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ATO Interpretative Decision

ATO ID 2006/93

Fringe Benefits Tax
Car parking fringe benefits: fee charged by a parking station for all-day parking - daily rate equivalent for periodic parking arrangements.

Attention This document has changed over time. View its history.
FOI status: may be released
Status of this decision: Decision Current

CautionCAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

This ATOID provides you with the following level of protection:

If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.


Issue

Where a parking station charges a parking fee for all-day parking which becomes progressively lower after a number of days parking, does the formula in section 39E of the Fringe Benefits Tax Assessment Act 1986 (FBTAA) apply to determine the lowest fee the parking station is taken to charge for all-day parking on a particular day?

Decision

Yes. When a customer parks their car for more than one day, the parking station provides all-day parking on a periodic basis and the lowest fee for all-day parking on a particular day will be calculated using the formula in section 39E of the FBTAA.

Facts

A parking station is a 'commercial parking station' and provides 'all-day parking' in accordance with subsection 136(1) of the FBTAA.

The parking station provides all-day parking in the ordinary course of business to members of the public.

The parking station charges a parking fee for all-day parking which becomes progressively lower after a number of days parking.

The following table represents the fees charged by the parking station:

NUMBER OF DAYS COST (including GST) NUMBER OF DAYS COST (including GST)
1 $16.00 13 $132.00
2 $28.00 14 $140.00
3 $40.00 15 $148.00
4 $42.00 16 $156.00
5 $54.00 17 $162.00
6 $66.00 18 $168.00
7 $76.00 19 $174.00
8 $86.00 20 $180.00
9 $96.00 21 $186.00
10 $106.00 22 $192.00
11 $116.00 23 $198.00
12 $124.00 24 $204.00
13 $132.00 25 $209.00

For 25 or more days parking the additional charge per day is $5.00 (including GST). There is no limit to how many days a customer could park their car under this arrangement.

A customer who parked their car for 365 days would incur a $1,909 parking fee.

During this period there are 246 business days.

Reasons for Decision

The car parking fringe benefits provisions require the ascertainment of the amount of the lowest fee charged by a commercial parking station for all-day parking on a particular day. Section 39E of the FBTAA provides a daily rate equivalent where there is a periodic parking arrangement.

Section 39E of the FBTAA applies if the commercial parking station provides all-day parking in the ordinary course of business to members of the public on a weekly, monthly, yearly or other periodic basis.

When a customer parks their car for more than one day, the parking station is providing all-day parking on a periodic basis under section 39E of the FBTAA.

The facts show that the parking station has no limit to the number of days of continuous parking. Under this arrangement, it is accepted that customers could park their car on a longer term periodic basis and as a practical general rule for a continuous period of up to one year. In order to determine the lowest rate charged for all-day parking by the car park, on a particular day, the formula in section 39E of the FBTAA would be applied on the basis that a car had been parked for a continuous period of one year (365 days).

The parking station is taken to charge, on any particular day, a daily rate equivalent. This is calculated by use of the formula:


Total Fee/Business days in period

Total fee is the total fee charged by the operator in respect of all-day parking for the total days in that period.

Business days in period means the number of business days in that period.


Total Fee/Business days in period = 1909/246 = $7.76

The lowest rate charged for all-day parking on a particular day would therefore be $7.76.

In determining the amount of that lowest fee, it has been accepted that a customer has parked their car on a yearly periodic basis in these circumstances.

Accordingly, where a parking station charges a parking fee for all-day parking which becomes progressively lower after a number of days parking, the formula in section 39E of the FBTAA applies to determine the lowest fee the parking station is taken to charge for all-day parking on a particular day.

Amendment History

Date of Amendment Part Comment
30 September 2016 Reasons for decision Updated formula with correct calculation and minor wording change.

Date of decision: 15 February 2006

Year of income:31 March 2006

Legislative References:
Fringe Benefits Tax Assessment Act 1986
   section 39E

Related Public Rulings (including Determinations)
Taxation Ruling TR 96/26

Keywords
Car parking fringe benefits
Fringe benefits
Fringe benefits tax

Siebel/TDMS Reference Number: 4942751

Business Line: Private Groups and High Wealth Individuals

Date of publication: 31 March 2006

ISSN: 1445-2782

ATO ID 2006/93 history   Top  
   Date   Version 
   15 February 2006   Original statement   
 You are here ®  30 September 2016   Updated statement   


 


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