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Income Tax Act 2007

Income - Excluded income - Introductory provisions

CX 5: Relationship with exempt income

You could also call this:

“How exempt income relates to fringe benefits”

If your employer gives you something that doesn’t count as income (which means you don’t have to pay tax on it), it’s not considered a fringe benefit. This rule doesn’t apply to money your employer gives you to help someone else.

If your employer gives you something that would have been tax-free if they had given you cash instead, it’s not a fringe benefit. But this doesn’t include interest, dividends, or money given to you to help someone else.

Remember, if your employer gives you money to help someone else, as mentioned in section CW 17, it might still be a fringe benefit even if it’s tax-free.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1513339.

Topics:
Money and consumer rights > Taxes
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Part C Income
Excluded income: Introductory provisions

CX 5Relationship with exempt income

  1. To the extent to which a benefit that an employer provides to an employee in connection with their employment is exempt income, the benefit is not a fringe benefit.

  2. Subsection (1) does not apply to—

    1. an allowance that is exempt income under section CW 17 (Expenditure on account, and reimbursement, of employees) to the extent to which it is made to enable the employee to provide a benefit to another person.

      1. To the extent to which a benefit that an employer provides to an employee in connection with their employment would have been exempt income if it had been paid in cash, the benefit is not a fringe benefit.

      2. Subsection (3) does not apply to interest, dividends, or an allowance under subsection (2)(b).

      Compare
      Notes
      • Section CX 5(2)(a): repealed, on , by section 36 of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
      • Section CX 5 list of defined terms expenditure on account of an employee: repealed, on , by section 38 of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
      • Section CX 5 list of defined terms life insurance policy: repealed, on , by section 38 of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
      • Section CX 5 list of defined terms premium: repealed, on , by section 38 of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).