Tax Tips November 2019
This post is by Sheral Reddy, Associate Director at GECA Chartered Accountants and an experienced CA who specialises in tax and property compliance.
Inland Revenue has made some updates that we thought you might like to know about, these Tax Tips have been outlined below:
Interest rates
Effective 29 August 2019, IRD has changed the use of money interest rates as follows:
- An increase for taxpayer’s paying rate of interest on the unpaid tax from 8.22% to 8.35% per annum, and
- A decrease of the Commissioner’s paying rate of interest on the overpaid tax from 1.02% to 0.81% per annum.
IRD Payment Changes
From 1 March 2020, IRD will no longer accept cheques if customers have alternative payment options available (this includes any post-dated cheques after 1 March 2020). Suggested ways to pay are as follows:
- myIR: You can pay by direct debit and make debit card and credit card payments securely through myIR online services.
- Online banking: You may be able to make payments using online banking.
- Credit or debit card via IRD website: Use your credit or debit card to make online payments through the IRD website. Visit ird.govt.nz/pay.
- In person at Westpac: Pay by EFTPOS or cash at a Westpac branch or Smart ATM.
- Money transfer: If you are overseas you can pay us using a money transfer service. Search for “make a payment” on the IRD website for more information.
GST Changes
New GST rules on low-value goods being imported will come into effect from 1 December 2019. Non-resident suppliers (including electronic marketplaces) need to register for and charge GST if the turnover from those supplies exceeds $60,000 in a 12-month period and if they are:
- resupplying any goods that are supplied by a non-resident,
- are outside of NZ at the time of supply or are delivered to a place in NZ by the supplier and has entry value of $1,000 or less.
The rules are not intended to apply to supplies made to GST registered businesses, or to supplies valued over $1,000, but to reduce compliance costs and subject to certain thresholds. The non-resident supplier can be permitted to also charge GST on those supplies.
The $1,000 threshold applies per item instead of per invoice/transaction. High-value items will continue to be taxed at the border as they come into New Zealand except for fine metal, alcohol and tobacco products.
Resident Withholding Tax (RWT) Changes
From April 2020, the new non-declaration rate for RWT on interest income will be 45%. If you will be receiving interest income we recommend your correct tax rate is provided to your investment provider or organisation.
