NZICA welcomes date change for lease inducement changes

MEDIA RELEASE
1 October 2012

NZICA welcomes date change for lease inducement changes

The New Zealand Institute of Chartered Accountants (NZICA) welcomes the Government’s decision to change the introduction date of lease inducement changes as a result of the recent consultation process.

NZICA’s Acting Director of Tax Frank Owen FCA says NZICA made strong submissions on these issues and views the change as positive.

“We welcome the change of the introduction date to 1 April 2013 as it gives certainty to the taxpayer.”

The initial proposal referred to an application date of 26 July 2012, to minimise risks to the tax base. But during the consultation process strong concerns were raised by parties including NZICA about business certainty regarding the suggested application date, given that the current tax position had been in place since 1998.

Owen says retrospective legislation punishes those who have entered into contracts on the basis of the existing law.

He says NZICA also welcomes the symmetry of treatment between lease inducement payments and lease surrender payments, with lease surrender payments being made deductible to the lessee.

“This is a good example of the Government and the business sector working together constructively and the results are a win-win.”

ENDS

© Scoop Media