Question

Bruce, an employee salesman, is awarded a free non-transferable theatre ticket valued at $100 for exceeding his monthly sales quota. What would be the position had he been a nonemployee agent?

Answer 1

As per taxation regulations, income for a taxpayer can be either be derived in the form of money or in a form which can be converted into money. The award received by Bruce as an employee salesman cannot be considered as an award that is convertible into money. Henceforth, such an income is not assessable for taxation purposes. However, the case of non-employee agent relates to “SECT 21A (1) ITAA 1936” under the consolidated acts prescribed by the Commonwealth. This particular act has defined the regulations pertaining to different types of non-cash benefits. Based on “SECT 21A (1)” when the income from non-cash business benefit is to be determined which is not alterable to cash, it should be considered as if it was alterable to cash. In this regard, if Bruce was a non-employee agent, such an award would be treated as an assessable income. This can be further related to “RHDB (taxpayer) v. Commissioner of Taxation [2017]”, in which the rent paid by his employer (KGWE) was not considered as a part of his assessable income.