Date posted: 10/04/2019 3 min read

NZ Tax Advocacy and Submission for March 2019

CA ANZ Tax Team New Zealand's recent Advocacy & Submissions.

In brief

  • CA ANZ Appearance before Finance and Expenditure Committee
  • AirBnB’s – Short-stay accommodation
  • Voluntary Disclosures

CA ANZ Appearance before Finance and Expenditure Committee 

CA ANZ appeared before the Finance and Expenditure Committee on 3 April on the Taxation (Annual Rates for 2019-20, GST Offshore Supplier Registration, and Remedial Matters) Bill. The proposals included in this Bill were outlined in a Government Discussion Document (GST on low-value imported goods – an offshore supplier registration system, May 2018).  The legislation as drafted is similar to the initial proposals, taking into account feedback received.  We agree with the overall framework and direction of the proposals.  The proposed legislation brings New Zealand into line with other countries who have enacted overseas supplier registration regimes, including Australia.  The proposed rules are similar to other countries’, while acknowledging the framework of New Zealand’s existing GST legislation.  

Supplementary Order Paper – Commissioner’s care and management power

CA ANZ recently submitted on the Supplementary Order Paper (SOP) to the Taxation (Annual Rates for 2019-20, GST Offshore Supplier Registration, and Remedial Matters) Bill. The proposal included in the SOP intends to give the Commissioner of Inland Revenue greater flexibility in the use of her care and management powers and to allow the Minister of Revenue the ability to recommend that the Governor-General make a modification to the application of the Inland Revenue Acts by Order In Council.

These proposals are intended to address situations where there are legislative anomalies which create taxpayer uncertainty. Given the time taken to correct such errors at present, and the pace and volume of tax reform, CA ANZ support these proposals however we note that it is still important that draft legislation is subject to appropriate and meaningful consultation and is thoroughly reviewed prior to introduction to ensure that it is in line with policy intent.

There has been a long consultation process regarding the extension of these powers and the proposed legislation includes several safeguards, including: a requirement for consultation, consistency with government policy and a time limit on the decision. It will be important that the new power is used in a targeted way, in situations when it is needed and to the extent intended.

OS 19/02: Persons who are permitted to confirm an income statement of a deceased person or provide information to the Commissioner to finalise the tax account of a deceased person

Inland Revenue have finalised and released an operational statement on who is able to confirm an income statement of a deceased person, and who can provide information to the Commissioner to finalise a deceased persons tax account where there is no will and no executor or administration. 

This was a matter raised by a Members previously and we are pleased the item has been finalised.

Late Filing Penalties 

This exposure draft updates SPS 12/02 Late Filing Penalty (2012). A key aspect of this draft details how late filing penalties will apply once pay day filing becomes compulsory on 1 April 2019.

AirBnB’s – Short-stay accommodation 

CA ANZ provided feedback to Inland Revenue on their eight items relating to short-stay accommodation. Inland Revenue have signalled that further work will be undertaken on this issue, we recommend that a future item be included considering how joint tenants or tenants in common be treated for the purposes of the GST registration threshold. 

Depreciation – change of use event

CA ANZ suggested adding an example to the item, illustrating when the depreciation recovery income will arise and be required to be returned by the taxpayer; and also that no depreciation loss will be deductible in that income year.

We also thought it would be helpful if the exposure draft confirmed that, except in the case of a building, a depreciation loss arising from a change in use when a business becomes a charity would be deductible.

Voluntary Disclosures 

Inland Revenue have finalised standard practice statement 19/02: Voluntary Disclosures. This will be published in the May 2019 Tax Information Bulletin and will apply from 27 March 2019.  

CA ANZ recently provided feedback on this item which updates and describes what the Commissioner will consider when deciding whether the taxpayer has made a full voluntary disclosure to the CIR of the details of a tax shortfall.

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