Tax treatment on certain benefit ‘parked’ by COVID under scrutiny once more

The fringe benefits standing of car parking was being looked at by the ATO until being “parked” by COVID-19 earlier this year, with proposed changes deferred until 2021. But now the ATO has re-started discussions on draft taxation ruling TR 2019/D5 dealing with car parking benefits.

The final ruling will update taxation ruling TR 96/26 Fringe benefits tax: car parking fringe benefits (now withdrawn) to reflect contemporary commercial car parking arrangements and legal developments including the Federal Court decisions in Commissioner of Taxation v Qantas Airways Ltd [2014] FCAFC 168 and Virgin Blue Airlines Pty Ltd v Commissioner of Taxation [2010] FCAFC 137. An updated version of Chapter 16 of Fringe benefits tax – a guide for employers will also be republished.

The ATO says it had received a significant number of submissions during consultation, which it has now re-started working through. This includes feedback on the changed view for car parking stations that charge penalty rates to discourage all-day parking (formerly in paragraph 81 of TR 96/26 [now withdrawn] and now in paragraph 18 of TR 2019/D5), and the potential impact of this changed view on employers.

Recognising that employers will require time to implement these changes following finalisation of the ruling (which it says will late 2020, but time will tell), it has determined that when the final ruling is published, any changes in view from TR 96/26 will apply from 1 April 2021.

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