Close companies can choose to file fringe benefit tax (FBT) returns to match their income tax balance date. They can also opt out of the FBT rules for motor vehicles.
FBT and income year return filing
If you’re a close company, you can elect to file income year FBT returns at the same time you file your income tax returns.
You can choose to file income year returns if you’re providing fringe benefits to shareholder-employees and if in the previous income year, 1 of the following applies.
- Your annual gross PAYE (excluding ACC earners’ levy) and employer superannuation contribution tax (ESCT) deductions were no more than $1,000,000.
- You only provide motor vehicles for private use to shareholder-employees and the benefit is limited to 1 or 2 vehicles.
- You were not an employer.
Making an income year return election
If you’re an existing employer, you must make an election by the last day of the 1st FBT quarter in the income year the election applies to.
If your company is a new employer, you must make an election by the last day of the quarter you started employing in the income year the election applies to.
You can make an election to change your filing frequency in myIR. If you’re not registered for myIR, send your election to us in writing.
Change your FBT filing frequency
We do not accept late elections. If your election is late, we’ll notify you it has not been accepted. You must continue to file quarterly returns until the end of the income year.
Due dates for filing income year returns and paying FBT
File your returns and pay the FBT by the due date. If the due date falls on a weekend or public holiday, you have until the next working day to pay the FBT.
The return period is the same as your company’s income tax return period. The due date for filing and paying FBT is the same as your company’s end of year income tax payment due date.
Opting out of FBT on motor vehicles
You can elect to opt out of the FBT rules for motor vehicles and use the income tax rules for vehicle expenditure instead. You can opt out if both of the following apply.
- You have only 1 or 2 motor vehicles available for private use of shareholder-employees.
- You do not provide any other fringe benefits.
If you elect to use the income tax rules, you must make private use adjustments for income tax and GST. For more information, go to ‘Claiming vehicle expenses’.
How to opt out
You can let us know you’re opting out by:
- sending us a message in myIR
- including a note with your paper return.
An opt out election is only valid if it’s made by the due date for filing the income tax return in the year a vehicle is acquired or first used for business.
Once you make the election, you cannot return to using the FBT rules for that vehicle unless the vehicle is disposed of, or you stop using the vehicle for business use.
If you’ve already registered for FBT and you make your election within the required time to opt out, cancel your FBT registration.
More information
Motor vehicles provided by employers for private use
Unclassified benefits and gift cards