GST Workshop for Business People

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FRINGE BENEFIT TAX PRESENTED BY TONY
GRAY BUSINESS TAX INFORMATION OFFICER INLAND
REVENUE DEPARTMENT

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OVERVIEW OF PRESENTATION

• What are fringe benefits?
• Categories of Fringe Benefits
• Subsidised Transport
• Unclassified Benefits

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WHAT IS FBT?

• FBT is a tax on benefits that employees receive
  and enjoy as a result of their employment. (Non
  monetary)
• This also includes benefits given to employees or
  shareholder-employees, that are provided through
  another person

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RATES OF FBT

• 49 CENTS
• OR
• 64 CENTS

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WHAT FRINGE BENEFITS DO NOT INCLUDE

• Cash remuneration (includes salary and wages,
  lump sums, bonuses, withholding payments and
  interest and dividends)
• Benefits given instead of a non-taxable cash
  allowance (e.g., a meal given instead of a meal
  allowance)
• Free board and lodging
• Some forms of entertainment

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FRINGE BENEFIT TAX CATEGORIES

• MOTOR VEHICLES
• LOW INTEREST LOANS
• SUBSIDISED TRANSPORT
• INSURANCES AND SUPERANNUATION SCHEMES
• UNCLASSIFIED BENEFITS

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SUBSIDISED TRANSPORT

• Businesss supplying transport to the general
  public
• Cost less than 25 of the highest fare
• Employee contributions deducted from value
• Contributions made over 25 (No FBT

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UNCLASSIFIED BENEFITS

• GOODS
• Sold at less than cost
• Market value to the public
• EXEMPTION
• Staff discount 5 or less
• Less than 200

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UNCLASSIFIED BENEFITS

• SERVICES
• Provided at less than cost
• If supplied by third party, the value is the
  amount paid by the employer
• If supplied by an associated person, the value is
  that which would have been supplied to the public

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UNCLASSIFIED BENEFITSTHRESHOLDS

• An individual employees unclassified benefit
  does not exceed 200 GST inclusive and
• All unclassified benefits in the last four
  quarters, including the current quarter, do not
  exceed 15,000, GST inclusive

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EXAMPLE

• WEEKEND HOLIDAY VOUCHERS
• Tom 160
• Sue 190
• Fred 280
• Tom (No FBT)
• Sue (No FBT)
• Fred (FBT)
• As long as current and previous 3 FBT periods do
  not exceed 15000

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EXAMPLE

• Exemption available
  15000 No FBT
• Unclassified Benefits 30/6 3000 12000 No
  FBT
• Unclassified benefits 30/9 5000 7000 No
  FBT
• Unclassified benefits 31/124000 3000 No
  FBT
• Unclassified benefits 31/3 6000
  FBT
• Unclassified benefits 30/6 3000
  FBT
• Unclassified benefits 30/9 2000
  No FBT

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FOR MORE HELP

• Please phone us on 0800 377 772
• Read our Fringe Benefit Tax guide (IR 409)
• Visit Inland Revenues website at
  www.ird.govt.nz