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Car fringe benefit

Newbie

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Replies 1

We are valuing car fringe benefits using the statutory method.

Should we use type 1 gross up rate, regardless if the car is leased or purchased by the company?

And then type 2 gross up rate to calculate the reportable fringe benefit amount?

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Most helpful response

Devotee

Replies 0

Assuming the employer is registered for GST, the type 1 rate applies when working out the tax payable on a car benefit.  The employer would be able to claim the GST credit relating to the purchase price or lease payments (whichever applies) and also for applicable running costs.

 

The type 2 rate is always used to calculate the reportable fringe benefits amount.

1 REPLY 1

Most helpful response

Devotee

Replies 0

Assuming the employer is registered for GST, the type 1 rate applies when working out the tax payable on a car benefit.  The employer would be able to claim the GST credit relating to the purchase price or lease payments (whichever applies) and also for applicable running costs.

 

The type 2 rate is always used to calculate the reportable fringe benefits amount.