Tax bill introduced

The Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Bill was tabled in Parliament today. The bill introduces changes to the tax rules to allow New Zealanders returning home from Australia to bring their retirement savings with them. It also includes a number of technical changes to the rules surrounding KiwiSaver, gift duty exemptions and binding rulings to improve the way the rules work and reduce compliance costs for taxpayers. For more information see the media statement, the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Bill (PDF 900KB), the Commentary on the bill and the Regulatory Impact Statement (PDF 189KB).

Revenue Minister speech to payroll conference

In a speech today, Revenue Minister Peter Dunne described policy developments in areas relevant to payroll professionals, including KiwiSaver, PAYE and payroll giving. For more information see his speech to the NZ Payroll Practitioners Association Conference.

Revenue Minister's policy update

In a speech today to the "Accountants in Practice" conference, Revenue Minister Peter Dunne updated the audience on developments in the Government's tax policy work. For more information see the speech.

Tax bill reported back to Parliament

The Finance and Expenditure Committee has reported back to Parliament on the Taxation (Consequential Rate Alignment and Remedial Matters) Bill, which was introduced in July. The main feature of the bill is the alignment of resident withholding tax rates on interest and portfolio investment entity tax rates with personal and company income tax rates. The committee's main recommendation is that the default RWT rate for existing bank accounts should not automatically rise from 21% to 38% from 1 April 2011, as originally proposed; instead, Inland Revenue should instruct banks to change individual taxpayers' RWT rates when they are using a rate that is inconsistent with their marginal tax rates. For more information on this and other recommended changes to the proposed legislation, see the bill as reported back and the officials' report on submissions.

Trans-Tasman super portability in bill

An omnibus tax bill to be introduced next month will allow retirement savings from certain Australian superannuation funds to be transferred to New Zealand KiwiSaver funds, and vice versa. The new arrangements are expected to take effect from the second half of next year, provided the necessary law changes are also made in Australia in time. For more information see the media statement.

Proposed changes to GST rules on land sales

Proposed changes to the GST rules on sales of land and other high-value assets, to prevent revenue loss, are the focus of a government discussion document released today for public comment. Other proposed changes include making it easier to account for the taxable and non-taxable use of assets on which GST is paid, and clarifying the boundary between residential and commercial accommodation for GST purposes. For more information see the media statement and the discussion document, "GST: accounting for land and other high-value assets".

More time for submissions on AIL, NRWT

The closing date for submissions on the issues paper "AIL, NRWT and the bond market" has been extended from 30 October to 30 November, in response to requests for more time to complete submissions.

Deemed rate of return down

The deemed rate of return for taxing foreign investment fund interests has been set at 9.18% for the 2008-09 income year, down from 10.87% for the previous year. For more information see the media release.

Tax Working Group papers released

Background papers prepared for consideration at the fourth session of the Tax Working Group were released today. The fourth session, held on 9 October, dealt with corporate taxes and tax integrity. For more information see the papers: “Debt and equity finance and interest allocation rules” (PDF 62KB) and “Company tax issues facing New Zealand” (PDF 410KB).

Finance Minister's speech to NZICA

In his speech to NZICA's 2009 tax conference on 17 October, Finance Minister Bill English explained the Government's economic plan, some of the challenges it faces, and the role that tax policy will play in the recovery. The Government would respond early next year to the options put forward by the Tax Working Group, which is expected to report in December, he said. For more information, see the media statement and speech.

Revenue Minister's speech to NZICA

In a speech today to the 2009 NZICA Tax Conference, Revenue Minister Peter Dunne commented on recent tax policy developments and those expected over the next year. Future developments include re-negotiation of DTAs with Canada and the UK, a review of the scope of gift duty, and consultative documents on child support, income splitting, and the second stage of the reform of New Zealand's international tax rules. A bill to be introduced in November will give effect to trans-Tasman portability of certain retirement savings. For more information, see the Minister's speech.

Special report: associated persons

The final in our series of special reports (PDF 319KB) on various aspects of the new legislation deals with changes to strengthen the definitions of "associated persons" in the Income Tax Act. The changes generally come into force in the 2010-11 income year. The changes relating to land transactions generally apply to land acquired on or after 6 October 2009, the date of enactment.

Full coverage of the contents of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act will be the feature of a forthcoming "Tax Information Bulletin".

Special report: GST & emissions trading

The Taxation (International Taxation, Life Insurance, and Remedial Matters) Act made a number of changes relating to the GST consequences of allocating and trading in emissions units. Our special report (PDF 30KB) outlines those changes, some of which took effect from enactment.

Special report: R&D tax credit changes

As part of the recently enacted Taxation (International Taxation, Life Insurance, and Remedial Matters) Act, remedial amendments were made to the now-repealed research and development tax credit. The amendments covered in our special report (PDF 32KB) clarify the policy intention of the original legislation, to help claimants who are in the process of calculating their tax credit entitlements for the 2008-09 income year.

Special report: payroll giving

Legislation introducing the new voluntary payroll-giving scheme for charitable donations, which comes into effect on 7 January 2010, is part of the recently enacted Taxation (International Taxation, Life Insurance, and Remedial Matters) Act. Our special report (PDF 99KB), published here, explains the tax mechanism for delivering tax credits for payroll donations and offers examples of possible approaches to setting up payroll giving in the workplace.

Special report: CFCs & foreign dividends

The recently enacted Taxation (International Taxation, Life Insurance, and Remedial Matters) Act introduced new rules for the taxation of foreign companies controlled by New Zealand residents and for foreign dividends received by New Zealand companies. The new rules apply for income years beginning on or after 1 July 2009. A special report has been compiled to help affected taxpayers and their advisors understand the consequences of the changes, in advance of the publication later this year of an article in the "Tax Information Bulletin". For more information see the special report, New rules for taxing controlled foreign companies and foreign dividends (PDF 528KB).

Legislation in July 08 bill enacted

Legislation introduced in the Taxation (International Taxation, Life Insurance, and Remedial Matters) Bill has been enacted. The bill, introduced in July 2008, passed its final stages in Parliament last month and received Royal assent today. The resulting 634-page Act is published here.

Special reports on several of the newly enacted reforms will also be published here over the next few days, as early information for interested parties. Full coverage of the contents of the new legislation will appear in a Tax Information Bulletin to be published later this year.

More Tax Working Group papers released

Background papers prepared for consideration at the third session of the Tax Working Group were released today. The third session, held on 16 September, dealt with revenue raising options. For more information see the individual papers: Taxing Capital Gains in New Zealand: Assessment and Recommendations (PDF 307KB), The Taxation of Capital Gains (PDF 724KB), The Long Term Effects of Capital Gains Taxes in New Zealand (PDF 466KB), Fiscal, Distributional and Efficiency Impacts of Land and Property Taxes (PDF 353KB), Land Tax (PDF 247KB), Other Base Broadening and Revenue Raising Ideas (PDF 261KB), Tax administration changes to raise additional revenue over time (PDF 261KB).

Govt to consult with tour operators

The Government will consult with inbound tour operators over draft legislation clarifying that the facilitation fees they charge for tour packages for overseas visitors should attract GST at the standard rate of 12.5%, Revenue Minister Dunne announced today. For more information see the media statement.

Revenue Minister's tax policy update

In a tax policy update to the EMA Tax Summit today, Revenue Minister Peter Dunne described the impact on tax policy of the changing economic, fiscal and international environments and the need for the tax administration to deliver greater value for money. Mr Dunne said the government was encouraging debate on what New Zealand's future tax mix might look like but made it clear that no decisions had been made. For more information see the Minister's speech and media statement, and the recently updated tax policy work programme.