It's been a busy week

Quite a bit has happened in my world of tax over the past week, and unfortunately during a time when I am presently travelling overseas. So, I thought I’d just briefly mention some of the items now, with a more detailed commentary in next week’s edition, post my return to New Zealand.

Early in the week, we saw the release of Inland Revenue’s (IR) regulatory review of the FBT regime, undertaken due to there not having been a full review of the scope of the rules, for nearly 20 years. The review considers the policy and design of fringe benefit tax (FBT), the compliance and administrative experience of the tax, and whether FBT is fit for the future. The purpose of the report is to convey the findings of the review and high-level recommendations for the next steps.

Next, we saw a reminder from IR regarding the issue of working from home, and home office expense claims – specifically in relation to payments being made by employers to their employees. The “Agents Answers” August 2022 edition refers you to Determination EE003, which has applications to payments made during the period 1st October 2021 to 31st March 2023.

The highlight of the week (well at least for someone who lives and breathes tax), had to be the introduction of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Bill (161-1) into Parliament. The latest Bill includes several GST-related changes, including a proposal to subject services supplied by managers and investment managers to managed funds and retirement schemes to 15% GST. This proposal, however, caused outrage from all corners of the earth. To the extent that within 24 hours the Bill had been withdrawn, presumably to be redrafted post the Government’s announcement that their brilliant idea to cause further pain to the average Kiwi, via fund managers passing on the increased GST costs to their KiwiSaver members, had been scrapped.

On the Covid-related front, there were a couple of releases. The first was an Order to extend the Commissioner’s discretion to vary due dates, or other requirements when compliance with those requirements becomes impossible, impractical, or unreasonable in the circumstances arising from either Covid-19 response measures or as a consequence of Covid-19. The Order extends the Commissioner’s ability to exercise this discretion for another year, now due to expire on 30th September 2023. The second is R&D specific and is an Order to extend the notification deadline under s.68CB(1)(d) (research and development tax credits: general approval) of the Tax Administration Act 1994 for the 2021–22 income year to 30 April 2023.

Finally, we’ve seen the release of a draft interpretation statement that considers the application of the 5-year bright-line test to family and close relationship transactions. The IS discusses transfers of land from parents to their children, from one person to then include their partner, and those related to inherited property. A fact sheet is included with the IS and the deadline for comment is 12th October 2022.

This article from the 'A Week in Review' newsletter was originally published Monday 5th September 2022. If you have any questions or would like a second opinion on any national or international tax issues, please contact me richard@gilshep.co.nz. 

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