Commonwealth Numbered Acts

TAXATION LAWS AMENDMENT (FRINGE BENEFITS AND SUBSTANTIATION) ACT 1987 No. 139 of 1987 - SECT 6

6. Section 10 of the Principal Act is amended:
(a) by omitting from subsection (2) "Where" and substituting "Subject to this
Part, where";
(b) by omitting from subsection (2) "continuously";
(c) by omitting from subsection (2) all the words after "amount calculated"
and substituting the following:

"in accordance with the formula:
(C X (100%-BP))-R
where:
C is the operating cost of the car during the holding period;
BP is:

   (a)  if, under section 10A or 10B, the employer is not entitled to a
        reduction in the operating cost of the car on account of business
        journeys undertaken in the car during the holding period-nil;

   (b)  if, under section 10A or 10B, the employer is entitled to such a
        reduction and the percentage calculated in accordance with the
        formula:
N-U
where:
N is the percentage applicable to the car specified in the employer's return
for the year of tax as mentioned in section 10A or 10B; and
U is the percentage (in this paragraph called the 'reasonable percentage')
that represents a reasonable estimate of the underlying business percentage
applicable to the car in relation to the provider for the holding period;
is a percentage that:

        (i)    if either of the following sub-subparagraphs applies:

                (A)  the year of tax is a log book year of tax of the employer
                     in relation to the car;

                (B)  the year of tax is not a log book year of tax of the
                     employer in relation to the car and the car is a low
                     business kilometre car of the provider in relation to the
                     year of tax;
exceeds nil; or

        (ii)   in any other case-exceeds 10%;
the reasonable percentage; or

   (c)  in any other case-the percentage applicable to the car specified in
        the employer's return for the year of tax as mentioned in section 10A
        or 10B; and
R is the amount (if any) of the recipient's payment.";
(d) by inserting in subparagraph (3) (a) (i) "insured repair expenses or"
after "other than";
(e) by omitting from subparagraphs (3) (a) (iii), (iv) and (vi) "year of
tax" and substituting "holding period";

   (f)  by adding at the end of paragraph (3) (a) "and";

   (g)  by omitting paragraph (3) (b);

   (h)  by omitting from subparagraph (3) (c) (i) "and";

   (j)  by inserting after subparagraph (3) (c) (i) the following
        subparagraph:

"(ia) in a case where car expenses in respect of fuel or oil for the car were
incurred during the holding period by recipients of the car fringe benefits
and:

                (A)  the persons incurring those expenses give to the
                     employer, before the declaration date, declarations, in a
                     form approved by the Commissioner, in respect of those
                     expenses; or

                (B)  documentary evidence of those expenses is obtained by the
                     persons incurring the expenses and given to the employer
                     before the declaration date;
the amount of those expenses paid by the recipients less any amount paid or
payable to the recipients by way of reimbursement of those expenses; and";

   (k)  by inserting in sub-subparagraph (3) (c) (ii) (A) "(other than car
expenses in respect of fuel or oil for the car)" after "in respect of the
car";

   (m)  by inserting after subsection (3) the following subsections:

"(3A) A reference in subparagraph (3) (a) (i) to an insured repair expense
relating to a car is a reference to:

   (a)  so much of an expense incurred in respect of repairs to the car as
        does not exceed an amount:

        (i)    received by way of insurance in respect of the repairs by the
               person incurring the expense;

        (ii)   paid by way of insurance in respect of the repairs in discharge
               of the obligation of the insured to pay the expense;

        (iii)  received by way of compensation in respect of the repairs by
               the person incurring the expense from the person legally
               responsible for the damage to the car; or

        (iv)   paid by way of compensation in respect of the repairs by the
               person legally responsible for the damage to the car in
               discharge of the obligation of the person incurring the expense
               to pay the expense; or

   (b)  an expense incurred in respect of repairs to the car:

        (i)    by an insurer under a contract of insurance; or

        (ii)   by way of compensation by the person legally responsible for
               the damage to the car.

"(3B) Where, in accordance with subsection 162K (2), the identity of a car
changes one or more times during the period (in this subsection called the
'overall holding period') that, apart from that subsection, would be the
holding period, the operating cost of the car during each period (in this
subsection called a 'statutory holding period') that is a holding period in
relation to the car when the car had a separate identity is so much of the
amount that would have been the operating cost of the car during the overall
holding period (assuming that the identity of the car had not changed during
the overall holding period) as is attributable to the statutory holding
period.

"(3C) Where, in accordance with subsection 162K (2), the identity of a car
changes one or more times during the period (in this subsection called the
'overall holding period') that, apart from that subsection, would be the
holding period, the recipient's payment in relation to each period (in this
subsection called a 'statutory holding period') that is a holding period in
relation to the car when the car had a separate identity is so much of the
amount that would have been the recipient's payment in relation to the overall
holding period (assuming that the identity of the car had not changed during
the overall holding period) as is attributable to the statutory holding
period.

"(3D) In determining, for the purposes of this section, whether:

   (a)  an expense is paid or payable in respect of the registration of, or
        insurance in respect of, a car;

   (b)  a charge is paid or payable under a lease agreement in respect of a
        car; or

   (c)  a lessor of a car is entitled to privileges or exemptions in relation
        to sales tax or customs duty in respect of a transaction by which the
        lessor purchased the car;
a change, in accordance with subsection 162K (2) or 162M (2), to the identity
of the car shall be disregarded."; and

   (n)  by omitting subsections (5) and (6) and substituting the following
        subsections:

"(5) Where:

   (a)  an employer elects that this section apply in relation to all the car
        fringe benefits in relation to the employer in relation to a year of
        tax that relate to a particular car; and

   (b)  the taxable value, or the aggregate of the taxable values, as the case
        requires, of the car fringe benefits that relate to the car
        ascertained under subsection (2) of this section exceeds the taxable
        value, or the aggregate of the taxable values, as the case requires,
        that would have been ascertained under section 9 if that election had
        not been made;
this Act (other than section 162G) applies, and shall be deemed always to have
applied, for the purposes of ascertaining that taxable value, or the aggregate
of those taxable values, as the case requires, as if that election had not
been made.

"(6) Nothing in section 74 prevents the amendment of an assessment for the
purpose of giving effect to subsection (5).".