Fringe benefit tax (FBT) doesn’t apply on days where a motor vehicle qualifies to be a work-related vehicle. To qualify, all of the following conditions must be met:
- the principal design of the vehicle isn’t for carrying passengers
- the exterior of the vehicle permanently and prominently displays business signage
- you notify employees in writing that the vehicle is available only for travel between home and work and travel incidental to business, eg, passing by the bank on your way home from work
- you carry out regular checks to make sure employees are following vehicle restrictions, and keep records of these checks.
FBT is payable for any day the motor vehicle doesn’t meet the four conditions. Our Fringe benefit tax guide (IR409) explains the conditions in more detail
Note
Sedans and station wagons don’t qualify as work-related vehicles, unless the necessary alterations are made to convert them.
Note
Sedans and station wagons don’t qualify as work-related vehicles, unless the necessary alterations are made to convert them.
Fringe benefit tax liability
Some examples where FBT is payable on work-related vehicles, (eg, utes, double cab utes or vans) is a vehicle:
- which does not have permanent sign-writing
- made available to use privately over the weekend
- that has no restrictions in place about using it privately
- where the employer has notified the employee(s) in writing of any private use restrictions, but doesn’t make regular checks on restriction compliance
- where regular checks (on restriction compliance) by the employer, identify private use had taken place
