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:
- Business Travel
- Personal Travel
- Mix of Business and Personal Travel
- Temporary Relocation
- Permanent Relocation
- Fly in Fly Out
- Remote Area residence
- Temporary Resident (Expatriate)
For each of the above scenarios (employee’s), it is necessary to understand what financial assistance has been / will be provided?
- Reimbursement of employee expenses
- Paid direct to supplier
- Provided directly by employer or related employer
- Allowance, whether taxed or tax free
- Reimbursed or paid and Salary Packaged
- 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closed: 11 August 2017||TR 2017/D6 replaces MT2030 Fringe Benefits Tax: living-away-from-home allowance benefits withdrawn effective 28 June 2017|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|