Industry Advice on Finance, Business & Tax for the New Zealand Market

The end of the financial year end is fast approaching. 2021 has been a year filled with uncertainties and challenges. In this article we cover off important changes already in force in 2021 as well as some of the recent developments relevant for businesses and personal matters from a tax perspective.

We look at the Government's draft legislative proposals with respect to limiting the deductibility of interest expense for residential property investments and a number of changes to the bright-line rules.

Today the Prime Minister announced a huge package of policies aimed at increasing housing affordability that includes changes to the bright-line test and interest deductions on investment property.

Reading the 194-page interim report from The Tax Working Group (TWG) - a culmination of months of work reviewing submissions - here are our first impressions...

Most people want to pay their fair share of tax, but the complexity of tax continues to evolve where even the simplest of mistakes can cost you dearly in penalties and interest – given the increased funding the Inland Revenue Department will receive you need to ensure you have your tax affairs in order.

Since 2017, Inland Revenue has had a dedicated audit team for Fringe Benefit Tax (FBT). Though FBT is a small part of tax revenue, it’s now a key audit focus, making compliance and accurate tax positions more important than ever.

Family. Gifts. Carols, baubles, tinsel on the tree. When it comes to Christmas time, these are the things that most Kiwis are going to be thinking about—but there’s one more thing that business owners need to keep in mind over the Season of Giving: how much they should be giving to their employees in pay over the holidays.

A major rewrite of New Zealand trust law is underway, and your trust could be impacted. IRD is scrutinising trusts with questionable commercial logic but favourable tax outcomes, while proposed law changes aim to give beneficiaries more visibility into trust activities and the income being generated.

Company cars often come under extra scrutiny during the Christmas period, especially when used privately. Understanding how Fringe Benefit Tax (FBT) applies during holidays is essential to avoid unexpected costs. This article explains key FBT rules, exemptions, and how to stay compliant when company vehicles are used over the festive season.

‘Tis the season of giving! But if you’re planning to give your clients and/or employees a present this year, you should temper your generosity of spirit with the correct tax treatment of gifts for employees. After all, you wouldn’t want the IRD to put you on its naughty list… here’s what you need to know:

From 1 April 2017, tax must be deducted from all payments made to contractors working under a ‘labour hire arrangement’ for a labour hire business. This change will impact many businesses and different industries such as: employment agencies, ‘temp’ agencies, on-hire businesses as well as the wider recruitment, IT and healthcare industries.

In 2015, the Tax Department introduced a ‘bright-line test’ for the sale of residential property. If you buy and sell a property within two years, this test is used to determine if you are required to pay tax on the profit. We explain how the bright-line test works and the responsibilities of residential property owners.