Taxation Laws Amendment (FBT Cost of Compliance) Act 1995 (145 of 1995)

Schedule 2   CAR PARKING

Part 1   AMENDMENT OF THE FRINGE BENEFITS TAX ASSESSMENT ACT 1986

Division 3   Alternative methods of valuing car parking benefits

5   After Subdivision B of Division 10A of Part III

Insert in Division 10A:

"Subdivision C-Statutory formula method-spaces

The key principle

"39F. Under this Subdivision, an employer may elect to calculate the

value of certain car parking fringe benefits by using a statutory

formula based on the number and value of spaces available to employees

covered by the election.

Spaces method of calculating total taxable value of car parking fringe

benefits

Election

"39FA.(1) If a provider provides one or more car parking benefits in

respect of one or more employees of an employer in a particular FBT

year, the employer may elect that this Subdivision applies to the

employer's car parking fringe benefits for some or all of the employees

for that FBT year.

Employer must specify employees covered by election

"(2) The employer must specify that the election covers:

(a) all the employees; or

(b) all employees of a particular class; or

(c) particular employees.

Total value of car parking fringe benefits

"(3) Despite any other provision of this Act (other than section

39FB) the total taxable value of the employer's car parking fringe

benefits for employees covered by the election for the FBT year is the

amount worked out using the spaces method under subsection (4).

Note: Section 39FB covers the situation where the number of spaces

available to employees exceeds the number of employees.

Method

"(4) The spaces method is:

Step 1: Work out an amount using the following formula, for each space

for which there is, in the FBT year, at least one car parking benefit

for an employee covered by the election:

Number of days in

availability periods in

relation to space

Daily rate amount X X 228

366

Step 2: Work out the total of all the amounts calculated under Step 1

(the total statutory benefit).

Step 3: Subtract from the total statutory benefit the sum of all

relevant recipients contributions.

Note 1: Section 39FC defines daily rate amount.

Note 2: Section 39FD defines availability period.

Note 3: Section 39FE defines relevant recipients contribution.

"(5) The election is of no effect if, in working out the daily rate

for a space, the fees referred to in subsection 39DA(3) are not

representative (see section 39AB).

Number of spaces exceeds number of employees

"39FB.(1) This section applies if, throughout the parking period (see

subsection (5)), the average number of employees covered by the

election is less than the average number of spaces (eligible spaces)

for which there is an availability period.

Formula to reduce total statutory benefits

"(2) If this section applies, the total statutory benefit (see Step 2

in subsection 39FA(4)) is multiplied by the following fraction:

Average number of employees

Average number of eligible spaces

"(3) The average number of employees is:

Number of employees covered Number of employees

by election at the beginning + covered by election at the end

of the parking period of the parking period

2

"(4) The average number of eligible spaces is:

Number of eligible spaces at

the beginning of the parking + Number of eligible spaces at

period the end of the parking period

2

"(5) The parking period is the period:

(a) beginning on the first day in the FBT year on which the parking

of a car in any space referred to in subsection 39FA(4) gives rise to a

car parking fringe benefit of the employer for an employee covered by

the election; and

(b) ending on the last day in the FBT year on which the parking of a

car in any space referred to in subsection 39FA(4) gives rise to a car

parking fringe benefit of the employer for an employee covered by the

election.

Number of employees and number of spaces must be representative

"(6) This section does not apply if the number of employees or the

number of eligible spaces referred to in subsections (3) and (4) are

not representative (see subsection (7)).

Meaning of not representative

"(7) A number of employees, or a number of eligible spaces, as the

case requires, is not representative if the number of employees, or

eligible spaces, as the case requires, is substantially greater or less

than the average number throughout whichever of the following periods

is chosen by the employer:

(a) the 4 week period ending on the first day of the parking period;

or

(b) the 4 week period beginning on the last day of the parking

period.

Meaning of daily rate amount

"39FC. The daily rate amount for a space is the amount that would be

worked out using whichever of the following methods that the taxpayer

chooses:

(a) the commercial parking station method;

(b) the market value method;

(c) the average cost method;

as the taxable value of the car parking fringe benefit for the space,

if there were no recipients contribution.

Meaning of availability period

"39FD. An availability period for a space begins on the first day in

the FBT year on which there is a car parking benefit for the space for

an employee covered by the election and ends on the last day in the FBT

year on which there is a car parking benefit for the space for an

employee covered by the election.

Meaning of relevant recipients contribution

"39FE. A relevant recipients contribution is a recipients

contribution in respect of any car parking fringe benefit provided in

respect of the employment of an employee covered by the election for

the FBT year.

"Subdivision D-12 week record keeping method The key principle

"39G.

Under this Subdivision, an employer may keep a 12 week register of car

parking provided to employees. An employer who keeps such a register

may elect that the total value of certain car parking fringe benefits

for an FBT year for which the register is valid is to be determined in

accordance with the register.

Employer may elect to use 12 week record keeping method

"39GA.(1) An employer may elect that this Subdivision applies to the

employer's car parking fringe benefits for some or all of the

employer's employees for that FBT year if the employer has a valid

register for that FBT year covering those employees.

"(2) The employer must specify that the election covers:

(a) all the employees; or

(b) all employees of a particular class; or

(c) particular employees.

Value of fringe benefits for year

"39GB. Despite any other provision of this Act (other than this

section), the total taxable value of the employer's car parking fringe

benefits for employees covered by the election for the FBT year is the

amount worked out using the formula:

((Total value of car ) Number of days

((parking benefits (register) X 52) car parking

( 12) availability periods

X 366

Meaning of total value of car parking benefits (register)

"39GC. The total value of car parking benefits (register), in

relation to the FBT year, means the amount that would be the total

taxable value of car parking fringe benefits for employees covered by

the election for the 12 week period for which a register is kept,

assuming that:

(a) the register had been kept in that FBT year; and

(b) the value of the benefits were calculated in accordance with the

information in the register; and

(c) the value of the benefits were calculated using whichever of the

following methods that the taxpayer chooses:

(i) the commercial parking station method;

(ii) the market value method;

(iii) the average cost method.

Meaning of car parking availability period

"39GD. The car parking availability period is the period:

(a) beginning on the first day in the FBT year on which there is a

car parking benefit for an employee covered by the election; and

(b) ending on the last day in the FBT year on which there is a car

parking benefit for an employee covered by the election.

Choosing the 12 week period for a register

"39GE.(1) The register must be kept for a continuous period of at

least 12 weeks throughout which car parking benefits are provided to

employees covered by the election.

"(2) The period for which the register is kept must be representative

of usage for the first FBT year for which it is valid.

"(3) If subsection (1) or (2) is not satisfied, the register is not

valid.

FBT years for which register is valid

12 week period in one FBT year

"39GF.(1) If the 12 week period begins and ends in the one FBT year,

the register is valid for that FBT year and, subject to subsections (3)

and (4), for each of the 4 FBT years immediately following that year.

12 week period over 2 FBT years

"(2) If the 12 week period begins in one FBT year and ends in another

FBT year, the register is only valid for the second FBT year and,

subject to subsections (3) and (4), for each of the 4 years immediately

following that year.

When register ceases to be valid-increase in benefits

"(3) A register that is valid for an FBT year ceases to be valid at

the end of that FBT year if the number of car parking fringe benefits

for the employer for employees covered by the election increases by

more than 10% on any day in that FBT year.

Note: This means that if the number of car parking fringe benefits

increases by more than 10%, the employer will have to keep a new

register in the FBT year following the year of the increase if the

employer wants to use the method in this Subdivision for that following

year.

When a register ceases to be valid-later register

"(4) A register that is valid for an FBT year ceases to be valid if

there is a later valid register for that FBT year that covers the same

employee.

Matters to be included in register

"39GG.(1) The register must include details of the following:

(a) the date on which each car covered by subsection (4) was parked;

(b) whether the car was parked for a total that exceeds 4 hours;

(c) whether the car travelled between the place of residence of an

employee covered by the election and his or her primary place of

employment on that day;

(d) the place where the car was parked.

"(2) The person responsible for making entries in the register must

make the entry as soon as practicable after he or she knows the details

required by subsection (1).

"(3) If subsection (1) or (2) is not satisfied, the register is not

valid.

"(4) A car is covered by this subsection if:

(a) a car benefit relating to the car is provided on a day during the

12 week period to an employee covered by the election in respect of the

employee's employment; or

(b) the car is owned by, or leased to, an employee covered by the

election at any time during the 12 week period; or

(c) the car is made available by another person to an employee

covered by the election at any time during the 12 week period where:

(i) the other person is not the employee's employer; and

(ii) the other person did not make the car available under an

arrangement to which the employee's employer is a party.

Fraudulent entries invalidate register

"39GH. For the purposes of this Act, a register is not valid if the

register contains an entry that is false or misleading in a material

particular.".