IRD proposes changes to company tax revenue

MEDIA RELEASE

18 July 2008

Inland Revenue proposes changes to company tax return

Inland Revenue is seeking public feedback on proposed changes to the company end-of-year income tax return.

A consultation document was released today, which includes proposals to rationalise various end-of-year tax forms into a single form, tailor reporting requirements for different-sized companies, and move to compulsory electronic filing of returns.

"These proposals could significantly reduce the cost and complexity of filing tax returns for most companies," said Inland Revenue Group Manager Assurance, Martin Scott.

" Smaller companies will be required to provide us with significantly less end-of-year financial information than currently is the case.

"On the other hand some large companies which contribute a substantial proportion of New Zealand's tax revenue will need to provide us with slightly more information, to enhance our ability to administer the tax system and advise the government on tax policy. The changes reflect international best practice.''

Mr Scott said Inland Revenue will work closely with large companies and their representatives to further develop proposals.

"Overall, it's a more tailored approach, which ensures we have the information we need while reducing unnecessary compliance costs."

The document includes proposals to:

rationalise the income tax forms businesses are required to complete, including the company income tax return (IR 4), annual imputation return (IR 4J), accounts information (IR 10) and other related forms and disclosures
tailor information requirements for different-sized companies
rely more on financial information compiled by companies for financial reporting purposes
enhance electronic filing systems to reduce common errors.

Mr Scott said he encouraged companies of all sizes to share their views, and work through any practical implementation issues with Inland Revenue.

Submissions on the proposed changes must be received by 30 September 2008. The consultation document can be found at http://www.ird.govt.nz/public-consultation/ .

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