There are numerous changes to tax laws from 1 Aril 2020 in response to the COVID-19 pandemic.
Business owners need to take note to make sure they are fully informed going forward.
There are a lot of changes, but broadly speaking, we see the following having the most impact:
• Depreciation deductions for non-residential buildings will be re-instated at 2% diminishing value or 1.5% straight-line. This is designed to reduce the tax liability for non-residential building owners. For example, a building with a book value of $2 million will get a $40,000 depreciation tax deduction at 2% diminishing value or $30,000 depreciation tax deduction at 1.5% straight line.
• Increasing the low-value asset write off threshold from $500 to $5,000 for the 2020/21 year, reducing to $1,000 for the 2021/22 year onwards. This is designed to encourage businesses to spend and keep money flowing through the economy.
• Increase the provisional tax threshold from $2,500 to $5,000. This is designed to remove the burden of provisional tax from smaller businesses and help them with cash-flow.
• The ability for IRD to remit interest charges for late paid taxes. Again, this is designed to ease the burden of meeting tax obligations by their due dates.
If you would like a no-obligation discussion on how these changes will impact on you, or if you would like further information, get in touch.