Monthly Archives August 2015
August 31, 2015 New Zealand Taxation
The government is cracking down on property speculation by foreign investors by proposing a withholding tax on such sales.
On August 31st the Inland Revenue Department released an issues paper on proposed new rules for collection income taxes for profits obtained by offshore residents selling property in New Zealand.
Under the proposed rules, foreign sellers will face a withholding tax when selling property, with a portion of the sale proceeds to be held by a lawyer, or conveyance agent, to be remitted to the IRD.
The amount to be withheld will be the lower of 10 percent of the sale price, or 33 percent of the sale price minus the original purchase price.
Some concession will be made if losses are incurred by the seller due to improvements made to the home.
The proposed withholding tax is ...Read More
August 18, 2015 New Zealand Taxation
The government is taking a close look at the feasibility of charging GST online digital purchases, even if the supplier is not based in New Zealand.
The Revenue Minister Todd McClay has released a new discussion document, calling for public input on the proposal to implement GST on the purchase of intangible digital goods purchased from online retailers registered overseas.
Currently, such digital purchases do not fall under the scope of GST, leading some local retailers to claim that such offshore businesses have an unfair advantage over their New Zealand counterparts.
Similar proposals around the world to implement consumption taxes on digital goods have commonly come to be called “Netflix Tax”, as they are often targeted at the large-scale international media streaming service.
The d...Read More
August 17, 2015 New Zealand Taxation
The Working for Families system has lost focus, and is no longer doing enough to help families.
The Working for Families Scheme has slowly transformed away from supporting families with low-incomes and into a system which forces families to enter the workforce, according to the Child Poverty Action Group.
The Group claimed that over the course of the last year approximately 381 000 families received payments from the Working for Families, while five years ago the number of families receiving such benefits was 11 percent higher.
Spending on the scheme has also dropped, as last year approximately NZD 2.5 billion was given out through the system, while this year the IRD estimates that NZD 2.4 billion will be paid out.
It was noted that the fiscal incentives for parents to enter the workforc...Read More
August 10, 2015 New Zealand Taxation
Online purchases made by New Zealanders could soon be significantly more expensive as the government looks at dropping the GST-free threshold.
Earlier this month the Prime Minister John Key indicated that the threshold for GST on online purchases may be reduced to as low as NZD 20, or even be abolished entirely.
The Prime Minister said that if the government opts to lower the threshold for online purchases at all, it would change the limit to a level which is similar, or equal, to the new limit in Australia.
Currently, GST doesn’t apply in Australia on purchases under AUD 1000, but currently the government is looking at greatly reducing the limit or abolishing it.
The threshold in New Zealand is currently set at NZD 400.
John Key added that the government is unlikely to discuss the is...Read More