ATO ID 2003/25: Fringe benefits tax: exempt benefits - small business car parking
Date of decision: 23 October 2002
Business line: Superannuation and Employee Obligations

Issue
Does the $10 million threshold prescribed in subparagraph 58GA(1)(d)(i) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA) only apply to the sum of the ordinary and statutory income of the employer entity itself, and not to the sum of the ordinary and statutory income of the group of entities of which the employer is a member?

Decision
Yes. The $10 million threshold prescribed in subparagraph 58GA(1)(d)(i) only applies to the sum of the ordinary and statutory income of the employer entity itself.

Facts
The employer is a proprietary limited company (the employer company) and is wholly owned by another proprietary limited company. Both companies form a group of companies. The sum of ordinary income and statutory income of the employer company for the relevant year in subparagraph 58GA(1)(d)(i) is less than $10 million. The sum of ordinary income and statutory income for the group of companies for the same year is $10 million or more. Subsection 58GA(2) of the FBTAA (new employers) does not apply.

Reasons for decision
Summary: Section 58GA of the FBTAA provides that certain car parking benefits will be exempt for small businesses. In order for the exemption to apply, the employer must, among other things, meet the turnover test at subparagraph 58GA(1)(d)(i); or be a small business entity for the income year ending most recently before the start of the FBT year. Subparagraph 58GA(1)(d)(i) states: (i) the sum of the employer's ordinary income and statutory income for the year of income ending most recently before the start of the fringe benefits tax (FBT) year is less than $10 million. Subparagraph 58GA(1)(d)(i) only refers to the sum of the employer's ordinary income and statutory income for the year of income (income tax year) ended most recently before the start of the FBT year. The sum of the ordinary income and statutory income of the group of companies is not relevant to subparagraph 58GA(1)(d)(i). Where subparagraph 58GA(1)(d)(i) is satisfied, the other parts of section 58GA of the FBTAA must also be satisfied in order for the car parking benefit to be an exempt benefit.

Legislative references: Fringe Benefits Tax Assessment Act 1986 section 58GA subparagraph 58GA(1)(d)(i) paragraph 58GA(2)
Subject references: Fringe benefits Fringe benefits tax FBT motor vehicle parking Car parking fringe benefits Small business Exempt benefits