In November 2022 Inland Revenue issued TDS 22/21, a Technical Decision Summary on whether the profit from a subdivision was subject to income tax and GST. TDS 22/21 covered a dispute involving a subdivision by the taxpayer of land into two lots. The taxpayer had acquired the property for the purpose of renovating and [...]
Despite recent reductions in property prices, there is little doubt that the passion New Zealanders have for investing in residential property will survive. However, the tax treatment of residential rental investments has increasingly become a tangled web of complexity due to changes in legislation over the past few years. It used to be that [...]
In today’s workplace environment, expectations around employee benefits are changing, with the norm shifting in the employee’s favour. For many, the days of a 9-5 workday and mandatory workplace attendance are a distant memory, to the point where flexible hours and working environments are considered a bare minimum. As the war for talent has [...]
In 2017 Inland Revenue released an Interpretation Statement, IS 17/02, which formalised the long-standing practice of allowing a farmer to claim a portion of their farmhouse expenditure on the basis it is the “headquarters” of the farm. But then in 2020 Interpretation Statement IS 20/05 was released by Inland Revenue which overthrew the common [...]
On 29 August 2022 Inland Revenue released a 49-page report: “Fringe benefit tax: regulatory stewardship review”, which reports the summary, findings and recommendations of a review of New Zealand’s current Fringe Benefit Tax (FBT) regime – a regime whose design and operation has not been subject to a full review for nearly 20 years. [...]
New Zealand’s Goods and Services Tax (GST) system is often praised for being a simple broad-based tax. But this doesn’t mean mistakes don’t happen. Going back to basics, if you carry out a taxable activity in New Zealand and your turnover is more than $60,000 in a 12-month period, you are required to register [...]
A company is sometimes referred to as an interim taxing vehicle because the income of a company is first taxed when derived but then taxed again when distributed to its shareholders. The benefit of the tax paid by a company is captured as imputation credits and able to be attached to dividends. Ensuring that [...]
Whether it’s a cold, flu, a tummy bug from day-care or the notorious C-word, we’re only partway through winter and already the amount of sick leave being taken seems higher than normal. In New Zealand, most employees are entitled to 10 days of paid sick leave per year – this was only increased recently [...]
On 20th July 2022 Inland Revenue released a 51-page interpretation statement 22/04 – Claiming depreciation on buildings. In light of the re-introduction of depreciation on non-residential buildings from the 2021 income year, the interpretation statement is intended to give guidance to building owners on when they can claim depreciation on buildings. Specifically, the statement emphasises the [...]
There are common misconceptions in relation to how portfolio shareholdings in foreign companies are treated for tax purposes. One misconception is that if either the profits of the foreign company or the dividends it pays have been subject to tax overseas then New Zealand (NZ) tax does not apply. Another is that if the [...]
