An employer has an existing car which it purchased on 1 Apr 2009 for $80,000 (inclusive of registration fee, ARF, excise duty and COE). The COE of the car expires on 31 March 2019. The employer pays $25,000 to renew the car's COE for another 5 years from 1 April 2019 to 31 March 2024. The employer would have received a PARF rebate of $10,500 if it had not renewed the car's COE. The employer provides this car to an employee from 1 January 2019 to 31 December 2019.
Running expenses incurred by the employer from 1 January 2019 to 31 March 2019 (90 days) |
Petrol | $900 |
Car park and ERP charges | $500 |
Car maintenance and repairs | $200 |
Total | $1,600 |
Value of taxable car benefit from 1 January 2019 to 31 March 2019 = 3/7 x {[($80,000 - $10,500) / 10] x 90 / 365 + $1,600} = 3/7 x $3,313 = $1,420
Running expenses incurred by the employer from 1 April 2019 to 31 December 2019 (275 days) |
Petrol | $2,900 |
Road tax (1 April 2019 to 31 March 2020) | $1,210 |
Car insurance (1 April 2019 to 31 March 2020) | $2,500 |
Car park and ERP charges | $1,500 |
Car maintenance and repairs | $1,000 |
Total | $9,110 |
Value of taxable car benefit for the period 1 April 2019 to 31 December 2019 = 3/7 x {[($25,000 + $10,500) / 5] x 275 / 365 + $9,110} = 3/7 x $14,459 = $6,196
Total value of taxable car benefit from 1 January 2019 to 31 December 2019 = $1,420 + $6,196 = $7,616