05 Jul 11 Changes to car FBT rules
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.