The federal government should no longer consider home internet services a fringe benefit given the large number of Australians that now work from home, according to Telstra.
The telco called on the government in the lead up to its May budget to revise current 'outdated' tax laws.
Employers pay tax on certain fringe benefits they provide to their employees, including things like cars, parking, and certain entertainment and recreation activities.
Tax law currently considers reimbursements for home telephone and internet services a fringe benefit, meaning employers need to pay fringe benefits tax on these services.
But Telstra's director of taxation John Burke argued that section 58X of the Fringe Benefits Tax Assessment Act, which covers exemptions for eligible work tools like laptops, briefcases, and tools of the trade, is outdated and should take into account flexible work arrangements.
He argued that if a laptop was exempt from fringe benefits tax, the internet services directly linked with the work tool should be as well.
Voice, SMS, and broadband services - any "telecommunications and fixed or wireless internet access services provided by the employer for the purposes of operating the eligible work-related item primarily for work" - should be exempt from FBT, Burke said.
He noted that section 58X of the fringe benefits law was last amended in 2008 to capture portable electronic devices, but not the linked telecommunications services.
"In the past eight years, significant changes in the way the workforce undertake their employment have seen many employers embracing flexible work arrangements where employees are encouraged to undertake some of their employment duties from home," Burke wrote.
"Employees are able to securely logon to their business network from anywhere, including their personal computer or laptop devices. We believe that the section 58X exemption should apply to both fixed and wireless access to the internet for the dominant purpose of operating an eligible work item."
Last year the Australian Bureau of Statistics revealed the number of employees who work from home had jumped from 20 percent of the national workforce to 30 percent over 15 years.
Almost a third - 3.5 million - of all employed persons regularly worked from home, the ABS said.