Taxation Determination

TD 2006/13

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 2006?

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FOI status:

may be released

Exclamation This Ruling 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, we must apply the law to you in the way set out in the ruling (or in a way that is more favourable for you if we are satisfied that the ruling is incorrect and disadvantages you, and we are 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.

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 2006 are:

Engine capacity Rate per kilometre
0 - 2500cc 40 cents;
Over 2500cc 48 cents; and
Motor cycles 12 cents.

Date of effect

2. This Determination applies to the FBT year commencing 1 April 2006.

Commissioner of Taxation
29 March 2005

Appendix 1 - Explanation

Exclamation This 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 motor vehicle (including a vehicle known as a four wheel drive vehicle), being:

(a)
a motor car, station wagon, panel van, utility truck or similar vehicle, designed to carry a load of less than 1 tonne; or
(b)
any other road vehicle designed to carry a load of less than 1 tonne or fewer than 9 passengers;

but does not include a motor cycle or similar vehicle.

4. Taxation Ruling MT 2034, Fringe benefits tax: private use of motor vehicles other than cars, 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 2005, reviewed to reflect the movement in the Consumer Price Index. (The rates that applied for the year commencing on 1 April 2005 are set out in Taxation Determination TD 2005/9, 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 2005?)

Not previously issued as a draft

References

ATO references:
NO 2004/6082

ISSN: 1038-8982

Related Rulings/Determinations:

TD 2005/9
MT 2034
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

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

Legislative References:
FBTAA 1986 136(1)
TAA 1953 Pt IVAAA

TD 2006/13 history
  Date: Version: Change:
You are here 29 March 2005 Original ruling  
  18 May 2016 Withdrawn