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This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

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Edited version of your written advice

Authorisation Number: 1051463389472

Date of advice: 6 December 2018

Ruling

Subject: Car Parking Fringe Benefits

Question 1

Is there a car parking fringe benefit for the Fringe Benefits Tax (FBT) year ended 31 March 20XX under section 39A of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)?

Answer

No.

Question 2

If the answer to Question 1 is yes, what would be the lowest car parking fee (using the average cost method) on 1 April 20XX?

Answer

Not applicable.

Question 3

Is there a car parking fringe benefit for the FBT year ended 31 March 20XX under section 39A of the FBTAA, assuming that the car parking threshold is less than the all-day parking fee (being $Z)?

Answer

Yes.

This ruling applies for the following period(s)

1 April 20XX to 31 March 20XX

1 April 20XX to 31 March 20XX

The scheme commences on

1 April 20XX

Relevant facts and circumstances

An employer (the Employer) has elected to use the average cost and statutory formula method to calculate the taxable value of their car parking fringe benefits.

Car parking is provided for employees at one of the Employer’s business premises at Location B.

A car parking operator (Car Park A) has recently commenced a commercial car parking business within a one kilometre radius of the Department’s business premises at Location B.

On 1 April 20XX, there were no other commercial car parking stations that existed within the one kilometre radius of those business premises, apart from Car Park A.

On 1 April 20XX, the all-day car parking rates at Car Park A were as follows:

The early bird rate ceased shortly after 1 April 20XX.

Employee cars are parked at premises that are owned or leased by, or otherwise under the control of, the Employer.

Each employee’s car parked on the Employer’s business premises at Location B is parked for a total of more than four hours between 7:00am and 7:00pm on the applicable business day.

Each employee’s car parked on these business premises is owned by, leased to, or otherwise under the control of, the employee.

Parking on the Employer’s business premises at Location B is provided to each employee in respect of their employment.

Employee cars parked at the Employer’s business premises at Location B are used by employees to travel between home and work (or work and home) at least once on that business day.

Assumptions

Relevant legislative provisions

Fringe Benefits Tax Assessment Act 1986 Section 39A

Fringe Benefits Tax Assessment Act 1986 Subsection 136(1)

Reasons for decision

Question 1

Is there a car parking fringe benefit for the FBT year ended 31 March 20XX under section 39A of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)?

Summary

A car parking fringe benefit does not arise for the FBT year ended 31 March 20XX.

Detailed reasoning

Relevant law

Subsection 136(1) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA) defines a ‘car parking fringe benefit’ to mean a fringe benefit that is a car parking benefit. A ‘car parking benefit’ is defined in subsection 136(1) to mean a benefit referred to in section 39A.

Section 39A of the FBTAA outlines all of the conditions that need to be satisfied to constitute the provision of a car parking fringe benefit.

A summary of the above conditions in subsection 39A(1) of the FBTAA is provided in the ATO publication, Fringe benefits tax – a guide for employers, as follows:

The Fringe benefits tax – a guide for employers publication defines key terms in subsection 39A(1) of the FBTAA as follows:

Commercial parking station

All-day parking

One-kilometre radius

Primary place of employment

Representative fee

The meaning of the ‘car parking threshold’ is provided at subsection 39A(2) of the FBTAA:

39A(2)

For the purposes of this section:

Further, paragraph 3.1 of the Explanatory Memorandum to the Taxation Laws Amendment (FBT Cost of Compliance) Bill 1995 provides:

Paragraph 43 of Taxation Ruling TR 96/26 Fringe benefits tax: car parking fringe benefits (TR 96/26) states that:

The following example is provided at paragraph 45 of TR 96/26:

Application to your circumstances

Pursuant to paragraph 43 of TR 96/26, the lowest all-day parking fee charged by Car Park A, a commercial parking station, may include charges for bona fide early bird parking where a reasonable number of parking spaces are set aside for this purpose.

As such, the lowest all-day parking fee charged by Car Park A on the first business day of the 20XX FBT year is the early bird rate of $X.00.

Therefore, the condition in subparagraph 39A(1)(a)(iii) of the FBTAA is not satisfied. This is because the lowest fee charged by Car Park A in the ordinary course of business to members of the public for all-day parking on the first business day of the 20XX FBT year is $X.00, which is not more than

Having regard to the intent of section 39A of the FBTAA as provided in paragraph 3.1 of the Explanatory Memorandum to the Taxation Laws Amendment (FBT Cost of Compliance) Bill 1995, the condition in subparagraph 39A(1)(a)(iii) is not satisfied irrespective of whether the early bird rate ceased shortly after 1 April 20XX. Of relevance is the value of the lowest all-day parking fee charged as at the first business day of the FBT year.

As sub-paragraph 39A(1)(a)(iii) of the FBTAA is not satisfied, a car parking fringe benefit does not arise for the FBT year ending 31 March 20XX.

Question 2

If there is a car parking fringe benefit in Question 1, what would be the lowest car parking fee (using the average cost method) on 1 April 20XX?

Summary

As per the response to Question 1, there is no car parking fringe benefit for the FBT year ended 31 March 20XX. Therefore, a response to Question 2 is not applicable.

Question 3

Is there a car parking fringe benefit for the FBT year ended 31 March 20XX under section 39A of the FBTAA, assuming that the car parking threshold is less than the all-day parking fee (being $Z)?

Summary

A car parking fringe benefit would arise for the year ended 31 March 20XX.

Detailed reasoning

Relevant law

All of the conditions that need to be satisfied to constitute the provision of a car parking fringe benefit are provided in section 39A of the FBTAA, as outlined in the response to Question 1.

Application to your circumstances

Based on the Facts and Assumptions above, the lowest all-day parking fee charged by Car Park A on the first business day of the 20XX FBT year will be $Z.00. It is assumed that this rate will be more than the car parking threshold for the 20XX FBT year.

Therefore, as all of the conditions in section 39A of the FBTAA will be satisfied, a car parking fringe benefit would arise for the FBT year ended 31 March 20XX.


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