NZ Government Warns America's Cup Competitors Of Tax Liabilities

by Mary Swire, Tax-News.com, Hong Kong

31 October 2001

The New Zealand Inland Revenue Department has announced that it will set up a special unit during the 2003 America's Cup Competition to advise participating teams of their tax liabilities to the New Zealand government.

Already the Department has released a booklet explaining what is expected of the competitors and members of the media covering the event. The booklet states: 'You may have to pay tax in New Zealand if you are: a challenging syndicate; a land-based syndicate member; a judge or official; a super-yacht operator or crew member; associated media or any other associated enterprise.'

The booklet adds that although there is no capital gains tax in New Zealand, profits from some forms of financial arrangements and selling some assets may be taxable.

'It's fair to say that they'll be here to win a yacht race and not to determine their tax obligations,' said Inland Revenue's corporate boss, Mike Spelman. 'What we are trying to do is get alongside and help them determine those obligations.'

The Inland Revenue states that many of the potential taxpaying visitors will be regarded as New Zealand residents if they stay in the country in excess of 183 days in any 12 month period or if they have a permanent link (such as financial/social/property ties) to New Zealand. Mr Spelman added: 'There were several hundred racing crew members here last time and some of them were here for up to two years, so there's a significant amount of tax at stake.'

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