But NOT Non-assessable Income (s 6-15) (i.e. exempt income and Non-assessable Non-exempt Income - NANE)

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1 TAXATION LAW NOTES Topic 1 & 2 Jurisdiction to tax Right to Tax - Tax Financial Year is 1 July to 30 June. Basic Formula (s4-10): Tax Payable = (Taxable Income x Tax Rate) Tax Offsets s 4-15 ITAA97: Taxable Income = Assessable Income Deductions s 6-1 ITAA97: Assessable Income includes Ordinary Income (s 6-5) + Statutory Income (s 6-10) But NOT Non-assessable Income (s 6-15) (i.e. exempt income and Non-assessable Non-exempt Income - NANE) Assessable Income of Residents: All ordinary income (s 6-5(2)) and statutory income (s 6-10(4)) of an Australian Resident Taxpayer derived directly or indirectly from all sources, whether in or out of Australia, during the income year. Assessable Income of Foreign Residents: All ordinary income (s 6-5(3)) and statutory income (s 6-10(5)) of a foreign resident taxpayer derived directly or indirectly from all Australian sources during the income year and any other amounts specifically included. Deductions = General Deductions (s 8-1) + Specific Deductions (s 8-5) Reasons why residency is important 1. Assessable income Australian residents are taxed on their worldwide income, whereas Foreign residents are taxed predominantly on Australian sourced income. 2. Tax rates Residents and Foreign residents have different applicable tax rates.

2 ORDINARY RESIDENT TEST pg 85 S6(1)(a): The PRIMARY test of residency, a TP is a resident if they RESIDE in Australia. Resides is not defined by the 1997 nor the 1936 act, thus its meaning is ascertained, by TR 98/17, from a dictionary: The meaning of RESIDES is established by cases: 1. Levene v IRC pg 86 To dwell permanently or for considerable amount of time in a particular place Lived in hotels, spent 4 or 5 months a year in the UK. The fact that the purposes for going abroad were nothing more than temporary (strong ties with the UK medical advice, religious ceremonies & visit relatives), the taxpayer was a resident of the UK for tax purposes. But after taking lease elsewhere, TP cease to be resident. 2. IRC v Lysaght 1928 pg 86 the visits to UK were not casual and uncertain but that the person held to reside does so in the ordinary course of life (meetings bcos NED of family co BUSINESS ties). Frequency of visits (1 week per month) > living elsewhere. TP held to be a resident in UK. 3. Joachim v FCT 2002 Taxpayer maintained a home for his family in Australia and, despite his absence for 316 days of the year, his intention to treat Australia as his home had not changed. Together the cases illustrate factors (pg87) considered in determining ordinary residence TR 98/17: 1. Physical presence at least some time physically present in Australia Joachim: Physical presence is not the most important determinant of residency 2. The frequency, regularity, and certainty of the visits IRC v Lysaght (1 week per month) 3. The purpose of the visits to Australia and purpose of absence (going abroad) from Australia - The purpose of visiting Australia affects the taxpayer s quality of life and behaviour. 4. The maintenance of a place of abode in Australia home available for use in Australia - Owning or having access to a fixed place of abode in Australia can suggest that the taxpayer has a quality of life and exhibits behaviour consistent with residing here. - In Example 5 of TR98/17, having a leased apartment indicates a more settled residential lifestyle. 5. The location of the person s family, business and social ties - Family (Joachim), business (Lysaght), social ties (Levene) - Key determinants of the taxpayer s lifestyle. They include presence of families, employment ties within the country, assets within and beyond Australia (e.g. properties, motor vehicles and bank accounts) and social and living arrangements (i.e. the way individuals interact with their surroundings in Australia). 6. The person s nationality not normally considered

3 Domicile test (pg 90) s6(1)(a)(i): Will be Australian resident if domicile is in Australia UNLESS the commissioner is satisfied that the TP has a permanent place of abode overseas Domicile is defined by the Domicile Act 1982 as being acquired by: 1. Birth (Domicile of Origin); 2. Intention to stay indefinitely (Domicile of Choice) - The intention that a person must have in order to acquire a domicile of choice in a country is the intention to make his home indefinitely in that country. (Tax Ruling IT 2650) - Note: TP with an Australian domicile but living outside Australia will retain that domicile if he/she intends to return to Australia on a clearly foreseen and reasonably anticipated contingency. Conversely, if TP has in mind only a vague possibility of returning to Australia, such a state of mind is consistent with the intention required by law to acquire a domicile of choice in the foreign country. Test generally applies to individuals leaving Australia, thus the person will have an Australian domicile. Therefore this test deals with the question of permanent place of abode outside Australia, rather the meaning domicile Permanent place of abode outside Australia Definition by cases: 1. FCT v Applegate pg91 meaning of permanent does not mean forever; more than temporary. TP sent to Vanuatu to open and operate a branch. A lease was obtained on a house and the TP obtained residency status in Vanuatu. TP became ill and returned to Sydney for medical treatment and did not return to Vanuatu. Lease in Vanuatu proved place of abode. Court decided if permanent ; held that it meant something less than everlasting but rather took its meaning from its context, contrasted with temporary or transitory. Not a resident. 2. FCT v Jenkins 1982 pg91 3 years sufficient to consider permanent although came back early. Transferred for a FIXED 3 years to Vanuatu to work. Attempted to sell the family home but was unsuccessful. Maintained Australian bank account but cancelled his health insurance policy. Fired from Vanuatu work after 18 months. Court held that TP was non-resident as he failed the domicile test, and non-residents are not taxed on non-australian sourced (Vanuatu sourced) income. Commissioner issued IT2650 setting out the various factors which will be taken into account in ascertaining whether a taxpayer has a permanent place of abode outside Australia: 1. Intended and actual length of the TP s stay in the overseas abode. 2. Whether the TP intended to return to Australia after stay in overseas abode or to further migrate to other countries. 3. Established a home outside Australia. 4. Whether any residence or place of abode exists in Australia, or has been abandoned because of the overseas absence. 5. The duration and continuity of the taxpayer s presence in the overseas country

4 6. The durability of association that the person has with a particular place in Australia maintaining bank accounts in Australia, informing government dpts to stop grants and allowances, place of education of TP s children, family ties.etc. Commissioner emphasise on length of stay overseas, IT years considered a substantial period of TP s stay in another country only a rule of thumb consider other factors too. 183 DAY TEST pg 93 s 6(1)(a)(ii) ITAA36: A person is a resident when: 1. Physically present in Australia for more than 183 days (1 ½ years). Generally applies to incoming individuals. 2. Unless TP s usual place of abode is outside Australia and that TP does not intend to take up residence in Australia. a. usual again means less than everlasting but is less stringent than permanent as in the domicile test. b. Does not intend to take up residence in Australia requires consideration of the factors listed in the common law test of ordinary residence. TR98/17 explains that if an individual is not residing in Australia under ordinary concepts (Requires Permanent), their usual place of abode is outside Australia. However there may be situations where an individual does not reside in Australia during a particular year but is present in Australia for more than one-half of the income year and intend to take up residence they may not fulfil the ordinary resident test, but they may fulfil the 183 day test. If this test is satisfied: - Initial ruling Executors of the Estate of Subrahmanyam (2002): the taxpayer s residency lasts for the whole income year. - Alternative ruling Groves v Commissioner of Taxation (2011): the AAT indicated that the period of residency is the number of days the taxpayer is present in Australia. Superannuation test pg 94 s 6(1)(a)(iii) ITAA36:Members of certain Commonwealth funds are deemed to be Australian residents. This DOES NOT mean whether or not they pay super. Period of residence pg 94 The Commissioner accepts that: 1. ORT only considered resident from the date TP first resides in Australia.

5 2. Domicile test Resident only when in Australia and foreign resident for actual period out of Aus. The tax-free threshold is pro-rated for the above 1 and day test resident for the whole income year, entitled to full tax free threshold. But note Groves case mentioned above. So far, no definitive answer about this. Taxation for Temporary Residents Objective: provide temporary residents with tax relief on most foreign sourced income and capital gains (subdivision 768-R) Temporary Residents are persons who: - Holds a temporary visa granted under the Migration Act 1958; AND - They and their spouse are not Australian residents within the meaning of the Social Security Act Tax Treatment: treated as a foreign resident for tax purposes even though they satisfy the residency tests. Hence, only taxed in Australia on Australian sourced income, BUT at resident s rates. Residency of Companies pg96 s 6(1)(b) ITAA36: A company is a resident of Australia where: - it is incorporated in Australia OR, not being incorporated in Australia, where it carries on business in Australia; AND - has either its central management and control in Australia or its voting power controlled by shareholders who are residents of Australia Start from the first test and make your way down. 1. Place of incorporation. 2. Place of central management & control test 3. Voting Control test. Place of Incorporation Test A company incorporated in Australia is automatically a resident of Australia regardless of any other factors. This is a question of fact determined by reference to the Corporations Act 2001 (Cth). Place of Central Management and Control Test Only relevant for co not incorporated in Australia (i.e. failing to meet place of incorporation test) - Company must A) be carrying on business in Australia AND B) Have its central management and control in Australia to be an Australia resident for tax purposes. Note: The 2 separate requirements can be met by the same facts - Malayan Shipping Co Ltd v FCT (1946) [pg96] has been argued as the authority for the principle that if a company has its central management control in Australia, it can be inferred that it is carrying on business in Australia on the basis that the acts of control and management equates to carrying on a business. BUT NOTE AS BELOW:

6 A) Location of carrying on business TR 2004/15 If business comprises: 1. Operational activities (e.g. trading, services, and mfg, and mining), location of business is where the activities are performed. a. Not necessarily where central management and control is located. 2. Passive activities (investment of assets). Location of Business is where the decisions in respect of those activities are made. - Often same location as central management and control. B) Location of central management and control Factors to determine the location of central mgmt and control: 1. Location of high-level decision-making processes. 2. Location of the monitoring of the overall corporate performance. The location is where the actual decision making takes place, rather than the formal execution of the director s resolutions: Malayan Shipping Co ltd v FCT Commissioner generally accept that if Australia is the location the BOD meet for meetings, then Australia is the location of central mgmt and control. Koitaki Para Rubber Estates Ltd v FCT 1940: Mere day-to-day control does not amount to central management and control of the company Voting Control Test Two limbs to satisfy: 1) Company s voting power is controlled by Australian shareholders; AND - Kolotex Hosiery (Australia) Pty Ltd v FCT (1975): The control of voting power appears to refer to the control of a majority (i.e. more than 50% of the voting power at general meetings). - Patcorp Investments Ltd v FCT (1976) [p.98]: A s/h is a person who is entered on the company s register. It does not look through to the ultimate beneficial owner of the shares. The residency of individual shareholders is determined by reference to the tests of residency. 2) Company is carrying on business in Australia - Same meaning as requirements for the Central Management & Control Test. Location of income source Australia or outside Australia Income activity and source location: 1) Income from business: Trading stock / sale of goods the place where the sale took place. - Where the sale of goods involves a number of activities situated in different jurisdictions, the income will be apportioned according to how much value added the activities done in each jurisdiction. - C of T (WA) v D & W Murray Ltd (1929) [p.101]:

7 - Where no value is added by one jurisdiction, there will be no income allocated to that jurisdiction for the purpose of source. 2) Income from sale of property other than trading stock. a. Land sale source is where the land is. Capital gains are resulted from sale of shares/properties. Capital gains are deemed to be Australian sourced if they are generated from Taxable Australian Property as outlined in s ITAA97. b. Other tangible and intangible property sale, factors considered: i. Place of contract made ii. Place of nego iii. Place of payment Essentially location of the economic activity giving rise to the income Cliffs International Inc. v FCT ) Income from personal services: Generally taken to be sourced from the place of the performance of the services. FCT v French (TP working for Australian company to carry out services performed in NZ, thus the income was sourced outside Australia); FCT v Efstathakis 1979 (TP moved to Australia to work at the Greek Government Press and information service office in Australia. Her services were performed in Australia, so Court held the income Australian sourced) - However, where services can be performed in any location, the place of contract or place of payment may be relevant: FCT v Mitchum (The source of income is not always the place of performance because the film could have been shot in any other country, not just in Australia) 4) Interest income - Source of interest income involves consideration of a number of factors including and emphasising the place where the contract for the loan was made, and the place where the money was advanced: Spotless Services v FCT ) Dividends s44(1) source of dividends: 1. If shareholder is a resident, then the dividend paid out of profits from worldwide sources is assessable. 2. If the shareholder is a foreign resident, then only the portion of dividends paid out of profits derived from Australian sources are assessable. 3. If dividend flows through a chain of companies, source is the previous company in the chain: Esquire Nominees Ltd v FCT. 6) Royalties

8 - Common law principle: source of royalty is the location of the industrial or intellectual property from which the royalty flows. - However, if royalty is outgoing (i.e. paid by an Australian business to a foreign entity), s 6C ITAA36 deems the royalty to have an Australian source. Hence, royalty holder has obtained Australian sourced income. Taxation (a.) Taxation of Foreign Residents Rate of Tax Foreign residents are generally subject to the progressive rate structure, but are denied the tax-free threshold Taxable income Tax on this income $0 - $80, cents for each $1 $80,001 - $180,000 $26,000 plus 37 cents for each $1 over $80,000 Over $180,000 $63,000 plus 45 cents for each $1 over $180,000 Income (a.) Resident Tax Rates (excluding medicare levy) Taxable income Tax on this income $0 - $18,200 Nil $18,201 - $37, cents for each $1 over $18,200 $37,001 - $80,000 $3,572 plus 32.5 cents for each $1 over $37,000 $80,001 - $180,000 $17,547 plus 37 cents for each $1 over $80,000 Over $180,000 $54,547 plus 45 cents for each $1 over $180,000 (b.) Tax Offsets: Reduces the tax payable DOLLAR FOR DOLLAR s 13-1 ITAA97: List of items eligible for income tax credit/rebate Welfare offsets: dependant rebates, low income tax offset, medical expenses, education o Low Income Tax Offset Table Taxable income LITO OFFSET $0 - $37,000 $445 $37,001 - $66,667 $445 [(Taxable income - $37,000) x 1.5%] Over $66,667 Nil Note: LITO is a non-refundable offset (i.e. can only be used to the maximum extent to reach $0 Income Tax) Incentive offsets: mature age workers. Overseas forces, zone rebate Foreign Income Tax Franked Dividends (franking credits)

9 Ordinary Income pg113 Definition: - s 6-5 ITAA97: Ordinary Income income according to ordinary concepts - Scott [p.113]: Ordinary Income determined in accordance with the ordinary concepts and usages of mankind. - Features of Ordinary Income 1. Sufficient nexus with an income-earning activity (from services/employment eg salary, business eg acct firm selling acct services or property eg rent/dividends) 2. Not a capital gain Eisner v Macomber (1920) [p.118]: Fruit and tree analogy to distinguish between capital gain and income Capital gain is like a tree, it grows in value. Once it has been taken, there will be no more inflow of gains. Income however is like a fruit on the tree, and that gains now will not affect gains in the future. Prerequisites of ordinary income pg Must be money or convertible to money a. Tennant v Smith 1892 The taxpayer was an agent for a bank and lived in free accommodation, which cannot be sub-let, supplied by the bank. The Court held that the accommodation was not regarded as income as it was neither cash nor cash-convertible. b. Cooke & Sherden 1980 TP received a free, non-transferrable holiday from the soft drink manufacturer due to them selling a certain number of soft drinks. The Court followed the principle in Tennant v Smith (1892) and held that because the holiday was not cash convertible they were not ordinary income. BUT NOTE: s 21A ITAA36 deems that non-cash business benefits received in the business context are deemed to be cash convertible (not deemed to be income) 2. Must be realized Gain: Eisner v Macomber 3. Must be from an external source: Tennant v Smith Must be derived by the taxpayer a. Countess of Bective 1932 There must be a real gain TP received money from trust which set up for TP s daughter. Not ordinary income because NOT REAL GAIN for the TP; but for her daughter. o If the taxpayer is not an object intended to be benefited at all by the provision for maintenance, the payments ought not to be included as assessable income. b. Hochstrasser v Mayes 1960: Reimbursement Reimbursement from employers is NOT income derived by employee But note: FB o TP sold his house for less than the price for which he had purchased it due to work relocation. The employer reimbursed him for the loss. o The Court held that the payment was not assessable because it was not a real gain. The taxpayer had been compensated for a work-related expense.

10 o Had the taxpayer been compensated for a non-work-related loss, the receipt would have been a real gain. c. Zobory 1995 o TP stole money from employer but had to return money + pay interest income back to employer. No real gain from the amount stolen by TP. d. S6-5(4) ITAA 97: Constructive Receipt Rule o Taxpayer is taken to have received the amount as soon as it applied or dealt with in any way on your behalf or as you direct. o Note: Constructive Receipt Rule is also caught under s 6-10(3) ITAA97, but is often treated as ordinary income Characteristics of ordinary income (NOT PRE-REQUISITES) Characteristics are not black or white rules; they are only indicators or pointers to what constitutes ordinary income. A gain can be ordinary income even when it does not fulfil the characteristics described below: Usually periodic, recurrent, and regular, more likely, to be ordinary income than a gain that is paid as a lump sum. o Harris capital received a one-off payment from the bank, which was described as a pension top-off to counter the effects of increasing inflation. Court held that the receipt was not a product of Harris s past employment and therefore was not ordinary income. o Blake ordinary income. The receipt was regular, hence the court held that the receipt was of an income nature. Facts for Harris and Blake were identical with the only difference being the regularity of the gain. Characterized in the hands of the taxpayer: It is OI for the particular TP and not for anyone else: Federal Coke Co Pty Ltd v FCT 1977 Le Nickel pay compensation to subsidiary of TP for breaking contract; Receipt not assessed in the hands of the TP bcos subsidiary and Le Nickel do not have contractual/legal obligations: but could have used Constructive Receipt Rule. Things to note Compensation payments obtain it s characteristics from the object being compensated. Dixon 1952 Employee enlisted in the military. Employer gave periodical payments voluntarily. Court held payments to be ordinary income as it compensated the difference between existing salary and military wages. Illegality Irrelevant for tax purpose

11 Principle of mutuality Membership fees paid but are refunded to members no real gain, so not OI for the members. OR funds received and used for activities for members not OI for club Statutory income s 6-10(2) ITAA97: Amounts that are included in assessable income by specific provisions of the income tax legislation When there is overlap between ordinary income and statutory income, usually statutory income prevails. S6-25(2) S 15-2(1) (Legislation pg 151): i) All allowances, gratuities, compensation, benefits, bonuses and premiums ii) provided to you (The TP) iii) in respect of, directly or indirectly to, any employment of or services rendered by employee. - Diff between OI and s15-2 a) S15-2 covers gains that are cash, cash-convertible and non-cash convertible b) Nexus requirement between gain and the services easier to be satisfied for s15-2 Non-assessable Income s 6-1 ITAA97: Not included in Assessable Income s 6-15 ITAA97: Two types of Non-assessable Income o s 6-20 ITAA97: Exempt Income; summary lists of provisions about exempt income in s 11-5 and s ITAA97 o s 6-23 ITAA97: Non-assessable Non-exempt Income; summary list of provisions about non-assessable non-exempt income in subdivision 11-B ITAA97 Four categories of Non-assessable Income o s 11-5 ITAA97: where the entity is exempt, no matter what kind of income they have (e.g. charitable institutions, local government) o s ITAA97: where the particular income is exempt (e.g. social service payments, educational scholarships (s ITAA97), foreign employment income (s 23 AG ITAA36) o s ITAA97: where the particular income is non-assessable non-exempt o Miscellaneous: exempt fringe benefit (s 23L(1A) ITAA36); non-cash business benefits <$300 (s 23L(2) ITAA36)

12 TAXING THE WORKER Process of Assessing the Nature of Income Personal Service Phase 1 Is it a FRINGE BENEFIT? Steps in dealing with FBT 1) Identify whether a fringe benefit exists - The following requirements are needed: A benefit defined by s136(1)fbtaa o When an employee loans to the employer, the repayment of the loan is NOT a benefit Slade Bloodstock Pty. Ltd v FCT 2007 Provided during the FBT year (i.e. 1 April to 31 March) Defined by s136(1)fbtaa A benefit may be provided where the benefit is prohibited but the prohibition is not consistently enforced: S148(3)FBTAA (eg. Employer turns a blind eye to let employee use employer-provided car for private purposes) Provided by employer, associate (CHECK PG 179 eg. Relatives, friends, related companies) or 3 rd party arranger (where employer has arranged for 3 rd party to provide the benefit) 1. Employer s136(1) a person who pays, or is liable to pay salary or wages. 2. S137 FBTAA - Employer cannot escape being an employer under the FBT legislation when there is clear employment r/ship but employer provide non-cash benefits instead. 3. S136(1) & Payne v FCT 1996 associate or arranger of the employer who participates in (contrasted with unilateral arrangements) the provision of the benefit and the employer ought reasonably to know that the associate is doing so. 4. TR99/6 Frequent flyer points not provided by the employer, as it does not arise out of arrangement between employer and airline so airline is not third party Provided to an employee or provided to an associate Ruling MT2016, fits definition of future employee only if confirmed the person WILL become an employee at the time the benefit is provided. Friend of employee not associate of employee under the definition of associate, but is deemed to be an associate under s148(2). In order to constitute a fringe benefit, the benefit provided must relate to a particular employee: Essenbourne Pty Ltd v FCT Provided in respect of the employment of the employee (past and future employment relationships)

13 o s 136(1) FBTAA: The benefit must be provided by reason of, by virtue of or for or in relation, directly or indirectly to the employment o J & G Knowles [p.182]: For there to be fringe benefits, there must be a sufficient and material relationship between the employment and the provision of the benefit. o NAT 1054 pg184: Would TP still receive the benefit if TP is not an employee? If NO - this may indicate FB. o If family + employment r/ship, consider if benefits are provided in the ordinary family setting & normal incidence of family r/ship. 2) Check whether it is excluded from the definition of fringe benefit - Exclusions are listed in s 136(1) FBTAA under definition of FB. Salary or wages (including allowances, commissions and bonuses; compensation/ sickness/accident payments) Superannuation contributions Payments from superannuation funds Benefits under an employee share scheme and Payments on termination of employment. - These are all taxed under ordinary income. 3) Identify the category of fringe benefit that applies - Div. 2 (s 7-12) FBTAA: Car Fringe Benefit pg 188 o Provides a car to employee for private use o Employer provides a car for an employee s private use. S7(1) o Car defined by s136(1) to reference s995-1itaa1997 o private use defined s136(1) as use by employee or associate not exclusively in the course of producing assessable income. o MT2027 driving to work is not in the course of producing assessable income. o Even if don t use the car, but AVAILABILITY for private use is sufficient. S7(1)(a)(ii). o S7(2): FB arise when employers car is garaged at or near a place of residence of the employee available for private use o Ruling MT2021 and determination TD94/16, FB arisen even if the car garaged near employee residence while employee is overseas. o S7(3): car FB still arises if employee has custody/control over car and not used for employment purpose. o S7(4): Car FB still arises if car is prohibited for private use but employer turns a blind eye and does not strictly enforce this prohibition. - Exemptions: o The car is only used for work-related travel and any private use by the employee or an associate of the employee is minor, infrequent and irregular: s8(2) o Only for taxi, panel van, utility truck or other road vehicle not designed for the principal purpose of carrying passengers. S8(2)(a). o Unregistered car: s8(3)

14 o FB arising from PROVISION of a car FB (eg. Fuel/repairs) could be expense FB but EXEMPT due to s53. - Div. 3 (s 14-15) FBTAA: Debt Waiver Fringe Benefit pg193 o Employer waives money owed by employee o Debt must be waived due to the employment relationship and not for some other reason (e.g. irrecoverable). - Div. 4 (s 16-19) FBTAA: Loan Fringe Benefit o S16 FBTAA: Employer supplies loans to employee o Exemptions: o S17(1): Loan is provided to the general public in the ordinary course of the employer s business; and o S17(2): Interest rate at least equal to the rate prevailing at that time on similar loans to the public. o S17(3): The loan is essentially an advance to meet expenses that are reasonably expected to be incurred in the next six months in the course of performing his or her duties of employment. o s17(4): Loan is provided to enable the employee to pay a rental bond, security deposit in respect of gas, electricity or telephone services or any similar amount and, The loan must be repaid within 12 months and The loan must be provided in conjunction with certain other fringe benefits to be exempt. - Div.5 (s 20-24) FBTAA: Expense Payment Fringe Benefit pg 195 S20 FBTAA: 1. An employer pays an expense incurred by the employee, or, 2. An employer reimburses an employee for expenditure incurred by the employee i. Analyze if reimbursement (FBT: EPFB) or allowance (income: salary and wages). 3. The expense is incurred by the employee the employee is definitely committed to the expense. o If does not fall within EPFB, can fall within other categories of FB if not incurred. - Exemptions: o no-private-use-declaration s20a FBTAA: Employer s reimbursement or payment for expense limited to the amount that would result in nil taxable value. o S21: Exempt accommodation if it is required solely because the duties of the employment require the employee to live away from his or her normal residence o S22: Exempt for certain car expense payment benefits: as mentioned under exemptions in Car FB above. - Div. 9A (s 37A-37CD) FBTAA: Meal Entertainment Fringe Benefit pg 197 Meal entertainment fringe benefits can be captured by categories such as: 1. Expense payment 2. Property 3. Meal entertainment.