BDO submission on ruling TR 2019-D5 and Chapter 16 of the ATO’s FBT Guide for Employers

28 January 2020

We refer to the ATO’s invitation to consult on draft taxation ruling TR 2019/D5: Fringe benefits tax: car parking benefits, which was released on 13 September 2019 and the accompanying draft update to chapter 16 of the ATO’s fringe benefits tax guide for employers.

BDO believe that the main issue with the ATO’s revised approach is that it will be difficult, if not impossible, for an employer to know whether particular car parks are ‘run to make a profit’. We therefore request that the ATO provide guidance on how employers can identify whether a particular car park is run to make a profit including a potential safe harbour. Our other observations on the ruling and recommendations are contained in Appendix 1.

BDO appreciate that the fundamental reason for proposed update to chapter 16 is the release of the ruling.  However, we note that, the guide gives little guidance on how an employer can determine whether a particular car parking station is run to make a profit. In fact, some of the examples in the new Chapter 16 make a statement that a particular car parking station is a commercial car parking station without any reference to how it was determined that the car parking station is run to make a profit in accordance with paragraph 16 of TR 2019/D5. Appendix 2 contains our detailed observations on the Chapter 16 rewrite.