FRINGE BENEFITS TAX ASSESSMENT ACT 1986

PART III - FRINGE BENEFITS  

Division 11 - Property fringe benefits  

Subdivision B - Taxable value of property fringe benefits  

SECTION 42   TAXABLE VALUE OF IN-HOUSE PROPERTY FRINGE BENEFITS  

42(1)   [Calculation of taxable value]  

Subject to this Part, the taxable value of an in-house property fringe benefit in relation to an employer in relation to a year of tax is:


(aa) if the recipient ' s property was provided to the recipient under a salary packaging arrangement - an amount equal to the notional value of the recipient ' s property at the provision time; or


(ab) if paragraph (aa) does not apply and the benefit is an airline transport fringe benefit - an amount equal to 75 % of the stand-by airline travel value of the benefit at the time the transport starts; or


(a) if neither paragraph (aa) nor (ab) applies and the recipient ' s property was manufactured, produced, processed or treated by the provider:


(i) if identical property that was manufactured, produced, processed or treated, as the case may be, by the provider was, at or about the provision time, sold by the provider in the ordinary course of business to purchasers being manufacturers, wholesalers or retailers - an amount equal to:

(A) if any of that identical property was, at or about the provision time, sold by the provider under an arm ' s length transaction or arm ' s length transactions - the lowest price at which it was sold under such a transaction; or

(B) if sub-subparagraph (A) does not apply - the lowest price at which any of that identical property could reasonably be expected to have been sold by the provider at or about the provision time under an arm ' s length transaction; or

(ii) if subparagraph (i) does not apply but identical property that was manufactured, produced, processed or treated, as the case may be, by the provider was, at or about the provision time, sold by the provider:

(A) in the ordinary course of business to members of the public under an arm ' s length transaction or arm ' s length transactions; and

(B) in similar circumstances and subject to identical terms and conditions (other than as to price) as those that applied in relation to the provision of the recipient ' s property to the recipient;
an amount equal to 75% of the lowest price at which that property was so sold to a member of the public; or

(iii) in any other case - an amount equal to 75% of the notional value of the recipient ' s property at the provision time; or


(b) if none of the above paragraphs applies and the property was acquired by the provider - an amount equal to the lesser of:


(i) the arm ' s length price in respect of the acquisition of the recipient ' s property by the provider; or

(ii) the notional value of the recipient ' s property at the provision time; or


(c) in any other case - an amount equal to 75% of the notional value of the recipient ' s property at the provision time;

reduced by the amount of the recipient ' s contribution.

42(2)   [arm ' s length price]  

In subsection (1), arm ' s length price , in respect of the acquisition of the recipients property by the provider, means:


(a) if the recipients property was acquired by the provider in the ordinary course of business under an arm ' s length transaction - the cost price of the recipients property to the provider; or


(b) in any other case - the amount that the provider could reasonably be expected to have been required to pay to acquire the recipients property under an arm ' s length transaction in the ordinary course of business.




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