We help our clients understand the complex rules around car parking fringe benefits and provide quality car parking rate reports for FBT returns. Order car parking rates for your FBT return.
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There are three methods of valuing car parking benefits:
• Lowest all-day commercial parking station fee
• Market value of car parking benefits, or
• Average commercial parking station fees.
All of these valuation methods are available where an employer has elected to use either the statutory formula or 12-week register methods of determining the taxable value. Otherwise the above valuation methods are limited to determining taxable value using the commercial parking station, market value and average cost methods respectively.
Lowest all-day commercial parking station fee
The lowest all-day commercial parking station fee is used to establish whether the employer has provided a car parking benefit. This valuation method is also used in the calculation of the taxable value of employer-provided car parking benefits using any of the following methods:
1. Commercial parking station method (section 39C)
2. Statutory formula method (section 39FC), and
3. 12-week register method (section 39GC).
Documentation
There are no specific record-keeping requirements in Division 10A. However, to establish whether a parking benefit has been provided and to value the parking benefit it will be necessary to document what parking stations within 1 km of the employer-provided parking are charging. The lowest all-day commercial parking station fee for each day a benefit is provided is required and therefore the lowest fee may vary throughout the FBT year.
Market value of car parking benefits
The market value method of valuing employer-provided car parking benefits may be used where the employer has chosen to calculate the taxable value using any of the following methods:
1. Market value method
2. Statutory formula method (section 39FC), and
3. 12-week register method (section 39GC).
Documentation
Before the lodgement of the annual FBT return employers are required to obtain a valuation report from a suitably qualified valuer in a form approved by the Commissioner. A suitably qualified valuer is a person with expertise in valuing parking facilities, either through relevant experience or by attaining relevant professional qualifications.
The Commissioner considers that at a minimum, a valuation report must include:
• The date of the valuation
• The precise description of the location of the car parking facilities valued
• The number of car parking spaces valued
• The value of the car parking spaces based on a daily rate
• The full name of the valuer and their qualifications
• The valuer’s signature, and
• A declaration stating the valuer is at arm’s length from the valuation.
The employer needs to obtain the valuation report annually before the date of lodgement of their FBT return for that year, or such later date as the Commissioner allows.
It is the employer’s responsibility to confirm the basis on which valuations are prepared. They must examine any valuation they suspect is incorrect or which considerably reduces their liability.
In addition to the valuation report, employers need to prepare a declaration relating to the FBT year that includes the number of car parking spaces available to be used by employees, the number of business days, and the daily value of the car parking spaces.
