By Saurav Wadhwa on Friday, 29 July 2022
Category: Tax updates

IBBZ Accounting Business and Tax Updates July 2022

Business and Tax Updates July 2022: IBBZ Accounting


Business updates

  1. eInvoicing – invoicing is creating the momentum, if you are still is not using the einvoicing you can start with this free software.
    The following providers offer free online portals so businesses can access eInvoicing capabilities without the need to acquire eInvoicing capable accounting or invoicing software. This is ideal for those who generate very few invoices, don’t currently use accounting or invoicing software packages or your buyers insist on eInvoices.

    B2Brouter(external link)
    Colladium(external link)
    Link4(external link)

  2. Do you know your customer, is your marketing strategy good? Business.Govt.nz has launched a new marketing strategy overview tool. The key point found here, was how to build a brand. You need to be working on a business which results into a brand. A brand on which customers can trust. How to build a brand if template is required let me know. If you want to try the marketing tool, the link is below.

    Tool(External link)

  3. The Reserve Bank of New Zealand (RBNZ) has hiked the Official Cash Rate (OCR) to 2.5 percent on 13-07-2022. The Committee agreed it remains appropriate to continue to tighten monetary conditions at pace to maintain price stability and support maximum sustainable employment. The Committee is resolute in its commitment to ensure consumer price inflation returns to within the 1 to 3 percent target range. A monetary policy review was conducted on 26-07-2022 by RBNZ, where its stated consumer price inflation is at 7.3 percent, above the Remit target range of 1-3 percent. They, acknowledge that their decision over recent years have influenced this outcome. They also said, How Central Bank Mistakes after 2019 led to Inflation, has been received by the Reserve Bank of New Zealand – Te Pūtea Matua and will be considered as part of our public Monetary Policy Remit review process underway.

Tax updates 

  1. The cost-of-living payment. The new Act allows Inland Revenue to make a cost-of-living payments to eligible individuals. The first payments will commence on 1 August 2022.
  2. Kilometre rates for the business use of vehicles for the 2022 income year is now 0.83 cents. For petrol or diesel, hybrid and electric cars. The rates set out below apply for the 2021/2022 income year for business motor vehicle expenditure claims. The tier one rates reflect an overall increase in vehicle running costs largely due to fuel costs. The table of rates for the 2022 income year: The Tier Two rate is for running costs only. Use the Tier Two rate for the business portion of any travel over 14,000 kms in a year.
    Vehicle Type Tier One Rate Tier Two Rate
    Petrol or diesel 83 cents 31 cents
    Petrol hybrid 83 cents 18 cents
    Electric 83 cents 10 cents
  3. TDS 22/05: Whether weathertightness payments by the Crown are subject to GST. It was held in the IRD decision a large settlement fund paid to the taxpayer related to weathertightness was subject to GST. the Crown FAP Payments to the Taxpayer are gratuitous payments to encourage or promote the repair of leaky buildings. Accordingly, the payments are in the nature of a grant or subsidy for the purposes of s 5(6D) of the Goods and Services Tax Act 1985 (GST Act). The Crown FAP payments are therefore deemed to be consideration for a supply under s 5(6D) of the GST Act.
  4. TDS 22/07: Income tax, controlled foreign company, double tax agreement, shortfall penalties. In this technical decision summary a case of taxpayer was discussed, where taxpayers income under ordinary concepts; employment income; attributed controlled foreign company income, Double tax agreement: tax residency; dependent personal services were critically analysed. The taxpayer was using two companies, NZ and US company to provide services as a CEO to NZ company. It was held the Taxpayer was treated as a New Zealand resident for the purposes of the DTA. The effect of article 15(1) of the DTA was that New Zealand had an exclusive right to tax the income that the Taxpayer derived. The disputed payments were income under ordinary concepts under s CA 1(2).
  5. Currently there has been many tax changes in the Residential Property. The IRD focus is to educate everyone in terms of Property Sales, Bright-line, Interest Limitation, and the Purchase of New Builds. They have seen many disparities in these areas, and their focus is a review of all property transactions. They are also focusing on offshore compliance and international tax affairs, to ensure the taxpayers who have offshore income is reported correctly in the tax returns.
  6. Provisional Tax Due Date is 28-08-2022. We will be sending a letter to respective clients to remind them the amount shortly. The GST filing of 2 monthly clients due date is 28-08-2022.

IBBZ Updates

Team IBBZ is working hard to ensure we provide great service to our clients. A new digital whiteboard has been installed in the meeting room.We are also working to ensure the old IT equipment’s are replaced with the new one.

Related Posts

Leave Comments