The Morrison Government will consult on restoring the previously‑understood application of fringe benefits tax (FBT) to car parking benefits.
FBT applies to parking provided by employers to their employees where there is alternative parking commercially available. It was previously understood that car parks that effectively charge penalty rates for all‑day parking (to encourage shorter stays) do not represent genuine alternative parking arrangements for commuters, and so should not trigger FBT liabilities.
Recent court decisions overturned this understanding, so that any alternative paid parking would trigger the liability. These decisions were reflected in an ATO Taxation Ruling due to take effect from 1 April 2022.
The consultation will identify appropriate modifications to the definition of ‘commercial parking station’ with a view to restoring the previously‑understood interpretation, which better reflects the policy intention of the law. This will also reduce the potential FBT burden on some employers, helping them attract employees back into the workplace.
The Government will consult with all affected stakeholders. The new definition will apply to car parking fringe benefits provided from 1 April 2022.