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.
In essence the aim of the proposals is to have investment information be pre-populated in the IRD system in much the same way that PAYE payments currently are.
Currently payers of investment income (interest, dividends, PIE income, Maori Authority taxable distributions and royalties provide the IRD with details of the total taxes withheld and attached to the income paid. The proposal will require these payers to also provide details of who they are paying the income to.
The suggested information that will be collected is:
- Amount of income paid
- The amount of tax withheld or credits attached
- The recipient’s IRD number
- The recipient’s name
- The recipient’s address
- The recipient’s date of birth
While in general the proposal is aimed at reducing compliance for the recipient, especially individuals who only otherwise have PAYE income, it has the potential to increase compliance for the payer.
The majority of information will just be adding further detail to the returns already filed by payers and while will add some time will largely already be available to most payers. The last requirement of requiring a birthdate however might cause more issues.
This information is collected by some payers already but not all and so may require additional data gathering or system changes in the early days if the proposal continues as suggested.
Submissions on the proposals are open until 19 August 2016.