Airpoints and tax
Nov 30, 2011, 1:47 pm
#1
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Airpoints and tax
I was wondering, now that the Airpoints programme is becoming ever more transparent re the value of one Airpoint being equivalent to $1, does this raise the question of whether they could be considered as taxable either as FBT or some other kind of tax?
If I fly, buy or whatever and earn Airpoints, could the IRD not argue I should declare this?
it seems to me that with other loyalty programmes (miles) you would struggle to assign a correct monetary value, but AirNZ have conveniently solved this problem.
I am in no way a tax expert so I may be way off the mark with this!!!
If I fly, buy or whatever and earn Airpoints, could the IRD not argue I should declare this?
it seems to me that with other loyalty programmes (miles) you would struggle to assign a correct monetary value, but AirNZ have conveniently solved this problem.
I am in no way a tax expert so I may be way off the mark with this!!!
Nov 30, 2011, 2:45 pm
#3
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Ha ha ha! I thought that might be the response here! But consider the upside, if IRD did determine the programme to be taxable Air NZ would presumably have to change it back to a more traditional mileage programme as no one wants to pay tax on their airpoints so would opt out when flying!
Nov 30, 2011, 3:27 pm
#4
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Ha ha ha! I thought that might be the response here! But consider the upside, if IRD did determine the programme to be taxable Air NZ would presumably have to change it back to a more traditional mileage programme as no one wants to pay tax on their airpoints so would opt out when flying!
Nov 30, 2011, 3:34 pm
#5
Join Date: Mar 2008
Location: Auckland
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US Airways were offering double miles when you purchase a certain amount of miles a month or so ago
(Purchase 65,000 miles and get 130,000 or something to that degree) all for around NZ$1300 +/- - maybe its the way for airlines (a win / win for the airline / some customers that's for sure)
(Purchase 65,000 miles and get 130,000 or something to that degree) all for around NZ$1300 +/- - maybe its the way for airlines (a win / win for the airline / some customers that's for sure)
Nov 30, 2011, 5:25 pm
#6
Join Date: Dec 2008
Location: New Zealand
Programs: NZ *G
Posts: 181
I was wondering, now that the Airpoints programme is becoming ever more transparent re the value of one Airpoint being equivalent to $1, does this raise the question of whether they could be considered as taxable either as FBT or some other kind of tax?
If I fly, buy or whatever and earn Airpoints, could the IRD not argue I should declare this?
I am in no way a tax expert so I may be way off the mark with this!!!
If I fly, buy or whatever and earn Airpoints, could the IRD not argue I should declare this?
I am in no way a tax expert so I may be way off the mark with this!!!
Nov 30, 2011, 9:21 pm
#7
Original Poster
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Location: Christchurch, New Zealand
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This has already been considered and dealt with by IRD in a ruling back in 2004 - The answer is that there is no liability for FBT arising from earning or spending airpoints. You can find some more information on the ruling here.
However, the ruling is actually not valid anymore, it expired in 2007.
in any case, my question was more around whether the changes made to Airpoints recently make it more and more like cash and whether this would change the tax treatment of them.
Dec 1, 2011, 12:11 pm
#8
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Dec 5, 2011, 8:02 am
#9
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The US airlines have been quite careful not to call mileage anything resembling currency and to emphasise that miles have no cash value.
I definitely wouldn't want to be in a position receiving hundreds (or thousands) of something called "dollars" when travelling on full fare business class tickets for my employer. I hope these APD type schemes don't catch on in the US...
I definitely wouldn't want to be in a position receiving hundreds (or thousands) of something called "dollars" when travelling on full fare business class tickets for my employer. I hope these APD type schemes don't catch on in the US...
Dec 5, 2011, 4:29 pm
#10
Join Date: May 2005
Location: Sydney, Australia
Programs: NZ*G ELT, VA-G
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The US airlines have been quite careful not to call mileage anything resembling currency and to emphasise that miles have no cash value.
I definitely wouldn't want to be in a position receiving hundreds (or thousands) of something called "dollars" when travelling on full fare business class tickets for my employer. I hope these APD type schemes don't catch on in the US...
I definitely wouldn't want to be in a position receiving hundreds (or thousands) of something called "dollars" when travelling on full fare business class tickets for my employer. I hope these APD type schemes don't catch on in the US...
Dec 5, 2011, 4:49 pm
#11
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Join Date: Oct 2011
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I was wondering, now that the Airpoints programme is becoming ever more transparent re the value of one Airpoint being equivalent to $1, does this raise the question of whether they could be considered as taxable either as FBT or some other kind of tax?
If I fly, buy or whatever and earn Airpoints, could the IRD not argue I should declare this?
it seems to me that with other loyalty programmes (miles) you would struggle to assign a correct monetary value, but AirNZ have conveniently solved this problem.
I am in no way a tax expert so I may be way off the mark with this!!!
If I fly, buy or whatever and earn Airpoints, could the IRD not argue I should declare this?
it seems to me that with other loyalty programmes (miles) you would struggle to assign a correct monetary value, but AirNZ have conveniently solved this problem.
I am in no way a tax expert so I may be way off the mark with this!!!