What's in the government’s tax-relief package?
The Government has launched a new financial support package for NZ businesses.
On April 15th, Grant Robertson announced a series of new financial measures to support New Zealand’s small and medium-sized enterprises through the impacts of Covid-19.
The schemes aim to help businesses improve their cash flow, as well as grow confidence. Here’s a quick outline of what’s included:
- A $3.1 billion tax loss carry-back scheme: this works on the idea that many businesses which were profitable in a previous tax year, won’t be this time around. As a result, you can receive a refund of the tax you paid in the profitable year to offset the losses you forecast for this one. Expect to see this measure included in legislation introduced in the week of April 27th, with detail to be hashed out in the intervening period.
- Changes to the tax loss continuity rules: currently, NZ has some of the strictest rules in the world when it comes to raising new capital. However, the new ‘in principle’ decision (set to be included in a bill later in 2020, and to come in from the 2020-1 income year) would make it easier for companies to do this without forfeiting the benefits of their tax losses.
- Tax deadline flexibility: currently limited to an 18 month period, the IRD will have more flexibility to alter requirements and timeframes for taxpayers impacted by Covid-19.
- Business consultancy support: this initiative is expected to cost the government $25 million, and will give businesses free access to tailored support from specialist bodies on matters such as business continuity planning, cash flow management and HR concerns.
- Initiatives to support commercial tenants and landlords: these measures allow more time for breaches and defaults by tenants to be remedied before a landlord can cancel a lease, or a mortgage lender can sell or repossess a property.
Other articles you might like