Calculate the taxable value of the benefit

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Reference no: EM132944616

Jim McEntee is provided with a company car which he is allowed to use for private purposes. The car was purchased on 1 November 2017 for $40,000. During the year Jim drove the car 30,000 km of which 60% were for business trips.

Costs associated with the vehicle were:

Petrol and oil $1,020
Registration and insurance $1,500
Maintenance $500

Required:

Problem 1: Calculate the Taxable Value of the benefit for the 2017/18 fringe benefits tax (FBT) year for the vehicle using both the statutory formula method and the operating cost method. (Show your workings for each method).

  • Statutory formula method: (assume 365 days in a year)
  • Operating cost method: (assume 365 days in a year and a benchmark interest rate of 5.25%)

Reference no: EM132944616

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