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Edited version of private ruling
Authorisation Number: 1011745254045
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Ruling
Subject: Car parking expenses
Question 1:
Are you entitled to a deduction for car parking expenses incurred when you are working and using the car parking space?
Answer
No.
Question 2
Are you entitled to a deduction for car parking expenses incurred when you are not working but still being charged for the car parking space?
Answer
No.
This ruling applies for the following periods:
Year ended 30 June 2008
Year ended 30 June 2009
Year ended 30 June 2010
Year ending 30 June 2011
The scheme commenced on:
1 July 2007
Relevant facts and circumstances
There is no parking available for you at your place of work.
There is no public transport available.
You have a car parking space approximately three kilometres away from your place of work.
Your employer provides a bus service between the car park and your place of work.
You pay a fee per fortnight for the car parking space.
Payment for the car parking space is made even when you are on leave from work.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1.
Income Tax Assessment Act 1936 Section 51AGA.
Reasons for decision
Car parking expenses incurred while at work
Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income, except where the outgoings are of a capital, private or domestic nature, or relate to the earning of exempt income.
It is the Commissioner's view that a deduction is allowable for parking fees (but not fines) and tolls if the expenses are incurred by an employee while travelling:
· between two separate places of work;
· to a place of education for self education purposes (if the self education expenses are deductible); or
· in the normal course of duty and the travelling expenses are allowable deductions.
A deduction is not allowable for parking fees and tolls incurred when employees are travelling between their home and their normal place of employment. The cost of that travel is a private expense and the parking fees and tolls therefore have the same private character. A deduction is allowable for parking fees and tolls if the travel is not private, e.g., travel between home and work when transporting bulky equipment.
In your case, you incur car parking expenses when you park your car near to your place of work. You are travelling between your home and work. The travel is not between two separate places of work, it is not to a place of education and it is not in the normal course of duty of employment.
Therefore, you are not entitled to a deduction under section 8-1 of the ITAA 1997 for car parking expenses incurred while you are working.
Furthermore, even if the car parking expense was deductible under section 8-1 of the ITAA 1997, it would be specifically not deductible under section 51AGA of the Income Tax Assessment Act 1936 (ITAA 1936).
Section 51AGA of the ITAA 1936 specifically deals with the deductibility of car parking expenses and provides that a deduction will not be allowed to an employee for car parking expenses incurred on a particular day if, on that same day:
· the employee has a primary place of employment
· the car is parked for one or more daylight periods exceeding four hours in total at, or in the vicinity of, that primary place of employment
· the expenditure is in respect of the provision of the car parking facilities, and
· the car was used for travel between the place of residence and that primary place of employment.
Car parking expenses incurred while on leave from work
As stated above, section 8-1 of the ITAA 1997 allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income, except where the outgoings are of a capital, private or domestic nature, or relate to the earning of exempt income.
In your case, you incur car parking expenses for a car space near your place of work, even on the days you do not work or use the car space.
These expenses are not incurred as part of you gaining your employment income. The expense is not necessary for you to be paid your salary and wages.
Therefore, you are not entitled to a deduction under section 8-1 of the ITAA 1997 for car parking expenses incurred while you are on leave from work.
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