On 25 March 2020, the New Zealand Government has passed COVID-19 Response (Taxation and Social Assistance Urgent Measures) Act 2020. The Act aims to support the package of economic and social measures needed to recover from the impact of the coronavirus outbreak.
Penalties for late tax payments will be written off, tax planning and certainty is restored through the ability to depreciate some buildings, and a higher threshold for provisional tax obligations will also give relief. The main measures contained in this Act are:
- Restoration of value depreciation rate of 2% on industrial and commercial buildings starting from the 2020-21 tax year;
- Increasing the provisional tax threshold from NZD 2,500 to NZD 5,000;
- Allowing immediate low-value asset write offs;
- Bringing forward broader R&D refundability;
- Allowing use of money interest to be waived;
- Allowing greater information sharing; and
- Allowing more access to the in-work tax credit.
