FRINGE BENEFITS TAX ASSESSMENT ACT 1986

PART III - FRINGE BENEFITS  

Division 2 - Car fringe benefits  

Subdivision B - Taxable value of car fringe benefits  

SECTION 11   CALCULATION OF DEPRECIATION AND INTEREST  

11(1A)   [Apportionment of depreciation]  

For the purposes of this Subdivision, the amount of depreciation that is deemed to have been incurred by a person in respect of a car in respect of the period (in this subsection called the holding period ) during a year of tax while the car was held by the person is the amount calculated in accordance with the formula:


  DEP × DHP
DCO
 

where:

DEP is the amount of depreciation that is deemed to have been incurred by the person in respect of the car in respect of the year of tax;

DHP is the number of days in the holding period during which the car was owned by the person; and

DCO is the number of days in the period in the year of tax during which the car was owned by the person.

11(1)   [Depreciation formula]  

For the purposes of this Subdivision, the amount of depreciation that is deemed to have been incurred by a person in respect of a car in respect of a year of tax is the amount calculated in accordance with the formula:


ABC
D

where:

A is:

  • (a) where the car was owned by the person at the beginning of the year of tax - the depreciated value of the car at that time; or
  • (b) in any other case - the cost price of the car to the person;
  • B is the amount worked out for the person and the car using the formula in subsection (1AA).

    C is the number of days in the period in the year of tax during which the car was owned by the person; and

    D is the number of days in the year of tax.

    11(1AA)   [Formula for effective life of car for 2008 and later FBT years]  

    The formula for working out the amount of B for the person and the car for subsection (1) is:


      DV percentage  
      Effective life of the car  

    where:

    DV percentage
    is the percentage applicable in using the diminishing value method (within the meaning of the Income Tax Assessment Act 1997 ) as at the start of the year of tax.

    effective life of the car
    is the number of years in the period specified as the effective life of the car in a determination made by the Commissioner under section 40-100 of the Income Tax Assessment Act 1997 and in effect at the most recent time (before the end of the year of tax) the person became the owner of the car.

    11(1B)   [Apportionment of interest]  

    For the purposes of this Subdivision, the amount of interest that is deemed to have been incurred by a person in respect of a car in respect of the period (in this subsection called the holding period ) during a year of tax while the car was held by the person is the amount calculated in accordance with the formula:


      INT × DHP
    DCO
     

    where:

    INT is the amount of interest that is deemed to have been incurred by the person in respect of the car in respect of the year of tax;

    DHP is the number of days in the holding period during which the car was owned by the person; and

    DCO is the number of days in the period in the year of tax during which the car was owned by the person.

    11(2)   [Interest formula]  

    For the purposes of this Subdivision, the amount of interest that is deemed to have been incurred by a person in respect of a car in respect of a year of tax is the amount calculated in accordance with the formula:


    ABC
    D

    where:

    A is:

  • (a) where the car was owned by the person at the beginning of the year of tax - the depreciated value of the car at that time; or
  • (b) in any other case - the cost price of the car to the person;
  • B is the statutory interest rate in relation to the year of tax;

    C is the number of days in the period in the year of tax during which the car was owned by the person; and

    D is the number of days in the year of tax.




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