Menu

Family Justice reforms experts announced

Justice Minister Andrew Little has announced the full line up of the ‘Expert Reference Group’ to support the Independent Panel examining the 2014 family justice reforms.

“I asked for highly qualified and experienced people because it’s critical that the panel is supported by relevant experts,” says Andrew Little.

Read more
Add your reaction Share

Canterbury tax relief, GST loophole closed

Revenue Minister Stuart Nash has confirmed Parliament will extend tax relief for Canterbury businesses affected by issues relating to depreciation following the earthquakes.

Mr Nash today introduced a Supplementary Order Paper (SOP) to the Taxation (Annual Rates, Modernising Tax Administration, and Remedial Matters) Bill currently making its way through Parliament.

“The SOP extends tax relief for Canterbury businesses affected by earthquakes. It extends depreciation roll-over relief for a further five years to the end of the 2023-24 income year. I have been advised that at least 40 Canterbury businesses will be adversely affected if current depreciation provisions are not extended.

“The tax issue arises because an insurance payout on a depreciable asset can attract a tax liability which may cause consequent cash flow problems. We do not want to hinder the city’s recovery or unfairly burden these taxpayers.

“Many Canterbury businesses are experiencing problems outside their control, such as delays with insurance pay-outs or finding tenants for properties or making progress on building projects. This measure will provide relief to affected businesses and further assist with the Canterbury rebuild.”

Mr Nash says the SOP will also close a loophole which allows non-profit entities to potentially avoid GST on income from asset sales. The change was signalled in an issues paper released on 15 May and will apply from that date.

“The GST treatment of non-profit organisations differs from other entities,” says Mr Nash. “Non-profits can register for GST and claim GST refunds on most of their expenses, even if their turnover is below the $60,000 threshold for GST registration. In many cases non-profit bodies do not pay much GST on their activities.

“In turn, when a GST-registered body sells an asset for which it has claimed GST expenses, it must pay GST on the income from the sale. Inland Revenue has applied this rule since GST was first introduced in 1986.

“Revenue officials have recently been advised of a new legal interpretation of this rule which exposes the tax system to potential losses. For the avoidance of doubt, the SOP introduced today will clarify the GST rules.

“The new interpretation is not consistent with the way the GST rules have been applied and understood in the past. If GST expenses have been claimed by a non-profit body in relation to an asset, GST should apply to the asset when it is sold or there is an equivalent event, such as an insurance pay-out.

“The tax system is based on fairness, and being simple and efficient to operate. The new interpretation threatens those principles and the law change restores certainty.

Add your reaction Share

Hong Kong double tax agreement updated

Revenue Minister Stuart Nash says New Zealand’s ability to detect and prevent tax evasion is enhanced by an update to our double tax agreement with Hong Kong which is now in force.

The update to the 2010 double tax agreement (DTA) removes an impediment to the automatic exchange of information (AEOI) between the two tax jurisdictions.

“The double tax agreement with Hong Kong is one of 40 such tax treaties with our main trading and investment partners,” says Mr Nash. “They encourage growth in economic ties by reducing tax impediments to cross-border trade and investment.”

“Double tax agreements provide greater certainty of tax treatment, eliminate double taxation, reduce withholding taxes on cross-border investment returns, and exempt certain short-term activities from income tax.

“But they also enable New Zealand and Hong Kong tax officials to help each other to detect and prevent tax avoidance and evasion. DTAs do this by establishing a mechanism for exchanging information.

“New Zealand residents are taxed on their worldwide income and so the exchange of information is critical to effective tax enforcement. It makes it possible to obtain off-shore information to verify that residents are correctly reporting their foreign income. Before these updates took effect, information was only exchanged on request between Hong Kong and New Zealand. The update allows for automatic information exchanges under a global standard supported by the OECD and G20.

“Under this AEOI initiative, New Zealand financial institutions must review their accounts and compile information which is then reported to Inland Revenue. The updated double tax agreement will allow New Zealand’s first automatic exchange of information with Hong Kong to occur by 30 September 2018.

“The AEOI initiative is an international response to mounting concerns with the problem of off-shore tax evasion, that is, the ability of individuals and entities to evade tax by hiding their wealth in off-shore accounts.

“Hong Kong is an important international financial centre and if it was not included as an AEOI exchange partner it would leave a significant gap in our tax compliance network. We are progressively expanding and updating our network of double tax agreements to clamp down on tax evasion,” Mr Nash says.

More information is available here: http://taxpolicy.ird.govt.nz/tax-treaties/hong-kong

Add your reaction Share

Ngāti Rangi Settlement Bill passes first reading

Minister for Treaty of Waitangi Negotiations, Hon Andrew Little, welcomed Ngāti Rangi to Parliament today to witness their Treaty settlement Bill pass its first reading.

Read more
Add your reaction Share

Pare Hauraki sign collective redress Deed

Add your reaction Share

Panel appointed to re-write 2014 Family Court reforms

Three experts have been appointed to an Independent Panel to examine the changes made to the family justice system in 2014 by the previous National Government, Justice Minister Andrew Little announced today.

Read more
Add your reaction Share

Canterbury Earthquake Insurance Tribunal Bill introduced

Justice Minister Andrew Little has introduced a Bill to help Cantabrians resolve outstanding residential insurance claims from the 2010 and 2011 earthquakes.

Read more
Add your reaction Share

Progress with Marutūāhu and Pare Hauraki iwi

Significant progress has been made with the collective redress deeds for the Marutūāhu and Pare Hauraki iwi, the Minister for Treaty of Waitangi Negotiations, Andrew Little, has announced today.

Read more
Add your reaction Share

New online tool for business owners

A new online tool to help small business owners quickly and easily choose their business structure has been launched by Small Business Minister Stuart Nash.

“Most businesses in New Zealand are either sole traders, companies, or partnerships. It can sometimes be daunting or confusing to decide which structure works best for your business,” Mr Nash says.

“New Zealand business structures have different legal and financial obligations which can affect the ability of a business to evolve or grow. It’s important for businesses get it right the first time.

“We are committed to helping New Zealand small businesses succeed, and that means ensuring they know where to get support from the very beginning.

“The online tool, developed by business.govt.nz, asks small business owners three quick questions. The questions help determine whether a sole trader, partnership or company structure is likely to be more suited to their business.

“The new tool, Choose Business Structure, takes an all-inclusive view of the various obligations and considerations businesses will face, such as tax, ACC, financial statements, and indemnity insurance. It was developed in collaboration with the Companies Office, New Zealand Business Number (NZBN), Inland Revenue, ACC and the private sector.

“It also offers practical tips, comparison tables and suggests when a business owner should talk with experts. It gathers information in one place so that small business owners can quickly and easily make decisions with confidence. If you’re already in business, it’s also a good way to check that you’re operating under the right structure.

“There are of course other structures such as trusts, unlimited liability companies, and co-operatives. I encourage business owners to check the new tool and explore other resources available from MBIE,” Mr Nash says.

Choose Business Structure is part of the new suite of tools on business.govt.nz  designed to help businesses, with guidance personalised to their individual needs. The tool follows the launch of a re-vamped ONECheck in May, which is now being searched almost 2,000 times a day. 

https://www.business.govt.nz/choose-business-structure/

Add your reaction Share

Keep our money clean

Justice Minister Andrew Little has launched a public information campaign to raise awareness about the problem of money laundering by domestic and foreign criminals here in in New Zealand.

Read more
Add your reaction Share