Richard has had over 30 years’ experience with NZ taxation, and particularly enjoys dealing with land tax issues and the GST regime. He deals with clients of all types and sizes and provides tax opinions on the appropriate treatment of items of income and expenditure, assists clients with IRD risk reviews and audits and can assist clients who are having difficulties meeting their tax payment obligations to make suitable repayment arrangements with the IRD.
Here are snippets from Richard’s weekly email ‘A Week in Review’ over the last month. If you would like to receive them as they happen, please sign up for the weekly mail out here.
- Increase in minimum wages
- Guidance material for R&D Credit
- Non-resident Directors – schedular withholding tax
- New reportable jurisdictions for CRS
- Have your say on Charities Act revamp
- Back-tracking already?
- If at first you don’t succeed
- IR’s Accommodation Items – Item 2
- Watson finding of no real surprise
- Modernising Tax Administration Bill receives third reading
- Director not in breach of duties
- Sea Captain’s application dismissed
- IR close-down – be prepared
- Tax Bill receives Royal Assent
Increase in minimum wages
As most of you will probably know by now, at times I like to share little gems of information that are not exactly pure tax-related in themselves, although this item naturally has taxation considerations attached to it.
It is hard to believe that we are already into March, meaning that not only are we arguably into Autumn (still hope for another Indian summer of course!) and the daylight hours are already diminishing, but it is also the last month of most taxpayer’s income year (so start ticking off your end of year checklist).
With the new income year therefore commencing 1st April, the date often brings with it changes in various rates for the coming 12 month period. In this regard, the minimum wage rates for both adult workers and newbees/trainees are increasing, to:
- $17.70 from $16.50 for adult workers; and,
- $14.16 from $13.20 for starting-out workers and trainees.
And just in case you’re wondering:
- means a worker aged 16 years or more to whom the Act applies; but
- does not include—
- a starting-out worker; or
- a trainee
Starting-out worker means;
- a worker aged 16 or 17 years to whom the Act applies and who;
- has not completed six months’ continuous employment with their current employer; and
- is not involved in supervising or training other workers.
- a worker aged 18 or 19 years to whom the Act applies and who;
- has been continuously paid one or more specified social security benefits for not less than six months; and
- has not completed 6 months’ continuous employment with any employer (excluding any employment undertaken before the worker started to be paid any 1 or more specified social security benefits); and
- is not involved in supervising or training other workers:
- a worker aged 16, 17, 18, or 19 years to whom the Act applies and who;
- is required by their contract of service to undertake at least 40 credits a year of an industry training programme for the purpose of becoming qualified for the occupation to which the contract of service relates; and
- is not involved in supervising or training other workers
Trainee means a worker who is aged 20 years or more to whom the Act applies and who;
- is required by their contract of service to undertake at least 60 credits a year of an industry training programme for the purpose of becoming qualified for the occupation to which the contract of service relates; and
- is not involved in supervising or training other workers.
Guidance Material for R&D Credit
While the Bill itself is still before Parliament, IR has released draft guidance for public consultation, which is based on the new credit rules as introduced in the Bill, to explain to businesses:
- the R&D tax credit eligibility criteria; and,
- what they need to do to facilitate the claiming of a credit.
The draft document can be located via IR’s online forum here, https://govt.loomio.nz/rdtaxcredit, and feedback is requested to be provided no later than 31st March 2019.
Non-resident Directors – schedular withholding tax
IR has finalised and released an interpretation statement, which considers the issue of payments of fees to non-resident directors, and the accompanying schedular withholding tax deduction obligations for the NZ payer.
IS 19/01 commences with espousing a view that there is first a need to determine whether the payment of the directors’ fee is actually a schedular payment, and this can largely be dependent on who the payer has contracted with to provide the directorship services, and in some cases, where the services are performed.
In the first instance, if the non-resident director is employed under a contract of services to perform directorship services, as opposed to a contract for services, the amounts paid will simply be “salary or wages” or an “extra pay”, and therefore subject to PAYE.
Secondly, if the source of the directors’ fee payment is deemed to be NZ (in whole or in part), there is likely to be a requirement for the payer to withhold tax, unless the non-resident is entitled to claim one of the available exclusions. Should the directors’ fees be deemed to be foreign sourced income however, the directors’ fees are unlikely to be defined as a schedular payment.
In considering the source of the particular directors’ fee payment, where a NZ company has contracted with a non-resident individual to provide the directorship services, regardless of whether any services are actually performed in NZ or not, the directors’ fees will be deemed to have a NZ source in most cases. Note in this regard the recent addition (2018) to the source rules in s.YD 4(17D), which deems the directors’ fees to have a NZ source, where NZ has a right under a DTA to tax the income (most of NZ’s DTA’s contain a directors’ fees article, and most of these articles provide NZ with a taxing right where a NZ company is paying the fees).
I am sure most of you will have considered at one time or another, the issue of where employment income is sourced, the outcome determining whether the employee should be paying NZ tax on the employment income. A common reference point in this regard, is Australian case law, which sets out three main factors that need to be weighed to determine source, namely:
- the place where the arrangement for the provision of the services was made;
- the place where the services were performed; and,
- the place from which the payment was made.
IR’s present view is that the question to be posed is, “Where would a ‘practical person’ regard the real source of the income to be?”, and it is often the second factor which will determine the answer to this question (although naturally case specific).
However when it comes to directors’ fees, the place where the services are actually performed does not take centre stage, due to IR’s conclusion that special factors exist for directors of NZ companies, namely:
- the director has a special statutory connection with NZ – the Companies Act 1993, which includes the duties and obligations of a director, which both are owed in NZ and apply for the purposes of NZ law;
- the contract is most likely formed in, and subject to, NZ law; and,
- the payment is likely being made from NZ.
On the basis of the source rules therefore, where the director is an individual and provides the services completely outside of NZ, the director’s fees paid are still likely to be schedular payments and subject to withholding tax deductions. Should the person come to NZ to perform some of the services however, they will satisfy the “non-resident contractor” definition, which could then entitle them to claim one of the exclusions contained in the schedular payment rules, although in most case they are unlikely to apply, because the person will not be entitled to full relief from tax in NZ under a DTA – as I alluded to above.
With respect to the contract for services being with a non-resident entity as opposed to an individual, if all the services are performed outside of NZ, the income may be foreign sourced and the payment will not therefore be defined as being a schedular payment (but again fact specific – for example if the entity has a NZ PE, a different outcome could arise).
Alternatively, if the non-resident entity has a NZ PE to which the directors’ fees are attributable, or should the entity perform the services in NZ (usually through one of the entities’ employees), unless the entity can claim one of the available exclusions, an obligation for the payer to deduct schedular withholding tax is likely to arise. The schedular withholding rate for directors’ fees is 33%, increased to a 45% rate where the non-resident individual has not provided the payer with an IR330C (20% for non-resident companies). The non-resident can also elect a lower withholding rate, although nothing less than 15%, unless they have obtained IR approval for a lesser rate.
New Reportable Jurisdictions for CRS
Effective for reporting periods beginning on or after 1st April 2018, the following territories have been added to NZ’s reportable jurisdictions list:
- Antigua & Barbuda
- Brunei Darussalam
- Cook Islands
- Costa Rica
- Curaçao Cyprus
- Nigeria Niue
- Saint Kitts & Nevis
- Saint Lucia
- Saint Vincent & Grenadines
- Sint Maarten
- Trinidad & Tobago
Reportable jurisdictions are territories to which IR may provide certain information about non-residents that is reported to IR by financial institutions in accordance with the CRS applied standard.
Have your say on Charities Act revamp
In 2018, the Minister for the Community & Voluntary Sector announced a review of the Charities Act 2005, with the DIA being the lead agency appointed to take the project through to its conclusion.
The initial terms of reference for the review were released in May 2018, and some 9 months later, the DIA has now opened the public consultation floodgates, coupled with issuing a discussion document titled Modernising the Charities Act 2005, which also contains specific questions targeted at obtaining from members of the public, their experiences and examples of how charities are currently operating under the existing legislation.
The present review is being undertaken to ensure that current law is fit for purpose and suits the different needs of NZ’s diverse charities. Naturally the outcome of the review, could have taxation implications for some charities, the Tax Working Group (“TWG”) already having expressed their concerns with respect to both the increasing level of accumulated surpluses by charities, and the existence of privately controlled foundations, and whether these entities should be distinguished in some way from other charitable organisations.
The public consultation period ends on 30th April 2019.
I’ll let you be the judge of course, although a number of comments made by some a Labour’s top brass since the release of the TWG’s final report, is certainly suggestive that the current Government is now in damage control mode.
One such example was exhibited during the recent IFA Conference, in a speech given by the Minster of Revenue, where the Hon Stuart Nash was quick to say that the final report was in no way binding on the Government, a thorough review along with Treasury and IR input (all within 6 weeks – somewhat indicative of a rush job considering how the wheels of Government departments usually operate??) required before any further decisions were made and the issue of the Government response in April (okay perhaps 8 – 9 weeks then if they do not go public until the end of April).
The Minister’s speech also covered the present tax policy work programme (work already done to ensure all taxpayers pay their fair share of tax), the new loss ring-fencing rules for residential rental properties (which when coupled with extension of the bright-line test, will simply level the playing field between property investors and home buyers – one would suggest it will have a lot more negative consequences than just that outcome), the potential introduction of a digital services tax (“DST”) to help NZ tax the increasing use of the digital economy by non-resident suppliers (a discussion document to be issued later this year), and IR’s Business Transformation project (one major outcome being to increase voluntary compliance by having a simpler tax system (hmm want to introduce CGT??)).
With respect to the last item, the Minister advised that the project was around half way through, targeted to end around 2021.
If at first you don’t succeed
In a recent AWIR, I advised that the first reading of the Taxation (Annual Rates for 2019-20, GST Offshore Supplier Registration, and Remedial Matters) Bill, had seen the removal of a proposal to change the law to permit the Commissioner to make minor legislative changes without having to go through Parliamentary process, the FEC nervous about the prospect for Parliament’s law-making authority to lose some of its respect as a result.
Obviously keen to get the change through regardless, a SOP has now been added to the Bill, in essence reinstating the proposal, but amended to address the FEC’s concerns. The proposed remedial powers are:
- a power to modify how tax laws apply by Order in Council on the recommendation of the Minister of Revenue, and
- a power for the Commissioner to grant exemptions from provisions of the Inland Revenue Acts.
Modification could apply with retrospective application for a period of up to four income years before coming into force (closely aligning to the present time bar).
The new safeguards will require:
- Public consultation will generally be required before a modification is made or an exemption is granted.
- Any modifications/exemptions will be time-limited, optional for taxpayers to apply, subject to review by the Regulations Review Committee and disallowance by the House of Representatives, and must not be inconsistent with the intended purpose/object of the relevant provision.
IR’s Accommodation Items – Item 2
This week I review the second of 7 draft items recently published by IR, the commentary this time dedicated to the item on private boarding service providers – PUB00303/a.
It is proposed that the determination will apply from the commencement of the 2019/20 income year, the taxpayer (provided they meet the eligibility criteria) having the option to use either a standard cost or an actual cost basis, to establish what boarding income, if any, needs to be included in their tax return.
So what were the important take-outs from PUB00303/a –
- The determination can only be used by natural persons, where they have 4 or less boarders, they are not providing short-stay accommodation services at the same time, and they are not providing the boarding services as part of their GST taxable activity;
- Standard costs consist of 3 elements – weekly standard-cost per boarder, annual capital standard-cost and transport standard-cost;
- Usually no need to compute the latter two standard-costs, where the weekly boarding income per boarder does not exceed the weekly standard-cost per boarder (presently $183 per week but will be CPI adjusted). Under these circumstance the boarding income is exempt, meaning no tax return required unless the taxpayer has other income of the nature to trigger a filing obligation;
- Taxpayers with trust-owned accommodation can only utilise the standard-cost regime where the host has personally paid all the costs included in the annual capital standard-cost element (financing costs or rent, insurance, rates and r&m) or this element is not claimed at all; and,
- If the taxpayer wishes to use an actual-cost basis instead, many expenses will need to be apportioned.
Remember that should you wish to provide feedback on any of the 7 draft items, you must do so no later than 22nd March 2019.
Watson finding of no real surprise
Arguably the highlight of the week for some people I spoke to, was the release of the High Court’s finding for the Commissioner, against Eric Watson’s Cullen Group challenge to IR’s assessment of NRWT.
When Mr Watson decided to relocate to the UK in 2002, I expect his esteemed advisors at the time, recommended a restructure of his affairs, which included the establishment of two Cayman Island conduit companies, who eventually lent funding to Cullen Group, an existing NZ company. Or did they? What did in fact happen, was that the shares Mr Watson owned in Cullen Investments Limited, were eventually (as a consequence of other transactions) replaced by loans owed by Cullen Group to the two Cayman Island companies. No new funds therefore actually came into NZ under the restructure.
For whatever reason was decided justifiable at the time, rather than just accepting that NRWT was probably the correct answer in terms of what was actually required to be deducted from any interest payments made on the debt, Cullen Group instead registered the loan documents with IR (as required), and obtained approval to use the AIL payment regime.
Under the AIL regime, the requirement to deduct NRWT (at a 15% rate in this instance), is negated by the borrower paying a 2% AIL levy calculated on the gross interest paid to the lender. However the use of the AIL regime is not permitted where the borrower and the lender are associated. The difference in this instance, between the AIL that was paid, and the NRWT that should have been deducted instead, was $51.5m, and that is before any use of money interest or penalty charges.
The prime issue for the Revenue to overcome in this case, was that while the average person on the street would think there could be little doubt that Cullen Group and the two Cayman Island entities were associated, legally they were not, and this was so, even though Mr Watson was on both sides of the loan and retained a high degree of control over all relevant entities.
How did the Revenue manage to leap this hurdle then? They argued instead that the use of the AIL regime by Cullen Group in this way, was not in a manner that was within Parliament’s contemplation or purpose, that the altering of the incidence of tax was more than merely incidental, and that the quantum of tax avoided and the integral nature of payment of AIL as a term of the relevant loans, were all factors signalling that this was an arrangement used by the taxpayer to avoid tax as a means to an end in its own right.
While this is a High Court decision, it is Mr Watson we are dealing with, so an appeal is likely I expect.
Regardless however, the decision is still a timely reminder to us all, that even if you are smart enough (or at least have the money to pay someone else who is smarter than you) to develop an arrangement or transaction that ticks all the black letter boxes within the law, if the Revenue do not like it and consider you have not used the taxing provisions in a way that Parliament would have intended for you to use them, then do not be surprised to see the anti-avoidance finger pointed your way.
Modernising Tax Administration Bill receives third reading
The Bill which has at its core focus, making tax simpler and easier for individuals, has passed its third and final reading and is now awaiting Royal assent.
As a result of the passing of the Bill, from April 1st, expect to see a more pro-active Inland Revenue, as it pursues its goal of attempting to ensure an individual receives the right amount of income at the right time. It will do this by monitoring the tax codes used by individuals, and where it is considered the individual could be better off by using a different tax code, that individual will then be contacted and have suggested to them, not forced, that they consider amending their code.
We will also see a change to the way individuals file their end of year tax returns, with an eventual phasing out completely of the existing personal tax summaries (PTS) and IR3 tax returns. With respect to the income year ended 31 March 2019, IR will issue pre-populated accounts to all individuals, which will include all reportable income details that IR already holds. For taxpayers who only derive reportable income, they will then have a final account issued and not have to do anything further unless they think their assessment is wrong, in which case they will have up until their terminal tax due date to advise IR of any changes required.
For those taxpayers who have income from non-reportable sources, they will need to provide that income information to IR, before their final account assessment will be made.
There will also be a new, low cost binding ruling system available to SME’s and there will be an expansion to the existing scope of the binding ruling regime, which previously only permitted a taxpayer to seek a ruling with respect to a particular arrangement they were entering into. The expanded rulings scope will now allow you to seek rulings on such things as confirming your purchase intention with respect to an acquisition of land, or having IR rule on your tax residency status.
Finally there are a number of changes to KiwiSaver, including the addition of 6% and 10% employee contribution rates, reduction of the contribution holiday (now renamed “savings suspension”) from a maximum period of 5 years to 1 year, and allowing for over 65 year-olds to now elect into KiwiSaver, as a potential low-cost managed funds saving option for them.
Look out for full details of all of the above changes arising from the passing of the Modernising Tax Administration Bill, and more, in a forthcoming issue of IR’s taxpayer information bulletin (TIB).
Director not in breach of duties
I wanted to make a mention of this particular decision of the Court of Appeal, because while not completely tax flavoured (although the liquidation was brought about by IR chasing unpaid GST), I think the decision is a very useful guide commercially to us all, and the tough decisions that our clients are sometimes forced to make when their businesses are in trouble.
I have certainly been around long enough now, to have had a client approach me when in financial difficulty, requesting advice as to what they should do next, and most importantly, what personal exposures could the decisions they make, create for themselves. While it is so simple to say to someone that it is no use continuing to flog a dead horse (as the saying goes), and that the business should just be wound up, it can be extremely hard for the recipient of that advice to put aside the emotions and realise that for all parties concerned, including themselves, it is just the right thing to do.
This case concerned the director of a building company, who had four building projects on the go, when he appreciated that the company was clearly in financial difficulties. Realising the need to take a breath and seek professional advice, he arranged a meeting with his accountant. The decision was in essence, close the door now, or attempt to find some temporary funding to at least complete the four projects, which based on the numbers had the potential to significantly improve the existing position for all creditors of the business, including the IRD.
The outcome of the meeting was to limit the company’s trading to the four uncompleted projects, and obtain funding from an existing second tier lender, as well as the directors family trust, for which a GSA was taken. The four projects were then fully completed and sold, the net outcome being three creditor groups (trade, IRD & the shareholders/trust) all being owed roughly similar amounts.
IR then applied to liquidate the company, subsequent to which the director was personally pursued by the liquidators, to which the High Court ruled he had breached his duties under the Companies Act – duty to act in good faith, reckless trading and duty to not agree to the company incurring an obligation it cannot ultimately satisfy.
However the Court of Appeal quashed the High Court decision, on the basis of adopting a business judgement approach to its analysis of the director’s duties. In this respect the Court commented:
- The purpose of the Companies Act is to provide that directors are allowed a “wide discretion in matters of business judgment” while protecting shareholders and creditors from the abuse of management power;
- While the director’s belief (when acting in good faith) cannot be based on a wholly inappropriate appreciation of the interests of the company, these words do not require perfect business judgment. The duty must be assessed recognising the wide discretion given to directors in matters of business judgment. Commercial good practice is relevant in assessing good faith;
- If directors are to have a wide discretion in matters of business judgment to encourage efficient and responsible management of companies as the long title envisages, the bar in terms of risk to the company’s creditors must not be set too high. A court is not to assess the risk of a particular transaction ignoring up-side to the business. It is a risk and loss to the company as a whole that is referred to and not just in relation to a particular transaction;
- With respect to the reckless trading issue, caution must be exercised to avoid bringing hindsight judgment to bear in circumstances which do not fully and realistically comprehend the difficult commercial choices facing the directors.
Bearing these comments in mind, the Court therefore found:
- The director did not act in bad faith and was not reckless. When things got rough, the director took stock of the company’s position, put the brakes on further projects, and focused on completion of the developments to best serve the interests of creditors. He incurred further debt in order to complete, but he considered whether those creditors could ultimately be paid, and did his costings with that in mind, and by and large they were paid with the exception of the IR and the Trust. In relation to that IR debt, the GST situation was complex and the IR was not necessarily going to be worse off, and could be better off, after completion and sales. The option which the liquidators say should have been taken of some sort of walk away by the director in November 2012 leaving the houses unfinished was in the Court’s assessment the less sensible commercial option.
- It was not strictly necessary to consider the application of the defence for a director relying on a professional advisor. The Court of Appeal agreed with the High Court that s138 was not available as a defence. However, the accountant’s general support expressed to the director in favour of completing the buildings and selling them, was a significant factor in the reasonableness of the director’s actions, and whether there was any element of recklessness.
A good commercial practical decision in my view, and certainly at a level of authority where as an adviser I can have some confidence in using the Court’s commentary as potential guidance for future scenarios of client’s faced with the same predicament – do I close the door now or push on, with a realistic supported view, that in doing so, there is a chance to improve my creditors ultimate outcome, although naturally coupled with the risk that such a result does not subsequently materialise.
Sea Captain’s application dismissed
For those of you who provide tax residency opinions for your clients, you will no doubt have been following the Van Uden case, which similar in vein to the Diamond landmark decision, required the Court to consider the facts and make a determination with respect to the issue of whether or not the taxpayer had a NZ permanent place of abode (“PPOA”) during the relevant income years in question.
When I first read the High Court judgement, just reading the facts of the case, I thought the taxpayer was in trouble, and sure enough, the decision was found in favour of the Commissioner. Not satisfied with the outcome however, the taxpayer then appealed to the Court of Appeal, where he again lost. Now at this point, just to give you a feel as to how the various courts were viewing the taxpayers case, as he had lost in the TRA as well, it should be noted that all Courts had also confirmed the imposition of shortfall penalties by the Commissioner, for the taxpayer taking an unacceptable tax position – indicative of a view that the taxpayers position was not even as likely as not to have been correct.
Clearly under the impression that he had suffered a serious miscarriage of justice, the taxpayer has then proceeded to seek leave from the Supreme Court to appeal the Court of Appeals decision. The Supreme Court dismissed the application for leave to appeal however, considering that it was not necessary in the interests of justice for the Court to hear and determine the proposed appeal. The Court found that the proposed grounds of appeal raised no point of general or public importance nor any matter of general commercial significance. There was also no appearance of a miscarriage of justice.
So with the case now at an end, what are some of the takeaways from the final decision that can provide useful guidance to us all, when advising clients of their potential NZ tax residency status, particularly with respect to the existence, or not, of a NZ PPOA:
- A core principle of any tax residency determination, is whether you have a NZ home available to you, and it is completely irrelevant in this regard, whether or not you actually own this home in your own name (dwelling owned by a trust in this case, of which the taxpayer was a trustee, although he did not hold a power of appointment over trustee positions);
the availability of a NZ home is established, if your track record reflects
that every time you return to NZ, you actually stay in the home, and you return
to NZ quite regularly, you are going to be on the slippery downhill slope
attempting to argue against the existence of a NZ PPOA; and,
- IR can, and will, examine all of your expenditure habits during the period in question, which can ultimately lead to supporting their position taken of you having a NZ PPOA, if coupled with the previous two factors, plotting on a map where you actually spend your funds when present in NZ, is geographically centred around the dwelling that has been deemed a home for you. Add to this any evidence that you use the property as your mailing address or you have services such as Sky TV connected to the same address, then I suggest you may be in a spot of bother.
A distinctly different case in terms of factual background elements to Diamond I would suggest therefore, although naturally the principles espoused in that case, certainly played a role in the latest decision. Time will tell of course, as to what impact if any, the decision has on future tax residency disputes brought before the Courts.
IR Close-down – be prepared
Just in case you have not seen the various notifications, IR will be effectively closed for around 1 week over the Easter/ANZAC period. The shutdown is to facilitate further modernisations to IR’s systems, and in essence, the only things you will be able to do during the affected timeframe, is pay bills as you normally would through your bank account, and access information through IR’s website. The following is IR’s published statement (I’ve highlighted one critical point):
Services will be temporarily unavailable
To make these changes our key services will be unavailable between 3pm, Thursday 18 April and 8am, Friday 26 April 2019. During this time you won’t be able to access myIR, E-File or contact us through our contact centres. Our offices will also be closed. Secure mail messages saved as drafts and any draft returns within myIR can’t be brought across and will be deleted as part of this process. Please therefore check your secure mail messages and submit any draft returns before Thursday 18 April. For more information, visit our service update website.
Click on the link for more detailed info, and remember that the Friday, Monday and Thursday of the specified period are all public holidays, so the impact may not be a bad as you first think.
Tax Bill receives Royal Assent
And just in time for the aforementioned shut-down, the Modernising Tax Administration Bill which passed its third reading just under two weeks ago, has now received Royal assent, the final step in the law making process.
Consequently, as if I have not drummed it into you all enough already, do not overlook the new payday filing requirements for employers applying from the 1st April, and expect to see the new end of year individual tax return filing processes come into play, with pre-populated accounts being issued by IR for all individuals for the 2019 income year, seeing the eventual phasing out of both personal tax summaries (PTS) and IR3 income tax returns.
Also do not be surprised if your employee suddenly requests a 6% or 10% employee contribution rate to their KiwiSaver scheme, or your over 65’s (I’m sure they’re still out there in active employment somewhere) suddenly opting into KiwiSaver.
Finally, I personally look forward to seeing exactly how the new “short process ruling” regime plays out in practice, in essence providing a low cost mechanism for SME’s (<$5m gross income, tax involved <$1m) to seek private binding rulings from IR, and not just restricted to rulings on the tax effect of arrangements they are looking to enter into as well. The new legislation also sees the expansion of the existing rulings scope, meaning going forward, taxpayers will also be able to seek a binding position from IR, with respect to questions like “what is my tax residency status?”, or, “Can you confirm my intention for acquiring a piece of land?”.
What exactly will be the “low cost” has yet to be determined, IR wanting to see how many taxpayers commence using the service, what internal resources will therefore by required to fulfil the demand, and as a consequence an appropriate cost model to operationally fund the offering. What this space for an update when I hear more.
If you have any questions or would like a second opinion on any national or international tax issues, please contact me firstname.lastname@example.org.
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