Draft Taxation Determination

TD 93/D270

Fringe benefits tax: is the method outlined in Taxation Ruling MT 2024 appropriate for determining whether a vehicle, other than a dual or crew cab, is "designed for the principal purpose of carrying passengers" and thereby ineligible for the work-related use exemption available under subsection 8(2) 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 94/19.

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.

1. No. The method outlined in paragraphs 14 to 16 of MT 2024 only applies to dual cab or crew cab vehicles. According to that method, if the majority of the load carrying capacity of the dual or crew cab is attributable to passenger carrying capacity, then it is taken to have been designed for the principal purpose of carrying passengers, regardless of any other considerations.

2. In coming to a conclusion as to the principal purpose for which any other vehicle was designed, regard should be had to factors including, but not limited to, the following:

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

3. In any event, the exemption provided in subsection 8(2) will only apply where, during the year, private use of the car is limited to:

work-related travel of the employee, and
other private use which is minor, infrequent and irregular.

Example ABC Pty Ltd purchased a new four wheel drive station wagon for the business. The office manager of the company, Rob, is allowed to use the car for home to work travel.The vehicle has seating for 5 passengers and has a load carrying capacity of 865 kgs. Promotional literature for the vehicle emphasises its level of passenger comfort, off-road capability and "sporty" features. Little reference is made to its capacity to carry a load. It has very little room to carry anything other than luggage or tools. It is clear from the promotional literature and the vehicle's specifications that it is designed principally for carrying passengers. Any private use of the vehicle by Rob, including home to work travel, will be subject to fringe benefits tax.

Commissioner of Taxation
21 October 1993


BO FBT Cell 30/6

ISSN 1038-8982

Related Rulings/Determinations:

MT 2024

Subject References:
car fringe benefit
fringe benefit
exempt benefit

Legislative References:
FBTAA 8(2)