Private ruling: Taxable value of car fringe benefits
Date of advice: 9 November 2016
Published: April 2017
Ruling period: 1 April 201X - 31 March 201X | 1 April 201X - 31 March 201X | 1 April 201X - 31 March 201X | 1 April 201X - 31 March 201X | 1 April 201X - 31 March 20XX
Date scheme commenced: 1 April 201X - 31 March 201X

Ruling: Q1: Does the Miscellaneous Taxation Ruling, MT 2023 Fringe benefits tax: taxable value of new demonstrator motor vehicles and used car stock of motor vehicle dealers (MT 2023) apply to Company X in calculating the taxable value of the car fringe benefit tax under the statutory formula in section 9 of the Fringe Benefits Tax Assessment Act 1986 ? | A1: No.

Relevant facts and circumstances: Company X conducts an X business and uses motor vehicles as props. On occasions, the business allows their employees to use the vehicles privately. Due to this arrangement, private use of the vehicles constantly changes.

Relevant legislative provisions: The Fringe Benefits Tax Assessment Act 1986 Section 9

Reasons for decision: Summary: The formula contained in section 9 of the Fringe Benefits Tax Assessment Act 1986 (FBTAA) operates on a per car basis taking as the taxable value a statutory percentage of the 'base value' of the car. However, it has been submitted that the application of the statutory formula can present practical problems for motor vehicle dealers due to the nature of the industry with rapid turnover of vehicles and a high ratio of pool vehicles to employees. In order to assist taxpayers in the industry in overcoming these practical problems, the ATO issued MT 2023. However, MT 2023 has restricted application to new demonstrator motor vehicles and used car stock of motor vehicles in the industry of motor vehicle car dealers only. Thus in this case where the company runs an X business, we are of the view that MT 2023 does not apply to Company X in calculating the taxable value of car fringe benefits under section 9 FBTAA.