Global

Details

  • Service: Tax, International Corporate Tax, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 8/3/2012

New Zealand - Proposal to make lease inducement payments taxable 

August 3:   The Inland Revenue and Treasury released an issues paper that proposes to make lease inducement payments taxable, for lease arrangements entered into on or after 26 July 2012.

The reason given by the tax authorities for this proposed change is to achieve asymmetry in the treatment of lease incentives between the lessee (non-taxable) and the lessor (generally deductible).


The proposal would require spreading both the income (receipt) and expense, if deductible, over the term of the lease or until the first rent review period.


The changes are “legislation by officials’ edict”—which may result in uncertainty concerning the treatment of lease incentive payments until legislation (if any) is passed.


Read a July 2012 report [PDF 73 KB] prepared by the KPMG member firm in New Zealand: Lease inducement payments to be taxable




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