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The Full Court of the Federal Court (Perram, Robertson and Davies JJ) has dismissed Qantas' appeal and upheld the Commissioner's appeal from the decision of the AAT in Qantas Airways Limited and FCT [2014] AATA 316.

The case concerned whether car parking spaces provided by Qantas to some members of its staff as part of their remuneration was a "car parking fringe benefit" as defined in the FBTAA 1986 and therefore whether Qantas was liable to pay fringe benefits tax (FBT). The AAT concluded that Qantas was liable to pay FBT in respect of the provision of the car spaces, apart from those at Canberra Airport.

Qantas’ argument that the car parking spaces were not a "car parking fringe benefit" relied on the exception in s 39A(1)(a)(ii) FBTAA 1986 that there should be a "commercial parking station" within a kilometre of the premises at which the car spaces were provided. Qantas did not dispute that there are commercially operated parking stations within a kilometre of its premises at each airport but submitted that these parking stations were not "commercial parking stations" because they do not provide car spaces to the public in the ordinary course of their businesses.

Qantas' argument was explained by the Full Court as follows:

"Because the public spoken of in the [definition of "commercial parking station" in s 136(1)] is to be understood as being the public including persons commuting between their homes and their ordinary places of work and not some broader public constituted by anyone using an airport parking station; and, because, correspondingly, the ordinary business of airport parking stations is the provision of parking spaces to air passengers and those who might deposit or collect such wayfarers at or from airports."

Qantas' argument was rejected for three reasons, the first of which was explained by the Court as follows:

"The statute does not operate on the basis that the commercial parking station has to be something which the employee might or could use. This is made clear by s 148(1)(c) of the Assessment Act, which provides that a benefit to the employee within the meaning of the Assessment Act will have been provided, whether or not the benefit is surplus to the needs or wants of that employee. The condition that there be a commercial car parking station within a one kilometre radius of the employer’s business premises to constitute a car parking fringe benefit is not a proxy for the value of the benefit to the employee of receiving an actual parking space at the employer’s business premises, but a proxy for determining the taxable value of a benefit provided by the employer to an employee on which tax on the employer is imposed. This is confirmed in the reference in the definition to any of the car parking spaces being available in the ordinary course of business to members of the public for all-day parking on that day on payment of a fee. So understood, it is apparent that the word ‘public’ should be given its ordinary meaning and there is no rationale for imputing into the definition a requirement that the commercial parking station be one that employees of the employer commuting to work by car would or could in fact use."

The Full Court therefore upheld the AAT's decision and dismissed Qantas' appeal.

In relation to Canberra Airport, the airport car park was available only to "airline passengers and meeters and greeters of airline passengers", and thus not staff. The AAT held that therefore it was not available to "members of the public" as required by the definition of "commercial parking station" in s 136(1) FBTAA 1986. The Full Court disagreed saying, at para 21:

"It was, therefore, incorrect for the Tribunal to seek to ascertain the meaning of the word ‘public’ in the definition of ‘commercial parking station’ by asking whether employees could, in fact, use the posited parking stations. It was not to the point that employees do not, in fact, use airport car parks nor is it to the point that they are prevented from doing so. The significance of the existence of a nearby commercial parking station is that it signifies the presence of value in the employer’s car spaces and not that it provides an alternative to the staff."

The Commissioner's appeal was upheld.

FCT v Qantas Airways Limited [2014] FCAFC 168 (Full Court, Federal Court; Perram, Robertson and Davies JJ; 9 December 2014).

TAXVINE COMMENT: In Taxation Ruling TR 96/26, the ATO excludes shopping centre car parks from the concept of a "commercial parking station" - see para 81. In light of this decision, this exclusion must now be in doubt.


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