Legislation which changes the statutory formula method to calculate car fringe benefits (Tax Laws Amendment (2011 Measures No 5) Act 2011) received Royal Assent on 30 June 2011: see 2011 TAXVINE No 25 (1 July 2011).
The ATO advises that the legislation replaces the current progressive rates with a flat statutory rate of 20% that applies regardless of the distance travelled.
For new commitments, the flat rate will be phased in over 4 years, unless the employer chooses to skip these transitional arrangements and move straight to the 20% rate. However, if the employee is disadvantaged by the employer's decision, employee consent is required.
All pre-existing commitments will remain under the old statutory rates unless there is a change made that would amount to a new commitment.