The COVID-19 (Taxation and Social Assistance Urgent Measures) Act 2020 was passed under urgency on 25 March 2020. A special report on the Act, produced by the Department of Inland Revenue, is now available.

A Special Report introduces three broad categories of amendments in which the Act aims to relieve taxpayers from and assist the Government in its response to the economic impacts of COVID-19.

The report states “the Act includes income tax amendments aimed at assisting the broader economic recovery from COVID-19 by incentivising businesses to bring forward investments and continue spending.”

These amendments include:

• restoring depreciation deductions for non-residential buildings;
• increasing the low-value asset write-off threshold;
• increasing the provisional tax threshold; and
• bringing forward the application date for the broader refundability rules for R&D tax credits.

Tax administration amendments also include a new discretion by which the Commissioner of Inland Revenue may remit use of money interest on tax payments that are late because of COVID-19.

The Act also allows Inland Revenue to share information with other government departments to assist those agencies in their response to COVID-19.

The third category of amendments relate to providing social assistance support to those financially impacted by COVID-19. These amendments include:

• removing the hours test eligibility requirement for the in-work tax credit;
• allowing people on a temporary visa to qualify for Working for Families if they are receiving an emergency benefit;
• ensuring GST does not apply to payments of the COVID-19 wage subsidy and leave payments; and
• reducing the winter energy payment rates to their previous levels from 2021 after a temporary increase in 2020.

Coverage of the new Act will be published in the June edition of the Tax Information Bulletin.