2TAXATIONIntroduction:The following study is concerned with the determination of the fringe benefitconsequences of Shine Homes and Charlie. As evident from the following scenario Charlie isan employee of Shiney Homes Pty Ltd working as the real estate agent. Homes on the otherhand performs a business of landscaping and provided Charlie with the 4 wheel drive sedan.As stated under Section 6 of the Miscellaneous Taxation Rulings and Fringe Benefit TaxAssessment Act 1986 it lays down the circumstances under which the fringe benefit tax willbe tax will be levied on car (Miller & Oats 2016). Determination of Car FBTAs defined under the taxation rulings of MT 2027 personal use under sub-section136 (1) any kind of use made by an employee or associates which is not completely used inthe phase of generating taxable income of the employee will be considered as personal use(Pope et al., 2016). However, under sub-section 136 (1) a definition on the operating costvaluation method for commercial journey has been stated in effect of any kind of use of carother than the personal use made by an employee (Christie, 2015). As defined underparagraph 3 of the Miscellaneous Taxation Ruling 2027 details concerning the businessjourney is required to be recorded in the logbook or identical kind of document if the businesskilometres travelled by the car are used in the determination of the personal use part of a carfor the purpose of applying the operating cost method. Hence, it is found from the case studythat Charlie travelled a total of 50,000 km relating to work. In determining the fringe benefitof the car used by Charlie operational cost valuation method will be used in compliance withsub-section 136 (1) of the Miscellaneous Taxation Rulings of 2027 (Fleurbaey&Maniquet,2015). A critical question arises in determination of the personal and commercial use.Therefore, whether the car used by the member of staff or the employee was wholly in thephase of the generating taxable earnings of the employee (Kabinga, 2015). This comprise ofall the use that is completely made by the employee in the phase of acquiring or generatingthe taxable proceeds or performing the business activities for the purpose of generating thetaxable proceeds in agreement with the sub section 136 (1). If further follows the use made inthe phase of employment by the member of staff with the employer who presented the car forbusiness carried on by the member of staff or an additional employment action of theemployee might make up for business use of the car for Fringe Benefit Tax (Lang, 2014).

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