Employee cars - applying the 'otherwise deductible' rule
This information forms Chapter 21 of Fringe benefits tax - a guide for employers.
Remember, a fringe benefit may be provided by another
person on behalf of an employer. It may also be provided
to another person on behalf of an employee (for example, a
End of attention
Various chapters in this guide describe a four-step procedure
for calculating the reduction available under the otherwise
deductible rule. Step 2 of the four-step procedure is
calculating an amount that hypothetically would have been allowable
as an income tax deduction to the employee. However, you have to
use a different step 2 where the costs of operating the
employee's own car are involved. Three methods are available, with
different substantiation requirements and varying results.