New Zealand

Details

  • Service: Tax
  • Type: Business and industry issue
  • Date: 19/02/2013

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John Cantin

John Cantin

Partner - Tax

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Tax

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Submission - tax treatment of employee allowances etc 

Reviewing the tax treatment of employee allowances and other expenditure payments
 

The focus of our detailed submission below is to ensure that the tax rules do not drive commercial decisions or restrict the operation of a mobile workforce.

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The taxation of employee allowances and payments needs to reflect modern work practices.

 

Employee allowances and payments for accommodation, meal and communication costs are driven by a genuine business need to have resources and skills in the location(s) that need them.

 

We strongly believe that the tax rules should not affect those business decisions.

Business expenditure should not be taxable.

 

We accept that this may be less certain but appropriate tests can be designed (if the employer is paying for the expense, then there ought to be a good business reason for doing it in that way rather than paying salary).

 

Bright lines allow some certainty but should

not be used as an absolute proxy for deciding what is private and therefore taxable.

Tax submissions - Submissions on draft tax legislation, Government discussion documents and issues papers, & various tax interpretation statements released by the New Zealand Inland Revenue.