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Understanding the FBT implications and opportunities of mobile employees

Many employers have mobile employees. This can be as simple as having employees undertaking regular business travel, or can be more extensive with employees relocating temporarily or permanently, employees on Living Away From Home arrangements, employees living and working in Remote Areas or on FIFO in to Remote and Non Remote areas, and international assignments.

Did you know that Relocations are the most popular topic for seeking ATO advice by way of Private Binding Rulings? So why is this…

Relocations is an FBT area that is not necessarily specific to a benefit category but is analysed based on an individual employee’s circumstances. Depending on the employee’s circumstances, there are a number of scenarios (and FBT exemptions and concessions) that may apply, as follows:

For each of the above scenarios (employee’s), it is necessary to understand what financial assistance has been / will be provided?

  1. Reimbursement of employee expenses
  2. Paid direct to supplier
  3. Provided directly by employer or related employer
  4. Allowance, whether taxed or tax free
  5. Reimbursed or paid and Salary Packaged
  6. Paid by a related employer (local or offshore)

It is important to understand ATO guidance. Recently the ATO has released three draft public rulings in relation to Employee Travel expenses and Employee work expenses – these rulings whilst subject to finalisation, provide a degree of uncertainty.

In the table below, we summarise the rulings. For each of these draft rulings we are not aware of the intended finalisation date by the ATO, noting that TR2017/D6 has been in draft format for nearly 3 years.

Draft ruling Issue date Notes
TR 2017/D6 – Income tax and fringe benefits tax: when are deductions allowed for employees’ travel expenses 28 June 2017 Comments closed: 11 August 2017 TR 2017/D6 replaces MT2030 Fringe Benefits Tax: living-away-from-home allowance benefits withdrawn effective 28 June 2017
TR 2019/D4 – Income tax: employees: deductions for work expenses undersection 8-1 of the Income Tax Assessment Act 1997 6 November 2019 Comments closed: 6 December 2019 Draft ruling contains a listing of all past related taxation rulings, ATOID’s, practice statements and tax determinations
TR 2019/D7 – Income tax: when are deductions allowed for employees’ transport expenses 13 December 2019 Comments by: 28 February 2020 Where TR 2019/D7 overlaps or has differing views from TR 2017 /D6, then TR 2019/D7 is current ATO view
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