Fringe Benefit Tax and Exempt Benefit

Q&A Tax

Question :

During the FBT year ending 31 March 2018, Good Business Pty Ltd provided the following benefits to
Liam, an employee of the company:

1. A Mac laptop for Liam mainly used for work-related purposes (valued at $1,500)
2. Payment for Liam’s gym membership fees of $60 per month
3. A cake and a small gift for his birthday (valued at $150)
4. A JB-HIFI gift card at the Christmas Party (valued at $300)
5. Reimbursement of the portion of Liam’s phone bills for work-related calls

Advise Good Business Pty Ltd that which above should be included in the FBT Return?

 

Answer :

1. Mac Laptop

FBTAA s58X allows the provision of a portable electronic device acquired after 13 May 2008 to be
exempt for FBT if it is ‘primarily used in the employee’s employment’ and it is the only one is provided
per FBT year. The mac provided to Liam falls into this category and is exempt from FBT.
Just note: if Liam received multiple Mac or Liam used for private purpose, the Mac is not exempt under
FBTAA s58X

2. Gym Membership

The payment for Liam’s gym membership fees is an expense payment fringe benefit. The minor benefit
(benefits valued under $300) exemption is not available as the benefit is not provided on an irregular or
infrequent basis (TR 2007/12). The membership payment will be included in the FBT return.

3. Birthday Cake and gift

The provision of cake and a small gift is a property fringe benefit. However, the minor benefit
exemption is applicable as the value of the benefit is below $300 and provided on an irregular and
infrequent basis. Thus, the cake and gift are exempt from FBT.

4. JB-HIFI gift card

Similar to the Birthday cake, it is a property fringe benefit but it is not likely to be exempted from
FBT as the value is not less than $300.

5. Reimbursement of phone bills

The reimbursement of work-related expenses is an expense payment fringe benefit under FBTAA s20.
As the employee would have been able to claim deduction on the work-related expenses, the taxable
value of the benefit would be reduced to nil under the ‘otherwise deductible rule’. Thus, the
reimbursement of work-related phone bills is exempt from FBT.

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