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.
The work programme continues to revolve around the two major ongoing projects comprising base erosion and profit shifting on the international front and business transformation at home.
The work programme has had a couple of inclusions as a result of recent case law and other issues which have come up over the last six months.
One point which will be happy news for anyone who has recently tried to get an IRD number for an offshore person is a review of the rule requiring a New Zealand bank account before an IRD number can be issued. In including this issue on the work programme it has been noted that in particular this has created an obstacle for people trying to comply with their tax obligations.
Two further new items are looking at some slightly more technical but far reaching points. An item has been included to look at trust beneficiaries as settlors of trusts. Currently where a beneficiary has a credit current account with a trust they can be deemed a settlor for tax purposes which has flow on effects. The Department indicates this was not the policy intent.
Another item on technical level relates to a decision of the Courts around the voting interest tests for corporate control where a corporate trustee is involved. Again, while of a technical nature, due to the important flow on effects of this decision the ultimate position reached could have real implications on tax planning.