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Welcome to Tax Watch

The Government has announced that it plans to shelve proposals to impose FBT on central city car parks.  Read the Ministers' media release

The developing “welfarism” approach which has seen politicians in the United Kingdom assert that the tax arrangements of many multinationals are immoral and shirking economic and social obligations prompts the question – “Is a company morally wrong to actively manage its taxes?”  In the UK, many household name companies have been criticised for lacking moral scruples in adopting legitimate tax avoidance schemes and have attracted much social stigma as a result.  How relevant is this “morality” tax debate in the New Zealand context.

Having recently widened the situations where accommodation allowances paid by an employer to an employee are taxable the Inland Revenue has now issued further guidance and examples on how to apply its new approach.   The new approach seeks to treat all accommodation benefits as taxable unless the relocation constitutes a “temporary shift”.   Read our summary of the Department’s guidance  for an indication of the additional administrative burden such changes will mean for employers.

Another useful avenue for certainty surrounding Inland Revenue’s publications is to seek the Commissioner’s Official Opinion; an opportunity being exercised by those taxpayers who are “Getting certainty in the absence of a binding ruling.”  This utilises a much overlooked provision in the Tax Administration Act 1994 which provides a source of clarification on tax treatments where seeking binding rulings proves too time-consuming and costly a process.

Our next article, ‘Spotlight on China’ , revisits the already highlighted implications and benefits of China’s 12th Five Year Plan for New Zealand companies working in the technology and green space. New reports addressing the additional opportunities the media and entertainment industries present are reviewed.

In looking at the ‘Latest Asia Pacific transfer pricing developments’ , the transfer pricing aspects of marketing intangibles are discussed following the release of a long-awaited Indian ruling on the issue. We also look at the proposals for new broader and timelier documentation requirements being introduced in Australia and the OECD-based transfer pricing regulations recently implemented in the Philippines.

In the area of trust law, the lack of jurisdiction of the Court to appoint a liquidator when required raises the question of gaps in the law.  Potential reforms are discussed .

Tax Watch in Brief this month outlines legislative and policy change with both domestic and international effect. This contains points of interest relevant to all our readers.

If you require any additional information on any of the featured articles in this newsletter, please contact your usual EY adviser or one of our tax team.

Kind regards
EY Tax team

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