Hon Peter Dunne
Minister of Revenue
Thursday 15 November 2012
Media Statement
Dunne: feedback sought on taxing employee allowances
Revenue Minister Peter Dunne today welcomed an Inland Revenue tax policy issues paper regarding the tax treatment of
employee allowances.
“Essentially, the proposed changes are to make the rules easier to apply,” Mr Dunne said.
The paper, Reviewing the tax treatment of employee allowances and other expenditure payments, suggests a number of
changes to the tax treatment of certain payments to cover expenses such as meals, accommodation, clothing and
cellphones.
“The current legislation around allowances and other expenditure payments can leave businesses unclear about the extent
to which such payments are taxable under different circumstances,” he said.
“Under the current rules, payments that meet an employee’s private expenses are treated as being part of the person’s
taxable income. However there are occasions when the line between a private expense and what is solely a work expense is
not straightforward.
“The issues paper makes some very practical suggestions about how to resolve these uncertainties and make the rules
simpler for employers to administer,” Mr Dunne said.
“It recognises that any changes must take into account the costs to businesses in administering the rules.
“For that reason, the paper suggests some clear boundaries for particular allowances, including the time over which they
are provided tax-free, to give greater certainty to businesses.”
He said that the paper seeks feedback on the suggested changes.
The paper, Reviewing the tax treatment of employee allowances and other expenditure payments, is available on Inland
Revenue’s tax policy website, www.taxpolicy.ird.govt.nz
Submissions close on 1 February 2013.
Ends