Edited version of your private ruling

Authorisation Number: 1012621577984

Ruling

Subject: Fringe benefits tax - car parking fringe benefits

Question 1

Will an expense payment fringe benefit arise when you reimburse your employee for the costs they incur in parking their car?

Answer

Yes

Question 1a

Will the answer to question 1 change if the benefit arises as part of a valid salary sacrifice arrangement?

Answer

No

Question 2

Is the car park a 'commercial parking station' according to the definition contained in subsection 136(1) of the FBTAA?

Answer

Yes

Question 3

Will a car parking fringe benefit arise where an employee leases a car park in the car parking facility described in question 2 above, on a monthly basis and pays for the park with your credit card?

Answer

No. However, an expense payment benefit will arise from the payment of an obligation incurred by the employee.

Question 3a

Will the answer to question 3 change if the benefit is provided as part of a valid salary sacrifice arrangement?

Answer

No

Question 4

Will a car parking fringe benefit arise where an employee leases a car park in the car parking facility described in question 2 above, on a monthly basis and is guaranteed an allocated parking bay each day and pays for the car park with your credit card?

Answer

No. However, an expense payment benefit will arise from the payment of an obligation incurred by the employee.

Question 4a

Will the answer to question 4 change if the benefit is provided as part of a valid salary sacrifice arrangement?

Answer

No

Question 5

Can a car parking fringe benefit arise where an employee parks their car in a 'commercial parking station' according to the definition contained in subsection 136(1) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA) on a daily or shorter basis and pays for the parking using your credit card?

Answer

Yes

Question 5a

Will the answer to question 5 change if the benefit is provided as part of a valid salary sacrifice arrangement?

Answer

No

This ruling applies for the following periods:

Year ending 31 March 2014

Year ending 31 March 2015

The scheme commences on:

In the year ending 31 March 2014

Relevant facts and circumstances

You enter into various arrangements with your employees to pay for their car parking expenses, including 'effective salary sacrifice arrangements' according to Taxation Ruling TR 2001/10 Income tax: fringe benefits tax and superannuation guarantee: salary sacrifice arrangements (TR 2001/10).

You reimburse some employee's car parking expenses after the employee has incurred and paid for the expenses themselves. Other employees pay for car parking using your credit card.

You are liable to the credit card provider for the expenses incurred.

You have sought a ruling in relation to the fringe benefits tax (FBT) treatment of various arrangements relating to the payment of your employee's car parking.

Scenario 1

An employee parks their car in a parking station and is charged a fee for that parking.

The employee pays the fee charged for the parking and you subsequently reimburse the employee for the cost incurred for the parking.

Scenario 1a

This scenario is the same as scenario 1, except that the arrangement occurs as part of an 'effective salary sacrifice arrangement'.

Scenario 2

One of your employees leases a monthly car parking space.

The carpark is attached to and part of a business.

The car parking space costs a fixed amount per month payable in advance.

The employee is provided with a swipe card that they can use to access the car park and guarantees them a parking space (but not a specific allocated parking space) between 7am and 7pm Monday to Friday.

After these hours parking may be available but is dependent on availability.

Parking at the carpark is generally provided to clients of the business and a few of the surplus car parks are rented out on a monthly or longer basis.

Access to the car park can only be gained by a swipe card.

The general public cannot enter the car park and park for a single day.

The car park only advertises available parking as excess spots become available by placing billboards on the side of the road.

The employee organised the car park directly with the owner.

The monthly invoice for the car park is in the employee's name.

The monthly invoice is paid for using your credit card.

The costs of the parking are then deducted from the employee's salary.

Scenario 2a

This is the same as scenario 2, except that the arrangement occurs as part of an 'effective salary sacrifice arrangement'.

Scenario 3

This scenario is the same as scenario 2 except that the employee is guaranteed a specific allocated parking bay each day as opposed to only being guaranteed a parking space somewhere within the car park.

Scenario 3a

Scenario 3a is the same as scenario 3 except that the arrangement occurs as part of an 'effective salary sacrifice arrangement'.

Scenario 4

An employee parks their car in a parking station that meets the definition of a 'commercial parking station' contained in subsection 136(1) of the FBTAA.

The employee chooses the commercial car parking station to park in and parks their car for all or part of the day.

The employee pays for the car parking with your credit card either on arrival at the parking station or at the conclusion of the parking period before exiting the car park.

Scenario 4a

This scenario is the same as scenario 4 except that the arrangement occurs as part of an 'effective salary sacrifice arrangement'.

Relevant legislative provisions

Fringe Benefits Tax Assessment Act 1986 section 20

Fringe Benefits Tax Assessment Act 1986 section 39A

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

Fringe Benefits Tax Assessment Act 1986 section 39E

Fringe Benefits Tax Assessment Act 1986 section 45

Fringe Benefits Tax Assessment Act 1986 section 58GA

Fringe Benefits Tax Assessment Act 1986 section 58G

Fringe Benefits Tax Assessment Act 1986 subparagraph 58G(1)(a)(ii)

Fringe Benefits Tax Assessment Act 1986 subsection 136(1)

Fringe Benefits Tax Assessment Act 1986 section 150

Reasons for decision

Question 1

Will an expense payment fringe benefit arise when you reimburse your employee for the costs they incur in parking their car?

Subsection 136(1) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA) provides the following definition of a 'fringe benefit':

fringe benefit, in relation to an employee, in relation to the employer of the employee, in relation to a year of tax, means a benefit:

(a) provided at any time during the year of tax; or

(b) provided in respect of the year of tax;

being a benefit provided to the employee or to an associate of the employee by:

(c) the employer; or

(d) an associate of the employer; or

(e) a person (in this paragraph referred to as the arranger) other than the employer or an associate of the employer under an arrangement covered by paragraph (a) of the definition of arrangement between:

(i) the employer or an associate of the employer; and

(ii) the arranger or another person; or

(ea) a person other than the employer or an associate of the employer, if the employer or an associate of the employer:

(i) participates in or facilitates the provision or receipt of the benefit; or

(ii) participates in, facilitates or promotes a scheme or plan involving the provision of the benefit;

and the employer or associate knows, or ought reasonably to know, that the employer or associate is doing so;

in respect of the employment of the employee, but does not include:

…

(g) a benefit that is an exempt benefit in relation to the year of tax; or

….

'Benefit' in this context is also defined in subsection 136(1) of the FBTAA as follows:

benefit 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:

(a) an arrangement for or in relation to:

(i) the performance of work (including work of a professional nature), whether with or without the provision of property;

(ii) the provision of, or the use of facilities for, entertainment, recreation or instruction; or

(iii) the conferring of rights, benefits or privileges for which remuneration is payable in the form of a royalty, tribute, levy or similar exaction;

(b) a contract of insurance; or

(c) an arrangement for or in relation to the lending of money.

In addition to this general definition of benefit, divisions 2 to 11 of Part III of the FBTAA contain a section that deems that a benefit will arise when certain conditions are met. For the purpose of this ruling, the relevant sections are section 20 and section 39A.

Section 20 states:

Where a person (in this section referred to as the provider):

(a) makes a payment in discharge, in whole or in part, of an obligation of another person (in this section referred to as the recipient) to pay an amount to a third person in respect of expenditure incurred by the recipient; or

(b) reimburses another person (in this section also referred to as the recipient), in whole or in part, in respect of an amount of expenditure incurred by the recipient;

the making of the payment referred to in paragraph (a), or the reimbursement referred to in paragraph (b), shall be taken to constitute the provision of a benefit by the provider to the recipient.

Where the conditions in this section are met, an expense payment benefit will be provided.

Section 39A states:

If the following conditions are satisfied in relation to a daylight period, or a combination of daylight periods, on a particular day:

(a) during the period or periods, a car is parked on one or more premises of a person (the provider), where:

(i) the premises, or each of the premises, on which the car is parked are business premises, or associated premises, of the provider; and

(ii) a commercial parking station is located within a 1 km radius of the premises, or each of the premises, on which the car is parked; and

(iii) the lowest fee charged by the operator of any such commercial parking station in the ordinary course of business to members of the public for all-day parking on the first business day of the FBT year is more than the car parking threshold;

(b) the total duration of the period or periods exceeds 4 hours;

(c) any of the following applies:

(i) a car benefit relating to the car is provided on that day to an employee or an associate of an employee in respect of the employment of the employee;

(ii) the car is owned by, or leased to, an employee or an associate of an employee at any time during the period or periods;

(iii) the car is made available to an employee or an associate of an employee at any time during the period or periods by another person, where:

(A) the other person is neither the employer of the employee nor an associate of the employer of the employee; and

(B) the other person did not make the car available under an arrangement to which the employer of the employee, or an associate of the employer of the employee, is a party;

(d) the provision of parking facilities for the car during the period or periods is in respect of the employment of the employee;

(e) on that day, the employee has a primary place of employment;

(f) during the period or periods, the car is parked at, or in the vicinity of, that primary place of employment;

(g) on that day, the car is used in connection with travel by the employee between:

(i) the place of residence of the employee; and

(ii) that primary place of employment;

(h) the provision of parking facilities for the car during the period or periods is not taken, under the regulations, to be excluded from this section;

(i) the day is on or after 1 July 1993;

the provision of parking facilities for the car during the period or periods is taken to constitute a benefit provided by the provider to the employee or the associate of the employee in respect of the employment of the employee.

Where the conditions in this section are met, a car parking benefit will be provided.

Alternatively, if the benefit provided is neither an expense payment benefit, nor a car parking benefit, it will be a residual benefit.

In summarising, the benefit provided will be an expense payment benefit if:

1. you reimburse an employee for expenses they incur; or

2. pay a third party in satisfaction of expenses incurred by an employee.

Alternatively, if these conditions are not met, but the conditions in section 39A are met, the benefit will be a car parking benefit.

A benefit will not be a fringe benefit if it is an exempt benefit. The FBTAA provides an exemption for a number of benefits. For the purpose of this Ruling, the relevant sections are:

• section 58G which provides that the benefit will be an exempt benefit if it is an expense payment benefit that is not an eligible car parking expense payment benefit, or a residual benefit; and

• section 58GA which provides that a car parking benefit will be an exempt benefit if certain conditions are met (including a condition that the car is not parked at a commercial parking station).

In the first situation, you reimburse the employee for the cost incurred by the employee in parking their car. This is an expense payment benefit under paragraph 20(b) of the FBTAA.

As the benefit is an expense payment benefit the exemption in section 58GA of the FBTAA will not apply.

Nor will the exemption in paragraph 58G(1)(a) as you have advised that the benefit is an 'eligible car parking expense payment benefit' according to the definition contained in subsection 136(1) of the FBTAA.

Therefore, as no other exemptions apply the expense payment benefit that arises when you reimburse your employee for the cost of their car parking expenses incurred will be a fringe benefit.

Question 1a

Will the answer to question 1 change if the benefit arises as part of a valid salary sacrifice arrangement?

Taxation Ruling TR 2001/10 Income tax: fringe benefits tax and superannuation guarantee: salary sacrifice arrangements (TR 2001/10) sets out what is an effective salary sacrifice arrangement. TR 2001/10 states:

19. 'Salary sacrifice arrangement' - in this Ruling, the term salary sacrifice arrangement means an arrangement under which an employee agrees to forego part of his or her total remuneration, that he or she would otherwise expect to receive as salary or wages, in return for the employer or someone associated with the employer providing benefits of a similar value. The main assumption made by the parties is that the employee is then taxed under the income tax laws only on the reduced salary or wages and that the employer is liable to pay FBT, if any, on the benefits provided.

20. The type of benefits provided in SSAs by employers to employees includes superannuation contributions, the provision of motor vehicles and expense payment fringe benefits, such as payment of school fees, childcare costs or loan repayments.

21. 'Effective SSA' - an effective SSA involves the employee agreeing to receive part of his or her total amount of remuneration as benefits before the employee has earned the entitlement to receive that amount as salary or wages.

22. 'Ineffective SSA' - an ineffective SSA involves the employee directing that an entitlement to receive salary or wages that has been earned (see paragraph 23 of this Ruling) is to be paid in a form other than as salary or wages.

If the arrangement that you have with the employee is the same as in question 1 above, but the arrangement occurs as part of an effective salary sacrifice arrangement, the benefit still arises at the point where you reimburse the employee for the expense that they have incurred. Therefore the benefit that is provided is an expense payment benefit as concluded at question 1. The fact that the benefit is provided as part of an effective salary sacrifice arrangement does not alter the type of benefit that is provided or the available exemptions.

Therefore, where you enter into an effective salary sacrifice arrangement with an employee for the reimbursement of the employee's car parking costs as discussed in question 1, the benefit will be an expense payment fringe benefit as it is an expense payment benefit that is not exempt.

Question 2

Is the car park a 'commercial parking station' according to the definition contained in subsection 136(1) of the FBTAA?

The term 'commercial parking station' is defined in subsection 136(1) as:

commercial parking station, in relation to a particular day, means a permanent commercial car parking facility where any or all of the car parking spaces are available in the ordinary course of business to members of the public for all-day parking on that day for a payment of a fee, but does not include a parking facility on a public street, road, lane, thoroughfare or footpath paid for by inserting money in a meter or by obtaining a voucher.

'All-day parking' is also defined in subsection 136(1) as:

all-day parking, in relation to a particular day, means parking of a single car for a continuous period of 6 hours or more during a daylight period on that day.

Subsection 136(1) defines 'daylight period' as;

daylight period, in relation to a day, means so much of a period on that day as occurs:

(a) after 7 a.m. on that day; and

(b) before 7 p.m. on that day.

In summarising therefore, a parking facility will be a 'commercial parking station' where, in relation to a particular day any or all of the car parking spaces are available in the ordinary course of business to members of the public for parking for a continuous period of six hours or more during a period that occurs after 7 a.m. and before 7 p.m., for the payment of a fee.

A commercial parking station will not include a parking facility on a public street, road, lane, thoroughfare or footpath paid for by inserting money in a meter or by obtaining a voucher.

Section 39E of the FBTAA confirms that if parking is provided in the ordinary course of business to members of the public on a monthly basis, the car parking operator is taken to charge a fee for all-day parking on a particular day. Subsection 39E(1) states:

39E(1) Daily rate equivalent for periodic parking arrangements. For the purposes of this Division, if the operator of a commercial parking station provides all-day parking in the ordinary course of business to members of the public on a weekly, monthly, yearly or other periodic basis, the operator is taken to charge a fee for all-day parking on a particular day during the period equal to the amount worked out using the formula:

Total fee .

Business days in period

where:

"Total fee" is the total fee charged by the operator in respect of all-day parking on days in that period;

"Business days in period" means the number of business days in that period.

The car park is available to use by leasing a monthly car parking space. The lease provides the lessee with a swipe card that they can use to access the car park and guarantees them a car park (but not a specific allocated space) between the hours of 7am and 7pm Monday to Friday. Outside of these hours car parking may be available dependant on availability. Parking is charged on a monthly basis, payable in advance.

Therefore, on a particular day, any or all of the car parking spaces are available in the ordinary course of business

The car park is a parking facility where on a particular day any or all of the car parking spaces are available in the ordinary course of business to members of the public for parking for a continuous period of six hours or more during a period that occurs after 7 a.m. and before 7 p.m., for the payment of a fee. The car park is a 'commercial parking station' according to the definition contained in subsection 136(1) of the FBTAA.

Question 3

Will a car parking fringe benefit arise where an employee leases a car park in the car parking facility described in question 2 above, on a monthly basis and pays for the park with your credit card?

In this second scenario the employee's leases a monthly car parking space in the car park discussed in question 2 above, on a month by month basis, payable one month in advance.

The lease provides the employee with a swipe card that they can use to access the hotel car park and guarantees them a car park (but not a specific allocated space) between the hours of 7am and 7pm Monday to Friday.

The car park is organised by the employee directly with the car park operator and the monthly invoice is in the employee's name. Therefore, the employee has an obligation to pay the car park operator the amount charged for the month.

The employee uses your credit card to pay for the parking. When this occurs the credit card provider makes a payment to the car park operator to discharge an obligation of the employee. This is an expense payment benefit under subsection 20(a) of the FBTAA.

Although the provider in this instance is the credit card provider, this benefit can still be a fringe benefit as the payment is made in accordance with the terms of the agreement between the employer and the credit card provider.

In considering whether the expense payment benefit is an exempt benefit:

• the exemption in section 58GA of the FBTAA will not apply as the benefit is an expense payment benefit; and

• the exemption in paragraph 58G(1)(a) will not apply as you have advised that the benefit is an 'eligible car parking expense payment benefit' according to the definition contained in subsection 136(1) of the FBTAA.

Therefore, as no other exemptions apply, the expense payment benefit that arises when the credit card provider makes a payment to the car park operator to discharge the obligation of the employee will be a fringe benefit.

Question 3a

Will the answer to question 3 change if the benefit is provided as part of a valid salary sacrifice arrangement?

This scenario is the same as question 3 above however the arrangement is conducted under an effective salary sacrifice arrangement in accordance with TR 2001/10.

As discussed at question 1a above, conducting the arrangement as part of an effective salary sacrifice arrangement does not alter the point at which the benefit arises and therefore the type of benefit that arises.

Therefore as concluded at question 3 above, the benefit will be an expense payment benefit. As no exemptions will apply and because the benefit is provided in respect of employment, the benefit will be an expense payment fringe benefit.

Question 4

Will a car parking fringe benefit arise where an employee leases a car park in the car parking facility described in question 2 above, on a monthly basis and is guaranteed an allocated parking bay each day and pays for the car park with your credit card?

If an employee was guaranteed an allocated parking bay each day rather than being guaranteed a space only but all other facts remained the same as the scenario discussed in question 3, the type of benefit being provided will not change as the arrangement still involves the credit card provider making a payment to discharge an obligation of the employee under an arrangement between the employer and the credit card provider.

Question 4a

Will the answer to question 4 change if the benefit is provided as part of a valid salary sacrifice arrangement?

Refer to the previous discussions of the effect of effective salary sacrifice arrangements on the classification of benefits. As previously discussed, if the arrangement referred to in question 4 above was entered into as part of an effective salary sacrifice arrangement, the type of benefit provided would not change.

Therefore, the benefit will be an expense payment benefit which will be a fringe benefit as no exemptions apply.

Question 5

Can a car parking fringe benefit arise where an employee parks their car in a 'commercial parking station' according to the definition contained in subsection 136(1) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA) on a daily or shorter basis and pays for the parking using your credit card?

In this scenario the employee parks their car in a parking station that meets the definition of a 'commercial parking station' contained in subsection 136(1) of the FBTAA. The employee chooses the commercial car parking station to park in and parks for all or part of the day. The employee pays for the car parking with your corporate card either on arrival at the parking station or at the conclusion of the parking period before exiting.

In this situation, the employee does not incur an obligation and you do not reimburse the employee. Therefore, the benefit will not be an expense payment benefit.

According to the definitions of 'benefit' and 'fringe benefit' contained in subsection 136(1) of the FBTAA, the arrangement will give rise to a benefit that will be a fringe benefit unless it is exempt.

Section 39A of the FBTAA, sets out when a car parking benefit will be provided as follows:

39A(1) [Provision of car parking facilities] If the following conditions are satisfied in relation to a daylight period, or a combination of daylight periods, on a particular day:

(a) during the period or periods, a car is parked on one or more premises of a person (the "provider"), where:

(i) the premises, or each of the premises, on which the car is parked are business premises, or associated premises, of the provider; and

…

(b) …

…

(i) …

the provision of parking facilities for the car during the period or periods is taken to constitute a benefit provided by the provider to the employee or the associate of the employee in respect of the employment of the employee.

That is, a car parking benefit will arise where car parking facilities are provided for an employee's car during a period and the conditions contained in paragraphs 39A(1)(a) to 39A(1)(i) of the FBTAA are met.

You have stated that the arrangement satisfies all of the conditions of subsection 39A(1) except the requirement to be parked on the 'business premises' or 'associated premises' of the provider (subparagraph 39A(1)(a)(i) of the FBTAA).

Therefore, the benefit will be a car parking benefit if subparagraph 39A(1)(a)(i) is satisfied.

Does the arrangement satisfy the requirement of subparagraph 39A(1)(a)(i) of the FBTAA?

Subparagraph 39A(1)(a) of the FBTAA states that the car must be parked on one or more premises of the 'provider'.

The term 'provider' as used in this context is defined in subsection 136(1) of the FBTAA as:

provider, in relation to a benefit, means the person who provides the benefit.

'Provide' is also defined in subsection 136(1) as:

provide:

(a) in relation to a benefit - includes allow, confer, give, grant or perform; and

As discussed in question 1 above, the definition of fringe benefit contained in subsection 136(1) of the FBTAA includes a benefit that is provided under an arrangement. Paragraphs 136(1)(e) and 136(1)(ea) of the definition states:

…

being a benefit provided to the employee or to an associate of the employee by:

…

(e) a person (in this paragraph referred to as the arranger) other than the employer or an associate of the employer under an arrangement covered by paragraph (a) of the definition of arrangement between:

(i) the employer or an associate of the employer; and

(ii) the arranger or another person; or

(ea) a person other than the employer or an associate of the employer, if the employer of associate of the employer:

(i) participates in or facilitates the provision or receipt of the benefit; or

(ii) participates in, facilitates or promotes a scheme or plan involving the provision of the benefit;

and the employer or associate knows, or ought reasonably to know, that the employer or associate is doing so;

…

Paragraph (a) of the definition of 'arrangement' contained in subsection 136(1) of the FBTAA as referred to above states:

arrangement means:

(a) any agreement, arrangement, understanding, promise or undertaking, whether express or implied, and whether or not enforceable, or intended to be enforceable, by legal proceedings; or

That is, a fringe benefit can be provided by a person that is not the employer or an associate of the employer under an 'arrangement' between the employer or an associate of the employer and the arranger or another person.

ATO Interpretative Decision ATO ID 2001/255 Fringe Benefits Tax Car Parking Fringe Benefits (ATO ID 2001/255) specifically confirms that car parking fringe benefits can be provided at a third parties business premises. In considering this ATOID 2001/255 states:

…

Sub-paragraph 39A(1)(a)(i) of the FBTAA states that the car must be parked on the business premises, or associated premises of the provider.

A 'provider" is defined in section 136(1) of the FBTAA as meaning the person who provides the benefit. The provider will usually be the employer but this need not be the case.

Where there is an arrangement between the carpark owner and the taxpayer the nature of that arrangement will:

(a) fix the limits of the right to park in the relevant carpark;

(b) determine who is the "provider" of the benefit for the purposes of the FBTAA.

Where the carpark owner retains ownership or other exclusive occupancy rights in respect of the relevant parking space the carpark owner is the "provider".

Where the taxpayer obtains exclusive occupancy rights in respect of the relevant parking space the taxpayer is the "provider".

Therefore, either the carpark owner or the taxpayer satisfies the requirements of being the "provider" as required in sub-paragraph 39A(1)(a)(i) of the FBTAA.

…

As an arrangement exists between the taxpayer and the third party, the provision of car parking to the employees constitutes a car parking fringe benefit under section 39A(1) of the FBTAA.

In considering whether the car park is provided under an arrangement between you and the car park operator section 150 of the FBTAA states:

150 Credit cards

For the purposes of this Act, where, in respect of the employment of an employee of an employer, the employee or an associate of the employee uses a credit card issued by a third person to, or to an associate of, the employer to obtain the provision of a benefit on credit from a fourth person, the following provisions have effect:

(a) the fourth person shall be taken to have provided the benefit, in respect of that employment, under an arrangement between:

(i) the employer or the associate of the employer, as the case requires; and

(ii) the fourth person;

(b) where the employer or the associate of the employer, as the case may be, incurred expenditure to the third person under an arm's length transaction in respect of the provision of the benefit - the employer or the associate of the employer, as the case requires, shall be taken to have incurred that expenditure to the fourth person under an arm's length transaction.

In summarising relevantly to your circumstances, if an employee uses a credit card issued to you by a third person, to obtain a benefit on credit from a fourth person:

• the fourth person is considered to have provided the benefit in respect of the employment under an arrangement between you and the fourth person; and

• where you incurred expenditure to the third person under an arm's length transaction in respect of the provision of the benefit, you are taken to have incurred the expenditure to the fourth person under an arm's length transaction.

Under the terms of the relevant credit card used by your employee to pay for the car park, you are liable for business expenses incurred on the card.

When you enter into an arrangement with an employee to provide car parking to them as a fringe benefit, the expense incurred in providing that benefit is a business expense.

Therefore, considering section 150, your employee uses the credit card issued to you by a third person, to obtain a benefit on credit from a fourth person (the car park provider).

Applying section 150, it is concluded that the fourth person (the car park provider) provided the benefit in respect of the employment under an arrangement between you and the car park provider.

Therefore, it is considered that you have an arrangement with the car parking provider to provide the car park.

Summary

The car parking provider is considered to provide the car park (the benefit) under an arrangement with you. The car is parked on the premises of the car park provider (the 'provider' under the arrangement) and therefore the requirement of subparagraph 39A(1)(a)(i) of the FBTAA is met.

As the other requirements of subsection 39A(1) are met, the benefit is a car parking benefit.

The benefit is provided in respect of the employee's employment and will therefore be a car parking fringe benefit unless it is an exempt benefit.

Car parking benefits can be exempt in certain circumstances under subsection 58GA(1) of the FBTAA. Subsection 58GA(1) states:

58GA(1) Exemption. A car parking benefit provided in an FBT year in respect of the employment of an employee is an exempt benefit if:

(a) the car is not parked at a commercial parking station; and

…

As the car is parked in a commercial parking station, the benefit will not be exempt under subsection 58GA(1).

Question 5a

Will the answer to question 5 change if the benefit is provided as part of a valid salary sacrifice arrangement?

Refer to the previous discussions of the effect of effective salary sacrifice arrangements on the classification of benefits. The same reasoning can be applied to conclude that if the benefit is provided as part of a valid salary sacrifice arrangement, the type of benefit provided will remain the same.

Therefore where the requirements of subsection 39A(1) are met, the benefit will be a car parking benefit. Where all of the requirements of subsection 39A(1) are met, the benefit will be a fringe benefit as no exemptions apply for the same reasons as discussed in question 3 above.

Where the requirements of subsection 39A(1) are not met the benefit will be a residual benefit that is exempt under section 58G of the FBTAA.