Country Tax Update: New Zealand
There has been a small increase in the maximum contribution to the Accident Compensation Levy. The net effect is a small increase in tax for higher incomes. To simplify and modernize New Zealand’s tax administration, effective April 1, 2019, employers are required to file “employee income information” every pay cycle.
Previously, non-resident and resident individuals deriving income without tax withheld at source were required to make a self-assessment of their New Zealand tax liability.
What is the net effect of these tax changes?
Under the change, the Inland Revenue will prepare and issue pre-populated accounts to individuals based on income reported to the Inland Revenue by a third party, such as employment income. Inland Revenue will then finalize an individual’s account and make an assessment for the tax year.
The information required to be electronically transmitted will affect nearly all employers, and the change in reporting requirements is particularly important for those with employee share schemes and those running shadow payrolls.
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