CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. Legislation 'Brings Clarity' To NZ Tax Rules

Legislation 'Brings Clarity' To NZ Tax Rules

by Mary Swire,, Hong Kong

28 November 2013

The New Zealand Government has released an omnibus tax bill designed to bring greater clarity to the tax rules and make them easier to understand and comply with.

The Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Bill builds on the results of a series of Government consultations. According to Revenue Minister Todd McClay, its measures support the Government's goal of a "well-targeted, responsive and efficient tax system."

The legislation will limit how much debt foreign investors are able to place in New Zealand, and the interest deductions that can be taken. As McClay explained, the existing thin capitalization rules "apply only when a single-non resident controls the investment. These changes are an important part of continued efforts to maintain the integrity of New Zealand's domestic tax rules governing the activities of international businesses here."

In a similar vein, the aim is to ensure that, once the inter-governmental Foreign Account Tax Compliance Act (FATCA) agreement with the US is finalized, New Zealand financial institutions will have an appropriate domestic law framework to follow. In addition, it contains measures to deal with the distortions arising from the current "black hole" treatment of certain items of expenditure. Businesses will no longer need to lodge a patent or resource consent application before they can receive a deduction for expenditure incurred on an aborted or unsuccessful application.

The bill will reform the income tax treatment of land-related lease payments, with the hope of protecting the tax base and providing certainty and consistency. This will mean the taxation of lease payments that are substitutable for taxable lease surrender, and of lease premium payments. The legislation also sets rules for charitable donors and sets the annual income tax rates for 2014-15.

"I expect the proposals in this Bill to make a real difference for businesses and taxpayers, as they contribute to an efficient tax administration, one that delivers the services to people that they need to enable them to manage their tax affairs. That's something the Government will be increasingly focusing on as Inland Revenue's programme of business transformation gathers momentum," McClay added.

TAGS: compliance | Foreign Account Tax Compliance Act (FATCA) | tax | investment | business | tax compliance | tax avoidance | tax incentives | interest | revenue guidance | FATCA | law | agreements | legislation | tax planning | tax rates | New Zealand | United States | tax breaks | revenue statistics | tax reform | legislation amendments | services | Compliance | Tax | Tax Evasion

To see today's news, click here.


Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »

Stay Updated

Please enter your email address to join the mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.

To manage your mailing list preferences, please click here »