Talking Tax – Issue 179

Fringe benefits tax: Car parking benefits

The Commissioner of Taxation recently issued Draft TR 2019/D5 (Draft Ruling) which sets out when a car parking benefit is provided for the purposes of the Fringe Benefits Tax Assessment Act 1986 (Act)The Draft Ruling will replace Taxation Ruling TR 96/26 (TR 96/26), which has now been withdrawn.

The Draft Ruling reflects the Commissioner’s current position that a car park may still be considered a commercial parking station even if its fee structure discourages all-day parking, provided certain conditions are satisfied.  This reverses the Commissioner’s previous position under TR 96/26.  The Commissioner’s revised position will only apply to car benefits provided from 1 April 2020.

Section 39A(1) of the Act prescribes a number of conditions which must be satisfied before a car parking benefit is taken to constitute a benefit provided to an employee.

The Draft TR provides that an employer will provide a car parking benefit on a particular day when:

• a car is parked at one or more ‘work car parks’ for more than 4 hours between 7:00am-7:00pm;
   o *A work car park is a business premises or associated premises of the   provider. For instance, where the employer obtains exclusive occupancy rights of a specific car space.
• an employee uses the car in connection with travel between their place of residence and primary place of employment;
• the work car park is located at or 'in the vicinity of the primary place of employment;
• a commercial parking station is located within a one kilometre radius of the work car park used by the employee;
   o *A commercial parking station is a permanent commercial car parking facility that makes all-day parking available to the public on payment of a fee and does this in the ordinary course of business. On-street parking is excluded.
• the lowest representative fee charged by any commercial parking station for all-day parking within that 1 km radius exceeds the car parking threshold;
• the parking is provided to the employee in respect of their employment; and
• the parking is not excluded by the regulations.

Once the Draft Ruling is finalised, it is proposed to have retrospective effect (except to the extent that it conflicts with the terms of settlement of a dispute agreed to before the date of issue).

Definition of ‘Significant Global Entity’ extended

The Government announced in the 2018-19 Budget that it was extending the definition of ‘Significant Global Entity’ (SGE).

The Treasury Laws Amendment (Measures for Consultation) Bill 2019 (Draft Legislation) has been released to implement this announcement.

Currently, an SGE is an entity which has annual global income of $1 billion or more, or which is part of a group of entities consolidated for accounting purposes that has annual global income of $1 billion or more.  The consequences of being an SGE are significant, as they are subject to a number of special reporting obligations and integrity measures.

The meaning of SGE is to be expanded by the Draft Legislation to include the concept of a ‘notional listed company group’.  This is a group of entities that would be required to consolidate for accounting purposes as a single group under the applicable accounting rules if:

  • any member of the group was a listed company; and
  • exceptions to requirements about when a group of entities would be required to consolidate, including materiality rules, were disregarded.

If a global parent entity is a member of a notional listed company group, its annual global income (for the purposes of determining whether they are an SGE) will be the total annual income of all members of the group as reported in the most recent global financial statements.

If there are no global financial statements for a period, its annual global income for that period will be the amount that would have been its annual global income if such global financial statements had been prepared.

Submissions on the Draft Legislation are due on 11 December 2019.

Decision impact statement: Bluescope Steel

On 12 November 2019, the Commissioner issued a decision impact statement (DIS) on the recent Full Federal Court case, Bluescope Steel (AIS) Pty Ltd v Australian Workers' Union [2019] FCAFC 84, in which the Commissioner of Taxation was granted leave to intervene.

The DIS outlines the Commissioner’s response to the case as it relates to the meaning of 'ordinary time earnings' (OTE) and 'ordinary hours of work' as used in the Superannuation Guarantee (Administration) Act 1992 (Cth) (SGAA).

The Full Federal Court concluded that the components of a worker’s annualised salary that relate to additional hours and public holidays were not OTE under the SGAA.


At first instance, the Federal Court in Australian Workers' Union v BlueScope Steel (AIS) Pty Ltd [2018] FCA 80 held that BlueScope had contravened terms of various industrial awards by not making superannuation contributions relating to the ‘additional hours’ and ‘public holidays’ components of their employees’ annualised salaries. 

In arriving at this conclusion, the Federal Court determined that the ordinary hours of work of BlueScope’s employees included the additional hours and public holidays provided for in the relevant industrial awards and agreements. 

The Commissioner was granted leave to intervene in the Full Federal Court appeal, to be heard on issues relating to:

  • the meaning of the terms 'ordinary time earnings' and 'ordinary hours of work'; and
  • the general operation of the SGAA and the Commissioner's powers and responsibilities under that Act.

The Full Court determined the interpretation of the terms ‘ordinary time earnings’ and ‘ordinary hours of work’ do not include the components of a worker’s annualised salary that relate to additional hours and public holidays.

Bills awaiting Royal Assent

The following Bills are now awaiting Royal Assent:

State Taxation Acts Further Amendment Bill 2019 (Vic)

This Bill has now passed through the Victorian Parliament without amendment.  See Talking Tax Issue 176 for a full update on the notable changes relating to vacant residential land tax, insurance duty, primary production land exemption and the young farmers duty concession.

Treasury Laws Amendment (International Tax Agreements) Bill 2019

This Bill amends the International Tax Agreements Act 1953 (Cth) to:

  • give legislative authority to the Convention between Australia and Israel for the elimination of double taxation with respect to income tax and the prevention of tax evasion and avoidance; and
  • correct an incorrect cross-reference to the specific source rule that applies in respect of the earlier agreement with Germany.

It also amends the Income Tax Assessment Act 1997 (Cth) to introduce a deemed source of income rule to ensure that Australia can exercise its taxing rights under the convention and future international tax agreements.

The above amendments will commence on the day after they receive Royal Assent.

This article was written with the assistance of Anne Wong, Law Graduate. 


Todd Bromwich

Todd is a taxation lawyer with experience in charity law, general commercial matters, trust law and estate planning.

Michael Parker

Michael is a tax lawyer who specialises in tax disputes, capital gains tax, business sales and acquisitions and restructuring.

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