A new section has recently been introduced to the Income Tax Act 2007 to allow a simplified calculation of deductions for private residence that are used for business purposes
If you have brought or sold land recently then as part of this transaction you would have been required to provide your IRD number.
IRD released Determination DET 19/02 on the 21 May 2019 on the standard-cost for short-stay accommodation providers
There has been an on-going concern over the under-taxation of the digital economy and digital multinationals who pay lower worldwide income tax compares to other industries.
Budget 2019 kicked of this year with more focus on secrecy leaks rather than the content itself. Let’s just say I wouldn’t like to be an official in Treasury right now!
The Government is introducing further changes to GST in relation to remote services.
Following on from the rejected Tax Working Group recommendations in relation to capital gains tax, the Welfare Expert Advisory Group has now put forward some recommendations
IRD are currently consulting on the questions “When does the business premises exclusion under s CB 19 apply to land being taxed under ss CB 6 to CB 11?” and “When does the business premises exclusion to the bright-line test apply?”
Yesterday the Government released its response to the Tax Working Groups recommendations and the big talking point in the media at large was the Government decision to not pursue an extension to the taxation of capital gains.
At the moment I am sure many of our readers will be finalising those "end of year" tax returns, but with that almost over, this is just a wee reminder of the big changes coming in April.
The Taxation (Annual Rates for 2018-19, Modernising Tax Administration and Remedial Matters) Act 2019, came into effect earlier in the week (18 March)
Last week 30 new jurisdictions were added to the list which Inland Revenue may share information with under CRS legislation. CRS is part of a global initiative to assist jurisdictions in fighting cross border tax avoidance.
The Tax Working Group's final report was released yesterday with recommendations across a wide range of New Zealand’s tax system
IRD has put out seven draft items to consult on that sets out the tax outcomes associated when you provide short stay accommodation
Last week IRD released a draft Standard Practice Statement ED0208 setting out when they consider tax payments made by taxpayers as having been made in time.
The Bill including the Governments R & D incentive package was introduced yesterday. This is the Bill relating to our Blog a couple of weeks ago on the proposed Research and Development Boost.
A High Court decision released this week reminded us all of the importance of the rules relating to deductions for bad debts. In the case of Hong v CIR, Mr Hong, a solicitor had made loans to two of his clients that were facing financial difficulties. In his 2011 tax return he claimed deductions for the outstanding balances, asserting that the debts were “bad”.
This week the government released details on the R&D incentive package promised in the election and announced in this year’s budget.
With the festive season coming up, those who are thinking of making donations should be mindful of IRD’s Statement released earlier in the week, “Income tax – donee organisations – meaning of wholly or mainly applying funds to specified purposes in New Zealand”.
The initial report of the Tax Working Group (TWG), was released yesterday. It suggests that no separate Capital Gains Tax should be introduced, but rather that the idea of “income” could be extended to include various forms of capital gain.
This week IRD have released a Standard Practice Statement, SPS 18/04 “Options for relief from tax debt”. While not really new, it is the amalgamation of three older statements which covered making instalment arrangements, remission of penalties and interest and the Commissioners practice for writing off debt.
Earlier in the year, the Commissioner released the Standard Practice Statement SPS 18/02 “Requests to Change a Balance Date”. The statement outlines the situations where the Commissioner will grant approval for a taxpayer to change their balance date.
The Government has introduced a Supplementary Order Paper to the Taxation (Annual Rates, Modernising Tax Administration, and Remedial Matters) Bill to extend some of the tax relief provisions introduced to assist in tax matters concerning the Canterbury earthquakes in 2010 and 2011.
When a GST-registered trust makes a distribution of goods or services to a beneficiary, this will be making a supply for GST purposes. As the beneficiary will be an associated person to the trust, the value of the supply is deemed to be a market value, meaning the trust must account for GST on that basis.
Trusts with all of their benefits and pitfalls are governed by Trust law and its founding documentation, the Trust Deed. How taxation consequences flow from the operation of trusts can be a troublesome area, and specific Trust rules apply for tax.
From 1 July 2018, a new component of the Working for Families Tax Credits exists. The "Best Start" tax credit is a payment to help families with the costs of a child in the child's first three years and replaces the existing parental tax credit.
An Omnibus Tax Bill was released on 28 June 2018 as part of the tax modernisation and simplification programme. For the most part this Bill includes further changes to remove outdated terms, processes and requirements.
Since the start of the 2017/18 tax year (1 April 2017 for most) we have been waiting for the IRD to release new kilometre rates to be used for calculating Motor Vehicle reimbursements/deductions. On 5 July 2018, IRD released the new rates.
IRD released a draft interpretation statement (PUB00301) last week to provide guidance on when the attribution rule under ss GB 27 to GB 29 applies.
In late May 2018, IRD released a Questions We've Been Asked document QB 18/09: "Income tax - can sharemilkers and contract milkers deduct farmhouse expenditure using the approach in IS 17/02?" clarifying whether or not sharemilkers and contract milkers can claim farmhouse expenditure using the same approach as some other farming businesses.
The IRD is currently consulting on the update to its public ruling considering the writing off of debts as bad for Income Tax and GST purposes.
Over the last couple of weeks we have heard of a number of instances of Inland Revenue Department contacting clients directly about tax issues, and offering to visit taxpayers.
Not too many surprises in Labour’s first budget. Key focus is clearly on ‘under-funded’ services, with a social rather than economic focus.
The big tax news over the last week was the release of the Governments proposal for GST on low value imported items.
In keeping with its pre-election promises, the government recently released a discussion paper on a possible Research and Development Tax Incentive for NZ.
Last week the IRD released some “Questions we’ve been asked” for public consultation.
One of Labour’s tax policies that it tabled before the election was to close tax loopholes relating to property investment. This was perceived to be the ability to offset losses from properties against other income.
From time to time IRD issue what they call Revenue Alerts and these are intended to provide information about significant or emerging issues which are of concern to IRD.
On Saturday the Minister of Revenue addressed the International Fiscal Association Conference in Queenstown. The address focused on current priorities and focuses of the Government particularly in the tax area.
On 27 February 2018, the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Bill had its second reading.
A supplementary order paper has been introduced to the latest Taxation Bill which will increase the 2 year Bright-line rule to 5 years.
While some of us have been basking in this unusually warm and pleasant weather, it has been more troublesome for our farming communities.
The rise and rise in the apparent value of crypto-currencies has seen interest in the various different individual currencies increase dramatically over the last year.
This week the new government has kept up progress with the new Tax Working Group being announced and IRD delivering the Briefing to the Incoming Minister (BIM).
Yesterday the Government announced a ‘mini-budget’ focusing on some of their family related promises in their 100-day plan.
The appointment of Sir Michael Cullen to chair the Labour government's tax working group provides the first clear signal of the make-up of the working group and therefore their likely approach to the New Zealand tax system.
A few days ago the IRD issued QWBA PUB00318: Binding Rulings — Effect of the Commissioner changing her mind in relation to the application of s BG 1.
On Monday the IRD released a series of 10 determinations setting out the adjustments required for paying provisional tax under the Accounting Information Method.
Today is the fourth instalment in our blogs regarding the tax changes proposed by the Labour Government. Today we are looking at income and corporate taxes.
Today we continue our series on the tax proposals put forward by the new government. A key part of the Labour Party’s election policy was to establish a Tax Working Group, to look at NZ tax policy.
R&D Tax Credits appear to be making a comeback, with the Labour-NZ First coalition agreement confirming they will boost R&D spending to 2% of GDP over 10 years, something NZ is currently lagging behind in.
As a continuation of our blogs on what we do know of the tax changes proposed by the Labour Government we look today at some of the specific levies and taxes proposed.
While it is early days, we do know some of the tax changes a Labour Government intend to introduce around property.
With the swearing in of our new government now completed, our attention now turns to the likely changes we will see resulting from that.
It is common practice for many Donee organisations to apply some of their funds to offshore charitable purposes.
While the most common GST filing frequency is 2-monthly, there are some instances where adopting a 6-monthly filing frequency will be more appropriate.
The taxation of land is often a tricky area and while it may not apply to every taxpayer every day, due to the numbers involved it is often an important one.
While we are waiting to get a firm outcome on who will be running the country, we will have to revert back on what happened in previous weeks instead in the world of tax!
Earlier in the week IRD released a standard relating to the use of a valid signature for documents that are provided to IRD. Given the change in business practices and the emergence of ecommerce and increased number of online transactions this will be a timely reminder for all.
Last Wednesday, the Commissioner released a draft “Questions We’ve Been Asked” (QWBA) relating to contributing assets to a partnership.
This week the government released an official’s issues paper presenting options on how to manage errors in relation to PAYE filing. With new proposals set to make PAYE filing a much more regular activity for employers using digital services, it seems the government are looking to streamline things further.
The Government recently announced their proposals to combat base erosion and profit shifting. It is estimated that these measures will result in $200m additional tax income for the government.
On Monday, the government rolled out another discussion document forming part of the project on making tax simpler. This latest discussion document focuses on improving social policy payments.
A recently released interpretation statement (IS 17/05) looked at the treatment of NZ patent costs. Previously we had relied on a statement issued in 2006, however, a number of recent legislative changes meant some revision was needed.
IRD has released a draft Standard Practice Statement – SPS 05/12 for consultation setting out certain practices that will be acceptable to the Commissioner for offsetting losses between group companies.
The tax treatment of insurance policies seems to be a frequently asked question as there are so many types of insurances and the treatment depends on many factors.
As part of the transformations relating to increased transparency and information sharing from Government departments legislation was enacted to enable the IRD to share information about certain IRD debt with approved credit reporting agencies.
Given that last week’s blog was on the budget changes, this week we thought we would cover a topic that is somewhat less exciting but relevant, being mileage rates.
Budget 2017 announced today by the Minister of Finance delivered four key changes in the tax area which were mainly focused on tax cuts for working families and called the Family Incomes Package.
The Tax Administration Act requires an offshore person to provide a current bank account number before issuing a NZ IRD number. This rule is aimed at meeting expectations around preventing NZ being used as a money laundering destination.
Are you someone who uses YouTube and gets paid for it? Then this may apply to you.
The long awaited Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Bill passed its third reading in Parliament this week.
At this time of year a lot of you will be busy with end of year filing of tax returns. IRD are also busy getting ready for their peak tax season – and we are all hoping that their many system changes this year will cause no issues for all!
As you may be aware of, the current anti-money laundering laws of New Zealand are getting an upgrade.
During the early part of the 20th century Al Capone was an American gangster operating out of Chicago. Accused of many crimes Capone was eventually brought to justice and sentenced to 11 years in prison in 1932.
The government released three consulting papers today which proposes to strengthen New Zealand’s rules for taxing large multinationals.
Taxpayers entering commercial transactions involving large property purchased often (incorrectly) assume that these allow them to register for and claim GST. A recent case highlighted the need to ensure you have a “taxable activity” before you go ahead and claim GST.
The IRD, who is the holder of a considerable amount of data, was and continues to be the go to organisation for information.
As many tax agents would be aware some of the IRD systems were down over the weekend. The reasoning for this was to switch on the new IRD GST improvements as part of their business transformation process.
All has been relatively quiet on the tax front so far in 2017 with little coming out over the Christmas break as expected.
With the end of the Summer break our thoughts turn now to the run into March year end. We expect that last year’s two major tax bills will be enacted any day now. There are a couple of things that you may want to keep in mind prior to 31 March.
It is an old saying that there are only two certainties in life, death and taxes. As another year comes to a close I thought it might be useful to reflect on what has occurred in the tax area in the last 12 months, and why perhaps tax is anything but certain!
12 days of Christmas – My true love gave me…. A simple festive expression of admiration you may think, but containing some serious tax implications… Let’s consider some of them.
Changes which came into force on 1 April 2015, changed the way employers were to treat accommodation provided to their employees.
The Closely Held Companies bill was reported back last Friday from the Finance and Expenditure Committee.
Welcome to the November 2016 issue of Better Business.
In response to the Earthquakes last week in Kaikoura the Government and the IRD have released a number of relief measures.
The Minister of Revenue Michael Woodhouse spoke at the CAANZ tax conference on Thursday where he covered updates to the Government’s tax policy work programme through to August / September 2017.
IRD have recently reissued their draft position on deductibility of the cost of obtaining a “detailed seismic assessment” (DSA) on buildings. In recent times we have seen a large increase in focus on ensuring building assets are able to withstand earthquakes.
Inland Revenue has released a new interpretation statement – IS 16/05: Income tax – foreign tax credits – how to claim a foreign tax credit where the foreign tax paid is covered by a Double Tax Agreement.
IRD has released Interpretation Statement IS 16/04 this week which considers how lump sum payments which are both capital and revenue in nature should be treated.
The IRD have recently put out a standard in relation to electronic signatures, how and when they can be used when providing information.
For most if something has been working well for the last 50 years there wouldn't be a great incentive to change the rules.
On Thursday the Commissioner confirmed her position on certain types of entertainment expenditure.
Some time ago we discussed concerns IRD had with the employee share schemes and an issues paper proposing changes.
A recent case was a timely reminder about a Director’s duties and obligations to those “outside” the company.
Earlier this month IRD released the draft interpretation statement “Income Tax – Timing – When is income from professional services derived?” which replaces three older statements.
On Monday the government introduced the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Bill.
As we have previously discussed there are changes being introduced by the Government in relation to GST for online purchases.
The Supreme Court has ruled on the long running dispute between IRD and Trustpower Ltd on the deductibility of feasibility expenditure it incurred.
Last week the IRD released an issues paper for consultation on the treatment of software development expenditure (IRRUIP10) for those taxpayers developing software for the purposes of commercial exploitation as part of a business or other income-earning activity carried out by them. It also applies to software that has “an independent form” as opposed to those that form part of an asset.
This week the Finance Minister Bill English and Revenue Minister Michael Woodhouse announced that the Government will be making some changes to the foreign trust disclosure rules.
Yesterday the government released a discussion document on gathering investment information. The discussion document is on further proposals as part of the broader tax simplification programme.
The IRD recently released a draft Interpretation Statement for consultation entitled “Goods and Services Tax – Single Supply or Multiple Supplies”.
Welcome to the June 2016 issue of Better Business.
Fresh from the large cash injection of Budget 2016, the IRD transformation programme is moving forward, with the Tax Transformation Bill passing its third reading (31 May).
While the budget dominated most of the news over the last week the rest of the world kept turning. Over the past week the Inland Revenue Department released Interpretation Statement 16/01 (IS 16/01) setting out the Commissioner’s position in relation to software acquired for business.
From a tax perspective, the 2016 Budget speech was a bit of a non-event. Coming hot on the heels of the welcome SME changes announced a few weeks ago, it felt like a bit of an anti-climax. The opposition parties have unanimously labelled the 2016 Budget as “boring”, but John Key prefers “solid and dependable”.
You may remember that in February last year, the Taxation (Annual Rates for 2015-16, Research and Development, and Remedial Matters) Bill was introduced including changes to research and development (R&D) tax losses. This was finally enacted in February this year and Tax Policy has released a special report on this last month.
Last week we discussed with you changes proposed in relation to Closely Held Companies. This week we discuss another area of change, relating to GST.
This week the new Taxation (Annual Rates for 2016-17, Closely Held Companies, and Remedial Matters) Bill (130-1) was introduced.
This week we thought we would continue our comments relating to the tax simplification proposals announced by the Prime Minister last Wednesday.
It’s been an exciting week in the world of tax (and you don’t get to say that very often).
There has been a lot of media coverage on this matter of late. Foreign Trusts have been labelled everything from an instrument of tax avoidance to a tool used for money laundering. Therefore we think it’s important to consider how a Foreign Trust actually operates for New Zealand “tax” purposes.
This year we should see some clear direction from IRD on how it sees its business transformation project impacting on taxpayers to make their life easier and improve the use of technology in the tax system.
This week it has been reported that thousands of people have been getting short changed on their holiday pay, including the Police, who reportedly had to back-pay more than $30 million earlier this year to current and former employees.
The Finance and Expenditure Committee reported back on two Bills on Monday. The Bills were the Taxation (Transformation: First Phase Simplification and Other Measures) Bill and the Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Bill.
The associated person rules are reasonably complex and their far reaching grasp usually results in association being established in one way or another between family entities.
IRD have recently released a draft QWBA - PUB00260: Income tax — land acquired for a purpose or with an intention of disposal.
Love them or hate them, IR10s are an important part of our annual return filing process, and IRD are especially precious about them. Last week IRD issued a draft operational statement outlining why it is the Commissioner’s preference for the majority of taxpayers to file an IR10, and how this interacts with section 108 Tax Administration Act 1994 (TAA).
After a bit of controversy with student loan arrests a few weeks ago and a new Minister of Revenue last week it has been a pretty quiet week in the tax world leading up the end of the tax year.
This year we should see some clear direction from IRD on how it sees its business transformation project impacting on taxpayers to make their life easier and improve the use of technology in the tax system.
Given that we are already into February in the New Year, it will be a busy time coming up for tax agents and others with a March balance date.
Welcome to the 2016 February issue of Better Business.
The big tax news in the past week has to be the first arrest at the border of an overseas based student loan borrower for failing to make repayments. The arrest has been made under legislation introduced in 2014 which allows an arrest warrant to be issued for overseas-based borrowers who persistently avoid making their student loan repayments and which will stop them leaving the country.
Welcome to 2016 and the first Polson Higgs Tax blog of the New Year.
IRD currently have a draft QWBA for comment which aims to clarify when payments by individual taxpayers will be considered to be gifts for income tax purposes, under section LD 1. This is relevant as to when a donee organisation can issue a receipt and the supporter can claim the donation tax credit.
Welcome to the 2015 September issue of Better Business
Welcome to the autumn edition of better business