The NZ Budget will be announced on Thursday 25 May 2017 by The Minister of Finance, Hon Steven Joyce.
Alliott NZ will provide a summary following the Budget so look out for this.
NZ Resident Director
Every NZ company must have at least one director that lives in New Zealand, or lives in Australia and is a director of a company incorporated in Australia. Australia has been prescribed as an ‘enforcement country’ by Regulation 12 of the Companies Act 1993 Regulations 1994.
The term ‘live in New Zealand’ is not defined in the Act. The Registrar of Companies interprets this on the basis that a director lives in New Zealand if he or she is present in New Zealand for more than 183 days in total in a 12-month period.
NZ Audit Requirements for Large Overseas Owned Companies
An overseas owned NZ company or NZ branch of an overseas company is required to be audited if the company is large. Large is defined as:
- As at the balance date of each of the two preceding accounting periods, the total assets of the entity and its subsidiaries (if any) exceed $20 million, or
- In each of the two preceding accounting periods, the total revenue of the entity and its subsidiaries (if any) exceeds $10 million.
Please note the large criteria for a branch applies to the company as a whole, not just the NZ branch.
Please note that to obtain a tax number or IRD number in a New Zealand, a bank account must first be open for the company or overseas residents/entities. Alliotts has contacts at the NZ banks that can assist with this if required.
Any property or land transactions require all parties to the sale and purchase agreement to have a NZ Tax/IRD number.
Records Kept Overseas
A company must keep 7 years’ worth of records at its NZ-registered office. These records may be kept at a place in New Zealand (other than the registered office) provided the location is notified to the Registrar 10 working days in advance of the relocation.
Alliotts has had some questions about the information kept in the Xero accounting system which has servers based overseas. In December 2016 the IRD released a list of approved third party providers approved to store taxpayer electronic records offshore which included a number of accounting software providers. Xero is included in this list.