Employers who provide staff parking spaces may be affected by the rewrite of the car parking fringe benefits Taxation Ruling. A draft ruling TR 2019/D5 was released on 13 November 2019, a rewrite of TR 96/26.

The draft ruling states that from 1 April 2020, the ATO proposes to treat a car park that offers all-day parking (meaning parking for at least six hours between 7 am and 7 pm) under the same rules as ‘commercial’ parking for fringe benefits tax (FBT) treatment even when the carpark’s fee structure discourages all-day parking with higher fees.

Generally, a carpark will be considered a ‘commercial parking facility’ when it is provided to make a profit. This includes car parks in shopping centres, airports and entertainment venues. A key change that the new draft ruling is that there will no longer be a general exclusion for shopping centre car parks that provide free short-term parking and higher rates for all-day parking. Employers therefore need to be aware of whether their staff parking spaces are considered to be commercial for FBT obligations.

The draft ruling proposes that FBT can generally apply to car parking provided by employers to staff where:

• A commercial parking facility such as a shopping centre car park is within a one-kilometre radius of the workplace.
• The car park charges a higher amount than the car parking threshold for all-day parking to the public. The threshold is currently $8.95 for the 2019/20 FBT year.
• The car park provides parking in the ordinary course of business and the facility is commercial (run to make a profit).

Small businesses where the employer’s turnover is less than $10m will still be eligible for the existing exemption from car parking FBT.