Taxation Determination
TD 97/16
Fringe benefits tax: what are the rates to be applied on a cents per kilometre basis for calculating the taxable value of a fringe benefit arising from the private use of a motor vehicle other than a car for the year commencing 1 April 1997?
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May be releasedI 1015416
| This Addendum forms part of the Ruling and, to the extent that it is capable of being a 'public ruling' in terms of Part IVAAA of the Taxation Administration Act 1953, it is a public ruling for the purposes of that Part. Taxation Rulings TR 92/1 and TR 97/16 together explain when a Ruling is a public ruling and how it is binding on the Commissioner. |
1. The rates to be applied where the cents per kilometre basis is used for the fringe benefits tax year commencing 1 April 1997 are:
| Engine Capacity | Rate per kilometre |
|---|---|
| 0 - 2500cc | 32 cents |
| Over 2500 cc | 39 cents |
| Motor cycles | 10 cents. |
2. An employee's right to use a car for private purposes constitutes a car fringe benefit under the Fringe Benefits Tax Assessment Act 1986 (FBTAA). Where an employee is entitled to use a motor vehicle other than a car, this gives rise to a residual benefit under that Act. For these purposes, in subsection 136(1) of the FBTAA, 'car' means:
'a motor vehicle (including a vehicle known as a four wheel drive vehicle), being:
- (a)
- a motor car, station wagon, panel van, utility truck or similar vehicle, designed to carry a load of less than one tonne; or
- (b)
- any other road vehicle designed to carry a load of less than 1 tonne or fewer than 9 passengers;
but does not include a motor cycle or similar vehicle'.
3. Taxation Ruling MT 2034 outlines a number of methods that may be used to value the benefit of the right to use an employer's motor vehicle other than a car. For example, MT 2034 applies to a calculation of the value of the benefit arising from the use of a motor cycle or a vehicle designed to carry a load of one tonne or more.
4. MT 2034 indicates that one method of valuing the benefit is to multiply the number of private kilometres travelled by employees in a vehicle during a year by a cents per kilometre rate.
5. The cents per kilometre rates set out in this Determination are those that applied for the year commencing 1 April 1996, modified to reflect the movement in the Consumer Price Index. (The rates that applied for the year commencing 1 April 1996 were set out in Taxation Determination TD 96/26.)
Commissioner of Taxation
25 June 1997