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07 May 077 Decision Impact Statement - Experienced Tours Australia Pty Ltd

The ATO has published a Decision Impact Statement in relation to the AAT decision in Experienced Tours Pty Ltd and Ors and FCT [2006] AATA 517 (14 June 2006).

The AAT held that a corporate taxpayer was liable to FBT in respect of shares issued to two of its employees, who were also existing shareholders of the company. The shares were issued to them in their capacity of employees rather than as shareholders. On this basis, the AAT upheld the company's objection to the Commissioner's disallowance of the company's claim for a deduction for moneys paid in respect of the issue of the shares, saying that "it is appropriate to find that the provision of a fringe benefit payment to the FBTA Act does constitute an allowable deduction" (para 14):

The ATO says that the AAT decision "may be one where further law clarification is required through an appropriate vehicle, although there are few, if any, outstanding cases involving similar issues". The case was settled before the Commissioner's appeal to the Federal Court could be heard.

For a copy of the Decision Impact Statement, go here

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