Taxation Law Case Study: Fringe Benefit Tax on Car Parking Analysis

This case study delves into the intricacies of Fringe Benefit Tax (FBT) within the Australian taxation system, with a primary focus on car parking benefits and small business exemptions. It begins by defining fringe benefits as non-salary payments from employers to employees and outlines various types of such benefits. The analysis then concentrates on the criteria for car parking FBT, detailing the different methods for calculating taxable value, including the commercial parking station method, market value method, average cost method, statutory formula method, and the 12-week record-keeping method. The study also explores the small business car parking exemption and presents an issues and analysis section, referencing the Qantas Case v FCT 2014 as a relevant example. The study concludes with recommendations and a summary of the key findings, providing a comprehensive overview of FBT related to car parking and exemptions. Desklib provides a platform for students to access this and other solved assignments for academic support.

Taxation Law – Fringe Benefit Tax
I. Introduction (200)
In Australian Taxation law, one of the most important topics that required to be studied in
depth is the fringe benefits tax. Principally, fringe benefits can be explained as special
‘payment’ offered by the employer to the employee which is not in a form of salary or wages.
The employees who can receive fringe benefits are not necessarily current employees but
they can be former or future employees. There are many different types of fringe benefits
II. Car Parking FBT Criteria (500)
III. Taxable Value Calculation Methods (1000)
In the given circumstance where all the criteria are met, employer are held liable to pay fringe
benefit tax for each benefit that they have given to their employees. There are five different
methods of calculating the taxable value of a car parking fringe benefit as below:
1) The “commercial parking station’ valuation method
2) The “market value” method
3) The “average cost’ method
4) The “statutory formula” method
5) 12 weeek record keeping method
The first method is known as the ‘commercial parking station’ valuation method. In this
method, taxable value of a car parking fringe benefit is calculated based on the lowest fee
charged by any commercial parking facilities which operated within 1 kilometre from the
provided car parking premise of the employer. In section () of the Fringe Benefits Tax
Assessment Act 1986, a car parking facility is prescribed as a commercial business operated
to make profit. The 1 kilometre distance is measured as the distance starts from the entrance
of the car parking facilities to the entrance of the premises where the car is parked in the
shortest route can be taken by the surface. The fee charged by the car parking facility will
have to be on a basis of all day payment. In case if the car parking facility charges their fees
on a weekly or a monthly payment, the daily rate can be calculated as the division of the total
charges to the total business days in a particular period of time.
In an event where there are more than one car parking facilities in 1 kilometre radius of the
employer’s car parking premises, the taxable value is based on the lowest fee charged by any
of the car parking operators in a basic of all day parking payment. For instance, there are two
car parking facilities, named as A and B, operated in 1 km radius of Employer C’s car

parking premises, if A charges $6 per day and B charges the fee of $5, the taxable value is $5
per day for each car parking benefit provided by the employer.
The second method of taxable valuation of car parking fringe benefit is the Market value
method. In this method,
IV. Small Business Car Parking Exemption (500)
V. Issues and Analysis (1200)
The Qantas Case v FCT 2014:
Given the scenario where it involved car parking fringe benefits,
VI. Recommendations (200)
VII. Conclusion (200)