Ride sourcing now considered ‘taxi travel’ for FBT purposes

The Australian Taxation Office has confirmed that for fringe benefits tax, or FBT purposes, the taxi travel exemption has been extended to include ride-sourcing vehicles. The change is due to amendments to the Fringe Benefits Tax Assessment Act 1986, which are now law. Before the amendments became law, a taxi was defined for FBT purposes as ‘a motor vehicle licenced to operate as a taxi’. This meant the FBT exemption did not extend to ride-sourcing not licensed to operate as a taxi. Employers will now be eligible for the exemption for travel provided to their employees if it’s a single trip to or from the employee’s workplace: on or after April 1, 2019, and in a licenced taxi or other vehicle involving the transport of passengers for a fare – other than a limousine – such as a ride-sourcing vehicle. Travel by an employee in such a vehicle on or after April 1, 2019, is also exempt if it’s as the result of the sickness of, or injury to, the employee, and whole or part of the journey is directly between the employee’s place of work, the employee’s place of residence, any other place that it is necessary, or appropriate, for the employee to go as a result of the sickness or injury. The change means any benefit arising from travel by an employee using a registered taxi or ride-sourcing provider, other than in a limousine, is now exempt from FBT subject to meeting certain criteria. The change is designed to help minimise compliance costs for businesses providing transport for their employees. Because the changes apply from April 1, 2019, the 2020 FBT return instructions have been updated to help employers who may need to amend their FBT return. For more information on the FBT taxi travel exemption, see ato.gov.au/FBTtaxi.