Tax ruling on FBT car parking delayed

Fringe Benefits TaxTax

5 May 2021

The Australian Tax Office (ATO) has again postponed the effective date for its upcoming final Fringe Benefits Tax (FBT) ruling on car parking fringe benefits to 1 April 2022.

The ATO had previously issued Draft Taxation Ruling TR 2019/D5 as an update to Taxation Ruling TR 96/26 Fringe benefits tax: car parking fringe benefits (now withdrawn).

For a car parking benefit to arise, one condition is that a commercial parking station must be located within a one-kilometre radius of the work car park.

TR 2019/D5 provided that a car parking facility may qualify as a commercial parking station even if the facility has another purpose other than providing all-day parking. For example, it may also have a purpose of providing short term parking. Further, the Commissioner’s view is that if a car park allows all-day parking, but its fees structure discourages all-day parking with higher fees, the car parking facility can still be considered a commercial parking station.

As part of its consultation process on TR 2019/D5, taxpayer bodies and industry experts raised concerns that TR 2019/D5 relied too heavily on subjective factors such as the profit-making intention of a car parking operator, which an employer would have difficulty in establishing for a nearby car park.

To address this, the ATO has advised the final Ruling will revise the test for determining what is a 'commercial car parking facility' to focus on a car parking facility’s objective characteristics.

It is intended the ATO will publish the final Ruling by mid-June 2021 and any changes in the Commissioner’s position from TR 96/26 (withdrawn) will apply from 1 April 2022.

To find out more or to speak with one of our FBT experts, get in touch with the Findex Tax Advisory team.

Author: Christopher Heyes

Chris has over 20 years’ experience providing practical advice and compliance services in the various areas of employment tax such as payroll tax, Fringe Benefits Tax (FBT), superannuation guarantee, workers compensation and pay-as-you-go (PAYG) Withholding. Chris has extensive experience working with clients across many areas of tax consulting to manage employment taxes risks and exposure. He has proven this experience across a broad range of industries and client categories including private companies, large corporations, government agencies and family owned businesses. Chris specialises in providing tax effective solutions which also take into account other tax and commercial considerations. My Specialty • Employment Taxes • Global Mobility