Date posted: 18/09/2019

ED0219 Draft DET 19/XX: Employee use of telecommunication tools and usage plans in their employment

Despite a number of our recommendations from pre-consultation submissions being included in the draft determination, CA ANZ remains of the view that there are practical challenges with the proposed approach which impede the desired outcomes of simplicity, certainty, and reduced compliance costs.

Draft determination 19/XX: Employee use of telecommunications tools and usage plans in their employment when finalised will provide employers with the option of applying certain percentages to make an allocation between business use and private use for usage plans related to telecommunications tools.

CA ANZ has had the opportunity to consult on earlier preconsultation versions of this draft but despite this, we remain of the view that there are practical challenges with the proposed approach. These challenges may impede the desired outcomes of simplicity, providing certainty and reducing compliance costs. In our view retaining three classes of circumstances (Class A, Class B, and the de minimis class), each with a different tax outcome, introduces unnecessary complexity.  

In order to achieve the objective of reducing business compliance costs, the determination needs to be practical and considered against the realities of telecommunication tools and usages in the modern environment.  As the line between work and personal time is increasingly blurred, a simplified and pragmatic approach would be preferred. There are circumstances where it would be appropriate for payments to be fully exempt.  

It is critical that the tax outcome of applying either the FBT rules or the draft determination to telecommunication/business tools is substantially the same. We recommend that these approaches be aligned – acknowledging a law change would be required, we recommend this issue should be referred to Inland Revenue Policy and Strategy for further exploration.