Private ruling: FBT - otherwise deductible rule
Date of advice: 23 August 2021
Published: November 2021
Ruling period: FBT year ending 31 March 20XX | FBT year ending 31 March 20XX | FBT year ending 31 March 20XX | FBT year ending 31 March 20XX
Date scheme commenced: 1 April 20XX

Ruling: Q1: Do the benefits for transport and accommodation provided to a non-executive director (NED) for travel between the NED'S home in the Overseas Country and the Australian office of the Employer constitute a fringe benefit for the purposes of subsection 136(1) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)? | A1: Yes. | Q2: Where the benefits for transport and accommodation are expense payment fringe benefits, can the taxable value be reduced in accordance with the 'otherwise deductible rule' (ODR) under section 24 of the FBTAA? | A2: Yes. | Q3: Where the benefits for transport and accommodation are residual fringe benefits, can the taxable value be reduced in accordance with the ODR under section 52 of the FBTAA? | A3: Yes.

Relevant facts and circumstances: Non-executive director YY was appointed to the board of the Employer as an independent non-executive director (NED) effective X Month 20XX. The NED is a citizen and tax resident of the Overseas Country who works and lives in the Overseas Country. The NED is not a tax resident of Australia. The NED's personal and economic ties are predominately in the Overseas Country. The NED visits Australia under a Subclass 400 visa, the highly specialised work stream temporary visa, suitable due to the NED's specialised skills, knowledge and experience not generally available in Australia. The NED brings extensive experience to the Employer along with a global perspective to the Employer's Board. The NED carries out duties consistent with the ordinary role of a NED, including providing an independent view in areas such as: i.Offer constructive challenges and contributions to the development of corporate strategic objectives, values, purpose and policies; ii.Provide leadership and challenge to the performance of management in meeting strategic goals and objectives and monitoring senior management succession planning; iii.Represent and serve the interests of shareholders and keep shareholders informed of corporate performance and major developments. iv.Monitoring the financial performance and operation including overseeing the identification of key financial and non-financial risks and monitoring efficiency and effectiveness of risk management framework and systems; and v.Consider appropriate levels of remuneration of executive directors and have a prime role in appointing, and where necessary removing, senior management. Board Meetings and site visits The Employer's board held a number of board meetings from its Australian office during the Fringe Benefits Tax (FBT) year ended 31 March 20XX (20XX FBT year). Each board meeting is conducted over the course of one business day. The NED attended some board meetings in person and some by teleconference/videoconference from the Overseas Country. The Employer distributes board papers to members of the board approximately one week in advance of the Australian-based board meetings. The board papers contain many documents, each board meeting requiring extensive preparation by members of the board. The NED's preparation work is completed in the Overseas Country for all board meetings (i.e. including those board meetings physically attended in Australia). In addition to attending the Employer's board meetings in Australia, the NED also undertook site visits of various sites of the Employer for three to four days during each trip before returning home to the Overseas Country. The Employer pays or reimburses the NED for travel expenses (flights and accommodation) from the Overseas Country to Australia undertaken for the purpose of physical attendance in Australia for board meetings and Employer site visits. The Employer did not make no-private-use declarations in respect of the travel expenses for the 20XX FBT year. Director's fees The Employer pays the NED's monthly director's fees as remuneration for the role of NED, paid into an Australian bank account of the NED. Assumption The expenses incurred in relation to the travel are wholly work related.

Relevant legislative provisions: Fringe Benefits Tax Assessment Act 1986 Section 20A | Fringe Benefits Tax Assessment Act 1986 Section 24 | Fringe Benefits Tax Assessment Act 1986 Section 45 | Fringe Benefits Tax Assessment Act 1986 Section 47A | Fringe Benefits Tax Assessment Act 1986 Section 48 | Fringe Benefits Tax Assessment Act 1986 Section 52 | Fringe Benefits Tax Assessment Act 1986 Subsection 136(1) | Income Tax Assessment Act 1997 Section 8-1

Reasons for decision: Summary: The benefits for transport and accommodation provided to the NED for travel between the NED's home in the Overseas Country and the Australian office of the Employer constitute a fringe benefit for the purposes of subsection 136(1) of the FBTAA. The benefits provided will be either expense payment fringe benefits or residual fringe benefits. The benefits are not exempt benefits because they were not covered by a no-private-use declaration. However, the taxable value of the benefits can be reduced in accordance with the ODR and therefore, the Employer would not have an FBT liability. | Detailed Reasoning - Question 1: Do the benefits for transport and accommodation provided to a NED for travel between the NED's home in the Overseas Country and the Australian office of the Employer constitute a fringe benefit for the purposes of subsection 136(1) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)? | Detailed Reasoning - Summary of Answer 1: The benefits for transport and accommodation provided to a NED for travel between the NED's home in the Overseas Country and the Australian office of the Employer constitute a fringe benefit for the purposes of subsection 136(1) of the FBTAA. Specifically, the benefits for transport and accommodation provided to the NED are either expense payment fringe benefits or residual fringe benefits. In this case, the benefits are not exempt benefits because they were not covered by a no-private-use declaration. | Detailed Reasoning - Detailed reasoning: In order to determine whether the Employer is liable to FBT in respect of transport and accommodation provided to the NED, it is necessary to firstly consider whether the provision of the travel and accommodation benefits constitute a 'fringe benefit' as defined in subsection 136(1) of the FBTAA. The definition of a 'fringe benefit' in subsection 136(1) of the FBTAA requires the following conditions to be satisfied: 1. A benefit is provided at any time during the year of tax. 2. The benefit is provided to an employee or an associate of the employee. 3. The benefit is provided by: a. their employer; or b. an associate of the employer; or c. a third party other than the employer or an associate under an arrangement between the employer or associate of the employer and the third party; or d. a third party other than the employer or an associate of the employer, if the employer or an associate of the employer: i.participates in or facilitates the provision or receipt of the benefit; or ii.participates in, facilitates or promotes a scheme or plan involving the provision of the benefit; and the employer or associate knows, or ought reasonably to know, that the employer or associate is doing so; 4. The benefit is provided in respect of the employment of the employee. 5. The benefit is not one that is specifically excluded as per paragraphs (f) to (s) of the definition of a fringe benefit in subsection 136(1) of the FBTAA. A discussion is provided below in respect of whether each element or condition of the definition of a fringe benefit is satisfied. | Detailed Reasoning - A benefit is provided: Subsection 136(1) of the FBTAA provides a broad definition of a 'benefit' as including: any right (including a right in relation to, and an interest in, real or personal property), privilege, service or facility and, without limiting the generality of the foregoing, includes a right, benefit, privilege, service or facility that is, or is to be, provided under: (a) an arrangement for or in relation to: (i) the performance of work (including work of a professional nature), whether with or without the provision of property; ... Based on the facts, travel expenses are paid for directly by the Employer or are reimbursed to the NED. This falls with the definition of a 'benefit' as defined in subsection 136(1) of the FBTAA. As such, the first condition (i.e. the provision of a 'benefit') of the definition of a 'fringe benefit' - as defined in subsection 136(1) of the FBTAA - would be satisfied. | Detailed Reasoning - The benefit is provided to an employee or an associate of the employee: An 'employee' is defined in subsection 136(1) of the FBTAA to mean a current, future or former employee. The definition of 'current employee' includes a person who receives 'salary or wages' (subsection 136(1) of the FBTAA). 'Salary or wages' is defined in subsection 136(1) of the FBTAA to mean: (a) a payment from which an amount must be withheld (even if the amount is not withheld) under a provision in Schedule 1 to the Taxation Administration Act 1953 listed in the table, to the extent that the payment is assessable income; and.... Amounts withheld under Schedule 1 to the Taxation Administration Act 1953 ("TAA") are referred to as Pay As You Go (PAYG) withholding amounts. The table in the definition of 'salary or wages' includes a reference to section 12-40 of Schedule 1 to the TAA, which covers payments to company directors. Payment of remuneration for performing duties as a director of a company is specifically a payment from which PAYG must be withheld. Section 12-40 of Schedule 1 to the TAA provides that: A company must withhold an amount from a payment of remuneration it makes to an individual: (a) if the company is incorporated - as a director of the company, or as a person who performs the duties of a director of the company; or .... The double tax agreement (DTA) between the Australian government and the government of the Overseas Country operates to avoid double taxation of income received by tax residents of Australia and of the Overseas Country. As a non-resident of Australia, the NED will be taxed in the Overseas Country unless the services are performed in Australia. The remuneration is paid by the Employer, an Australian tax resident company, and therefore the exception to transfer the taxing rights back to the Overseas Country does not apply as per the DTA. PAYG withholding is required from director's fees paid to the NED for services performed in Australia and such director's fees are 'salary and wages' as defined in subsection 136(1) of the FBTAA. As the benefit (the provision of transport and accommodation) is provided to the NED, a current employee, the second condition (i.e. a benefit is provided to an employee) has been met. | Detailed Reasoning - Benefit is provided by the employer: An 'employer' is defined in subsection 136(1) of the FBTAA to mean a current, future or former employer. The definition of 'current employer' being a person liable to pay 'salary or wages' (subsection 136(1) of the FBTAA). The Employer, being liable to pay director's fees qualifying as 'salary and wages' (see analysis above), is the employer of the NED for the purposes of the FBTAA. Therefore, the third condition (i.e. a benefit is provided by an employer) of the definition of a 'fringe benefit' as defined in subsection 136(1) of the FBTAA is satisfied. | Detailed Reasoning - The benefit is provided in respect of the employment of the employee: Subsection 136(1) of the FBTAA defines the term 'in respect of' in relation to the employment of an employee, as including 'by reason of, by virtue of, or for or in relation directly or indirectly to, that employment'. Subsection 148(1) of the FBTAA stipulates that: the provision of a benefit to a person in respect of the employment of an employee is a reference to the provision of such a benefit: (a) whether or not the benefit is also provided in respect of, by reason of, by virtue of, or for or in relation directly or indirectly to, any other matter or thing; (b) whether the employment will occur, is occurring, or has occurred; (c) whether or not the benefit is surplus to the needs or wants of the recipient; (d) whether or not the benefit is also provided to another person; (e) whether or not the benefit is, to any extent, offset by any inconvenience or disadvantage; (f) whether or not the benefit is provided or used, or required to be provided or used, in connection with that employment; (g) whether or not the provision of the benefit is, or is in the nature of, income; and (h) whether or not the benefit is provided as a reward for services rendered, or to be rendered, by the employee. In J & G Knowles & Associates Pty Ltd v Federal Commissioner of Taxation (2000) 96 FCR 402; 2000 ATC 4151; (2000) 44 ATR 22, 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'. Based on the facts, the benefits received by the NED (return flights from the Overseas Country to Australia, and accommodation in Australia) for the purpose of attending the Employer's board meetings and conducting Employer site visits in Australia has a substantial connection to the employment of the NED, being an employee for the purposes of the FBTAA. As such, the fourth condition (i.e. a benefit is provided in respect of the employment of the employee) of the definition of a 'fringe benefit' as defined in subsection 136(1) of the FBTAA would be satisfied. | Detailed Reasoning - The benefit is not specifically excluded from the definition of a fringe benefit: With respect to paragraphs (f) to (s) of the definition of a 'fringe benefit' in subsection 136(1) of the FBTAA, the relevant paragraph to consider is paragraph (g) which provides that an exempt benefit will not be a fringe benefit. In considering whether the travel and accommodation benefits provided by the Employer fall within any of the exempt benefits listed in Part III of the FBTAA, it is necessary to initially determine the types of fringe benefits that are applicable under the FBTAA, as identified in the table below. | Detailed Reasoning - Type of Fringe benefit: 1. The Employer pays for expenses for travel (flights and accommodation) This constitutes a ' Residual fringe benefit ', which is defined in section 45 of the FBTAA: A benefit is a residual benefit for the purposes of this Act if the benefit is not a benefit by virtue of a provision of Subdivision A of Divisions 2 to 11(inclusive) [of Part III of the FBTAA]. 2. The Employer reimburses for expenses for travel (flights and accommodation) This constitutes an ' Expense payment fringe benefit ', which is defined in section 20 of the FBTAA: Where a person (in this section referred to as the provider [the Employer]): (a) makes a payment in discharge, in whole or in part, of an obligation of another person (in this section referred to as the recipient) to pay an amount to a third person in respect of expenditure incurred by the recipient; or (b) reimburses another person (in this section referred to as the recipient [the employee]), in whole or in part, in respect of an amount of expenditure incurred by the recipient...the making of the payment...shall be taken to constitute the provision of a benefit by the provider to the recipient. | Detailed Reasoning - Are the expense payment fringe benefits exempt benefits for the purposes of section 20A of the FBTAA?: The benefits provided to the NED will either be an expense payment fringe benefit or a residual benefit. An expense payment fringe benefit will be an exempt benefit under section 20A of the FBTAA if the requirements are satisfied. Section 20A of the FBTAA provides the following: 20A(1) [Exempt benefit] An expense payment fringe benefit that is covered by a no-private-use declaration is an exempt benefit. 20A(2) [No-private-use declaration] An employer may make a no-private-use declaration that covers all the employer's residual fringe benefits for an FBT year that are covered by a consistently enforced policy in relation to the use of the property that is the subject of the benefit that would result in the taxable value of the benefit being nil. 20A(3) [Form of declaration] The declaration must be in a form approved in writing by the Commissioner. For the exemption to apply, the expense payment benefits provided must therefore be covered by a no-private-use declaration; and the employer must have procedures in place to ensure that the taxable value of the benefit is nil. A no-private-use declaration is a declaration made by the employer. A consequence of making a 'no-private-use' declaration is that the employer is not required to obtain specific declarations from employees for any fringe benefit covered by the declaration. The declaration must be in a form approved by the Commissioner and be given by the declaration date, which is defined in section 136(1) of the FBTAA as the date the employer lodges the FBT return for the relevant FBT year or such later date as allowed by the Commissioner. In the current case, a no-private-use declaration was not prepared. Therefore, the conditions for the expense payment benefits to be exempt benefits were not satisfied. If the Employer had made a no-private-use declaration, the conditions would have been satisfied and the benefits would have been exempt. | Detailed Reasoning - Are the residual fringe benefits exempt benefits for the purposes of section 47A of the FBTAA?: A residual fringe benefit that is covered by a no-private-use declaration may be an exempt benefit under section 47A of the FBTAA. Section 47A of the FBTAA provides the following: 47A(1) [Exempt benefit] A residual fringe benefit that is covered by a no-private-use declaration is an exempt benefit. 47A(2) [No-private-use declaration] An employer may make a no-private-use declaration that covers all the employer's residual fringe benefits for an FBT year that are covered by a consistently enforced policy in relation to the use of the property that is the subject of the benefit that would result in the taxable value of the benefit being nil. 47A(3) [Form of declaration] The declaration must be in a form approved in writing by the Commissioner. For the exemption to apply, the residual benefits provided must be covered by a no-private-use declaration; and the employer must have procedures in place to ensure that the taxable value of the benefit is nil. In the current case, a no-private-use declaration was not prepared. Therefore, the conditions for the residual fringe benefits to be exempt benefits were not satisfied. If the Employer had made a no-private-use declaration, the conditions would have been satisfied and the benefits would have been exempt. | Detailed Reasoning - Conclusion: The benefits for transport and accommodation that are provided to the NED satisfy all of the conditions of a 'fringe benefit'. Therefore, the benefits for transport and accommodation are fringe benefits pursuant to subsection 136(1) of the FBTAA. | Detailed Reasoning - Question 2: Where the benefits for transport and accommodation are expense payment fringe benefits, can the taxable value be reduced in accordance with the 'otherwise deductible rule' (ODR) under section 24 of the FBTAA? | Detailed Reasoning - Summary of Answer 2: If the expenses for transport and accommodation had been incurred by the NED, they would be regarded as having been incurred in gaining or producing assessable income and would therefore be deductible. Accordingly, the taxable value of the expense payment fringe benefits could be reduced in accordance with the ODR under section 24 of the FBTAA. The Employer would not be required to obtain an employee declaration. | Detailed Reasoning - Detailed reasoning: The taxable value of an expense payment fringe benefit can be reduced under section 24 of the FBTAA by the ODR. The ODR broadly provides that if an employee would have been allowed a once-only deduction for the expenditure had the employer not paid or reimbursed it, the taxable value of the benefit will be reduced. A 'once-only deduction' is defined in subsection 136(1) of the FBTAA to mean one that is wholly or partly allowable under the income tax law in only one income year. Section 24 of the FBTAA sets out the conditions required to be satisfied for the ODR to apply. The application of these conditions is discussed below. Expense payment fringe benefit Paragraph 24(1)(a) of the FBTAA applies where: the recipient of an expense payment fringe benefit in relation to an employer in relation to a year of tax is an employee of the employer, ... 'Expense payment fringe benefit' is defined in subsection 136(1) of the FBTAA as a 'fringe benefit' that is an 'expense payment benefit'. 'Expense payment benefit' is defined in section 20 of the FBTAA as follows: Where a person (in this section referred to as the provider): (a) makes a payment in discharge, in whole or in part, of an obligation of another person (in this section referred to as the recipient) to pay an amount to a third person in respect of expenditure incurred by the recipient; or (b) reimburses another person (in this section also referred to as the recipient), in whole or in part, in respect of an amount of expenditure incurred by the recipient; the making of the payment referred to in paragraph (a), or the reimbursement referred to in paragraph (b), shall be taken to constitute the provision of a benefit by the provider to the recipient. As determined above, where the Employer reimburses the NED for expenses relating to travel (flights and accommodation), the payments will be an expense payment benefit. Accordingly, it is considered that paragraph 24(1)(a) of the FBTAA will be satisfied. Deductibility of expenses for travel Paragraph 24(1)(b) of the FBTAA applies where, if the employee had, at the time the employee's expenditure was incurred, incurred and paid that expenditure (the gross expenditure ), they would have been entitled to a once-only deduction in respect of the gross expenditure. Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for a loss or outgoing incurred in gaining or producing assessable income. However, no deduction is allowed for losses or outgoings to the extent to which they are of a capital, private or domestic nature, or are incurred in gaining or producing exempt income, or are otherwise prevented from being deductible by a specific provision of the ITAA 1997. For any deduction to be allowable under section 8-1 of the ITAA 1997, an employee must be able to demonstrate that there is a real and direct connection between an outgoing (in this case, the travel and accommodation expense) and the gaining of assessable income, so that the outgoing is incidental and relevant to the actual activities that gain assessable income. Taxation Ruling TR 2021/1 Income tax: when are deductions allowed for employees' transport expenses? (TR 2021/1) sets out when an employee can deduct transport expenses under section 8-1 of the ITAA 1997. While expenses for travel will only be deductible if they satisfy the requirements of section 8-1, the following factors (based on relevant case law) 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. The NED undertakes a highly specialised role as an independent NED. He performs his duties for the Employer in the Overseas Country and in Australia. During the 20XX FBT year, the NED travelled to Australia to attend the majority of the board meetings held. In addition, the NED also attended various visits to the Employer's sites in Australia. The travel is relevant and necessary to the NED performing his duties as a NED. Therefore, the expenses for travel are considered to be incurred in gaining or producing the NED's assessable income and would be deductible under section 8-1 of the ITAA 1997. The deduction would be a 'once-only deduction' as defined in subsection 136(1) of the FBTAA as no percentage of the interest would be allowable as a deduction in any other year of income. Reduction of taxable value Paragraph 24(1)(ba) of the FBTAA provides for the determination of the 'notional deduction' which is used to calculate the reduction of the taxable value under the ODR. Applying the provision, the notional deduction equals: • GD (gross deduction) which is the amount of the expenses that an employee would be entitled to under section 8-1 of the FBTAA if they incurred the expenses (in this case, being the entire amount of the expenses for travel); minus • RD which in the present case is nil, given that there is no recipient's portion in relation to the expense payment. The notional deduction is the amount to which the taxable value of the expense payment fringe benefit will be reduced pursuant to the formula that appears beneath paragraph 24(1)(f) to which paragraph (g) will apply. As a consequence, it is considered that the ODR would apply to reduce the taxable value to nil under section 24 of the FBTAA. Employee Declaration Requirement Generally, an employer can only claim a reduction in the taxable value of an expense payment fringe benefit if a declaration in a form approved by the Commissioner is given to the employer before the date of lodgement of the FBT return. Under subparagraph 24(1)(e)(i) of the FBTAA, the requirement to provide a declaration does not apply where the expense payment fringe benefit is an 'exclusive employee expense payment benefit'. Under subsection 136(1) of the FBTAA, an 'exclusive employee expense payment benefit' means an expense payment fringe benefit where the recipient's expenditure is exclusively incurred in gaining or producing salary or wages of the recipient in respect of the employment to which the fringe benefit relates and is not expenditure in respect of interest. It is assumed in this case that the expenses incurred in relation to the travel are wholly work related. That is, the travel is undertaken exclusively in gaining or producing salary or wages of the NED and therefore, an employee declaration is not required. | Detailed Reasoning - Question 3: Where the benefits for transport and accommodation are residual fringe benefits, can the taxable value be reduced in accordance with the ODR under section 52 of the FBTAA? | Detailed Reasoning - Summary of Answer 3: If the expenses for transport and accommodation had been incurred by the NED, they would be regarded as having been incurred in gaining or producing assessable income and would therefore be deductible. Accordingly, the taxable value of the residual fringe benefits could be reduced in accordance with the ODR. The Employer would not be required to obtain an employee declaration. | Detailed Reasoning - Detailed reasoning: The taxable value of a residual fringe benefit can be reduced under section 52 of the FBTAA by the ODR. A residual benefit under section 45 of the FBTAA arises where an employee is provided with a benefit that does not fit into any of the specific categories of benefit (e.g. cars, expense payments or loans). As determined above, the NED is an employee of the Employer. Where the Employer pays for the travel expenses (flights and accommodation) related to the NED attending the Employer's board meetings and visiting Employer sites in Australia, this is considered to be a residual benefit. Deductibility of expenses for travel Entitlement to an income tax deduction is determined by section 8-1 of the ITAA 1997. As discussed above, TR 2021/1 sets out when an employee can deduct transport expenses under section 8-1. While expenses for travel will only be deductible if they satisfy the requirements of section 8-1 of the FBTAA, the following factors (based on relevant case law) in paragraph 16 of TR 2021/1 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. The NED undertakes a highly specialised role as an independent NED. He performs his duties for the Employer in the Overseas Country and in Australia. During the 20XX FBT year, the NED travelled to Australia to attend the majority of board meetings held. In addition, the NED also attended various visits to the Employer's sites in Australia. The travel is relevant and necessary to the NED performing his duties as a NED. Therefore, the expenses for travel are considered to be incurred in gaining or producing the NED's assessable income and would be deductible under section 8-1 of the ITAA 1997. The deduction would be a 'once-only deduction' as defined in subsection 136(1) of the FBTAA as no percentage of the interest would be allowable as a deduction in any other year of income. It is assumed in this case, that the expenses in relation to the travel are wholly work related. If the employee had incurred the expenses, they would be entitled under section 8-1 of the ITAA 1997 to deduct the entire amount of the expenses. Accordingly, it is considered that the taxable value of the residual benefits could be reduced to nil by the ODR in section 52 of the FBTAA. Employee Declaration Requirement Generally, an employer can only claim a reduction in the taxable value of a residual benefit if a declaration in a form approved by the Commissioner is given to the employer before the date of lodgement of the FBT return. Under paragraph 52(1)(c) of the FBTAA, the requirement to provide a declaration does not apply where the residual benefit is an 'exclusive employee residual benefit'. Under subsection 136(1) of the FBTAA, an 'exclusive employee residual benefit' means a residual fringe benefit where, if the recipient had incurred expenditure in respect of the provision of the recipient's benefit, that expenditure would have been exclusively incurred in gaining or producing salary or wages of the recipient in respect of the employment to which the fringe benefit relates. It is assumed in this case that the expenses incurred in relation to the travel are wholly work related. That is, the travel is undertaken exclusively in gaining or producing salary or wages of the NED and therefore, an employee declaration is not required. Conclusion As the Employer has not made 'no-private-use' declarations pursuant to sections 20A and 47A of the FBTAA, the travel and accommodation benefits constitute 'fringe benefits' as defined in subsection 136(1) of the FBTAA. However, the taxable value of these expense payment fringe benefits and residual fringe benefits can be reduced to nil using the ODR under sections 24 and 52 of the FBTAA respectively.

This ruling applies for the following periods: