Plan for new rules on tax

The Government has issued a discussion paper on proposed new tax rules aimed at improving New Zealand's reputation as an investment destination.

Revenue Minister Michael Cullen said the proposed rules covered transactions involving the lending of shares, units and bonds for a fee.

"Unlike many countries, New Zealand taxes securities lending on the basis of legal form rather than economic substance," Cullen said.

This might account for the "relatively small" local market for these transactions.

Cullen said the aim of the proposed rules was to "improve New Zealand's reputation as an investment destination".

The proposed package also included anti-avoidance rules to prevent the use of securities lending to give rise to undue tax advantages or avoidance.

The closing date for submissions is January 31.

- NZPA