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ATO Interpretative Decision

ATO ID 2012/18

Fringe Benefits Tax

Exempt benefits: reimbursement of parking fees - remote area employees
FOI status: may be released

CAUTION: 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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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 an employer reimburses an employee for fees incurred to park the employee's car at the local airport whilst the employee is working interstate at a remote location, will the reimbursement of the parking fees constitute an exempt benefit under paragraph 58G(1)(a) of the Fringe Benefits Tax Assessment Act 1986 (FBTAA)?

Decision

Yes. The reimbursement of the parking fees will constitute an exempt benefit under paragraph 58G(1)(a) of the FBTAA.

Facts

An employee's usual place of residence is situated in a major Australian city.

The employee's primary place of employment is located at a mine site in a remote locality interstate.

The employee works under a roster system which requires the employee, on a regular basis, to work for a number of days followed by a number of days off.

At the commencement of each rostered period of working days, in order to get to the place of employment, the employee drives to the local airport and leaves their car at the airport car park and in so doing incurs car parking fees.

The employee flies interstate and catches a connecting flight to a township near the mine site.

At the completion of each rostered period of working days, the employee returns to his usual place of residence.

The employer reimburses the employee for the parking fees incurred at the airport.

The employer is not a non profit organisation that could consider the application of either subsections 58G(2) or 58G(3) of the FBTAA.

Division 10A - Car parking fringe benefits, of the FBTAA, does not apply in these circumstances for a number of reasons including that the employee's car is not being parked at or in the vicinity of the employee's primary place of employment.

Reasons for Decision

Where an employer reimburses an employee for an expense incurred by the employee in these circumstances, an expense payment benefit can arise. However, in accordance with paragraph 58G(1)(a) of the FBTAA an expense payment benefit will be an exempt benefit where:

(i)
the recipients expenditure is in respect of the provision of motor vehicle parking facilities ; and
(ii)
the benefit is not an eligible car parking expense payment benefit (emphasis added).

'Motor vehicle parking facilities' is not a defined term in the FBTAA. It is considered that any defined area which may be utilised for the purposes of parking motor vehicles would qualify as a 'motor vehicle parking facility'.

Where the employee has incurred fees for parking a car at the airport car park, the employee has incurred expenditure in respect of the provision of motor vehicle parking facilities. In so doing the requirement of subparagraph 58G(1)(a)(i) of the FBTAA has been satisfied.

The term 'eligible car parking expense payment benefit' is a defined term. For a benefit to be an 'eligible car parking expense payment benefit', paragraph (c) of the definition of the term in subsection 136(1) of the FBTAA requires that all of the following conditions must be satisfied:

(i)
on that day the employee has a primary place of employment;
(ii)
on that day, the car was parked for one or more daylight periods exceeding four hours in total at, or in the vicinity of, that primary place of employment;
(iii)
the whole or a part of the recipients expenditure is in respect of the provision of the parking facilities to which that parking relates;
(iv)
on that day, the car was used in connection with travel by the employee between the place of residence of the employee and that primary place of employment;
(v)
the provision of parking facilities for the car during the period or periods is not taken under the regulations to be excluded from this definition;
(vi)
the day is on or after 1 July 1993.

As the employee has parked the car at the local airport and the employee's primary place of employment is interstate, subparagraph (ii) of the definition has not been satisfied. Therefore, the expense payment benefit does not qualify as an 'eligible car parking expense payment benefit'. As a consequence the requirement of subparagraph 58G(1)(a)(ii) of the FBTAA has been met.

Accordingly the reimbursement of the parking fees will constitute an exempt benefit under paragraph 58G(1)(a) of the FBTAA.

Note: If the benefit was provided by way of a residual benefit rather than an expense payment benefit and the facts were otherwise the same, the residual benefit would be exempt under paragraph 58G(1)(b) of the FBTAA.

Date of decision:  7 March 2012

Year of income:  Year ending 31 March 2012

Legislative References:
Fringe Benefits Tax Assessment Act 1986
   subsection 58G(1)
   subsection 136(1)

Keywords
Fringe Benefits Tax
Exempt Benefits

Siebel/TDMS Reference Number:  1-3LJQFDK; 1-BDS3Z0C

Business Line:  Private Groups and High Wealth Individuals

Date of publication:  16 March 2012
Date reviewed:  10 May 2017

ISSN: 1445-2782


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