Car-related items

At a glance - Tax treatment of various car-related items

Taxable value of car benefit

The car provided to the employee is a:

• New car 
• Second-hand car 
• Car with renewed COE 
• Leased Car 

New car

The value of the car benefit of a new car is as below.

Where:

• 3/7 refers to the use of car outside office hours for private matters which is estimated at three out of seven days in a week.
• Car cost refers to the acquisition cost of the car (inclusive of COE) paid or payable at the date of purchase. If the car is a company-registered car (i.e. Q-plate before 1 Apr 1998), the cost of the car is pegged to that of an identical private car.
• Residual value depends on when the car is registered.
  • Car registered on or after 1 Nov 1990, residual value is 80% of the open-market value of the car. The open-market value at the time of purchase can be found on the vehicle registration card.
  • Car registered before 1 Nov 1990, residual value is the amount of rebate allowable under the Road Traffic Act as shown in the table below.

  Engine capacity of the vehicle	Amount of rebate allowable - $
  For cars > 10 years	Nil
  For cars not more than 10 years
  1,000 cc and below	9,200
  1,001 cc to 1,600 cc	11,200
  1,601 cc to 2,000 cc	29,000
  2001 cc to 3,000 cc	43,700
  Above 3,000 cc	49,300

• Private mileage refers to the mileage made for personal (i.e. not business) purposes. Employee is to keep record of the mileage and inform the employer.

Second-hand car

The value of the car benefit of a second-hand car is as below.

Where:

• If employer pays for the cost of petrol, use the rate of $0.55 per km instead of $0.45 per km.
• A = actual cost (inclusive of COE) of the car paid or payable by the employer at the date of purchase
• B = the remaining period from the date of purchase of the car to the date of expiry of the first COE (i.e. at the end of the 10th year)
• F = the remaining period from the date of purchase of the car to the date of expiry of the renewed COE

Car with renewed COE

The value of the car benefit of an existing car with renewed COE is as below.

Where:

• If employer pays for the cost of petrol, use the rate of $0.55 per km instead of $0.45 per km.
• C = the residual value, if any, which has previously been allowed as set-off against the cost of the Q-plated car for purposes of computing the car benefit for the period prior to the expiry of the first COE
• D = the amount payable on renewal of COE for the continued use of the car after the end of the 10th year. If the car is a Q-plated car, the amount payable on renewal of COE for the car should be pegged to that of an identical private car for purposes of computing the car benefit after the 10th year
• E = the remaining period from the date of renewal of COE to the date of expiry of the renewed COE (currently either five or 10 years)
• G = the amount of residual value which would have been allowable as set-off against the cost of the private car for purposes of computing the car benefit for the period prior to the expiry of the first COE

Leased car

The value of the car benefit where the employer bears the full cost of rental of the leased car and all other running and maintenance expenses are borne by the car hiring company is as below.