TaxTalk Alerts: Global Mobility

FIFO workers: travel costs considered otherwise deductible – 11 June 2015

In what is expected to become a landmark decision in relation to travel costs, the Full Federal Court of Australia has held that costs incurred by an employer to transport fly-in-fly-out (FIFO) employees from their point of hire to their project location and back were “otherwise deductible” and therefore not subject to Fringe Benefits Tax (FBT).

In a unanimous decision handed down this morning, the three Justices in John Holland Group Pty Ltd v Commissioner of Taxation [2015] FCAFC 82 (John Holland Decision) determined that the flights provided were not subject to FBT on the basis that the employees were on paid duty under the control and direction of their employer from their arrival at Perth Airport and during their flights to and from Geraldton. As such, the travel costs were considered to be incurred in the course of their employment rather than being private and domestic in nature.

This decision will have a significant impact on companies who engage FIFO workers. As an advocate for John Holland in this case, we share our insights on the judgement and outline below how this decision may be relevant for your organisation.

Subclass 457 visa program – future changes – 24 March 2015

The Department of Immigration and Border Protection (DIBP) has released its response to the recommendations provided in the Robust New Foundations report.

This report was provided to the DIBP by an independent review panel in 2014, after completion of a comprehensive review of the 457 visa program. Once the full suite of changes has been implemented, users can expect a more streamlined and efficient program, which is able to respond quickly to changing business needs without compromising overall program integrity.

2014

Subclass 457 review – Robust New Foundations report released – 19 September 2014

The Department of Immigration has released details of the Robust New Foundations Report recently provided on completion of the Independent Review of the 457 visa program, announced in February this year.

The Review Panel engaged in extensive consultations with various industry groups, trade unions, government bodies as well as users of the 457 visa program. In addition, almost 200 submissions were received and reviewed by the panel. The final report has provided various recommendations aimed at deregulating and simplifying the program including proposed changes to the current English language, labour market testing and market salary rate criteria. In some cases, the proposed changes would see some criteria regain exemptions similar to those in place prior to the sweeping reforms implemented on 1 July 2013.

Immigration Minister Scott Morrison has indicated that the Department's formal response will be provided in the 'weeks or months ahead' and that it cannot guarantee that any or all of the changes it seeks to implement which require legislative changes will receive approval from Parliament. Minister Morrison has also acknowledged that the recommendations in the report appear to propose a balanced and measured set of reforms while keeping faith with the necessary requirements for a robust integrity framework to support the 457 visa program.

In anticipation of further announcements, we have provided an overview below of some of the recommendations outlined in the report.

Employee Share Scheme reporting (ESS) – It's time to start preparing – 12 May 2014

The deadlines for 2014 Employee Share Scheme (ESS) reporting are once again almost upon us. Employees must be provided with an ESS Statement by 14 July 2014, and an ESS annual report must be provided to the Australian Taxation Office (ATO) by 14 August 2014.