Monday, August 8, 2016
A bill containing proposals to simplify New Zealand's tax processes, reduce compliance costs for smaller businesses, and tighten foreign trust disclosure rules was introduced in Parliament on August 8, 2016.
"Business tax changes proposed in the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Bill deliver on the Government's Budget 2016 SME-friendly tax package announcement and will reduce compliance costs and make tax simpler for small businesses," Revenue Minister Michael Woodhouse said.
"Changes include new business-friendly measures to simplify the provisional tax rules, which will provide a new pay-as-you-go option for small businesses to pay their provisional tax, from April 1, 2018," Woodhouse said. "The bill also proposes to remove the one per cent monthly incremental late payment penalty on new GST, income tax, and the Working for Families tax credit debts, from April 1, 2017. This will help strike a better balance between penalties encouraging taxpayers to make timely payment without becoming overwhelming."
"Small businesses are the backbone of the New Zealand economy. We want to help them spend more time focused on their business, not their taxes, and these changes will help make that possible," the Minister said.
The bill also includes measures to further strengthen and update New Zealand's international tax rules with new disclosure requirements for foreign trusts. It proposes to introduce a register that is searchable by Internal Affairs and the Police, as well as annual disclosure requirements.
Following the recent Inquiry into Foreign Trust Disclosure Rules, also known as the Shewan Inquiry, the Government committed to moving quickly on the changes to foreign trust disclosure rules. "The inclusion of those changes in this bill reflects that," Woodhouse said.
Finally, the bill includes the necessary measures to implement the G20/OECD standard for the Automatic Exchange of Information, which New Zealand financial institutions will have to comply with.