A Bill to improve and strengthen the tax rules passed its third reading today, Revenue Minister Judith Collins says.
“Building a more competitive and productive economy for New Zealanders is a priority for this Government.
“Making sure that the tax rules keep up with social and economic changes, as well as current business practices, is a vital part of a well-functioning economy.
“Improvements to the tax rules following enactment of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Bill will give taxpayers more certainty over their tax affairs by dealing with inefficiencies and complexities that have occurred over time.
“That in turn, should result in lower compliance costs for business,” Ms Collins says.
Changes include:simplifying the look-through company rules and the dividend rules as they apply to closely held companies, to ensure that the decision to convert a small business to a company is not driven by tax considerations; bolstering the rules around the tax treatment of interest earned in New Zealand by non-residents to ensure greater fairness; taxpayer-friendly changes to the GST rules, such as enabling businesses to deduct GST associated with the costs of raising capital; depreciation rollover relief for businesses in the upper South Island and Greater Wellington areas hit by last year’s earthquakes and aftershocks, and adding 14 new charities to the list of donee organisations in schedule 32 of the Income Tax Act 2007, making donors to those charities eligible for tax benefits on their donations.