Suggested changes to improve the fairness of Working for Families may actually cost the Government more than it will save, according to the New Zealand Institute of Chartered Accountants' (NZICA) tax director Craig Macalister.

Amendments to cut compliance costs around the upcoming GST rate change and the repeal of fund withdrawal tax are among "business-friendly" changes being made to a key piece of tax legislation says Revenue Minister Peter Dunne.

Earlier this week Netprophet reported on how results in the current reporting round for listed companies have been distorted by more than $1 billion. (Story here)

In this article we link to examples of how deferred tax works. This document has been prepared by Rob Challinor.

Also below we have a table showing the deferred tax “liabilities” for NZX-listed companies. These liabilities come about as a result of the application of International Financial Reporting Standards to withdrawal of tax depreciation on buildings which the government announced in this year's Budget.

Company Deferred Tax Adjustment ($millions) AMP Office Trust 93 Auckland Airport 89 Briscoe Group 3 Cavalier 4 Contact Energy 34 Fisher & Paykel Healthcare 11 Fletcher Building 30 Freightways 6 Goodman Fielder 16 Goodman Property Trust 130 ING Medical Properties Trust 15 ING Property Trust 96 Kiwi Income Property Trust 132 Metlifecare 45 M & C Hotels 26 OneSteel 4 Port of Tauranga 10 Ports of Auckland 4 Property for Industry 36 Queenstown Airport 6 Skellerup Holdings 11 Sky City 40 Steel and Tube 4 Telecom 30 Vector 21 The Warehouse Group 23 Total

$919 million

 

The figures above are the reported or estimated additional ‘”liability” at 19 August 2010. No responsibility for the accuracy of these numbers is accepted. If individually quoted, a direct check should be made with the relevant company website.

The government's Savings Working Group announced yesterday, looks to be at least as much about tax as it is about savings.

Up to 310,000 New Zealand families will be eligible to share their income for tax purposes through legislation tabled in Parliament yesterday by Revenue Minister Peter Dunne under the Confidence and Supply Agreement with the National-led Government.

Revenue Minister Peter Dunne is calling for public submissions to the taxation Rewrite Advisory Panel on Available Subscribed Capital on corporate reorganisation and beneficiary income of trusts.

Cavalier, the only listed carpet-maker in New Zealand, said full-year profit was higher than forecast though net income was eroded by the impact of changes to tax rules.

People have been keen to tell the Government what they think about simplifying the tax system via an online consultation forum which still has over a week to run, says Revenue Minister Peter Dunne.

Two Christchurch orthopaedic surgeons are to appeal in the Supreme Court against a ruling last month which found the combination of company and trust structures they used to minimise their income amounted to tax avoidance.

Christchurch-based NZ Tax Refunds has taken top honours at the recent HER Businesswoman of the Year 2010 awards.  The specialist online tax refund company won the Small to Medium Enterprise Business of the Year category.

The full tax implications of the Penny and Hooper case are still not clear even though Inland Revenue released a Revenue Alert to clarify the situation says the New Zealand Institute of Chartered Accountants (NZICA).

Businesses with contracts, leases or transactions straddling the Oct. 1 implementation of the new 15% GST rate are being urged to make the newly appointed GST Advisory Panel aware of any problems they face with the changeover.

The recently appointed GST Advisory Panel will help ensure that a business sector that has not faced GST change in a generation has a smooth transition to the 15% rate on 1 October, says Revenue Minister Peter Dunne.

Inland Revenue today released a Revenue Alert on diverting personal services income to further refine its position on income allocation and diversion arrangements in the wake of the Penny and Hooper decision.

The soothing noises coming out of Inland Revenue Department in the wake of the Penny and Hooper decision have not yet allayed all fears.

The Inland Revenue Department is moving to dampen fears that thousands of small business owners' tax arrangements could fall foul of tax avoidance rules because of last week's landmark Court of Appeal ruling in the so-called "Penny and Hooper" case.

The Government intends to repeal gift duty if concerns around creditor protection and social assistance targeting can be addressed, Revenue Minister Peter Dunne announced yesterday.

There will be no further rises to GST, says Finance Minister Bill English.

There has been speculation National might eventually move GST to 17%, once the new rate of 15% is bedded in, with  - like the current changes - the rise being offset by personal tax cuts.

 

A switch to greater use of electronic filing of tax should not detrimentally affect the accountancy profession, says Revenue Minister Peter Dunne.

 

The Inland Revenue Department (IRD) wants increasingly to deal with taxpayers online rather than through paper tax returns and communications.