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.

The deemed rate of return for taxing foreign investment fund interests has been set at 9.12% for the 2009-10 income year, down slightly from 9.18% for the previous year, Revenue Minister Peter Dunne has announced.

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.

Hoteliers, retailers and commercial office interior decorators look likely to get the reprieve they were looking for from new depreciation rules they feared would drastically raise the cost of maintaining modern premises.

The government announced today that it will enact recommendations made by the GST Advisory Panel that will deal with a range of difficulties arising in the transition to the 15% GST rate.

A bill tabled in Parliament today will prevent so-called "phoenix" fraud schemes that undermined the integrity of the GST rules, said Revenue Minister Peter Dunne.

The Serious Fraud Office (SFO) has laid charges against a Waikanae based accountant, tax agent and investment advisor.

The nation's highest court granted the orthopaedic specialists, Ian Penny and Gary Hooper, leave to appeal today against the Court of Appeal's split decision, delivered on June 4, that found the way they restructured their earnings through family trusts at the time of income tax rate increases in 2000 constituted avoidance.

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.

The Government remains committed to sound management of its finances and ongoing fiscal discipline says Finance Minister Bill English.

The High Court has found tax avoidance in an arrangement where two companies deliberately registered for GST on a mismatched accounting basis and incorporated non-arm's length individuals for the purpose of developing and selling software.

New Plymouth company director Stephen Blackman was fined $1500 plus court costs when he appeared in the New Plymouth District Court after earlier pleading guilty to two charges of filing false or incomplete tax returns.

Officials at the Treasury and Inland Revenue Department were at a loggerheads over whether the government should have cut the company tax rate to 28%.

Inland Revenue is seeking feedback on proposed administrative and legislative changes to the tax disputes process, Revenue Minister Peter Dunne and Inland Revenue Commissioner Robert Russell jointly announced today.

The head of last year's Tax Working group has repeated an earlier call for a permanent body to focus on the integrity of the tax system.

The government is not looking at further taxes aimed at the property market, says Finance Minister Bill English.

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.