The ATO has released the Taxation Determination 2019/9, which outlines changes to the fringe benefits tax (FBT) car parking threshold.
The car parking threshold for the year commencing on 1 April 2019 is $8.95. This replaces the amount of $8.83 which applied to the FBT year ended 31 March 2019. The increase has been set by adjusting the previous year amount by a factor equivalent to the movement in the Consumer Price Index (1.3%).
Section 39A of the Fringe Benefits Tax Assessment Act 1986, sets out a number of conditions that must be met before car parking facilities provided by an employer to their employees will be subject to FBT. These conditions include:
- A commercial car parking station is located within a one-kilometre radius of the employer-provided car park.
- The lowest fee charged by the car park operator is more than the car parking threshold.
- The car is parked for more than four hours between 7am and 7pm on any day.
There are circumstances where car parking benefits are exempt from FBT. These exemptions apply to:
- Employers who meet the conditions of a small business entity.
- Institutions of certain research, education, religion and charity.
- Employees with a disability (irrespective of the type of employer).
The small business car parking benefits exemption applies where all of the following conditions are satisfied:
- The parking is not provided in a commercial car park.
- The employer qualifies as a small business with a gross total income for the last income year before the relevant FBT year of less than $10 million.
- The employer is not a government body or listed public company.