A reform to Australia's Fringe Benefits Tax, which will take effect on April 1, 2014, will remove the statutory formula method for both salary-sacrificed and employer-provided car fringe benefits for contracts entered into after the announcement, according to a government-provided Fact Sheet about the change.

The purpose of the reform, according to the Australian government, is to "ensure a more level playing field for all workers by removing a tax concession for the personal use of a salary-sacrificed or employer-provided car." Drivers who use their vehicle for work-related travel will still be able to use a log book to ensure their car fringe benefit excludes any business use.

Existing contracts materially varied after July 16, 2013, will also fall under the new arrangements. Existing contracts that are not varied will continue to have access to the existing statutory rate throughout the contract. All car fringe benefits for new leases will be calculated using using the operating cost method from April 1, 2014.

A fact sheet issued by Graeme Cuxson, tax advisor at the Office of the Hon. Chris Bowen, MP, treasurer and Member for McMahon can be viewed online.

The Australasian Fleet Management Association (AfMA) said that it is preparing a response to the reform and its repercussions for commercial fleets.