ATO issues statement on FBT decision by Federal Court

The ATO has issued an interim decision impact statement on the recent Federal Court decision, Toowoomba Regional Council v Commissioner of Taxation [2025] FCA 161.

The decision examined whether a shopping centre car park was a commercial parking station as defined in subsection 136(1) of the Fringe Benefits Tax Assessment Act 1986. The Federal Court ruled in favour of Toowoomba Regional Council, determining that the Grand Shopping Centre car park was not a commercial parking station.

The ATO has since filed an appeal against the Federal Court decision in the Full Federal Court.

In its interim decision impact statement, the ATO advised taxpayers to continue lodging their FBT returns in accordance with the ATO view as set out in Taxation Ruling TR 2021/2 Fringe benefits tax: car parking benefits (TR 2021/2) and Chapter 16 of the FBT guide.

The ATO explained that its views in TR 2021/2 set out the way it will administer the law as it applies to commercial car parking arrangements.

Based on TR 2021/2, the ATO said that even if the car park has a primary purpose other than providing all-day parking and its fee structure discourages all-day parking through charging penalty rates, it can still be a ‘commercial parking station’ as defined in subsection 136(1).

In the Federal Court decision, Justice John Logan concluded that the range of free parking available at the Grand Shopping Centre car park was inconsistent with it being operated commercially for profit as a standalone car parking facility.

Justice Logan also noted there were various council-operated car parking facilities in the Toowoomba CBD, which offered all-day parking fees up to a maximum of a range between $6 and $9 per day, which was in stark contrast to the Grand Central car parking facilities.

"One also sees in respect of car parking at Grand Central, a range of other scenarios in which free parking is available, or parking at a flat rate, which bears comparison with the range for all day parking which is within the range of all-day parking offered by the Council at its facilities," Justice Logan said.

"These facts, in my view, make it obvious that the Grand Central car parking facility is being operated to a different end to a commercial car parking facility."

Justice Logan said it was obvious from the range of fees that the car park was being operated to the end of "complementing the operation of the shopping centre".

The Tax Office said that until the appeal process is finalised, it did not intend to revise its view relating to car parking fringe benefits and the meaning of commercial parking station, as set out in TR 2021/2 and Chapter 16 of FBT guide.

"Pending the outcome of the appeal process, we are administering the law in accordance with the current ATO view relating to car parking fringe benefits and the meaning of commercial parking station, as set out in TR 2021/2 and Chapter 16 of the FBT guide," it said.

Where taxpayers have lodged an application for a private ruling before the appeal process in this case is finalised, the ATO said it would make the private ruling in accordance with the ATO view as set out in TR 2021/2 and Chapter 16 of the FBT guide.

The Tax Office also said that until the appeal process was finalised for the case, it did not intend to finalise objection decisions in relation to whether a car parking facility is a commercial parking station.

"However, if a decision is required to be made (for example, because a taxpayer gives notice requiring the Commissioner to make an objection decision), that objection decision will be made in accordance with the ATO view as set out in TR 2021/2 and Chapter 16 of the FBT guide," it said.