Monthly Archives March 2013
March 21, 2013 New Zealand Taxation
New Zealand could see significant economic benefits if the government opted to cut personal income taxes.
On March 20th the Treasury of New Zealand released the report of the Taxation of Savings and Investment Review, which investigated the potential repercussions of various changes to the tax system, finding that New Zealand would benefit the most from reductions to the rate of personal income taxes.
The conclusions in the report were based on whether changes to the tax system would increase the overall levels of savings and investment in New Zealand, and whether the change would reduce macroeconomic vulnerabilities of New Zealand or boost overall economic efficiency in the country.
The Review suggested that deceases to personal income taxes would provide the most benefits to New Zealand...Read More
March 18, 2013 New Zealand Taxation
The New Zealand Reserve Bank takes an expansive and holistic approach to analyzing economic factors affecting its policy decisions.
In a speech given late last week in Wellington the assistant governor of the Reserve Bank of New Zealand John McDermott explained the importance of economic forecasting for making decisions when setting the country’s monetary policies.
He said that there is no single “correct way to look at the economy”, and emphasized that the Reserve Bank analyzes data from several different sources when making a policy decision.
While describing the Bank’s forecasting procedures, John McDermott said that currently some of the most significant issues faced in New Zealand are the “…treatment of the persistently high exchange rate, high household debt and accounting for th...Read More
March 7, 2013 New Zealand Taxation
The IRD is calling on tax evaders to come clean regarding their tax structures in exchange for some lenience on their tax reassessment.
In a press release issued on March 6th the Inland Revenue Department has reminded taxpayers “…who may have reduced their income tax obligations through an income diversion arrangement have until the end of this month to take advantage of Inland Revenue’s concession to make a voluntary disclosure.”
Under the terms of the current disclosure program, any taxpayers coming forward to willingly disclose information about their income diversion structure will only be required to reassess their incomes for two years during which they used such a structure.
Any taxpayers who choose not to take advantage of the disclosure program and come forward with informatio...Read More
March 6, 2013 New Zealand Taxation
The IRD has won another case against companies using financial instruments to artificially lower their tax obligations in New Zealand.
In a ruling by the Court of Appeals on March 5th the Inland Revenue Department won its case against Alesco New Zealand regarding claims that the businesses’ use of optional convertible notes was tantamount to excessive tax avoidance.
Explaining the position of the IRD, the director of litigation management at the Department said “…when Alesco New Zealand issued OCNs with zero percent interest coupons attached, to its parent company to fund the purchase of Biolab Limited and Robinson Industries Limited in 2003 and claimed a deduction for ‘interest’ expenditure, it acted outside the intended scope of financial arrangement rules and the relevant Inland Revenue...Read More