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

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.

Property taxation is currently a hot area of focus for the Tax Department. If you’re buying, selling or renting property in New Zealand, it’s important to understand how property taxation works and your responsibilities as a business owner.

If you are moving to New Zealand, or are returning to New Zealand from overseas, then you could qualify for the transitional tax resident exemption. We explain what this means and how it impacts your tax obligations.

As the tax landscape continues to change with increased complexity of tax regulation both domestically and overseas, the management of tax is fast becoming a necessary part of today’s advisory board agendas. Graham Lawrence gives some important advice to business owners who want to get it right.