The Inland Revenue of New Zealand is inviting public feedback on proposed changes to the Fringe Benefit Tax (FBT) rules, aiming to simplify compliance and reduce costs for taxpayers, Revenue Minister Simon Watts has announced.
This announcement was made by the official website of the New Zealand Government on 1 April 2025.
FBT is a tax applied when certain benefits are provided to employees or shareholder-employees, including:
- Low-interest or interest-free loans
- Free, subsidised, or discounted goods and services
- Employer contributions to superannuation schemes, sick, accident, or death funds, and specified insurance policies
- Motor vehicles available for private use
- Other unclassified fringe benefits
Minister Watts emphasised that public input will help shape the final proposals, which the Government will review later this year. He noted that the proposed changes are designed to be fiscally neutral while enhancing the integrity of the tax system.
“Inland Revenue has collaborated with private sector experts to develop practical options for modernising the FBT rules and reducing compliance costs,” he said. “We have particularly considered feedback from small businesses and are proposing a shift from a strict accuracy-based approach to a more pragmatic ‘close enough is good enough’ principle, which could significantly ease the compliance burden.”
The consultation focuses primarily on simplifying FBT requirements for motor vehicles and other small benefits, aiming to make the tax more manageable for businesses.
“FBT was introduced 40 years ago, and since then, only minor adjustments have been made to the rules. It’s fitting that we’re launching this consultation on the tax’s 40th anniversary,” Minister Watts added.
The consultation document is available online at taxpolicy.ird.govt.nz, with submissions open until 5 May.
