Car and Car-related Benefits

              A.   New Car

1. The value of benefit derived from a new car is computed as follows:

   Value of Car Benefit = either (a) or (b)
   a) Employee pays for the petrol	3/7 x [(car cost - residual value)/10] + ($0.45 per km x private mileage)
   b) Employer pays for the petrol	3/7 x [(car cost - residual value)/10] + ($0.55 per km x private mileage)

   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.
   • 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.
     Rebates Allowable under the Road Traffic Act

     Engine Capacity of the Vehicle	Engine Capacity of the Vehicle
     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. The employee should keep records of the mileage and inform the employer.
   B.   Second-hand Car

2. The value of benefit derived from a second-hand car is computed as follows:

   Less than 10 years old at the time of purchase	3/7 x [(A - residue value)/B] + ($0.45 per km x private mileage), if employee pays for the cost of petrol
   More than 10 years old at the time of purchase	3/7 x (A/F) + ($0.45 per km x private mileage), if employee pays for the cost of petrol

   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
   C.   Car with Renewed COE

3. The value of benefit derived from an existing car with renewed COE is computed as follows:

   3/7 x (G+D)/E + ($0.45 per km x private mileage), if employee pays for the cost of petrol

   Where:

   • If employer pays for the cost of petrol, use the rate of $0.55 per km instead of $0.45 per km.
   • D = the amount payable on renewal of COE for the continued use of the car after the end of 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
   D.   Leased Car

4. 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 computed as follows:

   Employer pays for the petrol	(3/7 x rental cost incurred by the employer) + ($0.10 km x private mileage)
   Employee pays for the petrol	3/7 x rental cost incurred by the employer

   You may use the Car Benefit Calculator (92KB) to check the taxable value of car benefits.