IR has released draft operational statement ED0227, ‘Income tax treatment of accommodation provided to employees’.
Discussed within the commentary is:
- The definition of ‘accommodation’, exploring the types of accommodation that are specifically excluded from the definition such as a room, berth or other lodging provided on a mobile workplace such as a ship, a truck or an oil rig, or accommodation provided in a remote location outside New Zealand
- The application of any of the available exclusions if the accommodation is not excluded (i.e. out-of-town secondments and projects, ongoing multiple workplaces, meetings, conferences, and training courses)
- Valuing the accommodation benefit.
A good starting point for dealing with any employer provided accommodation questions from your clients, is to commence with the premise that PAYE should be withheld by the employer on the value of what their employee receives. Then proceed to examine the accommodation type and whether it is excluded from the definition, and if not, whether a specific exclusion from an otherwise taxable benefit may be applied.
The deadline for comment on ED0227 is 1st February 2021.