From the Government’s response to COVID-19
Tax relief measures for the government’s economic response to COVID-19 include:
Depreciation deductions for commercial and industrial buildings will be re-introduced from the 2020/21 income year. Available to all sectors, these apply to new and existing buildings on a permanent basis. Building owners can adjust provisional tax payments immediately in anticipation of the additional deductions.
As a two-stage incentive to encourage spending, tax write-offs will be available for more low-value assets. Initially, for the 2020/21 income year, assets costing up to $5,000 will be eligible for an immediate write-off. As a permanent measure, from the 2021/22 income year, the existing $500 threshold will increase to $1,000.
Currently, taxpayers with a residual income tax of $2,500 or more pay provisional tax. From the 2020/21 tax year, this threshold will increase to $5,000, so fewer businesses will need to pay provisional tax.
Businesses and individuals who are struggling because of COVID-19 and can demonstrate they’re unable to pay tax by the due date may be eligible for a use-of-money interest (UOMI) write off. This applies to all tax payments including provisional tax, PAYE and GST due on or after 14 February 2020, for two years, unless the Government extends it. Inland Revenue will release details on how they will test this.