McLEAN AND CO.

RELEVANT BUSINESS AND TAXATION ARTICLES

New Zealand's tax system is based on two broad notions:

If you are going on an OE or perhaps you are temporarily based here, it is important to work out whether you meet the definition of a tax resident.     Note that residency status for immigration purposes is quite different to being a tax resident.  

If you are already a New Zealand tax resident and are away for more than 325 days in any 12-month period, you become a non-tax resident provided you do not have a 'permanent place of abode' in New Zealand.   You will have a 'permanent place of abode" here if you have an enduring relationship with New Zealand. 

An enduring relationship is established by considering:    Presense in New Zealand,   Accommodation,    Social and Economic ties,   Employment or Business Activity,   Personal Property,   Intentions,    Benefits and other payments .    It will usually take more than one of these to form an enduring relationship.

If you do have an enduring relationship, you will continue to be a resident for tax purposes even though you may be away for more than the 325 days.

On the other side, if a person who is not already a New Zealand tax resident is present in New Zealand for more than 183 days in a 12 month period, then the individual is deemed a tax resident.

GST RETURN PAYMENTS AND POSTDATING CHEQUES

Inland Revenue's structured programme of interactive consultation with small to medium sized businesses (SME) is underway. The programme aims to build greater understanding of business needs, look into ways of simplifying the tax process and reducing tax-related compliance costs for SME.

This initiative is one part of a governmental cross-sector approach to reduce tax compliance costs, create more time for businesses to carry out their business and encourage business growth and innovation.

"The initiative represents a significant effort by Inland Revenue to ensure the voices of small to medium business are heard. We want to identify the problems specific to this taxpayer group and find solutions to those problems," said Bruce Thompson General Manager Service Delivery.

Over the coming two months this programme will involve a combination of focus groups, qualitative and quantitative research providing a rich source of information. There will be four streams of consultation:

"The extensive consultation we are undertaking with SME will allow a greater understanding of the things that concern those business operators the most and will present opportunities for tangible solutions that specifically meet the needs of that taxpayer group."

In addition Inland Revenue has a number of other activities in progress to support SME, both operational and policy. Some of the information gathered during consultation could be used to further develop these.