Accounting Blog

The Finance and Expenditure Select Committee (“FEC”) has reported back the May 2016 Taxation (Annual Rates for 2016-17, Closely Held Companies, and Remedial Matters) Bill (the “Bill”). Our previous taxmail discusses the Bill as introduced.

]The Finance and Expenditure Select Committee (“FEC”) has reported back the May 2016 Taxation (Annual Rates for 2016-17, Closely Held Companies, and Remedial Matters) Bill (the “Bill”). Our previous taxmail discusses the Bill as introduced.

The FEC’s recommendations include:

·         Leaving the Approved Issuer Levy (“AIL”) eligibility requirements unchanged. The Bill proposed allowing AIL only if the NZ borrower or foreign lender were financial institutions or widely-held companies, or if total interest payable to non-residents was at least NZ$500k per annum.

·         Including an intention test for “back-to-back loans”, and other indirect associated lending, so that AIL continues to apply to genuine commercial arrangements.

·         Redrafting the “related parties debt remission” provisions in the Bill to make those rules clearer. The broad substance, no debt remission income in certain circumstances, is largely unchanged.

The other changes to the Bill are mainly clarifications. It now awaits enactment.