FBT Exempt Taxi Travel
Employers may wish to re-consider the tax consequences of reimbursing employees for trips taken in ride-sharing vehicles for hire such as Uber.
On 2 July 2019, the Australian Taxation Office (ATO) finally confirmed its view in relation to the Fringe Benefits Tax (FBT) exemption for taxi travel supplied to employees. In September 2017, the ATO called for consultation about the definition of a taxi for the exemption from FBT for taxi travel provided to an employee, where the trip either begins or ends at work, or where the travel results from sickness or injury. While the FBT legislation is different to the Goods and Services Tax (GST) legislation, the ATO’s view is that ride-sourcing vehicles are considered to be Taxis for the purpose of a requirement to register under the GST rules.
The ATO has now confirmed its view that for the purpose of this FBT exemption, travel by ‘Taxi’ only applies to a vehicle that is licensed to operate as a taxi. The FBT exemption does not apply to ride-sourcing vehicles for hire.
Travel by ride-sourcing vehicles may not be subject to FBT if another exemption applies, eg if the trip is taken entirely for a business purpose and is therefore ‘otherwise deductible’. Accordingly, we recommend employers consider their travel and expense reimbursement policies and the underlying tax consequences.
Details of the exemption can be found here .
If you have any questions regarding the FBT please speak to your usual Mazars advisor or alternatively our tax team on:
+61 7 3218 3900
+61 3 9252 0800
+61 2 9922 1166
Please note that this publication is intended to provide a general summary and should not be relied upon as a substitute for personal advice.