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Donating Trading Stock

What was a temporary tax concession relating to donated trading stock has now become a permanent one thanks to the enactment of the Taxation (Annual Rates for 2023–24,Multinational Tax, and Remedial Matters) Act 2024 on 1 April 2024. Prior to March 2020, in most cases, if a business donated trading stock it resulted in deemed income equivalent to its market value. This resulted in a business being taxed on a deemed profit margin, even though no cash was received.

Government reverses interest deductibility limitations

With the new Government now firmly settled in, legislation has been passed which reverses the interest deductibility limitation rules that were introduced by the previous government in 2021.

As previously introduced, the rules phased out the ability to deduct interest on loans drawn down before 27 March 2021 to purchase residential property over a period of five years. For loans drawn down after 27 March 2021, no interest deductions were allowed unless the property qualified as a ‘new build’. 

GST registration checks

A standard data policing check completed by Inland Revenue is to review taxpayer GST filing patterns to identify taxpayers that are GST registered, but
perhaps shouldn’t be.

In order to qualify for GST registration, a taxpayer needs to be conducting a “taxable activity”. This comprises a continuous or regular activity that involves making a supply of goods or services for consideration. This is a different test to whether a person is operating a “business” for income tax purposes, as it does not require an intention to make a profit.

Super Profits

Last year, the Green Party hit the headlines for suggesting banks, fuel companies, supermarkets, building products suppliers and energy generators/retailers should pay tax on super profits.

So, as we go into the election, we should give some thought as to whether some new innovative taxes are warranted.

Tax ourselves out of recession?

The buoyant covid subsidy funded days are behind us, and New Zealand has entered a ‘technical’ recession. This was reinforced by the recent announcement that New Zealand’s corporate tax paid was almost 11% down in the 11 months to May relative to Government expectations.

North Drift Cafe achieves business goal!

"Yorke Stone assisted me in purchasing the building for my business, which was one of my three year goals, much sooner than I had expected"

"Through an organization called Wharariki, I met Nancy and Daniel when I was in search of an accountant who could help me achieve my goals and provide proactive, helpful, welcoming, and understanding services.

Read more here

Tax policy from two sides of the political aisle

With the upcoming elections, this article on the Tax policies may be of interest. 
Given that either Labour or National are likely to enter into coalition agreements of some form with the Green Party and Act, respectively, and the tax policies of the two main parties are more ‘vanilla’, it is worth reviewing the tax policies of the two minor parties as this is where unexpected change may come from.

Common Error - Claiming GST on FBT

For those of you who prepare and file FBT returns on behalf of a GST- registered employer, you will be familiar with the GST on FBT adjustment that forms part of the FBT return.

Other tax changes in response to Covid-19

In addition to the tax loss carryback scheme, the New Zealand Government has introduced a number of other tax changes to assist businesses and individuals to get through COVID-19. Currently, if an asset is purchased for less than $500 it does not need to be depreciated.

Message From Dan

We all know how Covid-19 has impacted our economy and our businesses. Some businesses have experienced a growth, others a downturn and the struggle to keep staff employed and the business open is very real for others.

GST on land - Holdway and Ellwood

It is common for disagreements to arise between taxpayers and Inland Revenue on the GST treatment of land transactions, but less common for these disputes to arise between a vendor and purchaser.

Payday filing

The way employers report payroll information to Inland Revenue (IRD) is changing. From 1 April 2018, IRD introduced a new electronic reporting system, providing employers the option of filing payroll information every payday.

Foreign shares

The global economy is seeing New Zealand (NZ) taxpayers invest in overseas companies. However, many people acquire foreign investments without understanding how they will be taxed.

Proposed tax changes

The Taxation (Annual Rates for 2018-19, Modernising Tax Administration, and Remedial Matters) Bill was introduced into parliament in June 2018. The Bill seeks to improve tax administration and modernise the revenue system by making tax “simpler and easier” for individuals.

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