New Zealand’s Goods and Services Tax (GST) system is often praised for being a simple broad-based tax. But this doesn’t mean mistakes don’t happen. Going back to basics, if you carry out a taxable activity in New Zealand and your turnover is more than $60,000 in a 12-month period, you are required to register for […]
On 29 August 2022 Inland Revenue released a 49-page report: “Fringe benefit tax: regulatory stewardship review”, which reports the summary, findings and recommendations of a review of New Zealand’s current Fringe Benefit Tax (FBT) regime – a regime whose design and operation has not been subject to a full review for nearly 20 years. The
In 2017 Inland Revenue released an Interpretation Statement, IS 17/02, which formalised the long-standing practice of allowing a farmer to claim a portion of their farmhouse expenditure on the basis it is the “headquarters” of the farm. But then in 2020 Interpretation Statement IS 20/05 was released by Inland Revenue which overthrew the common practice
Update – GST on farmhouses and holiday homes Read More »
In today’s workplace environment, expectations around employee benefits are changing, with the norm shifting in the employee’s favour. For many, the days of a 9-5 workday and mandatory workplace attendance are a distant memory, to the point where flexible hours and working environments are considered a bare minimum. As the war for talent has evolved,
The employees’ market Read More »
Greetings, I feel we have had enough rain for now. With the majority of the clients in the middle of calving season we hope for more fine sunny days like today! This issue includes an article on sick leave. Last year Jacinda doubled every worker’s entitlement and my experience this winter shows that it was
From My Desk – August 2022 Read More »
There are common misconceptions in relation to how portfolio shareholdings in foreign companies are treated for tax purposes. One misconception is that if either the profits of the foreign company or the dividends it pays have been subject to tax overseas then New Zealand (NZ) tax does not apply. Another is that if the foreign
Shares held in foreign companies 101 Read More »
Whether it’s a cold, flu, a tummy bug from day-care or the notorious C-word, we’re only partway through winter and already the amount of sick leave being taken seems higher than normal. In New Zealand, most employees are entitled to 10 days of paid sick leave per year – this was only increased recently on
Sick leave balances taking a hit Read More »
On 20th July 2022 Inland Revenue released a 51-page interpretation statement 22/04 – Claiming depreciation on buildings. In light of the re-introduction of depreciation on non-residential buildings from the 2021 income year, the interpretation statement is intended to give guidance to building owners on when they can claim depreciation on buildings. Specifically, the statement emphasises
Depreciation on buildings Read More »
Residential property acquired after 27 March 2021 is subject to a 10-year bright-line period, or 5 years if the property qualifies as a ‘new build’. The extension to 10 years has increased the likelihood that a property transfer will be caught. In an attempt to alleviate the risk that related party transfers would be unfairly
Rollover relief – Does it go far enough? Read More »
The introduction of the 39% tax rate for individuals who earn over $180,000 from 1 April 2021 has reignited Inland Revenue’s interest in the income attribution and market salary regimes. These rules currently prevent a person from having income earnt from individual efforts or “personal services” taxed through an associated entity at a lower tax
Attribution vs market salary rules Read More »
