

12. As it has been determined above that tea, coffee, orange juice, wraps and sandwiches being provided in this particular instance would not constitute tax-exempt body entertainment benefits this requirement need not be met.

(d) concluded unreasonable to treat minor benefit as a fringe benefit

13. In determining whether it would be unreasonable to treat minor benefit as a fringe benefit regard must be had to the following 5 factors, however, no single factor on its own will determine the matter and also the weight to be given to each individual factor may vary depending on the circumstances surrounding the provision of the benefit.

(i) the infrequency and irregularity of associated identical or similar benefits to the minor benefit.

(ii) the sum of the notional taxable values of the minor benefit and any associated identical or similar benefits.

(iii) the sum of the notional taxable values of any other associated benefits.

(iv) the practical difficulty in determining the notional taxable value of the benefit and any associated benefits.

(v) the circumstances surrounding the provision of the minor benefit and any associated benefits including whether the benefit was provided to assist the employee deal with an unexpected event and whether the benefit was provided otherwise than wholly or principally by way of a reward of services rendered or to be rendered by the employee.

14. Albeit that the relevant benefits are provided regularly on an annual basis, their notional values are readily ascertained, it is an annual ceremony that is not an unexpected event and also the possibility that some of the attendees may attend other functions during the year where they are provided with similar fare it is, nonetheless, considered that in the particular overall circumstances including the reason for the event together with the relatively insubstantial notional taxable values of the benefits involved it be concluded that it would be unreasonable to treat the relevant minor benefits as fringe benefits.

15. This requirement is met.

Conclusion

16. The food and drink provided to employee attendees at annual event are exempt benefits under section 58P of the FBTAA.

Question 2

1. As determined above, exemption under section 58P of the FBTAA will apply in this particular instance where all of the following requirements are met:

(a) the notional taxable value of the minor benefit is less than $300; and

(b) it is not tax-exempt body entertainment; or

(c) if it is tax-exempt body entertainment it falls within one or more of the two limited circumstances; and

(d) it would be concluded that it would be unreasonable, having regard to the specified criteria in paragraph 58P(1)(f) of the FBTAA, to treat the minor benefit as a fringe benefit.

(a) notional taxable value less than $300

2. For similar reasons as for Question 1 it is considered that this requirement is met.

(b) not tax-exempt body entertainment benefits

3. For similar reasons as for Question 1 it is considered that this requirement is met.

(c) tax exempt body entertainment benefits limited circumstances

4. For similar reasons as for Question 1 it is considered that this requirement need not be met.

(d) concluded unreasonable to treat minor benefit as a fringe benefit

5. For similar reasons as for Question 1 it is considered that this requirement is met. It is also considered that the additional fact that the awardees will also receive an award certificate has no material bearing on this issue pending any evidence to the contrary.

Conclusion

6. The food and drink provided to employee attendees at award presentations held off business premises are exempt benefits under section 58P of the FBTAA.

Question 3

1. As determined above, exemption under section 58P of the FBTAA will apply in this particular instance where all of the following requirements are met:

(a) the notional taxable value of the minor benefit is less than $300; and

(b) it is not tax-exempt body entertainment; or

(c) if it is tax-exempt body entertainment, it falls within one or more of the two limited circumstances; and

(d) it would be concluded that it would be unreasonable, having regard to the specified criteria in paragraph 58P(1)(f) of the FBTAA, to treat the minor benefit as a fringe benefit.

(a) notional taxable value less than $300

2. For similar reasons as for Question 1 it is considered that this requirement is met.

(b) not tax-exempt body entertainment benefits

3. For similar reasons as for Question 1 it is considered that this requirement is met. It also may be noted that the award ceremonies are held on employer premises.

(c) tax exempt body entertainment benefits limited circumstances

4. For similar reasons as for Question 1 it is considered that this requirement need not be met.

(d) concluded unreasonable to treat minor benefit as a fringe benefit

5. For similar reasons as for Question 2 it is considered that this requirement is met.

Conclusion

6. The food and drink provided to employee attendees at award presentations held on business premises are exempt benefits under section 58P of the FBTAA.

Question 4

1. As determined above, exemption under section 58P of the FBTAA will apply in this particular instance where all of the following requirements are met:

(a) the notional taxable value of the minor benefit is less than $300; and

(b) it is not tax-exempt body entertainment; or

(c) if it is tax-exempt body entertainment, it falls within one or more of the two limited circumstances; and

(d) it would be concluded that it would be unreasonable, having regard to the specified criteria in paragraph 58P(1)(f) of the FBTAA, to treat the minor benefit as a fringe benefit.

(a) notional taxable value less than $300

2. For similar reasons as for Question 1 it is considered that this requirement is met.

(b) not tax-exempt body entertainment benefits

3. For similar reasons as for Question 1 it is considered that this requirement is met. It also may be noted that the award ceremonies are held on employer premises.

(c) tax exempt body entertainment benefits limited circumstances

4. For similar reasons as for Question 1 it is considered that this requirement need not be met.

(d) concluded unreasonable to treat minor benefit as a fringe benefit

5. For similar reasons as for Question 1 it is considered that this requirement is met.

Conclusion

6. The food and drink provided to employee attendees at the graduation ceremonies held off business premises are exempt benefits under section 58P of the FBTAA.

Issue 2

Question

1. Section 47 of the FBTAA provides exemption for residual benefits that meet certain criteria. Subsections 47(3) and 47(4) of the FBTAA state:

47(3) [Use of property used in employer's business]

Where a residual benefit provided to a current employee in respect of his or her employment consists of the use of property (other than a motor vehicle) that is ordinarily located on business premises of, and is wholly or principally used directly in connection with business operations of:

(a) the employer; or

(b) ...

the benefit is an exempt benefit.

History S 47(3) amended by No 139 of 1987.

47(4) [Property used in connection with employer's business]

For the purposes of subsection (3), toilets, bathroom facilities, food or drink vending machines, tea or coffee making facilities, water dispensers or other amenities (not being facilities for drinking or dining) for the use of employees of an employer shall be taken to be principally used directly in connection with business operations of the employer.

2. Section 45 of the FBTAA states that a residual benefit is one that is not a benefit by virtue of any provision of Subdivision A of Divisions 2 to 11 inclusive of the FBTAA. Therefore, in basic terms, a residual benefit is a benefit that does not fall within one of the other more specific benefit types contained in the FBTAA.

3. The expression 'in respect of' as defined in subsection 136(1) of the FBTAA refers "in relation to the employment of an employee, includes by reason of, by virtue of, or for or in relation directly or indirectly to, that employment".

4. Also, the meaning of the phrase 'in respect of the employment of the employee' was considered in J & G Knowles & Associates Pty Ltd v. Federal Commissioner of Taxation (2000) 96 FCR 402; 2000 ATC 4151; 44 ATR 22 (Knowles). It was found in Knowles that the words 'in respect of' must be given a meaning that depends on the context in which they are used. In the case of the FBTAA, this means that there must be a sufficient or material relationship or connection between the provision of the benefit and the employee's employment. The views expressed in Knowles, concerning the meaning of the phrase 'in respect of the employment of the employee', were stated with approval in the case of Starrim Pty Ltd v FCT (2000) 102 FCR 194; [2000] FCA 952; 2000 ATC 4460; (2000) 44 ATR 487.

5. It is readily accepted, for the purposes of subsection 47(3) of the FBTAA, that the relevant lunch rooms are on, or are part, of the business premises of the employer and also that the new LCD televisions (TVs) are ordinarily located in the lunch rooms and are being used by current employees.

6. It is further noted that the term 'business operations', as defined in subsection 136(1) of the FBTAA, 'in relation to a government body...includes any operations or activities carried out by that body...'.

7. Taxation Ruling TR 2000/4, Fringe benefits tax: meaning of 'business premises, provides the following guidance (mainly in the context of the provision of employer provided child care) :

40. In relation to other persons, 'business operations' is not defined and has to be given its ordinary meaning. 'Operations' is a very wide expression, for example, 'mining operations' is wider than 'the working of a mining property' (see Parker v. FC of T (1953) 90 CLR 489, at 494; (1954) ALR 26, at 28; (1953) 10 ATD 287, at 291; (1953) 27 ALJ 574, at 575). Whether a particular activity or series of activities amounts to a business operation is a question of fact.

41. In the context of the definition of 'business premises' in subsection 136(1) we consider that the term 'business operations' has a broad meaning. In our view 'business operations' ought to be regarded as wider than 'carrying on a business' and would include both passive and active dealings, including isolated transactions of a person, without the need to establish that the person was carrying on a business, provided the dealings were undertaken for the purpose of profit making by way of a business operation or a commercial transaction.

42. Where a business exists, the term 'business operations' would include a wide range of activities undertaken by the person carrying on the business. Support for this view can be found in the judgment of Merkel J in Esso Australia Ltd v. FC of T 98 ATC 4953, at 4957; (1998) 40 ATR 76, at 80; 157 ALR 652, at 656.

43. ...[T]he provision of benefits to employees in the form of child care would be an important factor in recruiting, retaining and otherwise rewarding employees. Having regard to the views expressed above, activities undertaken in connection with the provision of those benefits (or indeed the provision of recreational, car parking or health care facilities) to employees would be 'business operations' of the employer who carried on the business...

...

Example 1

71. ABC Pty Ltd is a company that has one principal place of business where it carries out certain manufacturing activities. There is no space on the premises for employees to park their cars during working hours. The company purchases premises situated two blocks away from its principal place of business and converts those premises into a car park for use only by its employees. The company has exclusive occupancy rights in respect of the premises. As part of their remuneration package, employees pay no fees for the use of the facility.

72. The provision of the car parking facility, as the provision of a facility to remunerate employees, in the interest of efficiency of the business, would be regarded as 'business operations' of the company...

8. The use of the TVs in this particular case would constitute residual benefits for the purposes of section 45 of the FBTAA, are being provided to current employees of the employer and are ordinarily available on the business premises of the employer. It is also considered that the use of the TVs in the circumstances of this particular case may be accepted as being provided in respect of those relevant employees' employment.

9. The use of the TVs in these particular locations and overall circumstances are considered to be of assistance in the interests of efficiency of the business of the particular employer and also in retaining or otherwise rewarding employees.

10. It is considered, therefore, that the provision of the use of the TVs in these particular circumstances is either principally directly in connection with the business operations of the employer for the purposes of subsection 47(3) of the FBTAA or else may, perhaps, be considered to be the provision of 'other facilities' for the purposes of subsection 47(4) of the FBTAA and, hence, deemed by that immediately aforementioned subsection to be principally used directly in connection with business operations of the employer for the purposes of subsection 47(3) of the FBTAA . In any case, subsection 47(3) of the FBTAA applies in this particular instance.

11. Consequently, in this case the particular circumstances are such that the provision of new LCD televisions in business premises lunch rooms are exempt benefits under section 47 of the FBTAA as all the necessary criteria are met.