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.

The Minister stated the immediate priorities were:

  • Ring fencing of residential rental losses
  • Extending the bright-line to 5 years
  • Base erosion and profit shifting methods concerning international taxation
  • R & D tax credits
  • Feasibility expenditure
  • Business transformation (reducing compliance)
  • Accounting Income Method (AIM)

We have covered most of these in earlier tax blogs and some of these are already in Bill form. We have not however seen any draft documents yet for the ring-fencing of residential losses and when this comes out it may be relevant for some people to consider their current structure. This could potentially be important where a loss making residential rental is held by an entity with other income so the loss is not immediately apparent.

In other relevant news the Commissioner has released a draft statement on the changes to the motor vehicle re-imbursement rules being the new kilometre rule. This statement sets out the new two-tiered approach to motor vehicle reimbursements applicable for the 2017 – 2018 year. Unfortunately, it still does not provide the applicable rates.

The Commissioner has also re-released her statement on School donations for both GST and income tax. These statements have been redrafted in places but are the same in principle as the existing statements. In short this confirms that for a donation there can be no direct benefit to the payer and must be for the school generally.