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Under the statutory formula method of calculating car fringe benefits in section 9 of the Fringe Benefits Tax Assessment Act 1986, the base value of the car is the amount which the employer or the lessor could reasonably have expected to pay if the car had not been purchased free of sales tax. The base value will be the amount actually paid plus the notional amount of sales tax which would otherwise have been payable.

This Office will accept methods which arrives at an accurate figure for the notional sales tax, including; • where the amount of sales tax which would otherwise have been payable is disclosed in the purchase documentation, that amount • the amount calculated by multiplying the tax-inclusive Recommended Retail Price (RRP) of the car by the applicable percentages set out in the table below: CAR PURCHASE DATE SALES TAX LUXURY CAR LIMIT (STLCL) FOR PERIOD IF RRP IS LESS THAN THE STLCL IF RRP IS NOT LESS THAN THE STLCL before 1/7/1993 $45,693 10.4% of RRP 19% of RRP before 18/8/1993 $46,598 10.4% of RRP 19% of RRP before 1/7/1994 $47,116 11% of RRP $5,200 plus 25% of excess above STLCL before 1/7/1995 $49,896 11% of RRP $5,500 plus 25% of excess above STLCL • where the RRP for the car is less than the sales tax luxury car limit, the amount calculated by multiplying the actual cost of the car by the sales tax rate applicable to non-luxury cars (15% up to 18 August 1993, 16% up to 1 July 1995).

The sales tax luxury car limit referred to in paragraph 2 is the retail price above which the vehicle is taxed at the luxury car rate specified in the sales tax legislation. It is not the same as the motor vehicle depreciation limit used for income tax purposes.

These rates apply to cars purchased during the period 1 April 1993 to 31 March 1995.