Tax residence
May 2010: NZ tax residence and implications
This newsletter follows on from our recent newsletter in respect of tax disputes and IRD’s use of ‘disputable decisions’. This article examines some fundamental faults in IRD's Administration of tax residence decisions
September 2010: Inland Revenue administration of tax residence – update
This article updates our experience with administration of residence for taxation purposes, with a series of examples, some proposed changes at IRD, and our recommendations to those affected.
February 2011: IRD issues two incorrect residence rulings - then taxpayer pays for IRD’s errors
The following article sets out a real life case example of a taxpayer who:
• In good faith relied on an incorrect ruling from IRD in respect of his tax residence
• Was then subjected to significant cost in overturning a second IRD ruling, also incorrect
• Was then subjected to unsympathetic IRD debt collection procedures
We also remind taxpayers that they should not seek advice from Inland Revenue, and especially not in respect of tax residence.
• In good faith relied on an incorrect ruling from IRD in respect of his tax residence
• Was then subjected to significant cost in overturning a second IRD ruling, also incorrect
• Was then subjected to unsympathetic IRD debt collection procedures
We also remind taxpayers that they should not seek advice from Inland Revenue, and especially not in respect of tax residence.
February 2011 residence case study
IR886 Tax Residence form - current status
Note: As at today's date (more than a year after we raised our concerns) IRD has still not revised the IR886 Tax residence form.
Our advice:
Use of the form is not complulsory;
- It focusses entuirely on NZ as opposed to overseas connections;
- It gives a misleading impression to bothtaxpayers and IRD;
- Dont use it - get professional advice instead
- We have designed our own form which collates appropriate data for all countires where the taxpayer has connections