Parliament

Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 

New finance lease amendments return to Parliament

11 December 2007 Media Statement

New finance lease amendments return to Parliament

New changes to the finance lease tax rules in the Income Tax Act have been added to the taxation bill currently before Parliament, the government announced today.

The proposed legislation is intended to shut down tax schemes relating to leases on overseas assets that result in a loss to the New Zealand revenue. The schemes involve New Zealand parties claiming depreciation deductions for assets in which they have no economic interests that are leased to parties overseas who are not subject to New Zealand tax law.

“The government has listened to concerns about the proposed changes and has come up with a new treatment for leases entered into before 20 June 2007, when the changes were announced,” Finance Minister Michael Cullen and Revenue Minister Peter Dunne said today.

“Our modifications to the transitional arrangements represent a pragmatic compromise that deters aggressive tax minimisation schemes and recovers some lost revenue while limiting the negative effects on existing commercial arrangements.

“As originally conceived, the changes would have required all operating leases entered into before 20 June 2007 that met the amended definition of ‘finance lease’ to be reclassified as such from the beginning of the next income year. Parties who had entered into the affected leases would have had to pay back excess depreciation they had previously claimed for the assets involved.

“The modification announced today reduces allowable depreciation deductions over the whole term of affected leases by one-sixth. That means the parties involved will have to pay back one-sixth of the depreciation they claim for the life of the leases.

“In the government’s view, this transitional arrangement achieves a balance between the need to recognise that some of the affected schemes are commercial realities that involve more than one party and the necessity of deterring people from entering other tax-driven schemes.

“We are also recommending four minor modifications to the proposed legislation to ensure it is correctly targeted and prevent unintended consequences.

“We are confident that these modifications to the proposed legislation will allow a less disruptive transition to the new rules for parties involved in leases that existed before 20 June, while allowing the previously announced changes to achieve their intended purpose,” the Ministers said.

Announced on 20 June 2007, the proposed changes to the finance lease tax rules were later withdrawn from the taxation bill to allow the government more time to consider transitional concerns that had been raised in submissions to the Finance and Expenditure Committee.

The modified proposals have been re-introduced to the bill by means of supplementary order paper No. 167, which was released today.

ENDS


© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines


Gordon Campbell: On Why Herd Immunity Isn’t A Valid Option, And What’s With Our Reluctance To Wear Masks?

Herd immunity has recently bounced back into the headlines as a tool for managing Covid-19, and as a supposed alternative to lockdowns. In the US, a group of scientists was recently brought together in the town of Great Barrington, Massachusetts by a think tank funded by the Koch brothers. The assembled scientists signed the so called Barrington Declaration, which promotes herd immunity as a rational means of re-opening US public schools and the economy at large... More>>

 

Gordon Campbell: On National Being Shafted By Its Own Creation

As it licks its wounds, let’s hope the National Party can still find time to look back with some pride at what it has achieved in Epsom. The Act Party’s nationwide success on Saturday night has been a tribute to National’s foresight, and to its ... More>>

ALSO:

Green Party: 'Fruitful Discussions ... Further Discussions To Have'

The Green Party says there is a negotiation going on with the Labour Party, but there are more discussions to be had. More>>

ALSO:


Border: No Changes To Border Exemptions After Fishing Crew Test Covid-19 Positive

The cases were detected after routine day three testing but the immigration minister and air commodore agree there's no need to change border exemptions. More>>

PSA: Labour-Led Government Has Mandate For Transformation, Equality And Transparency

The Public Service Association welcomes the progressive electoral landslide New Zealand voters delivered on Saturday, and the union says its members look forward to implementing policies that reduce poverty and inequality, support affordable housing ... More>>

ALSO:


Stats NZ: New Report Shows Significant Changes To New Zealand’s Climate

Climate change is already happening in New Zealand and could have a profound impact on future generations of New Zealanders, a new report from the Ministry for the Environment and Stats NZ says. Our atmosphere and climate 2020 , released today, includes analysis ... More>>

ALSO:

Judith Collins: Obese People Must Take Responsibility For 'personal Choices'

National Party leader Judith Collins has described obesity as a weakness and says people should not 'blame systems for personal choices'. More>>

Māori Party: Poll Reveals Tamihere On Cusp Of Historic Māori Movement Election Victory

John Tamihere’s election campaign is on the rise and on track to return the Māori Party to parliament, a new Māori TV poll has revealed. The poll released on 11 October during the seventh and final Māori TV Maori Electoral campaign coverage has Tamihere ... More>>

Gordon Campbell: On Four-Year Terms Of Parliament, And On How The US Courts Are Dismantling Democracy

Last week, the issue of four-year parliamentary terms surfaced again. Infuriatingly, it is being discussed purely in terms of its convenience for political parties. They’d get so much more time to enact their policies, free of scrutiny or sanction by voters ... More>>

ALSO:

 
 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

InfoPages News Channels