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Edited version of private ruling
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Ruling
Subject: Fringe Benefits Tax-Provision of Car
Whether the provision of the car can be excluded from constituting Car Fringe Benefits under the Fringe Benefits Tax Assessment Act 1986 (FBTAA) as it is not used for private purposes?
No.
This ruling applies for the following period
1 April 2009 to 31 April 2010
The scheme commenced on
1 July 2008
Relevant facts and circumstances
This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.
The employer operates a service business
The employer owns a car which is taken home by a different employee each night to man the phones of the business which are diverted to a mobile phone.
The employee uses the car to make house calls in the event of a call out and the vehicle is not used for private purposes.
The employee who takes the car home is also responsible for collecting the business mail the following morning.
Relevant legislative provisions
Fringe Benefits Tax Assessment Act 1986 Section 7
Fringe Benefits Tax Assessment Act 1986 Subsection 7(1)
Fringe Benefits Tax Assessment Act 1986 Subsection 7(2)
Fringe Benefits Tax Assessment Act 1986 Subsection 7(3)
Fringe Benefits Tax Assessment Act 1986 Subsection 7(4).
Reasons for decision
The provision of the car could not be excluded from constituting Car Fringe Benefits under the FBTAA, because, notwithstanding the use to which the vehicle is put and the prohibition on private use, the availability of a car for private use of an employee is taken by subsection 7(1) of the FBTAA to constitute a benefit, and where a car is "garaged or kept at or near a place of residence of the employee", subsection 7(2) deems the car to be available for the private use of the employee at those times. The only exception to subsection (2) of the FBTAA is where the car is used by a fire fighting, ambulance or police service, subsection 7(2A) of the FBTAA. This exception does not apply as the car is not used for any of the services mentioned in subsection 7(2A).
As the car is taken home and garaged at the residence of the employees, the deeming provision in subsection 7(2) is satisfied and it is not relevant whether the car is used exclusively for business purposes or not. In such circumstances, a car fringe benefit arises under subsection 7(1) of the FBTAA in respect of the car regardless of whether the vehicle is actually applied for private use by the employees.
Subsection 7(4) of FBTAA is for the purposes of subsection 7(3). Therefore, subsections 7(4) and 7(3) of the FBTAA don't apply in circumstances where a car is garaged at an employee's home and thus bringing into operation the deeming provision in subsection 7(2). A car that is garaged at an employee's home, as stated in the previous paragraph, is treated as being available for the private use of the employee regardless, of whether or not the employee has permission to use it.
There are no provisions in the FBTAA to exclude the provision of the car from constituting Car Fringe Benefits under the FBTAA in these circumstances.
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