New Zealand: New Zealand releases discussion document on modernising tax administration

International Tax Review is part of Legal Benchmarking Limited, 4 Bouverie Street, London, EC4Y 8AX

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

New Zealand: New Zealand releases discussion document on modernising tax administration

harker.jpg
riley.jpg

Chris Harker

Jessica Riley

The New Zealand government released a discussion document late last year, outlining proposals to simplify and modernise the Tax Administration Act. The proposals are one aspect of Inland Revenue's broader business transformation project.

The discussion document, entitled "Making Tax Simpler – Proposals for modernising the Tax Administration Act", proposes legislative changes to:

  • Better assist taxpayers to "get it right from the start";

  • Extend Inland Revenue's care and management powers under the Tax Administration Act so that Inland Revenue has a broader and clearer discretion to determine how the law applies to particular situations where there are gaps or anomalies in the way the legislation is drafted or would otherwise apply;

  • Increase access to information and cross-government information-sharing; and

  • Adopt a new "taxpayer confidentiality" rule to replace the "tax secrecy" concept.

The discussion document 'firms up' the proposals included in an earlier discussion document (released in November 2015) and addresses the submissions received in response to that earlier document (see earlier article entitled "New Zealand continues tax administration reform", International Tax Review, March 9 2016).

It is proposed that a new Tax Administration Act will be enacted, following completion of Inland Revenue's ongoing "Business Transformation" programme in 2019–21. Until such time, proposals included in the latest discussion document will, to the extent they proceed, be incorporated into the existing legislation in progressive amendments.

Getting it right from the start

The government proposes various changes to support taxpayers in "getting it right from the start".

The specific proposals include a possible reduction in fees (at least for small and medium sized businesses) for binding ruling applications, the ability for a taxpayer to seek a binding ruling after having taken a tax position in a tax return, and expanding the criteria for using a streamlined process for correcting minor errors in tax returns.

Extending Inland Revenue's care and management powers

Inland Revenue's care and management powers will be extended by providing a statutory discretion to remedy legislative anomalies in specified circumstances.

Taxpayers could choose whether or not to apply any determination or decision Inland Revenue makes pursuant to this extended care and management power. This is an important practical safeguard for taxpayers, and is appropriate given the constitutional principle that tax should be imposed only by or under Parliamentary authority and not by the discretion of officials.

Increased access to information and cross-government information sharing

The discussion document proposes a new provision to empower the making of regulations governing the repeat collection of external data sets (for example credit and debit card transaction data collected from financial institutions and records of online sales activities). The government notes it will follow the Australian and UK examples in its approach to the transparency reporting of external dataset collection so that the public is aware of circumstances in which certain data is routinely provided to Inland Revenue.

Further, a new legislative framework will be introduced to allow more flexible information sharing between government agencies via regulations. It is proposed that principles governing when information-sharing is appropriate will be enacted alongside the power to make regulations for information-sharing.

A new taxpayer confidentiality rule

The proposed taxpayer confidentiality rule narrows the coverage of the tax secrecy concept, which prohibits the disclosure of any and all information relating to the administration of the tax system.

Taxpayer confidentiality as a general rule would (subject to certain exceptions) protect information that identifies or could identify a taxpayer. The discussion document notes that this is similar to the approach taken in other countries such as Australia and Canada. A further proposed amendment would permit Inland Revenue to refuse requests for official information if necessary to protect the public revenue.

The government has sought submissions on the proposals by February 24. It is unlikely that the proposed changes will be enacted until 2018.

Chris Harker (chris.harker@russellmcveagh.com) and Jessica Riley (jessica.riley@russellmcveagh.com)

Russell McVeagh

Tel: +64 4 819 7345 and +64 9 367 8183

Website: www.russellmcveagh.com

more across site & shared bottom lb ros

More from across our site

Despite garnering significant revenues from multinationals, Italy’s digital services tax presents pressing double taxation issues, say Stefano Simontacchi and Francesco Saverio Scandone of BonelliErede
ITR’s research shows that in-house tax counsel in Asia also feel underserved by their advisers’ international networks
World Tax global head of research Jon Moore tells ITR how his team spots standout submissions, and gives early statistical insights into this year’s entries
Australia’s conservative opposition will repeal controversial tax agent reporting rules if elected in the country’s May general election
Shapley would be the fourth person to hold the job this year; in other news, UK tax advisory firm MHA raised fewer funds than expected from its London IPO
The US needs to be involved in pillar one for there to be more international acceptance of the project, Michael Masciangelo says
The UK regulator is investigating EY’s auditing of the national postal service as it relates to the high-profile Horizon scandal, which saw hundreds wrongfully convicted
The directive will extend cooperation and information exchange around pillar two, according to the Council of the EU
Audit engagement partner Christopher Voogd has also been hit with a £32,500 charge over the firm’s work with Stirling Water Seafield Finance
China’s largest overhaul of its tax administration system in 24 years, featuring enhanced enforcement powers, is underway, says Abe Zhao of FenXun Partners
Gift this article