• Service: Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 11/15/2013

New Zealand - Tax plan for 2014-2015; R&D proposals 

November 15: New Zealand’s Minister of Revenue released the government’s tax policy work plan for 2014-2015.

The key focus areas are:

  • Improvements to tax and social policy rules, including a review of tax rules for annuities, closely held companies, and measures to improve growth and innovation, including a research and development (R&D) proposal
  • International tax reform, including an active income exemption for branches, mutual recognition, and various items on the recent OECD tax action plan
  • Inland Revenue Department (IRD) business transformation to deliver a 21st century tax system

KPMG observation

The new tax policy work program contains no major surprises, given that a number of the items reflect previously released proposals. It has been observed that IRD’s ambitious business transformation project could have significant implications for both the government and business taxpayers.

R&D expenditures

The government also released a discussion paper aimed at dealing with certain non-deductible / non-depreciable (“black hole”) capitalised R&D expenditures.

It has been proposed to make such costs either depreciable (if they relate to a successful R&D project) or immediately deductible (if unsuccessful).

The government also proposes to clarify the rules for depreciating internally developed software.

Read a November 2013 report [PDF 74 KB] prepared by the KPMG member firm in New Zealand: Government releases 2014-15 tax policy work programme and “black hole” R&D proposals

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