New Zealand

Details

  • Service: Tax
  • Type: Business and industry issue
  • Date: 8/03/2013

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Rebecca Armour

Director - Tax

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rarmour@kpmg.co.nz

 

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Olive Wallis

Partner - Tax

+64 3 371 4834 

 

 

Taxmail - IRD “clarifies” stance on accommodation payments 

Issue 1 - March 2013

 

Inland Revenue has “clarified” its position on the taxation of employer provided accommodation and accommodation allowances where an employee is travelling for work.

 

This follows the widely-criticised statement issued last December where Inland Revenue stated that accommodation is (and was always) taxable even if an individual is maintaining a home elsewhere and does not benefit from the arrangement. Taxpayers were advised to make voluntary disclosures and pay tax on previously un-taxed accommodation.


The latest release suggests that that a relocation of between 6 and 12 months could potentially be a temporary shift (and therefore non-taxable) but that a shift of over 12 months is likely to be more than a temporary shift unless exceptional circumstances exist (and taxable).

 

The Inland Revenue statement and follow-up clarification will result in many employees travelling to Christchurch, to help with the rebuild, becoming taxable on their accommodation.

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Taxmail - IRD changes view on accommodation allowances

Feature image
IRD's Statement signals a significant and unwelcome change in approach to accommodation and accommodation allowances.