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NOTE:
The tax regime applying to all fringe benefits is
highly complex, and professional advice should be
taken before planning any scheme designed to minimise
taxation. These notes are intended simply to give
a general overview and should not be relied upon as
a basis for action in any particular case.
Housing
Employees
can be reimbursed directly or indirectly (including
services furnished in kind) for moving expenses. Deductible
moving expenses include only the reasonable expenses
of moving household goods and personal effects from
the former home to the new home, and travelling (including
lodging) from the former home to the new home.
Employees
can be given lodging by an employer if it is furnished
on the business premises, if it is furnished for the
employer's convenience and if the employee accepts
it as a condition of employment.
In
July 2004, The American Institute of Certified Public
Accountants urged Congress to reject a proposal contained
in Senate tax legislation which aimed to restrict
employer-provided housing benefit for workers based
overseas.
In a letter to House and Senate tax writers, the AICPA
argued that the measure, which was included in the
Senate ‘JOBS’ bill, "will reverse long-standing tax
policy and result in the loss of American jobs and
exports".
Overseas workers are permitted to exclude up to $80,000
from American income taxes, and where employers pay
for housing costs, individuals can exclude costs that
are considered not to be “lavish or extravagant”.
However, under proposals advanced by Sen. Mary Landrieu
(D-La), the employer-paid housing costs would have
been included in the $80,000 limit as part of a plan
intended to help firms who continue to pay the salaries
of National Guard and Reservists on active duty.
The AICPA expressed concern that if the proposal became
law, it would lead to many foreign-based American
workers losing their jobs, as firms would hire foreign
employees in their place. The Institute was therefore
delighted to learn that the provision did not pass
with the rest of the JOBS Act.
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