ATO ID 2001/255: Car Parking Fringe Benefits
Date of decision: 11 July 2001
Business line: SEO

Issue
Whether the provision of carparking spaces to employees at a third party's business premises constitute a car parking fringe benefit as defined under section 39A of the Fringe Benefits Tax Assessment Act 1986 (FBTAA).

Decision
Yes, the provision of the carparking spaces constitutes a car parking fringe benefit under section 39A of the FBTAA.

Facts
The taxpayer requires a 'third party' to provide carparking facilities free of charge to the taxpayer's employees at the third party's business premises. The employees' cars are parked in the basement of the third party's business premises which is owned/leased by the third party. Four parking spaces are allocated for the use of the taxpayer's employees and the taxpayer does not pay for these spaces. The taxpayer advises that all the conditions for a car parking fringe benefit are satisfied apart from sub-paragraph 39A(1)(a)(i) of the FBTAA.

Reasons for decision
Summary: A car parking fringe benefit will arise on each day on which an employer provides a car parking space for the use of an employee and all of the conditions in section 39A of the FBTAA are satisfied. Subsection 136(1) of the FBTAA provides definitions of "business premises", "associated premises" and "leased". Paragraph 4 of Taxation Ruling TR 2000/4 Fringe benefits tax: meaning of 'business premises' (TR 2000/4) states that premises are only "business premises" where two requirements have been satisfied: The definition of a "fringe benefit" in subsection 136(1) of the FBTAA includes a benefit provided to an employee of an employer under an arrangement between the employer (or associate) and a third party. An "arrangement" is defined in subsection 136(1) of the FBTAA. Sub-paragraph 39A(1)(a)(i) of the FBTAA states that the car must be parked on the business premises, or associated premises of the provider. A "provider" is defined in subsection 136(1) of the FBTAA as meaning the person who provides the benefit. The provider will usually be the employer, but this need not be the case. Where there is an arrangement between the carpark owner and the taxpayer the nature of that arrangement will: Where the carpark owner retains ownership or other exclusive occupancy rights in respect of the relevant parking space the carpark owner is the "provider". Where the taxpayer obtains exclusive occupancy rights in respect of the relevant parking space the taxpayer is the "provider". Therefore, either the carpark owner or the taxpayer satisfies the requirements of being the "provider" as required in sub-paragraph 39A(1)(a)(i) of the FBTAA. The taxpayer states that the remainder of the conditions in subsection 39A(1) are satisfied. As an arrangement exists between the taxpayer and the third party, the provision of car parking to the employees constitutes a car parking fringe benefit under subsection 39A(1) of the FBTAA.

Legislative references: Fringe Benefits Tax Assessment Act 1986 section 39A subsection 136(1) sub-paragraph 39A(1)(a)(i)
Related public rulings and determinations: TR 2000/4
Subject references: Car parking fringe benefits FBT arrangement FBT arranger FBT business premises FBT providers