IBBZ Accounting

Chartered Accountants & Tax Specialist

 

Useful tips for Small Business

General update by IBBZ Accounting on latest tax news, business growth and technology tips.

Tax updates

Use-of-money Interest (UOMI) Rules for Provisional Tax Payments

Use-of-money Interest (UOMI) Rules for Provisional Tax Payments

Summary: If the Residual income tax (RIT) is higher than the provisions, UOMI not charged to taxpayers who had used standard uplift method (105% or 110% uplift rule) and paid their three instalments on time and total tax liability is under $60,000.

Effective date: From 2018 Financial Year onwards

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Tax Loss Carry Back Scheme: An Attempt to Improve Cash Flow

Loss Carry Back Scheme.

From 15-04-2020 almost all entities trust, companies, sole trader, partnership can carry back the anticipated losses to avail tax refund. The scheme is another measure taken by the Government to assist struggling New Zealand business to deal with economic impact of Covid-19. The bill Covid-19 Response (Taxation and Other Regulatory Urgent Measures) is enacted now.

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COVID-19 Government Response: Changes to the Tax System

The Government of New Zealand passed urgent bill (COVID-19 Response: Taxation and Social Assistance Urgent Measures) to deal with the economic turmoil created by COVID-19. This bill provides immediate response and relief to struggling businesses and individuals. The targeted measures aimed at providing relief to those that have been economically affected by the COVID-19 outbreak.

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The Court of Appeal reconfirm Permanent Place of Abode is very crucial in determining New Zealand Tax Residency.

In a tax case Van Uden v Commissioner of Inland Revenue [2018] NZCA 487 the decision was delivered on 08th November 2018. High court decision was upheld in the favor of IRD explaining New Zealand Tax Residency and Permanent Place of Abode Test.


The decision confirms the interpretation of permanent place of abode as set out in Commissioner of Inland Revenue v Diamond [2015] NZCA 613. Permanent place of abode in New Zealand can be seen as “a home in New Zealand”


This case provides very good explanation on New Zealand Tax Residency and Permanent Place of Abode Test.


The permanent Place of Abode test overrides 183 days test for New Zealand Tax Residency.

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GST: zero-rating of services related to land

 GST:  zero-rating of services related to land

Legislation

As amended, section 11A(1)(k) land related services provided to non-residents outside New Zealand at the time the services are performed are eligible for zero-rating, if they are:
• not directly in connection with land in New Zealand or
• not in connection with land in New Zealand and intend to enable or assist a change in physical condition, ownership or other legal status of that land or
• directly in connection to land outside New Zealand

Tagged in: GST Land Zero-Rated
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