FBT and car parking – a further update

Following the decision in Toowoomba Regional Council v Commissioner of Taxation [2025] FCA 161, the ATO has appealed to the Full Federal Court and released an interim decision impact statement.

We covered the outcome of the case in a recent article for TaxEd members – click here.

In summary, the Federal Court held that the shopping centre car park in question was not a commercial parking station and as such, is not relevant when considering whether a car parking fringe benefit arose. The decision turned on the meaning of the word ‘commercial’ and preferred (between alternate meanings) the requirement for a profit-making purpose. The apparent availability of significant free/low cost parking was held as inconsistent with it being operated commercially for profit.

The interim decision impact statement confirms the ATO will, pending the outcome of the appeal, maintain the view as set out in Tax Ruling TR 2021/2.

TR 2021/2 states that even if the car park has a primary purpose other than providing all-day parking and a fee structure that discourages all-day parking (through charging penalty rates), it can still be a ‘commercial parking station’. As such, a shopping centre car parking station would likely be considered a commercial parking station.

Where to from here?

In the interim decision impact statement, the ATO states taxpayers should lodge 2024/25 FBT returns in accordance with the ATO view as set out in TR 2021/2 and Chapter 16 of the ‘Fringe Benefits Tax – a guide for employers’.

The ATO also confirms it will not finalise any objection decision in relation to whether a car parking facility is a commercial parking station until the appeal process is complete. If required to determine an objection before the appeal process is complete, the position taken will be in line with TR 2021/2.

Further, the ATO advises any private rulings determined before the appeal process is complete will be determined in line with TR 2021/2.            

As discussed in our recent article, pending the outcome of the appeal, taxpayers can either:

1. choose to apply the ATO view for the 2024/25 FBT return with the prospect of amendments/refunds if the ATO lose the appeal; or
2. apply the decision for the 2024/25 FBT return with risk that if the ATO win the appeal, amendment of the FBT return may be required with interest/penalties imposed.

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