Ask Me Anything on FBT

Confused about FBT? Join our Ask Me Anything session to get your questions answered live in an interactive, ‘office hours’ format.

In this session, we cover:

• My client bought a motor vehicle costing $120,000. The car limit is $69,674. The car has been registered within the car limit, is it still subject to FBT?

• What are the steps to salary packaging exempt benefits? Does this mean the employer can’t claim the cost of the exempt benefits in their tax return?

• Is there a maximum amount where you can apply the “otherwise deductible rule” per year?

• If there are amounts that are fully contributed by the employee, do we still need to include it in the FBT Return?

• What happens when a car is owned by one entity, but provided to an employee from a different entity?

• Do entertainment fringe benefits create a RFBA for employees? If so, how should it be split up between employees in a work dinner environment?

• How do you determine whether a motor vehicle provided under the statutory formula method is a type 1 or type 2 benefit?

• Practically, how do you keep track of the aggregate type 1 and type 2 benefits? Additionally, if there are employee contributions, do you apply these against type 1 or type 2 benefits?

• If an employee contribution reduces the FBT liability to nil, is it still mandatory to lodge a nil FBT return each year?

• If an employee is relocating for work and staying in temporary accommodation (short term lease) reimbursed by the employer, are the purchased meals subject to the $2/meal reduction? Or does this only apply when the employer directly provides the actual food?

• A private company has purchased an electric vehicle (EV) which is driven by the director. Is it necessary to lodge an FBT return for the EV? If so, how can we lodge it so that it is a NIL return?

• When using the operating cost method and depreciation is capped for tax purposes, how does this affect the opening written-down value in year 2 when calculating deemed depreciation?

• If a car is owned by Company A, but the director is now employed as a PAYG employee for a completely separate business, and Company A is hiring the car to the director under a loan agreement at market value - is this arrangement acceptable? Would FBT still apply in this case?

• Previously, you mentioned that a motor vehicle provided under the statutory formula method is generally reported as a Type 1 benefit if the supplier is registered for GST. If part of the car purchase is not subject to GST (due to stamp duty), how should the Type 1 and Type 2 amounts be apportioned?

• Should we be showing private use on any vehicle? Does it matter if it’s a sedan or ute?

• How do you value entertainment lease facilities and other recreational entertainment?

• If an employee has not kept a logbook for a car, is it still possible to use the Statutory Method?

• Can you do salary packaging for benefits that have had their taxable value reduced?

• How does the transport reduction work when an employee drives to their new location as part of a relocation? Does the company reimburse the fuel cost and reduce the taxable value of the benefit by the cents per kilometre rate?

• If the vehicle is a two-seater ute that is not classified as a car (as it is not designed primarily for carrying passengers), but no logbook has been maintained, how should this be treated for FBT purposes? Additionally, how does the cents per kilometre method apply in this context?

• If someone is on the highest marginal tax rate, is there ever a benefit in purchasing a car through a company for 100% personal use, and valuing the fringe benefit using the statutory formula method?

• Is there a limit to the otherwise deductible amount that can be claimed per employee?

• Does the pool/share car exemption apply only to cars, or can it also be applied to “work horse” type vehicles such as utes (dual cab or not) and vans?

• If a ute is parked at the director’s home which is the main place of business, does an exemption apply? If yes, how does it work?

Date recorded: 27 June 2025