The only specialised marine publication in Oceania that focuses on the maritime industry, from super yachts to small craft to large commercial ships, including coastal shipping, tugs, tow boats, barges, ferries, tourist, sport-fishing craft
Issue link: https://viewer.e-digitaleditions.com/i/131029
NZMTA N E W S IRD SOUNDS THE DEATH KNELL ON CHARTERBOATS MARGARET WIND EXECUTIVE OFFICER NZMTA A fter a tumultuous period of review and analysis to prepare submissions for six different maritime rules over the Christmas/New Year period, I can now breathe a sigh of relief and look forward to a period of catch up. With the views of many members now presented through the MOSS and SeaCert suite of rules, we now wait with baited breath for Maritime New Zealand to review industry comments and respond through the preparation of rules for the Ministry and Government sign-off. At this point, we place our trust in our regulators to balance those views and take a realistic approach to what operators can sustain effectively and financially without compromising the desired outcome of increased safety and environmental awareness. Rather than dwell on the content of the draft rules and how these might impact on business, view the Marine Transport Association submissions online: www.marinetransport.co.nz/submissions.html. The most recently posted are headed Funding Review, Antifoul and SeaCert Submission. The latter may be of particular interest as it covers some crucial information on transitional requirements for existing ticket holders, including proposed costs and manning tables for commercial operators. Let's hope that common sense prevails in these areas and status quo remains. Proposed new tax rules for boat owners: As reported late 2012, this proposal relates to the private use of commercial assets (i.e. charter boats) and are included in a tax bill which also deals with a number of other issues. The Government initially proposed new tax rules that would affect the amount of deductions that some boat owners were able to claim. The owners that would have been affected are those who use their boat to earn income and also use it privately, where the boat costs $50,000 or more, and is unused for more than 62 days in an income year. This proposal was introduced into Parliament in September 2012. Select Committee is still considering the public submissions, which closed on February 7, and is expected to report a revised bill back into Parliament around the end of May. The Inland Revenue have advised that they expect legislation to be enacted sometime during August. The Marine Transport Authority recently requested an update, and received the following response from the Inland Revenue: 62 DAY TEST When we were first considering deductibility in this area we released a public consultation document which set out a structure dividing asset owners into three categories. The threshold between two of the categories was that the asset was rented for 62 days or more during the year. We received a number of submissions in response to that consultation, and a good proportion of them were opposed to the 62-day test. We dropped that idea in response to those submissions and it does not appear in the legislation which was introduced into Parliament in September 2012. EFFECTIVE DATE OF PROPOSALS The legislation as introduced was structured to take effect from the beginning of the 2013-14 income year, which for most people is April 1, 2013. A number of submissions were made to the Select Committee expressing concern, because people are effectively subject to rules now without knowing exactly what those rules will look like. Select Committee will be considering these submissions. DEDUCTIBILITY OF SURVEY COSTS The legislation as introduced included a provision allowing for expenses to be deductible in full where they relate solely to the income earning use of the asset, that they do not derive a personal benefit from, and which are necessary to meet a regulatory requirement. This rule is specifically designed to allow deductibility for expenses like advertising and survey costs which are purely incurred for income earning purposes and would not be incurred by an owner who purely used the asset privately. This is section DG 7 in the legislation, which is followed by this example: Mike operates a charter boat which he also uses privately. He incurs expenses including advertising costs, costs in meeting Maritime New Zealand survey requirements, and general maintenance costs. The advertising costs are fully deductible because they deliver no private benefit. The survey costs are fully deductible if they are incurred only for charter purposes. The maintenance costs are not deductible under this provision because they deliver a personal benefit as well as an incomeearning benefit. A portion of these maintenance costs may be allowed as a deduction under section DG 8. As noted above, the legislation is not yet in its final form, and is subject to whatever changes the Select Committee might make in response to submissions. However, the submissions are now publicly available (link below), and I am not aware of any submissions that challenge the approach in the legislation that survey etc. expenditure should not be deductible in full. – Inland Revenue For those wishing to discuss any aspect of these proposals, contact the MTA, or follow this link for more: www.legislation. govt.nz/bill/government/2012/0064/latest/DLM4739236.html MTA CONFERENCE 11-13 SEPTEMBER 2013 With seven maritime rules scheduled to hit our sector midway through this year, timing for the next MTA conference has never been more significant. MOSS and SeaCert are central to the way we operate our respective businesses and this conference aims to guide attendees through the principle planning stages to ensure timely compliance. The venue this year is looking like the beautiful Kaikoura with some whale watching thrown in to break up the workshops. In addition to MOSS and SeaCert, other topics will include specialist interests covering the IRD changes, swimming operations and dangerous goods. A questionnaire will be going up on the MTA website early next week to gather expressions of interest and collect thoughts on any additional content. Alternatively, we can post out a copy on request. Note the date – everyone is welcome to attend. If interested in becoming an MTA member, application forms can be completed online at www.marinetransport.co.nz or email info@marinetransport.co.nz. May/June 2013 Professional Skipper 23