The Australian Tax Office has recently collaborated with industry representatives to develop a safe harbour for car fringe benefits. A safe harbour is a guideline that allows Australian businesses to make use of an efficient way to calculate tax where certain conditions are met.
Businesses can access the safe harbour and use this new simplified approach if they have:
a fleet of 20 or more ‘tool of trade’ cars, which are not part of salary packaging arrangements and cost less than the luxury car tax limit in the year acquired
a mandatory logbook policy and hold valid logbooks for at least 75 per cent of the cars in the logbook year
gathering all log books kept for each car in the fleet
determining which of those log books are valid
confirming they have valid log books for at least 75 per cent of the cars in the fleet
calculating the average of the business use percentages determined in accordance with each of the valid log books