Taxation Determination

TD 2005/9

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 fringe benefits tax year commencing on 1 April 2005?

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FOI status:

may be released

Preamble

1. The rates to be applied where the cents per kilometre basis is used for the fringe benefits tax (FBT) year commencing on 1 April 2005 are:

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 1 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 acceptable methods that may be used to value the benefit of the right to use an employer's motor vehicle other than a car . 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. The effect of paragraphs 15 and 16 of MT 2034 is that this method can only be used where there is extensive business use of the vehicle.

4. The cents per kilometre rates set out in this Determination are those that applied for the year commencing on 1 April 2004, reviewed to reflect the movement in the Consumer Price Index. (The rates that applied for the year commencing on 1 April 2004 are set out in Taxation Determination TD 2004/9.)

Date of effect

5. This Determination applies to the FBT year commencing 1 April 2005.

Commissioner of Taxation
30 March 2005

Not previously issued as a draft

References

ATO references:
NO 2004/6082

Related Rulings/Determinations:

TD 2004/9
MT 2034
TD 93/59
TD 94/22
TD 95/19
TD 96/26
TD 97/16
TD 98/10
TD 1999/5
TD 2000/20
TD 2001/8
TD 2002/6
TD 2003/6
TD 2004/9

Subject References:
FBT
FBT motor vehicle
FBT motor vehicle definition
FBT taxable value
fringe benefits tax
private use of motor vehicles other than cars
residual fringe benefits

Legislative References:
TAA 1953 Pt IVAAA
FBTAA 1986 136(1)