New Bill Update Tax Rules
September 19, 2011 New Zealand Taxation
New Zealanders are set to see a slew of tax changes to be instated, as a new tax bill is introduced into Parliament. The Bill, which was brought forward on September 14th, contains several proposed changes to the tax system and tax filing requirements, which were in the 2011 Budget.
In line with the results of a public consultation held last year, the new bill contains changes to filing rules, which will allow New Zealand business to file more of their annual obligations online. The move towards electronic filing will allow the Inland Revenue Department to instate a stronger infrastructure for information sharing and data verification. The move is should make significant reductions in compliance costs for taxpayers and the IRD.
Amongst the proposals contained in the bill is a change to the tax treatment of software development projects. If passed, the bill will ensure that software development projects remain tax deductible, even if they are abandoned and cannot be used at the end of the project. Industry analysts say that the change will help foster a stronger IT sector in New Zealand.
Kiwisaver contribution rates will also be changed, with the minimum employee and employer rates rising from 2 percent to 3 percent.
The bill also contained a wealth of minor changes to clarify and update elements of the GST system.
Photo by Pauli Antero