Question

Question 1 (10 Marks) Perisher Pty Ltd (Perisher) is a Ski equipment manufacturer that operates around Mt Hotham in Victoria. On 1 May 2019, Perisher provided Nikita (one of its employees) with a car as Nikita does a lot of travelling for work purposes. However, Nikita’s usage of the car is not restricted to work only. Perisher purchased the car on that date for $44,000 (including GST) plus $2,000 (including GST) dealer delivery charges. For the period of 1 May 2019 to 31 March 2020, Nikita travelled 12,000 kilometers in the car and incurred expenses of $770 on minor repairs that have been reimbursed by Perisher. The car was not used for 10 days when Nikita was interstate and was parked at the airport and for another five days when the car was scheduled for annual repairs. Calculate the Fringe Benefits Tax Liability for Perisher, please have a look at the matrix below on how to answer the question QUESTION 1: Calculate the FBT liability for Perisher Pty Ltd Weighting Identification of material facts (issues) regarding fringe benefits provided to Nikita 1 % Identification and analysis of legal issues / legal question and relevant taxation law in regards to fringe benefits (e.g. FBTAA 1986). 1 % Thorough application of tax law (e.g. ITAA 1936 and ITAA 1997) to material facts in Perisher’s case. 1 % Accurate conclusion of the FBT calculation. 5 % Correct information and taxation law have been used and properly cited. A detailed analysis has been performed. 2 % QUESTION 1 TOTAL MARKS: 10 %

Answer 1

1 2 Solution 3 4 5 The formula to calculate fringe benefits is as follows 1calculation of. Base value of the car = Purchase cost + Delivery charges 6 7 8 9 =$44000+$2000= $46,000 10 11 12 13 2. Number of days of days in the year on which the car where provided by the employer(perisher Pty Ltd) = May 1,2019 - March 31,2020. = 304 days in total 3. percentage on the taxable value given for the fringe benefit is = 10% on the taxable value The following formula shall be used to calculate taxable value 0.2 * Base value of the car * No of days during that year of tax on which the car is provided as fringe benefits 0.2 * $46000 * 304 y/365 - Expenses paid by employee $6892.24 Fringe benefit tax liability = Taxable value of car * Rate of tax 6892.24*10%= $689 14 15 16 17 18 19 20 21