Date posted: 30/09/2022

New Tax Bill now open for public consultation

The Finance and Expenditure Committee are seeking public submissions on the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Bill (No 2) until 2 November 2022.

In brief

  • CA ANZ will be making a submission
  • Member feedback is welcome
  • A summary of the key proposals

The Finance and Expenditure Committee are seeking public submissions on the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Bill (No 2) until 2 November 2022. Chartered Accountants Australia and New Zealand will be making a submission and welcome feedback from members. 

This Bill (No 2) is a cut-off version of the Bill released on 30 August, which was then withdrawn within 24 hours of introduction due to public outcry over the proposal to charge GST at the rate of 15% on fees for Kiwisaver and managed funds. In a significant u-turn the NZ Government announced they would not be proceeding with this proposal. 

Here we briefly summarise the key proposals:

In addition to proposals setting out the annual rates for the 2022-2023 year, this Bill contains a range of proposals intended to improve aspects of the tax system.

The Bill proposes changes to the GST apportionment and adjustment rules that are expected to reduce the compliance costs they impose on businesses and better align them with current taxpayer practices. These changes would include:

  • introducing a principal purpose test for goods and services acquired for $10,000 or less (GST exclusive) that would allow a registered person to claim a full GST input tax deduction, and
  • allowing GST-registered persons to elect to treat certain assets that have mainly private or exempt use, such as dwellings, as if they only had private or exempt use, i.e., sole traders using their home offices for business.

It also introduces a requirement for digital platforms to collect GST on ridesharing, food and beverage delivery, and short-stay and visitor accommodation provided in New Zealand and return it to Inland Revenue.

The Bill also contains proposals to implement the OECD’s information reporting and exchange framework for activities facilitated by digital platforms in the sharing and gig economy.

It includes amendments to clarify and modernise how the various employer taxation requirements, such as PAYE, FBT, and employer’s superannuation contribution tax, apply in a cross-border situation.

These measures are aimed at foreign employers with workers coming to New Zealand, i.e., addressing taxation obligations for inbound workers. 

A fringe benefit tax exemption for public transport and an exemption from the interest limitation rules for build-to-rent assets are also proposed in the Bill.

For more information, see the Bill, the Bill commentary, the departmental disclosure statement and the regulatory impact assessments

 

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