Tax Updates: 6 May 2024

Welcome to this week’s review of tax issues where Richard comments on what’s been happening in the world of tax over the past week. If you have a question or would like a second opinion on any national or international tax issues, please contact Richard via email at richard@gilshep.co.nz.

Technical decision summaries

I don’t want to sound like a broken record, but once again, nothing across my desk in the past week stoked my interest other than the release of a Technical Decision Summary (TDS) by Inland Revenue (IR) on employee share scheme taxing dates (the relevant date for determining the taxable value of any employee share scheme benefit). So, I thought it would be timely to remind you of these little potential gems.

For those of you who have been involved in an IR dispute and have gone the distance, you’ll certainly appreciate that the last step before the issue proceeds to court is a ‘fresh eyes’ review of the case by the Tax Council Office (TCO).

The TCO is an ‘independent’ IR unit that undertakes a final review of the dispute and issues a ruling accordingly. If the TCO rules against IR, then that decision is binding on the Commissioner, and the case can proceed no further. However, if the TCO rules against you, you can still pursue your case through the courts.

In more recent years, IR has commenced issuing the TCO rulings (watered-down concise versions at least), which I find are a good read on several different levels – they enable you to see the issues that are being disputed between the taxpayer and IR, understand IR’s perspective on different areas of tax law, and to see how TCO rules on the issue and why. In days of old, all you used to see were the decisions of the court (usually in favour of the Revenue), with no real visibility into the cases that almost made it to court and why they didn’t (often because IR lost the case at the final independent review).

The good thing about a TDS is that it is always less than 10 pages long, making it easy to read over your morning coffee. If interested, visit IR’s technical tax section on their website and enter TDS in the keyword search.

This article was originally published through the ‘A Week In Review’ newsletter. If you would like to receive Richard’s tax updates every Monday morning, you can subscribe here.