New Zealand


  • Service: Tax
  • Type: Business and industry issue
  • Date: 19/11/2012

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Rebecca Armour

Partner - Tax

+64 9 367 5926


Our tax advisory team has the skills and commitment to help you to be competitive and compliant in all areas of business tax.

Taxmail - Proposals to tax employee allowances and reimbursements 

Issue 1,  November 2012


Inland Revenue officials have released a discussion paper outlining various options to tax “employee expenditure payments”.


The key employee payments targeted are:


  • Accommodation payments – to meet an employee’s accommodation expenses during work travel (including overseas) or where the employee is provided with accommodation at or near their normal workplace due to the needs of their job.
  • Meal payments – to meet an employee’s meal expenses during work travel and non-travel related work meals.
  • Communication payments – to meet an employee’s internet/phone related costs.
  • Clothing costs. 

Officials’ starting point is that accommodation and meal costs are inherently private, so any employer reimbursement of such expenses should be taxable. The question is then whether compliance or administrative costs justify an exemption. 


We believe a more practical starting point is that there is typically no private benefit to employee expenditure payments.


More fundamentally, the question needs to be asked whether the current legislation is in fact deficient.


We believe the current uncertainty can be attributed, in part at least, to Inland Revenue’s lack of a consistent or coherent approach in this area. Better Inland Revenue guidance presents an alternative approach to legislative reform.


If you have any questions on the above, please speak to your usual KPMG advisor or contact:


Rebecca Armour
Partner - Tax
Phone: +64 9 367 5926

Darshana Elwela
National Tax Director
Phone: +64 9 367 5940

Taxmail - Comment on topical tax issues from KPMG NZ Tax. 
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