Edited version of private advice

Authorisation Number: 1052346627821

Date of advice: 22 April 2025

Ruling

Subject: FBT - car parking

Question 1

Is the car park located on XXXX and called XXXX (parking area 1) considered to be 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" (on-street parking) being an element of the definition of 'commercial parking station' in subsection 136(1) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)?

Answer

No.

Question 2

Is the car park located at XXXX, and called XXXX (parking area 2) considered to be on-street parking being an element of the definition of 'commercial parking station' in subsection 136(1) of the FBTAA?

Answer

No.

Question 3

If the answer to question 1 or 2 is no will all the car parks in this vicinity, including parking area 1 and parking area 2 be treated as single commercial car parking station under subsection 136(1) of the FBTAA?

Answer

Commissioner declines to rule

Question 4

Will a car parking fringe benefit arise under subsection 39A(1) of the FBTAA, when the company provides their employees with a car parking space?

Answer

No.

This ruling applies for the following periods:

FBT year ending 31 March 20YY

FBT year ending 31 March 20YY

FBT year ending 31 March 20YY

FBT year ending 31 March 20YY

The scheme commenced on:

1 April 20YY

Relevant facts and circumstances

The Company is an Australian private company and a medium business entity.

The business address is XXXX and this is located within the XXXX.

The Company provides 82 car parking spaces to its administrative employees.

The parking is accessed via electric security gates and access is granted via a security code or fob.

Parking is available 7 days a week, 24 hours a day.

The Company pays for the parking, and this is incorporated into the lease agreement.

The parking fee is paid at arm's length to the landlord of the Company's business premises.

XXXX has a number of car parking locations, which are managed by either XXXX or by themselves.

Two car parks within this vicinity that are within 1km of the company's offices are XXXX parking area 1 and parking area 2.

Parking area 1:

•                     this car park is located off XXXX and is operated by XXXX

•                     it is a permanent car parking lot with numerous car parking spots outlined on the ground

•                     the car park is advertised as casual parking

•                     carparking is available to the public 24 hours a day, 7 days a week

•                     upon entry it has signage that indicates the parking rates and the terms and conditions

•                     payment machines are located within the parking area and credit card payment can be accepted at these machines

•                     tickets/receipts of payment are to be displayed on the vehicle's dashboard on the passenger's side

•                     during 20YY, the parking rate is $7.00 per hour, with a maximum daily charge of $35.00

•                     parking in these car parks cannot be pre-booked

•                     long term parking rates are available to the public.

Parking area 2

•                     this car park is located off XXXX and is operated by XXXX

•                     it is a permanent car parking lot with numerous car parking spots outlined on the ground

•                     the car park is advertised as casual parking

•                     carparking is available to the public 24 hours a day, 7 days a week

•                     upon entry it has signage that indicates the parking rates and the terms and conditions

•                     payment machines are located within the parking area and credit card payment can be accepted at these machines

•                     tickets/receipts of payment are to be displayed on the vehicle's dashboard on the passenger's side

•                     during 20YY, the parking rate is $7.00 per hour, with a maximum daily charge of $35.00

•                     parking in these car parks cannot be pre-booked

•                     long term parking rates are available to the public.

Parking Fees:

The car parking threshold for the FBT year ended 31 March 20YY was $10.40.

The car parking threshold for the FBT year ended 31 March 20YY is $10.77.

Long term parking fees for parking area 1 and parking area 2 is under the car parking threshold for both FBT years.

Assumptions

For the FBT years ending 31 March 20YY and 20YY we are making the assumption that the car parking rate at the two parking stations remains less than the FBT car parking threshold for those years.

Relevant legislative provisions

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

Fringe Benefits Tax Assessment Act 1986 Subsection 136(1)

Reasons for decision

Question 1

Is the car park located on XXXX and called XXXX (parking area 1) considered to be 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" (on-street parking) being an element of the definition of 'commercial parking station' in subsection 136(1) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)?

Summary

Parking area 1 is not considered to be on-street parking for the purposes of subsection 136(1) of the FBTAA.

Detailed reasoning

Commercial car parking station is defined in subsection 136(1) of the FBTAA as:

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 on 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.

In summary a commercial parking station is a parking facility which is permanent, not on-street parking and has car spaces available in the ordinary course of business to the public for all day parking on payment of a fee.

Not on-street parking

The FBTAA doesn't have a definition for 'on-street parking Taxation Ruling Fringe Benefits Tax: car parking benefits (TR 2021/2) states:

'On-street parking' is parking on a street, road, lane, thoroughfare or footpath paid for by inserting money in a meter or by obtaining a voucher.

The term thoroughfare is not defined in the FBT legislation. The Macquarie Dictionary defines thoroughfares as:-

1.           a road, or the like, open at both ends, especially a main road

2.           a passage or way through

The XXXX website discloses that parking area 1 has only one entry and exit point and that the entry to the car park is not a thoroughfare to anywhere except the car park. The car park is not on its own street, road or lane. It is a carpark located between two streets.

Parking area 1 contains the following features that indicate it is not on-street parking:

•                     it is a permanent car parking lot with numerous car parking spots outlined on the ground.

•                     upon entry it has signage that clearly states that indicates the parking rates and the terms and conditions.

•                     payment machines are located within the parking area and credit card payment can be accepted at these machines.

•                     tickets/receipts of payment are to be displayed on the vehicle's dashboard on the passenger's side.

•                     XXXX parking operates the facility

Conclusion

Parking area 1 does not meet the definition of 'on street parking' as it is off the street and is not located on a road, thoroughfare or footpath.

Question 2

Is the car park located at XXXX, and called XXXX (parking area 2) considered to be on-street parking being an element of the definition of 'commercial parking station' in subsection 136(1) of the FBTAA?

Summary

Parking area 2 is not considered to be on-street parking for the purposes of subsection 136(1) of the FBTAA.

Detailed reasoning

The relevant law and reasoning as outlined in detail in the response to Question 1 is also relevant to Question 2.

Conclusion

Parking area 2 does not meet the definition of 'on street parking' as it is off the street and is not located on a road, thoroughfare or footpath.

Question 3

Will all the car parks in the XXXX be treated as single commercial parking station under subsection 136(1) of the FBTAA?

Summary

The Commissioner declines to rule.

Detailed reasoning

The relevant law as outlined in detail in the response to Question 1 is also relevant to Question 3.

All parking within XXXX is owned and operated by XXXX or XXXX.

The two commercial car parking stations parking area 1 and parking area 2 are within 1km of your designated parking location and are relevant for the purpose of this ruling. There is no reason for the Commissioner to consider any further car parking stations.

Question 4

Will a car parking fringe benefit arise under subsection 39A(1) of the FBTAA when the company provides their employees with a car parking space?

Summary

A car parking fringe benefit does not arise under subsection 39A(1) of the FBTAA.

Detailed reasoning

A car parking fringe benefit may arise for each day an employer provides a car parking space for the use of an employee.

A car parking benefit is discussed at subsection 39A(1) of the FBTAA as follows:

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 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.

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.

Application to your circumstances

Car is parked at premises

The client has advised that the car parking provided to employees is located at the business premises.

Therefore, it is accepted that subparagraph 39A(1)(a)(i) of the FBTAA is satisfied.

A commercial parking station is located within 1km radius of the premises

The two parking facilities in question are located within XXXX parking area 1 and parking area 2 are both located within 1km of the business premises.

•                     parking area 1: shortest travelling distance to the business premises is 850 metres via walking.

•                     parking area 2: shortest travelling distance to the business premises is 750 meters via walking and driving.

Therefore, it is accepted that subparagraph 39A(1)(a)(ii) of the FBTAA is satisfied.

Lowest fee charged by the commercial parking station is more than the car parking threshold

According to Australian Taxation website the car parking threshold for the year commencing 1 April 20YY and 1 April 20YY are $10.40 and $10.77 respectively.

The cheapest long term car parking rate provided by the commercial parking station for parking area 1 and parking area 2 on the first business day of the FBT years were below the car parking thresholds for both FBT years.

As the long-term parking rate is lower than the FBT car parking threshold it is accepted that subparagraph 39A(1)(a)(iii) of the FBTAA is not satisfied.

Conclusion

A car parking fringe benefit does not arise under subsection 39A(1) of the FBTAA 1986, when the Company provide their employees with car parking, as:

•                     the car parks provided to their employees are located at the business premises;

•                     the commercial parking station, at XXXX - parking area 1 and parking area 2, are within one kilometre of the Company's business premises; and

•                     the lowest fee charged by the operator is below the FBT threshold.

This ruling is only valid for FBT year ending 31 March 20YY and 20YY if the lowest fee charged by XXXX for parking area 1 and parking area 2 remains below the FBT threshold.