| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your written advice
Authorisation Number: 1012760790756
Ruling
Subject: Motor-powered road vehicle and Fringe Benefits Tax Assessment Act 1986 (FBTAA1986)
Question 1
Does the specific motor-powered road vehicle meet the definition of 'car' for the purposes of the Fringe Benefits Tax Assessment Act 1986 (FBTAA 1986)?
Answer
Yes
This ruling applies for the following period:
01/07/2014 - 30/06/2015
The scheme commences on:
01/07/2014
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 applicant is proposing to enter into a salary sacrifice arrangement under an associate lease with their employer.
Under the arrangement the employee is proposing to obtain use of the motor-powered road vehicle, a description of the motor vehicle was provided in detail.
The modification process involves the addition of various items such as Kitchen with sink and microwave oven, table, TV, fridge, water tanks, lounge which converts to an electric roll down stylish bed, shower, toilet etc.
Relevant legislative provisions
Fringe Benefits Tax Assessment Act 1986 Subsection 136(1)
Income Tax Assessment Act 1997 Subsection 995-1(1)
Reasons for decision
Subdivision A of Division 2 of Part III of the FBTAA 1986 covers and applies to the provision of a car held by the provider (being the employer or an associate of the employer) under an arrangement, to an employee or associate of the employee in respect of employment.
The subject matter under this ruling request, is limited to the question as to whether the specified motor vehicle subject to the proposed salary sacrifice arrangement, meets the definition of "car" for the purposes of the FBTAA 1986.
In order to conclude wether a motor vehicle meets the definition of "car" for the purposes of the FBTAA 1986, the following definitions are considered.
A "motor vehicle" under subsection 136(1) of the FBTAA 1986 has the meaning given by sub-section 995-1 of the Income Tax Assessment Act 1997.
A "motor vehicle" under subsection 995-1(1) of the Income Tax Assessment Act 1997, means a motor-powered road vehicle (including a 4 wheel drive vehicle).
A "car" under subsection 136(1) of the FBTAA 1986 has the meaning given by sub-section 995-1(1) of the Income Tax Assessment Act 1997.
A "car" under subsection 995-1(1) of the Income Tax Assessment Act 1997 means a motor vehicle (except a motor cycle or similar vehicle) designed to carry a load of less than one tone and fewer than 9 passengers.
In addition the Commissioner's view on what types of vehicles are cars, is expressed in the publication "Fringe benefits Tax: a guide for employers" (ato.gov.au search for QC 16123) which states:
The following types of vehicles (including four-wheel drive vehicles) are cars:
• motor cars, station wagons, panel vans and utilities (excluding panel vans and utilities designed to carry a load of one tonne or more)
• all other goods-carrying vehicles designed to carry less than one tonne
• all other passenger-carrying vehicles designed to carry fewer than nine occupants.
"Arrangement" under subsection 136(1) of the FBTAA 1986, means:
(a) any agreement, arrangement, understanding, promise or undertaking, whether express or implied, and whether or not enforceable, or intended to be enforceable, by legal proceedings; and
(b) any scheme, plan, proposal, action, course of action or course of conduct, whether unilateral or otherwise.
Conclusion
On the basis of the description and nature of the motor vehicle, it is concluded that this motor-powered road vehicle meets definition of a "car" for the purposes of the FBTAA 1986.
As such where the car is made available to the employee under an arrangement, the availability and usage of this car will be subject to the application and provisions of the FBTAA 1986.
Copyright notice
© Australian Taxation Office for the Commonwealth of Australia
You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).
