| IMPROVING CURRENT TAX SETTINGS WITHIN A BROAD-BASE, LOW-RATE TAX FRAMEWORK |
| Research and development |
(R&D) tax losses Taking forward the Government’s proposal to cash-out R&D tax losses in the income year in which they arise. |
| Black-hole R&D expenditure |
Considering the tax deductibility of capital R&D expenditure, in appropriate circumstances. |
| Interaction of loss grouping and imputation credits |
Considering how to preserve the benefit of loss offsetting for shareholders of non-wholly owned groups. |
| Review of tax rules for closely held companies |
Considering simplification, technical and base maintenance issues that arise under current tax rules applying to closely held companies, including improving the overall coherence of the rules. These include the rules for look-through companies and other close company regimes. |
| Tax pooling |
Reviewing whether the tax pooling rules are operating as intended. |
| Depreciation on buildings |
Considering on-going boundary and remedial issues stemming from removal of depreciation on buildings. |
| Tax treatment of government grants |
Reviewing the current income tax treatment of government grants. |
| Financial reporting |
Setting minimum financial reporting requirements for companies and certain other business taxpayers. |
| Taxation of annuities |
Scoping a review of the tax settings for annuities. |
| Remedial work programme |
Considering remedial matters arising from recently enacted legislation as well as other priority tax law coherence and maintenance issues. Recently enacted regimes include:
- the controlled foreign company rules
- the life insurance rules
- the mixed-use assets rules
- social assistance income base broadening rules
- the new child support regime.
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| KiwiSaver employer and employee contributions |
Supporting Inland Revenue’s review of the process for the reporting, recording and collection of KiwiSaver employer and employee contributions, and ensuring a visible and cohesive approach to non-payment of KiwiSaver contributions. |
| Child support overseas debt |
Considering whether there are further ways to address the problem of overseas child support debt. |
| Student loan overseas-based borrowers |
Providing continued policy support for the on-going compliance strategy to encourage compliance by overseas-based borrowers. |
| INTERNATIONAL TAX REFORM AND ADDRESSING BASE EROSION AND PROFIT SHIFTING |
| Active income exemption for offshore branches |
Aligning the treatment of offshore branches with the current regime for controlled foreign companies. An active income exemption will mean that foreign business income or losses will not be included in New Zealand tax assessments. |
| Mutual recognition of imputation credits |
Working to progress mutual recognition of trans-Tasman imputation credits which would see both New Zealand and Australia recognising company tax paid in the other jurisdiction for imputation purposes. |
| Profit shifting using related-party debt |
Examining problems with the thin capitalisation and transfer pricing rules. These rules are designed to prevent profit shifting by non-residents who fund their New Zealand investment using related-party debt that gives rise to deductible interest payments. |
| Foreign hybrid instruments and entities |
Exploring whether New Zealand should restrict interest deductions on hybrid instruments where the interest payment is not taxed in the foreign jurisdiction. Examining the need for an anti-arbitrage rule for offshore entities to prevent double non-taxation or double deductions. |
| Non-resident withholding tax (NRWT) on related-party debt |
Addressing problems with the application of NRWT to interest on related-party debt. |
| Approved issuer levy (AIL) disclosure requirements |
Considering a requirement that all AIL payers provide more information relating to lenders. |
| GST and online shopping |
Consulting with the public on GST issues raised by the increasing use of online shopping on overseas websites. |
| Double tax agreements and tax information exchange agreements |
Negotiating new agreements to maintain and expand the network. |
| BUSINESS TRANSFORMATION AND BETTER PUBLIC SERVICES |
| Review of the tax secrecy provisions (section 81 of the Tax Administration Act 1994) |
Addressing a range of secrecy/privacy issues, including enabling data to be made available to interested parties for research purposes and supporting the Ministry of Justice review of the Privacy Act 1993. |
| Information sharing |
Advancing work in the following areas:
- Information sharing with the social welfare sector – Information sharing within the wider social services clusters to prevent and recover debt and prevent fraud.
- Information sharing with business regulators – Information sharing with business regulators for the purpose of ensuring compliance and efficient government administration.
- Information sharing in relation to serious crime – Information sharing with law enforcement agencies to enable the detection and prevention of serious crime.
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| Business transformation – enabling secure digital services |
Ensuring that the policy and legislative framework is fit for purpose to enable the implementation and delivery of secure digital services. |
| Business transformation – collection of GST and PAYE information |
Ensuring that the policy and legislative framework is fit for purpose to improve and streamline the collection of PAYE and GST information. |
| Encouraging compliance |
Reviewing the interest, penalty and debt rules to ensure that the rules encourage taxpayers to comply with their tax obligations. |
| Simplifying the tax and transfer system |
Considering whether the tax and transfer system can be simplified either legislatively or operationally to reduce complexity for individuals. |
| 21st century tax administration |
Identifying and scoping the directions or steps, from a tax administration perspective, to ensure that the policy and legislative framework facilitates and supports business transformation, particularly stage 2 (streamlining income and business tax processes) and stage 3 (streamlining social policy processes). |
