On Monday 22 Nov 2021, the Full Federal Court has held that Virgin Airlines provided car parking fringe benefits to its flight and cabin crew at Sydney, Brisbane or Perth airports, thus allowing the ATO’s appeal.
Virgin contracted with owners of car parks adjacent to the Sydney, Brisbane and Perth airports to procure parking spaces for flight and cabin crew. The ATO assessed Virgin to FBT under s 39A(1) of the FBT Assessment Act for car parking fringe benefits provided to flight and cabin crew employees operating from those airports for the 2013 to 2016 FBT years.
The relevant statutory provisions are set out below.
At first instance (in Virgin Australia Airlines Pty Ltd v FCT [2021] FCA 523), the Federal Court held that Virgin Airlines did not provide car parking fringe benefits to the flight and cabin crew because: (i) where they operated only one aircraft on a particular day, their primary place of employment” on that day (for the purposes of s 39A(1)) was that aircraft; and (ii) if they operated more than one aircraft on a particular day, they had no “primary place of employment” on that day.
The Full Court has allowed the ATO’s appeal, finding that the flight and cabin crew’s home base airport was their “primary place of employment” for the purposes of s 39A(1). In coming to this conclusion, the Full Court took into account the relevant enterprise agreements covering the flight and cabin crew. Under those agreements, employees were allocated a “home base” and numerous rights and obligations were defined by reference to the home base, including rosters, rest periods, allowances and car parking entitlements.
The relevant statutory provisions
Division 10A of the Fringe Benefits Tax Assessment Act 1986 (Cth) (FBTAA) addresses car parking fringe benefits provided to employees. Section 39A
39A Car parking benefits
(1) If the following conditions are satisfied in relation to a daylight period, or a combination of daylight periods, on a particular day:
(e) on that day, the employee has a primary place of employment;
(f) during the period or periods, the car is parked at, or in the vicinity of, that primary place of employment; …
The expression “primary place of employment” is defined in s 136(1) of the FBTAA:
(a) if the employee performed duties of his or her employment on that day—on that day; or
(b) in any other case—on the most recent day before that day on which the employee performed duties of his or her employment;
those premises are or were:
(c) the sole or primary place of employment of the employee; or
(d) otherwise the sole or primary place from which or at which the employee performs duties of his or her employment.
The definition of “business premises” is:
business premises, in relation to a person, means premises, or a part of premises, of the person used, in whole or in part, for the purposes of business operations of the person, but does not include: [various exceptions are set out, none of which have any relevant application] …
(CofT v Virgin Australia Regional Airlines Pty Ltd [2021] FCAFC 209, Full Federal Court, Logan, Thawley and Downes JJ, 22 November 2021.) LTN 226, 23.11.21]
[Tax Month – November 2021 – Previous 2021] 23.11.21