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Edited version of your written advice
Authorisation Number: 1012979493791
Date of advice: 14 March 2016
Ruling
Subject: Exempt Car Benefit
Question 1
Does the 20XX relevant vehicle provided to the employee 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 2016
Year ended 31 March 2017
Year ended 31 March 2018
Year ended 31 March 2019
Year ended 31 March 2020
Year ended 31 March 2021
The scheme commences on:
The scheme has commenced
Relevant facts and circumstances
The taxpayer (a company) is an employer.
An employee is provided with a 20XX relevant utility vehicle (the "vehicle").
The purpose of providing the vehicle to the employee is to carry and store bulky tools, equipment and spare parts that the employee uses in the course of their work.
There is no secure storage at the work site to store the bulky tools, equipment and spare parts.
The employee uses the vehicle to travel between home and work.
The vehicle is designed to carry a load of less than one tonne, and does not have any modifications altering its design which means it could carry more than 1 tonne.
There is no private use of the vehicle.
Relevant legislative provisions
Fringe Benefits Tax Assessment Act 1986 Subsection 8(2),
Fringe Benefits Tax Assessment Act 1986 Subsection 136(1),
Fringe Benefits Tax Assessment Act 1986 Subsection 47(6) and
Income Tax Assessment Act 1997 Section 995-1(1)
Reasons for decision
A car benefit is an exempt benefit under subsection 8(2) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA) where the relevant requirements are satisfied.
Subsection 8(2) of the FBTAA states as follows:
(2) A car benefit provided in a year of tax in respect of the employment of a current employee is an exempt benefit in relation to the year of tax if:
(a) the car is:
(i) a taxi, panel van or utility truck, designed to carry a load of less than 1 tonne; or
(ii) any other road vehicle designed to carry a load of less than 1 tonne (other than a vehicle designed for the principal purpose of carrying passengers); and
(b) there was no private use of the car during the year of tax and at a time when the benefit was provided other than:
(i) work-related travel of the employee; and
(ii) other private use by the employee or an associate of the employee, being other use that was minor, infrequent and irregular.
The vehicle (as defined in the scheme) is a utility truck designed to carry a load of less than one tonne. There have been no modifications made to the vehicle altering its design so it could carry more than one tonne.
The vehicle has been provided to the employee for work-related travel. Although the employee uses the vehicle for home-to-work travel, there is no secure storage at the work site for the bulky tools, equipment and spare parts. The vehicle serves this purpose of providing secure storage.
There was no private use of the vehicle during the year of tax by the employee, when this vehicle was provided to the employee as a benefit by the employer.
Therefore, the provision of this vehicle to the employee meets the eligibility criteria to be FBT exempt under Subsection 8(2) of the FBTAA.
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