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New Zealand parties blocked a plan to tax unpaid shareholder loans, citing unfair burdens on small businesses and double taxation risks.
New Zealand First and ACT have blocked a proposed Inland Revenue plan to tax unpaid shareholder loans, arguing it could unfairly burden small businesses and create double taxation.
The plan, which would treat unpaid loans as dividends upon company liquidation, faced criticism for lacking a tax refund mechanism when loans are repaid.
While Inland Revenue cited concerns about tax avoidance and $2 billion in unpaid loans, critics including the Taxpayers’ Union and business groups warn the rule adds complexity without clear benefits.
The UK’s different approach, avoiding double taxation, is cited as a model.
The proposal’s future remains uncertain as ministers review feedback.
Los partidos neozelandeses bloquearon un plan para gravar los préstamos no pagados a los accionistas, citando cargas injustas para las pequeñas empresas y riesgos de doble tributación.