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Changes to Car Fringe Benefits Tax using the Statutory Formula Method
CAR FRINGE BENEFITS
TAXABLE VALUE
Statutory formula method – following the 2011 Budget, changes were made to the statutory formula method which has resulted in the old progressive statutory rates being replaced with a single statutory rate of 20% (subject to transitional rules), which applies regardless of kilometres travelled. This rate applies to all new car fringe benefits after 7.30pm AEST on 10 May 2011. The taxable value of the car fringe benefits is the statutory rate multiplied by the car’s base value.
DETERMINING THE STATUTORY PERCENTAGE
A flat statutory rate of 20% applies (subject to transitional rules), regardless of the distance travelled, to all car fringe benefits you provide after 7.30pm AEST on 10 May 2011.
The statutory percentages for car fringe benefits provided prior to 7.30pm AEST on 10 May 2011, are as follows:
| Total kilometres travelled during the year | Statutory percentage |
| Less than 15,000 | 26 |
| 15,000 to 24,999 | 20 |
| 25,000 to 40,000 | 11 |
| Over 40,000 | 7 |
TRANSITIONAL ARRANGEMENT AND RATES
The move to one statutory rate of 20% will be phased in over four years. There will be transitional arrangements that apply to any new commitments entered into from 10 May 2011 to 31 March 2015. The following statutory rates should be used:
| Total kms travelled during FBT year |
STATUTORY RATE | |||
| From 10 May 2011 |
From 1 Apr 2012 |
From 1 Apr 2013 |
From 1 Apr 2014 |
|
| Less than 15,000 | 0.20 | 0.20 | 0.20 | 0.20 |
| 15,000 to 25,000 | 0.20 | 0.20 | 0.20 | 0.20 |
| 25,000 to 40,000 | 0.14 | 0.17 | 0.20 | 0.20 |
| Over 40,000 | 0.10 | 0.13 | 0.17 | 0.20 |
If you have any queries about this article please call Mark Trevaskis on (03) 9832 8424.