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Wellington Head Offices

44 Mairangi Road, Wadestown
Wellington 6012, NZ

Customer Services
Phone: + 64 4 830 3351
Email: enquiries@fspfinancial.co.nz

Business Development Team
Phone: + 64 4 888 1324
Email: info.wellington@fspfinancial.co.nz

Cork City Offices, Ireland

Commerce House, Office 103
Washington Street West
T12NCF2 Cork City
Republic of Ireland

Phone: + 353 212 028 051
enquiries.ie@atrium-associates.com

Altrincham Offices, UK

Peel House, 30 The Downs, Ste 28
Altrincham, Cheshire, WA14 2PX
England

Phone: + 44 161 3941 173
Email: info.altrincham@fspfinancial.co.nz

New Zealand Announces New Rules For Tax Operating Leases

new-zealand-announces-new-rules-for-tax-operating-leases

Posted on 12-17-2019

The New Zealand Government has agreed to proposed changes that would allow taxpayers who apply the New Zealand Equivalent to International Financial Reporting Standard 16 Leases (IFRS 16) to follow their accounting treatment to claim tax deductions on certain leases that are classified as tax operating leases.

The proposed changes are in response to taxpayers’ requests for a closer alignment between the tax and accounting treatment of tax operating leases to simplify compliance.

According to the Government, it is intended that the proposed changes would apply only for the person using the asset (the lessee), not the person supplying the asset (the lessor). It would apply only to certain tax operating leases, with some exceptions where the existing treatment is intended to continue, it said.

The proposed changes would not affect the boundary between tax operating and finance leases.

The proposed changes will be included in a tax bill planned for introduction early in 2020. They would apply to taxpayers with IFRS reporting obligations for income years starting on or after January 1, 2019, to align with the commencement of IFRS 16.

The New Zealand Government has agreed to proposed changes that would allow taxpayers who apply the New Zealand Equivalent to International Financial Reporting Standard 16 Leases (IFRS 16) to follow their accounting treatment to claim tax deductions on certain leases that are classified as tax operating leases.

The proposed changes are in response to taxpayers’ requests for a closer alignment between the tax and accounting treatment of tax operating leases to simplify compliance.

According to the Government, it is intended that the proposed changes would apply only for the person using the asset (the lessee), not the person supplying the asset (the lessor). It would apply only to certain tax operating leases, with some exceptions where the existing treatment is intended to continue, it said.

The proposed changes would not affect the boundary between tax operating and finance leases.

The proposed changes will be included in a tax bill planned for introduction early in 2020. They would apply to taxpayers with IFRS reporting obligations for income years starting on or after January 1, 2019, to align with the commencement of IFRS 16.