Well - 2020 was going to be a relatively quiet year for most taxpayers - just minor adjustments as IRD's new system beds in - investment income reporting Kiwisaver and student loans, R&D etc. Then along came a little thing called covid-19. Along with social and economic challenges, that has prompted more tax changes.

 

The major one is the tax loss carry-back scheme. Losses are usually carried forward, but now they can be carried back. This can reduce provisional tax, as well as generating refunds. However, there are catches. Notably, you can't undo shareholder salaries which have been already returned, and you can't undo previous dividends. These have implications for overdrawn shareholder current accounts and imputation credit accounts.

 

The threshold for low-value has been raised from $500 to $1,000, with a level of $5,000 from 17 March 2020 till 16 March 2021.

 

Non-residential buildings can once again be depreciated at 2%DV or 1.5%SL.

 

The provisional tax threshold has risen from $2,500 to $5,000.

 

Penalties and interest incurred because of covid-19 can now be written off, and the threshold for automatic tax write-offs rose from $50 to $200.