Question

If an employer has paid for an employee’s 482 Visa is this tax deductible and FBT exempt?

Answer

If the employer pays expenses in connection with hiring or relocating an employee to assist in their business activities then the expenses should generally be deductible under Section 8-1 ITAA 1997. This should include costs associated with sponsorship, the visa, legal expenses etc. It would also encompass the visa renewal expenses for an existing employee (i.e. these costs are still incurred in relation to the employee’s role in the business).

However, if the employer is paying or reimbursing any expenses on behalf of an employee then you would need to consider the FBT implications. 

When it comes to the FBT issues, visa application costs can potentially be exempt from FBT if they relate to an employee’s initial travel/relocation to Australia. Section 58F FBT Act provides that the payment or reimbursement of expenses that are in respect of relocation transport will be an exempt benefit. Subsection 142A(1) provides that the cost of a visa or vaccination or similar matter or thing shall be taken to be in respect of, or to consist of, transport.

The ATO’s view is that the exemption can only apply if the costs relate to the employee’s initial travel/relocation to Australia. If the employee is already living in Australia and the visa allows them to stay or work in Australia then the ATO’s view appears to be that the costs cannot really qualify for the exemption. If this is the case you would probably look at whether the minor benefit exemption could apply. Refer to ATO ID 2013/35.

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