The ATO has finally released the long awaited ruling to provide clarification to employers that provide FBT car parking benefits to their employees in response to two Full Federal Court decisions – Virgin Blue Airlines Pty Ltd v FCT [2010] FCAFC 137 and FCT v Qantas Airways Ltd [2014] FCAFC 168.

By way of background, the Qantas case, which the ATO won, focused on the meaning of the word “public” in relation to commercial parking stations. The Full Court decided that the word “public” should be given its ordinary meaning and that car parks with restrictions on who could use them could still be public car parks. In doing so, it also distinguished the case from Virgin Blue.

This new ruling states that a commercial car parking facility takes on its ordinary meaning and includes but is not limited to a purpose-built complex designed for car parking (including parking provided as part of an office or apartment building), or an area of land dedicated or adapted to providing car parking (including on-street parking).

Further, a parking facility will be considered to be a commercial car parking facility if it is operated by a car parking operator. This includes a parking facility that exists within another complex (ie 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.

The ATO notes that generally if a parking facility displays two or more of the following characteristics, it will be considered a commercial car parking facility:

• has clear signage visible from the street advertising that paid parking is available;
• has mechanisms to control who can enter and/or exit the parking facility, or park at the facility, including the use of boom gates, “pay and display” ticketing machines etc; and
• charges more than a nominal fee for paid parking, including charging a user for parking which is not all-day parking (ie parking at an hourly rate).

This new definition of commercial car parking facility differs from the previously withdrawn ruling TR 96/26, which expressed the view that car parking facilities that have a primary purpose other than providing all day parking were not commercial parking stations. This meant that previously those car parks that charge penalty rates significantly higher than the rates chargeable for all-day parking at commercial all-day parking facilities were not considered to be commercial parking stations. This is no longer the case for car parking benefits provided on or after 1 April 2022.

Example

A shopping centre provides dedicated car spaces in a multi-levelled structure that is attached to a shopping complex. The facility is operated by the landlord of the shopping centre and there is licence plate recognition functionality at each entrance and boom gates at each exit. Free parking is available for the first 2 hours after which parking costs $7 with a maximum daily charge of $60. The signage to advertise the car parking is available is visible from the street and available at each entrance. Under the new ruling, this will most likely be considered to be a commercial car parking facility.