Date posted: 15/06/2018 3 min read

New Zealand Tax Update - June 2018

Recent developments in New Zealand tax

In brief

  • Tax Working Group
  • Recent Submission
  • Items open for consultation

Our 2018 Tax Update Roadshow has now finished, our team visited 23 locations around New Zealand and over 920 members. Thank you to all those who came along.  

GST processing system issues update

Over the last few weeks, CA ANZ’s New Zealand tax team has been advising Inland Revenue (IR) on member issues with processing of GST returns.

The team sought a waiver on any late filing and late payment penalties. This was confirmed by IR on Thursday when it committed to not apply late filing and late payment penalties for any GST returns due on June 28, if they are filed and payments are made by Wednesday 4 July.

The same day IR said “Problems with Inland Revenue’s GST processing system over the past couple of weeks have been largely resolved”.

Tax Leader John Cuthbertson said when IR first became aware of the problems, it would have been helpful if they had been more proactive and provided advice to taxpayers at an earlier stage.

“As IR says, this issue is largely fixed, but I suspect there will be intermittent and on-going issues over the next 12 months as the old and new computer systems run in tandem.”

He said a second issue which hit hard this week impacted further GST access/filing. “With the detailed help of some of our Gisborne members, the fault was able to be isolated to a load splitter at Spark”.

IR has apologised to affected customers and says “we understand how frustrating it has been in the lead up to the GST filing date. Most customers are now managing to file their GST returns, for example 18,000 did yesterday, which is around what we would expect”.

IR says this hasn’t impacted other types of tax, for example income tax or people seeking tax refunds.  Last week there were over 700,000 logins to IR’s online services, with 98.9% within their service standard of 6 seconds.

Nor does it affect Best Start, which will be processed as planned from 1 July.

But IR says if any customer has difficulty meeting their GST filing date because of issues with their online services, let them know, and they will be reasonable about that.  

Tax Working Group

John Cuthbertson our NZ Tax Leader and Chair of our Tax Advisory Group Paul Dunne, recently presented our oral submission to the Tax Working Group. The group’s draft report is due in September 2018. Our comments can be viewed here.  

Recent Submissions  

ED0200: Options for Relief from Tax Debt  

CA ANZ was satisfied with the drafting of Draft Standard Practice Statement ED0200 – Options for relief from tax debt, which consolidates earlier statements SPS 11/01, SPS 15/02 and SPS 15/03 which considered the option for removing or deferring the obligation to pay tax, interest and/or penalties under the Tax Administration Act 1994.  

A copy of our comments are available on our website.  

Government Discussion Document – Research & Development Tax Credit regime  

CA ANZ makes our submissions from a best practice, public policy perspective and endeavour to provide comment on a “what’s best for New Zealand” basis.  We make a number of broad comments on the Research and Development Tax Incentives discussion document which can be viewed on our website.  

Submission on GST Treatment of Distributions made by Trading Trusts to Beneficiaries  

PUB 00281 – GST Treatment of distributions made by a trading trust to a beneficiary examines the GST treatment of distribution of goods, by a registered trading trust, to a beneficiary.  CA ANZ’s submission suggests the detailed discussion in the interpretation statement should address an alternative view for the time of supply when a trading trust distributes land to a beneficiary and that land forms part of the Trust’s taxable activity.   A copy of our comments are available on our website.    

GST on Assets sold by non-profit bodies

CA ANZ’s submission makes a number of recommendations including clarification on how mixed use assets should be treated.  

A copy of our comments are available on our website.    

Items open for submission  

Inland Revenue contact  

The CA ANZ Tax Team is aware that there have been recent incidents where Inland Revenue has contacted member’s clients directly regarding tax debt, perceived unpaid tax where tax pooling is being used, and in relation to the Accounting Income Method.  

We are having on-going discussions with Inland Revenue to mitigate the extent of direct contact with taxpayers where they have engaged a tax agent. As a starting point we have asked Inland Revenue to investigate the extent and reasons why there has been a spike in direct contact in recent times. We are currently scheduling meetings with Inland Revenue to address the problems this action is causing members. Please feel free to provide any examples to us where direct client contact has caused problems for you or your practice.  

We will update you on progress on this matter in future editions of Insight.  

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