About Fringe Benefit Tax (FBT) - CardLink NZ · About Fringe Benefit Tax (FBT) ... use and should...
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About Fringe Benefit Tax (FBT) What is a Fringe Benefit? An example is when a company provides a vehicle to an employee, and it is available for personal use, this is considered a fringe benefit, or perk and needs to be taxed under the Fringe Benefit Tax regime. There are however some instances where the vehicle is exempt from the tax. General Exemptions: General exemptions apply to: • Work-related vehicles not available for private use • Work-related vehicles with limited private use (partial exemption) • Vehicles stored on the employer's premises • Vehicles over 3,500 kilograms. Work related vehicles not available for general use are where employees, or shareholder – employees, store the vehicles at home and the employer doesn’t allow the vehicles to be avail- able for general private use. Work related vehicles must also meet the following four criteria: 1) The principal design of the vehicle cannot be for carrying passengers. This means that no sedans (unless the sedan is a taxi) qualify. Vehicles that can qualify include utes, light pick-up trucks, taxis, minibuses and vehicles with rear doors, that are permanently without rear seats or have rear seats that are permanently secured down and are unusable (vans, station wagons, hatchbacks, panel vans and 4WD’s). 2) The employer’s name, logo, acronym or other business identification must be permanently and prominently displayed on the exterior of the vehicle. 3) The employer must notify employees in writing that the only private use the vehicle is avail- able for is travel between home and work and travel incidental to business travel. 4) The employer must record checks carried out at least quarterly on each vehicle the exemption is claimed for, to ensure the restriction is being followed Partial Exemption If a work related vehicle meets the four conditions and isn’t available for private use most of the week but, allowed for some private use on certain days (such as Saturday, Sunday and Public holidays) partial exemptions apply. Daily Exemptions Emergency Calls A motor vehicle is exempt from fringe benefit tax for the whole day of any day on which an employee uses it to attend an emergency call. The visit must be for one of the following purposes: - to attend some essential plant or service of the employer or a client - to maintain services of a public or local authority - to supply energy or fuel to the public - to attend in relation to a person's health or safety. In addition, the visit must take place between 6 pm and 6 am Monday to Friday, or any time on Satur- days, Sundays or statutory holidays. These time restrictions do not apply when the visit concerns personal health or safety. Out of Town Travel When an employee is required to travel, the motor vehicle is exempt from fringe benefit tax on trips that are longer then 24 hours. This exemption includes the day of departure and the day of return. Private use that is incidental to travel may qualify for an exemption. However, if private travel is a significant part of the trip, the vehicle is subject to fringe benefit tax for all days of travel. Other days not liable: Where a vehicle is not available to an employee for one completed 24 hour period due to breakdown or being repaired or leaving the vehicle at the airport carpark (business related flight), these days will qualify for exemption. Records Adequate records must be kept to support exemp- tions claimed. P 0800 428 847 www.fleetsmart.co.nz
Transcript of About Fringe Benefit Tax (FBT) - CardLink NZ · About Fringe Benefit Tax (FBT) ... use and should...
About Fringe Benefit Tax (FBT) What is a Fringe Benefit?An example is when a company provides a vehicle to an employee, and it is available for personal use, this is considered a fringe benefit, or perk and needs to be taxed under the Fringe Benefit Tax regime. There are however some instances where the vehicle is exempt from the tax.
General Exemptions:General exemptions apply to:• Work-related vehicles not available for private use • Work-related vehicles with limited private use (partial exemption) • Vehicles stored on the employer's premises • Vehicles over 3,500 kilograms.
Work related vehicles not available for general use are where employees, or shareholder – employees, store the vehicles at home and the employer doesn’t allow the vehicles to be avail-able for general private use.
Work related vehicles must also meet the following four criteria:
1) The principal design of the vehicle cannot be for carrying passengers. This means that no sedans (unless the sedan is a taxi) qualify. Vehicles that can qualify include utes, light pick-up trucks, taxis, minibuses and vehicles with rear doors, that are permanently without rear seats
or have rear seats that are permanently secured down and are unusable (vans, station wagons, hatchbacks, panel vans and 4WD’s).
2) The employer’s name, logo, acronym or other business identification must be permanently and prominently displayed on the exterior of the vehicle.
3) The employer must notify employees in writing that the only private use the vehicle is avail-able for is travel between home and work and travel incidental to business travel.
4) The employer must record checks carried out at least quarterly on each vehicle the exemption is claimed for, to ensure the restriction is being followed
Partial ExemptionIf a work related vehicle meets the four conditions and isn’t available for private use most of the week but, allowed for some private use on certain days (such as Saturday, Sunday and Public holidays) partial exemptions apply.
Daily ExemptionsEmergency CallsA motor vehicle is exempt from fringe benefit tax for the whole day of any day on which an employee uses it to attend an emergency call. The visit must be for one of the following purposes: - to attend some essential plant or service of the employer or a client - to maintain services of a public or local authority
- to supply energy or fuel to the public - to attend in relation to a person's health or safety.In addition, the visit must take place between 6 pm and 6 am Monday to Friday, or any time on Satur-days, Sundays or statutory holidays. These time restrictions do not apply when the visit concerns personal health or safety.
Out of Town TravelWhen an employee is required to travel, the motor vehicle is exempt from fringe benefit tax on trips that are longer then 24 hours. This exemption includes the day of departure and the day of return.
Private use that is incidental to travel may qualify for an exemption. However, if private travel is a significant part of the trip, the vehicle is subject to fringe benefit tax for all days of travel.
Other days not liable:Where a vehicle is not available to an employee for one completed 24 hour period due to breakdown or being repaired or leaving the vehicle at the airport carpark (business related flight), these days will qualify for exemption.
RecordsAdequate records must be kept to support exemp-tions claimed.
P 0800 428 847 www.fleetsmart.co.nz
Questions & Answers’s1) Who needs to complete an FBT Form?If you have been listed as a driver of a vehicle (or vehicles) that is considered to be liable for FBT during a quarter, you will be required to complete the online form. It may be that you were the driver of the vehicle for less than the full quarter. You will still need to complete the form up to the last date you had access to the vehicle – even if it’s just one day.
2) When does the FBT Form need to be completed?This process needs to be completed quarterly each year. The quarters run from:
Quarter 1 01 January to 31 March Quarter 2 01 April to 30 JuneQuarter 3 01 July to 30 SeptemberQuarter 4 01 October to 31 December
3) What is the date my FBT Return is to be completed by?All returns are to be completed by the 5th calender day of the month following the end of the quarter. If the completed FBT form is not received by the due date, the full FBT payment for the quarter will be applied to the vehicle.
4) What if the vehicle has changed owner and I have a new vehicle OR I have just taken over the vehicle?If you have used the vehicle within the current quar-ter you will need to complete the FBT form for those days that the vehicle was not available for personal use, regardless of the period for which the vehicle was in your posession.
If you did not use the vehicle or have changed users within the previous quarterplease notify us at [email protected].
5) I have lost the link can you resend it?Yes we can. Please contact us at [email protected]
6) Can we get an extension?No. IRD have a given period for the returns to be submitted in or penalties apply
7) Can FleetSmart complete the FBT Form on our behalf?No. It is the sole responsibility of the user/driver to complete this FBT process in order to enable your company to comply with IRD requirements.
Useful Websites/Links for more on FBTQuestions and Answers re FBT -
http://www.ird.govt.nz/fbt/fbtfaq-faq.html Official
IRD Guide on FBT – pages 11 to 20 have more details on exemptions, record keeping and motor vehicle FBT calculations and valuation methods available.
http://www.ird.govt.nz/forms-guides/number/forms-400--499/ir409-guide-fbt.html
P 0800 428 847 www.fleetsmart.co.nz
Note: This document has been created for FleetSmart Customer use and should not be used as a legal document. For further information on FBT please refer to your accountant or the Inland Revenue Department.
Welcome to the “How to” for completing your FBT online.
How to Complete FBT online?
Step One:Click the boxes that apply to your company (multiple or singular)
Click ‘Next’ once completed
If you have questions on FBT- What it is and how it applies to you then please refer to our ‘about FBT’ link- here.
1P 0800 428 847 www.fleetsmart.co.nz
FLEETSMART FBT
FLEET
Step Two:Enter Exempted reasons for each date by clicking on the date required, a comment box will appear with a drop list of all your reasoning.
Once completed hit the “Save & Complete” button. Tick the accepted box and type your name. This will confirm to FleetSmart that the FBT form has been completed, a confirmation page should appear.
Tip 1:
Where you have one reason for multiple days- Hold the “Ctrl” key while clicking on each relevant date.
How to Complete FBT online?
2P 0800 428 847 www.fleetsmart.co.nz
Tip 2:
You can use the exempt button at the top of the table for bulk exemptions.- Exempt Quarter- Exempt Weekends- Exempt Month
