Section RD 60 — Income Tax Act 2007: Close company option

RD 60 Close company option When this section applies (1) This section applies in an income year when an employer that is a close company provides a fringe benefit to a shareholder-employee if, in the preceding income year,— (a) the gross amounts of tax for both PAYE income payments and employer's superannuation cash contributions withheld under section RA 5(1)(a) and (c) (Tax obligations for employment-related taxes) for the tax year were no more than $500,000; or (b) the only benefit provided by the employer was a fringe benefit— (i) arising under section CX 6(1) (Private use of motor vehicle); and (ii) limited to making available to shareholder-employees 1 vehicle or 2 vehicles for their private use; or (c) the employer did not employ any employees. Income year basis (2) The employer may choose to pay their FBT liability on an income year basis, informing the Commissioner of their decision in writing or by telephone no later than— (a) the last day of the first quarter of the relevant income year; or (b) the last day of the quarter in which the employer first starts employing employees, if subsection (1)(c) applies. Rate or calculation (3) The employer must pay FBT on the taxable value of fringe benefits in the income year in which they make their election and in later income years either— (a) at the rate of 49.25% of the taxable value of a fringe benefit; or (b) by calculating for the relevant income year the total pay of each employee under sections RD 50 and RD 53 . Replacing rate with calculated liability (4) Despite subsection (3), the employer may ask the Commissioner to replace the FBT liability determined under subsection (3)(a) with a calculation under subsection (3)(b). The employer must provide the information necessary for the calculation. Part-periods (5) If an income year for which an employer chooses to pay FBT on an income year basis does not start on the same day as the first day of a quarter, the employer must treat the period between the first day of the quarter in which the first day of the income year falls and the first day of the income year as if it were a quarter. More than 1 business (6) If an employer ceases business and starts a new business, or operates 2 or more businesses at the same time, the total of all amounts of tax withheld under section RA 5(1)(a) and (c) must be aggregated. Defined in this Act: amount of tax , business , close company , Commissioner , employee , employer , employer's superannuation cash contribution , FBT , fringe benefit , gross , income year , pay , PAYE income payment , quarter , shareholder-employee , tax year , Compare: 2004 No 35 ss ND 1(2)(c), (5) , ND 14 , ND 15(7), (8) Section RD 60(1): substituted, on 1 April 2009, by section 18(1) of the Taxation (Business Tax Measures) Act 2009 (2009 No 5). Section RD 60(1)(a): substituted (with effect on 1 April 2008), on 6 October 2009, by section 517(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section RD 60(1)(a): amended (with effect on 1 April 2009), on 6 October 2009, by section 517(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section RD 60(2)(b): amended, on 1 April 2009, by section 18(2) of the Taxation (Business Tax Measures) Act 2009 (2009 No 5). Section RD 60(3)(a): amended, on 1 April 2011 (applying for the 2011–12 income year and later income years), by section 69(2) of the Taxation (Budget Measures) Act 2010 (2010 No 27). Section RD 60(3)(a): amended (with effect on 1 April 2010), on 28 May 2010 (applying for the 2010–11 income year and later income years), by section 69(1) of the Taxation (Budget Measures) Act 2010 (2010 No 27). Section RD 60(3)(a): amended, on 1 April 2009, by section 8(1) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105). Section RD 60(6): amended (with effect on 1 April 2008), on 6 October 2009, by section 517(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section RD 60 list of defined terms employer's superannuation cash contribution : inserted (with effect on 1 April 2008), on 6 October 2009, by section 517(4)(b) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section RD 60 list of defined terms employer's superannuation contribution : repealed (with effect on 1 April 2008), on 6 October 2009, by section 517(4)(a) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).