Bikes and scooters exempt from FBT
The recent tax Act allows an FBT exemption where an employer provides bicycles, electric bicycles, scooters, electric scooters and other low powered vehicles for their staff.
It also includes all low powered vehicles that the NZ Transport Agency declares are mobility devices or not motor vehicles.
The exemption also applies if the employer helps to pay for certain vehicle share services for any of these modes of transport, like motor scooter hire.
The exemption only applies to transport mainly used for the purpose of the employee travelling between work and home, so there can be some private enjoyment of the vehicle.
These new rules became effective from 1 April 2023.
Problem
How does the employer know whether the vehicles are being used primarily for travelling to and from work or for private purposes?
This information would be needed by the employer to know whether the FBT exemption applies.
There is provision for a maximum cost of the vehicle to be set but this appears not to have occurred yet.
Please let us know if you replace any of your employees vehicles with low powered vehicles so we can make the necessary adjustments to your Fringe Benefit tax.
