Support for reform

Issue: Support for the proposal

Submission

(Accountants and Tax Agents Institute of New Zealand, Arthur Jacobson, Baucher Consulting Limited, Chris Pearson, Corporate Taxpayers Group, Ernst & Young, Financial Services Council, Grey Power New Zealand Federation Incorporated, KPMG, New Zealand Institute of Chartered Accountants, New Zealand Law Society, PricewaterhouseCoopers)

A number of submitters have expressed their broad support for the proposed changes to the taxation of foreign superannuation interests (Arthur Jacobsen, Chris Pearson, Corporate Taxpayers Group, Ernst & Young, Financial Services Council, Grey Power New Zealand Federation Incorporated, KPMG, New Zealand Institute of Chartered Accountants, New Zealand Law Society, PricewaterhouseCoopers).

Two submitters supported the move to clarify the rules, and to exempt taxpayers during the first 48 months on residency (Accountants and Tax Agents Institute of New Zealand, Baucher Consulting Limited).

One submitter stated that the proposed changes contained in the bill represent an acceptable compromise between the proposals in the officials’ issues paper and the submissions received in response to the issues paper (Arthur Jacobsen).

One submitter is pleased that the proposed rules provide options (schedule method and formula method) (New Zealand Institute of Chartered Accountants).

Another submitter expressed his support for the move to receipts-based taxation for foreign superannuation interests as the proposed changes would bring the New Zealand tax code in line with other countries (Chris Pearson).

Comment

Officials welcome the support for the bill.

Officials note that an issues paper proposing changes to the tax treatment of foreign superannuation was released in July 2012. Fifty-nine submissions from a variety of interested parties – including individuals, professional advisory firms, and pension transfer agents – were received.

A number of changes to the original proposals were made as a result of submissions, including the introduction of an alternative method of calculating actual gains (the “formula method”).

Recommendation

That the submission be noted.