• Skip to content
  • Skip to navigation

Grant Thornton Australia

Grant Thornton uses cookies to monitor the performance of this website and improve user experience.

If you are happy to accept cookies from this site, please check the box.

To find out more about cookies, what they are and how we use them, please see our privacy notice, which also provides information on how to delete cookies from your hard drive.

How to be COVIDSafe when visiting Grant Thornton offices. Find out how

Global site
  • Global site
  • Algeria
  • Botswana
  • Cameroon
  • Egypt
  • Ethiopia
  • Gabon
  • Guinea
  • Kenya
  • Libya
  • Malawi
  • Mauritius
  • Morocco
  • Nigeria
  • Namibia
  • Senegal
  • South Africa
  • Togo
  • Tunisia
  • Uganda
  • Zambia
  • Zimbabwe
  • Anguilla
  • Antigua
  • Argentina
  • Aruba, Bonaire, Curacao and St. Maarten
  • Bahamas
  • Barbados
  • Bolivia
  • Brazil
  • British Virgin Islands
  • Canada LLP
  • Canada RCGT
  • Cayman Islands
  • Chile
  • Colombia
  • Costa Rica
  • Dominica
  • Ecuador
  • El Salvador
  • Grenada
  • Guatemala
  • Honduras
  • Mexico
  • Montserrat
  • Nicaragua
  • Panama
  • Paraguay
  • Peru
  • Puerto Rico
  • St Kitts
  • St Lucia
  • St Vincent and the Grenadines
  • Trinidad & Tobago
  • United States
  • Uruguay
  • Venezuela
  • Turks & Caicos
  • Afghanistan
  • Australia
  • Bangladesh
  • Cambodia
  • China
  • Hong Kong
  • India
  • Indonesia
  • Japan
  • Korea
  • Malaysia
  • Mongolia
  • Myanmar
  • New Zealand
  • Pakistan
  • Philippines
  • Singapore
  • Taiwan
  • Thailand
  • Vietnam
  • Albania
  • Armenia
  • Austria
  • Azerbaijan
  • Belarus
  • Belgium
  • Bosnia and Herzegovina
  • Bulgaria
  • Channel Islands
  • Croatia
  • Cyprus
  • Czech Republic
  • Denmark
  • Estonia
  • Finland
  • France
  • Georgia
  • Germany
  • Gibraltar
  • Greece
  • Hungary
  • Iceland
  • Ireland
  • Isle of Man
  • Israel
  • Italy - Bernoni
  • Italy - Ria
  • Kazakhstan
  • Kosovo
  • Kyrgyzstan
  • Latvia
  • Liechtenstein
  • Lithuania
  • Luxembourg
  • Macedonia
  • Malta
  • Moldova
  • Monaco
  • Netherlands
  • Northern Ireland
  • Norway
  • Poland
  • Portugal
  • Romania
  • Russia
  • Serbia
  • Slovak Republic
  • Slovenia
  • Spain
  • Sweden
  • Switzerland
  • Tajikistan
  • Turkey
  • Ukraine
  • UK
  • Uzbekistan
  • Bahrain
  • Egypt
  • Jordan
  • Kuwait
  • Oman
  • Qatar
  • Saudi Arabia
  • United Arab Emirates
  • Yemen
  • Lebanon
Grant Thorton Logo

Grant Thornton Logo Grant Thornton Logo

Contact us
  • Insights
  • Services
  • Industries
  • Meet our people
  • Careers
  • News centre
  • Locations
  • About us
  • Audit
  • Tax
  • Private Advisory
  • Financial Advisory
  • Grant Thornton Consulting
  • Asia
Audit Home
  • Audit methodology
  • Audit technology
  • Financial reporting advisory
Tax Home
  • Corporate tax
  • Employee equity reward schemes
  • Fringe benefits tax
  • Global mobility services
  • GST & indirect tax
  • International tax
  • Payroll assurance
  • Research & development
  • Tax compliance
  • Tax governance & risk management
  • Tax in mergers & acquisitions
  • Tax lawyers
  • Transfer pricing
Private Advisory Home
  • Family Business Consulting
  • Family office services
  • Private wealth
  • Superannuation
Financial Advisory Home
  • Corporate finance
  • Debt advisory
  • Forensic consulting
  • Payments advisory
  • Restructuring advisory
Grant Thornton Consulting Home
  • Business risk
  • Human capital
  • Performance improvement
  • Strategy & growth
  • Technology consulting
  • GNC Group Consulting
Asia Home
  • China practice
  • India practice
  • Japan practice
  • Agribusiness, food & beverage
  • Automotive dealers
  • Education
  • Energy & resources
  • Financial services
  • Health & aged care
  • Life sciences
  • Manufacturing
  • Not for Profit
  • Professional services
  • Public sector
  • Real estate & construction
  • Retail & consumer products
  • Technology & media
Agribusiness, food & beverage Home
Bite Size Dealtracker Food, Beverage & Agribusiness industry insights
Key insights for the Australian Food, Beverage & Agribusiness industry.
Financial services Home
  • Banking
  • Fintech
  • Private Health Insurance
  • Superannuation
  • Asset management
  • BEAR FAQs
  • Open banking
Royal Commission wrap up Top 10 things for Financial Services providers
Eleven months on from the first round of hearings for the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, Commissioner Hayne’s final report has been released.
Health & aged care Home
Aged Care Royal Commission Perspectives on the Future of Ageing
Transitions in ageing are not consistent and systematic as they are described by our ageing systems. Sometimes they are incremental, sometimes accidental, sometimes monumental, and they are always personal. We can create something better.
Life sciences Home
Biotechnology Industry Position survey Australia's biotechnology industry drives economic growth
The 2019 Biotechnology Industry Position survey conducted by Ausbiotech and supported by Grant Thornton has revealed that new technologies across regenerative medicine and medicinal cannabis are disrupting the industry, and Australia's global strength in clinical trials continues to drive contributions to the economic and social fabric of the country.
Manufacturing Home
mid-sized business report Manufacturing is critical to our economy – how can we support the sector?
Although the knock-on effects of the Australian automotive industry exiting our country are yet to be fully understood, the industry is evolving, and manufacturing continues to be a major employer and critical to our overall economy.
Not for Profit Home
NATIONAL OUTCOMES MEASUREMENT PROGRAM A practical framework
Royal Commissions and federal budgets are critical things for Nonprofit human service providers to be thinking about at this point in time.
Real estate & construction Home
mid-sized business report Supporting affordable housing requires planning, certainty – and tax reform
There is a lot of noise around the property sector at the moment – and it’s not all positive. Prices are down – but this shouldn’t be a surprise when some markets (namely Sydney & Melbourne) saw unprecedented hikes in recent years.
Retail & consumer products Home
GNC Group Consulting The Technology Trap: Online innovation in retail
I recently attended the NRF Retail Big Show in New York, an overwhelming smorgasbord of retail technology and new store concepts.
Technology & media Home
  • Telecommunications
Scaling-up for Growth From start-up to scale-up
Navigating the complexities of growth and maintaining previous success is a challenge for all mid-size businesses.
  • Working at Grant Thornton
  • Student opportunities
  • Experienced careers
  • Contact us
Working at Grant Thornton Home
  • Flexibility
  • Your career and development
  • Diversity and inclusion
  • In the community
  • What we offer you
Student opportunities Home
  • Graduates
  • Vacationer Program
  • The application process
  • FAQs
  • Student application tips and tricks
Experienced careers Home
  • Client spotlight
  • Grant Thornton Australia | Audit, Tax and Advisory
  • Client alerts
  • 2017
  • Do your employees travel a lot, live away from home or have they relocated?

Do your employees travel a lot, live away from home or have they relocated?

29 Jun 2017
  • Do your employees travel a lot, live away from home or have they relocated?

A look at new ATO changes to impact on deductions and FBT.

Have you ever struggled with determining the correct tax treatment of different travel costs for your employees? Were the employees travelling on business, living away from home, or perhaps they relocated? And what did this mean in relation to the deductibility of the costs and the application of FBT?

Grant Thornton Partner, Elizabeth Lucas, was part of the ATO’s lengthy consultation process that looked at these issues and has now culminated in the release of a new draft tax ruling, Draft Taxation Ruling TR 2017/D6, which attempts to simplify these issues for employers. 

Summary

  • Inclusions in the draft ruling
    • Working regularly in two or more locations
    • Living away from home
    • International secondees to Australia
    • Fly-in, fly-out
  • Issues that have not been addressed
    • Commuting interstate
    • Flexible working arrangements
    • Who is living away from home

Some inclusions in the draft ruling worth noting are:

Working regularly in two or more locations

It is increasingly common for employees to have regular work duties to perform at two locations. For instance, an employee may work 2-3 days per week in each of two different States, living in one State and using an employer-provided apartment in the other. The draft ruling confirms that the travel between States and the cost of the apartment and meals whilst in the second State are all deductible.

Living away from home

The draft ruling outlines that initial travel to a location where the employee will be living away from home, and the travel home again at the end of the living away from home assignment, will be deductible/not subject to FBT (although this would usually be exempt from FBT anyway). However, travel back and forth between home and the place where the employee is living away from home during the assignment is treated either:

  • As deductible/not subject to FBT if the employer arranges and pays for the travel and the employee is subject to the direction and control of the employer during the travel; or
  • As not deductible/subject to FBT if the employer decides the flights are not part of the employee’s work and are to be taken in the employee’s own time (although still paid for by the employer).

Further, the draft ruling provides similar examples where a 2 month period away from home is treated as travelling on business, and a 4 month period is treated as living away from home.

International secondees to Australia

Secondments to Australia for between 90 and 120 days, where the employees stay on the home country payroll but have travel and accommodation costs paid for by the Australian employer, broadly, are treated as living away from home arrangements, such that the accommodation and meal costs are not deductible/subject to FBT (unless any FBT exemptions apply, although this is unlikely). By inference, it is probably arguable that secondments of lesser periods can usually be treated as travelling on business, rather than living away from home, with travel costs being deductible/not subject to FBT.

Fly-in, fly-out

According to the draft ruling, fly-in, fly-out travel is deductible/not subject to FBT if the employee is being paid for that travel time and is subject to the employer’s direction and control whilst travelling, but is not deductible if the employee is not being paid for that travel time and is not subject to the employer’s direction and control whilst travelling. This difference was born from the ‘John Holland case’ and is a fairly subtle one. It may be difficult to determine which side of the fence a salaried employee falls. Official start and finish times of rosters and the precise terms of the employment contract are important. In any event, if the destination is a ‘remote area’ as defined for FBT purposes, these travel costs are usually exempt from FBT.

Some of the issues we had hoped would be addressed, but have not, are:

Commuting interstate

Similarly to the scenario where employees regularly work in two or more States, it is very common for an employee to live in one state and work in another, commuting weekly. On the one hand, this appears to be travel to and from work, rather than being travel during the course of undertaking the work activities. However, using the principles in the draft ruling, if the employer considers the travel to be a requirement of the employee’s work, pays them for the travel time and the employee is under the direction and control of the employer during the travel time, it may be arguable that the travel costs are deductible/not subject to FBT. We would like to see this clarified in the final ruling.

Flexible work arrangements

Employees are increasingly working from home, or locations other than ‘the office’, and at different times of the day. Both at home and in the office, less and less equipment is required to establish a place of work. Whilst the draft ruling says that a work location is “any place an employee attends for work”, it would be nice to have some clarity regarding the fact that this might be the employee’s home, a café, the beach, a client’s premises, etc. and how travel between such locations should be treated.

Who is living away from home

As the old ruling that covers what constitutes ‘living away from home’, MT 2030, is to be repealed, it is important that we understand the ATO’s view on this going forward. This is critical when an employer pays for accommodation and food costs for an employee – as whether those costs are deductible or not will hinge on whether the employee is considered to be living away from home or travelling on business. Whilst we recognise that there are a number of factors that determine the outcome, some further examples in the ruling, with similar facts but different time periods would be useful.

Grant Thornton plans to lodge a submission in relation to this draft ruling by the due date of 11 August 2017, and would welcome your comments in this regard. Please send any comments to Elizabeth Lucas, details below.

For further information, please contact your usual Grant Thornton adviser, or:

Elizabeth Lucas
Elizabeth Lucas
Partner & Head of National Specialist Tax Melbourne
Email address https://www.linkedin.com/in/elizabeth-lucas-37209848/ Elizabeth Lucas VCard
View full profile
Share this page
  • Share this page on Facebook LinkedIn
  • Share this page on Twitter Twitter
  • Share this page on LinkedIn LinkedIn
  • Share this page on Wechat WeChat
  • Share this page via email Email
  • Follow us on youtube
  • Follow us on linkedin
  • Follow us on twitter
  • Follow us on facebook
Connectclose
  • Contact us
  • Locations
  • Meet our people
  • Subscribe
  • Staff portal
Aboutclose
  • About us
  • Careers
  • News centre
  • Client alerts
  • Grant Thornton Foundation
  • Grant Thornton Affinity
Legalclose
  • Privacy
  • Compliance and ethics
  • Disclaimer
  • Site map

© 2021 Grant Thornton Australia Limited – All rights reserved

    • EN
    • Contact us