Section RD 41 — Income Tax Act 2007: Services

RD 41 Services Price, amount paid, or fee (1) The value of a fringe benefit that an employer provides to an employee in services is,— (a) when an employer normally provides the services as part of their business, the price charged by the employer— (i) at the time they provided the services; and (ii) for the same or similar services to the public in the open market in New Zealand; and (iii) on ordinary trade or professional terms between buyers and sellers independent of each other: (b) when an employer pays for the services to be provided, dealing at arm’s length with the supplier of the services, the amount paid or payable: (c) if neither paragraph (a) nor (b) applies, the price or fee that the employer or supplier providing the services would at that time have charged the public, had they provided the same or similar services to the public in the open market in New Zealand on ordinary trade or professional terms. Exclusions (2) This section does not apply to a service that consists of making available a motor vehicle for private use, providing an employment-related loan, or providing subsidised transport. Services provided to group of employees (3) For the purposes of this section, a person who provides services to an employee belonging to a group of employees is treated as providing the same or similar services to the public in the open market in New Zealand on ordinary trade or professional terms if the person provides the same or similar services to a group of persons that— (a) negotiates the transaction on an arm’s-length basis; and (b) is comparable in number to the group of employees. Some definitions (4) In this section,— amount , for a registered person who may claim input tax for that service, means the GST-inclusive amount fee and price , for a registered person who may claim input tax for that service, means the GST-inclusive fee or price. Defined in this Act: amount , business , employee , employer , employment-related loan , fee , fringe benefit , GST , input tax , motor vehicle , New Zealand , pay , price , private use , registered person , subsidised transport , Compare: 2004 No 35 s ND 1K