Tax ruling on FBT car parking delayed
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Ruling TR 2019/D5 as an update to Taxation Ruling TR 96/26 Fringe benefits tax: car parking fringe benefits (now withdrawn).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the ATO will publish the final Ruling by mid-June 2021 and any changes in the Commissioner’s position from TR 96/26 (withdrawn) will apply from 1 April 2022.