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Car Parking Fringe Benefits – changes to consider before 1 April 2022

Car Parking Fringe Benefits – changes to consider before 1 April 2022

Daniel Pegdon      Varun Kumar      

The Australian Taxation Office (ATO) released a Taxation Ruling (TR) 2021/2 which considers when a parking station is considered a commercial car parking station for the purposes of Fringe Benefits Tax (FBT) provisions. The ruling represents a significant shift in the ATO’s view on whether a parking facility is a commercial car parking station for FBT purposes. It is important to take note and consider these changes as they may have an impact on your business’ FBT liability.

The change in view applies to car parking fringe benefits provided during FBT years commencing from 1 April 2022.  

Overview of car parking fringe benefits
FBT may be payable on car parking provided to employees where there is a commercial car parking station within one kilometer of the car parking spot provided, and the all-day charge for parking exceeds the car parking threshold (currently set at $9.25). On-street parking is not considered a commercial car parking station.


Certain businesses may be exempt from paying FBT on car parking benefits if the car parking is not provided in a commercial car park, and the employer is not:
  • a government body; or
  • a listed public company; or
  • a subsidiary of a listed public company.
This exemption may be available to businesses with a standalone turnover of less than $10 million or an aggregated turnover of less than $50 million.

The changes
In TR 2021/2, the ATO provides some further guidance on the characteristics of a commercial car parking station and broadly, they view a commercial car parking station as one that is:

  1. A commercial car parking facility

  2. Is permanent

  3. Is not on-street parking

  4. Has car spaces available in the ordinary course of business to the public for all-day parking on payment of a fee.

If a parking facility is operated by a car parking operator, it will meet the requirements of being considered a commercial car parking facility [(a) above]. This includes parking facilities that exists within another complex (such as an office, shopping centre or hospital) where the owner or lessor of that complex outsources the management of the parking facility to a car parking operator.

If a parking facility is not operated by a car parking operator, it may nevertheless still be a commercial car parking facility [(a) above] where two or more of the following characteristics can be displayed:

  • The facility has clear signage visible from the street advertising that paid parking is available.

  • The facility has mechanisms to control who can enter/exit the parking facility, or park at the facility. This may include boom gates, or 'pay and display' ticketing machines.

  • The facility charges more than a nominal fee (usually a significantly lower rate than the local market rate) for paid parking. This includes charging a customer for parking which is not all-day parking (such as parking at an hourly rate).

The ATO’s previous views in TR 96/26 (which has now been withdrawn) was that commercial car parks are those run with a primary purpose of providing all day parking. This meant that those parking stations that charged penalty rates for all-day parking (e.g. shopping centres or hotels) may not be considered a commercial car park for FBT purposes. This view has now changed due to a case which involved Qantas where the Federal Court held that airport car parks are commercial car parking facilities even though they charge penalty rates for long term parking.


An employer provides car parking to its employees at their office building. Within one kilometre of the building:
  • There is an inner-suburban shopping centre provides dedicated car spaces in a multi-level concrete structure attached to the shopping complex. The car park is operated by the landlord of the shopping centre. There is licence plate recognition functionality at each entrance and boom gates at each exit to the parking facility. A car can be parked for free for the first two hours, after which parking costs $5 per hour. There is signage visible from the street and at each entrance advertising that car parking is available. 
  • There is a hotel which has several car spaces on its basement levels (a parking facility). There is clear directional signage visible from the street indicating the location of the hotel's parking facility. Entry and exit to the facility is controlled by boom gates. All the car spaces are clearly marked. None of the car spaces are available for paid parking but are exclusively available to hotel guests during their stay at the hotel.
The shopping centre parking facility would be considered a commercial car parking station, whereas the hotel parking facility would not be. It follows that if the all-day parking fee at the shopping centre exceeds the car parking threshold, an FBT liability may arise for the employer.

Practically, businesses who provide parking to their employees will need to consider whether there are any car parks which may be considered commercial car parking stations following the change to the ATO’s view. This may include having a look at any shopping centres, hospitals, and hotels etc. within a one-kilometer radius with car parking made available to the public.  

Once you have identified whether an issue has arisen, you will then need to work out whether an FBT liability arises from the provision of car parking benefits.
More information
If you would like to learn more about FBT, or need assistance, contact your local Moore Australia advisor today.