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Tax changes

Low Value Assets

Early in 2020, and as part of the COVID-19 relief measures, the Government allowed businesses to deduct the full cost of business assets costing less than $5,000 (previously $500). This is instead of having to spread the cost over the life of the asset, through depreciating it.

The Government is only raising the threshold for a short time until 16 March 2021.

For assets purchased on or after 17 March 2021, the original threshold will be permanently increased from $500 to $1,000.

If you are planning on purchasing assets that cost less than $5,000 and wish to take advantage of this temporary opportunity, we suggest you arrange the purchase prior to 16 March 2021.

 

New Vehicle Reimbursement Rates

The IRD have released new rates to calculate mileage to reimburse employees for usage of their motor vehicle for business purposes:

Vehicle type

Tier One rate

Tier Two rate

Petrol or Diesel

82 cents per kilometre

28 cents per kilometre

Petrol Hybrid

82 cents per kilometre

17 cents per kilometre

Electric

82 cents per kilometre

9 cents per kilometre

Tier One rate – less than 14,000kms per annum

Tier Two rate – for all usage over 14,000kms per annum

 

RWT / NRWT Returns

If interest dividends or royalty payments are made, then a return must be filed with the IRD and the required withholding tax paid by the 20th of the month following the month in which the interest/dividend/royalty was paid. This applies to both resident (RWT) and non-residents (NRWT).

Note: There is no longer a requirement to file Nil returns if there were no interest/dividends /royalties paid.

There are some additional IRD requirements related to RWT/NRWT, so please contact your PKF Carr & Stanton advisor for assistance and confirmation.

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