This draft Ruling sets out when an employee can deduct transport expenses under section 8-1 of the Income Tax Assessment Act 1997. This includes the cost of travel by airline, train, taxi, car, bus, boat or another vehicle.
This Ruling explains that transport expenses incurred for ordinary travel between home and a regular place of work are not deductible. In contrast, transport expenses incurred by an employee is traveling between work locations usually are deductible. This Ruling also explains a number of special cases or exceptions to these general rules.
This Ruling also applies for the purposes of the Fringe Benefits Tax Assessment Act 1986in determining whether such expenses paid by the employer would have been ‘otherwise deductible’ if incurred by the employee.
This Ruling does not address:
The substantiation of transport expense.
Transport expenses related to self-education or study – refer to Taxation Ruling TR 98/9 Income tax: deductibility of self-education expenses incurred by an employee or a person in the business.
The deductibility of parking fees.
Employees carrying out itinerant work – refer to Taxation Ruling TR 95/34 Income tax: employees carrying out itinerant work – deductions, allowances and reimbursements for transport expenses..
Fringe benefits tax generally, except for the application of the ‘otherwise deductible’ rule.
An employee can only deduct a transport expense under section 8-1 to the extent that:
They incur the expense in gaining or producing their assessable income[4]
The expense is not of a capital, private or domestic nature
The applicable substantiation requirements satisfied.
For an expense to be incurred ‘in’ gaining or producing an assessable income it is both sufficient and necessary that the occasion of the expense should be found in whatever is productive of the assessable income.
Deductibility of transport expenses – general principles
Where the occasion of transport expenses can be found in the employee’s employment duties, the expenses will be incurred in gaining or producing the employee’s assessable income.
It has long been established that the term ‘incurred in gaining or producing assessable income’ is understood as meaning incurred ‘in the course of gaining or producing’ assessable income. Other ways that this has been expressed in the context of transport expenses, is that the employee is traveling ‘on work’, the travel is part of the employment the travel is an incident of the employment.
When the final Ruling is issued, it is proposed to apply both before and after its date of issue. However, the Ruling will not apply to taxpayers to the extent that it conflicts with the terms of settlement of a dispute agreed to before the date of issue of the Ruling. To the extent that there is any conflict between the final Ruling and draft Ruling TR 2017/D6, the Commissioner would have regard to the earlier draft in deciding whether to apply compliance resources in income years to which the earlier draft applies.
This draft ruling sets out when the provision of car parking is a car parking benefit for the purposes of the Fringe Benefits Tax Assessment Act 1986.
Background:
This Ruling replaces Taxation Ruling TR 96/26 Fringe benefits tax: car parking fringe benefits (now withdrawn). Chapter 16 of the Fringe benefits tax – a guide for employers (Employers’ guide) provides additional guidance to help employers calculate the taxable value of a car parking fringe benefit and provides practical examples.
Ruling:
Subsection 39A (1) prescribes the conditions which must be satisfied before a benefit is a car parking benefit.
When do you provide a car parking benefit?
You provide a car parking benefit on a particular day when between 7.00 am-7.00 pm:
A car is parked at a work car park for the minimum parking period.
An employee uses the car in connection with travel between their place of residence and primary place of employment at least once on that day.
The work car park is located at or ‘in the vicinity of the primary place of employment, on that day.
A commercial parking station located within a one-kilometer radius of the work car park used by the employee.
The ‘lowest representative fee’ charged by any commercial parking station for all-day parking within a one-kilometer radius of the work car park exceeds the car parking threshold (the car parking threshold requirement).
The parking is provided to the employee in respect of their employment, and
The parking is not excluded by the regulations. For example, car space is excluded if it is provided to a disabled employee who holds and displays a valid disabled person’s parking permit and the permit allows the employee to park in spaces that are designated for the exclusive use of a disabled person.
You do not have to be the employer to provide a car parking benefit as long as it is provided under an arrangement with the employer. Further, you can provide a car parking benefit in relation to a car where the use of that car is an exempt benefit.
A car that is parked at one or more work car parks on the same day, between 7.00 am-7.00 pm, may also satisfy the minimum parking period.
Ordinarily, where there is no evidence that the employee and employer are dealing with each other in any other capacity, the parking is provided to the employee in respect to oftheir employment.
All-day parking available to the public on payment of a fee
The term ‘public’ takes its ordinary meaning. A car park is offered to the public where car spaces are available to any member of the public. Contractual terms may restrict who may use the car park, for instance, an airport car park may be restricted to passengers and greeters of passengers. Such restrictions do not prevent the car park from being available to the public, provided any member of the public that accepts these restrictions can use the car park.
Date of effect
When the final Ruling is issued, it is proposed to apply to car parking benefits provided in FBT years commencing before and after its date of issue. In any case, this Ruling will not apply to taxpayers to the extent that it conflicts with the terms of settlement of a dispute agreed to before the date of issue of this Ruling (see paragraphs 75 to 76 of Taxation Ruling TR 2006/10).
You will receive guidance on how to prepare the 2020 FBT return and:
Learn how to identify and value all benefits
Work through the valuation methodologies for all benefit categories including Cars, Car Parking, Entertainment, Temporary & Permanent Relocations, Living Away From Home, Remote Area, Employee Expenses and Property
Gain an understanding of the key documentation requirements for claiming reductions, concessions, and exemptions
How to avoid the most common mistakes that organizations make
Discover ways that you can achieve real savings and reduce the tax liability for your organization
Attendees will be provided with:
A detailed 2020 FBT Technical Manual
Our 2020 FBT Planner Checklist
Our 2020 FBT Essentials Checklist
An attendance certificate for CPD/CPE purposes (6.25 hours)
Lunch, morning & afternoon tea
Opportunities to network with your peers and fellow FBT-preparers over lunch
Registrants also receive the following special offers:
Free access to the FBT Query service until 30 June 2020 – the sooner you register, the sooner you’ll have access to this valuable service from FBT Solutions
A free Fleet and FBT optimization review
A free Salary Packaging review
Preferential pricing for the FBT Solutions car parking valuation service
Receive a 20% discount on the FBT 2020 webinar program
Who should attend?
All personnel involved in the preparation or review of the 2020 FBT return, whether new to FBT or those requiring refresher training. This includes Tax Accountants, Financial Accountants, Payroll Managers and Staff, HR Managers and their teams.
