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Income Tax Act 2007

General collection rules - Employment-related taxes - Attributing fringe benefits to employees

RD 49: Application of thresholds to attributed benefits

You could also call this:

“How thresholds affect the tax treatment of certain employee benefits”

When the value of a fringe benefit described in section RD 47 is above or below a certain threshold, special rules apply. These rules help decide how to handle the benefit for tax purposes.

If the taxable value of a benefit under section RD 47(1)(c) and (d) is under the relevant threshold, you have two choices. You can either attribute all fringe benefits in that category that are under the threshold, or you can pool the value of the benefit under section RD 53.

Even if subsidised transport under section CX 9 has a taxable value over the threshold, you might still be able to pool its value under section RD 53. This is allowed if all your employees have the same or similar entitlement to the fringe benefit.

The Governor-General can set the amount of these thresholds by Order in Council. This order will say which tax year the threshold starts to apply from.

An Order in Council that sets these thresholds is considered secondary legislation. This means it has to follow certain rules about how it’s published, which you can find in Part 3 of the Legislation Act 2019.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1520084.

Topics:
Money and consumer rights > Taxes
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Part R General collection rules
Employment-related taxes: Attributing fringe benefits to employees

RD 49Application of thresholds to attributed benefits

  1. This section applies when the value of a fringe benefit described in section RD 47 is above or below the threshold referred to in that section.

  2. If the taxable value of a benefit under section RD 47(1)(c) and (d) is under the relevant threshold, the employer must either—

  3. attribute all fringe benefits with an annual taxable value under the relevant threshold that fall within the particular category; or
    1. pool the value of the benefit under section RD 53.

      1. Despite section RD 47(1)(c)(i), if the employer provides subsidised transport under section CX 9 (Subsidised transport) with a taxable value over the threshold, they may pool the value of the benefit under section RD 53 if all their employees have the same or a similar entitlement to the fringe benefit.

      2. The Governor-General by Order in Council may determine the amount of the thresholds referred to in section RD 47, setting out the first tax year in which the threshold is to apply.

      3. An Order in Council under subsection (4) is secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements).

      Compare
      Notes
      • Section RD 49(5) heading: inserted, on , by section 3 of the Secondary Legislation Act 2021 (2021 No 7).
      • Section RD 49(5): inserted, on , by section 3 of the Secondary Legislation Act 2021 (2021 No 7).