Bechtel Australia Pty Ltd v Commissioner of Taxation [2023] FCA 676

Federal Court of Australia

Bechtel Australia Pty Ltd v Commissioner of Taxation [2023] FCA 676 File number: QUD 97 of 2021

Judgment of: LOGAN J

Date of judgment: 22 June 2023

Catchwords: TAXATION – Fringe benefits tax – deductibility of travel expenses for 'fly in, fly out' (FIFO) employees – whether travel expenses incurred to and from work, before and after the employee began and finished their duties is travel in the course of employment - whether circumstances satisfy 'otherwise deductible' test Fringe Benefit Tax Assessment Act 1986 (Cth), s 52(1) – whether deduction would have been allowable to employees in respect of travel expense Income Tax Assessment Act 1997 (Cth), s 8-1 – Lunney v Federal Commissioner of Taxation v Payne (2001) 202 CLR 93 applied – where travel expenses, if incurred by employee would not be deductible because travel expenses from home to work and back again are deemed living expenses, not business expenses therefore not deductible – travel expenses incurred as a prerequisite to earning income is not the same as travel expenses incurred in the course of gaining or producing income – John Holland Group Pty Ltd v Commissioner of Taxation (2015) 232 FCR 59 distinguished – that the employee is under a code of conduct during travel to and from work does not convert that travel to travel in the course of employment – Orr v University of Tasmania (1957) 100 CLR 526 applied – appeal to objection decision dismissed

Legislation: Fringe Benefits Tax Assessment Act 1986 (Cth) ss 52, 78A, 136, 140 Income Tax Assessment Act 1997 (Cth) s 8-1 Taxation Administration Act 1953 (Cth) ss 14ZL, 14ZY, 14ZZ

Cases cited: Commissioner of Taxation v Payne (2001) 202 CLR 93 Fullerton v Commissioner of Taxation (1991) 32 FCR 486 John Holland Group Pty Ltd v Commissioner of Taxation (2015) 232 FCR 59 Lunney v Federal Commissioner of Taxation (1958) 100 CLR 478 Orr v University of Tasmania (1957) 100 CLR 526 R v Teachers Appeal Board; Ex parte Bilney (1984) 35 SASR 492 Rose v Telstra Corporation Limited [1998] AIRC 1592