Monthly Archives June 2009

New DTA Between Australia-NZ

June 30, 2009 International FinanceInternational TaxationNew Zealand FinanceNew Zealand Taxation  No comments

The signing of a new Double Taxation Agreement (DTA) between Australia and New Zealand has taken place.

On the 29th of June New Zealand Trade Minister Tim Groser signed the new agreement on behalf of New Zealand in a Paris based ceremony. There is no date set yet to its enforcement as in it needs to be legally enacted in both countries. In New Zealand this will happen by the Order of the Council, which is expected to occur later in 2009.

The key changes in the new DTA, according to Tim Groser, are lower withholding taxes on dividend and royalty payments between Australia and New Zealand, changes to pension payments, and overall reduced compliance costs.

In the new DTA the standard withholding tax rate on dividends will be 15%, but, 5% for an investing company has at least a 10% shareholdi...

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Wellington Tax Evasion Sentencing

June 26, 2009 New Zealand Taxation  No comments

Home detention has been sentenced to a man in the Lower Hutt District Court, after a guilty plea on 26 tax evasion charges.

Wellington based, Joseph Anthony Rosendaal, company director of DeRose Limited, has pleaded guilty to 26 counts of tax evasion, totaling over $270,000. He has been sentenced to 12 month home detention.

Joseph Rosendaal created and ran his bread delivery company from the October of 2003 onwards. According to the Inland Revenue Department (IRD) he failed to file income tax returns in the 2004, 2005 and 2006 years. In total, his income tax evasion amounted to $117, 572. There were also a total of 14 GST tax returns not filed between the periods of November 2003 and march 2006. This amounted to a total of $110,117...

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Views on PDP Change Called For

June 25, 2009 New Zealand Taxation  No comments

The Government has released a document detailing the proposed changes to profit distribution plans, and are calling for public comment.

As announced on the 16th of April, the Government is looking to implement new legislation in regards to Profit Distribution Plans (PDP). Specifically it aimed to deal with the situation under PDP schemes where shares which are given to shareholders by a company are immediately sold back to the company, which not currently covered by tax legislation.

The Government is seeking feed back on the new legislative paper, but with greater eagerness towards the technical aspects of the law change.

The proposal paper can be viewed on the Inland Revenue Department’s Tax Policy website, here.

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Fringe Benefit Tax Rate Lowered

June 23, 2009 New Zealand Taxation  No comments

The rate at which fringe benefit tax is calculated on low-interest employment related loans has been lowered.

The rate used to determine the Fringe Benefit Tax (FBT) on low-cost employment related loans will drop from its current rate of 8.05% to 6.41%. The change was announced and set by Order in Council on the 22nd of July, and will come into effect on the 1st of July. The change was announced by Revenue Minister Peter Dunne.

The fall of 164 basis points in this rate is attributed to the change in variable first mortgage housing interest rates surveys, since the last rate change, in January.

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