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EY Tax News Update: Edition 4, 2024
Welcome to the latest edition of EY’s tax news. This edition covers key tax developments for the month of April. You can also find details of upcoming events, along with links to EY insights.
In brief
Inland Revenue updates
- New finalised guidance, including:
- Amortisation rates for listed horticultural plants
- Depreciation rate for horticulture LED grow light systems
- Technical Decision Summaries on: sale of property and the bright-line test; supressed cash sales, GST and evasion shortfall penalties; Employee Share Scheme – right to receive shares
- Website updates relating to:
- Special Reports on 39% trustee tax rate and new Offshore Gambling Duty
- GST platform economy rules
- Taxpayers with overdue debt
- Applying for an RWT exemption
Government and political updates
- Political update – Government portfolio reshuffle, upcoming Budget
- Reserve Bank consultation on digital cash
- Economic update
International updates
- BEPS Pillar Two – OECD releases Consolidated Commentary to Global Anti-Base Erosion Model Rules
EY Global Webcasts
- The outlook for global tax policy and controversy in 2024
EY Insights
- Tax Guides – various matters covering over 150 jurisdictions
- EY Green Tax Tracker - get ahead and stay ahead of evolving global green tax policies
- The Latest on BEPS and Beyond, April 2024 edition
- European Parliament adopts new regulation to reduce global methane emissions from energy sector
Inland Revenue updates
New finalised guidance
Key Inland Revenue guidance items finalised since our last update include:
|
Finalised guidance name |
Description |
|---|---|
|
Determination DET 24/01: Amortisation rates for listed horticultural plants |
Sets out the amortisation rates (based on diminishing values) for listed horticultural plants from the 1 April 2023 and subsequent income years. |
|
Depreciation Determination DEP 111: Horticulture LED grow light systems |
Sets a depreciation rate for horticulture LED grow light systems used for indoor farming operations. |
|
Technical Decision Summary TDS 24/06: Sale of property and the bright-line test |
Summarises a decision of the Tax Counsel Office (TCO) relating to whether the bright-line test could potentially apply to the future sale of three sections of residential land. |
|
Technical Decision Summary TDS 24/07: Supressed cash sales, GST and evasion shortfall penalties |
Summarises a decision of the TCO on whether a restaurant business under-reported its cash sales, whether it was entitled to certain GST input tax deductions and whether it was liable to pay a shortfall penalty for evasion. |
|
Technical Decision Summary TDS 24/08: Employee Share Scheme – right to receive shares |
Summarises a decision of the TCO in relation to an employee who was granted rights under an employee share scheme. The key question was whether the “share scheme taxing date” was when the rights vested or when the taxpayer exercised the rights. |
Website updates
Inland Revenue has published several updates on its website, including:
- Special Reports providing early information on the 39% trustee tax rate (see here) and Offshore Gambling Duty (see here).
- A revised Special Report on the GST platform economy rules (see here), as well as website information on the listing intermediary rules and new transitional rule (here). An Inland Revenue marketing campaign targeting ride-sharing drivers and accommodation hosts who may be impacted by the changes has also been announced – see here.
- Inland Revenue is taking action on taxpayers with overdue debt, indicating a change in stance to the previous focus on supporting businesses through COVID-19 recovery – see here.
- Taxpayers and tax agents can now apply for an RWT exemption in myIR – see here.
Government and political updates
Political update
Prime Minister Christopher Luxon has announced a portfolio reshuffle, which will see Revenue Minister Simon Watts move into Cabinet. Previously Minister Watts, and therefore the Revenue portfolio, sat outside of Cabinet. See the Beehive release here for details.
A reminder that Budget 2024 will be delivered on 30 May. The Budget is expected to contain the promised income tax relief for individuals, although the exact details of the personal tax cuts are not yet known. Keep an eye out for the next EY Tax News Update for post-Budget details.
Reserve Bank consultation on digital cash
The Reserve Bank of New Zealand (“RBNZ”) has issued a consultation paper on principles and design options for the possibility of introducing digital cash in New Zealand, with consultation open until 26 July.
Digital cash would be an electronic version of cash issued by RBNZ, but it would not replace cash.
RBNZ are currently in stage 2 of a multi-year, multi-stage process of considering digital cash with many details yet to work out before a decision can be made on whether digital cash is right for New Zealand.
For more information, see the RBNZ website here.
Economic update
Treasury has published the Interim Financial Statements of the Government for the eight months ended 29 February 2024. Key figures include:
- Tax revenue of $78.8 billion (0.6% below forecast, largely due to corporate tax and net other individual’s tax being below forecast)
- Operating balance before gains and losses deficit of $4.2 billion (in line with forecast)
Refer to the Treasury media release here for more information.
In addition, recent figures released by Stats NZ show:
International updates
In relation to the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project, the OECD released a Consolidated Commentary to the BEPS Pillar Two Global Anti-Base Erosion (GloBE) Model Rules. The Consolidated Commentary incorporates Agreed Administrative Guidance released by the Inclusive Framework on BEPS between March 2022 - December 2023. It provides taxpayers (and tax administrations) with guidance on the interpretation and application of the GloBE Rules. The Consolidated Commentary can be found on the OECD website here.
EY Global Webcasts
The outlook for global tax policy and controversy in 2024 register on ey.com here to watch on demand
EY insights
Refer to the below guides, thought leadership articles and regular newsletters available on ey.com:
- Tax Guides – browse our in-depth guides covering corporate tax, indirect tax, personal taxes, transfer pricing and other tax matters in more than 150 jurisdictions
- EY Green Tax Tracker - get ahead and stay ahead of evolving global green tax policies
- The Latest on BEPS and Beyond, April 2024 edition
- European Parliament adopts new regulation to reduce global methane emissions from energy sector
Contact us
Dean Madsen | New Zealand Tax Leader
Ernst & Young Limited
New Zealand
Dean.Madsen@nz.ey.com
Paul Dunne | New Zealand Tax Policy Leader
Ernst & Young Limited
New Zealand
Paul.Dunne@nz.ey.com
Aaron Quintal | Partner, Private Client Services
Ernst & Young Limited
New Zealand
Aaron.Quintal@nz.ey.com
Sarah-Jane Leslie | Tax Watch Editor, Tax Policy
Ernst & Young Limited
New Zealand
Sarah-Jane.Leslie@nz.ey.com
Sladja Lines | Senior Manager, Tax Policy
Ernst & Young Limited
New Zealand
Sladjana.Lines@nz.ey.com