Miscellaneous Taxation Ruling

MT 2024

Fringe benefits tax : dual cab vehicles eligibility for exemption where private use is limited to certain work-related travel

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FOI status:

May be releasedFOI number: I 1210185

Preamble

Generally speaking, a liability for FBT arises where an employer's motor vehicle is used by an employee for private purposes or is available for the private use of an employee. However, under sub-sections 8(2) and 47(6) of the Fringe Benefits Tax Assessment Act ("the Act"), a liability for FBT will not arise where the private use of certain vehicles by employees during a particular year of tax is limited to certain work-related travel and non-work- related use that is minor, infrequent and irregular. This would include the occasional use of the vehicle to remove domestic rubbish. (Note for the purpose of this Ruling work-related use includes work- related travel and private use that is minor, infrequent and irregular). Work-related travel is defined in sub-section 136(1) of the Act to be travel between the employee's residence and place of employment or other place at which employment duties are performed and any travel that is incidental to travel in the course of performing duties of employment.

2. This Office has been asked whether vehicles known as dual cabs are capable of qualifying for this work-related use exemption. Broadly, dual cabs are variants of conventional goods vehicles under which additional seating positions are provided behind the driver and front-passenger seats. They share a common chassis to which the single or dual passenger cab and alternate tray sections may be fitted.

3. Vehicles that may qualify for this exemption are, firstly, those that are not classified as a car (as defined in sub-section 136(1)) for the purposes of Division 2 of Part III of the Act, i.e. vehicles other than -

·
a motor car, station wagon, panel van, utility truck or similar vehicle, designed to carry a load of less than one tonne; or
·
any other road vehicle designed to carry a load of less than one tonne or fewer than nine passengers.

Such vehicles may qualify for the work-related use exemption under sub-section 47(6).

4. Alternatively, under sub-section 8(2), a vehicle may qualify for the exemption if, while classified as a car for the purposes of Division 2 of Part III of the Act, it is a taxi, panel van, utility truck or any other road vehicle that, while designed to carry a load of less than one tonne, is not designed for the principal purpose of carrying passengers.

Ruling

5. The classification of motor vehicles under the FBT law is expressed in the same terms as that used in the income tax law e.g., sub-section 82AF(2) of the Income Tax Assessment Act 1936, which applied to exclude from the income tax investment allowance certain motor vehicles. As such, the interpretation of those provisions provides an appropriate base from which to determine the operation of the FBT law.

6. Dual cabs, particularly those of lesser load capacities, are commonly fitted with styled steel well bodies and are often referred to as "utes" in advertising material. An initial question to be determined therefore in deciding the eligibility of dual cabs for the work-related use exemption is whether they qualify as "utility trucks" within the meaning of paragraph (a) of the definition of car in sub-section 136(1) and, accordingly, within the meaning of sub-section 8(2). If dual cabs are in fact utility trucks within the meaning of sub-section 8(2), it follows that they would qualify for the concession afforded by that sub-section irrespective of their load or passenger carrying design features.

7. The meaning of utility truck as expressed in sub-section 82AF(2) of the Income Tax Assessment Act 1936 - which is expressed in identical terms to the definition of car in sub-section 136(1) - was considered in Case M10, 80 ATC 77; Case 92, 23 CTBR(NS) 869. Based on that decision, the term utility truck as used in sub-section 136(1) and, accordingly sub-section 8(2), is seen as being restricted to derivatives of motor cars. Crew cabs could not be so described (see description in the preamble).

8. It follows that crew cabs will be capable of qualifying for the work-related use exemption only if either of the following tests are satisfied -

(a)
they are designed to carry a load of one tonne or more, or more than eight passengers (sub-section 47(6)); or
(b)
while having a designed load capacity of less than one tonne, they are not designed for the principal purpose of carrying passengers (sub-section 8(2)).

9. Current model crew cabs have a maximum seating capacity of seven and, as such, could not qualify under the second limb of (a).

10. Whether a particular vehicle is designed to carry a load of one tonne or more is to be determined on the same basis as that applied in determining eligibility for the former income tax investment allowance.

11. Consistent with that approach, the designed load capacity of a motor vehicle is to be taken as the gross vehicle weight as specified on the compliance plate by the manufacturer (broadly, the maximum all-up loaded weight), reduced by the basic kerb weight of the vehicle. For this purpose, basic kerb weight is synonymous with unladen weight, as specified in the Australian Design Rules, being the weight of the vehicle with a full tank of fuel, oil and coolant together with spare wheel, tools (including jack) and installed options. It does not include the weight of goods or occupants.

12. In the case of cab/chassis vehicles, the designed load capacity is to be ascertained after the body has been fitted to the vehicle, i.e. to satisfy the one tonne test, the margin between the gross vehicle weight and the basic kerb weight must not be less than one tonne plus the weight of the body which is ultimately attached to the vehicle.

13. Where, on the application of this test, it can be concluded that a particular dual cab model has a designed load capacity of one tonne or more, there will be no FBT liability if employee use of the vehicle during a particular FBT year consists solely of eligible work-related travel or private travel which is minor, infrequent and irregular.

14. As previously mentioned, a dual cab that has a designed load carrying capacity of less than one tonne may still qualify for the work-related use exemption, under sub-section 8(2), if the vehicle is not designed for the principal purpose of carrying passengers. It is considered that the appropriate basis for determining this issue is whether or not the majority of the designed load capacity is attributable to passenger carrying capacity. It is understood that this approach is consistent with that adopted under the Australian Design Rules in determining what is a passenger vehicle.

15. For this purpose the designed passenger carrying capacity is to be determined by multiplying the designed seating capacity (including the driver's) by 68 kg, which is the figure adopted for the purposes of the application of the Australian Design Rules.

16. If the total passenger weight so determined exceeds the remaining "load" capacity, the vehicle is to be treated as being designed for the principal purpose of carrying passengers and as such ineligible for work-related use exemption.

17. By way of illustration, if a vehicle has a gross vehicle weight of 2,000 kgs, a basic kerb weight of 1,400 kgs, and has a designed seating capacity of five, the vehicle would be considered to be a vehicle designed principally for the carriage of passengers. This is because the total load capacity is 600 kgs of which the majority, 340 kgs, would be absorbed by its designed passenger carrying capacity.

18. The position of current release dual cab vehicles has been reviewed on the basis of published information made available to this office. The results are detailed in the attachment.

19. Of those vehicles listed as being eligible for the work-related use exemption, the majority do so on the basis that they have a designed load capacity of one tonne or more. The remaining vehicles satisfy the requirement of not being designed principally for the carriage of passengers.

20. Accordingly, provided that employee use of these dual cab vehicles in a particular FBT year is restricted to travel to and from work and any travel that is incidental to travel in the course of performing duties of employment, there will be no FBT liability.

21. The models listed as being ineligible for the concession are designed to carry a load of less than one tonne and, on the application of the test detailed above, are designed principally for the carriage of passengers.

Commissioner of Taxation
1 September 1986

Appendix

Attachment

Dual Cabs - Eligible for Exemption
Make Description
Nissan Navara 4x2 2.4 litre petrol Ute Dual Cab DX
Nissan Navara 4x2 2.4 litre petrol Ute Dual Cab ST
Nissan Navara 4x2 2.7 litre diesel Ute Dual Cab DX
Nissan Navara 4x4 2.4 litre petrol Ute Dual Cab DX
Nissan Navara 4x4 3.2 litre diesel Ute Dual Cab DX
Nissan Navara 4x4 3.2 litre diesel Ute Dual Cab ST
Mitsubishi Triton Double Cab GLX 5 speed manual
Mitsubishi Triton Double Cab GLX 4 speed auto
Mitsubishi Triton Double Cab GLX 5 speed manual Diesel
Mitsubishi Triton 4WD Double Cab GLX 5 speed manual
Mitsubishi Triton 4WD Double Cab GLX 5 speed manual Diesel
Mitsubishi Triton 4WD Double Cab GLS 5 speed manual
Mitsubishi Triton 4WD Double Cab GLS 4 speed auto
Holden Rodeo V6 4x2 3.2 litre Petrol Crew Cab Pick Up LX 5 Speed manual
Holden Rodeo V6 4x2 3.2 litre Petrol Crew Cab Pick Up LX 4 Speed auto
Holden Rodeo V6 4x2 3.2 litre Petrol Crew Cab Pick Up LT 5 Speed manual
Holden Rodeo V6 4x2 3.2 litre Petrol Crew Cab Pick Up LT 4 Speed auto
Holden Rodeo V6 4WD 3.2 litre Petrol Crew Cab Pick Up LX 5 speed manual L/S Diff
Holden Rodeo V6 4WD Diesel 2.8 litre Crew cab LX 5 speed manual L/S Diff
Holden Rodeo 4x2 2.2 litre petrol pick up Crew Cab DX 5 speed manual power steering
Mazda Bravo 4x2 2.6 litre petrol dual cab ute DX 5 speed manual
Mazda Bravo 4WD 2.6 litre petrol dual cab ute DX 5 speed manual
Mazda Bravo 4WD 2.6 litre petrol dual cab ute SDX 5 speed manual
Mazda Bravo 4WD 2.5 litre diesel turbo dual cab ute DX 5 speed manual
Mazda Bravo 4WD 2.5 litre diesel turbo dual cab ute SDX 5 speed manual
Toyota Hilux 4x2 Standard petrol dual cab ute
Toyota Hilux 4x2 Standard diesel dual cab ute
Toyota Hilux 4WD Standard petrol double cab ute
Toyota Hilux 4WD SR5 petrol dual cab ute
Toyota Hilux 4WD Standard diesel double cab ute
Toyota Hilux 4WD SR5 diesel double cab ute
Ford Courier 4x2 Crew cab chassis 2.6 litre petrol GL manual
Ford Courier 4x2 Crew cab pickup 2.6 litre petrol GL manual
Ford Courier 4x2 Crew cab pickup 2.6 litre petrol GL auto
Ford Courier 4x2 Crew cab pickup 2.6 litre petrol XL manual
Ford Courier 4x2 Crew cab pickup 2.6 litre petrol XL auto
Ford Courier 4x2 Crew cab pickup turbo diesel GL manual
Ford Courier 4WD Crew cab chassis 2.6 litre petrol GL
Ford Courier 4WD Crew Cab Pickup 2.6 litre petrol GL
Ford Courier 4WD Crew Cab Chassis turbo diesel GL
Ford Courier 4WD Crew Cab Pickup turbo diesel GL
Ford Courier 4WD Crew Cab Pickup turbo diesel XL
Single Cabs - Eligible for Exemption
Make Description
Nissan Navara 4x2 2.4 litre Petrol Single Cab/Chassis STD
Nissan Navara 4x2 2.4 litre Petrol Single Cab/Chassis DX
Nissan Navara 4x2 2.7 litre Diesel Single Cab/Chassis DX
Nissan Navara 4x4 2.4 litre Petrol Single Cab/Chassis DX
Nissan Navara 4x4 3.2 litre Diesel Single Cab/Chassis STD
Nissan Navara 4x4 3.2 litre Diesel Single Cab/Chassis DX
Mitsubishi Triton Cab Chassis 5 speed manual
Mitsubishi Triton Cab Chassis 4 speed auto GLX
Mitsubishi Triton Cab Chassis 5 speed manual Diesel
Mitsubishi Triton 2WD Club Cab GLX 5 speed manual
Mitsubishi Triton 2WD Club Cab GLX 4 speed auto
Mitsubishi Triton Cab Chassis GLX 5 speed manual
Mitsubishi Triton Cab Chassis GLX 5 speed manual Diesel
Mitsubishi Triton Club Cab GLX 5 speed manual
Holden Ute Series III Ecotec V6
Holden Ute Series III 179kw* V8
Holden Rodeo V6 4x2 3.2 litre Petrol s/cab chassis LX 5 speed manual
Holden Rodeo V6 4x2 3.2 litre Petrol s/cab chassis LX 5 speed manual with L/S Diff
Holden Rodeo V6 4x2 3.2 litre Petrol s/cab chassis LX 4 speed auto
Holden Rodeo V6 4x2 3.2 litre Petrol s/cab chassis LX 4 speed auto with L/S Diff
Holden Rodeo V6 4WD 3.2 litre Petrol s/cab chassis LX 5 speed manual L/S Diff
Holden Rodeo 4WD 2.6 litre petrol space cab LS 5 speed man L/S Diff
Holden Rodeo 4WD 2.8 litre diesel s/cab DX 5 speed manual L/S Diff
Holden Rodeo 4WD 2.8 litre diesel s/cab LX 5 speed manual L/S Diff
Holden Rodeo 4WD 2.8 litre diesel space cab LX 5 speed manual L/S Diff
Holden Rodeo 4x2 2.2 litre single cab chassis DX 5 speed manual
Holden Rodeo 4x2 2.2 litre single cab chassis DX 5 speed manual power steer
Holden Rodeo 4x2 2.2 litre single cab pickup DX 5 speed manual power steer
Mazda Bravo 4x2 2.6 litre petrol single cab chassis DX 5 speed manual
Mazda Bravo 4x2 2.6 litre petrol single cab ute DX 5 speed manual
Mazda Bravo 4x2 2.6 litre petrol cab plus ute DX 5 speed manual
Mazda Bravo 4x2 2.5 litre diesel turbo single cab chassis DX 5 speed man
Mazda Bravo 4WD 2.6 litre petrol single cab chassis DX 5 speed man
Mazda Bravo 4WD 2.6 litre petrol cab plus cab chassis DX 5 speed man
Mazda Bravo 4WD 2.6 litre petrol cab plus ute DX 5 speed man
Mazda Bravo 4WD 2.5 litre diesel turbo single cab chassis DX 5 speed man
Mazda Bravo 4WD 2.5 litre diesel turbo cab plus cab chassis DX 5 speed man
Toyota Hilux 4x2 Workmate petrol single cab ute
Toyota Hilux 4x2 Workmate petrol single cab chassis
Toyota Hilux 4x2 Standard petrol single cab ute
Toyota Hilux 4x2 Standard petrol cab chassis
Toyota Hilux 4x2 Standard diesel single cab ute
Toyota Hilux 4x2 Standard diesel cab chassis
Toyota Hilux 4x2 Xtra petrol ute
Toyota Hilux 4WD Standard petrol single cab ute
Toyota Hilux 4WD Standard petrol cab chassis
Toyota Hilux 4WD Xtra standard petrol ute
Toyota Hilux 4WD Standard diesel single cab ute
Toyota Hilux 4WD Standard diesel cab chassis
Toyota Hilux 4WD Xtra standard diesel ute
Toyota Hilux 4WD Xtra standard diesel cab chassis
Ford Courier 4x2 Single chassis 2.6 litre petrol GL manual
Ford Courier 4x2 Single chassis 2.6 litre petrol GL auto
Ford Courier 4x2 Single Pickup 2.6 litre petrol GL manual
Ford Courier 4x2 Single chassis turbo diesel GL manual
Ford Courier 4WD Single chassis 2.6 litre petrol GL
Ford Courier 4WD Super Pickup 2.6 litre petrol XL
Ford Courier 4WD Single chassis turbo diesel GL
Ford Courier 4WD Super Chassis turbo diesel XL
Ford Courier 4WD Super Pickup turbo diesel XL
Four Wheel Drives and Vans - Eligible for Exemption
Make Description
Mitsubishi Express SWB Petrol Manual
Mitsubishi Express Window Van
Mitsubishi Express SWB Petrol Auto
Mitsubishi Express MWB Petrol Auto
Mitsubishi Express 4WD Manual
Mitsubishi Express MWB Diesel Manual
Mitsubishi Express MWB 'Walkthru' Manual
Mitsubishi Express MWB 'Walkthru' Auto
Toyota Townace SBV 4 Door 2 seater Semi Bonneted Van
Toyota Hiace SBV 2 seater Semi Bonneted Blind Van
Holden Combo Panel Van, 2 seater
Volkswagen Transporter 2.0L SWB
Volkswagen Transporter 2.5L SWB
Volkswagen Transporter 2.5L LWB
Volkswagen Transporter 2.5L SWB Single Cab Chassis
Volkswagen Transporter 2.5L LWB Double Cab Chassis
Toyota Dyna Double Cab Pickup
Toyota Landcruiser Troop Carrier
Ford Econovan 4m Van
Ford Econovan 4.4m Van
Ford Econovan 4.7m Cab Chassis
Ford Transit SWB Van
Ford Transit LWB Van
Ford Transit Chassis Cab
Four Wheel Drives and Vans - Ineligible for Exemption
Make Description
Mitsubishi Pajero SWB GLS Petrol Manual
Mitsubishi Pajero SWB GLS Petrol Automatic
Mitsubishi Pajero SWB GL Petrol Manual
Mitsubishi Pajero SWB GL Diesel Manual
Mitsubishi Pajero SWB GLX Diesel Manual
Mitsubishi Pajero LWB Escape Petrol Manual
Mitsubishi Pajero LWB Escape Petrol Automatic
Mitsubishi Pajero LWB GLS Petrol Manual
Mitsubishi Pajero LWB GLS Petrol Automatic
Mitsubishi Pajero LWB GLS Diesel Manual
Mitsubishi Pajero LWB Exceed Petrol Manual
Mitsubishi Pajero LWB Exceed Petrol Automatic
Mitsubishi Challenger Manual
Mitsubishi Challenger Auto
Kia Sportage Petrol 5 Speed Manual
Nissan Pathfinder Standard
Nissan Pathfinder Ti
Nissan Patrol DX 2.8 Litre turbo diesel manual
Nissan Patrol ST 2.8 litre turbo diesel manual
Nissan Patrol DX 4.2 litre diesel manual
Nissan Patrol ST 4.2 litre turbo diesel manual
Nissan Patrol St 4.5 litre petrol manual
Nissan Patrol ST 4.5 litre petrol automatic
Nissan Patrol Ti 4.5 litre petrol automatic
Toyota Prado RV RV RZJ95R-GKMNKQ
Toyota Prado RV6 RZJ95R-GKPNKQ
Toyota Prado RV6 VZJ95R-GKMNKQ
Toyota Prado RV6 VZJ95R-GKPNKQ
Toyota Prado GXL VZJ95R-GKMNKQ
Toyota Prado GXL VZJ95R-GKPNKQ
Toyota Prado ( Grande ) VZJ95R-GKPEKQ
Toyota Landcruiser Snowy Petrol Manual
Toyota Landcruiser Snowy Petrol Auto
Toyota Landcruiser Snowy Diesel Manual
Toyota Landcruiser Snowy Diesel Auto
Holden Jackaroo Base Manual 8DQ35-261
Holden Jackaroo SE Diesel 8DS35661
Holden Jackaroo Manual 8DQ35-251
Holden Jackaroo Auto 8DQ35-252
Holden Jackaroo SE Manual 8DS35-651
Holden Jackaroo SE Auto 8DS35-652
Holden Monteray Auto 8DT35-952
Jeep Cherokee Sport
Jeep Cherokee Turbo Diesel
Jeep Grand Cherokee Laredo
Jeep Grand Cherokee Limited
Ford Explorer XL Auto
Ford Explorer XL Manual
Ford Explorer XLT Auto
Ford Explorer Limited Auto
Ford Explorer Limited Manual
Toyota Spacia Manual
Toyota Spacia Automatic
Mazda MPV
Mitsubishi Starwagon Satellite Manual
Mitsubishi Starwagon Satellite Auto
Mitsubishi Starwagon GL Manual
Mitsubishi Starwagon GL Automatic
Mitsubishi Starwagon GLX Automatic
Toyota Tarago GLI TCR10R-RRMDKQ
Toyota Tarago GLI TCR10R-RRSDKQ
Toyota Tarago GLX TCR11R-RRSGKQ
Toyota Tarago Ultima TCR11R-RRSGKQ
Chrysler Voyager Auto
Chrysler Grand Voyager Auto
Volkswagen Caravelle 8 seater van

References

ATO references:
NO L85/10-3

Date of effect:
Immediate

Subject References:
FRINGE BENEFITS TAX

Legislative References:
FBTAA 1986 8
FBTAA 1986 47
FBTAA 1986 136

Case References:
Case M10
80 ATC 76

MT 2024 history
  Date: Version: Change:
  1 September 1986 Original ruling  
You are here 19 January 2000 Consolidated ruling Addendum
  13 July 2005 Consolidated ruling Addendum
  12 July 2006 Consolidated ruling Addendum
  22 August 2007 Consolidated ruling Addendum
  19 September 2007 Consolidated ruling Addendum
  22 October 2008 Consolidated ruling Partial Withdrawal