New Zealand: Update on bill including GST measures and dual-resident company tax changes

The “Taxation Bill" was reported back from the Finance and Expenditure Committee with a number of recommendations.

The “Taxation Bill" was reported back with a number of recommendations.

The “Taxation (Annual Rates for 2022-23, Platform Economy, and Remedial Matters) Bill” on 2 March 2023 was reported back from the Finance and Expenditure Committee (FEC) with a number of recommendations.


The bill was originally introduced 30 August 2022 and includes the following tax-related measures:

  • New information reporting requirements for New Zealand digital platform operators in the gig and sharing economy
  • Imposing goods and services tax (GST) collection obligations on electronic marketplaces that facilitate accommodation and transportation services
  • New rules for non-resident employers and changes to the non-resident contractors’ tax rules
  • Dual-resident company tax changes (largely in response to the Australian corporate tax residence test change)
  • A build-to-rent exemption from the recent residential interest limitation rules
  • Miscellaneous remedial amendments, including to the residential interest limitation and bright-line rules, and recent GST invoicing changes

Read TaxNewsFlash

FEC recommendations

The FEC recommendations with respect to the proposed measures in the bill include:

  • GST and the platform economy
    • Inland Revenue will provide the GST registration details of underlying suppliers to the electronic marketplace operators to ensure the “flat-rate credit scheme” (which provides a GST input tax credit) works as intended.   
    • Underlying suppliers with sales of NZ$500,000 or more in any 12-month period through electronic marketplaces will be able to unilaterally opt-out of these rules and continue paying GST (and claiming input credits) directly. The bill as introduced required agreement with the marketplace operator.
    • The opt-out threshold for large-scale accommodation providers will apply if they have 2,000 or more nights per year available on at least one electronic marketplace. This may create issues if multiple platforms are used, and the number of nights offered on some platforms is less than 2,000. The opt-out can also be applied on an aggregate basis – that is, at a group level if there are multiple group entities providing accommodation.
  • Information reporting requirements for platforms
    • Platform operators that facilitate the provision of short-term accommodation and personal services will have information collection obligations commerce from 1 January 2024 (for reporting to Inland Revenue in early 2025), as originally proposed.
    • Platform operators that facilitate the sale of goods and vehicle rentals will be brought into the reporting framework at a future date, by an Order in Council within three years of the bill being passed. This is to align New Zealand’s implementation of these extended reporting rules with that of other countries, namely in the EU. 
  • Cross-border worker tax reforms
    • The 60-day grace period for complying with New Zealand employer tax obligations if domestic law or tax treaty exemptions cease to apply will apply in more cases, including when the ordinary time frame for compliance is unable to be met.
    • The requirement for non-resident employers to communicate to each employee that they must meet their own New Zealand tax obligations will be removed.    
    • Non-resident employers will remain primarily liable for fringe benefits tax (FBT) and employer superannuation contribution tax (ESCT) and will be required to provide employees with information to help them to comply. FBT on benefits will be payable at marginal rates rather than the top FBT rate.
    • Employers will retain the option to pay FBT rather than pay as you earn (PAYE) on foreign superannuation contributions.
  • Dual residence company changes
    • The intercompany dividend exemption will continue to apply to dividends paid to an Australian dual resident company.
    • Imputation credits may be attached retrospectively to dividends arising as a result of the application of the integrity measures.
    • The trigger event for application of New Zealand’s corporate migration tax rules will be the earlier of when tax relief as a result of income tax treaty non-residence is actually claimed or two years following the receipt of tax authority confirmation of treaty non-residence.

Read a March 2023 report prepared by the KPMG member firm in New Zealand


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