FBT Proposes: Have Your Say
It's proposed to reduce Fringe Benefit Tax (FBT) on the private use of company-owned cars by reducing the rate used to value the vehicles from 24 percent to 20 percent of cost. It's also proposed to raise the threshold at which FBT is paid on minor benefits, from $75 to $200 per quarter per employee and from $450 to $2000 per quarter for the employer; and exempt employer-owned work tools, for example laptops and cell phones. These proposals are in a discussion paper released late last year.
Because around two-thirds of the FBT take comes from motor vehicles, many of the recommendations relate to the tax treatment of cars. Other vehicle-related amendments under consideration are:
- allowing employers to elect the start time for their day for the purposes of calculating FBT to prevent private use of the vehicle within a 24-hour period being treated as two days' use;
- allowing employers the option of calculating FBT on the vehicle's lower depreciated value rather than its cost, the equivalent rate being 36 percent;
- bringing leased vehicles into alignment with company-owned vehicles to remove the incentive to lease; and
- removing inequities in the current treatment of car parks, where some are taxed and others are not.
Contact for Enquiries
The Ministry of Agriculture and Forestry
Pastoral House
25 The Terrace
PO Box 2526, Wellington
Tel: 0800 00 83 33
Fax: +64 4 894 0720
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