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GST on fringe benefit

Generally, output tax has to be returned by an employer on the provision of fringe benefit.

Two situations

If a taxpayer wants to use business assets for private use, the taxpayer will need to make a GST adjustment for the private use, because GST must be paid on assets used for private use.

For example, a taxpayer purchased a boat for both business use and private use and the percentage is 50% to 50%. The 50% of the GST paid can be claimed back (IRD Adjustment for mixed-use assets).  


GST on fringe benefit is also an adjustment, but it is entered separately on fringe benefit tax return. This adjustment applies to registered persons who are employers and are liable for FBT.

·         If you're a sole trader, partner, trust member, or an associated person, and you have used business assets for private use, you account for the adjustment in Box 9 on your GST return.

·         If an employee (including shareholder-employee) has used business assets for private use, the employee accounts for the GST in your fringe benefit tax return for the period.


Fringe benefits that are GST-exempt supplies will not include any GST component, so their taxable value is GST-exclusive. Examples are low-interest loans, overseas travel and life insurance. However, for the rest of fringe benefits, they are valued on GST-inclusive amount.