Tax Policy, Inland Revenue | News and information about the Government's tax policy work programme

Tax policy news

23 December 2019

A new double tax agreement with China, which was signed in April this year, will come into force on 27 December 2019. It replaces an earlier agreement dating back to 1986. The new agreement contains provisions to ensure those who conduct business between China and New Zealand do not have to pay tax in both countries for the same transaction.

The new DTA with China does not apply to Hong Kong, which is managed by a separate DTA.

18 December 2019

Tax bill reported back

The Taxation (KiwiSaver, Student Loans, and Remedial Matters) Bill, introduced on 27 June 2019, was reported back to Parliament today.

For more information see the Bill as reported back and the officials’ report* on submissions received on the bill.

17 December 2019

Government to clarify donation tax credit rules

Today Revenue Minister Stuart Nash announced that the Government would move to restrict the issuance of donation tax credits and gift deductions to cash donations (including payments made by credit card or bank transfer). The announcement follows a Court of Appeal decision on Tuesday 17 December that ruled that under current law, donors are entitled to claim a tax credit or gift deduction on debt forgiveness. The proposed change would be included as a late item in the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Bill due for its second reading in Parliament early next year.

For more information see the Minister of Revenue’s media statement and the related Court of Appeal Decision (PDF 257 KB).

12 December 2019

Tax treatment of operating leases

The Government has agreed to proposed changes that would allow taxpayers who apply the New Zealand Equivalent to International Financial Reporting Standard 16 Leases (IFRS 16) to follow their accounting treatment to claim tax deductions on certain leases that are classified as tax operating leases. The proposed changes are in response to taxpayers’ requests for a closer alignment between the tax and accounting treatment of tax operating leases to simplify compliance.

It is intended that the proposed changes would apply only for the person using the asset (the lessee), not the person supplying the asset (the lessor). It would apply only to certain tax operating leases, with some exceptions where the existing treatment is intended to continue. The proposed changes would not affect the boundary between tax operating and finance leases.

The proposed changes will be included in a tax bill planned for introduction early in 2020. They would apply to taxpayers with IFRS reporting obligations for income years starting on or after 1 January 2019, to align with the commencement of IFRS 16.

For more information see the fact sheet and supporting information.

10 December 2019

Purchase price allocation consultation

Inland Revenue is seeking public views on policy proposals to ensure that parties to the sale of a business or commercial property adopt the same allocation of the global price to the various assets, and base this allocation on relative market values.

For more information see the issues paper. The closing date for submissions is 14 February 2020.

Tax Working Group

For the terms of reference, news, reports, and other information see the Tax Working Group's website.

Information releases

We now proactively release Cabinet papers, minutes and supporting papers for tax policy related decisions. View the latest information releases.

Highlights

Pre-Budget announcements

Two pre-Budget announcements were made by the Government today.

GST on...

R&D tax bill enacted

The Taxation (Research and Development Tax Credits) Act 2019 received Royal assent yesterday....

Minister's address to the 2019 IFA conference

The Minister of Revenue, Hon Stuart Nash, spoke at the International Fiscal Association’s...