Date posted: 17/01/2020

Joint submission – ATO draft guidance on car parking fringe benefits

Joint submission on ATO guidance on car parking fringe benefits calls for legislation change

Chartered Accountants ANZ, together with CPA Australia and Corporate Tax Association, has lodged a joint submission on the ATO draft guidance on car parking fringe benefits, namely TR 2019/D5 and the FBT Guide for Employers Chapter 16.

In the submission we acknowledge the ATO has had to change its interpretation of a ‘commercial parking station’ in determining whether an employer has provided a car parking fringe benefit to an employee as a result of the Full Federal Court decision in Commissioner of Taxation v Qantas Airways Ltd [2014] FCAFC 168.

In that case, the Full Federal Court held that Qantas was liable to pay FBT on car parking provided to employees at major Australian airports. The airport car parks were 'commercial parking stations' for FBT purposes. Under the ATO’s previous ruling, TR 96/26 Fringe benefits tax: car parking fringe benefits  it said the following does not constitute a commercial parking station: ‘car parking facilities, with a primary purpose other than providing all-day parking, that usually charge penalty rates significantly higher than the rates chargeable for all-day parking at commercial all-day parking facilities (such as parking provided for short term shoppers or hotel guests)’.

In view of this decision and the emerging use of apps in car parking, the draft ruling has broadened the ATO’s view of a ‘commercial parking station’ which practically speaking means that more work car parks provided to employees in suburban and regional areas could now be subject to FBT as a car parking fringe benefit. 

The submission requests the ATO to withdraw the draft ruling and liaise with Treasury to amend the FBT legislation to ensure that the original policy intent of the law is reflected in the legislation and suburban and regional work car parks are not inadvertently captured by FBT. If the draft ruling is finalised we have requested further clarification for certain situations and safe harbours for the ATO’s expanded views.

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