Date posted: 24/05/2018 3 min read

New Zealand Tax update - May 2018

Recent developments in New Zealand tax

In brief

  • Budget 2018
  • Recent submissions
  • Items open for submission

New Zealand Budget 2018

The 2018 Budget delivered on 17 May included funding for Inland Revenue of $30.8 million over the next four years to improve tax compliance and to implement and administer the research and development tax credit regime announced in March.

The areas of tax compliance that will be focused on are following up outstanding company tax returns and identifying legislative opportunities to extend the third party reporting and withholding tax rules.

Other tax related announcements include new tax rules for bloodstock breeding and a new tax policy work programme.

Recent Submissions

The New Zealand Tax team has recently completed a number of large submissions. Details of these are below and full copies of our submissions can be viewed on our website.

Tax Working Group

In our submission to the Tax Working Group we considered a broad range of areas including general taxation principles, the sustainability of the tax system, capital gains taxes and corrective taxes. Our recommendations included the need for reform of small business taxation, the need for efficiency, equity and fairness in the tax system, and the need to increase tax compliance from the shadow economy.

Ring-fencing of Rental Losses

CA ANZ raised concerns that the proposal to ring-fence rental losses may not achieve its objectives to improve housing affordability and fairness in the tax system.

Items open for submission

GST on Assets Sold by Non-profit Bodies

An issues paper was recently released for public consultation on GST on assets sold by non-profit bodies. The proposals intend to clarify the GST rules on the sale of assets by charities and other non-profit bodies. The proposed changes will apply from 15 May 2018.  Submissions on this item closed 15 June 2018.

GST on Low-value Imported Goods: An Offshore Supplier Registration System

This discussion document proposes to require offshore suppliers to register for and to collect GST on goods with a value of less than $400 supplied to New Zealand consumers where total supplies to New Zealand consumers exceed $60,000 in a 12-month period. Submissions on this item closed 29 June 2018.

PUB00281: GST Treatment of Distributions Made by a Trading Trust to a Beneficiary

In this draft interpretation statement, Inland Revenue considers the GST treatment of a distribution made by a GST-registered trading trust to a beneficiary, where that distribution consists of goods forming part of the trust's taxable activity.

Submissions on this item closed 7 June 2018.

R&D Tax Incentive for New Zealand Discussion Document

If you haven't already had your say on the R&D Tax Incentive for New Zealand discussion document, there's still time, submissions close 5pm 1 June 2018! The document sets out the proposed R&D tax credit design as well as eligibility and qualifying criteria.

National Average Market Values of Specified Livestock Determination 2018

Inland Revenue has released the 2018 National Average Market Values of Specified Livestock and will be published in the July 2018 Tax Information Bulletin. The determination applies to specified livestock on hand at the end of the 2017-18 income year.

AIM

Inland Revenue has published updated materials on their website about the Accounting Income Method for provisional tax including videos and fact sheets.

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