FBT car parking benefits: ATO’s changed views on commercial parking stations – Taxation Ruling TR 2021/2
On 16 June 2021, the ATO issued TR 2021/2 on when a car parking benefit is provided for FBT purposes. It replaces the previous Ruling on this topic, TR 96/26, which was withdrawn when TR 2021/2 was issued in draft form (as TR 2019/D5). The need for a replacement ruling is due to changes to the ATO view following two Full Federal Court decisions – Virgin Blue Airlines Pty Ltd v FCT [2010] FCAFC 137 and FCT v Qantas Airways Ltd [2014] FCAFC 168.
A car parking benefit is provided to an employee if various requirements in s 39A of the Fringe Benefits Tax Assessment Act 1986 are met. One requirement is that a commercial parking station must be located within a 1 km radius of the work car park.
A commercial parking station is a permanent facility that makes all-day parking available to the public for a fee and does this in the ordinary course of business.
The ATO considers that a facility can qualify as a commercial parking station even if it has a purpose other than providing all-day parking (eg hourly parking at a hospital or airport), and even if its fee structure discourages all-day parking. The previous ATO view (in withdrawn TR 96/26) was that a car parking facility was not a commercial parking station if it had a primary purpose other than providing all-day parking (by charging penalty rates significantly higher than the rates chargeable for all-day parking at commercial all-day parking facilities).
While the meaning of “primary place of employment” was addressed in Draft TR 2019/D5, this commentary has been removed from the final Ruling. However, the ATO advises that TR 2021/2 will be amended once it has finished considering its position in light of the recent Federal Court decision in Virgin Australia Airlines Pty Ltd v FCT [2021] FCA 523.
DATE OF EFFECT: generally retrospective. However, the revised ATO view on commercial parking stations charging higher fees will only apply to car benefits provided from 1 April 2022.