Fringe benefits tax: if an employer decides not to claim an income tax deduction for expenditure incurred in providing a fringe benefit to an employee, does this alter the employer's liability, if any, for fringe benefits tax?

No. An employer's liability for fringe benefits tax arises independently of any decision of an employer to forego the right to claim an income tax deduction for the expenditure. Example: Tasso Pty Ltd incurs expenditure of $1000 in reimbursing an employee for a private expense of the employee. The $1000 is fully deductible under the Income Tax Assessment Act 1936. Regardless of whether Tasso Pty Ltd decides to claim the deduction to which it is entitled, the reimbursement is an expense payment fringe benefit with a taxable value of $1000.