New Zealand: Tax relief measures, fringe benefit tax exemption for e-bikes added to 2022 Tax Bill
Additional measures to Tax Bill focused on providing tax relief for individuals and business affected by North Island weather events
Tax relief measures, fringe benefit tax exemption for e-bikes added to 2022 Tax Bill
The government has added additional measures to the Taxation (Annual Rates for 2022-23, Platform Economy, and Remedial Matters) Bill (No 2) focused on providing tax relief for individuals and businesses affected by the North Island weather events Cyclone Hale between 8-12 January, the flooding events of 26 January to 3 February, and Cyclone Gabrielle between 12-16 February.
The measures, included in a Supplementary Order Paper (SOP) to the bill:
- Allow employer-provided accommodation to employees relocating to the affected areas to assist with the rebuild and recovery (as part of a project of limited duration) to be provided tax-free for a period of up to five years
- Allow employers to provide temporary tax-free accommodation support payments to affected employees
- Allow cash and quantifiable non-cash benefits totaling up to $5,000 to be paid to an affected employee without adverse tax consequences
- Confirms the extension of tax deductibility for donated trading stock to 31 March 2024
The SOP also includes a number of remedial amendments to items in the bill, to give effect to the recommendations in the Finance and Expenditure Committee’s report back.
KPMG observation
Tax professionals are expecting a range of Cyclone/flooding-related tax relief measures to be released shortly. The amendments are welcomed and should give clarity to business on the treatment of welfare payments (and other support) provided to employees and others during a difficult time.
While the government did signal early on it was working on a support package, including tax measures, there was little detail on the actual content. As a result, some welfare payments will have already been made with tax deducted (as employers will have taken a position based on the tax law at the time). As currently drafted, these payments will not get the benefit of these measures (the SOP wording requires the employer to have treated the payment as exempt income).
Fringe benefit tax
A new SOP introduces a fringe benefit tax exemption for employer-provided bicycles, e-bikes, scooters and mobility devices (that are not motor vehicles).
The Finance and Expenditure Committee received a number of submissions that these alternative forms of transport need to also be included alongside the proposed fringe benefit tax exemption for employer-subsidised public transport fares. However, the Committee rejected those submissions in its report-back on the bill. It appears the government has reconsidered those submissions and decided they have merit.
Read a March 2023 report prepared by the KPMG member firm in New Zealand
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