Business and Tax New Year Updates: IBBZ Accounting

Summary:

We are already in March, couple of months in 2023 are gone. Not a great start of the year for all of us. Remote working has again been in full swing last month.

In summary business updates has some tips for newbies in business, Guidance for exporters and climate action toolbox. Tax updates contains cyclone relief, new GST rules for Air BNB, Income reporting among OECD plus some guidance towards buying property in Australia. IBBZ working at 2023 workflow and we upgraded our old website to a new version.

Business Updates

1. Tax 101 for sole traders, this article was published on business website. Where it explains different types of taxes such Income tax, GST, ACC and other pieces in a simple format. Good read for someone who is new to the business.
   

2. When you start to think about exporting your food products, there are lots of steps to consider, from which export regulations you have to meet, to labelling. That’s where the Ministry for Primary Industries’ Exporter Regulatory Advice Service (ERAS) can help. Seek help MPI

3. Climate Action toolbox is created by the Govt. this will help you to build your action plan and measure your emission. See here

Tax Updates

1. Cyclone Gabriel Interest Remission
   Those severely affected by the cyclone will likely be suffering from damage and disruption to their normal operations. As a result, they may not be able to submit their tax payments within the deadline. Under S 183BA of the TAA, those experiencing difficulty due to the cyclone may ask the Commissioner of IRD to remit the interest charged for failure of timely payment.
   The commissioner will remit this interest if:
   a. It is equitable for the interest to be remitted
   b. The taxpayer asked for the relief as soon as practicable
   c. The taxpayer made the payment as soon as practicable
   
   
2. New GST Rules for suppliers to Air Bnb, Fiver and other online marketplace
   With the rise in online marketplace operators, the GST rules have been amended to capture the providers of these online marketplaces. The operator of the marketplace will be treated as the supplier of the listed services and therefore be liable for GST. The underlying supplier will not be liable for GST as they do not usually have a large commercial operation of providing accommodation.
   
   
3. Income reporting between OECD is going ahead
   With the increased development and popularity of the platform economy, a significant amount of economic activity is facilitated by digital platforms. Buyers are connected with service providers through their smartphones in seconds. This means that there are likely to be thousands of taxpayers who earn their income from activity on digital platforms.
   
   Currently, IRD does not receive information about the income earned by taxpayers through online platforms unless the information is requested. This increases compliance costs for platform operators who will need to accumulate and provide the relevant information. Costs are significantly high for multinational digital platforms who could be receiving requests from multiple tax authorities.
   
   It is crucial to ensure that NZ’s tax system adapts to accommodate the rise of the platform economy. This will be ensured through the proposal of an information reporting and exchange network that has been advised by the OECD.
   
   Platform operators will be required to provide information about the income earned by sellers from the following activities through their platform:
   o Rental of immovable property (Commercial, Short-stay and visitor accommodation)
   o Personal Services (Ridesharing, Food/beverage delivery and any time/task-based work)
   o Sale of goods
   o Vehicle Rentals
   This information will be provided only to the tax authority in the jurisdiction in which the platform operator is based once a year. This means that NZ based platform operators will be required to provide information such as tax file number, country of residence and other identifying information to IRD.
   
   
   
4. Buying property in Australia, these are the things you need to know
   As you may be aware, being a NZ citizen an individual is exempt from requiring approval from the FIRB when purchasing property in Australia. However, this exception is not available for companies.
   A NZ company is able to purchase Australian residential property through offshore ownership. Before this can be done, a company must submit an application to the Australian government for permission to purchase residential property.
   
   Australian Requirements
   Australia has somewhat strict laws regarding offshore investment in residential property. As a result, it is a requirement of the Australian government that the investment must either go toward a new dwelling. This means investors must purchase vacant land or new buildings that have not yet been occupied. The only exception to this rule is if an investor plans to buy an existing residential property and redevelop it. This redevelopment must be completed within 4 years and proof sent to the appropriate authority. We advise a company looking to invest to contact an Australian property lawyer for the best advice.
   A NZ company buying a residential property in Australia is generally undesirable. This is because the setup is slightly complex and requires additional compliance. The likelihood of double taxation arises, and the capital gains tax discount differs in Australia for companies. It is advised to purchase the property personally. However, NZ has DTA with Australia so foreign tax credits will be issued.
   
   

IBBZ Updates

We are at full swing working. We have completed almost all tax returns for 2022 (99%). And the new financial year planning and preparation is underway. A new staff member has joined our team as a graduate accountant. IBBZ has a new website, a newer version.