Ruling on FBT and car parks finalised
December 2015 Tax Alert
On 18 November 2015, Inland Revenue released the following public rulings:
- BR Pub 15/11: “FBT – exclusion for car parks provided on an employer’s premises” which states that car parks provided by an employer to an employee will be exempt from FBT where the car park is on premises that the employer owns or leases; and
- BR Pub 15/12: “FBT – exclusion for car parks provided on the premises of a company that is part of the same group of companies as an employer” which sets out the rule where the car parking is on the premises of a company that is part of the same group of companies as an employer.
The public rulings address the on-premises exclusion from FBT for car parking provided to employees in car parks that are owned or leased by an employer and will apply indefinitely from 17 November 2015. The rulings provide that the premises of an employer will not usually include a car park that an employer is merely licensed to use, unless the employer can show they have a right to use the car park that is in fact or effect substantially exclusive. For more background information refer to our August 2015 tax alert article on the draft item.
This position is different from the previously published ruling BR Pub 99/6 on FBT and car parks which expired in 2005 and since then the legislation has changed. That public ruling determined that licensed car parks could never be an employer’s premises, and so the provision of licensed car parks by employers to employees was always subject to FBT. Because the new public rulings produce a different FBT outcome from the expired ruling, Inland Revenue has prepared an operational position explaining the process for employers who consider they may have overpaid FBT which allows employers to request that Inland Revenue applies the analysis in the recent public rulings to tax positions taken in earlier years. The Commissioner will apply the principles set out in the Standard Practice Statement on s 113 of the Tax Administration Act 1994 to determine whether to amend past assessments subject to the statutory time limits for refunds.
Every request made under s 113 will be considered by the Commissioner on a case by case basis taking into account all of the relevant individual circumstances of the employer and their parking arrangements. Relevant supporting documents need to accompany any request.
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