Government reinstates FBT parking exception
The government will review the definition of a “commercial parking lot” to reinstate a previously understood application of employee benefit tax.
The FBT applies to parking provided by employers to their employees where there is alternative commercially available parking.
Deputy Treasurer Michael Sukkar said it was previously understood that car parks which effectively charged penalties for all-day parking (to encourage shorter stays) would not represent genuine alternative parking arrangements for commuters and should not therefore not trigger passive FBT.
“Recent court decisions have overturned that understanding, so any further paid parking would trigger liability,” he said.
“These rulings were reflected in an ATO tax ruling to be effective April 1, 2022.”
He said the government would consult with stakeholders and identify changes to the definition of “commercial parking station” with a view to restoring the previously understood interpretation, which better reflected the policy intent of the law.
This would reduce the potential burden of FBTs on some employers, helping them attract employees to the workplace.