Income Tax Act 2007

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Schedule 5 Fringe benefit values for motor vehicles

ss GB 31, RD 28, RD 29, RD 56, RD 57

1

The following paragraphs apply to determine the value of the benefit that an employee has for a quarter, tax year, or income year when section RD 60 applies, if in the quarter, tax year, or income year, a motor vehicle is provided by a person for the private use of an employee, or is made available for their private use:

(a)

if the vehicle is owned by the person, jointly or otherwise,—

(i)

on the basis of the cost price of the vehicle to the person: for a quarter, 5% of the cost price, and for a tax year or income year, 20% of the cost price:

(ii)

subject to clause 10, on the basis of the tax value of the vehicle to the person: for a quarter, 9% of the tax value, and for a tax year or income year, 36% of the tax value:

(b)

if the vehicle is leased or rented by the person from another person, whether they are associated or not,—

(i)

on the basis of the cost price of the vehicle to its owner at the time the benefit is provided to the employee: for a quarter, 5% of the cost price, and for a tax year or income year, 20% of the cost price:

(ii)

subject to clause 10, on the basis of the tax value of the vehicle to its owner at the time the benefit is provided to the employee: for a quarter, 9% of the tax value, and for a tax year or income year, 36% of the tax value.

2

If a motor vehicle to which this schedule applies is 1 of a number of motor vehicles, each of which is available for private use as described in clause 1, the value of the benefit is determined as follows:

(a)

if the employee mainly uses the same vehicle, clause 1 applies to that vehicle:

(b)

if paragraph (a) does not apply, and the employee is employed in a business engaged in the selling of motor vehicles, and the vehicles available for use are trading stock of the business, clause 1 applies to the quotient obtained by dividing the sum of either the cost price of the vehicles or their tax value, by the total number of those vehicles:

(c)

if paragraphs (a) and (b) do not apply, clause 1 applies to the highest value of any vehicle used by the employee.

3

In this schedule, a motor vehicle’s tax value in a quarter, tax year, or income year is—

(a)

the value of the vehicle as determined under subpart EE for the beginning of the tax year or income year, if paragraphs (b) and (c) do not apply; or

(b)

the cost price of the vehicle, if the vehicle is acquired after the beginning of the tax year or income year, and paragraph (c) does not apply; or

(c)

determined under clause 4 if, in the period of 2 years before the vehicle’s acquisition by the person (person A) providing it to the employee, the vehicle is owned by person A or by a person (person B) associated with them.

Schedule 5 clause 3(a): amended (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 140(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Schedule 5 clause 3(c): substituted (with effect on 1 April 2008), on 6 October 2009, by section 580(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

4

For the purposes of clause 3(c), the tax value of the vehicle is the value it would have under subpart EE at the beginning of the tax year or income year, or at the time of acquisition in the year, treating the cost of the vehicle on acquisition as the amount determined under—

(a)

clause 5, if—

(i)

the cost price was last used by person A or person B for the vehicle under clause 1:

(ii)

clause 1 did not apply to the vehicle in the 2-year period referred to in clause 3(c) and neither person A nor person B has used the tax value for the vehicle under clause 1:

(b)

clause 6, if person A did not own the vehicle and person B last used the tax value of the vehicle under clause 1:

(c)

clause 7, if person A owned the vehicle and the tax value was last used for the vehicle under clause 1.

5

The highest of the following amounts is the relevant amount for clause 4(a):

(a)

the highest cost of the vehicle to person A on an acquisition of it by them:

(b)

the highest cost of the vehicle to person B on an acquisition of it by them.

6

The highest of the following amounts is the relevant amount for clause 4(b):

(a)

the tax value of the vehicle under this schedule for person B, immediately before the last disposal of the vehicle by them:

(b)

the cost of the vehicle to person A on acquisition.

7

The highest of the following amounts is the relevant amount for clause 4(c):

(a)

the tax value of the vehicle under this schedule for whichever of person A or person B last used tax value for the vehicle under clause 1, immediately before the last disposal of the vehicle by that person:

(b)

the cost of the vehicle to person A on the last acquisition of it by them.

8

To determine the value of a benefit under clause 1—

(a)

any GST paid on the acquisition of a vehicle by the owner or lessor of the vehicle is—

(i)

included in the cost price of the motor vehicle or in the calculation of the motor vehicle’s tax value:

(ii)

not reduced by an amount of input tax on the supply of the vehicle to the owner or lessor:

(b)

if, in the period of 2 years before the vehicle’s acquisition by the person providing it to the employee, the vehicle is owned by the person or by someone associated with them, the cost price is treated as being the highest one of the cost prices paid for the vehicle by the person or an associate since its manufacture:

(c)

subject to paragraph (b), the cost price of the vehicle is treated as being equal to the vehicle’s market value if,—

(i)

the cost to the person who acquires the vehicle is zero; or

(ii)

the cost price is unable to be established to the satisfaction of the Commissioner by the person who acquires the vehicle; or

(iii)

at the time the vehicle is acquired, the cost price to the person who acquires the vehicle is less than the market value because of an arrangement between that person and an associated person, and that arrangement has the purpose of defeating the intent and application of the FBT rules.

9

Despite clause 8(a), a person who in a quarter, tax year, or income year provides a benefit that is valued under clause 1 may choose to value the vehicle on the basis of its cost price exclusive of GST or its tax value calculated exclusive of GST using clause 1 as modified by clause 10.

10

The following paragraphs apply to a person who values a vehicle on the basis of its cost price exclusive of GST or its tax value calculated exclusive of GST:

(a)

the terms ‘cost price’ and ‘tax value’ in clause 1 do not include an amount of GST payable:

(b)

the references to 5% in clause 1 are treated as if they were references to a percentage calculated using the formula—

5 + (5 × rate of GST applying on last day of relevant quarter):

(c)

the references to 9% in clause 1 are treated as if they were references to a percentage calculated using the formula—

9 + (9 × rate of GST applying on last day of relevant quarter):

(d)

the references to 20% in clause 1 are treated as if they were references to a percentage calculated using the formula—

20 + (20 × rate of GST applying on last day of relevant
tax year or corresponding income year):

(e)

the references to 36% in clause 1 are treated as if they were references to a percentage calculated using the formula—

36 + (36 × rate of GST applying on last day of relevant
tax year or corresponding income year).

11

When a vehicle is leased or rented to the person after it has been leased or rented to another person (the other person), the cost price of a vehicle is its market value at the time it is first leased or rented to the person if—

(a)

the person is not associated with the other person; and

(b)

the person is not associated with the lessor or owner of the vehicle; and

(c)

the employee is not the lessor or owner of the vehicle; and

(d)

the employee is not associated with the lessor or owner of the vehicle.

12

If the vehicle is leased or rented by the person from another person and the lessee requests that the lessor disclose the cost price or tax value of the vehicle for the lessor, the lessor must disclose to the lessee the information requested.

13

The minimum tax value of a motor vehicle to which this schedule applies is $8,333.