Issue
Is a computer that is different to a notebook or laptop computer but is still portable, considered to be an eligible work related exempt benefit under paragraph 58X(2)(h) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)?
Decision
No. For the exemption under paragraph 58X(2)(h) of the FBTAA to apply, the computer must be similar to a notebook or laptop computer.
Facts
An employer provides an employee with a computer. The computer has the following features: • it is lighter in weight than an average desktop computer but much heavier than a notebook or laptop computer • it comes in three separate units; a case with carry handle containing the processing unit; a monitor; and a keyboard • it comes with a carry handle attached to the case for ease of transport between worksites • it needs no installation at each new worksite • it can perform all functions that a laptop can • it has no battery power and uses mains electricity
The computer is marketed as a portable model designed to be more powerful than a standard laptop but to be portable between various worksites.
Reasons for Decision
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.'
The FBTAA does not provide a definition of a 'notebook, laptop or similar portable computer'; therefore it takes on its ordinary meaning. The Macquarie Dictionary , 2001, rev. 3rd edn, The Macquarie Library Pty Ltd, NSW defines a laptop computer as 'portable and small enough to be operated while held on one's knees'. It also defines a notebook computer as 'a small, lightweight, portable computer'. 'Portable' is defined as 'easily carried or conveyed by hand'.
The meaning of the words 'or a similar portable computer' should be restricted to the characteristics of the words that preceded the general words. That is, the meaning of 'or a similar portable computer' is limited to a computer which has characteristics similar to a notebook or laptop computer.
It is considered the primary characteristics of notebook and laptop computers for the purposes of this provision are that they: • are easily portable and designed primarily for use away from an office environment • are smaller and lighter than even the most compact desktop computer • can operate without an external power supply, and • are designed as one complete unit.
If all of these characteristics are met, it would be accepted that the computer would be a 'similar portable computer and would fall within paragraph 58X(2)(h) of the FBTAA. An example would be a tablet computer, which is approximately the same size as a laptop computer but with the ability for direct data input via a touch screen.
A mains powered computer that is formed of three separate parts; the central processing unit, the monitor and the keyboard would not be considered to be similar to a battery powered notebook computer or a laptop computer. Such a computer, whilst being portable in the sense that it can be moved from one office environment to another, is not capable of being operated in a mobile environment, for example whilst travelling on a plane.
In order to determine if a particular computer should be considered to be similar to a notebook or laptop computer, it may also be useful to consider the way the computer is marketed to the public. Where a computer is listed by a manufacturer or retailer as a desktop computer (albeit one that is portable), it is unlikely that it would be considered to be similar to a notebook or laptop computer to the degree that would be required for the exemption under paragraph 58X(2)(h) of the FBTAA to apply.
Accordingly as the computer requires an external power source and is composed of three pieces, all of which would be carried separately and is marketed as a desktop computer, it isn't considered as a 'similar portable computer'. Therefore the computer will not be an exempt item under paragraph 58X(2)(h) of the FBTAA.