TAX NEWSFLASH
August 2006
The Government has confirmed it will review the taxation of outbound, non-portfolio investment. A discussion document will be released by the end of the year.
The review has been on the Government's tax policy programme for some time.
Revenue Minister Peter Dunne said the review of the international tax rules will:
- consider whether New Zealand should continue with the current controlled foreign company (CFC) regime;
- consider the merits of introducing an active-passive distinction between different types of income, which is common internationally;
- canvass options for changing the current outbound, non-portfolio investment rules, including any associated changes to the conduit and thin capitalisation rules; and
- consider New Zealand's tax treaty policy on non-resident withholding tax (NRWT) rates on dividends, interest and royalties.
The Government plans to release its discussion document by the end of the year. The Minister has also indicated that the implementation date of the proposed rules for taxing portfolio investment entities (PIEs), which are included in the Bill currently before Parliament's Finance and Expenditure Committee (FEC), is likely to be delayed to fit in with the timing of KiwiSaver. The FEC recommended to Parliament earlier this week that the start date of KiwiSaver be deferred from 1 April 2007 to 1 July 2007.
Disclaimer Information contained within this document is of a general nature and does not constitute advice. Readers are cautioned not to act or reply on it without first seeking professional advice.
