Spending APD: tax deductible?
Jan 19, 2020, 8:38 pm
#1
Original Poster
Join Date: Oct 2015
Location: Wellington
Programs: NZ E
Posts: 8
Spending APD: tax deductible?
Any accountants in the room? If I pay for business travel using APD, can I claim it as an expense for tax deduction purposes?
Before anyone flames me, the reason for the question is that APD are pretty much the same as spending real NZD, so just wondering if there is a precedent for this.
TIA.
Before anyone flames me, the reason for the question is that APD are pretty much the same as spending real NZD, so just wondering if there is a precedent for this.
TIA.
Jan 19, 2020, 9:31 pm
#3
Original Poster
Join Date: Oct 2015
Location: Wellington
Programs: NZ E
Posts: 8
Very good point. The APD earn is partly from business and partly from personal expenditure.
Self-employed sole trader scenario. So business expenses go on my credit card (as do personal expenses), both earn APD on the Visa (which I understand is not taxable as income?) then get spent either personal or business travel.
Self-employed sole trader scenario. So business expenses go on my credit card (as do personal expenses), both earn APD on the Visa (which I understand is not taxable as income?) then get spent either personal or business travel.
Last edited by honie99; Jan 19, 2020 at 9:33 pm Reason: Clarify my answer..
Jan 19, 2020, 10:10 pm
#4
Join Date: Nov 2017
Location: New Zealand (when I'm home!)
Programs: Air NZ Elite
Posts: 1,218
APD earned and then spend has zero bearing on taxes. You cannot claim them as an expense as they are not counted as income. If you aren't being taxed for earning them you can't have your cake and eat it too by claiming that spending them is an expense.
What I would like to know is if BUYING APD with a credit card can be counted as an expense. My guess is yes but I don't know for sure.
What I would like to know is if BUYING APD with a credit card can be counted as an expense. My guess is yes but I don't know for sure.
Jan 19, 2020, 10:51 pm
#5
Original Poster
Join Date: Oct 2015
Location: Wellington
Programs: NZ E
Posts: 8
Makes sense. In which case you're better off to collect as many APD as possible on business expenditure, spend real$ on business travel and claim the expense against it, and save the APD for personal travel.
Jan 19, 2020, 11:39 pm
#6
Join Date: Dec 2017
Location: Wellington
Programs: AirNZ Airpoints Elite
Posts: 121
Ssshhhh, talk like that may result in our APD’s being forcibly redistributed in the name of equality, fairness or someone’s wellbeing.
Jan 20, 2020, 12:27 am
#8
Original Poster
Join Date: Oct 2015
Location: Wellington
Programs: NZ E
Posts: 8
Jan 20, 2020, 12:36 am
#9
Join Date: Nov 2017
Location: New Zealand (when I'm home!)
Programs: Air NZ Elite
Posts: 1,218
Frequent flyer miles are definitely one way to get a little extra value from your business spend. I am happy they are separate from income, most of mine are earned through business expenditure!
Jan 20, 2020, 1:13 am
#10
FlyerTalk Evangelist
Join Date: Mar 2005
Location: WLG/BKK
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Jan 20, 2020, 2:57 am
#13
Join Date: Mar 2014
Location: bne
Programs: Velocity Gold, AIRNZ Elite, Qantas Silver ,Hilton Diamond
Posts: 1,319
Can you claim APD tax deduction
Any accountants in the room? If I pay for business travel using APD, can I claim it as an expense for tax deduction purposes?
Before anyone flames me, the reason for the question is that APD are pretty much the same as spending real NZD, so just wondering if there is a precedent for this.
TIA.
Before anyone flames me, the reason for the question is that APD are pretty much the same as spending real NZD, so just wondering if there is a precedent for this.
TIA.
Everytime you earn airpoints on a business travel the journal entry is
Credit travel
Credit GST
Debit airpoints inventory
When you use
Debit travel
Debit GST
Credit airpoints inventory
If you use the airpoints for personal purposes then you need to pay GST
Or pay paye on the use
That's the theory but I assume most people would ignore airpoints
Jan 20, 2020, 2:22 pm
#15
Ambassador: Air New Zealand
Join Date: Dec 2006
Location: Wellington NZ
Programs: NZ Elite, EK Gold, Qatar Gold, Amex Plat, Accor Gold, Hilton Gold
Posts: 1,424
One Ruling I have found.
IRD Ruling
IRD Product Rulings 2004
Airpoints Dollars - accruing and redemption
Applicant: Air New Zealand
Ruling Number: BR Prd 04/13
Under this ruling, no gross income arises to members of the Air New Zealand Airpoints Programme when they receive Airpoints Dollars or Rewards, and there is no FBT liability.
Ruling applies: 3 November 2004 to 2 November 2007
Airpoints Dollars - accruing and redemption
Applicant: Air New Zealand
Ruling Number: BR Prd 04/13
Under this ruling, no gross income arises to members of the Air New Zealand Airpoints Programme when they receive Airpoints Dollars or Rewards, and there is no FBT liability.
Ruling applies: 3 November 2004 to 2 November 2007
Last edited by WLG Base; Jan 20, 2020 at 2:30 pm