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Tax Watch - December 2012

Welcome to Tax Watch

In our final Tax Watch for 2012 we herald the arrival of the proposals for taxation of salary trade-offs, particularly FBT on employer-provided car parks and tax on lease surrender and lease inducement payments.  Many employers throughout New Zealand will be caught by the new rules. We also repeat contents of our recent alert on taxation of accommodation allowances .

IRD has changed the definition of some key principles that underpin an individual’s tax residency. The upshot may be that more individuals leaving New Zealand are still considered to be a tax resident of New Zealand. There are no substantive changes to the Commissioner’s views on the residency of companies, but some updates are in the pipeline. We set out the issues in IRD’s latest interpretation statement on New Zealand’s tax residency rules and encourage you to make a submission by 31st January.

If you have interests in mining, oil and gas, take note of the proposed tax changes to bring various regimes for mineral exploration into line. Tax treatments are set for some major changes if the proposals in the October issues paper go ahead.

Employers are in the eye of not only the tax office, but also Immigration New Zealand. Proof of entitlement to work in New Zealand rests squarely with employers. In our next article we remind you of your obligations under the Immigration Act 2009, as well as benefits of becoming an accredited employer.

Doing business in Australia or Japan? We review the second major tranche of changes to Australia’s Transfer Pricing rules and the updated New Zealand Japan tax treaty. The first article is important if you have a company branch in Australia, and the second if you have operations in Japan.

Ho ho ho….tis the season for staff largesse. But to avoid an unintended hangover, we suggest you complete your annual FBT check-up . As we do seasonally, we remind you of when you may need to pay FBT for bestowing of parties and gifts.

On that note, the EY tax team would like to wish you a very enjoyable holiday period and to thank you for your readership of Tax Watch. We will return again in February 2013. As always, please let us know any comments or what you would like us to cover.

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