Issue
Where an employee is provided with the use of a car by their employer and, as a result of employment duties, the car is parked overnight at or near the employee's temporary motel, hotel or similar type of accommodation, will the car be taken to be available for private use under subsection 7(2) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)?
Decision
Yes. A car parked overnight by an employee under such circumstances is considered to be 'garaged or kept at or near a place of residence' and thus available for private use under subsection 7(2) of the FBTAA.
Facts
The employee has been provided with the use of a car by their employer.
The employer uses the statutory formula method for calculating the taxable value of car fringe benefits.
The car is generally garaged or kept overnight at the employee's home.
The employee uses the car for the purposes of both private and business travel. When using the car for business travel, the employee is required to occasionally be away from home overnight.
When this occurs, the employee parks the car at or near a motel, which is temporary accommodation.
Reasons for Decision
Under paragraph 7(1)(a) of the FBTAA, a car benefit will arise at any time of day in respect of the employment of the employee where a car held by the provider is either: i. applied to a private use by the employee or associate, or ii. taken to be available for the private use of the employee or associate of the employee.
In accordance with paragraph 7(2)(b) of the FBTAA, a car shall be taken to be available for private use where it is garaged or kept at or near a place of residence of the employee or an associate of the employee, for the purposes of subparagraph 7(1)(a)(ii) of the FBTAA.
Subsection 136(1) of the FBTAA defines a 'place of residence' as: (a) a place of residence at which the person resides; or (b) a place at which the person has sleeping accommodation, whether on a permanent or temporary basis and whether or not on a shared basis.
Accommodation in the form of a motel or hotel room is 'sleeping accommodation' that is used on a temporary basis. Therefore, where the car is parked overnight at or near such temporary accommodation, this will constitute days on which the car is available for private use of the employee.
Amendment History
Date of Amendment Part Comment 13 March 2026 Business line Updated to correct business line
Date of Amendment | Part | Comment
13 March 2026 | Business line | Updated to correct business line