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Revenue Minister Todd McClay has welcomed the announcement today of the remaining members of the Taxpayer’s Simplification Panel.

The Taxpayer’s Simplification Panel membership is:

Record numbers of people are filing their tax returns online as Kiwis take advantage of new services provided by Inland Revenue, says Revenue Minister Todd McClay.

From April to July, 20,000 more New Zealander’s used Inland Revenue’s online service to file their tax returns than the same period last year, taking the total to more than 150,000 and growing.

Revenue Minister Todd McClay has said that the IR4U Save Time Campaign recently run in the Hawke’s Bay has been a success and that similar ‘listening’ campaigns will be rolled out to other parts of the country as IRD focuses on simplifying the tax system.

The IR4U pilot, targeted small business owners and asked customers what Inland Revenue could do to save them time,” Mr McClay says.

Between 8 May and 19 June nearly 1400 people contributed to the campaign.

Racing Minister Nathan Guy and Revenue Minister Todd McClay have confirmed that Inland Revenue officials will work with the New Zealand Thoroughbred Breeders’ Association on a number of tax issues raised by the industry.

The issues cover questions the NZTBA has over the application of tax rules for the industry and are expected to be dealt with as part of the normal consultative process between the private sector and tax officials.

Revenue Minister Todd McClay has said that flood affected farmers in Northland will be offered assistance through Inland Revenue’s income equalisation discretion following the declaration of a medium scale adverse event by Primary Industries Minister Nathan Guy this morning.

Revenue Minister Todd McClay has signalled changes to tax pooling rules will mean that taxpayers can use tax pooling arrangements to pay any interest owed as a result of a tax dispute or an amended tax assessment.

Tax pooling assists businesses by making it easier for them to plan for changes in tax obligations. The current rules allow taxpayers to withdraw funds from a tax pool to cover the tax owed but not any interest that might be due. This can result in further interest accruing on the remaining amount which was not the original intention of the legislation.

An international solution to base erosion and profit shifting (BEPS) moved a step closer at OECD discussions involving IRD officials last week, says Revenue Minister Todd McClay.

The Committee of Fiscal Affairs approved the final recommendations for the first set of actions that are due to be presented to Finance Ministers at a meeting of the G20 in September.

The BEPS Action Plan has seven deliverables due in 2014 and is on track to meet these targets. The deliverables relate to the following action points:

Revenue Minister Todd McClay has announced Board Dynamics founder, Henri Eliot, as the Chair of the new Taxpayer’s Simplification Panel.

The Panel will give New Zealanders a voice in simplifying, modernising and transforming the way we all pay tax.

Mr Eliot brings with him a wealth of knowledge as an experienced small-to-medium business owner and independent director of numerous SME boards in New Zealand.

Revenue Minister Todd McClay has announced that the deemed rate of return for taxing foreign investment fund (FIF) interests has been set at 7.99% for the 2013–14 income year, up from 6.91% for the previous income year.

The deemed rate is set annually and is one of the methods that can be used to calculate income from FIF interests.

The rate is based on an average of the five-year Government bond interest rate at the end of each quarter, plus a 4% margin.

The rate was set by Order in Council earlier this week.

Senior New Zealand tax officials are this week working with the OECD in Paris to prepare for delivery of the first parts of the OECD’s action plan to counter base erosion and profit shifting, says Revenue Minister Todd McClay.

A 15 point action plan was developed by the OECD late last year as a response to base erosion and profit shifting (BEPS) measures used by some multinational companies to avoid taxation.

“Now that we are nearing completion of the first parts of the plan our officials are at the OECD supporting their delivery,” Mr McClay says.

Revenue Minister Todd McClay welcomed the passage of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Bill through Parliament today, saying it would “help support business growth and innovation”.

“As part of the Government’s work to ensure that tax law remains fit for purpose, the new legislation introduces a range of practical measures to clarify the tax rules for businesses, remove distortions in the existing rules and make sure everyone pays their fair share of tax,” Mr McClay says.

Revenue Minister Todd McClay and United States Chargé d’Affaires a.i., Marie Damour, today signed an intergovernmental-agreement (IGA) which will minimise compliance costs to financial institutions in New Zealand while assist in the prevention of tax evasion.

The IGA is in response to the Foreign Account Tax Compliance Act (FATCA) information-reporting regime enacted by the United States which will take effect from 1 July 2014. It requires non-US financial institutions to provide certain information about their US customers to the United States. 

Revenue Minister Todd McClay has announced that the Rewrite Advisory Panel is likely to have completed its work and will therefore be disestablished by the end of 2014.

Mr McClay says the Panel has achieved what it set out to do and would complete its work after considering final submissions.

“Over the years the Rewrite Advisory Panel has done a fantastic job to ensure our tax legislation remains consistent with the intention of drafting tax law that is clear enough for taxpayers to understand it,” Mr McClay says.

Minister of Revenue Todd McClay has announced his intention to clarify through legislation that bodies corporate will not be required to register for GST and file returns, thereby aligning them with the rules for other residential property owners.

The proposed law change is in response to legal analysis that suggested bodies corporate may have to register for GST.

“This clarification is a question of pragmatism, fairness and eliminating compliance costs,” Mr McClay says.

Revenue Minister Todd McClay has congratulated Inland Revenue on being named Department of the Year in TransTasman’s Annual Departmental Briefing Report.

“This is great recognition for the dedication and hard work of Inland Revenue’s staff,” Mr McClay says.

“It is particularly pleasing for the Department to be recognised for its high degree of professionalism and efficiency; two qualities that New Zealanders expect from their public sector.”

Revenue Minister Todd McClay has announced the new prescribed interest rate used to calculate fringe benefit tax on low-interest loans provided by employers will be 6.13% from 1 July 2014. 

The previous rate was 5.90%.

The rate is reviewed regularly to align it with the results of the Reserve Bank’s survey of variable first mortgage housing rates to ensure it is in line with market interest rates.

The new rate was set by Order in Council on Monday and gazetted today.

Revenue Minister Todd McClay has announced the establishment of the Taxpayer’s Simplification Panel to give New Zealanders a voice in simplifying, modernising and transforming the way we pay tax.

The Taxpayer’s Simplification Panel will ask customers to submit their views on any aspect of tax compliance to find areas where Inland Revenue can make paying tax easier for taxpayers.

Police Minister Anne Tolley and Revenue Minister Todd McClay say a new information-sharing agreement between Inland Revenue and the Police will help fight serious crime.

Starting in August, Police will be able to request relevant personal information from Inland Revenue when they have reasonable grounds to suspect a serious offence has or is being committed. Serious crimes are defined as crimes punishable by a jail sentence of four years or more.

Revenue Minister Todd McClay says that the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Bill, which passed its second reading today, is an example of the Government’s focus on coherence and fairness in the tax system.

“Businesses require fairness and certainty from the tax system,” Mr McClay says.

A recent tax complexity survey of Asia-Pacific countries found that New Zealand’s tax policies are generally seen as straightforward, consistent and predictable.

The Government has allocated funding in Budget 2014 to increase the collection of Child Support from liable parents and improve the promptness of payments, says Revenue Minister Todd McClay.

“Around 73 per cent of liable parents currently do not make their first child support payment on time and 44 per cent of Child Support debt is not under any payment arrangement at all,” Mr McClay says.

“That is not fair to children relying on Child Support.”

Cheque duty will be abolished from 1 July 2014, Revenue Minister Todd McClay says.

“The Government’s focus is to ensure the fair treatment of taxpayers and to reduce customers’ compliance costs wherever possible,” he says.

“Cheque duty is a relic from a previous age and no longer serves the function it was intended for. It is also distortionary in that other methods of payment do not have an equivalent tax.”

The Government is extending the parental tax credit to help many lower- and middle-income families at a time when they most need it - the birth of a new baby, Social Development Minister Paula Bennett and Revenue Minister Todd McClay say.

Budget 2014 includes the following changes:

Innovative Kiwi businesses investing in research and development (R&D) will benefit from two new tax measures as part of Budget 2014, Science and Innovation Minister Steven Joyce and Revenue Minister Todd McClay say.

As a result of Budget changes, loss-making start-up companies will be able to cash out all or part of their tax losses from R&D expenditure, while all businesses will be allowed tax deductibility for R&D “black hole” expenditure that is currently neither deductible nor able to be depreciated.

Revenue Minister Todd McClay has welcomed the release of seven new videos that will help make tax compliance easier for customers who are hearing impaired.

“Sign Language is the third official language in New Zealand with around 42,000 of us using it every day,” says Mr McClay. 

“It is important that Inland Revenue communicates directly with customers, and doing this in their preferred language helps build constructive and ongoing relationships.”