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  • Eligibility criteria

    The private use of a motor vehicle is exempt from FBT if all of the following conditions are satisfied:

    • the vehicle is a panel van, utility (ute) or other commercial vehicle (that is, one not designed principally to carry passengers)
    • the employee's private use of such a vehicle is limited to    
      • travel between home and work
      • travel that is incidental to travel in the course of duties of employment
      • non-work related use that is minor, infrequent and irregular (for example, occasional use of the vehicle to remove domestic rubbish).

    The exemption will also apply to the private use of a taxi if the taxi is owned or leased (for example, not let on hire), if the employee's private use is limited to:

    • travel between home and work
    • travel that is incidental to travel in the course of duties of employment
    • non-work related use that is minor, infrequent and irregular (for example, occasional use of the vehicle to remove domestic rubbish).

    For more guidance on the private use of cars and home to work travel, refer to MT 2027 Fringe benefits tax: private use of cars: home to work travel.

    The exemption also applies to non-work related use by an employee's associate that is minor, infrequent and irregular.

    See Table 1 below for information about when usage requirements are not met.

    Table 1: Usage requirements are not met

    If:

    Then:

    • the vehicle is a car
    • your employee's use of the car exceeds the limitations set out above, and
    • you elect to use the operating cost method

     

    your employee's use of the car is a car fringe benefit and all of the private use of the car, including travel between home and work, is taken into account in determining the business percentage.

    Note: If no log book records are maintained, the percentage of private use will be 100%.

    • the vehicle is a car
    • your employee's use of the car exceeds the limitations set out above, and
    • you use the statutory formula method

     

    your employee's use of the car is a car fringe benefit and all of the private use of the car, including travel between home and work, is taken into account in working out when the car was used or available for the private use of the employee.

    • the motor vehicle is not a car, and
    • your employee's use of the vehicle exceeds the limitations set out above.

     

    your employee's use of the vehicle is a residual fringe benefit.

    Note: The operating cost method may be used for valuing the benefit. Alternatively, if there is extensive business use the cents per kilometre method may be used to value the benefit.

    Find out about:

    Eligible vehicles

    In preparing your FBT return for the FBT year ended 31 March 2017, you can continue to use the lists of eligible and ineligible vehicles or the principles-based approach.

    The eligible and ineligible vehicles lists will be removed from this website after 21 May 2017. You can use the lists to prepare your 2017 FBT return, but for years following you will need to assess whether the vehicles held meet the private use exemption criteria based on the guidance provided on the principles-based approach in Table 2 below.

    Table 2: Eligible vehicles – principles-based approach

    Vehicle type

    Requirements

    More information

    Taxi

    Taxis qualify for the work-related use exemption if they are owned or leased and designed to carry a load of less than one tonne and fewer than nine passengers.

    See subsection 8(2) and 47(6) Fringe Benefits Tax Assessment Act 1986.

    Panel van – solid rigid-bodied, non-articulated car, smaller than a truck, without rear side windows

    Panel vans qualify for the work-related use exemption.

    See subsection 8(2) and 47(6) Fringe Benefits Tax Assessment Act 1986.

    Single cab ute

    Single cab utility trucks qualify for the exemption.

    See subsection 8(2) and 47(6) Fringe Benefits Tax Assessment Act 1986.

    Dual cab ute – different from conventional goods vehicles with extra seats behind the driver and front passenger. They also share a common chassis which can fit a single or dual passenger cab and alternate tray section

    Dual cabs qualify for the work-related use exemption only if they are not designed for the principal purpose of carrying passengers.

    For an explanation on how to work out if a dual cab is eligible for the exemption, refer to MT 2024 Fringe benefits tax: dual cab vehicles eligibility for exemption where private use is limited to certain work-related travel.

    Four-wheel drive vehicle (other than utilities and dual cabs)

    Four-wheel drive vehicles qualify for the work-related use exemption if they are:

    • designed to carry a load of one tonne or more, or
    • designed to carry more than eight passengers, or
    • not designed for the principal purpose of carrying passengers.

     

    See TD 94/19 for examples of factors to consider when deciding whether a four-wheel drive vehicle (other than a utility or dual cab) is designed for the principal purpose of carrying passengers. These factors include:

    • the appearance and presentation of the vehicle
    • any relevant promotional literature
    • the emphasis evident in marketing
    • the vehicle's specification
    • load carrying capacity
    • passenger carrying capacity.

     

    Modified vehicle

    Modified vehicles qualify for the work-related use exemption if, for the entire FBT year when the car is provided, a modification or alteration permanently affects the inherent design of the vehicle (for example, hearses).

     

    See MT 2033 Fringe benefits tax: application of sub-section 8(2) exemption to modified cars.

    Other road vehicle

    Other road vehicles qualify for the work-related used exemption if they are designed to carry:

    • a load of one tonne or more, or
    • more than eight passengers.

     

    See subsection 8(2) and 47(6) Fringe Benefits Tax Assessment Act 1986.

    See also:

      Last modified: 04 Dec 2018QC 21311