Calculating Fringe Benefit Tax (FBT) on motor vehicles can be complex, due to the various permutations that can exist depending on the use of the vehicle, its type and the approach adopted by the employer. As a result, it is very common for businesses to get the calculation wrong.

On 31 March 2023, Inland Revenue released a draft interpretation statement (PUB00417) addressing the deductibility of land holding costs - namely, interest, rates and insurance - and the relevance of whether the land is taxed on disposal. How will this affect you?

In response to the adverse weather events that hit in January and February this year, a number of tax concessions were released on 14 March 2023 in an attempt to provide some relief to those who were impacted.

We explore a recent Inland Revenue decision on whether the profit from a subdivision was subject to income tax and GST. 

Between concessionary changes enacted over recent years and the option of using tax pooling, the days of incurring large interest and penalty charges with Inland Revenue are in the past.

An important date for many taxpayers in New Zealand is 31 March. And for many, the end of the financial year can be a very stressful one but it needn’t be. Here’s how to minimise stress and maximise efficiency.

Is your farm house the ‘headquarter’ of the farm? Is your bach, or home office GST-claimable? Are you up with the rules?

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. We outline some of common ones.
 

A recent Inland Revenue report found that although FBT is performing its task of taxing non-cash benefits and hence supports the tax system, it was inconclusive as to whether FBT functions well. We explore this further.

Parents wishing to assist their children with buying residential property should carefully consider the ownership structure and alternate options before settlement. Inland Revenue has issued a draft interpretation regarding bright-line application in family and close relationship transactions.

Could your employees benefit from subsidised public transport fares? Fringe benefit tax is soon to be removed from public transport passes, making them a more cost-effective option as an employee perk.

Rewarding your team with vouchers or trips? Providing a car or a gym membership? FBT can be tricky, so make sure you’re calculating the true cost of employee perks.

How can Inland Revenue’s publication of Technical Decision Summaries help your business? And what exactly is TDS? We share more.

There are common misconceptions in relation to how portfolio shareholdings in foreign companies are treated for tax purposes. We correct the misconceptions.

Inland Revenue released a 51-page interpretation statement in July that while appears logical enough, includes a surprising statement.

Inland Revenue has sought to clarify the deductibility of employee-related costs incurred due to the Covid-19 pandemic. We share more here.

The residential bright line period has increased from 5 to 10 years with a denial of interest deductibility for residential investment properties. The new legislation is complex and difficult to interpret because it has been written with numerous potential fact scenarios in mind.

Savvy scammers know that Kiwis expect to receive correspondence from Inland Revenue over the next few months. Beware emails or texts that appear to have come from IR to con you out of money.

New legislation was passed at the end of March to improve and modernise GST invoicing and record-keeping requirements. Learn what’s involved with TSIs, SCIs and more.

Inland Revenue released a government discussion document that contains a proposal that represents a further erosion of the principle that New Zealand does not tax capital gains. What’s proposed if you sell shares in a company?

Do you earn more than $180,000 in taxable income? Inland Revenue is proposing changes that will make it much tougher to avoid paying the full 39 percent top tax rate.

For those of you who prepare and file FBT returns on behalf of a GST-registered employer, you will be familiar with the GST on FBT adjustment that forms part of the FBT return. But are you clear on the rules?

For many business owners, a break over summer is an opportunity to evaluate their future strategy and consider whether it is time to exit, or conversely, grow by purchasing someone else’s business. Whether buying or selling, it is a demanding exercise.

After over a year of consultation, the purchase price allocation legislation is now in effect. The purpose of the legislation is to ensure vendors and purchasers allocate consistent prices to business assets for tax purposes when selling and buying assets.

For employers, the Christmas period is a time to splurge a little (or a lot) on your staff. This may include a Christmas party, taking the team out for lunch or providing Christmas gifts but you could also be liable to pay Fringe Benefit Tax (FBT) on those perks. 

Care needs to be taken when completing a land sale. With the surge in property valuations and property development activity, an incorrect GST declaration could prove to be a costly mistake.

‘Telecommunications usage plans’ is Inland Revenue speak for your telephone and internet connections. IR has created rules for reimbursing employees. This includes shareholder employees. We share more.

In December last year tax changes were made under urgency without the usual consultation process. Fast forward one year and three things have happened.

In September 2021, the Government introduced a Bill that contained over 100 tax amendments. We share a few of the changes of note.

On Tuesday 28 September, the Government released the draft legislation outlining the details of the policy limiting the deductibility of interest costs for residential property investments.

It now appears Inland Revenue may be directed to crack down on the application of FBT to utes and enforce the view that they may not qualify as a work-related vehicle. While on the other hand, the Government is incentivising the purchase of electric vehicles.

Inland Revenue has released various forms of guidance on the topic of ‘crypto-assets’, which encompasses cryptocurrencies. This guidance is varied and somewhat contradictory. In general, crypto-assets are treated as a form of property for tax purposes.

Inland Revenue’s “Design of the interest limitation rule and additional bright-line rules” document provides clarification on the proposed rules and seeks feedback on certain elements regarding the tax deductibility of interest on residential investment properties and the extension of the bright-line period to 10 years. 

If you’re self-employed as a sole-trader, you have a greater degree of flexibility and control of your business affairs but you may be disadvantaged in how income and expenditure is calculated compared to a company. Tax deductible meal allowance for one.

Investing on a share platforms like Sharesies or Hatch? Should you be worried about paying tax on your dividends or when you sell? We have some tips.

Did you, or someone you know, get a tax bill they weren’t expecting? Inland Revenue has released a list of six possible reasons. We can help you figure out which one might apply, or why your bill isn’t what you expected.

EV feebates will hit utes the hardest – three things you should know if you’re in the market for a new ute for your business.

With Inland Revenue no longer accepting cheques, more taxpayers are moving to online banking to pay their tax bills – and this has been a learning curve for many.

While most of us can accept the Government’s intentions of tipping the balance away from speculators and back towards first home buyers, the new property tax changes are going to hurt ordinary New Zealanders, mum and dad investors, and in reality, tenants themselves as the cost of providing rental stock rises to investors.  We share more here.

During the early days of the COVID-19 pandemic, the Government relaxed rules relating to carrying forward tax losses. The thinking being businesses requiring new capital investment would not forfeit tax losses. This change is now law.

Tax pooling is a way to pay provisional tax by either chipping away at what you owe in instalments or deferring the whole amount to a payment date that suits you, without incurring Inland Revenue late payment penalties or interest.

Inland Revenue has set out a ‘draft’ view on to what extent businesses can claim tax deductions for expenditure incurred while impacted by Covid-19. Your comment is welcomed – the deadline is 28 May.

The top personal marginal tax rate increases to 39 percent on income over $180,000 with effect from 1 April 2021. Businesses should consider what the flow-on effects are and forward plan to ensure they are not caught off guard.

Here’s how you should be treating employee reimbursements for tax for those working from home this year

The treatment of employee accommodation (and taxable allowances) can be confusing. We share some insights to clarify the tax obligations.

Labour has ruled out a capital gains tax and an increase in fuel taxes but is prepared to introduce a Digital Services Tax to target multinational digital businesses who have taken advantage of tax structuring options.

We share IR guidance on the deductibility of costs to bring residential rentals up to new legislative standards.

You wouldn’t be blamed for assuming FBT wouldn’t apply to motor vehicles during the recent Level 4 lockdown period. Right?

In addition to the tax loss carry-back scheme, the New Zealand Government has introduced various tax changes to assist businesses and individuals to get through COVID-19.

As part of the Government’s Covid-19 response, on 30 April 2020 legislation was passed under urgency that allows tax losses to be offset against income derived in a previous year, thereby enabling the taxpayer to obtain a refund comprising prior year income tax paid. This temporary tax loss carry-back scheme is available to most taxpayers, e.g. trusts, companies and individuals.

The Government has announced (April 15) a further set of tax proposals to help businesses manage the impacts of COVID-19.  In summary:

Inland Revenue has recognised the system of binding rulings doesn’t work for small businesses because it’s too expensive.

You might have been contacted by your bank to fill in a form enquiring about your CRS status. In simple terms, CRS stands for Common Reporting Standard.

If you pay your provisional tax one day late you come out of what is called the Safe Harbour scheme.

There have been several tax changes recently. Some of the important ones are listed here:

If you’ve received a wage subsidy, don’t treat it as being part of sales.

Whether a price includes GST or not is important to know for the price of a product. In the case between New Zealand Police and Genesis Pure, ‘GST’ became the difference between a maximum penalty of seven years in jail, or one.

Tax is often quoted as being unfair. However, a review of taxes from historic periods can highlight how ‘sensible’ our current system is.

GST is deducted on goods and services that are acquired for use in making taxable supplies. A recent High Court decision is a timely reminder that understanding the legal form of a transaction is important for applying the correct GST treatment.

A series of legislative changes have been implemented over the past few years as part of the Government’s focus on ensuring multi-national corporations pay their fair share of tax.

The Income Tax Act 2007 requires a donation to be a “…gift of money of $5 or more…”, but what does this phrase mean? Confusion arises because monetary gifts can take various forms. A dispute on the issue has been making its way through the Courts.

Looking to protect the long-term future of your business and investments? We’ll help you create a new holding company and establish a robust group structure that safeguards your profits.