The recent Federal Court case on the GST treatment of Ubers decided to adopt a common sense definition of taxi and thus have the same GST rules apply to taxi and Uber travel. However the FBT law defines a taxi as a "motor vehicle that is licensed to operate as a taxi". It would seem therefore on a literal reading of the FBT law, that the exemption given to certain taxi related travel given to employees does not apply if your staff catch an Uber rather than taxi as Ubers aren't licensed to operate as a taxi. Seems an unintended consequence that you have to pay FBT on certain Uber travel, but no FBT when you use a taxi.
The FBT law was written in 1986, some thirty years ago, and needs updating. A common definition of taxi across all tax laws seems needed.
Hi Paul, thanks for posting this idea. The ATO has now opened public consultation on the definition of taxi under FBT law.
For further information, please see: https://www.ato.gov.au/General/Consultation/What-we-are-consulting-about/Papers-for-comment/Fringe-benefits-tax-and-definition-of-taxi/
The final date for comment is 24 October 2017.
I hope this is of assistance. The Board will continue to monitor this matter and keep you posted on the outcome.
The Board can report that the issues raised have been resolved via the Treasury Laws Amendment (2019 Measures No. 3) Act 2020. This amendment applies to the 2019-20 fringe benefits tax year and later fringe benefit tax years. To view the amendments please visit: https://www.legislation.gov.au/Details/C2020A00064.