FBT Q&A – Payment of employee visa costs

Is reimbursement of a visa application cost subject to FBT?

Question

We have recently employed a new staff member and paid for their Visa application for their right to work in Australia. Is this subject to FBT as an expense payment benefit?

Answer

Transport provided to an employee and family members as a consequence of an employee being required to relocate his/her usual place of residence, or live away from home in order to perform employment duties is an exempt benefit under section 58F of the FBT Act.

Relocation transport encompasses an expense payment benefit where the recipient’s expenditure is in respect of the provision of transport, or meals or accommodation in connection with transport. ‘Transport’ is not defined in the FBT Act but, by virtue of subsection 142A(1) of the FBT Act, expenditure by an employee on accident insurance, airport or departure tax, a passport, a visa, a vaccination or any similar matter ‘in connection with transport’ is taken to be ‘in respect of the provision of, or to consist of, transport’.

As such, if the Visa application was to enable the employee to relocate to Australian in order to work for you, FBT exemption appears available.

This should be compared with visa costs for an employee to remain in Australia – in this case the visa is not to enable them to relocate but rather to remain here and, as such, no FBT exemption would be available.

This article provides a general summary of the subject covered and cannot be relied upon in relation to any specific instance. It is not intended to be, nor should it be relied upon as, a substitute for professional advice. TaxEd Pty Ltd and any person connected with its production disclaim any liability in connection with any use.

This article provides a general summary of the subject covered as at the date it is published. It cannot be relied upon in relation to any specific instance. TaxEd Pty Ltd and any person connected with its production disclaim any liability in connection with any use. It is not intended to be, nor should it be relied upon as, a substitute for professional advice.