As published on indiannewslink.co.nz, Wednesday 6 July, 2022.
The Inland Revenue Department (IRD) has released its compliance focus on offshore tax transparency with guidance to assist tax agents in complying with international rules.
IRD Spokesperson John Nash said that the compliance focus highlights the extensive international exchanges of information taking place and the new intelligence tools being used in tracking down people who do not pay their fair share of tax.
New Zealand tax residents should pay tax on their worldwide income, regardless of any withholding tax deducted overseas or whether the income has been repatriated to New Zealand.
“New Zealanders have become increasingly involved in overseas investment. They’re taxed on their worldwide income including things like rental income from property overseas, interest from an offshore bank account, and returns from a portfolio of overseas shares,” he said.
Mr Nash said that the Department manages international tax compliance by making it easy for people to get things right, hard for them to get it wrong, and costly for those who are determined to avoid their obligations.
He said that most taxpayers voluntarily met their offshore tax obligations, but there are always some who look for ways to evade or avoid paying.
“That is where the new tools and New Zealand’s wide network of tax treaty partners come into effect. Our improved intelligence capability means that we are only in the lives of those customers who deserve further inquiries and interventions,” Mr Nash said.
He said that with the increasing complexities of global investment such as new challenges arising from the gig/sharing economy and crypto assets, IRD will continue to actively participate in international solutions.
“Inland Revenue will also continue to run compliance campaigns to verify and facilitate compliance by New Zealand tax residents in returning their offshore income. We have an ongoing monitoring programme to ensure people return their overseas income as they should, and we will verify customer records against additional information received from treaty partners for later years,” Mr Nash said.
IRD launched the offshore tax transparency package on June 28, 2022, and the documents are available online – Compliance Focus for Individuals (www.ird.govt.nz)