Private ruling: Fringe benefits tax; non monetary gifts
Published: August 2012
Ruling period: Year ended 31 March 2008 | Year ended 31 March 2009 | Year ended 31 March 2010 | Year ended 31 March 2011 | Year ended 31 March 2012 | Year ending 31 March 2013 | Year ending 31 March 2014 | Year ending 31 March 2015

Ruling: Q1: When an employee of the employer is also a board member of a third party company, are gifts they receive as a result of their position on the board of the third party company provided 'in respect of' their employment with the employer in accordance with the meaning of 'in respect of' in subsection 136(1) of the Fringe Benefits Tax Assessment Act 1986 ? | A1: No

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. It is customary for employees of the employer to receive non monetary gifts from businesses and members of the public to thank them for hard work done on a project or when they attend events as a representative of the employer. Most non monetary gifts received by employees are from a third party government entity and a third party company. At least one employee is also a board member of the third party company. Certain non monetary gifts are provided to the employee as a result of their position on the board of the third party company.

Relevant legislative provisions: Fringe Benefits Tax Assessment Act 1986 subsection 136(1).

Reasons for decision: Summary: While these reasons are not part of the private ruling, we provide them to help you to understand how we reached our decision. | Detailed Reasoning - Benefits 'in respect of' employment: An employer is generally liable for fringe benefits tax on the taxable value of fringe benefits that are provided to its employees. In accordance with the definition of 'fringe benefit' in subsection 136(1) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA), a benefit is a fringe benefit if it is provided 'in respect of' the employment of the employee. The definition of 'in respect of' in subsection 136(1) of the FBTAA, 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. When employees of the employer receive gifts that are given to them because of their position as a board member of a third party those gifts are not provided in respect of their employment with the employer.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.