Draft Taxation Determination
Fringe benefits tax: what is an acceptable method for determining the 'notional value' of a property fringe benefit for the purpose of sections 42 and 43 of the Fringe Benefits Tax Assessment Act 1986?
Please note that the PDF version is the authorised version of this draft ruling.This document has been finalised by TD 93/231.
FOI status:draft only - for comment
|Draft Taxation Determinations (TDs) present the preliminary, though considered, views of the ATO. Draft TDs may not be relied on; only final TDs are authoritative statements of the ATO.|
2. To ascertain the 'notional value' of a property fringe benefit the employer must determine the amount the employee would have to pay for a comparable (on the basis of age, type and condition) benefit under an arm's length transaction.
- the price of comparable goods advertised in local newspapers and/or relevant magazines or similar publications;
- the price paid for comparable goods at a public auction; or
- the price of comparable goods at a second-hand store.
6. Subsection 132(1) requires an employer to keep records that identify and explain all transactions and acts relevant for the purpose of ascertaining an employer's fringe benefits tax liability. To satisfy this requirement, an employer should maintain records of how the value of a property fringe benefit in these circumstances is arrived at. Supporting information such as newspaper advertisements and auction notices should be retained for this purpose.
Example: An employer allows one of her employees to have possession of an old office computer that is no longer used. A comparable computer was advertised in the local newspaper for $700. These computers were also recently sold at a second-hand computer show for $500. The notional value to the employer will be accepted as $500.
Commissioner of Taxation
23 September 1993