Revenue Minister, Peter Dunne has welcomed the passage of an omnibus tax bill that includes measures on withholding and investment taxes, together with clarification on the applicability of goods and services tax (GST) on the arrangement of tour packages for overseas visitors.
The main features of the bill were the alignment of resident withholding tax rates on interest with the previous changes to personal income tax rates and the 30% corporate tax rate, and the alignment of portfolio investment entities (PIE) tax rates to the personal tax rates of 12.5%, 21% and 30%.
The income thresholds at which the PIE rates apply are also adjusted, to ensure that those who invest in PIEs are not disadvantaged relative to direct investors.
A further amendment, Revenue Minister, Peter Dunne, said, includes the provision of certainty around the GST treatment of facilitation services for tour packages for overseas visitors. These services will now be subject to GST at the standard rate of 12.5%.
However, a transitional provision is allowed for inbound tour operators to zero-rate these services for the year to July 1, 2008, which will help minimise any adverse effects on in-bound tour operators who have not zero-rated the services.
The new measures also change the supplementary dividend rules to allow newly signed tax treaties with Australia, Singapore and the US to come into force, while another provision ensures that those who get New Zealand superannuation and the veterans' pension will remain subject to New Zealand tax while travelling overseas. However, if they decide to live overseas, the pensions will not be subject to New Zealand tax.
"Overall, this was an important omnibus bill that served to tie up a number of loose ends and anomalies,” Peter Dunne concluded.
A comprehensive report in our Intelligence Report series titled "The Lowtax International Pensions Report" which has an in depth view on The Mechanics of Pensions Provision, 'High-Tax' Country Pension Regimes and 'Lowtax' Jurisdictions In Which To Locate Pensions Savings, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report14.asp
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