Date posted: 03/08/2023

Submission on May Tax Bill

CAANZ’s feedback on the Taxation (Annual Rates for 2023-24, Multinational Tax, and Remedial Matters) Bill.

Chartered Accountants Australia and New Zealand (CA ANZ) has considered the proposals in the Bill and our key submissions are as follows: 

  • OECD Global minimum tax

Subsequent changes to the OECD rules should be clearly communicated by New Zealand officials to affected New Zealand businesses.

  • Trustee tax rate

CA ANZ recommends that the application date be delayed to allow a thorough analysis of the data collected under the new trust disclosure regime. Sufficient time should be allowed to ensure changes are appropriately targeted and other options for alignment are considered.

If the proposals proceed, a de-minimis rule (two-tier tax rate structure) should be introduced. This would mitigate overreach, ensure certainty, simplicity and minimise compliance costs. A trustee tax rate of 33% should be retained for trusts with trustee income (before allocations) of $100,000 or such lesser amount as appropriate. Given the absence of publicly available trust data, Inland Revenue will currently be best placed to confirm an appropriate de-minimis income threshold.

In our view, a two-tiered approach should be preferred from the perspective of design efficiency and outcomes to the provision of multiple disparate exemptions. This would substantially reduce the need to provide specific exemptions.

  • Rollover relief

CA ANZ would like to thank the Government and officials for working quickly to address the tax issues potentially linked to the recent cyclones and/or flooding, including by way of provision for rollover relief for replacement assets.

  • Backdated lump sum payments

This has been a longstanding issue and CA ANZ welcomes the proposed amendments.

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