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Edited version of your private ruling

Authorisation Number: 1012459417759

Ruling

Subject: Fringe benefits tax

Can the lowest fee charged by a car parking station be used to determine the taxable value of a car parking fringe benefit under section 39C of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)?

Answer

Yes

This ruling applies for the following periods:

1 April 2012 - 31 March 2013

The scheme commences on:

1 April 2012

Relevant facts and circumstances

The company provides a car parking facilities to its employees.

There is a car parking station (CPS) located within 1 km of the company's car parking facility

The CPS charges car parking fees for 0-6 hours, 6-8 hours, 8-10 hours and flat rate for Friday and Saturday nights and Public Holidays.

The company uses the commercial car parking station method to calculate the taxable value of its car parking fringe benefit.

In respect of the car parking facilities provided by the company:

The CPS does not fall under one of the categories below:

Parking facilities provided by a sporting venue to persons associated with the venue where:

The CPS satisfies the following:

Relevant legislative provisions

Fringe Benefits Tax Assessment Act 1986 subsection 39A(1)

Fringe Benefits Tax Assessment Act 1986 section 39C

Fringe Benefits Tax Assessment Act 1986 subsection 136(1)

Reasons for decision

The term 'benefit' in subsection 136(1) of the FBTAA includes any right (including a right in relation to, and an interest in, real or personal property, privilege, service or facility and, without limiting the generality of the foregoing includes a right, benefit, privilege, service or facility that is, or is to be, provided under:

In this case, the company is providing its employees with car parking facilities. This is considered to fall under the definition of a 'benefit' above.

Under subsection 39A(1) of the FBTAA, a benefit is a car parking fringe benefit if it satisfies the following requirements:

In response to each of the above criteria the benefit satisfies the requirements of a car parking fringe benefit in subsection 39A(1) of the FBTAA. Therefore, the company's provision of car parking facilities is a car parking fringe benefit.

There are three methods used to work out the taxable value of a car parking fringe benefit. The company has indicated that it will use the 'commercial car parking station' method in section 39C of the FBTAA.

Section 39C of the FBTAA states:

The CPS is located within a 1km radius of the company's car parking facility. However, in order to determine whether the 0-6 hour rate is able to be used as the lowest fee for all-day parking, the CPS must be a 'commercial parking station'.

Subsection 136(1) of the FBTAA defines a 'commercial parking station' to mean:

Paragraph 81 of Taxation Ruling TR 96/26 Fringe benefits tax: car parking fringe benefits states that the following parking arrangements are not considered to constitute commercial parking stations:

From the information submitted by the applicant, CPS is a permanent car parking facility that provides all-day parking to the public for a fee. Further, CPS does not fall under one of the car parking arrangements in paragraph 81 of TR 96/26. Therefore CPS is considered to be a commercial car parking station under subsection 136(1) of the FBTAA.

'All-day parking' is defined in subsection 136(1) of the FBTAA as:

In this case, the CPS charges a parking fee for 0-6 hours. From the information provided in the terms and conditions of the car park, it is not apparent that there is a time restriction on when a person can enter the car park, except for Friday and Saturday nights and Public Holidays. Therefore, a car can be parked for 6 hours during a daylight period at the CPS for the 0-6 hour rate.

Therefore, the 0-6 hour rate charged at the CPS can be used as the lowest rate in accordance with section 39C in determining the taxable value of the company's car parking fringe benefit.


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