Are you ready for the tax changes taking effect from 1 April 2017?
1 April 2017 heralds some important changes for taxpayers and their advisers. Most of the changes are business friendly and are designed to reduce compliance costs. The changes are contained in the recently enacted Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act.
The following list of changes has been extracted from the 2017 New Zealand Master Tax Guide, with cross-references to commentary in the Guide where the changes are discussed:
- The current residual income tax limit of $50,000 before use of money interest is imposed will be increased to $60,000, and this safe-harbour rule will be extended to non-individual taxpayers. Refer ¶22-352.
- Use of money interest will be removed for the first two provisional tax instalments for all taxpayers who use the standard (uplift) method to calculate and pay provisional tax. Refer ¶22-352.
- Contractors subject to the schedular payment rules will be able to elect their own withholding rate. The schedular payment rules will be extended to contractors that work for labour-hire firms. Contractors not covered by the schedular payment rules will be able to opt in to the rules with the consent of their payer. Refer ¶3-044.
- The 1% incremental late payment penalty will be removed from GST, provisional tax, income tax and working for families tax credit overpayments. Refer ¶14-050.
- The Commissioner will be able to disclose tax debt information for the most serious cases of non-compliance to credit reporting agencies, and provide information to the Registrar of Companies in certain circumstances. Refer ¶1-630.
- The self-correction threshold for minor errors will be increased from $500 to $1,000. Refer ¶2-112, ¶4-090 and ¶32-074.
- The threshold for annual FBT returns will be increased from $500,000 to $1,000,000 of PAYE/ESCT. Refer ¶21-145 and ¶21-150.
- Taxpayers will be able to choose whether to apply the existing 63-day rule for employee remuneration. Refer ¶3-015 and ¶10-292.
- The motor vehicle expenditure rules in subpart DE of the Income Tax Act 2007 will be extended to allow certain close companies to use the rules as an alternative to paying FBT. Refer ¶21-105.
- A simplified method for the calculation of deductions for premises and vehicles that are used for dual purposes is being introduced.Refer ¶10-530 and ¶10-710.
- RWT exemption certificates will not need to be renewed annually. Refer ¶15-112.
Ready to find out more?
The 2017 New Zealand Master Tax Guide highlights these and other changes ahead for tax practitioners preparing 2017 tax returns, working out 2018 provisional tax payments, and looking for an overview of changes made during the 2016/17 income year.
Order your copy today!
The 2017 New Zealand Master Tax Guide is the essential resource to keep up-to-date with all the changes and help answer your tax questions quickly and accurately.
As well as the comprehensive guidebook, you also receive:
- Free eBook version of the guide
Free copy of New Zealand Depreciation Rates