Employee share scheme reporting
From 1 April 2017, employers must disclose the value of share benefits that employees receive under employee share schemes. This requirement applies to shares and share options. Under the current payday filing rules, employers are also required to report the amount of tax withheld for the benefit (if any) to Inland Revenue. Employers are not required to disclose the specific details of the share scheme benefits provided.
Simplifying tax administration
The Government continues its work to modernise tax administration and reduce compliance costs. A number of recent Acts incorporate changes intended to simplify tax for businesses and individuals.
The Taxation (Annual Rates for 2018-2019, Modernising Tax Administration, and Remedial Matters) Act 2019 is the most recent. The purpose of the Act is to make it easier for individuals to understand their tax obligations and entitlements by simplifying and modernising the rules and processes. Such measures include: the introduction of “tailored tax codes” aimed at reducing the cash flow burden secondary tax codes can impose on people with multiple jobs or income sources, the automatic calculation of individuals’ taxable income and subsequent automatic refunds and simplifying the process for claiming donation tax credits.
In addition to the tax administration improvements, the Act also introduces a number of other policy measures including the introduction of two new contribution rates for KiwiSaver and opening up KiwiSaver to employees aged over 65.
The Government continues to look at ways to simplify and improve New Zealand’s tax administration and will be releasing more detailed proposals on these areas over the next few years.
Double taxation agreements (DTAs)
New Zealand is currently negotiating new and updating DTAs with a number of countries, including Luxembourg, Norway, Portugal, and the United Kingdom. See Significant developments in the Corporate section for a summary of the effect of the Multilateral Instrument (MLI) on New Zealand’s DTAs.