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Income Tax Act 2007, ss RD28–RD32 set out the regulatory framework for calculating fringe benefit tax due on employer provided motor vehicles, where they are owned and leased by the employer and made available for private use by the employee.

Whether the vehicle is made available for private use is based on two conditions (access and permission) that must both be met for a fringe benefit to arise (ie, the employee has permission to use the vehicle and they have taken possession of it). In this situation, they are deemed to have 'practical and unconditional access'. If both conditions are not met at the same time, then no benefit arises.

Similarly, the vehicle will be deemed available for private use where the employee is given permission to use it to travel between home and work and for any other private journey or use (ie, without restriction).

The following examples provide a variety of scenarios to assist in determining whether a fringe benefit arises or not.

Example 18

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