24Reduction of taxable value—otherwise deductible rule

24 Reduction of taxable value—otherwise deductible rule

(1) Where: (a) the recipient of an expense payment fringe benefit in relation to an employer in relation to a year of tax is an employee of the employer; and (b) if the recipient had, at the time when the recipients expenditure was incurred, incurred and paid unreimbursed expenditure (in this subsection called the gross expenditure), in respect of the same matter in respect of which the recipients expenditure was incurred, equal to: (i) in the case of an in‑house expense payment fringe benefit—the amount that, but for this subsection and Division 14 and the recipients contribution, would be the taxable value of the expense payment fringe benefit in relation to the year of tax; or (ii) in the case of an external expense payment fringe benefit—the amount of the recipients expenditure; a once‑only deduction (in this subsection called the gross deduction) would, or would if not for Divisions 28 and 900 of the Income Tax Assessment Act 1997, have been allowable to the recipient under that Act or the Income Tax Assessment Act 1936 in respect of the gross expenditure; and (ba) the amount (in this subsection called the notional deduction) calculated in accordance with the formula: Start formula GD minus RD end formula where:

GD is the gross deduction; and

RD is:

(i) if there is no recipients portion in relation to the expense payment fringe benefit—nil; or
(ii) if there is a recipients portion in relation to the expense payment fringe benefit—the amount (if any) that would, or that would but for Divisions 28 and 900 of the Income Tax Assessment Act 1997, have been allowable as a once‑only deduction to the recipient under that Act or the Income Tax Assessment Act 1936 in respect of the recipients expenditure (assuming that any payment of that expenditure by the recipient had been paid by the recipient at the time when the recipients expenditure was incurred);
exceeds nil; and
(c) in the case of an expense payment fringe benefit that is not an eligible incidental travel expense payment benefit or an eligible overtime meal expense payment benefit:
(ia) where the recipients expenditure is in respect of fuel or oil for a motor vehicle owned by, or leased to, the recipient:
(A) where the fringe benefit is an eligible small expense payment fringe benefit or an undocumentable expense payment fringe benefit—substitute documentary evidence of the recipients expenditure is maintained by or on behalf of the provider and, if the provider is not the employer, that documentary evidence, or a copy, is given to the employer before the declaration date; or
(B) in any case—documentary evidence of the recipients expenditure is obtained by the recipient and that documentary evidence, or a copy, is given to the employer before the declaration date; or
(C) in any case—the recipient gives to the employer, before the declaration date, a declaration, in a form approved by the Commissioner, in respect of the recipients expenditure; or
(i) where subparagraph (ia) does not apply and the fringe benefit is an undocumentable expense payment fringe benefit or an eligible small expense payment fringe benefit:
(A) documentary evidence of the recipients expenditure is obtained by the recipient and that documentary evidence, or a copy, is given to the employer before the declaration date; or
(B) substitute documentary evidence of the recipients expenditure is maintained by or on behalf of the provider and, if the provider is not the employer, that documentary evidence, or a copy, is given to the employer before the declaration date; or
(ii) in any other case—documentary evidence of the recipients expenditure is obtained by the recipient and that documentary evidence, or a copy, is given to the employer before the declaration date; and
(d) where the expense payment fringe benefit is an extended travel expense payment benefit (other than an international aircrew expense payment benefit)—the recipient gives to the employer, before the declaration date, a travel diary in relation to the travel undertaken by the recipient to which the fringe benefit relates; and
(e) except where the expense payment fringe benefit is:
(i) an exclusive employee expense payment benefit; or
(ia) covered by a recurring fringe benefit declaration (see section 152A); or
(ii) an eligible overtime meal expense payment benefit; or
(iii) an eligible incidental travel expense payment benefit; or
(iv) an extended travel expense payment benefit; or
(v) a car expense payment benefit;
the recipient gives to the employer, before the declaration date, a declaration, in a form approved by the Commissioner, in respect of the recipients expenditure; and
(ea) where:
(i) the expense payment fringe benefit is a car expense payment benefit in respect of a car held by the recipient during a period (in this section called the holding period) in the year of tax; and
(ii) the substantiation rules set out in Division 15 have been complied with in relation to the car in relation to the holding period;
the following conditions are satisfied:
(iii) the recipient gives to the employer, before the declaration date, a car substantiation declaration for the car for the year of tax;
(iv) in a case where the substantiation rules require log book records or odometer records to be maintained by or on behalf of the recipient in relation to the car—the car substantiation declaration is accompanied by a copy of those documents; and
(f) if:
(i) paragraph (ea) does not apply; and
(ii) the expense payment fringe benefit is a car expense payment benefit in respect of a car held by the recipient during a period (the holding period) in the year of tax;
the recipient gives a declaration to the employer, before the declaration date and in a form approved by the Commissioner, that purports to set out:
(iii) the holding period; and
(iv) the number of whole business kilometres travelled by the car during the holding period; and
(v) the number of whole kilometres travelled by the car during the holding period;