January 13, 2020
Taxable Benefit Trends Continue To Get Worse – Australia Going After Free Parking At Your Office & Cellphones Next
Fringe benefits tax: Car parking benefits
The Commissioner of Taxation recently issued Draft TR 2019/D5 (Draft Ruling) which sets out when a car parking benefit is provided for the purposes of the Fringe Benefits Tax Assessment Act 1986 (Act). The Draft Ruling will replace Taxation Ruling TR 96/26 (TR 96/26), which has now been withdrawn.
The Draft Ruling reflects the Commissioner’s current position that a car park may still be considered a commercial parking station even if its fee structure discourages all-day parking, provided certain conditions are satisfied. This reverses the Commissioner’s previous position under TR 96/26. The Commissioner’s revised position will only apply to car benefits provided from 1 April 2020. Read more
Section 39A(1) of the Act prescribes a number of conditions which must be satisfied before a car parking benefit is taken to constitute a benefit provided to an employee.
The Draft TR provides that an employer will provide a car parking benefit on a particular day when:
• a car is parked at one or more ‘work car parks’ for more than 4 hours between 7:00am-7:00pm;
2.5 Years ago a very prestigious law firm here in Canada saw a very large uptick in CRA (Canadian tax authorities) enforcement of “free parking” at your employer.
Since then it has been very well reported that if you get “free parking” at your office it is deemed to be a taxable benefit.
The Head of Tax at this law firm upon discovering 2.5 years ago the changes to the tax code here in Canada (Jamie Golombek warned all Canadians in Canada’s National Post) around cellphones; said that going after cellphones (historically untaxed taxable benefit) is at the same stage as going after parking (historically untaxed taxable benefit)
What does this have to do with Australia?
Typically the G-20 share best practices in taxation policy; and we have reported on numerous occasions the global trend on cellphone taxable benefits/cellphone taxation for employers.
It would seem that Australia is now taking a page out of the Canadian playbook in going after parking just like Canada.
We are pretty confident that the next focus area will be cellphones.
Governments around the world are all bankrupt and they are going after historically untaxed taxable benefits; and increasing enforcement dramatically.