ATO ID 2003/498: Car benefit: service of a chauffeur
Date of decision: 18 June 2003
Year of income: Year ending 31 March 2002
Business line: SEO

Issue
Is the service of a chauffeur a car benefit as defined in subsection 136(1) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)?

Decision
No. The service of a chauffeur is a residual benefit as defined in subsection 136(1) of the FBTAA and is not a car benefit.

Facts
A company owns and uses a car in its business. The company allows its employee to travel in the car for business and private purposes. The employer provides the service of a chauffeur to the employee. The chauffeur drives the car at the employee's direction for business and private purposes.

Reasons for decision
Summary: Is the service of a chauffeur a car benefit? The term car benefit, as defined in subsection 136(1) of the FBTAA, 'means a benefit referred to in subsection 7(1)'. A benefit referred to in subsection 7(1) of the FBTAA is the application or availability of the car for private purposes. The employee is provided with the service of a chauffeur. The chauffeur drives the car at the employee's direction. The service of a chauffeur is not an application of a car to a private use by the employee. The service of a chauffeur is not the availability of a car for the private use of the employee. The service of a chauffeur is not a benefit referred to in subsection 7(1) of the FBTAA and is not a car benefit as defined in subsection 136(1) of the FBTAA. Accordingly, the car benefit provisions (under Subdivision A of Division 2 of Part III of the FBTAA) do not apply in relation to the service of a chauffeur. Is the service of a chauffeur a residual benefit? The service of a chauffeur is a benefit as defined in subsection 136(1) of the FBTAA. The benefit does not fall within any of the categories of benefits covered by Subdivision A of Divisions 2 to 11 (inclusive) of Part III of the FBTAA, such as car benefits. Accordingly, the benefit is a residual benefit per section 45 of the FBTAA, and as defined in subsection 136(1) of the FBTAA.

Legislative references: Fringe Benefits Tax Assessment Act 1986 subsection 7(1) section 45 subsection 136(1)
Subject references: Benefit Car fringe benefits FBT car FBT car expenses Fringe benefits Fringe benefits tax Residual fringe benefits