Commonwealth Consolidated Acts

FRINGE BENEFITS TAX ASSESSMENT ACT 1986 - SECT 44

             (1)  Where:

                     (a)  the recipient of a property fringe benefit in relation to an employer in relation to a year of tax is an employee of the employer; and

                     (b)  if the recipient had, at the provision time, incurred and paid unreimbursed expenditure (in this subsection called the gross expenditure ), in respect of the purchase of the recipients property, equal to the amount that, but for this subsection and Division 14 and the recipients contribution, would be the taxable value of the property fringe benefit in relation to the year of tax--a once‑only deduction (in this subsection called the gross deduction ) would, or would if not for section 82A of the Income Tax Assessment Act 1936 , and Divisions 28 and 900 of the Income Tax Assessment Act 1997 , have been allowable to the recipient under either of those Acts in respect of the gross expenditure; and

                    (ba)  the amount (in this subsection called the notional deduction ) calculated in accordance with the formula:

                            where:

"GD" is the gross deduction; and

"RD" is:

                              (i)  if there is no recipients contribution in relation to the property fringe benefit--nil; or

                             (ii)  if there is a recipients contribution in relation to the property fringe benefit equal to, or calculated by reference to, an amount of consideration paid by the recipient to the provider or to the employer in respect of the provision of the recipients property--the amount (if any) that would, or that would but for section 82A of the Income Tax Assessment Act 1936 , and Divisions 28 and 900 of the Income Tax Assessment Act 1997 , have been allowable as a once‑only deduction to the recipient under either of those Acts in respect of that consideration if that consideration had been incurred and paid by the recipient at the provision time;

                            exceeds nil; and

                     (c)  except where the property fringe benefit is:

                              (i)  an exclusive employee property benefit; or

                            (ia)  covered by a recurring fringe benefit declaration (see section 152A); or

                             (ii)  an extended travel property benefit; or

                            (iii)  a car property benefit;

                            the recipient gives to the employer, before the declaration date, a declaration, in a form approved by the Commissioner, in respect of the recipients property; and

                     (d)  where the property fringe benefit is an extended travel property benefit (other than an international aircrew property benefit)--the recipient gives to the employer, before the declaration date, a travel diary in relation to the travel undertaken by the recipient to which the fringe benefit relates; and

                    (da)  where:

                              (i)  the property fringe benefit is a car property benefit in respect of a car held by the recipient during a period (in this section called the holding period ) in the year of tax; and

                             (ii)  the substantiation rules set out in Division 15 have been complied with in relation to the car in relation to the holding period;

                            the following conditions are satisfied:

                            (iii)  the recipient gives to the employer, before the declaration date, a car substantiation declaration for the car for the year of tax;

                            (iv)  in a case where the substantiation rules require log book records or odometer records to be maintained by or on behalf of the recipient in relation to the car--the car substantiation declaration is accompanied by a copy of those documents; and

                     (e)  where paragraph (da) does not apply and the property fringe benefit is a car property benefit in respect of a car held by the recipient during a period (in this section also called the holding period ) in the year of tax--the recipient gives to the employer, before the declaration date:

                              (i)  a declaration, in a form approved by the Commissioner, that purports to set out:

                                        (A)  the holding period; and

                                        (B)  the number of whole business kilometres travelled by the car during the holding period; and

                                        (C)  the number of whole kilometres travelled by the car during the holding period; or

                             (ii)  where the average number of business kilometres per week travelled by the car during the holding period exceeded 96:

                                        (A)  a declaration referred to in subparagraph (i); or

                                        (B)  a declaration, in a form approved by the Commissioner, that purports to set out the holding period and includes a statement by the recipient that the average number of business kilometres per week travelled by the car during the holding period exceeded 96;

the taxable value, but for Division 14, of the property fringe benefit in relation to the year of tax is the amount calculated in accordance with the formula:

where:

"TV" is the amount that, but for this subsection and Division 14, would be the taxable value of the property fringe benefit in relation to the year of tax; and

"ND" is:

                      (f)  if neither paragraph (da) nor paragraph (e) applies and paragraph (k) does not apply--the notional deduction; or

                     (g)  where paragraph (da) applies and paragraph (k) does not apply--whichever of the following amounts is applicable:

                              (i)  if it would be concluded that the amount of the recipients contribution would have been the same even if the property fringe benefit were not applied or used in producing assessable income of the recipient--the business use percentage of the amount that, but for this subsection and Division 14, would be the taxable value of the property fringe benefit in relation to the year of tax;

                             (ii)  if subparagraph (i) does not apply--the business use percentage of the amount that, but for this subsection and Division 14 and the recipients contribution, would be the taxable value of the property fringe benefit in relation to the year of tax; or

                     (h)  where:

                              (i)  paragraph (e) applies; and

                             (ii)  a declaration referred to in subparagraph (e)(i) has been given to the employer; and

                           (iia)  paragraph (k) does not apply;

                            whichever of the following amounts is the least:

                            (iii)  the notional deduction;

                            (iv)  if it would be concluded that the amount of the recipients contribution would have been the same even if the property fringe benefit were not applied or used in producing assessable income of the recipient--33 % of the amount that, but for this subsection and Division 14, would be the taxable value of the property fringe benefit in relation to the year of tax;

                             (v)  if subparagraph (iv) does not apply--33 % of the amount that, but for this subsection and Division 14 and the recipients contribution, would be the taxable value of the property fringe benefit in relation to the year of tax; or

                      (j)  where:

                              (i)  subparagraph (e)(ii) applies; and

                             (ii)  a declaration referred to in subparagraph (e)(i) has not been given to the employer; and

                           (iia)  paragraph (k) does not apply;

                            whichever of the following amounts is applicable:

                            (iii)  if it would be concluded that the amount of the recipients contribution would have been the same even if the property fringe benefit were not applied or used in producing assessable income of the recipient--33 % of the amount that, but for this subsection and Division 14, would be the taxable value of the property fringe benefit in relation to the year of tax;

                            (iv)  if subparagraph (iii) does not apply--33 % of the amount that, but for this subsection and Division 14 and the recipients contribution, would be the taxable value of the property fringe benefit in relation to the year of tax; or

                     (k)  if, under subsection 138(3), the property fringe benefit is deemed to have been provided to the recipient only--the amount calculated in accordance with subsection (5).

             (2)  For the purposes of the application of this section in relation to a fringe benefit, where the recipient:

                     (a)  while undertaking travel referred to in paragraph (1)(d), engages in an activity in the course of producing assessable income of the recipient; and

                     (b)  does not make, as mentioned in the definition of travel diary in subsection 136(1), an entry relating to the activity, being an entry of the kind referred to in that definition;

the activity shall be deemed not to have been engaged in by the recipient in the course of producing assessable income.

             (3)  Where:

                     (a)  apart from this subsection, paragraph (1)(da) applies in relation to a fringe benefit in relation to an employer in respect of a car held by the recipient during a period in a year of tax; and

                     (b)  whichever of the following amounts is the greater exceeds the amount that, apart from this subsection, would be ascertained under paragraph (1)(g) as representing the component ND in the formula in subsection (1):

                              (i)  in all cases--the amount that would have been ascertained under paragraph (1)(h) as representing that component if:

                                        (A)  paragraph (1)(e) had applied in relation to the fringe benefit; and

                                        (B)  a declaration of the kind referred to in subparagraph (1)(e)(i) had been given to the employer;

                             (ii)  in a case where the average number of business kilometres per week travelled by the car during the holding period exceeded 96--the amount that would have been ascertained under paragraph (1)(j) as representing that component if:

                                        (A)  subparagraph (1)(e)(ii) had applied in relation to that fringe benefit; and

                                        (B)  a declaration of the kind referred to in subparagraph (1)(e)(i) had not been given to the employer; and

                                        (C)  a declaration of the kind referred to in sub-subparagraph (1)(e)(ii)(B) had been given to the employer;

this Act applies, and shall be deemed always to have applied, as if the amount represented by that component had been calculated as mentioned in whichever of subparagraphs (b)(i) or (ii) of this subsection is applicable.

             (4)  Nothing in section 74 prevents the amendment of an assessment for the purpose of giving effect to subsection (3).

             (5)  For the purposes of paragraph (1)(k) (which applies to a property fringe benefit that, under subsection 138(3), is deemed to have been provided to an employee only), the amount is calculated in accordance with the formula:

where:

"employee's percentage of interest" :

                     (a)  is the percentage of the interest held by the employee, during a period (in this subsection called the holding period ) in the year of tax, in the asset or other thing that:

                              (i)  is the property to which the property fringe benefit relates; and

                             (ii)  is applied or used for the purpose of producing assessable income of the employee; and

                     (b)  does not include the percentage of the interest held in that asset or other thing by the employee's associate or associates during the holding period.

"unadjusted ND" is the amount that would be ascertained as representing the component ND in the formula in subsection (1) if paragraph (1)(k) did not apply in relation to the property fringe benefit.