FBT
FBT Q&A – Morning teas for staff departures and milestones
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Member Q&A: What is the FBT treatment for a car navigation system?
Question
Our employee is provided with a car benefit and the car has an in-built satellite navigation system that is part of the car.
During the FBT year, as part of a service of the car, a map update of the satellite navigation system was installed. The update allowed the employee to navigate to locations along roads constructed or altered after the system was installed.
Is the update cost a car expense?
Answer
Yes.
In applying the meaning of the terms ‘repairs’ and ‘maintenance’ to the map update, the update involves a restoration of the functionality of the satellite navigation system and does not change its character. Without the update, the system is not able to navigate to locations along roads constructed or altered after the system was installed. The map update also preserves and keeps the satellite navigation system unimpaired and in due condition and operation.
Therefore, the cost of the map update of the in-built satellite navigation system can be seen as both a repair to and maintenance of the car and, as such, is a ‘car expense’ as the expense is incurred in respect of repairs to or maintenance of the car.
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