News and information about the Government's tax policy work programme, including:
- proposed changes to the laws that Inland Revenue is responsible for
- updates on the progress of bills through Parliament
- policy announcements
Closely held companies tax bill passes
23 March 2017
The Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Bill passed its third reading in Parliament today. The Bill contains measures to improve, strengthen and update the rules for closely held companies, non-resident withholding tax and the approved issuer levy, and the GST rules. It also proposes a large number of technical changes to ensure the tax rules work as intended. The Bill now awaits Royal assent. For more information see the media statement.
Special reports on changes to the NRWT rules, closely held companies, and GST services connected with land, will be published here soon, while full coverage of the new legislation will be published in an upcoming Tax Information Bulletin.
23 March 2017
Bill to improve and strengthen tax rules passes
A Bill to improve and strengthen the tax rules passed its third reading today, Revenue Minister Judith Collins says.
“Building a more competitive and productive economy for New Zealanders is a priority for this Government.
“Making sure that the tax rules keep up with social and economic changes, as well as current business practices, is a vital part of a well-functioning economy.
“Improvements to the tax rules following enactment of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Bill will give taxpayers more certainty over their tax affairs by dealing with inefficiencies and complexities that have occurred over time.
“That in turn, should result in lower compliance costs for business,” Ms Collins says.
- simplifying the look-through company rules and the dividend rules as they apply to closely held companies, to ensure that the decision to convert a small business to a company is not driven by tax considerations;
- bolstering the rules around the tax treatment of interest earned in New Zealand by non-residents to ensure greater fairness;
- taxpayer-friendly changes to the GST rules, such as enabling businesses to deduct GST associated with the costs of raising capital;
- depreciation rollover relief for businesses in the upper South Island and Greater Wellington areas hit by last year’s earthquakes and aftershocks, and
- adding 14 new charities to the list of donee organisations in schedule 32 of the Income Tax Act 2007, making donors to those charities eligible for tax benefits on their donations.