again to the TotalAccounting Newsletter
in which we discuss current taxation and business matters. We trust
you find it informative.
are happy to accept new clients. We would be happy to assist colleagues
and acquaintances as new clients.
Cheque Duty Repealed from 1 July 2014
Changes re Accommodation and Employee Allowances
International Tax for Individuals
DUTY REPEALED FROM 1 JULY 2014
From 1 July 2014, the 5 cents duty per cheque will not be payable on
new cheque books. Additionally, from 1 July 2014, cheque duty will not be
payable on bills of exchange unless cheque duty has been prepaid. Cheque
duty is being repealed because it is an outmoded tax that no longer raises
substantial revenue. This is largely due to the decline in popularity of
Cheques printed or issued after 30 June 2014 may have the words
"cheque duty paid" printed on them. These cheques can still be
used even though cheque duty will not have been paid on them.
CLARIFYING WHEN ACCOMMODATION AND EMPLOYEE ALLOWANCES ARE NON-TAXABLE
The Taxation (Annual Rates, Employee Allowances, and Remedial Matters)
Act 2014 enacted on 30 June 2014 has introduced a number of changes to the
tax treatment of employee allowances. These changes clarify the
tax treatment of:
- employer-provided accommodation
- accommodation allowances, and
- other payments provided to employees as reimbursement for expenses.
When the New Rules come into Effect
Most of the new rules will take effect from 1 April 2015. However,
employers may have the option to apply some of the new rules from 1 January
2011 provided they meet certain criteria.
Key Features of the Changes
The following, provided certain conditions are met, are exempt from
- Accommodation and accommodation payments provided to employees on
- secondments of up to two years, or
- capital projects of up to three years.
These time periods are extended under specific transitional rules
for people working on Canterbury earthquake recovery projects.
- Accommodation and accommodation payments provided to employees who
are required to work regularly in more than one location.
- Accommodation and meals when employees attend a conference or
When accommodation is taxable, it is generally taxable on its market
rental value. Accommodation provided to New Zealand Defence Force personnel,
ministers of religion, and people working overseas are treated under the
rules that apply specifically to them.
Meal costs linked to work-related travel will not be taxed for up to 3
Distinctive clothing, such as uniforms, used for work purposes is
tax-exempt in specific circumstances.
INTERNATIONAL TAX FOR INDIVIDUALS
International tax compliance can be complex and difficult. The following list of
includes tax facts relating to individuals:
- New Zealand residents aren't just taxed on the income they earn in New
Zealand; they're also taxed on their worldwide income.
- If you leave the country but maintain a permanent place of abode here,
you're still a New Zealand resident for tax purposes.
- Foreign income including investments (even if deposited in an offshore
account or left on a foreign credit card) is taxable in New Zealand even
if it's not repatriated to New Zealand.
- Equally, the fact that withholding tax may have been deducted on
foreign income doesn't mean that this income is no longer taxable in New
- A foreign tax credit may be available but only where the tax involved
is not subsequently refunded (even in a later income year), it's
substantially similar to income tax and can't exceed the tax otherwise
payable on the underlying income in New Zealand.
- Not all overseas pension payments are tax-free, certain ones may be
fully taxable in New Zealand.
- Special taxing regimes (controlled foreign company and foreign
investment fund rules) apply to gains on certain foreign shareholdings,
retirement schemes and life insurance investments.
- Additional disclosures are required in respect of controlled foreign
companies and foreign investment funds.
- Allowances that may be treated as tax-free in other countries (for
example, living-away-from-home allowances) are generally fully taxable
in New Zealand.
- The temporary tax exemption on foreign income for transitional
residents expires after 48 months and there's no entitlement to Working
for Families Tax Credits during the period of the exemption.
The information provided in this email newsletter is for
informational purposes only. TotalAccounting accepts no
responsibility for the opinions and information expressed in the
information provided and it is provided "as is" without
warranty of any kind. The user assumes the entire risk
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