Taxation Laws Amendment (FBT Cost of Compliance) Act 1995 (145 of 1995)

Schedule 5   OTHER AMENDMENTS OF THE FRINGE BENEFITS TAX ASSESSMENT ACT 1986

22   Section 115A

Repeal the section, substitute:

Penalty tax for making unreasonable estimate of business kilometres

"115A. If:

(a) the number of kilometres specified by an employer as the

employer's estimate of the number of business kilometres travelled by a

car during a period in an FBT year is not a reasonable estimate of the

number of business kilometres travelled in that period; and

(b) the tax that would be payable by the employer if a reasonable

estimate of the number of business kilometres was substituted for the

employer's estimate exceeds the tax that would be payable if the

employer's estimate was used;

then:

(c) the Commissioner may make a reasonable estimate of the number of

business kilometres; and

(d) the Commissioner's estimate is to be used in calculating the

business use percentage applicable to the car for the period; and

(e) the employer is liable to pay, by way of penalty, additional tax

equal to double the amount of the excess referred to in paragraph

(b).".