Interpretative Decisions ID 2014/17 – FBT Redemption of Voucher By A Retail Store Employee

When a retail store employer provides an employee with a voucher/coupon, entitling the employee to merchandise form a participating retail store of the employer, the employer has not yet provided the employee with an ‘in-house property fringe benefit’.

The employer operates retail stores and provides the employee with a voucher/coupon at regular intervals during the year.

The voucher/coupon arrangement has the following characteristics:
• no monetary value is specified, nor loaded, onto it;
• it can be redeemed at participating stores operated b the employer;
• it can be redeemed for a specified type of merchandise up to a
specified number of items for a certain time after its issue date;
• if it is not redeemed by the expiry date; it will be forfeited;
• the employee does not pay for it nor for the merchandise;
• each one is individually numbered and the number is
recorded as being provided to that particular employee;
• each one is surrendered upon redemption and
the redeemed voucher number is recorded in the employer’s sales system;
• it is reconciled against the identity of the employee
before the merchandise can be obtained; and
• the merchandise is exactly the same as that sold to the general public.

Reasons for Decision
Where the employer has provided an employee with a voucher/coupon, which the employee can redeem for merchandise from a participating retail store of the employer, the employer provides the employee with an ‘in-house property fringe benefit’ when the employee redeems the voucher/coupon for the merchandise, not when it is issued.


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