IRD Extends Disclosure Time
October 15, 2012 New Zealand Taxation
Looking to further clamp down on tax evasion and to raise more tax revenues, the IRD is offering tax cheats more time to come forward.
Last week the Inland Revenue Department announced that it is extending its deadline for disclosure of “Penny and Hooper” style tax arrangements to March 31st 2013.
The disclosure program is aimed at taxpayers who use trusts to hide their incomes and create artificial structures intended to illegitimately lower their tax obligations.
Under the disclosure programs, taxpayers who come forward and provide the IRD with details of their tax arrangements will only be investigated for two of the previous four years of their operation, and all tax settlements will be based on the assessment and audit of those two years.
Commenting on taxpayers’ opportunities to receive the more lenient assessment, the Group Tax Counsel for the IRD Graham Tubb said “… full four year audits may be commenced however at any time for taxpayers who have received risk review letters but who do not make a voluntary disclosure.”
As of early October 170 taxpayers have come forward to the IRD to disclose details of “Penny and Hooper” style structures, leading to the recovery of approximately NZD 4 million.
Photo by Alan Cleaver