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New Zealand: Tax guidance for employers and employees (COVID-19)

New Zealand: Tax guidance for employers and employees

Inland Revenue released tax guidance for employers and their employees regarding tax issues arising from the coronavirus (COVID-19) pandemic.


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The Inland Revenue guidance includes:

  • The tax residence status of individuals will not change if the individuals are stranded in New Zealand due to travel restrictions, as long as they leave New Zealand within a “reasonable time.”
  • For companies, the residence test remains to be the location where director control is ordinarily carried out, and a New Zealand “fixed establishment” would not arise simply due to COVID-19 disruptions.  
  • A new temporary COVID-19 determination concerns employee allowances and reimbursements for working-from-home costs. This measure provides a $15* per week safe harbour (in addition to the existing $5 de minimis) for payments to employees to be tax-free. More complex rules apply for working-from-home allowances and reimbursements above this level.
  • Confirmation that fringe benefit tax will continue to apply for vehicles taken home during the lockdown, unless private use has been explicitly restricted. 

Read a May 2020 report prepared by the KPMG member firm in New Zealand

*$=New Zealand dollar

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