Edited version of private advice

Authorisation Number: 1051951180978

Date of advice: 30 March 2022

Ruling

Subject: Motor vehicle parking fees

Question

Are you entitled to claim a deduction for your motor vehicle parking expenses under section 8-1 of the Income Tax Assessment Act 1997?

Answer

No, the cost of your parking fees is considered private and domestic in nature and not deductible.

This ruling applies for the following periods:

Year ended 30 June 20XX

Year ended 30 June 20XX

Year ended 30 June 20XX

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

You're employed as a commercial real estate agent.

Your office is located within the CBD.

During the course of your employment, you're required to show commercial properties to clients using your private motor vehicle.

When commercial property viewings are scheduled, you drive your private motor vehicle to work to utilise.

You purchase parking fee tickets when you drive your private motor vehicle.

You keep a logbook of your motor vehicle movements during work purposes.

Your employer does not provide motor vehicle parking.

Your employer doesn't provide a reimbursement.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1

Reasons for decision

Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) states that you can deduct from your assessable income any loss or outgoing to the extent that it is incurred in gaining or producing your assessable income. However, you cannot deduct a loss or outgoing to the extent that it is capital, private or domestic in nature.

Taxation Ruling TR 98/6 discusses deductions for real estate industry employees. It states that a deduction is not allowable for parking fees and tolls incurred when real estate employees 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 that same private character.

Paragraph 173 of TR 98/6 states that a deduction is allowable for parking fees (but not fines) if the expenses are incurred while travelling:

•         between two separate places of work;

•         to a place of education for self-education purposes (if the self education expenses are an allowable deduction); or

•         in the normal course of duty and the travelling expenses are allowable deductions.

Paragraph 176 of TR 98/6 states a deduction is allowable for parking fees and tolls if the travel is not private, e.g., travel between home and work whilst transporting bulk tools or equipment.

Travel between two places of employment or between a place of employment and a place of business

Paragraph 154 of TR 98/6 states that a deduction is allowable for the cost of travelling directly between two places of employment or between a place of employment and a place of business. This is provided that the travel is undertaken for the purpose of engaging in income-producing activities.

Example: Graham, a real estate salesperson, is selling a number of units in the same block. One unit is furnished for display. It is open for inspection on Wednesday and Saturday mornings and Graham is on site during this time. The cost of travel from the office to the block of units is an allowable deduction as the cost is incurred in travelling between two places of employment

Travel between two places is not 'travel between two places of employment' if one of the places is the person's residence. Likewise, travel between two places is not travel between workplaces if at the time of travelling to the second place if it is no longer a place at which income is derived.

Transport of bulky equipment

A deduction may be allowable if the transport costs can be attributed to the transportation of bulky equipment rather than to private travel between home and work (Taxation, Federal Commissioner of v. Vogt [1975] 1 NSWLR 194;5 ATR 274;75 ATC 4073). If the equipment is transported to and from work by the employee as a matter of convenience or personal choice, it is considered that the transport costs are private and no deduction is allowable.

Taxation Ruling IT 112 states that in cases comparable with Vogt's Case - travel expenditure will be deductible wherethe essential character of the expenditure is part of the operations by which the taxpayer earns his income; there is no other practicable way of getting his equipment to the places where he is to perform; and, the expenditure may be attributed to the carriage of the equipment rather than to his travel to the place of performance.

Therefore, the cost of your parking fees is considered private and domestic in nature and not deductible under section 8-1 of the ITAA 1997.