Company Motor Vehicles - Latest FBT Changes

Company Motor Vehicles - Latest FBT Changes

When a Company vehicle is available for private use
it is subject to Fringe Benefit Tax (FBT). FBT is
calculated on 20% of the original cost of the vehicle
with the FBT tax rate generally being 49.25%.

From 1 April 2017 the IRD has modified the rules so that when a close Company purchases a vehicle they have the option to keep a log book and claim vehicle expenses based on an apportionment of business/private use. Certain rules apply here:
• This method can only be used when the only (fringe) benefits supplied by the Company is at maximum 2 vehicles to shareholder-employees. This means that if other fringe benefits are provided to employees or vehicles are provided to non shareholders this method cannot be used.
• The vehicle must be purchased after 1 April 2017 to use the new rules.
• A vehicle log book must be kept for a minimum of 90 days, once every 3 years to determine the business portion of expenses.

Wednesday, 8th November 2017


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"DB Chartered Accountants is a firm with integrity. It gives us peace of mind to know that our GST and tax affairs will be in order. Everybody is very pleasant and friendly to deal with."
 
Lance & Dulcie Coombes, Directors,
COOMBES FARMS LIMITED
 
 
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