Other Tax Changes and Reactions
February 5, 2009 New Zealand Taxation
Along with the changes to New Zealand taxation announced in the government Jobs and Growth Plan that were published yesterday, other changes were made.
Businesses are now able to provide up to $300 worth of fringe benefits per quarter per employee without attracting Fringe Benefit Tax. Further, the interest rate on for low interest employee loans has been reduced from 10.9% to 8.05%. Government press releases are vague in regards to some changes, although they are positive changes to business. These include simplification of some tax systems and alteration of some expenditure thresholds.
These changes will take place alongside the next set of personal tax cuts, on April 1st 2009. Changes to the Provisional Tax system will take place on the 1st of March. The change to the low interest scheme applies retro-actively from the 1st of January.
Post change commentators are beginning to praise the new scheme. While many concede that in all reality they would not expect to see these changes make drastic changes to New Zealand’s financial position both internally and internationally, they do believe that the small business sector will be breathing a sigh of relief.