Fringe Benefit Tax (FBT)
FBT is a tax imposed on employers who provide fringe benefits to employees. FBT is intended to tax fringe benefits that had previously been received free of tax and to encourage a switch from remuneration paid in the form of non-taxable benefits to cash remuneration, which is subject to tax in the hands of the employee.
Typical fringe benefits include:
- The provision of a motor vehicle
- Employment-related loans
- Subsidised transport
- Discounted goods and services
- Certain types of sickness, accident and death benefit fund contributions
- Certain types of entertainment
FBT is an area of tax compliance that presents taxpayers with more confusion than any other.
Getting the right advice is crucial to ensure that you are not penalised by Inland Revenue for filing an incorrect return.