scoop.co.nz 21 Mar, 2021 23:00 am

“Stark Choice” On FBT Confronts Businesses In Wake Of 39% Tax Rate

“Stark Choice” On FBT Confronts Businesses In Wake Of 39% Tax Rate
The new 39 percent top personal tax rate coming into effect on 1 April will result in many Kiwi businesses paying more Fringe Benefit Tax (FBT) than they need to, says Chartered Accountants Australia and New Zealand (CA ANZ). “Businesses will be confronted ...

“They will have to decide whether to keep it simple and pay more tax than they need to using a flat FBT rate which is out of step with what their employees actually earn or pay the right amount of tax and incur substantial extra compliance costs.A new flat FBT rate of 63.The new FBT rate represents an increase of nearly 30 percent on the old.“The new higher flat FBT rate will upend that calculation.

“Employers will have to figure out if it is better for them to pay too much tax using the new single rate or the flat annual FBT rate of 63.” CA ANZ would prefer a more targeted approach to dealing with the impact of the 39 percent top rate on FBT, including keeping the current FBT rates and only applying the new 63.

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