New Taxation Act passed on 26 June 2019
The Taxation (Annual Rates for 2019 -20, GST Offshore Supplier Registration and Remedial Matters) Act has now received Royal Assent and is passed into law.
Losses from rental properties are now ring fenced
The biggest change to arise from this new bill is that property investors will no longer have the ability to offset any losses incurred from rental properties against other sources of income eg salaries, self-employed income etc.
The losses from rental properties can now only be applied against future income earned from any rental property owned by the same entity.
This change will take effect from 1 April 2019.
Changes to GST on overseas purchases
This new bill also introduces changes to the way that GST is collected from offshore businesses.
Previously, the duty to return GST on overseas purchases greater than $400 lay with the consumer and this GST was then collected by Customs when goods were imported into New Zealand.
Now, overseas suppliers with turnover greater than $60,000 p.a who supply low value goods will be required to register for GST. They will then need to collect GST on all sales made to NZ consumers and return the GST portion to the IRD.
Customs will continue to collect GST at the border on goods valued at $1,000 or more.
The changes to the way GST is collected will take effect from 1 December 2019.
Please feel free to contact us if you have any questions regarding these changes and we will be happy to help.