Cross-border worker issues paper | GST filing date extended | Further Covid support payments available

By November 3, 2021 No Comments

Further Covid support payments available

Applications for the third round of the resurgence support payment (RSP) can now be made. The RSP will support you with paying wages and fixed costs of the business, with an initial lump sum of $1,500, plus $400 for every FTE up to 50 employees – so a maximum payment of $21,500. The eligibility criteria remains the same – 30% decline in revenue/capital raising ability over a seven day period – which must commence on or after 1st October 2021. And don’t forget that all sole traders can make a claim for $1,900.

Also passed is the COVID-19 Resurgence Support Payments Scheme (August 2021) Amendment Order (No 3) 2021 (LI 2021/299) which amends the COVID-19 Resurgence Support Payments Scheme (August 2021) Order 2021 (August Order) and provides for the above third payment, as well as the fourth grant payment, where the seven-day period during which the 30% requisite decline must have occurred, must commence on or after 22nd October 2021.

Applications for the fourth round of the wage subsidy can be made now as well and you have until Thursday 14th October at 11.59pm to make your claim. No changes to the eligibility criteria, and the subsidy amounts are $600 per week per FTE and $359 per week for PTE’s

Cross-border worker issues paper

Since Covid hit the world stage, I have noticed a trend of the increasing use of remote workers, particularly kiwi’s returning home to what was, at least until about eight weeks ago, a relatively Covid free environment, while still retaining employment with their offshore employer.

In July 2020, IR released ED0223, a draft Operational Statement on Non-resident employers’ obligations to deduct PAYE, FBT and ESCT in cross-border employment situations.

ED0223 has remained in its draft form for some time now, no doubt explained to some extent by the recent release of IR’s official issues paper – Cross-border workers: issues and options for reform. It’s a 40-page document which sets out to review the tax obligations that apply to the payers of cross-border workers to ensure they remain fit for purpose, and is essentially broken into a two-part discussion on the topics of:

  • Employers are obliged to withhold tax under the Pay as You Earn (PAYE) system and pay fringe benefit tax (FBT) and employer’s superannuation contribution tax (ESCT), where applicable; and,
  • Payers of non-resident contractors are obliged to withhold non-resident contractor’s tax (NRCT) from contract payments.

Within these two parts, five issues are discussed for which feedback is now sought:

  • The current PAYE, FBT and ESCT system is inflexible
  • It is not always clear when PAYE, FBT or ESCT obligations arise
  • The NRCT withholding threshold tests require consideration of facts unconnected to the contract
  • The current NRCT system is inflexible; and,
  • The exemption process requires modernisation.

The document then ends with a discussion on some other technical or remedial changes which may be required to various rules within the Income Tax Act 2007 and the Tax Administration Act 1994.

Once submissions on the issues paper have been fully considered, any proposed changes will be included in a future tax bill. ED0223 will also be finalised.

If you would like to make any comments, the closing date for submissions is 19th November 2021.

GST filing date extended

In my humble opinion, in what would have to be one of the poorest planning exercises in the history of man, you are hopefully all aware by now of IR’s systems shut down for a week from 3pm Thursday 21st of October 2021 until start of business on Thursday 28th of October 2021, to progress their final Business Transformation release.

Someone clearly forgot to tell those planners (or they just didn’t care), that the 28th October just happens to be one of the busiest filing dates for GST returns on the annual tax calendar, with not only your usual monthly/two monthly returns due, but also quarterly returns under the remote services/low value imported goods regimes and six-monthly returns.

However, rather than move the planned shutdown a couple of weeks into November when things may be just a little bit quieter, the boffins in charge have decided to extend the filing due date to 4th November 2021 instead.

And please note that all drafts such as tax returns and secure mail will be deleted during the shut-down upgrade, so make sure that you complete everything that you don’t mind losing by 3pm on the 21st of October.

This article from the ‘A Week in Review’ newsletter was originally published Monday 11th October 2021. 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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