Revenue Minister Michael Woodhouse informed that New Zealand has introduced a tax bill to simplify tax processes, reduce compliance costs for smaller businesses, and tighten foreign trust disclosure rules. The bill includes the necessary measures to implement the G20/OECD standard for the Automatic Exchange of Information for financial institutions.
The Minister informed that the 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. The Revenue will also increase the threshold for the annual Fringe Benefit Tax (FBT) returns from $500,000 to $1m. Some of the other changes include:
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 Shewan Inquiry, the Government committed to moving quickly on the changes to foreign trust disclosure rules and the inclusion of those changes in this bill reflects that,” Revenue Minister Michael Woodhouse said.
The bill also includes the necessary measures to implement the G20/OECD standard for the Automatic Exchange of Financial Account Information in Tax Matters. It is also proposed to incorporate the Common Reporting Standard (CRS), a law that sets out the due diligence and reporting obligations to be imposed on financial institutions.
From July 1, 2017, financial institutions will be required to apply the specified due diligence procedures for all new accounts and financial institutions will be expected to begin due diligence reviews of all pre-existing accounts.
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