We’re coming to get you…

Well, they’re not really, but certainly if you are investing offshore as a New Zealand tax resident, which usually means that you should be paying New Zealand taxes on your worldwide income, then it’s certainly prudent that you understand entirely your New Zealand tax obligations with respect to those offshore investments.

Recently Inland Revenue (IR) has released its compliance focus on offshore transparency, together with guidance to assist tax agents in complying with the international rules.

The compliance focus highlights the extensive international exchanges of information taking place, as well as the new intelligence tools being used in tracking down people who do not pay their fair share of tax. Clearly, the world is not as large as it once used to be, and it’s ‘investor beware’ if you think it still is.

IR has an ongoing monitoring programme to ensure people return their overseas income as they should, and it will verify customer records against additional information received from treaty partners for later years. We have certainly received a number of “please explain” letters in recent times, where there has been a mismatch between what the client has disclosed in their New Zealand income tax return and what IR thinks they should have returned.

Often our response is quite straightforward, our client is presently a transitional resident and consequently, the foreign income is still exempt from New Zealand taxation, but it’s not always the case.

If you’re looking for further guidance on the topic, then you can refer to IR’s website link – where they have placed four guides to assist you and your clients with obtaining an appreciation of their present filing obligations.

Covid variation for R&D tax-loss credit filings

IR has issued Determination COV 22/18, ‘Variation in relation to s 70C of the Tax Administration Act 1994 to extend deadline for filing statements in relation to R&D loss tax credits’.

The variation provides extra time to file the statements required by section 70C of the Tax Administration Act, in relation to R&D loss tax credits and R&D repayment tax for the 2021 tax year, when the statements were unable to be filed on time due to Covid-19 response measures or as a consequence of Covid-19.

For the 2021 tax year, the time within which a statement must be filed has been extended to 31 August 2022.

The variation applies from 1 April 2022 to 31 August 2022.


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Contributing Advisors