Taxation Determination

TD 2014/6

Fringe benefits tax: what are the rates to be applied on a cents per kilometre basis for calculating the taxable value of a fringe benefit arising from the private use of a motor vehicle other than a car for the fringe benefits tax year commencing on 1 April 2014?

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Preamble

Exclamation This publication provides you with the following level of protection:

This publication (excluding appendixes) is a public ruling for the purposes of the Taxation Administration Act 1953.

A public ruling is an expression of the Commissioner's opinion about the way in which a relevant provision applies, or would apply, to entities generally or to a class of entities in relation to a particular scheme or a class of schemes.

If you rely on this ruling, the Commissioner must apply the law to you in the way set out in the ruling (unless the Commissioner is satisfied that the ruling is incorrect and disadvantages you, in which case the law may be applied to you in a way that is more favourable for you - provided the Commissioner is not prevented from doing so by a time limit imposed by the law). You will be protected from having to pay any underpaid tax, penalty or interest in respect of the matters covered by this ruling if it turns out that it does not correctly state how the relevant provision applies to you.

Ruling

1. The rates to be applied where the cents per kilometre basis is used for the fringe benefits tax (FBT) year commencing on 1 April 2014 are:

Engine capacity Rate per kilometre
0 - 2500cc 50 cents
Over 2500cc 60 cents
Motorcycles 15 cents

Date of effect

2. This Determination applies to the FBT year commencing 1 April 2014.

Commissioner of Taxation
26 March 2014

Appendix 1 - Explanation

ExclamationThis Appendix is provided as information to help you understand how the Commissioner's view has been reached. It does not form part of the binding public ruling.

Explanation

3. An employee's right to use a car for private purposes constitutes a car fringe benefit under the Fringe Benefits Tax Assessment Act 1986 (FBTAA). Where an employee is entitled to use a motor vehicle other than a car , this gives rise to a residual benefit under that Act. For these purposes, in subsection 136(1) of the FBTAA, 'car' means:

(a)
a motor vehicle (including a vehicle known as a four wheel drive vehicle), being:
(b)
a motor car, station wagon, panel van, utility truck or similar vehicle, designed to carry a load of less than 1 tonne; or
(c)
any other road vehicle designed to carry a load of less than 1 tonne or fewer than 9 passengers;
(d)
but does not include a motor cycle or similar vehicle.

4. Taxation Ruling MT 2034 outlines a number of acceptable methods that may be used to value the benefit of the right to use an employer's motor vehicle other than a car. One method of valuing the benefit is to multiply the number of private kilometres travelled by employees in a vehicle during a year by a cents per kilometre rate. The effect of paragraphs 15 and 16 of MT 2034 is that this method can only be used where there is extensive business use of the vehicle.

5. The cents per kilometre rates set out in this Determination are those that applied for the year commencing on 1 April 2012, reviewed to reflect the movement in the Consumer Price Index. (The rates that applied for the year commencing on 1 April 2013 are set out in Taxation Determination TD 2013/7 Fringe benefits tax: what are the rates to be applied on a cents per kilometre basis for calculating the taxable value of a fringe benefit arising from the private use of a motor vehicle other than a car for the fringe benefits tax year commencing on 1 April 2013?).

Not previously issued as a draft

Previous Rulings/Determinations:

TD 93/59

TD 94/22

TD 95/19

TD 96/26

TD 97/16

TD 98/10

TD 1999/5

TD 2000/20

TD 2001/8

TD 2002/6

TD 2003/6

TD 2004/9

TD 2005/9

TD 2006/13

TD 2007/8

TD 2008/4

TD 2009/7

TD 2010/5

TD 2011/5

TD 2012/6

TD 2013/7

References

ATO references:
NO 1-593QDCF

ISSN: 1038-8982

Related Rulings/Determinations:

TD 2008/4
MT 2034

Subject References:
FBT
Fringe benefits tax
FBT motor vehicle
FBT motor vehicle definition
FBT taxable value
private use of motor vehicles other than cars
residual

Legislative References:
FBTAA 1986 136(1)
TAA 1953