intended to incentivise taxpayers to provide their IRD numbers to their investment income provider. Currently 20 per cent of interest certificates received by Inland Revenue do not contain the recipient’s IRD number, if the increased non-declaration rate proposals only applied to new accounts, these taxpayers would have no incentive to provide their IRD number to their investment income payer. The non-declaration rate needs to be higher than 33% in order to incentivise taxpayers on a 33% marginal rate, and those with social policy entitlements/obligations who may have a higher effective tax rate, to provide their IRD number to their investment provider. In 2015, the average annual household income of taxpayers receiving Working for Families was $90,948 and the median was $75,920. Taxpayers on the 17.5% marginal tax rate would have an effective tax rate above 33% once Working for Families abatement is considered. A 45% non-declaration rate is consistent with the non-declaration rate applicable to salary and wage income. Inland Revenue intends to work with the banks to reduce the number of taxpayers subject to the non-declaration rate prior to its increase to 45%. Officials agree with Financial Services Council’s suggestion that provision be made for PIE investors that subsequently become residents. Officials recommend that these taxpayers are given 6 weeks from notifying their PIE that they have become resident to obtain an IRD number in order to remain a member of the PIE. Recommendation That the submission be accepted in part, subject to officials’ comments. Issue: Sharing IRD number data Submission (ANZ, New Zealand Bankers Association) It would be useful to share IRD number information between IRD and payers of investment income. It is highly likely that the IRD will have IRD number data which banks do not have. Sharing such information in advance of 1 April 2020 will minimise the number of taxpayers impacted by the increase in the non-declaration rate. Comment Officials agree with the submitter and propose that the matter be subject to consultation. It could then be included in a future tax Bill. As an interim measure, Inland Revenue will consider ways to work with banks to share IRD numbers on an administrative basis. Recommendation That the submission be accepted, subject to officials’ comments. Issue: Date of birth
intended to incentivise taxpayers to provide their IRD numbers to their investment income provider. Currently 20 per cent of interest certificates received by Inland Revenue do not contain the recipient’s IRD number, if the increased non-declaration rate proposals only applied to new accounts, these taxpayers would have no incentive to provide their IRD number to their investment income payer. The non-declaration rate needs to be higher than 33% in order to incentivise taxpayers on a 33% marginal rate, and those with social policy entitlements/obligations who may have a higher effective tax rate, to provide their IRD number to their investment provider. In 2015, the average annual household income of taxpayers receiving Working for Families was $90,948 and the median was $75,920. Taxpayers on the 17.5% marginal tax rate would have an effective tax rate above 33% once Working for Families abatement is considered. A 45% non-declaration rate is consistent with the non-declaration rate applicable to salary and wage income. Inland Revenue intends to work with the banks to reduce the number of taxpayers subject to the non-declaration rate prior to its increase to 45%. Officials agree with Financial Services Council’s suggestion that provision be made for PIE investors that subsequently become residents. Officials recommend that these taxpayers are given 6 weeks from notifying their PIE that they have become resident to obtain an IRD number in order to remain a member of the PIE. Recommendation That the submission be accepted in part, subject to officials’ comments. Issue: Sharing IRD number data Submission (ANZ, New Zealand Bankers Association) It would be useful to share IRD number information between IRD and payers of investment income. It is highly likely that the IRD will have IRD number data which banks do not have. Sharing such information in advance of 1 April 2020 will minimise the number of taxpayers impacted by the increase in the non-declaration rate. Comment Officials agree with the submitter and propose that the matter be subject to consultation. It could then be included in a future tax Bill. As an interim measure, Inland Revenue will consider ways to work with banks to share IRD numbers on an administrative basis. Recommendation That the submission be accepted, subject to officials’ comments. Issue: Date of birth
2018-or-areiirm.docx