General principles for motor vehicles

The following general principles apply to fringe benefit tax on motor vehicles.

  • As long as a vehicle is available for private use (for example, travel between home and work) by your employees, including shareholder-employees, you must pay fringe benefit tax. Your liability does not depend on whether the employees actually use that vehicle.
  • There are some general exemptions and some daily exemptions from fringe benefit tax on motor vehicles.
  • Sole traders or partners in a partnership are not required to pay fringe benefit tax on a business vehicle they use privately. However, they usually record their business use of the vehicle, as they must make an appropriate adjustment in their income tax and GST returns.