Business and Tax Updates October 2022: IBBZ Accounting

Summary:

This October month has been colder than usual 2022 is still on track to likely be the fifth warmest year on record in most weather forecast.

In business updates: Phasing out hard-to-recycle and single use plastics from 01 October 2022, The Fair Pay Agreement has become a legislation and RBNZ has lifted the Official Cash Rate to 3.5%.
In tax updates: The bill Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Bill (No 2) has been introduced.

Christmas break is almost upon us, we are working to ensure all tax returns are filed before the end of the year.

 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

On 01 Feb 2019 Tax working group headed by sir Michal Cullen has recommended the Government to introduce capital gain tax. The formal report is due to be released to the public on 21 Feb 2019. The government may consider the introduction from 01 April 2021

It is expected the scheme will be broad based with very little and no exemptions, excluding family home.

Sir Michael Cullen is the same person who was behind the introduction of GST in New Zealand. The GST scheme is a broad based with very little exemptions, almost everything in New Zealand attract GST. It makes New Zealand GST unique in the world. New Zealand is the only country in the world who has broad based consumption tax with no exemptions not even on essential items. GST collects significant revenue for the government.