Family Focused Tax Cuts

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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.

Non-residents and bank accounts

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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.

Something to think about…

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Are you someone who uses YouTube and gets paid for it? Then this may apply to you.

Closely Held Companies Bill passes

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The long awaited Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Bill passed its third reading in Parliament this week.

Not long now…

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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!

Anti–Money Laundering Laws Extended

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As you may be aware of, the current anti-money laundering laws of New Zealand are getting an upgrade.

Tax Evasion Doesn’t Pay

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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.

Taxing Google?

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The government released three consulting papers today which proposes to strengthen New Zealand’s rules for taxing large multinationals.

How much activity is enough activity?

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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.

Simplification of the TAA

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The IRD, who is the holder of a considerable amount of data, was and continues to be the go to organisation for information.

GST made quicker and easier?

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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.

8 Weeks to 31 March

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All has been relatively quiet on the tax front so far in 2017 with little coming out over the Christmas break as expected.

Thinking Ahead

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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.

What did 2016 deliver in the tax area

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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!

‘Tis the season!

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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.

Market Rental Value – valuing employer provided accommodation

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Changes which came into force on 1 April 2015, changed the way employers were to treat accommodation provided to their employees.

The Bill is back

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The Closely Held Companies bill was reported back last Friday from the Finance and Expenditure Committee.

Better Business

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Welcome to the November 2016 issue of Better Business.

Earthquake relief provided

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In response to the Earthquakes last week in Kaikoura the Government and the IRD have released a number of relief measures.

New Jobs to Do

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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.

Are you on shaky ground?

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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.

Clearing up Foreign Tax Credits

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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.

Lump sum settlements – taxable or not?

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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.

Using Electronic Signatures

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The IRD have recently put out a standard in relation to electronic signatures, how and when they can be used when providing information.

IRD Launches Attack on Farmers

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For most if something has been working well for the last 50 years there wouldn't be a great incentive to change the rules.

Entertainment and Gifts

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On Thursday the Commissioner confirmed her position on certain types of entertainment expenditure.

IRD Further Consider Employee Share Schemes

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Some time ago we discussed concerns IRD had with the employee share schemes and an issues paper proposing changes.

Breaching Director’s Duties

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A recent case was a timely reminder about a Director’s duties and obligations to those “outside” the company.

Income from Professional Services

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Earlier this month IRD released the draft interpretation statement “Income Tax – Timing – When is income from professional services derived?” which replaces three older statements.

Life is simply getting simpler, or so they say

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On Monday the government introduced the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Bill.

Lowering the GST Threshold for online purchases

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As we have previously discussed there are changes being introduced by the Government in relation to GST for online purchases.

Supreme Court decision on feasibility expenditure out

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The Supreme Court has ruled on the long running dispute between IRD and Trustpower Ltd on the deductibility of feasibility expenditure it incurred.

Developing Software?

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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.

Changes for Foreign Trusts

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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.

Just sit back and relax

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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.

Single or Multiple supplies

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The IRD recently released a draft Interpretation Statement for consultation entitled “Goods and Services Tax – Single Supply or Multiple Supplies”.

Better Business

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Welcome to the June 2016 issue of Better Business.

Transformation Rolls On

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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).

And the wheels keep on turning

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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.

Budget 2016 – Solid and Dependable

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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”.

Cashing out your Losses

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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.

More from the Omnibus Bill

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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.

Closely Held Company Changes on the Way

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This week the new Taxation (Annual Rates for 2016-17, Closely Held Companies, and Remedial Matters) Bill (130-1) was introduced.

An Escape From Fringe Benefit Tax

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This week we thought we would continue our comments relating to the tax simplification proposals announced by the Prime Minister last Wednesday.

Making Tax Simpler

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It’s been an exciting week in the world of tax (and you don’t get to say that very often).

Foreign Trusts - evil or ok?

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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.

New Minister of Revenue

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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.

Getting Short Changed?

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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.

More Taxation Bills Reported Back

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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.

Two Degrees of Separation

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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.

Did you intend to sell?

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IRD have recently released a draft QWBA - PUB00260: Income tax — land acquired for a purpose or with an intention of disposal.

IR10s and the Four Year Time Bar

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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).

Looking Ahead

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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.

New Minister of Revenue has a big year ahead

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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.

Tax return season coming up

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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.

Better Business

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Welcome to the 2016 February issue of Better Business.

Student Loan Defaulters

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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.

Diamond is the taxpayer’s best friend

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Welcome to 2016 and the first Polson Higgs Tax blog of the New Year.

Donee Organisations and Gifts

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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.

Better Business

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Welcome to the 2015 September issue of Better Business

Better Business

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Welcome to the autumn edition of better business