AGENTS ANSWERS
Inland Revenue’s tax agents’ update
Issue No 191 • June 2016 • IR787
REMINDERS
28 June: The first instalment of 2017 provisional tax is due for customers using the ratio option who have a
standard balance date.
30 June: Annual reconciliation return (IR853) and Investor certificates (IR854) are due for PIEs with an early or
standard balance date.
7 July: 2016 income tax returns are due for clients with a standard balance date and no extension of time.
Note: If a due date falls on a weekend, public holiday or provincial anniversary day, we can receive your return or
payment on the next working day without a penalty being applied.
If you have any suggestions for topics you'd like covered in this newsletter, email [email protected]
Private use of motor vehicles and fringe benefit tax
If your client makes a vehicle available to an employee, their associated persons or shareholder-employees
for private use, they'll need to pay fringe benefit tax (FBT) whether the vehicle is used or not.
Travel between work and home is generally classified as private
use. Go to www.ird.govt.nz (search keyword: IS3448) to find
out if this travel is deductible for FBT purposes. This
interpretation statement contains guidelines for determining
whether travel between home and work is deductible, and when
travel between home and work will be treated as work-related
use (rather than private use or enjoyment) for FBT purposes.
Your clients are required to keep records for any motor vehicle
made available for private use. If a private use restriction is in
place, the employer must keep a record of quarterly checks to
make sure the vehicle isn't used for unauthorised private use.
There are exemptions for FBT if the vehicle is a work-related
vehicle. Adequate records must be kept by the employer to
support the days claimed as FBT exempt under the work-related
vehicle exclusion. Our Fringe benefit tax guide (IR409) has
more information on general and daily motor vehicle
exemptions. Go to www.ird.govt.nz (search keyword: IR409).
To find out more about motor vehicles and FBT go to www.ird.govt.nz (search keywords: FBT vehicles).
If you have any questions about FBT on motor vehicles send them to [email protected] We'll respond to
your question within 10 working days.
This is the first of a series of articles highlighting FBT issues. In the next edition of this newsletter, we'll be looking at
FBT and work-related vehicles and common errors found in FBT returns.
Classified Inland Revenue – Public
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Income adjustments for Working for Families Tax Credits and student loans
You'll need to complete an Adjust your income (IR215) form for your clients if they have:
• Working for Families Tax Credits entitlements, or
• student loans
and additional income types and adjustments to declare.
The IR215 needs to be filed before your client receives their personal tax summary (PTS) or when you file their
IR3. This is so we can calculate an accurate end-of-year assessment.
All student loan clients with additional income types and adjustments need to file an IR215, even if they don't
receive a PTS or need to file an IR3.
Find out more about income types and adjustments at www.ird.govt.nz (search keywords: income types
adjustments).
Reading ACC levy invoices is about to get easier
From 1 July, businesses will start to receive their recently redesigned ACC
invoice.
ACC worked with customers and ACC staff who deal with business customers
every day, to include their feedback when redesigning their levy invoices.
The result is an invoice that is clearer and easier to read, while keeping all
the information businesses need.
The key design changes include:
•an improved layout
•simplified design
•fewer pages
•the removal of unnecessary colours.
More information about the invoices, including examples, will be available after 1 July at
www.acc.co.nz/yourinvoice
Share your feedback about the new design with ACC at [email protected]
Use-of-money interest rate change
Effective 8 May 2016, the use-of-money interest (UOMI) rates on underpayments and overpayments of tax
changed.
• Underpayments are now 8.27% down from 9.21%
• Overpayments are now 1.62% down from 2.63%
Rates are reviewed regularly to make sure they are aligned with market interest rates.
Taxation (Residential Land Withholding Tax, GST on Online Services, and Student
Loans) Act 2016
The Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Act 2016 received
Royal assent on 13 May 2016.
Non-resident businesses and GST
From 1 October 2016, non-resident businesses that meet certain GST requirements will be required to charge and
return GST on any services they supply to customers in New Zealand. This includes businesses providing online
services such as online gaming, gambling, video streaming and music streaming services.
For more information about this change go to www.ird.govt.nz (search keywords: non-resident GST).
Residential land withholding tax
Effective 1 July 2016 a new withholding tax will apply to certain residential property sales and disposals. Your
clients may be able to apply for a certificate of exemption from this tax.
For more information about this new tax and how it may impact your clients go to www.ird.govt.nz (search
keyword: RLWT).
Classified Inland Revenue – Public
AGENTS ANSWERS • Issue No 191 • June 2016
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We've stopped sending paper IR3A returns
We're receiving queries from tax agents asking when we'll be sending out their client's paper income tax returns.
In the 2012 return season, we stopped sending paper-based IR3A returns to tax agents. We now send you a
schedule of document lodgement numbers (DLN) for your clients so you can file online. The schedule contains a
full list of your clients including each client's name, IRD number, bank account number, contact details and DLN.
If you need a paper return you can download one from www.ird.govt.nz (search keyword: IR3A).
"Preparing tax professionals for simpler tax" webinar
Webinars are being held in June to provide agents with high level information about the new tax system and the
changes and benefits that tax professionals and clients can expect. We'll also cover the new look GST in myIR, how
technology will enable simplified compliance and the support you'll receive from us as we move to the new tax system.
For more information and to register go to www.cchlearning.co.nz (search keywords: simpler tax).
Tax agents’ guide for migrants and returning New Zealanders
If you have clients with international tax obligations, it’s important these are recorded, disclosed and accounted for
correctly. The Tax agents’ guide for migrants and returning New Zealanders (IR1069) covers all the key
information and references you need to assist your clients meet their tax obligations in New Zealand.
Our Overseas income questionnaire (IR995) and Transitional residency flowchart (IR1028) have been developed to
support this guide. You can download these from www.ird.govt.nz (search keywords: IR995, IR1028, IR1069).
From our technical tax area
The following summaries are from recent publications in the technical tax area of our website
www.ird.govt.nz/technical-tax. Full commentaries are also published in the Tax Information Bulletin.
QB 16/03: Goods and services tax – GST treatment of bare trusts
This question considers whether it is the trustee or the beneficiary of a bare trust who makes supplies for the trust
property for GST purposes. It explains that a bare trustee can be both a trustee and an agent for a beneficiary.
Any supply a bare trustee makes or receives is treated as such. This means it is the beneficiary and not the bare
trustee who makes supplies and is required to register for GST (if necessary).
2016 review of the Commissioner's mileage rate for expenditure incurred for the business use of a motor
vehicle
Inland Revenue has concluded a review of the Commissioner's mileage rate and advises the rate for the 2016
income year has been reduced to 72 cents (from 74 cents for 2015) per kilometre for both petrol and diesel fuel
vehicles.
CPI Adjustment 16/01 for Determination DET 09/02: Standard-cost household service for childcare providers
Standard-cost amounts for the 2016 income year have changed as a result of the annual movement of the CPI for
the twelve months to March 2016.
CPI Adjustment - CPI 16/02 for Determination DET 05/03: Standard-cost household service for boarding
service providers
Standard-cost amounts for the 2016 income year have changed as a result of the annual movement of the CPI for
the twelve months to March 2016.
Agents Answers comments generally on topical tax issues relevant to tax
agents. Every attempt is made to ensure the law is correctly interpreted,
but articles are intended as a brief overview only. The examples provided
are not intended to cover every possible factual situation.
Classified Inland Revenue – Public
Email: [email protected]
www.ird.govt.nz
AGENTS ANSWERS • Issue No 191 • June 2016
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