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Ruling

Subject: Fringe Benefits Tax - Motor Vehicle Exemption

Question 1

Does a 2011 Volkswagen Amarok Trendline TDI 400 Dual Cab Ute with standard heavy duty suspension meet the eligibility criteria for fringe benefits tax exemption under subsection 8(2) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA), given all of the employee usage criteria are met?

Answer

Yes

This ruling applies for the following periods:

Year ended 31 March 2012

Year ended 31 March 2013

Year ended 31 March 2014

Year ended 31 March 2015

The scheme commences on:

1 April 2011

Relevant facts and circumstances

The taxpayer is a proprietary company and an employer.

An employee is provided with a 2011 Volkswagen Amarok Trendline TDI 400 Dual Cab Ute with the following features:

Relevant legislative provisions

Fringe Benefits Tax Assessment Act 1986 subsection 8(2).

Reasons for decision

Summary

Although the 2011 Volkswagen Amarok Trendline TDI 400 Dual Cab Ute with standard heavy duty suspension is not a vehicle specifically listed under the Commissioner's exempt vehicle listing, it does comply with sub-paragraph 8(2)(a)(ii) and sub-paragraph 8(2)(b) of the FBTAA and therefore meets the eligibility criteria for FBT exemption.

Detailed reasoning

The 2011 Volkswagen Amarok Trendline TDI 400 Dual Cab Ute with standard heavy duty suspension, needs to meet the definition of a car as defined in subsection 136(1) of the FBTAA:

The meaning given by subsection 995-1(1) of the Income Tax Assessment Act 1997.

Subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997) defines a car as:

a motor vehicle (except a motor cycle or similar vehicle) designed to carry a load of

less than 1 tonne and fewer than 9 people.

The manufacturer specifications that were provided for the 2011 Volkswagen Amorak Trendline TDI 400 Dual Cab Ute indicate that the total load capacity is 998 kg, calculated as per the Commissioner's Miscellaneous Taxation Ruling MT 2024:

Gross vehicle mass - curb weight = total load capacity

Substituting in the figures for the 2011 Volkswagen Amarok Trendline TDI 400 Dual Cab Ute with standard heavy duty suspension:

3040 kg - 2042 kg = 998 kg

Manufacturer specifications also stated a seating capacity of 5 passengers meeting the 'fewer than 9 people' component of subsection 995-1(1).

Subparagraph 8(2)(a)(ii) and subparagraph 8(2)(b) of the FBTAA then states that:

You have advised that the employee usage criteria in subparagraph 8(2)(b) above will be met so the 2011 Volkswagen Amarok Trendline TDI 400 Dual Cab Ute with heavy duty suspension must meet the criteria that it is not a vehicle designed for the principal purpose of carrying passengers to be an exempt benefit.

The guidelines for determining this are set out in the Commissioner's Miscellaneous Taxation Ruling MT 2024. The eligibility is determined on the basis that the majority of the designed load capacity is not attributable to passenger carrying capacity. The methodology given is to multiply the designed seating capacity (including driver) by 68 kg, in line with the application of the Australian Design Rules. Applying this to the 2011 Volkswagen Amarok Trendline TDI 400 Dual Cab Ute with heavy duty suspension:

Seating capacity = 5 passengers

5 passengers x 68 kg = 340 kg

The passenger load capacity of 340 kg, as a percentage of the total load capacity of 998 kg, is 34%. As this is not a majority of the total load capacity, the Volkswagen Amarok Trendline TDI 400 Dual Cab Ute with standard heavy duty suspension is determined not to be a vehicle designed for the principal purpose of carrying passengers.

Therefore, the 2011 Volkswagen Amarok Trendline TDI 400 Dual Cab Ute with standard heavy duty suspension meets the definition of a car and furthermore, the benefits provided in relation to it, do meet the eligibility criteria for an FBT exemption provided that the only private use is minor, infrequent and irregular.

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