Thursday, April 12, 2018
New Zealand has deferred the introduction of a new tax on insurance contracts, which is proposed to be introduced to fund emergency services in the country.
The Fire and Emergency New Zealand Act Commencement Order Revocation Order 2018 has been enacted, to revoke the Fire and Emergency New Zealand Act Commencement Order 2017. It pushes forward the implementation date of January 1, 2019, to July 1, 2019. As such, transitional arrangements will continue until June 30, 2019.
Regulation 4 of the Fire and Emergency New Zealand (Levy Rates and Information Requirements in Transitional Period) Regulations 2017 prescribes the tax rates: for each motor vehicle, a rate of NZD8.45 per year; and, for all other property, a rate of 10.6 cents per year for every NZD100 of the amount for which the property is insured for the period of the contract of fire insurance.
On entering into a contract of insurance under which property is insured against physical loss or damage, the policyholder becomes liable to pay the amount of levy to the insurer.
The insurer must then pay the levy to Fire and Emergency New Zealand (FENZ) not later than the 15th day of the third month after the end of the month in which the contract of insurance was entered into.
Numerous other compliance obligations, including filing obligations and record retention rules, are set out in the law and regulations.