Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Exemptions to aid recruitment of global talent

KPMG March 14

Exemptions to aid recruitment of global talent, but not retention

The current low level of unemployment is forcing employers to attract highly skilled workers from overseas and encourage Kiwis with international experience to return to New Zealand. The Tax (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Bill reported back yesterday by the Finance and Expenditure Committee (the FEC) takes significant steps to remove some of the tax barriers to international recruitment and keep pace with similar reforms in Australia.

The proposed exemptions apply to new migrants and Kiwis returning after ten years or longer, referred to as Transitional Residents. The changes made by the FEC demonstrate a clear desire to improve the tax laws currently applying to offshore investments held by New Zealand residents. However the exemptions are temporary and only apply to Transitional Residents arriving after 1 April 2006.

"It is unfortunate that Officials explicitly rejected the plight of expatriates currently in New Zealand and employers' efforts to retain them," says Murray Sarelius tax partner KPMG. The Officials' Report to the FEC states that "those who arrive in New Zealand before 1 April 2006 will not be sensitive to New Zealand tax, as they have already chosen to come to New Zealand". "Officials appear not to have fully understood the nature and needs of the mobile, global workforce. We cannot simply assume that international executives currently in New Zealand are here to stay - assignments need to be extended, contracts need to be renewed" said Mr Sarelius. Officials' failure to understand the detrimental effect that New Zealand's tax laws can have on individuals will only make it more difficult to retain the world-class talent that we already have in New Zealand beyond the term of their current contracts.

The tax breaks to be provided to Transitional Residents will include a 4-year exemption from income tax on certain foreign sourced income and from the more onerous aspects of the New Zealand tax system, such as the foreign investment fund rules applying to foreign equity and superannuation investments.

Key improvements made by the FEC include treating all new migrants equally regardless of whether they are employees or self-employed, removing the requirement to apply to IRD for the exemption, and extending the exemption to foreign sourced interest and dividends and remuneration that relates to offshore employment before arriving in New Zealand, such as deferred bonus payments.

Officials and the FEC have also demonstrated their desire to get the exemptions right by making a technical change to allow pre-arrival visits to be excluded from the residence test. The original proposals made some migrants ineligible for the exemption because of an orientation visit, or employment interview in New Zealand, before 1 April 2006. The recent amendment ensures that such visits will not disqualify them from the exemption.

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>

ALSO:

Half A Billion Accounts: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>

Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>

ALSO:

Half Full: Fonterra Raises Forecast Payout As Global Supply Shrinks

Fonterra Cooperative Group, the dairy processor which will announce annual earnings tomorrow, hiked its forecast payout to farmers by 50 cents per kilogram of milk solids as global supply continues to decline, helping prop up dairy prices. More>>

ALSO:

Results:

Meat Trade: Silver Fern Farms Gets Green Light For Shanghai Maling Deal

The government has given the green light for China's Shanghai Maling Aquarius to acquire half of Silver Fern Farms, New Zealand's biggest meat company, with ministers satisfied it will deliver "substantial and identifiable benefit". More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news