Tax Changes in 2020

To help stimulate the New Zealand economy the Government has introduced some tax changes which have now passed into legislation.

Depreciation on nonresidential buildings restored.
From April 1st 2020 the depreciation on non-residential buildings has been reintroduced at a rate of 2% diminishing value and 1.5%straight line.

Low Value Asset Threshold for write-offs increased
The low-value asset write-off threshold has been increased from $500 to $5,000 for assets purchased in the 12 months from 17 March 2020.
The $500 threshold will be permanently increased to $1,000 for assets purchased from 17 March 2021.
 
Provisional tax threshold increased
From the 2020-21 financial year onwards the threshold for having to pay provisional tax has increased from $2,500 to $5,000.

Use of money interest waived
For any tax payments due after February 14th , the IRD can write-off interest charged on late  payments for those who have been  “significantly adversely affected by the COVID-19 outbreak”. You must ask for the relief as soon as possible and make the payment as soon as practicable.

In-work tax credit calculation removes minimum work requirements
The definition of “full-time earner” used to determine family scheme income has been amended to remove the minimum work hour requirements to be eligible for the In-Work Tax Credit and changed to just “earner”.  It also now includes a person who is unable to work due to being incapacitated but would otherwise be employed if not for the incapacity.  

If you require any assistance understanding how the new tax legislation applies to you or your business, please contact us.