Exempt Benefits: laptop or similar portable computer - expense payment made earlier in the FBT year

If an employer reimburses an employee over a two year period, for the cost the employee incurred to purchase a laptop computer, can the employer provide another laptop computer to the employee in the second FBT year as an exempt benefit, under subsection 58X(1) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)?

No. Where there has been an expense payment benefit in relation to a laptop computer earlier in an FBT year, the provision of another laptop computer in that same year will not be an exempt benefit under subsection 58X(1) of the FBTAA.

An employee purchases a laptop computer.

The employer agrees to reimburse the employee for the cost of the laptop computer over a two year period.

Each of the employer's payments is an expense payment benefit for the purposes of paragraph 20(b) of the FBTAA.

Later in the second FBT year the employer provides the employee with another laptop computer.

Section 58X of the FBTAA exempts from FBT the provision of certain work related items. Subsection 58X(1) of the FBTAA provides that the provision of an expense payment benefit, a property benefit or a residual benefit in respect of an eligible work related item will be an exempt benefit. Subsection 58X(2) of the FBTAA lists the items that are 'eligible work related items' and thus subject to exemption. Included in this list is: '(h) a notebook computer, a laptop computer or a similar portable computer.'

Subsection 58X(4) of the FBTAA then limits the exemption in relation to these computers by providing that they are not exempt if, 'earlier in the FBT year, an expense payment benefit or a property benefit of the employee has arisen in relation to another' one of these portable computers. The test under subsection 58X(4) does not simply limit the exemption to the provision of one portable computer per year, subsection 58X(4) in fact limits the exemption to the provision of expense payments for one computer or the provision of one computer (property benefit) per year.

This means that if an employer provides a number of expense payments with respect to one computer, over say a two year period, then another computer cannot be provided as an expense payment benefit or a property benefit in either the first or second year of payments. This is because there has already been expense payments made in each of those years in relation to a notebook computer, laptop computer or similar portable computer.

Therefore, where there has been an expense payment benefit in relation to a laptop computer earlier in an FBT year, the provision of another laptop computer in that same year will not be an exempt benefit under subsection 58X(1) of the FBTAA.