What's changing at Inland Revenue: A high-level overview, & closer look at investment income changes - Ird
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What’s changing at Inland Revenue:
A high-level overview, & closer look at
investment income changes
Presented by
Rhys Mohi & Aroha Paranihi
5 February 2020, 2:30pm – 3:30pm
IN CONFIDENCE
Welcome to your webinar
Rhys Mohi Aroha Paranihi
Community Community
Compliance Officer Compliance Officer
IN CONFIDENCE
How to participate
Submit
your
questions
here
Slides
Presenter info
Control panel
IN CONFIDENCE
Māori Authorities: Who is eligible?
• Companies • Co established by iwi
organisation – asset-holding co
• Trustees of a trust
• Trustees of trust recognised by
• Company that owns land
Te Ohu Kai Moana Trustee
• Trustees of trust that own
• Trustees of trusts established by
land
Te Ohu Kai Moana Trustee Ltd
• Māori Trustee in Māori
• Co receives & manages assets
Trustee capacity as agent for
for Māori claimants, transferred
owner of land
by Crown as part of settlement
• Māori Trust Board of claim
• Crown Forestry Rental Trust • Trustees of trust who receive
and manage assets transferred
• Te Ohu Kai Moana Trustee Ltd by Crown as part of settlement
• Aotearoa Fisheries Ltd of claim, on behalf of Māori
claimants
IN CONFIDENCE
Information required
• Name, IRD number and contact address of the authority
• Total distributions made, tax withheld, Māori Authority credits
attached and Māori Authority credit ratio
For those who received a distribution:
• Name and contact address
• Amount and type of income paid
• Tax withheld
• Date tax withheld
• Māori Authority credits attached
For each person who received distribution (if available):
• IRD number and date of birth
• Name, IRD number, date of birth and contact address of joint
owners
IN CONFIDENCE
Kaitakawaenga Māori support
Our Kaitakawaenga Māori can advise you on:
• which taxes you need to know about
• what records you need to keep
• how to complete your tax returns (eg GST and employer
returns), and
• when to file returns and make payments
IN CONFIDENCE
Why are we
changing?
Fair
Easy to get right
We’re making tax
and payments Quick to self-manage
simpler and more
certain for Provide confidence
individuals
Less cost
IN CONFIDENCE
Our transformation
2016/17 2017/18 2018/19 2019/20 2020/21
Stage 1 Stage 2 Stage 3 Stage 4
Enable secure Streamline tax Streamline social policy Complete the future
digital services
revenue system
Release 1 – Feb Release 2 – April Release 3 – April Release 4 – April Release 5 – April
2017 2018 2019 2020 2021
Making it easier to Making it easier to Making it easier to Making it easier to Making it easier to
manage GST: manage: manage: manage: manage:
▪ file and pay at ▪ withholding taxes ▪ income tax ▪ KiwiSaver ▪ Child support
same time ▪ fringe benefit tax ▪ provisional tax ▪ Student loans ▪ Paid parental
▪ amend previous ▪ gaming machine ▪ imputation ▪ Investment income leave
returns duty ▪ Working for information ▪ Duties
▪ set-up instalment ▪ Wine equalisation Families reporting ▪ Unclaimed
arrangements and tax (WET) (mandatory) monies
direct debits ▪ Payday filing ▪ New R&D incentives
▪ AIM (provisional (mandatory) ▪ Write-off rules ▪ Customers can
▪ NZ Business tax) ▪ Reduce PAYE ▪ Short process see all their info
Number ▪ Automatic electronic filing rulings in one place
recognition Exchange of threshold ▪ Reserve schemes ▪ Changes for
▪ Digital registration Information ▪ Changes to WfFTC
for migrants and ▪ Payday filing investment income Further changes for
company entities (voluntary) information employers:
reporting ▪ Single employer
(voluntary) and account
KiwiSaver ▪ Coordinated
approach to
notifications
IN CONFIDENCE
Our previous changes were significant
• Income tax and Working for Families – new systems and
processes
• New automatic year-end process
• Payday filing became mandatory
• PAYE electronic filing threshold reduced
• New reporting requirements for employment and
investment income information
• New website & revamped digital channels and services
IN CONFIDENCE
The next phase: April 2020
• Mandatory electronic investment income information reporting
• Student loans & KiwiSaver into new system
• KiwiSaver, student loans and PAYE easier to manage
• Single employer account
• Working for families tax credits
• New R&D incentive
• Short process rulings
• Cheques no longer accepted from 1 March 2020
IN CONFIDENCEInvestment income
changes
IN CONFIDENCEWhat is investment income?
Investment income
• Interest
• Dividends
• Portfolio Investment Entity (PIE) income
• Taxable Māori authority distributions
• Royalties
Effective dates
• Majority of changes effective 1 April 2020
IN CONFIDENCEHow does investment income
reporting work?
• Pay income to investor, withhold tax as required
• By the 20th of the following month:
o Pay tax withheld to us
o File details about investors and payments (new requirement)
• How and when you pay tax to IR is not changing
• Multiple returns possible
• Exceptions: PIE investor information and NRWT on royalties -
annual
IN CONFIDENCEInvestment income reporting
changes
• Mandatory investment income reporting - 1 April 2020: due by
20th of the month
• Multi-rate PIE (not superannuation fund/retirement savings)
report yearly by 15 May after end of tax year
• Reporting not required for:
o Nil returns (if no income is paid in a month)
o Resident withholding tax (RWT)-exempt investors
• Reporting done electronically
• For tax year ending 31 March 2020 – transition measure – report
IPS and NRT by 15 May
IN CONFIDENCEInvestment income reporting
changes Cont.
• Additional information required
o Date of birth
o Contact details of recipient
o Details of joint account holders (if held)
• Non-declaration rate increases to 45% - if no IRD number provided
• Removed requirement to issue end-of-year RWT on interest
certificates (if IRD number provided)
• Electronic RWT-exempt status register replaces RWT-exempt
certificates
• Improved error-correction process
• Additional record keeping - non-resident withholding tax
IN CONFIDENCEHow to file
Reporting done electronically by:
• Manually uploading a csv file on myIR – most common
• Completing an on-screen form on myIR – up to 2000
lines
• Directly through accounting software – large volume
filers
Penalties:
• For payers who don’t file electronically
• $250 each time information isn’t received electronically
IN CONFIDENCERecipients of investment
income
• Provide IRD number to investment income payer (eg the
bank)
o ensure right tax rate and avoid non-declaration rate
• From 1 April 2020, RWT exemption status included on
electronic RWT-exempt status register
• RWT exemption application criteria hasn’t changed
• myIR provides information on investment income
IN CONFIDENCEPayers – where to start
• Begin reporting anytime, beginning of a month
• Opt in electronically via myIR before the start of the month
o complete the opt in form at the account level under ‘I
want to…’ > ‘More’
o Opting in has to be done for each tax type that you pay
on investment income
• Choose either single filer or multi-filer
• Return obligation will be pre-populated
• Note to file final reconciliation return(s)
IN CONFIDENCEDistributions in practice
• Whanau have shares in land generating an
income
IN CONFIDENCEWhat’s changing for
employers?
Employer activities and financials move to our new system
• Employer accounts will be combined into the single
Employer Activities (Payroll) account
• Transactions and payments will show up sooner
• New payment options when filing in myIR
IN CONFIDENCEEmployer changes cont.
Where possible, we’re consolidating employer
notifications:
We’ll group communications by ‘topic’:
Deductions
Notifications
Start or stop employers are
that advise of
deductions for currently
return errors
employees making for
to be fixed
employees
Based on feedback received, we’ll have one page per
employee
IN CONFIDENCEEmployer changes cont.
We’re improving the employee on-boarding process:
• New Employee Details (IR346) and KiwiSaver
Enrolment (KS1) forms combined
• Supply employee’s first and last name
• Update employee details broken down
• KiwiSaver status for new employees, not existing
employees
• Advise of income received exempt from KiwiSaver
contributions
IN CONFIDENCEEmployer changes cont.
Employer transactions will display differently in myIR:
• Account name change from ‘Payroll (was ir-File)’, to
‘Payroll’
• The landing page of the Payroll account will be redesigned
• Employment information (EI) return – breakdown of
different deductions will still be shown
• ‘My details’ tab renamed to ‘Names and addresses’
Collecting additional data from employers – Hours paid
(digital channels only)
IN CONFIDENCEEmployer changes cont.
The way employers submit information
Current state Future state
‘File transfer’ – ‘I want to’ – then From April 2020
choose file to upload from:
1. File transfer Payday schedules
2. File transfer Payday • Ability to drop off a single CSV
amendments file relating to the EMP
account, or zip file of multiple
3. File transfer employee details CSV files
4. Upload KiwiSaver file
• Fields evaluated & feedback
5. Upload compressed zip file on any errors identified
6. File transfer employer schedules
• File formats remain
7. File transfer EMS amendments unchanged
8. File transfer employer
deductions
IN CONFIDENCEEmployer changes cont.
Improved validations for online submissions of
employment information
New fields added to employment information return:
To be completed if applicable instead of using separate tax
code on additional line item:
• Employee Share Income (ESS)
• Extra compulsory deduction for student loans (SLCIR)
• Extra voluntary deductions for student loans (SLBOR)
Letters issued to employer and customer when loan is
close to being paid off:
• If below $1,000 or expected to be paid in 3 months
IN CONFIDENCECurrent summary screen
IN CONFIDENCECurrent transaction detail
IN CONFIDENCEFuture view of consolidated
account
Small to medium
employer
IN CONFIDENCEFuture view of consolidated
account
Small to medium
employer
IN CONFIDENCEFuture view of consolidated
account
Transaction
detail
IN CONFIDENCEFuture view of consolidated
account
Return
detail
IN CONFIDENCEFuture view of consolidated
account
Return
detail
IN CONFIDENCEWhat’s not changing?
• The payment date
• How employers communicate with us through voice,
paper and electronic channels
• Using paper solutions
IN CONFIDENCEStudent loans
• Administered in new system
• Interest no longer charged and written off
• Employer notified when loan is close to being paid off
• Repayment holiday renamed “temporary repayment suspension”
• Unable to pay - medically unable to work/care for yourself, apply
to be treated as overseas – interest free
• Customers can do more online
IN CONFIDENCEWorking for families tax credits
(WfFTC)
• New customers –
request backdated
entitlement
• Automatically offset
partner’s income tax
credit
• Change in payment
due date – 30 days
to pay
• New entitlement
instalment
arrangement option
IN CONFIDENCEKiwiSaver: Member changes
• KiwiSaver administered in new system.
• Enhanced visibility of funds in myIR
• Employer contributions sent to Scheme Providers faster
• Faster voluntary transfers between Scheme Providers
• Reduction of holding period from 3 to 2 months
• Funds to Scheme Provider faster - retirement savings grow
faster
IN CONFIDENCEShort process rulings
• New binding ruling service
• From 1 October 2019 eligible customers can apply
• Apply, pay and track status through myIR
• Cost: $2000 (inclusive of GST)
• Turnaround time: 6 weeks
IN CONFIDENCEMoving on from cheques
Cheques no longer accepted from 1 March 2020
Discuss payment options with your bank or tax agent
Pay online in myIR
• Debit or credit card payments
• Set up a direct debit in myIR
Pay on our secure payment website
• Use debit or credit card to pay securely online
• www.ird.govt.nz search “make a payment”
Pay using internet banking
IN CONFIDENCEHow to pay
Pay through Westpac
• Pay by EFTPOS or cash
• Use a Smart ATM
o Bring the barcode on your statement (from 1 July 2020)
Pay through your bank
• Eg direct credits, automatic payments and phone banking
Pay IR by phone
• New self-service function – SPK2IR – available early April 2020
o Arrange payments over the phone
IN CONFIDENCEWatch the presentation on
demand
IN CONFIDENCEGet in touch
• Visit www.ird.govt.nz
• Contact Community Compliance
o www.ird.govt.nz keyword: advisory
• Sign up for one of our newsletters
• Connect with us on:
o Twitter
o LinkedIn
o Facebook
IN CONFIDENCETHANK YOU FOR WATCHING www.ird.govt.nz/webinars: • Register for future webinars • Watch previous sessions On Demand • Webinar presentation, questions & answers available on this page Any other questions? Send them to IRTransformation@ird.govt.nz IN CONFIDENCE
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