A Bill aimed at simplifying and improving the settings for the administration of the tax system passed its third reading in Parliament tonight.

“Inland Revenue are currently implementing more customer-focused business practices and new technologies to make it simpler for people to complete their tax affairs and get them right,” Revenue Minister Michael Woodhouse says.

Budget 2016 invests $503 million of new operating funding over the next four years and $354 million of new capital funding for Inland Revenue’s new tax administration system, Revenue Minister Michael Woodhouse says.

“It is important that our tax system keeps pace with changes in New Zealanders’ expectations and changing business models,” Mr Woodhouse says.

Revenue Minister Michael Woodhouse says the recent signing of the Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports will help ensure large multinationals pay their fair share of tax by providing for increased sharing of information between revenue authorities.

“Some large multinationals often have intricate financial arrangements in place to minimise or eliminate tax obligations on their earnings, known as base erosion and profit shifting (BEPS),” Mr Woodhouse says.

An officials’ issues paper seeking feedback on the taxation of employee share schemes was today release for consultation, Revenue Minister Michael Woodhouse says.

Employee share schemes are arrangements that allow employers to provide shares and share options to their employees as part of their remuneration.

“Employee share schemes are becoming a much more popular form of remuneration, so it’s important the tax treatment of share schemes is fair,” Mr Woodhouse says.

Tertiary Education, Skills and Employment Minister Steven Joyce and Revenue Minister Michael Woodhouse have welcomed the passing of a Bill which will help Inland Revenue contact more student loan borrowers in Australia.

The Taxation (Residential Land Withholding Tax, GST on Online Services and Student Loans) Bill includes an information sharing agreement with the Australian Tax Office which will ensure that Kiwis fulfil their student loan obligations.

Cross-border purchases by New Zealand residents of services and other intangibles such as music bought through offshore providers will be subject to GST from 1 October 2016, following the passing of the Taxation (Residential Land Withholding Tax, GST on Online Services and Student Loans) Bill in Parliament today, Revenue Minister Michael Woodhouse says.

“Collecting GST from the growing volume of online sales across borders has been an issue of growing concern for some time, so the passing of this legislation marks a very important first step,” Mr Woodhouse says.

The Government remains committed to tackling tax evasion and avoidance by ensuring that our tax rules are open and transparent, Revenue Minister Michael Woodhouse says.

“New Zealand has an extensive network of tax treaties and information exchange agreements, which are at the heart of a transparent tax system,” Mr Woodhouse says.

“As of today New Zealand has signed such agreements with around 100 countries, including Latin American countries. This helps New Zealand and other tax authorities detect tax avoidance and evasion.

A wide-ranging tax Bill introduced today proposes technical changes to improve, strengthen and update our tax rules so they continue to work well for taxpayers, says Revenue Minister Michael Woodhouse.

“The Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Bill continues the Government’s work in making sure our tax system remains fit for purpose,” Mr Woodhouse says.

An SME-friendly tax package announced by the Prime Minister today will reduce compliance costs and make tax simpler for small businesses, Finance Minister Bill English and Revenue Minister Michael Woodhouse say.

“The package will make paying tax easier and more certain, reduce the burden of interest and penalties, and help small businesses tailor payments to their circumstances,” Mr English says.

“We want the tax system to fit in with how businesses operate, not the other way around.”

Key measures in the proposal are that:

Cabinet today agreed to appoint highly regarded tax expert John Shewan to conduct an independent review of disclosure rules covering foreign trusts registered in New Zealand, Ministers Bill English and Michael Woodhouse say.

“Ministers decided that in light of the ‘Panama Papers’ being released last week, it’s worth looking at whether the disclosure rules are fit for purpose and whether there are practical improvements we can make,” Mr English says.

Revenue Minister Michael Woodhouse says New Zealand has a very sound tax system with world-class tax rules.

“We tax people who live, work and do business here. We don’t tax foreign income earned by foreigners,” says Mr Woodhouse.

“The same principles apply to trusts, and have done since 1988.

“It is ridiculous to suggest that New Zealand is a tax haven, as tax havens thrive on secrecy.

Tertiary Education, Skills and Employment Minister Steven Joyce and Revenue Minister Michael Woodhouse have welcomed a further boost in repayments from overseas-based student loan borrowers.

Over the first two months of this year there was a 31 per cent increase in repayments by overseas based borrowers over the same period in 2015.  In January and February this year $29.7 million was received from overseas-based borrowers, compared with $22.7 million in January and February last year.

The OECD’s automatic exchange of information (AEOI) initiative will set a global standard for sharing information with the objective of minimising tax evasion, says Revenue Minister Michael Woodhouse.

An issues paper, Implementing the global standard on automatic exchange of information, was released today for public feedback. The paper outlines proposals for implementing the global standard on the AEOI.

A wide-ranging tax bill passed its final stage in Parliament today, bringing together a suite of proposals to help support the Government’s work in creating a more productive economy, Revenue Minister Michael Woodhouse says.

Welcoming today’s third reading of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Bill, Mr Woodhouse says the bill contains some practical measures for businesses, while other measures clarify rules for taxpayers more generally.

A bill that will see offshore property speculators pay a withholding tax on profits from property transactions under the ‘Bright-line test’, and GST applied to online purchases of services and intangibles from overseas suppliers has passed its first reading.

Revenue Minister Todd McClay says the Residential Land Withholding Tax (RLWT), GST on Online Services, and Student Loans Bill is about fairness.

Revenue Minister Todd McClay today announced that the new prescribed interest rate used to calculate fringe benefit tax on low-interest loans provided by employers to their employees will be 5.99%.

The new, lower rate will apply for the quarter beginning on 1 October 2015 and for subsequent quarters.  The previous rate was 6.22%.

The FBT rate on employer-provided low-interest loans is reviewed regularly to align it with the results of the Reserve Bank’s survey of variable first mortgage housing rates to ensure it is in line with market interest rates.

Low-income working families who are eligible for the minimum family tax credit (MFTC) will receive an increase for the 2016–17 tax year, Revenue Minister Todd McClay has announced.

The tax credit currently guarantees recipients an after-tax income of $23,036 a year ($443 a week).  This will increase to $23,764 a year ($457 a week) for the 2016–17 tax year, beginning on 1 April 2016.

A tax bill introduced today proposes a new withholding tax on sales of residential property by people who live overseas and go on to sell the property within two years of purchase. 

The proposed measure is the third part of the Government’s investment property tax reforms announced as part of Budget 2015.

A tax bill introduced to Parliament today will allow information on student loan borrowers living in Australia to be shared between Inland Revenue and the Australian Taxation Office, ensuring defaulters pay their outstanding loan balances.  

Revenue Minister Todd McClay says measures proposed in a tax bill introduced today are about fairness and equity.

“It is about creating a level playing field for collecting GST and putting New Zealand businesses and jobs ahead of the interests of overseas suppliers”, says Mr McClay.

These measures are an important first step in the Government’s efforts to deal with increasing volumes of online services and other intangibles purchased from overseas suppliers that should, under New Zealand’s tax rules, be subject to GST.

Revenue Minister Todd McClay says the passing of the bright-line legislation in Parliament today is an important tool to ensure property speculators pay their fair share of tax.

The bill, which contains further measures to strengthen the property tax rules announced as part of Budget 2015 passed its third reading in Parliament today.

Mr McClay says proposals in the Taxation (Bright-line Test for Residential Land) Bill were part of a three-pronged approach announced by the Government in May to tighten the property investment rules.