Updated UK DTA in force

The updated double tax agreement between the United Kingdom and New Zealand has come into force, the Minister of Revenue announced today. The update of the 1983 agreement is intended to strengthen co-operation between the two jurisdictions in the enforcement and collection of tax. For more information see the media statement and the text of the amending protocol to the agreement.

Stapled stock changes added to bill

The government has introduced legislative changes to treat certain stapled stock instruments as equity for tax purposes, to prevent a loss to the revenue through their use. The changes have been added to the Taxation (International Taxation, Life Insurance, and Remedial Matters) Bill by means of a Supplementary Order Paper released today. For more information see the media statement.

FBT rate for low-interest loans up

The prescribed rate used to calculate fringe benefit tax on low-interest, employment-related loans will rise from 10.57% to 10.90% from 1 October. For more information see the media statement.

Imputation discussion document released

A government discussion document released today seeks views on whether the law should allow limited streaming of imputation credits to those who can use them and refunds of credits for charities and other tax-exempt entities. The closing date for submissions is 10 October. For more information see the media statement and the discussion document, "Streaming and refundability of imputation credits".

Child support data matching begins

Information matching between Inland Revenue and New Zealand Customs for the purpose of recovering outstanding child support debt will begin at the end of the week, the government announced today. The new system, which was legislated for last year, will enable Inland Revenue to know when liable parents with significant child support debt enter or leave the country. The start-up date was approved by an Order in Council signed yesterday. For more information see the media statement.

DTA progress: Czech Republic, UK update

Arrangements for a new double tax agreement with the Czech Republic took a further step towards completion with the signing today of an Order in Council that incorporates it into New Zealand law. A second Order in Council also signed today completed legislative procedures for the update of the 1983 double tax agreement with the United Kingdom. Both are expected to enter into force in late August or early September, once final diplomatic procedures have been completed. For more information see the media statement.

Aus-NZ mutual recognition on agenda

The Australian and New Zealand governments are open to the idea of moving toward mutual recognition of imputation and franking credits between firms that invest in each other's country, Australian Treasurer Wayne Swan and New Zealand Finance Minister Michael Cullen said today. New Zealand will be making a submission on the matter to the Secretary of the Australian Treasury, they said.

Negotiations for a new double tax agreement between the two countries are progressing well, they said, and are expected to be concluded by the end of the year.

For more information see the media statements.

Deemed rate of return set

The deemed rate of return for taxing foreign investment fund interests has been set at 10.87% for the 2007-08 income year, up from 10.27% for 2006-07. For more information see the media statement.

Finance Minister's policy update

Finance Minister Michael Cullen's update to the Deloitte Tax Seminar today included a description of the follow-up work on RWT and PIE tax rates that is being done as a result of the personal tax cuts announced in Budget 2008. He also described business tax reforms contained in the bill introduced today and the process set up to deal with unintended law changes that result from the recent rewrite of the Income Tax Act. For more information see the speech.

Tax bill introduced

A bill tabled in Parliament today introduces a number of major business tax reforms, including:

• Reform of New Zealand's international tax rules to help New Zealand-based companies compete more effectively overseas.
• Raising tax thresholds to reduce compliance costs for smaller businesses.
• Clarifying the law to ensure employer payments for relocation and overtime meal allowances are tax-free.
• Reform of the taxation of the life insurance business.
• Introduction of a voluntary payroll giving system for charitable donations.
• Updating the petroleum mining tax rules.
• Changes to strengthen the definitions of "associated persons" in income tax law.