Private ruling: Per diem amounts for accommodation and food and drink - Short term assignment - overseas workers
Date of advice: 24 September 2025
Published: 24 November 2025
Ruling period: FBT Year Ended 31 March 20XX | FBT Year Ended 31 March 20XX | FBT Year Ended 31 March 20XX | FBT Year Ended 31 March 20XX | 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 reimbursed per diems amounts for accommodation and food and drink that are paid for using a corporate credit card, give rise to expense payment benefits under section 20 of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)? | A1: No | Q2: Do the reimbursed per diems amounts for food and drink that are paid for using a corporate credit card, give rise to property benefits under section 40 of the FBTAA? | A2: Yes | Q3: Can the taxable value of the property fringe benefits (in relation to food and drink) be reduced using the otherwise deductible rule under section 44 of the FBTAA? | A3: Yes | Q4: Do the reimbursed per diems amounts for accommodation that are paid for using a corporate credit card, give rise to residual benefits under section 45 of the FBTAA? | A4: Yes | Q5: Can the taxable value of the residual fringe benefits (in relation to the accommodation) be reduced using the otherwise deductible rule under section 52 of the FBTAA? | A5: Yes | Q6: Do the reimbursed per diems amounts for accommodation and food and drink that are paid for using a personal credit card, give rise to expense payments benefits under section 20 of the FBTAA? | A6: Yes | Q7: Can the taxable value of the expense payment fringe benefits (in relation to accommodation and food and drink) be reduced using the otherwise deductible rule under section 24 of the FBTAA? | A7: Yes | Q8: Is the per diems allowance paid for food and drink and local transport, a living away from home allowance (LAFHA) under section 30 of the FBTAA? | A8: No


Relevant legislative provisions: Fringe Benefit Tax Assessment Act 1986, section 7 | Fringe Benefit Tax Assessment Act 1986, section 20 | Fringe Benefit Tax Assessment Act 1986, section 24 | Fringe Benefit Tax Assessment Act 1986, section 30 | Fringe Benefits Tax Assessment Act 1986, section 45 | Fringe Benefits Tax Assessment Act 1986, section 51 | Fringe Benefit Tax Assessment Act 1986, section 52 | Fringe Benefits Tax Assessment Act 1986, section 58F | Fringe Benefits Tax Assessment Act 1986, section 136(1) | Fringe Benefits Tax Assessment Act 1986, section 143A | Income Tax Assessment Act 1997 , section 8-1 ATO view documents | Taxation Administration Act 1953, section 12-35 of Schedule 1 Taxation Ruling 2021/1 Income tax: when are deductions allowed for employees' transport expenses? | Taxation Ruling 2021/4 Income tax and fringe benefits tax: employees: accommodation and food and drink expenses travel allowances, and living-away-from-home allowances | Practical Compliance Guideline 2021/3 Determining if allowances or benefits provided to an employee relate to travelling on work or living at a location - ATO compliance approach

Reasons for decision: Detailed Reasoning - General principles: A 'fringe benefit' is defined in subsection 136(1) of the FBTAA, which 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: (i) their employer; or (ii) an associate of the employer; or (iii) 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 (iv) a third party other than the employer or an associate of the employer, if the employer or an associate of the employer: (A) participates in or facilitates the provision or receipt of the benefit; or (B) 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). | Detailed Reasoning - Is a benefit provided?: Subsection 136(1) of the FBTAA provides a broad definition of a 'benefit' as: 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; (ii) the provision of, or of the use of facilities for, entertainment, recreation, or instructions; or (iii) the conferring of rights, benefits or privileges for which remuneration is payable in the form of a royalty, tribute, levy or similar exaction; (b) a contract of insurance; or (c) an arrangement for or in relation to lending of money The definition of 'provide' and 'provider' in subsection 136(1) of FBTAA are as follows: | Detailed Reasoning - provide:: (a) in relation to a benefit - includes allow, confer, give, grant or perform; and (b) ... provider, in relation to a benefit, means the person who provides the benefit. | Detailed Reasoning - Is a benefit provided to an employee or an associate of an employee?: An employee is defined in subsection 136(1) of the FBTAA to include a current, future and former employee. Subsection 136(1) defines a 'current employee' to mean a person who receives, or is entitled to receive, salary or wages. 'Salary or wages', as defined in subsection 136(1) of the FBTAA, means payments from which an amount must be withheld under section 12-35 of Schedule 1 to the Taxation Administration Act 1953 . In the context of employee assignees, amounts paid to them whilst working in Australia would be regarded as Australian sourced income and assessable to such employees. The Employer provides benefits (transport, accommodation, food and drink) to their employees in relation to the performance of their work whilst in Australia. Specially what is provided are: • Reimbursements for accommodation paid for using a corporate credit card • Reimbursements for accommodation paid for using a personal credit card • Reimbursements for food and drink paid for using a corporate credit card • Reimbursements for food and drink paid for using a personal credit card • Per diems allowance for food and drink and local transport. The benefits provided meet the definition of 'benefit' in subsection 136(1) and therefore this condition is satisfied. | Detailed Reasoning - Is the benefit provided in respect of employment?: 'Employee' is defined in subsection 136(1) of the FBTAA as a current, former, or future employee. The phrase 'in respect of' in relation to the employment of an employee is defined in subsection 136(1) of the FBTAA to include 'by reason of, by virtue of, for or in relation directly or indirectly to, that employment'. The meaning of this phrase was considered by the Federal Court in J & G Knowles v. Federal Commissioner of Taxation [2002] 96 FCR 402; 2000 ATC 4151; 44 ATR 22 ( Knowles ) and Starrim Pty Ltd v. Federal Commissioner of Taxation [2000] FCA 952; 2000 ATC 4460; 44 ATR 487 ( Starrim ). In Knowles the Full Federal Court considered the judgements in Smith v. FCT (1987) 164 CLR 513; 19 ATR 274; 87 ATC 4883 and Federal Commissioner of Taxation v. Rowe (1995) 60 FCR 99; 31 ATR 392; 95 ATC 4691 before concluding that it is not sufficient for the purposes of the FBTAA to conclude that there is a causal connection between the benefit and the employment. At paragraph 26 the Court said: Whatever question is to be asked, it must be remembered 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. The accommodation, transport, food and drink are provided to enable the employees to travel to Australia to perform their employment duties. It is considered that these provisions to the employees are sufficiently and materially connected, to their employment, and as such, is considered to be 'in respect of' their employment. Therefore, this condition is satisfied. | Detailed Reasoning - Is the benefit excluded from the definition of a fringe benefit?: A benefit which comes with paragraphs (f) and (s) of the definition of a 'fringe benefit' in subsection 136(1) of the FBTAA is excluded from being a fringe benefit. Paragraph (g) of the definition of 'fringe benefit' excludes 'a benefit that is an exempt benefit'. When relevant, this condition will be discussed below in relation to a specific benefit. Are the employees required to live away from home? It must be determined if the employees are required to live away from home, or whether they are travelling on work when performing the work in Australia. Guidance for this can be found in TR 2021/4 Income tax and fringe benefits tax: employees: accommodation and food and drink expenses, travel allowances, and living-away-from-home allowances. Paragraph 42 sets out key indicators which would indicate whether an employee is living at a location away from their usual residence or travelling on work: A. Whether there is a change in the employee's regular place of work. B. The length of the overall period the employee will be away from their usual residence C. The nature of the accommodation D. Whether the employee is, or can be, accompanied by or visited by family or friends. Each of these factors is considered in further detail below. Change in the employee's regular place of work Paragraph 45 of TR 2021/4 outlines that where there is a change in the employee's regular place of work and the employee incurs accommodation and meal expenses to be closer to their new regular place of work, the employee will be living at that new location away from their usual residence. Conversely, where there is no change in the employee's regular place of work and the employee incurs accommodation and food and drink expenses when they temporarily attend and stay overnight at another location in the course of carrying out their income-producing activities, the employee will not be living at the location they visit and work at temporarily (paragraph 46 of TR 2021/4). The Commissioner's view of the concept of 'regular place of work' is outlined in paragraphs 24 - 38 of Taxation Ruling TR 2021/1: Income tax: when are deductions allowed for employees' transport expenses ? which states: " 25. Most employees have a regular place of work, being a usual or normal place where the employee starts and finishes their work duties with a particular employer. 26. In most cases, identifying an employee's regular place of work is clear. In circumstances where it isn't clear, it may be necessary to consider in more depth the contract of employment, customary practice, the nature of the work duties, where these duties commence and at what point in time the employee is under the direction and control of their employer in order to determine where the employee's regular place of work is. 32. ...In situations where it is difficult to conclude whether a second or subsequent place of work is also a regular place of work, an actual or anticipated duration of three months or more at the location would usually be sufficient for the location to amount to a regular place of work." The length of the period away Paragraph 48 explains that the 'length of period away' means the overall period of time the employee spends living at a particular location for work. Where an employee is living at one location for work for an extended period, that period is not broken by short trips they take from that location, for example travelling back to their usual residence on weekends or when travelling on work from that location. Generally, the longer an employee spends away from their usual residence for work, the more likely the employee is living at the location. In relation to the 'length of period away' from their usual place of residence and the amount of time spent at the placement location is not indicative of the employee relocating to establishing residence at the location of the placement. An employee generally will not establish residence and be living at a location away from their usual residence where the overall period that they stay away from their usual residence in the course of performing their income-producing activities is reasonably short. The nature of the accommodation Paragraphs 56 and 58 explains that the nature of an employee's accommodation is relevant but does not determine whether the employee is living at a location away from their usual residence. Generally, where an employee works away from home for a considerable period and, for that period, stays in accommodation generally used for longer term accommodation (such as a house, unit, apartment or caravan), this would support a view that they are living at a location away from their usual residence. Paragraph 59 of TR 2021/4 notes that the use of short-term accommodation such as hotels and motels located close to the temporary work location is generally an indication that the employee is travelling on work. Whether the employee is, or can be, accompanied by family or visited by family and friends Paragraph 60 provides that an employee who is living at a location away from their usual residence can generally be accompanied or visited by their family and friends. However, if an employee cannot be accompanied by family or visited by family and friends, this tends to indicate that the employer retains a degree of control over the employee outside their standard workday and which may contribute to an overall impression that the employee is travelling on work during this period. | Detailed Reasoning - Practical Compliance Guideline 2021/3: Practical Compliance Guideline 2021/3 - Determining if allowances or benefits provided to an employee relate to travelling on work or living at a location - ATO compliance approach (PCG 2021/3) is also of assistance when determining if an employee's regular place of work has changed if they are living away from home. Under PCG 2021/3, the Commissioner will accept that an employee is travelling on work and will generally not apply compliance resources to determine if benefits received relate to expenses for living at a location when all the following circumstances are satisfied: Table 1 | Detailed Reasoning - The employee: • provides an allowance to an employee or pays or reimburses accommodation and food and drink expenses for the employee • does not provide the reimbursement or payment as part of a salary-packaging arrangement and the employee is not given the option to elect to receive additional remuneration in lieu • includes the travel allowance on the employee's payment summary or income statement and withholds tax, where appropriate, and • obtains and retains the relevant documentation to substantiate the fact that all of these circumstances are met. • is away from their normal residence for work purposes • does not work on a fly-in fly-out or drive-in drive-out basis • is away at the same work location for no more than 21 calendar days at a time continuously • is away at the same work location for no more than 90 calendar days in total in an FBT year, and • must return to their normal residence as soon as practicable when their period away ends. Travel on work In weighing up all the factors, it is concluded that the duties of the employee's employment require them to travel on work and not live away from their normal residence. This is discussed below in Question 8. | Detailed Reasoning - Question 1: Do the reimbursed per diems amounts for accommodation and food and drink that are paid for using a corporate credit card, give rise to expense payments benefits under section 20 of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)? | Detailed Reasoning - Answer 1: No | Summary: Where a corporate card is used an expense payment benefit cannot arise because of the operation of section 150 of the FBTAA. | Detailed Reasoning - Detailed reasoning: An expense payment benefit is defined under section 20 of the FBTAA. An expense payment benefit arises where an employee uses a personal credit card to acquire goods or services, and the employer either pays an amount to the issuer of the card or reimburses the employee in respect of the expenditure. Section 150 of the FBTAA governs the situation where an employee acquires goods and services by using a credit card issued to the employer or an associate of the employer. Section 150 provides that where an employee or an associate of the employee acquires a benefit on credit by using a credit card issued to the employer or an associate of the employer, the benefit is considered to have been provided under an arrangement between the employer, the associate of the employer, and the person who provided the recipient with the benefit. Section 150 of the FBTAA states: | Detailed Reasoning - 150 CREDIT CARDS: For the purposes of this Act, where, in respect of the employment of an employee of an employer, the employee or an associate of the employee uses a credit card issued by a third person to, or to an associate of, the employer to obtain the provision of a benefit on credit from a fourth person, the following provisions have effect: (a) the fourth person shall be taken to have provided the benefit, in respect of that employment, under an arrangement between: (i) the employer or the associate of the employer, as the case requires; and (ii) the fourth person; (b) where the employer or the associate of the employer, as the case may be, incurred expenditure to the third person under an arm's length transaction in respect of the provision of the benefit - the employer or the associate of the employer, as the case requires, shall be taken to have incurred that expenditure to the fourth person under an arm's length transaction. | Detailed Reasoning - Application to your circumstances: The benefit is considered to have been provided under an arrangement. The food and drink purchased with the corporate credit card is consumed by the employee and therefore is considered to be provided by the employer. Therefore, an expense payment cannot arise. | Detailed Reasoning - Question 2: Do the reimbursed per diems amounts for food and drink that are paid for using a corporate credit card, give rise to property benefits under section 40 of the FBTAA? | Detailed Reasoning - Answer 2: Yes | Summary: The reimbursement per diems amounts for food paid for using a corporate credit card will give rise to property benefits under section 40 of the FBTAA. | Detailed Reasoning - Detailed reasoning: Food and drink provided to employees while traveling on work constitute a property benefit for the purposes of section 40 of the FBTAA. As all requirements of a fringe benefit are met, a property fringe benefit will arise. Property benefits Section 40 of the FBTAA states: Where, at a particular time, a person (in this section referred to as the provider) provides property to another person (in this section referred to as the recipient), the provision of the property shall be taken to constitute a benefit provided by the provider to the recipient at that time. The term 'property fringe benefit' is defined in subsection 136(1) of the FBTAA to mean 'a fringe benefit that is a property benefit'. A 'property benefit' is defined in that subsection to mean: Where, at a particular time, a person (in this section referred to as the provider) provides property to another person (in this section referred to as the recipient), the provision of the property shall be taken to constitute a benefit provided by the provider to the recipient at that time. Subsection 136 defines 'property' as: (a) intangible property and (b) tangible property. Tangible property is defined under sec tin 136 as "goods" and includes: (a) animals, including fish; and (b) gas and electricity. Division 11 applies to property fringe benefits. For a property fringe benefit to arise the property must be 'provided'. In the context of property fringe benefits, 'provide' is a defined term under subsection 136(1). Provision of property is the disposal of the providers beneficial interest in the property, or the legal ownership of the property. A residual benefit will arise from the use of the property, instead of a property benefit. | Detailed Reasoning - Application to your circumstances: As discussed in Question 1, section 150 of the FBTAA provides that where an employee or an associate of the employee acquires a benefit on credit by using a credit card issued to the employer or an associate of the employer, the benefit is considered to have been provided under an arrangement between the employer, the associate of the employer, and the person who provided the recipient with the benefit. The food and drink purchased with the corporate credit card is consumed by the employee and therefore it is considered to be provided by the employer. As food and drink are tangible property, the definition under section 136(1) of the FBTAA of 'property' is met. | Detailed Reasoning - Question 3: Can the taxable value of the property fringe benefits (in relation food and drink) be reduced using the otherwise deductible rule under section 44 of the FBTAA? | Detailed Reasoning - Answer 3: Yes | Summary: The taxable value may be reduced using the otherwise deductible rule, under section 44 of the FBTAA. As discussed above, the employees are 'travelling on work'; they are not living away from home. The expenses would have been deductible to the employees under section 8-1 had they incurred the expenses themselves. Therefore, the otherwise deductible rule would apply. | Detailed Reasoning - Detailed reasoning: Reduction of taxable value of property benefits Reduction of taxable value - otherwise deductible rule is explained in section 44(1) of the FBTAA: Where: (a) the recipient of a property fringe benefit in relation to an employer in relation to a year of tax is an employee of the employer; and (b) if the recipient had, at the provision time, incurred and paid unreimbursed expenditure (in this subsection called the gross expenditure ), in respect of the purchase of the recipients property, equal to the amount that, but for this subsection and Division 14 and the recipients contribution, would be the taxable value of the property fringe benefit in relation to the year of tax - a once-only deduction (in this subsection called the gross deduction ) would, or would if not for Divisions 28 and 900 of the Income Tax Assessment Act 1997 , have been allowable to the recipient under that Act or the Income Tax Assessment Act 1936 in respect of the gross expenditure; and (ba) the amount (in this subsection called the notional deduction ) calculator in accordance with the formular: Where: GD is the gross deduction; and RD is: (i) if there is no recipient's contribution in relation to the property fringe benefit - nil; or (ii) if there is a recipients contributions in relation to the property fringe benefit equal to, or calculated by reference to, an amount of consideration paid by the recipient to the provider or to the employer in respect of the provision of the recipients property - the amount (if any) that would, or that would but for Divisions 28 and 900 of the Income Tax Assessment Act 1997 , have been allowable as a once-only deduction to the recipient under that Act or the Income Tax Assessment Act 1936 in respect of that consideration if that consideration had been incurred and paid by the recipient at the provision time... exceeds nil; and..... The reimbursement per diems amounts for food paid for using a corporate credit card will give rise to property benefits under section 40 of the FBTAA. The taxable value may be used reduced using the otherwise deductible rule, under section 44 of the FBTAA. Paragraph 44(1)(a) For the 'otherwise deductible' rule to apply, the recipient of the benefit of food and drink expenses must be an employee of the employer. Paragraph 44(1)(b) For the 'otherwise deductible' rule to apply, a once-only deduction must have been allowable to the employee under either the ITAA 1936 or ITAA 1997. Application of section 8-1 of the ITAA 1997 To be deductible under section 8-1 of the ITAA 1997, the expense must have a sufficiently close connection to the performance of the employment duties and activities through which the employee earns income. It will not be enough to show some general link or causal connection between the expenditure and the production of income. The occasion of the outgoing on food and drink must be found in the employee's income producing activities, rather than because the employee: • lives far away from where they gain or produce their assessable income (i.e. due to their personal circumstances) • is living at a location away from their usual residence • incurs the expenses as a result of relocating from their usual residence. Such expenses are 'living expenses' and are not deductible under section 8-1 of the ITAA 1997 because they are not incurred in performing an employee's income-producing activities and are also private or domestic in nature. Similarly, costs incurred by an employee to maintain their normal residence and in consuming food and drink to go about their daily activities are not deductible. They are living expenses. They are preliminary to the work and are not incurred in performing the work activities. They are also of a private or domestic nature. However, where an employee travels and stays away from their usual residence overnight in the course of performing their income producing activities and incurs food and drink expenses, these expenses will generally be deductible under section 8-1 of the ITAA 1997 The employee does not incur the expenses due to their personal circumstances Living expenses include expenses incurred by an employee where, due to their personal circumstances, they live far away from where they gain or produce their assessable income. Such expenses are incurred because the employee's personal circumstances are such that they keep their usual residence, rather than relocate. The occasion of the outgoing for food and drink is not found in the employee's income-producing activities, meaning that these expenses are not incurred in the course of gaining or producing the employee's assessable income. They are private and domestic in nature. Therefore, their expenses would be an incident to their employment, incurred in the course of producing or gaining their assessable income and would not be private or domestic in nature. The employee does not incur the expenses because they are living at a location or have relocated Where an employee is living at a location away from their usual residence or has relocated, their food and drink expenses are living expenses and will not be deductible even if the employee is living at that location due to their employment. This is because the location at which the employee works has become their new regular place of work, and the food and drink expenses are not an incident of their income-earning activity. Rather, the employee's personal circumstances are such that their usual residence is not located near their new workplace. Consequently, the employee is living at a location away from their usual residence and their food and drink expenses will not be deductible. Paragraphs 38 to 72 of Tax Ruling TR 2021/4: Income tax and fringe benefits tax: employees: accommodation and food and drink expenses, travel allowances, and living-away-from-home allowances further explain when an employee will not be 'travelling on work' but 'living at a location' away from their usual residence (including when they have relocated). Where an employee is living at a location away from their usual residence, their food and drink expenses are living expensesand will not be deductible even if the employee is living at that location due to their employment. The 'length of period away' means the overall period of time the employee spends living at a particular location for work. Where an employee is living at one location for work for an extended period, that period is not broken by short trips they take from that location, for example travelling back to their usual residence on weekends or when 'travelling on work' from that location. Generally, the longer an employee spends away from their usual residence for work, the more likely the employee is living at the location. In this case, employees are away from their usual residences for varying lengths of time, up to 90 days. The actual length of time an employee is away from their usual residence depends on the project or training required. | Detailed Reasoning - Application to your circumstances: Having regard to the elements of section 8-1 of the ITAA 1997, the employees' food and drink expenses, had they incurred these expenses themselves, would have been incurred by them in the course of their gaining or producing their assessable income. As discussed above, it is considered that they were 'travelling on work'. Furthermore, in considering the factors outlined in TR 2021/4, the employees would not have incurred the food and drink expense because of their personal circumstances or due to living at a location away from their residence or having relocated from their usual residence. Therefore, the food and drink expense would be deductible to the employees under section 8-1 of the ITAA 1997 had they incurred the expense themselves. Accordingly, the otherwise deductible rule would apply to reduce the taxable value of the benefit of food and drink provided to employees. | Detailed Reasoning - Question 4: Do the reimbursed per diems amounts for accommodation that are paid for using a corporate credit card, give rise to residual benefits under section 45 of the FBTAA? | Detailed Reasoning - Answer 4: Yes | Summary: The requirements of section 45 are met. As all the requirements of a fringe benefit are met residual fringe benefits will arise. | Detailed Reasoning - Detailed reasoning: Is the provision of accommodation a Housing Benefit? A Housing benefit arises where an employee or an associate is granted a lease or licence to occupy employer provided premises as their usual place of residence. The Commissioner considers that generally an employee is living away from their usual place of residence where, the employee would have continued to live in a particular place, but for having to change residence in order to work temporarily for the employer at another locality and expects to return to that place when the temporary period is over. Therefore, in this instance as the employee maintains their usual place of residence and returns there when the travel has ceased, the benefit cannot be a housing benefit. Residual fringe benefits Section 45 of the FBTAA defines residual benefits as: | Detailed Reasoning - 45 Residual benefits: A benefit is a residual benefit for the purposes of this Act is the benefit is not a benefit by virtue of a provision of Subdivision A of Divisions 2 to 11 (inclusive) Residual fringe benefits can be separated under four different categories under subsection 136(1) of the FBTAA as: (1) In-house non-period residual fringe benefits; (2) In-house period residual fringe benefits; (3) External non-period residual fringe benefits; (4) External period residual fringe benefits. Broadly, an 'in-house residual fringe benefit' is a residual benefit provided by an employer or associate of the employer as part of their business activities. An 'external residual fringe benefit' is a benefit that is not an in-house residual fringe benefit. The distinction between a 'period' and a 'non-period' residual fringe benefits depends on the definition of 'period residual fringe benefit' in subsection 136(1) and section 149 of the FBTAA. A 'period residual fringe benefit' is defined as a residual fringe benefit that is provided during a period. Under subsection 149(1), a benefit is taken to be provided during a period if, and only if, it is provided and subsists during a period of more than one day and is not deemed to be provided at a particular time or on a particular day. The effect of this is that, generally, where a residual fringe benefit is provided and subsists for more than one day, it is a period residual benefit. | Detailed Reasoning - Is the benefit an exempt residual fringe benefit?: Subsection 47(5) of the FBTAA provides that accommodation provided by an employer to an employee can be an exempt benefit: Where: (a) A residual benefit consisting of the subsistence, during a year of tax, of a lease or license in respect of a unit of accommodation is provided to an employee of an employer in respect of his or her employment; and (b) The unit of accommodation is for the accommodation of eligible family members and is provided solely because the duties of that employment require the employee to live away from his or her normal residence; and (ba) the employee satisfies: (i) Sections 31C (about maintaining an Australian home) and 31D (about the first 12 months); or (ii) Section 31E (about fly-in fly-out and drive-in drive-out requirements); and (c) The accommodation is not provided while the employee is undertaking travel in the course of performing the duties of that employment; and (d) Any of the following conditions is satisfied: (i) Subsection (7) applies in relation to the provision of transport for the employee in connection with travel in the period in the year of tax when the lease or licence subsisted, being travel between the employee's usual place of residence and the employee's usual place of employment; (ii) If the employee satisfies section 31C and 31D - the employee gives to the employer, before the declaration date, a declaration, in a form approved by the Commissioner, purporting to set out the matters in subparagraphs 31F(1)(a)(i) to (iii); (iii) If the employee satisfies section 31E - the employee gives to the employer, before the declaration date, a declaration, in a form approved by the Commissioner, purporting to set out the matters in subparagraphs 31F(1)(b)(i) to (iii); the benefit is an exempt benefit in relation to the year of tax. | Detailed Reasoning - Application to your circumstances: In this case, employees are provided the accommodation while the employee is undertaking travel in the course of performing the duties of their employment. There is no evidence to suggest that the employees are receiving exempt external period residual fringe benefits. As discussed above, all other requirements of a fringe benefit would be met. | Detailed Reasoning - Question 5: Can the taxable value of the residual fringe benefits (in relation to the accommodation) be reduced using the otherwise deductible rule under section 52 of the FBTAA? | Detailed Reasoning - Answer 5: Yes | Summary: The provision of accommodation expenses is a residual fringe benefit under section 45 and subsection 136(1) of the FBTAA. The employees were 'travelling on work'; they were not living away from home. The expenses would have been deductible to the employees under section 8-1 had they incurred the expenses themselves. Therefore, the otherwise deductible rule would apply. | Detailed Reasoning - Detailed reasoning: Reduction of taxable value of residual benefits Section 52(1) of the FBTAA explains the reduction of taxable value - otherwise deductible rule for a recipient of a residual fringe benefit: Where: (a) The recipient of a residual fringe benefit in relation to an employer in relation to a year of tax is an employee of the employer; and (b) If the recipient had, at the comparison time, incurred and paid unreimbursed expenditure (in this subsection called the gross expenditure ), in respect of the provision of the recipients benefit, equal to the amount that,, but for this subsection and Division 14 and the recipients contribution, would be the taxable value of the residual fringe benefit in relation to the year of tax - a once-only deduction (in this subsection called the gross deduction ) would, or would if not for Divisions 28 and 900 of the Income Tax Assessment Act 1997 , have been allowable to the recipient under that Act or the Income Tax Assessment Act 1936 in respect of the gross expenditure; and (ba) the amount (in this subsection called notional deduction ) calculated in accordance with the formula: GD - RD Where: GD is the gross deduction; and RD is: (i) if there is no recipient's contribution in relation to the residual fringe benefit - nil; or (ii) if there is a recipients contributions in relation to the residual fringe benefit equal to, or calculated by reference to, an amount of consideration paid by the recipient to the provider or to the employer in respect of the provision of the recipients benefit - the amount (if any) that would, or that would but for Divisions 28 and 900 of the Income Tax Assessment Act 1997 have been allowable as a once-only deduction to the recipient under that Act or the Income Tax Assessment Act 1936 in respect of so much of that consideration as was taken into account for the purposes of section 4-15 or 8-1 of the Income Tax Assessment Act 1997 , if that consideration had been incurred and paid by the recipient at the comparison time; exceeds nil; and.... | Detailed Reasoning - Application to your circumstances: The reasoning outlined at Question 3 in relation to the application of the otherwise deductible rule to the benefit of food and drink expenses would apply in an analogous way to the employees' accommodation expenses covered by this question. Therefore, the otherwise deductible rule in section 52 of the FBTAA would apply and reduce the taxable value of the residual fringe benefit. | Detailed Reasoning - Question 6: Do the reimbursed per diems amounts for accommodation and food and drink that are paid for using a personal credit card, give rise to expense payment benefits under section 20 of the FBTAA? | Detailed Reasoning - Answer 6: Yes | Summary: The requirements of section 20 are met. As all the requirements of a fringe benefit are met expense payment fringe benefits will arise. | Detailed Reasoning - Detailed reasoning: Expense payment benefits An expense payment benefit is defined in section 20 of the FBTAA: 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 to another person (in this section referred to as the recipient ) to may 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. An expense payment benefit arises where an employee uses a personal credit card to acquire goods or services, and the employer either pays an amount to the issuer of the card or reimburses the employee in respect of the expenditure. | Detailed Reasoning - Application to your circumstances: As discussed in Question 1, when an employee uses a corporate credit card and is reimbursed by the employer, section 150 applies. Section 150 provides that where an employee or an associate of the employee acquires a benefit on credit by using a credit card issued to the employer or an associate of the employer, the benefit is considered to have been provided under an arrangement between the employer, the associate of the employer, and the person who provided the recipient with the benefit. When a personal credit card is used, this means the benefit is taken to have been given indirectly to the recipient by the employer. Therefore, the employee is a recipient of an expense payment benefit. As discussed above, all other requirements for a fringe benefit are met. | Detailed Reasoning - Question 7: Can the taxable value of the expense payment fringe benefits (in relation to accommodation and food and drink) be reduced using the otherwise deductible rule under section 24 of the FBTAA? | Detailed Reasoning - Answer 7: Yes | Summary: The employees are 'travelling on work'; they are not living away from home. The expenses would be deductible to the employees under section 8-1 of the ITAA 1997 had they incurred the expenses themselves. Therefore, the otherwise deductible rule will apply. | Detailed Reasoning - Detailed reasoning: Reduction of taxable value of expense payments benefits An expense payment benefit taxable value may be reduced using the otherwise deductible rule as described in section 24(1) for the FBTAA: Where: (a) 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; and (b) if the recipient had, at the time when the recipient's expenditure was incurred, incurred and paid unreimbursed expenditure (in this subsection called the gross expenditure ), in respect of the same matter in respect of which the recipient's expenditure was incurred, equal to: (i) in the case of an in-house expense payment fringe benefit - the amount that, but for this subsection and Division 154 and the recipients' contributions, would be the taxable value of the expense payment fringe payment in relation to the year of tax; and (ii) in the case of an external expense payment fringe benefit - the amount of the recipients expenditure; a once-only deduction (in this subsection called the gross deduction ) would, or would if not for Divisions 28 and 900 of the Income Tax Assessment Act 1997 , have been allowable to the recipient under that Act or the Income Tax Assessment Act 1936 in respect of the gross expenditure; and (ba) the amount (in this subsection called the notional deduction ) calculated in accordance with the formula: GD - RD Where: GD is the gross deduction; and RD is: (i) if there is no recipient's contribution in relation to the expense payment fringe benefit - nil; or (ii) if there is a recipients portion in relation to the expense payment fringe benefit - the amount (if any) that would, or that would but for Divisions 28 and 900 of the Income Tax Assessment Act 1997 , have been allowable as a once-only deduction to the recipient under that Act or the Income Tax Assessment Act 1936 in respect of the recipients expenditure (assuming that any payment of that expenditure by the recipient had been paid by the recipient at the time when the recipients expenditure was incurred); exceeds nil; and.... | Detailed Reasoning - Application to your circumstances: Where the reimbursed per diems amounts for food and transport, the accommodation that is paid for using a personal card, will give rise to an expense payment fringe benefit. The taxable value may be reduced using the otherwise deductible rule under section 52 of the FBTAA | Detailed Reasoning - Question 8: Is the per diems allowance paid for food and drink and local transport, a living away from home allowance (LAFHA) under section 30 of the FBTAA? | Detailed Reasoning - Answer 8: No | Summary: As the employees are not living away from home, the per diems allowance is not a LAFHA. As the allowance is not a fringe benefit it is taxable as a Travel Allowance. The exception to withholding PAYG from travel allowance will apply if the necessary conditions have been met. | Detailed Reasoning - Detailed reasoning: LAFHA versus Travel Allowance Subsection 136(1) of the FBTAA defines a LAFHA benefit as a benefit referred to in section 30 of the FBTAA. Subsection 30(1) of the FBTAA sets out the circumstances in which an allowance paid by an employer to an employee will qualify as a LAFHA benefit to an employee and states: Where: (a) At a particular time, in respect of the employment of an employee of an employer, the employer pays an allowance to the employee; and (b) It would be concluded that the whole or a part of the allowance is in the nature of compensation to the employee for: (i) Additional expenses (not being deductible expenses) incurred by the employee during a period; or (ii) Additional expenses (not being deductible expenses) incurred by the employee, and other additional disadvantages to which the employee is subject, during a period; by reason that the duties of that employment require the employee to live away from his or her normal residence; the payment of the whole, or of the part, as the case may be, of the allowance constitutes a benefit provided by the employer to the employee at that time. A payment is a LAFHA if it is reasonable to conclude from all the surrounding circumstances that some or all of the allowance is in the nature of compensation to the employee for additional expenses incurred, or additional expenses incurred and other disadvantages suffered, because the employee is required to live away from his or her usual place of residence in order to perform the duties of employment. Additional expenses do not include expenses for which the employee would be entitled to an income tax deduction. The whole or such part of the allowance that satisfies these tests is a LAFHA fringe benefit, the taxable value of which is calculated in accordance with the rules contained in section 31 of the FBTAA. Taxation Ruling 2021/4provides guidelines on travel allowances and LAFHA. Paragraph 130 of TR 2021/4 states, the main difference between a travel allowance and a LAFHA is that a: • travel allowance can only be paid to cover deductible accommodation and food and drink expenses and incidental expenses incurred by an employee when they are travelling on work • LAFHA is paid to provide compensation to an employee for the additional living expenses incurred by an employee because their duties of employment require them live at location away from their usual residence. Paragraph 133 of TR 2021/4 further provides, to determine whether an allowance is a travel allowance or a LAFHA, it is first necessary to determine what expenditure the allowance is designed to cover or compensate the employee for and whether those expenses are deductible under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997). Usual residence The term 'normal residence' is defined in subsection 136(1) of the FBTAA as the employee's usual place of residence, when the employee's usual place of residence is in Australia. The FBTAA does not provide a definition of the term 'usual place of residence'. However, subsection 136(1) of the FBTAA defines 'place of residence' to mean: (a) a place at which the person resides; or (b) a place at which the person has sleeping accommodation; whether on a permanent or temporary basis and whether or not a shared basis. In the absence of a legislative reference, it is relevant to refer to the ordinary meaning of the word 'usual'. The Macquarie Dictionary defines 'usual' to mean 'habitual or customary...'. The employee assignees remain attached to their usual place of work in their home country. There is no change to their usual place of work. They have been selected by their employee to support a particular project for a short period of time (less than 90 days) and it is not practicable for these employee assignees to perform this work physically at their usual place of work and/or return to their usual place of residence at the end of each business day. It is accepted that, in the current circumstances, an employee's permanent and settled principal place of residence is the employee's usual place of residence. | Detailed Reasoning - Application to your circumstances: • In all cases the employees work on projects or training programs for short periods of time only; the work performed is non-going and will be completed within 90 days. Accordingly, the number of days in Australia is no more than 90 days as per compliance with their Temporary Work (Short Stay Specialist) (Subclass 400) Visas requirements. • The employee assignees continue to be subject to the overall direction & control from their home supervisor (i.e. home country employer) who is responsible for their performance evaluations. • The requirement to undertake travel and stay away overnight from their usual place of residence is part of their employment with the Employer. There is no element of private or domestic purposes in the decision being made by their employer. • The nature of the accommodation is temporary and the fact that they maintain their usual place of residence in their home country that is always available for their immediate use and occupation is indicative of a short temporary period travelling on work. Family are unable to join the employee assignees whilst working in Australia as reflective of a short temporary period which will revert to normal at the conclusions of the assigned role in Australia. • It is the employer that selects employees and requires them to travel from their home country to Australia to perform work on projects in Australia. There is no element of the Employer's employee assignees 'self-selecting' to travel to join projects and perform work in Australia. There is also no element of 'reward' in deciding which individual is selected by the Employer to travel to Australia to support on a particular project. In weighing up all of the factors, it is concluded that the duties of the employee's employment require them to travel on work and not live away from their normal residence. The per diem allowance paid to the employees is not a LAFHA and is therefore, not a fringe benefit. The per diems allowance that is received by some employees is a travel allowance. Withholding from travel allowance Some employees are paid a 'per diem' allowance rather than be reimbursed for expenses incurred in respect of meals and travel expenses. The 'per diem' allowance paid by the Employer to such employees is intended to cover the cost of meals and incidentals such as snacks, tips and gratuities incurred at restaurants, hotels, cafes and similar whilst working in Australia for a short period of time. The amount of the 'per diem' paid is set by the Employer to be at or below the reasonable travel allowance rates set each year in a Tax Determination by the ATO which sets the reasonable limit for each year. If the allowance for domestic travel involving an overnight absence from the employee's ordinary place of residence, and the allowance is 'up to' the reasonable allowances amount, there is no requirement to withhold. However, there is a requirement to withhold if the travel allowance is for overseas accommodation and the amount of the allowance is over the reasonable limit.

Relevant facts and circumstances | The Employer is an Australian company and a global market leader. | The Employer currently employs a large number of people and has offices in multiple countries. | The Employer offers trained staff from various overseas offices the opportunity to support projects in Australia. | Staff with the various skills from overseas locations, from time to time, are required to travel to Australia for short term projects, to learn more about the company and work with highly qualified personnel based in Australia. | In addition to the specific projects, the company also invites certain employees to apply for a specific training program in Australia for their learning and development purposes. | While the employees from overseas may come to Australia for short term periods or longer-term periods, this private ruling addresses employee assignees from overseas locations who are required to travel to Australia to work on projects or training programs for short periods of time only (i.e. up to 90 days or less). | The typical profile of employee assignees who come to Australia for projects or training purposes: | • Where sufficient resources are not available or highly qualified specialist resources are required, employees from overseas may be requested by a project manager to support a project and travel to Australia. | • These resources are in high demand and may only be available for limited periods. | • Accommodation bookings are usually made in hotels or serviced apartments. This is paid for by the Employer's corporate credit card or personal cards and claimed back via expense reimbursement. | • The home country employer decides which employees are allocated to projects/training programs in Australia and their travel to Australia. Employee assignees do not make this determination themselves. | • Whilst in Australia, the host entity in Australia oversees the employee assignees' day to day activities. | • Employee assignees remain employed formally by their home country employer. | • They also remain on home country payroll including social security obligations. | • There is no change to benefits that they would receive had they remained working in their home country. | • Employee assignees who travel to Australia for work are not encouraged to be accompanied by family members. | • Employee assignees are expected to maintain their usual place of residence in their home country whilst working in Australia for this short period. | • The primary objective of the travel is to work on and deliver projects for clients in Australia or receive training. There is no element of reward in the selection process. | • Employee assignees are paid a daily per diem for food and local transportation to the officer at or below the ATO reasonable travel allowance amounts as are applicable in any tax year. | Assumption: All employees within the scope of this ruling are taxable in Australia under Australian law.