Tax Updates

This post is by Sheral Reddy, Associate Director at GECA Chartered Accountants and an experienced CA who specialises in tax and property compliance. 

Anti-Money Laundering Legislation

From 1st October, all accountants have to comply with the Anti-Money Laundering legislation. We are now required to put in place preventative measures to tackle these issues. This will mean we will be required to do the following:

  • Ask you for more information about your business than what we have done so in the past.
  • We may require information regarding the source of funds for financial transactions. Questions will especially relate to any large cash transactions of $10,000 or more (in one transaction) identified in the information provided to us.
  • Request for additional information about your identity. We will need to obtain, verify and store information that identifies you and your address. A passport is a primary form of identification, but other sources such as driver license may be sufficient. Recent utility bills will be required to verify your address.

If you have further queries regarding the anti-money laundering legislation and how it will impact your business, please do contact us.

Research & Development (R&D)

The government has announced a new R&D tax incentive package last month to encourage businesses to increase their R&D Expenditure. The new legislation includes the following:

  • A credit of 15% will be allowed of relevant R&D expenditure up to $120 million which will be available from beginning of 2019/20 financial year
  • A minimum threshold of $50,000 R&D expenditure per year
  • For the purposes of this new credit the Research and Development has been further defined. The credit is not available to businesses who receive a Callaghan Innovation Growth Grant already. R & D expenditure needs to have related characteristics of creating new knowledge or new and improved processes.


In September IRD released a statement about “Income tax-donee organisations – meaning of wholly or mainly applying funds to specified purposes in New Zealand”. This is just a timely reminder with the festive season coming up and a lot of us thinking about making donations. The statement:

  • Explains what is required to qualify as a donee organization and how an organization applies its funds to purposes within New Zealand and overseas under the Income Tax Act 2007.
  • Clarifies further what is a wholly and mainly donee organization as there has been confusion as to what percentage of activity is required within New Zealand.
  • We suggest that a receipt be obtained and kept for end of year records for any donations made. Also, if you are considering donating and would like to claim the tax credits, it would be worth checking if the donee organization meets the criteria. As not all organisations qualify to have the tax credits claimed on the donations made.

Do contact us if you would like to know if your choice of charity meets the donee organization criteria.

Customs and Excise Act 2018

The new Customs and Excise Act 2018 came into effect on 1st October. Businesses who might be affected by the new act are:

  • Importers and Exporters
  • Brokers
  • Businesses providing logistic services
  • Transportation and storage companies providing these services for imports and exports

The new act includes:

  • Customs having the ability to decide or make a ruling on the value of imported goods
  • Introductions of interest and penalties for any late duty payments
  • Introduction of penalties for any administration errors
  • Importers will also be able to declare provisional values of the imported goods at the time of the importation if the final values are unknown

This website is available to educate businesses more on the new Act