ATO ID 2002/102: Fringe Benefits Tax - Changing the basis for valuing car fringe benefits
Date of decision: 16 November 2001
Year of income: Year ended 31 March 2001
Business line: Superannuation and Employer Obligations

Issue
Can a request for an amendment of a Fringe Benefits Tax (FBT) return after the return has been lodged, to change the method used to value a car fringe benefit from the statutory formula to the operating cost method, be allowed under subsection 10(4) of the Fringe Benefit Tax Assessment Act 1986 (FBTAA)?

Decision
Yes. A request for an amendment of an FBT return after the return has been lodged, to change the method used to value a car fringe benefit from the statutory formula to the operating cost method, can be allowed under subsection 10(4) of the FBTAA.

Facts
The employer lodged an FBT return using the statutory formula method to calculate the value of a vehicle as the log book was misplaced. Subsequently, the log book was found. A comparison of the taxable value of the vehicle using the operating cost method as against the statutory formula method revealed that the value was lower under the operating cost method. The employer requested an amendment to the original assessment.

Reasons for decision
Summary: As required under subsection 10(4) of the FBTAA, an employer wishing to use the operating cost method to value a car fringe benefit is required to make an election in writing to the Commissioner on or before 'the declaration date'. This date is defined in subsection 136(1) of the FBTAA as 'the date of lodgment of the return of the fringe benefits taxable amount of the employer of the year of tax, or such later date as the Commissioner allows'. It is considered appropriate in the specific circumstances of the employer for the Commissioner to extend the declaration date to accept a late election by the employer to allow the operating cost method of valuing the car fringe benefit.

Legislative references: Fringe Benefits Tax Assessment Act 1986 Subsection 10(4) Subsection 136(1)
Subject references: FBT car FBT operating cost FBT statutory formula