Prior to the 2017-2018 tax year all companies have had to pay FBT on company vehicles available for private use by an employee. FBT was payable for vehicles made available to employees (and their associated persons), as well as shareholder-employees.
However, with changes to legislation from the 2017-2018 tax year under Subpart 4B, section CX 17 of the income tax act 2007 a close company can elect exclude FBT on private us of motor vehicle.
An election by a close company under subsection (4B) may be made for the income year which the close company acquires the motor vehicle or first starts using the motor vehicle for business use.
Once an election is made for a motor vehicle you can't return to using the FBT rules for that vehicle unless the vehicle is disposed of or the close company stops using the vehicle for business use.
Working out the taxable value of a motor vehicle or have questions around record keeling for motor vehicle. You can contact us for a consultation.
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