FBT obligations for company vehicles

The Tax Office has reminded employers about their FBT obligations in relation to company vehicles particularly those who took advantage of the investment allowance as vehicles purchased may have an associated FBT liability.

The use of some motor vehicles may be exempt from FBT if employers meet the eligibility criteria. The FBT exemption is limited to certain vehicles where private use of the vehicle is limited to specific circumstances.<--break->

Vehicles which may qualify for the exemption are:

  • vehicles designed to carry at least one tonne and/or nine or more passengers
  • a taxi, panel van/or single cab utility designed to carry less than one tonne
  • any other road vehicle designed to carry a load of less than one tonne and not designed principally to carry passengers.

The private use of company vehicles will only be exempt from FBT when the private use is limited to:

  • travel between home and work
  • incidental private travel undertaken in the course of performing employment-related duties
  • non-work related use that is minor, infrequent and irregular (for example, occasional use of the vehicle to remove domestic rubbish).

The FBT year ends on 31 March and returns along with any tax outstanding for 2010 must be lodged by 21 May 2010.

Ref: Own a company vehicle? Check oil, water and FBT, Tax Office Information Sheet, 6 May 2010.

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