Inland Revenue is launching public consultation on proposals to make the Fringe Benefit Tax (FBT) rules easier and to reduce compliance costs for taxpayers.
Revenue Minister, Simon Watts says public feedback will help shape final proposals which Government will consider this year.
“The proposals have also been designed to be broadly fiscally neutral as the changes will focus on enhancing the integrity of the tax system,” said the Minister.
FBT is a tax payable when the following benefits are supplied to employees or shareholder-employees:
- – low interest/interest-free loans
- – free, subsidised, or discounted goods and services
- – employer contributions to sick, accident or death funds, superannuation schemes and specified insurance policies
- – motor vehicles available for private use
- – unclassified fringe benefits.
“Inland Revenue has been working with private sector experts to develop practical options for modernising the rules and to reduce compliance costs. We have already heard a lot of feedback from small businesses, and therefore, Inland Revenue has incorporated a proposal to move away from a focus on absolute accuracy of usage and instead adopting a ‘close enough is good enough’ approach which could take a lot of the compliance cost sting out of FBT,” said Mr Watts.
The focus of the proposals in the consultation document relates to motor vehicles and other small benefits and aims to simplify requirements and ease the compliance cost burden.
“The Fringe Benefit Tax was launched 40 years ago and, in that time, only a limited number of minor adjustments have been made to the rules,” said the Minister.
“It is a quite fitting coincidence that consultation is being launched on the 40th anniversary of fringe benefit tax coming into effect.”
The consultation document is available at https://www.taxpolicy.ird.govt.nz/consultation/2025/fbt-options-for-change with consultation closing on 5 May.
