As the end of the Fringe Benefits Tax (FBT) year approaches once more, it seems a good time to provide a reminder of some of the Fringe Benefits Tax Updates which have occurred over the past year, particularly in relation to the electric vehicle exemption and the court cases around car parking benefits.
- FBT exemption for electric vehicles – applies from 1 July 2022 to zero or low emissions vehicles. It is important to note that although the private use of an eligible electric car is exempt from FBT, the value of the benefit must be included when working out whether an employee has a reportable fringe benefits amount. The ATO has recently issued a fact sheet for employers.
- Car parking (commercial car parking station) – following the decision of the Federal Court in FC of T v Qantas Airways Ltd, Taxation Ruling 2021/2 on car parking benefits (TR 2021/2), was updated to provide that from 1 April 2022, car parking facilities that charge penalty rates higher than commercial rates are now considered to be commercial parking stations for FBT purposes. Previously, employers have been able to exclude car parking benefits from FBT where the only car parking facilities within a 1-kilometre radius of the work car park were special purpose car parks (i.e. shopping centres, universities and hospitals). There types of car parks would generally charge a penalty rate to discourage all day parking.
- Car parking (primary place of employment) – In response to the decision in FCT v Virgin Australia Regional Airlines Pty Ltd, the ATO has issued an addendum to TR 2021/2, providing new commentary and an example on ‘’primary place of employment.’’ A reminder that in this case, the Full Federal Court held that an airline provided car parking fringe benefits to its flight and cabin crew when it contracted with car park operators for the provision of car parking spaces at the various airports.
- Small business car parking exemption – a reminder that small business are exempt from FBT on car parking benefits if the parking is not provided in a commercial car park, and for the 2022 FBT year the business’s gross total income was less than $10 million, or aggregated turnover was less than $50 million.
If you have any questions, please feel free to reach out.