TAX ANNOUNCEMENTS
Latest IRD and legislation change notices
MINIMUM WAGES
December 16, 2020
The government has confirmed that from 1 April 2021 the minimum wage will increase from $18.90 to $20 per hour.
The starting out wage and training minimum wage will also increase to $16per hour to remain at 80% of the adult minimum wage.
TOP TAX RATE INCREASES TO 39%
December 2, 2020
The government has announced an increase to the top individual tax rate to 39% on income over $180,000.
This is effective form 1 April 2021.
There are consequential amendments that will happen as a result of this and these include changes to Fringe benefit tax, Employer Superannuation Contribution Tax, Resident withholding tax and Residential land Withholding tax rates.
At this stage Company and Trust tax rates are unchanged at 28% and 33% respectively, however Inland revenue have advised they will be watching closely the use of trusts.
The Dividend withholding Tax rate is unchanged however those earning $180,000 or more may now have to lodge a tax return to pay the additional 6% on dividend income.
IRD BRIGHTLINE TEST
November 18, 2020
The IRD have started issuing letters in relation to properties bought and sold which they believe may be caught by the Brightline Test. These need to be well considered before approaching IRD with answers.
SMALL BUSINESS CASHFLOW SCHEME CHANGES
November 17, 2020
The government have announced changes to the small business cashflow scheme as follows:
Applications are now open until 31 Dec 2023.
No interest charged if loan is repaid within 2 years from drawdown.
Fewer restrictions on what the money can be spent on.
This rules apply retrospectively to all loan taken out.
