Inside this edition Trust reforms. 1 Importance of good record keeping. 2 When is income from professional services derived? 3 Tax planning before 1 April 2017 3 Snippets. 4 FBT changes on the horizon......................... 4 Unusual tax balance date............................. 4 Trust reforms Trusts are a popular way of protecting property and managing assets in New Zealand. The number of trusts we have in New Zealand is unknown, but estimates put the figure between 300,000 and 500,000. The legislation governing NZ trusts has remained unchanged for decades as it has been predominantly governed by the Trustee Act 1956. The Act has been criticised for allowing the mismanagement of trusts
Reduce the interest cost on underpaid 2016 income tax Here is an IRD-approved option we recommend if you are set to pay terminal tax on 7 April due to underpaid provisional tax for the 2016 tax year. Tax Management NZ (TMNZ) is a payment intermediary that allows you to reduce IRD interest costs by up to 30 percent and eliminates any late payment penalties incurred. You can settle underpaid income tax for the current tax year (2017) or the previous one (2016) in this manner. TMNZ pays money into its tax pool account at IRD on each provisional tax and this deposit is date-stamped. When you settle your liability through TMNZ, it arranges the provisional tax you require to be transferred from it
Changes to combat international tax structuring Perceived tax avoidance by multinational companies has been attracting significant media and public attention. There is widespread concern that corporate structures and financing arrangements are being used to minimise worldwide tax bills. A common example to illustrate the problem is where a business operates through companies in both New Zealand and Australia, and there is a loan between the two. By using certain type of debt instruments, interest payments can be structured as tax deductible in New Zealand, but non-assessable in Australia. This results in a mismatch between the two companies / countries and a net reduction in their total tax
