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New Zealand Budget 2020

2020 “Rebuilding Together” Budget

Alliott NZ Summary

As expected, the 2020 Budget has been a high spending one with a deficit forecasted to be $29.6 billion in 2021.

Unemployment is projected to increase significantly, peaking at 9.8 per cent in the September 2020 quarter before recovering thereafter.

New Zealand’s real GDP growth rate is projected to decline from 2.8 per cent in the year ending June 2019 to -4.6 per cent in the year ending June 2020. Annual real GDP growth is not forecast to become positive until the year ending June 2022.

The Government’s net core debt is predicted to be 30.2 per cent of GDP in 2019/20, 49.8 per cent of GDP in 2021/22 and 53.6 per cent of GDP in 2023/24.

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COVID19 coronavirus

COVID-19 Tax Measures and Alert Levels

As we near the end of the initial four-week lockdown, the Government has released further Tax Measures to assist businesses including more complete information on what Alert Level 3 would mean.
Yesterday the Government announced two further tax proposals – Tax Loss Carry Back Scheme and changes to the Tax Loss Continuity Rules.

Alliott NZ Chartered Accountants
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COVID19 coronavirus

COVID-19 Tax changes to support NZ business

COVID-19 (novel coronavirus) – Tax changes to support businesses

Temporary loss carry-back scheme

This temporary change should be introduced in a bill in the week beginning 27 April.

Businesses expecting to make a loss in either the 2019/20 year or the 2020/21 year would be able to estimate the loss and use it to offset profits in the past year. In other words, they could carry the loss back one year.

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auckland harbour

NZ GST on low-value imported goods

New GST rules for low-value imported goods

From 1 December 2019 overseas businesses selling low-value goods to consumers in New Zealand must charge GST at the point of sale if they meet the GST registration requirements, including a NZ$60,000 turnover threshold.

Low-value goods are physical goods valued at NZ$1,000 or less (excluding GST), such as books, clothing, cosmetics, shoes, sporting equipment and electronic items. Goods sold for more than NZ$1,000 will continue to be taxed by Customs at the border as they come into New Zealand.

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Alliotts TaxPulse

April TaxPulse

Alliott Group’s global tax news in one monthly digest

Asia Pacific Tax News

BJP pledges to revise income tax brackets if re-elected

India’s ruling BJP party says it will revise income tax brackets if re-elected in the seven-phase general election, starting from 11 April. “We are committed to further revise the tax slabs and the tax benefits to ensure more cash and greater purchasing power in the hands of our middle-income families,” the BJP said in its election manifesto.
Times of India

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Alliotts TaxPulse

Global tax news monthly digest Mar-19

Alliott Group’s monthly global tax digest for March

Welcome to March’s edition of TaxPulse

A monthly media round-up of news, views and comment pertaining to global taxation, provided by Alliott Group’s International Tax Services Group.

Asia Pacific Tax News

China unveils $298bn tax cuts to boost growth

Chinese number two Li Keqiang has outlined plans to cut billions of dollars in taxes in order to boost the world’s second-largest economy. Mr Li told 3,000 delegates at the National People’s Congress that China would aim to deliver nearly 2 trillion yuan ($298bn) of cuts in taxes and other company fees. A value-added tax for transportation and construction sectors will be reduced from 10% to 9%, and VAT for manufacturers will fall from 16% to 13%, he said.
BBC News    South China Morning Post   China Daily

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Alliotts TaxPulse

Global tax news monthly digest Feb-19

Asia Pacific Tax News

China tax cut package to stimulate economy 

China will cut value-added tax rates for selected industries and provide tax rebates for others as part of its efforts to boost a slowing economy. Government officials said they would cut taxes “on a larger scale” in order to boost business activity. JPMorgan Chase & Co. economists estimate the total impact of the tax cuts will be around 2trn yuan ($300bn), or 1.2% of GDP. Tax cuts for graduates and low-income workers have also been announced in a stimulus drive to fend off the effects of the economic slowdown. Companies which hire people designated as “needy” will also qualify for a tax deduction of 6,000 yuan per person per year for three years.
Financial Times   Bloomberg   China Daily

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Global tax news in January monthly digest

January TaxPulse by Alliott Group


Chinese leaders promise tax cuts to boost flagging economic growth

China’s top economic policymakers promised more tax cuts and increased funding for infrastructure at a key annual planning meeting last month, as US tariffs and weakening domestic consumption added to downward pressure on growth. China’s economy slowed to 6.5% year-on-year growth in the third quarter of 2018. “The pro-active fiscal policy should enhance efficiency, implement larger-scale tax cuts and fee reductions, and substantially increase the size of local government special bonds,” state news agency Xinhua said in a translation provided by Reuters.
CNBC   Financial Times   South China Morning Post

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E-Commerce and the Special Scheme for Distance Selling

According to a study conducted by the CRR (Centre for Retail Research), e-commerce generated net sales of €232.6 billion in Europe and Poland in 2016 and €265.7 billion in 2017.

In 2018, this market should exceed €300 billion. Although it proves a fantastic opportunity for online sellers, e-commerce can also be the source of significant tax risks, particularly VAT. Mickael Tatayas, Head of Alliott Group’s VAT/Indirect Services Group, explains the state of play in Europe and provides scenario examples.

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digital economy

Digital economy

Taxing the digital economy fairly

David Gibbs, corporate tax partner at London accounting firm Alliotts (and chair of Alliott Group’s International Tax Services Group) explains in this short report that the OECD and the European Commission (EC) have both issued publications with their respective latest analysis and proposals to tackle the issue of taxing profits and income earned from within the digital economy.

So where are we now in terms of concrete proposals? Read David’s views below.

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online shopping

US Supreme Court’s Wayfair Decision

Wayfair: Could the US Supreme Court decision open Pandora’s Box across the globe?

In the case of South Dakota vs. Wayfair, the United States Supreme Court may have opened a Pandora’s Box of tax compliance problems around the world as states seek to collect taxes they believe are due to them.

Alliott Group colleague Daryl R. Petrick of Californian accounting firm Bowman & Company, LLP, explains the decision and the potential reverberations for domestic and international retailers.

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Personal Tax

Cristiano Ronaldo and foreign high net worth individuals

Cristiano Ronaldo’s arrival at Juve highlights Italy’s attractive new tax regime for foreign high net worth individuals.

Cristiano Ronaldo’s summer switch to Juventus has sparked debate about not only sporting performance and statistics, but also the fiscal implications of his transfer to the club. In particular, Cristiano’s move has drawn attention to the optional tax regime for new residents in Italy. Find out more below in this article from partners Giorgio Marcolongo and Paolo Bifulco, a version of which also appeared in a recent copy of Rolling Stone magazine.

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NZ CRS & FATCA disclosures

Although due date for CRS & FATCA disclosures has passed, NZ IRD still accepts late submissions

Financial institutions needed to report information about foreign tax resident financial accounts to us for the year ending 31 March 2018 by 30 June.

This is an annual obligation to comply with the Common Reporting Standard (CRS) and Foreign Account Tax Compliance Act (FATCA) legislation. IRD is due to exchange information internationally by 30 September 2018.

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Budget 2016 transforming NZ’s tax system

Global tax evasion

Combatting global tax evasion

The New Zealand government has joined more than 100 other countries in a global initiative to combat tax evasion. It’s called the Automatic Exchange of Information – or AEOI.

This international collaboration will make it even harder for people who are trying to evade paying tax by hiding money or investments overseas.

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new zealand

NZ Budget 2018

Finance Minister Grant Robertson delivered Budget 2018 to the nation

It’s the first Budget for the Labour-NZ First Government and forms a key part of the narrative around where and how our new Government wishes to recalibrate the longer term destination for the country.

Tax – Reconfiguring the incentives for R&D

In the lead up to Budget 2018, the Government released its proposals to lift research and development (R&D) spending from the current 1.3% of gross domestic product (GDP) to a target of 2% of GDP. The solution put forward is to reintroduce an R&D tax credit regime with effect from 1 April 2019.

The bones of the proposed regime are similar to what we had under the previous Labour government, prior to the regime being repealed and replaced with the Growth Grant scheme administered by Callaghan Innovation. It comes at an estimated cost of $1.0 billion of operating expenditure over four years.

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Australia's House of Representatives, Canberra

Australian Budget 2018

Wealthy, healthy and prizes

That fiscal prudence has come at the ‘cost’ of fewer giveaways than might have been the case ahead of an election.

We expect the government to gain favourable comment for banking some of the revenue gains with enough left over for a variety of measures, including personal income tax cuts.

“By far the biggest improvement [in Australia’s cash balance] was due to stronger-than-expected tax revenue.” 

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Reminder: New Australian GST rules from 1 July

Tax on retail sales of goods and services into Australia

Australian goods and services tax (GST) may apply to you for retail sales of low-value goods, services or digital products to Australia.

Retailers, online marketplaces and goods re-deliverers may need to register and pay GST to the Australian Taxation Office. GST is a consumption tax similar to sales tax or value-added tax.

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bitcoin cryptocurrency

Cryptocurrency tax implications

Investors in cryptocurrency need to be aware of tax implications

With all the excitement around cryptocurrency, it can be easy to forget about the taxation that comes along with it.

Cryptocurrency (sometimes known as a virtual, digital, or electronic currency) is a digital asset which is traded and secured using cryptography. Bitcoin, the most widely recognized type of cryptocurrency, has an equivalent value in traditional currency, and is digitally traded peer to peer using a decentralized system referred to as Blockchain.

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international tax transparency

ATO encouraging international tax transparency

Australian Tax Office (ATO) transparency regimes and initiatives part of commitment to combat international tax avoidance.

They involve comprehensive exchanges of taxpayer information and the number of jurisdictions they now exchange information with is growing.

The ATO works with the Organisation for Economic Co-operation and Development (OECD), Joint International Tax Shelter Information Centre (JITSIC) and overseas jurisdictions to improve global tax transparency. These regimes and initiatives contribute to ensuring individual and corporate taxpayers pay the right amount of tax in Australia.

The measures supporting international tax transparency include:

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Rough Seas Ahead for Multinationals

Rough Seas Ahead for Multinationals?

Short Report: The New Country by Country Reporting (CbCR) & Transfer Pricing Documentation Rules

This report stems from Alliott Group’s International Tax Services Group meeting in Sydney, Australia where international tax advisors from across the world engaged in a roundtable discussion on Action 13 of the Base Erosion and Profit Shifting (BEPS) Action Plan.

The report provides basic guidance on the CbCR and transfer pricing documentation recommendations, an update on the status quo in different countries and opinions from local tax practitioners.

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Vacancy Fee Introduced in Australia

International Tax Alert

Vacancy Fee Introduced in Australia for Foreign Investors in Residential Property

New rules in Australia have imposed an annual vacancy fee on foreign owners of residential real estate in situations where a property is not occupied or not genuinely available for rent for at least six months in a 12 month period.

Australia’s Federal Government recently passed the law to increase the amount of housing stock available for occupation.

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UK Budget 2017 Summary

UK Chancellor Philip Hammond announced the Autumn Budget on 23 November 2017

6 Key points

London member firm Alliotts referred to the Chancellor’s second budget of the year as ‘A Budget for Building the New Economy’ and drew attention to the Government’s commitment to further investment in technology, incentives for knowledge-based companies and funding for the development of construction skills to plug the skills shortage.

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AUS GST changes to foreign importers and Australian consumers July 2018

Changes will expand Australia’s GST base

Australia’s Goods and Services Tax (GST)* rules on the import of goods into Australia will change 1 July 2018 as Australia continues to modernise its tax rules to make them more applicable to new business models being used in the digital economy.

Australia’s GST rate is 10% and a business is required to register for GST if its actual or anticipated sales over the next 12 months exceed $AUD 75,000.

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Australian Government’s changes to foreign resident withholding tax regime

On 9 May 2017, Australia’s Federal Government announced substantial changes to the rate and threshold of its Foreign Resident Capital Gains Withholding (FRCGW) regime which has been in force since 1 July 2016.

Alliott Group member firm BRH Lawyers in Brisbane explain the changes and what foreign residents purchasing property in Australia need to be alive to.

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Evolution of tax residency definition by ATO needs to be observed by international companies

International companies with an interest in doing business in Australia will be interested to learn that the Australian Taxation Office (ATO) has recently issued a draft taxation ruling TR 2017/D2 Foreign Incorporated Companies: Central Management and Control test of residency. Simultaneously, the ATO has withdrawn its earlier tax ruling TR 2004/15 which covered similar issues.

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2017 UK Spring Budget highlights

A clear signal that Britain is open for business

“My ambition is for the UK to be the best place in the world to start and grow a business. In 2010, Corporation Tax was 28%. From April this year, it will fall to 19%, the lowest rate in the G20. In 2020, it will fall again to 17%, sending the clearest possible signal that Britain is open for business.” – Philip Hammond, UK Chancellor of the Exchequer.

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