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Clarification of role of tax agents and others | Crypto-asset binding rulings

By January 17, 2021 No Comments

Clarification of role of tax agents and others released

IR has issued an update to clarify how tax agents and other intermediaries can co-exist. In a nutshell:

Tax agents can link to most account types with the exception of child support accounts, KiwiSaver and paid parental leave. A client authority is required to enable the agent to act, and only tax agents qualify for EOT arrangements to file income tax returns. Tax agents can also choose where client mail and refunds are sent for linked account types. They can also link to a customer master link that gives them access to a client’s customer level mail.

Bookkeepers and other representatives can link to the same account types as tax agents. However, they cannot choose where client mail and refunds are sent.

PAYE intermediaries and payroll bureaus can only link to payroll accounts and register clients as an employer. Client mail and refunds for PAYE intermediaries are sent to the intermediary as they are legally responsible for filing and paying employer taxes. Client mail and refunds for payroll bureaus are sent to the client. Customers can have many intermediaries acting on their behalf, but they cannot have more than one intermediary of the same type linked to the same account at any time. All intermediaries must keep a signed authority to act so Inland Revenue can be satisfied that information is being released to the correct parties.

You can refer to IR’s website for the full article.

 

Crypto-asset binding rulings re-released

The previous binding rulings on the topic of salary, wages and bonuses paid in crypto-assets (BR Pub 19/01 & BR Pub 19/02) have been replaced via the issue of BR Pub 21/01: Income tax — salary and wages paid in crypto-assets, and BR Pub 21/02: Income tax — bonuses paid in crypto-assets.

The conclusions reached previously in the earlier rulings remain unchanged in the latest versions, with the exception of inconsistencies with the Wages Protection Act 1983 and the Minimum Wage Act 1983 that had arisen which have now been remedied in the latest versions.

The income tax treatment of crypto-assets payments of this nature, is that they are PAYE income payments in accordance with section RD 3 of the Income Tax Act 2007, and consequently subject to the PAYE rules.

BR Pub 19/01 and BR Pub 19/02 are being withdrawn on 28 February 2021. Again, you can source copies of the new Rulings directly from IR’s website.

 

If you have any questions or would like a second opinion on any national
or international tax issues, please contact me richard@gilshep.co.nz

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