A new study conducted by UHY International finds that Western Economies are saddled with a tax burden 40% higher than the global average. Western European countries are inhibiting their economies with tax burdens at least 40% heavier than both the global average and the average for neighbouring countries in Central and Eastern Europe, according to…Details
The UHY network has released its 2015 “Global Transfer Pricing Guide” to assist tax and finance professionals responsible for cross-border tax planning and compliance with their enquiries. Given the complexity of transfer pricing issues, the guide provides in the first instance a country-by-country summary of major transfer pricing requirements, including pricing methods, documentation and penalties…Details
G7 economies risk undermining entrepreneurship with excess taxes on the sale of businesses German business owners may pay almost half gains in tax and in France a third – by contrast BRICs economies pay just 16.7%. The tax take on business disposals in G7 economies risks seriously undermining entrepreneurship, with entrepreneurs in the G7 countries…Details
New Zealand has one of the lowest tax burdens for high earners of any major economy, according to a new study by UHY, the international accountancy network.
New Zealand has the 8th lightest tax burden out of 25 countries, ranked by UHY according to how much tax and social security it takes from its highest earners’ wages (on a salary of US$1.5m – see table below).
UHY notes that New Zealand is making itself more attractive to high earners than neighbouring Australia, which levies 46% in tax on a salary of US$1.5m, compared to New Zealand’s 32.6%. However, UHY also notes that New Zealand does not have a compulsory retirement savings scheme and individuals do not make social security contributions other than as part of normal Income Tax and ACC levies. Instead, individuals have the choice not to participate in KiwiSaver or choose to contribute 3%, 4% or 8% of their gross earnings. The data used in this survey assumes that the individual has chosen not to participate in KiwiSaver, even though there are significant incentives for participation. Furthermore, retirees’ are also entitled to a state-funded pension and any savings amassed through KiwiSaver are intended to supplement the pension.Details
UHY Haines Norton Managing Director Grant Brownlee considers the implications of a Labour government introducing Capital Gains Tax.
We recently asked Labour’s Phil Twyford, MP for Te Atatu, whether Labour would introduce a Capital Gains Tax (CGT) if they are elected. Phil indicated a CGT would be introduced within the first 100 days of their first term.
So what might a CGT look like in New Zealand? To provide an answer to that question I thought it would be a good idea to look across the Tasman and pose a few questions to Bill Charlton, a Partner from UHY Haines Norton in Brisbane.
Question 1: When CGT was introduced into Australia, what impact did it have on the property market?
When CGT was introduced, and in its first one or two years, it had very little influence on the property market at all. There were two main reasons for this. First, prior to the introduction of CGT, Australia already had a system of taxing property transactions where the property was sold within 12 months of its purchase. This was deliberately done to eliminate any debate about whether a sale was of a revenue nature (and taxable) or of a capital nature (and not taxable). So, short term property transactions were already caught in the tax net. Investors were aware of this tax and had already taken it into account. The CGT rules merely replaced these existing rules and CGT had no impact at all on short term sales.Details
Based on figures released last year by Statistics New Zealand, some 1,000 New Zealanders move to Australia every week.
It is often reported that New Zealanders migrate to Australia for economic reasons.
This month we have provided a comparison of tax rates between the New Zealand and Australian tax regimes for a number of major tax types.
By Jim Martin, Tax Manager, UHY Haines Norton, Email email@example.com
In an increasingly globalised world, governments are under pressure to find ways to attract and retain businesses to their country and then to help those businesses compete against their international competitors.
An increasing number of government’s now realise that one powerful tool they have to achieve those goals is lowering the level of corporation tax that they impose on business profits.
Clearly a high corporation tax rate can make one business location unattractive compared to overseas economies with lower tax rates. A high corporate tax rate can also suppress a corporate’s growth by taking money out of a business and its shareholder’s pockets that could alternatively be invested in marketing or R&D to further grow the business.
The latest research project from UHY’s international network has found that some developed nations are still dragging their economies down and hitting businesses with far higher corporation tax rates than faster growing emerging economies.Details
Brazil and India hit consumers with the highest levels of consumption and sales taxes in the world, according to new research by UHY, the international accounting and consultancy network.
UHY adds that behind India and Brazil, European countries impose the heaviest sales tax burden, which threatens to undermine recoveries in consumer spending by putting pressure on disposable incomes.
UHY tax professionals studied data from 22 countries* across its international network, including all members of the G7 and the developing BRIC economies. UHY calculated the percentage of the total price of a representative basket of goods and services that was made up of taxes and duties.
The Brazilian and Indian governments take 28.7% and 38% respectively of the total price of the basket of goods and services through taxes. On average, European governments are responsible for 15.5% of the price of UHY’s basket of goods and services.
This compares to an average of 13.8% for all countries, an average of 8.1% in the Asia-Pacific countries, 12.1% in G7 countries.
Ladislav Hornan, chairman of UHY, says: “Brazil and India, like many developing economies, rely far more on sales taxes than income taxes compared to their more economically developed counterparts. Lower income taxes can have a positive effect on productivity, as it encourages individuals to work harder and entrepreneurs to generate more wealth.
“However, questions remain as to whether these high consumption taxes have hindered the growth of vibrant consumer element of those economies.”Details
If you own a secondary or investment property in Australia, it is likely to be subject to capital gains tax (CGT) in Australia when sold. The Australian government is proposing to remove one of the CGT concessions from non-residents (including New Zealanders), with effect from 8 May 2012. At the time of writing the legislation…Details