New Tax Bill Introduced
September 14, 2012 New Zealand Taxation
A new bill has been introduced, proposed several tax changes aimed at ensuring that the New Zealand tax system remains fair and competitive.
On September 13th a new bill was introduced to Parliament today, proposing revisions to the taxation of livestock, the taxation of mix-use assets, and also suggesting that non-resident businesses should be able to register for GST in New Zealand.
The bill, the Taxation (Livestock Valuation, Assets Expenditure and Remedial Matters) Bill, contains provisions to amend the rules for the valuation of livestock.
Explaining the proposed change, the Revenue Minister Peter Dunne said “…the situation had previously been too loose, allowing some farmers to switch between the two main livestock valuation methods to receive an unfair tax advantage over those farmers who applied the rules as they were intended.”
The bill also proposes to revise the rules for deductions on assets which are used privately by the owner and are also used to earn an income.
Providing more details on the matter, Peter Dunne said “…it is important that the so-called mixed-use rules work properly when the property is held in a company. Achieving this is not straightforward as companies are generally allowed automatic tax deductions for interest expenditure. As a result the bill proposes rules that apportion company interest deductions.”
Explaining the suggested change to the GST rules, the Minister said “…the bill proposes to allow non-resident businesses to register for, and claim back, GST in a broadly similar way to a comparable resident business.”
If accepted, the change to the GST rules will allow non-resident businesses to register for and make claims for GST.