Commissioner of Taxation v Qantas Airways Ltd
Document type: Decision Impact Statement
Venue: Federal Court of Australia (VID 333 of 2014)
Judgment date: 9 December 2014
Date published: 16 February 2015

Summary of decision:
Whether the word 'public' within the definition of 'commercial parking station' in subsection 136(1) of the Fringe Benefits Tax Assessment Act 1936 (FBTAA) should be given its ordinary meaning or whether the statute requires 'public' to include commuting employees who would or could use the parking station.

Overview of facts:
This is a case about car parking spaces provided to some members of Qantas' staff as part of their remuneration. The staff work at various airports around the country. The car spaces are provided on Qantas' own premises at these airports and they are either at, or in the vicinity of, the premises at which the staff work. | The terms and conditions of parking at the Canberra Airport car parks contained the following clause: 'This Car Park is available only to airline passengers and meeters & greeters of airline passengers.' This is a contractual restriction imposed by the parking station operator. In Re Qantas Airways Limited v Commissioner of Taxation [2014] AATA 316 the Administrative Appeals Tribunal (Tribunal) held that the airport parking stations (other than those at Canberra) are 'commercial parking stations' such that the provision of car parking spaces at those parking stations is a 'car parking fringe benefit.' Qantas appealed against the decision in respect of the provision of car spaces at airport parking stations other than at Canberra Airport. The Commissioner appealed against the decision in respect of Canberra Airport parking stations. | Issues Decided by the Court | 1. Whether the provision of the car parking spaces is a 'car parking fringe benefit' as defined in the FBTAA. 2. Whether a different situation exists in the case of Canberra Airport. | 1. Whether the provision of the car parking spaces is a 'car parking fringe benefit' as defined in the FBTAA. 2. Whether a different situation exists in the case of Canberra Airport. | The answer to both questions turns on the meaning of the word 'public' as used within the subsection 136(1) of the FBTAA definition of 'commercial parking station'. | The Commissioner's position was that each of the airport parking stations (including the parking station at Canberra Airport) is a 'commercial parking station'. | Qantas' argument was that the airport parking stations are not commercial parking stations because those stations did not provide car spaces to the public in the ordinary course of their businesses. That is, the meaning of 'public' was to be understood as being the public including persons commuting between home and work and not some broader public constituted by anyone using an airport parking station, such that the airport parking stations should be disregarded because employees did not use them. | In the case of the Canberra Airport parking stations, Qantas argued that the Tribunal decision should be maintained because the contractual restriction at these parking stations meant that employees could not use that airport parking station. | The Court held in relation to all of the airport parking stations that the word 'public' should be given its ordinary meaning and that there is no rationale for imputing into the definition a requirement that a commercial parking station be one that employees of the employer commuting to work by car would or could in fact use. | The Court rejected Qantas' submissions for the following reasons: 1. First, the subject matter of the tax is the 'taxable value' of the car parking facilities provided by the employer to the employees, not the value to an employee of the provision of car parking by the employer. The FBTAA does not operate on the basis that the commercial parking station must be something the employee might or could use. Accordingly, it is apparent that the word 'public' should be given its ordinary meaning and there is no rationale for imputing into the definition a requirement that the commercial parking station be one that employees of the employer commuting to work by car would or could in fact use. 2. Secondly, the requirement that there be a commercial parking station within one kilometre of the employer's premises is a trigger for liability to the tax but it is not the concept which is taxed. The proximity requirement is simply the statute's way of working out which car spaces are likely to be sufficiently valuable to warrant assessment. 3. Thirdly, therefore, there is no ambiguity about the word 'public'. Consequently there is no reason to resort to extrinsic materials (the explanatory memorandum or second reading speech). | 1. First, the subject matter of the tax is the 'taxable value' of the car parking facilities provided by the employer to the employees, not the value to an employee of the provision of car parking by the employer. The FBTAA does not operate on the basis that the commercial parking station must be something the employee might or could use. Accordingly, it is apparent that the word 'public' should be given its ordinary meaning and there is no rationale for imputing into the definition a requirement that the commercial parking station be one that employees of the employer commuting to work by car would or could in fact use. 2. Secondly, the requirement that there be a commercial parking station within one kilometre of the employer's premises is a trigger for liability to the tax but it is not the concept which is taxed. The proximity requirement is simply the statute's way of working out which car spaces are likely to be sufficiently valuable to warrant assessment. 3. Thirdly, therefore, there is no ambiguity about the word 'public'. Consequently there is no reason to resort to extrinsic materials (the explanatory memorandum or second reading speech). | In addressing the Canberra Airport parking stations the Court found that despite the contractual restrictions imposed by the operator of the parking stations, the car parks are, in the ordinary course of the business, available to any member of the public on the contractual terms stipulated. The contractual terms do not mean that the car park spaces are not available to members of the public but, rather, that conditions are imposed on the use of the car park by members of the public. | The Court therefore found that the provision of the car parking spaces at each airport parking station gave rise to 'car parking fringe benefits', allowing the Commissioner's appeal in respect of Canberra Airport parking stations and dismissing the Taxpayer's appeal in respect of the other airport parking stations.

Issues decided:
1. Whether the provision of the car parking spaces is a 'car parking fringe benefit' as defined in the FBTAA. 2. Whether a different situation exists in the case of Canberra Airport. 1. Whether the provision of the car parking spaces is a 'car parking fringe benefit' as defined in the FBTAA. 2. Whether a different situation exists in the case of Canberra Airport. The answer to both questions turns on the meaning of the word 'public' as used within the subsection 136(1) of the FBTAA definition of 'commercial parking station'. The Commissioner's position was that each of the airport parking stations (including the parking station at Canberra Airport) is a 'commercial parking station'. Qantas' argument was that the airport parking stations are not commercial parking stations because those stations did not provide car spaces to the public in the ordinary course of their businesses. That is, the meaning of 'public' was to be understood as being the public including persons commuting between home and work and not some broader public constituted by anyone using an airport parking station, such that the airport parking stations should be disregarded because employees did not use them. In the case of the Canberra Airport parking stations, Qantas argued that the Tribunal decision should be maintained because the contractual restriction at these parking stations meant that employees could not use that airport parking station. The Court held in relation to all of the airport parking stations that the word 'public' should be given its ordinary meaning and that there is no rationale for imputing into the definition a requirement that a commercial parking station be one that employees of the employer commuting to work by car would or could in fact use. The Court rejected Qantas' submissions for the following reasons: 1. First, the subject matter of the tax is the 'taxable value' of the car parking facilities provided by the employer to the employees, not the value to an employee of the provision of car parking by the employer. The FBTAA does not operate on the basis that the commercial parking station must be something the employee might or could use. Accordingly, it is apparent that the word 'public' should be given its ordinary meaning and there is no rationale for imputing into the definition a requirement that the commercial parking station be one that employees of the employer commuting to work by car would or could in fact use. 2. Secondly, the requirement that there be a commercial parking station within one kilometre of the employer's premises is a trigger for liability to the tax but it is not the concept which is taxed. The proximity requirement is simply the statute's way of working out which car spaces are likely to be sufficiently valuable to warrant assessment. 3. Thirdly, therefore, there is no ambiguity about the word 'public'. Consequently there is no reason to resort to extrinsic materials (the explanatory memorandum or second reading speech). 1. First, the subject matter of the tax is the 'taxable value' of the car parking facilities provided by the employer to the employees, not the value to an employee of the provision of car parking by the employer. The FBTAA does not operate on the basis that the commercial parking station must be something the employee might or could use. Accordingly, it is apparent that the word 'public' should be given its ordinary meaning and there is no rationale for imputing into the definition a requirement that the commercial parking station be one that employees of the employer commuting to work by car would or could in fact use. 2. Secondly, the requirement that there be a commercial parking station within one kilometre of the employer's premises is a trigger for liability to the tax but it is not the concept which is taxed. The proximity requirement is simply the statute's way of working out which car spaces are likely to be sufficiently valuable to warrant assessment. 3. Thirdly, therefore, there is no ambiguity about the word 'public'. Consequently there is no reason to resort to extrinsic materials (the explanatory memorandum or second reading speech). In addressing the Canberra Airport parking stations the Court found that despite the contractual restrictions imposed by the operator of the parking stations, the car parks are, in the ordinary course of the business, available to any member of the public on the contractual terms stipulated. The contractual terms do not mean that the car park spaces are not available to members of the public but, rather, that conditions are imposed on the use of the car park by members of the public. The Court therefore found that the provision of the car parking spaces at each airport parking station gave rise to 'car parking fringe benefits', allowing the Commissioner's appeal in respect of Canberra Airport parking stations and dismissing the Taxpayer's appeal in respect of the other airport parking stations.

ATO view of decision:
The views expressed by the Court in interpreting the word 'public' are consistent with the Commissioner's view and current practices.

Administrative treatment:
Implications for impacted ATO precedential documents (Public Rulings, Determinations, ATO IDs) | The Commissioner will update Taxation Ruling TR 96/26 Fringe benefits tax: car parking fringe benefits. | Implications for impacted Law Administration Practice Statements | There are no implications for Law Administration Practice Statements.

Legislative references: Fringe Benefits Tax Act 1986 The Act Fringe Benefits Tax Assessment Act 1986 39A 39C 39D 39DA 136 148 Taxation Laws Amendment (Car Parking) Act 1992 The Act
Case references: Lee v Evans (1964) 112 CLR 276 Australand Investments Ltd v Commissioner of State Revenue (Vic) [2009] VSC 453 (2009) 77 ATR 683 Commissioner of State Revenue (Vic) v Australand Investments Pty Ltd [2012] VSCA 152 (2012) 89 ATR 329 Queensland v Commonwealth (1987) 162 CLR 74 Saeed v Minister for Immigration and Citizenship (2010) 241 CLR 252 Virgin Blue Airlines Pty Ltd v Commissioner of Taxation (2010) 190 FCR 150 (2010) 81 ATR 85 2010 ATC 20-226