Edited version of private advice

Authorisation Number: 1051780764991

Date of advice: 25 November 2020

Ruling

Subject: Exempt car parking benefits

Question

Are the car parking benefits provided by a government agency at the government agency's college to employees who are employed exclusively in connection with the government agency's college considered exempt benefits under subsection 58G(3) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)?

Answer

Yes

This ruling applies for the following periods

Year ending 31 March 2021

Year ending 31 March 2022

Year ending 31 March 2023

Year ending 31 March 2024

The scheme commenced on

1 April 2020

Relevant facts

The government agency is a non-corporate Commonwealth entity. To assist with training requirements for its employees, the government agency created the government agency's college.

The government agency's college is a Registered Training Organisation under the Australian Skills Quality Authority that delivers courses on a wide range of topics, with a number of them accredited under the Tertiary Education Quality and Standards Agency. Several levels of qualifications, certificates, diplomas and advanced diplomas are on its scope of registration.

The training at the government agency's college is provided to encourage members of the industry to grow their knowledge and skills. The government agency's college provides structural training to its clientele.

Nationally, the government agency's college's focus is on helping government agencies build capacity within their own organisation.

The government agency college's international training programs focus on helping similar international partners build capacity within their own organisations.

The government agency's college is not available to every member of the public, but to any member of the public who are employees of the government agency, or employees from other government agencies and similar international government agencies. There is no requirement to gain approval through a commit or current member introduction.

Employees of the government agency college

Several car parks are provided for employees of the government agency's college. The employees consist of members from the Learning and Development (L & D) team and recruits.

The L & D team provide high quality learning and development to people engaged in courses at the government agency's college. They consist of trainers and support staff, who are solely engaged at and in relation to the government agency's college.

Recruits are new members of the government agency who are solely employed to study at the government agency's college, and they have no other duties.

Relevant legislative provisions

Fringe Benefits Tax Assessment Act 1986 Section 39A

Fringe Benefits Tax Assessment Act 1986 Subsection 58G(3)

Fringe Benefits Tax Assessment Act 1986 Subsection 136(1)

Reasons for decision

Are the car parking benefits provided by a government agency at the government agency's college to employees who are employed exclusively in connection with the government agency's college considered exempt benefits under subsection 58G(3) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)?

Section 39A of the FBTAA lists the following criteria, all of which must be met, before a car parking fringe benefit will arise:

a)    a car is parked at premises that are owned, or leased by, or otherwise under the control of the provider (usually the employer);

b)    a commercial parking station is located within 1 kilometre of the employer-provided parking facility;

c)    the lowest fee charged in the ordinary course of business, to members of the public, for all-day parking by a commercial parking station, exceeds the car parking threshold figure;

d)    the car is parked for a total of more than 4 hours between the hours of 7 am and 7 pm on the day. The 4 hour period need not be continuous, but may be made up of several parking periods;

e)    the car is owned by, leased to, or otherwise under the control of, an employee or associate, or it is provided by the employer or associate of the employer;

f)     the parking is provided in respect of the employee's employment;

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

h)    the car is used by the employee to travel between his or her place of residence and primary place of employment at least once on that day;

i)      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; and

j)      the day is on or after 1 July 1993.

The government agency acknowledges it provides car parking benefits at its college as all of the criteria in section 39A of the FBTAA are satisfied.

Exempt car parking benefits

Car parking benefits are exempt under subsection 58G(3) of the FBTAA which states:

If:

(a)  the employer of an employee is a government body; and

(b)  the employee is exclusively employed in, or in connection with, a public educational institution;

the following benefits provided in respect of the employment of the employee are exempt benefits:

(c)   an eligible car parking expense payment benefit;

(d)  a car parking benefit.

Government body

The term 'government body' is defined in subsection 136(1) of the FBTAA to mean 'the Commonwealth, a State, a Territory or an authority of the Commonwealth or of a State or Territory'. The government agency satisfies the definition of a government body.

Public educational institution

The term 'public educational institution' is not defined in the FBTAA. Taxation Ruling TR 2000/10 Income tax: public libraries, public museums and public art galleries (TR 2000/10) states at paragraph 18:

...A public educational institution is generally a school, college or university operated on a non-profit basis.

The term 'educational institution' is defined in subsection 136(1) of the FBTAA to mean 'a school, college or university'. The ATO publication Income Tax Guide for Non-Profit Organisations (NAT 7967) sets out the Commissioner's view on what constitutes a 'public educational institution', as follows:

A public educational institution is an institution that is available or open to the public or a section of the public and whose sole purpose is providing education. Any other purpose of the organisation must be incidental or ancillary to providing public education. Education in this context does not extend to merely providing information or lobbying.

Public educational institutions include:

•         universities or colleges managed by public bodies

•         grammar schools

•         primary and secondary schools run by churches or religious bodies

•         non-profit business colleges.

Organisations that are not public educational institutions include:

•         colleges run for the profit of the private owners

•         associations operated for their members' professional benefit

•         promotional and lobbying bodies.

Many other organisations connected with education are not public educational institutions. Examples are a parents and friends committee and a scholarship provider.

The term 'public' is not defined in any Tax Act; therefore, it takes its ordinary meaning.

In Commissioner of Taxation v Qantas Airways Limited [2014] FCAFC 168, the court held that the airport car park was a commercial parking station because, 'whilst the operator imposed the restriction that the car parks were available only to airline passengers and meeters and greeters of airline passengers, the car parks nonetheless are public car parks in the sense that in the ordinary course of the business the car spaces are available to any member of the public on the contractual terms stipulated. The contractual terms do not mean that the car park spaces are not available to members of the public, but rather, that conditions are imposed on the use of the car park by members of the public'.

In relation to an educational institution, an entity will be 'public' if it operates for the benefit of a section of the public and does not provide a pecuniary benefit to those that operate it. In Taxation Ruling TR 2011/4 Income tax and fringe benefits tax: charities, paragraph 141 states:

Limitation to groups with particular characteristics within a community - residents of a particular geographic area, the adherents of a particular religion, those following a particular calling or profession, or sufferers of a particular disability or condition - can be consistent with the public requirement, unless the limits are incompatible with the nature of the benefit. For example, limiting access to a library to residents of a particular town could still be for the public benefit, but limiting the use of a bridge to adherents of a particular religion would not.

The government agency's college is not available to every member of the public, but to members of the public who are the government agency's employees, or employees from other government agencies and similar international agencies. There is no requirement to gain approval through a committee or current member introduction. Entry to the government agency's college is therefore limited to a group with particular characteristics within a community which is consistent with the college being operated for the benefit of a section of the public.

The training at the government agency's college is provided to encourage members of the industry to grow their knowledge and skills. Consisting of education designed around its policies, the government agency's college provides structural training to its clientele. The government agency's college is a registered training organisation, and provides qualifications of certificates, diplomas and advanced diplomas.

It is accepted that government agency's college is a public educational institution.

Employees employed exclusively in, or in connection with, a public educational institution

The parking spaces provided at the government agency's college are provided to employees employed by the government agency within the L & D team and recruits. The L & D team is dedicated to providing high quality learning and development to all personnel in the government agency, as well as their external clients and stakeholders. The L & D team consists of trainers and support staff that are solely engaged at and in relation to the government agency's college. Recruits are new members of the government agency who are solely employed to study at the government agency's college to become more skilled, and they have no other duties.

It is accepted that the L & D team and recruits are exclusively employed in, or in connection with, a public educational institution.

Conclusion

The car parking benefits provided to employees of the government agency at the government agency's college are exempt benefits under subsection 58G(3) of the FBTAA.