Secondary tax changes

25

Mar

The Taxation (Annual Rates for 2018-19, Modernising Tax Administration, and Remedial Matters) Bill passed its third reading on 13 March and will now come into effect on 1 April. The bill amends incorrect secondary tax codes, relieving workers with more than one job who have previously been paying too much tax annually.

The IRD will now be looking closer at tax paid by wage and salary earning individuals throughout the year to ensure proper PAYE tax codes are applied. The legislation will now enable automatic tax refunds for about 750,000 people per year. This bill also removes the need for people who solely earn employment or investment income to file a personal tax summary (PTS) to get a tax refund.

Other changes included in the bill further relate to the IRD and updating the tax system as a whole. Some of these changes are:

  • New KiwiSaver contribution rates of 6% and 10%, making the savings scheme accessible to people over 65.
  • Depreciation roll-over relief for properties affected by the Canterbury earthquakes in 2010 and 2011 extended until 2024.
  • Clarifications of how the IRD can collect, use and disclose taxpayer information.
  • Introduction of a ‘short process ruling’, meaning small businesses can easily apply for a binding ruling from the IRD on any tax matters.
  • Confirms the annual rates of income tax for the 2018/19 tax year remain the same as previous years.

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