New ATO guidance on car parking fringe benefits to impact many suburban employers
On 13 November 2019, the Australian Taxation Office (ATO) released Draft Taxation Ruling TR 2019/D5 setting out its views on when the providing of car parking is a ‘car parking benefit’ for Fringe Benefits Tax (FBT) purposes. The ATO revised its views and withdrew TR 96/26 after the Full Federal Court’s decision in the Qantas case [2014] FCAFC 168.
While the draft ruling discusses many aspects of car parking fringe benefits, the most consequential aspect for employers is likely to be the ATO’s views regarding commercial parking stations. By way of background, a car parking benefit is provided on a particular day if, among other requirements, there is a commercial parking station located within a 1km radius of the car park provided to the employee and the lowest representative fee charged by any commercial parking station for all-day parking within 1km radius of the work car park exceeds the car parking threshold ($8.95 in the 2020 FBT year).
In a change that is particularly relevant to employers located near shopping centres, hospital car parks and airport car parks, the ATO says that if a car park allows all-day parking, but its fee structure discourages it (for example by stepped rates), the car park can still be considered a commercial car parking station (if it also satisfies the other requirements). If all-day parking was outright prohibited the result would be different.
The ATO has requested comments on the draft ruling by 17 January 2020 and will issue a final ruling after this date. Once finalised, the ruling is intended to apply to car benefits provided from 1 April 2020 (in the 2021 FBT year).
