Car parking and fringe benefits – what should we do in the 2025/26 FBT return

A common question raised by TaxEd members and other attendees at the 2026 FBT Roadshow was what should they do regarding disclosure of car parking fringe benefits given the pending appeal decision in Toowoomba Regional Council v FCT [2025] FCA 161 (‘Toowoomba’).

(For those wanting a recap of the Toowoomba decision have a look at our summary of the case in the April 2024 TaxEd Update or follow-up article in the May 2024 TaxEd Update)

We have been paying FBT as per ATO view?

If you have been paying FBT based on the ATO view of what is a commercial car park (which currently can include carparks such as shopping centre carparks) it is reasonable to take a similar approach for the 2026 FBT year if the appeal decision is not handed down before the 2026 FBT return is lodged.

The ATO view took effect from the 2023 FBT year and is reflected in TR 2021/2.

Where an employer has been paying FBT based on the ATO view (since the 2023 FBT year) and the ATO appeal is unsuccessful it will be possible to lodge an objection against car parking fringe benefits incorrectly included in the 2023 and later FBT years. A 4-year window exists to lodge an objection meaning only from April 2027 onwards will employers potentially be out of time to object against overstated car parking fringe benefits included in the 2023 or later FBT years. There is also an ability to request the Commissioner’s discretion to extend the 4-year objection period where the surrounding circumstances warrant such. Given the lengthy appeal process involved in contesting the Toowoomba decision it would be hoped such discretion requests would be favourably granted (if required although employers are encouraged to take proactive action and act within the 4-year period).

We also note there is a 3-year window to seek an FBT refund via amendment of an earlier FBT assessment. As the 3-year limit is approaching for the 2023 FBT return (depending on when it was lodged) these options are open but the ATO may block any refund or amendment if the Toowoomba appeal decision has not been decided in favour of Toowoomba by the 3-year time limit date.

We haven’t been paying FBT as per the ATO view?

Unlike the 4-year objection rule for taxpayers, the FBT law contains a 3-year period in which the ATO can amend assessments meaning depending on when the 2023 FBT return was lodged the ATO’s amendment period in relation the 2023 FBT year is close to expiring. This is of relevance to employers who have chosen not to include car parking fringe benefits based on the Toowoomba decision.

Whilst a 6-year amendment period exists where there has not been full and true disclosure and there is an avoidance of tax , given any decision not to include car parking fringe benefits would have been based on the original Toowoomba decision this would seemingly not engage the 6-year extended review period.

Join us for the 2026 FBT Roadshow, covering key issues for Governments and NFPs | Brisbane, Darwin, Melbourne & Online | 17 March – 14 April 2026 | Click here for more information and to register >

If you would like to know more about membership or become a member, please visit our website for more information.

Subscribe to our newsletter for more updates and articles.

This article provides a general summary of the subject covered as at the date it is published. It cannot be relied upon in relation to any specific instance. TaxEd Pty Ltd and any person connected with its production disclaim any liability in connection with any use. It is not intended to be, nor should it be relied upon as, a substitute for professional advice.