Upcoming Changes to New Zealand’s 2024 Tax Laws With the Budget almost upon us, following are some of the more important tax changes we are expecting to be confirmed with Budget related legislation. Income Tax Threshold Changes The new government intends to change the tax rate thresholds from 1 July 2024. The proposed threshold adjustments are as follows:         In conjunction with the threshold change, the eligibility for the Independent Tax Earner Credit (IETC) is also said to expand to $70,000 (up from $48,000). IETC is the tax credit you’re eligible for if you ..read more

What is the ‘Netflix Tax’ The landscape of taxation is ever-evolving, and New Zealand is no exception. With the rise of digital services and the global marketplace, the New Zealand government has implemented GST on remote services supplied to its residents by overseas businesses. It’s commonly known as the ‘Netflix Tax’.​ Remote services are a service that, at the time of the performance of the service, has no necessary connection between (a) the place where the service is physically performed; and (b) the location of the recipient of the services”.​ Some of the examples are:​ supplies ..read more

From the 1st April 2024, the trust tax rate has increased from a flat rate of 33%, to a flat rate of 39%.This is on any income retained in the trust and not distributed to beneficiaries.​ ​However, there are a few exemptions:​ Exemption 1: if your trust income is less than $10,000​ If your trust earns $10,000 or less in a tax year, and this income is retained in the trust and not distributed to beneficiaries, you will only pay tax at 33%. However, if your trust earns any more than $10,000, you need to pay at a rate of 39%.​ Exemption 2: the estate of someone who has died​ If an esta ..read more

GST (Goods and Service Tax) is a tax charged on most goods and services in New Zealand and is collected by businesses on behalf of the IRD from its consumers. Businesses that are registered for GST are required to issue tax invoices and keep records of their sales and purchases.  ​ However, issuing invoices and recordkeeping can be daunting and time-consuming for businesses – so much so that the IRD has modernised the GST rules to help business owners. These rules have been in effect since the 1st of April 2023.These changes raise important questions for Kiwi business owner ..read more

Year End Tax Tips By Sheral Reddy, Associate Director at GECA Chartered Accountants. If you need help with Tax advice including end of financial year preparation, then Sheral and the GECA team can help. The end of financial year deadline:  As the end of the financial year approaches, it always pays to spend a little extra time examining your financial records and considering ways to increase your after-tax income. There is a high chance that you will find a couple of extra savings from 2022-23, which can add up to reduce your tax bill by a significant amount. It is also a good time o ..read more

Introduction: The recent Budget 2023 announcement of an increase in the trustee tax rate from 33% to 39% starting from 1st April 2024 has raised concerns among the many New Zealanders who have a family trust. There are approximately 400,000 family trusts registered in the country and although Budget Press Release attempts to downplay the impact on most trusts, emphasizing that only a small proportion of trusts will bear the brunt of the additional tax burden, this development could impact any trusts that derive an income.   The Trustee Tax Increase: The decision to raise the trustee tax ..read more

Introduction: As a residential landlord, it’s essential to stay informed about the tax rules and regulations that apply to your property investments. One important aspect to understand is the treatment of denied interest deductions when you sell disallowed residential property (DRP) in New Zealand. In this blog post, we’ll break down the key points of Section DH 11 of the New Zealand Income Tax Act 2007 to help you navigate this aspect of property taxation. Background: Under the interest limitation rules, some landlords may have been denied deductions for interest expenses on their residentia ..read more

Introduction: Investing in rental properties can be a lucrative venture, providing a stable source of income and potential long-term wealth accumulation. When considering the purchase of a rental property, it’s important to carefully evaluate the most suitable ownership structure to optimize tax efficiency. This blog aims to provide guidance for individuals with incomes exceeding $70,000 who are planning to buy a property within a trust and subsequently rent it out.  Choosing the Right Ownership Structure: If your income surpasses $70,000, it is advisable to purchase the rental property ..read more

Year End Tax Tips  By Sheral Reddy, Associate Director at GECA Chartered Accountants. If you need help with Tax advice including end of financial year preparation, then Sheral and the GECA team can help. The end of financial year deadline:  As the end of the financial year approaches, it always pays to spend a little extra time examining your financial records and considering ways to increase your after-tax income.  There is a high chance that you will find a couple of extra savings from 2021-22, which can add up to reduce your tax bill by a significant amount. It is also a ..read more

This post is by Sheral Reddy, an chartered accountant and tax specialist at GECA Chartered Accountants. Call Sheral now for tax advice on your circumstances. Following from our newsletter from April last year, just a reminder to our clients that the interest deductions are being phased out for properties acquired before 27 March 2021 as follows: As the 2022 financial year is a transitional year, please bear with us if we require more detailed copies of the loan statements for the whole year instead of just a summarised Loan Summary from the banks. Please contact your GECA Advisor on 0800 758 ..read more