Taxing Fruit Pickers
The Inland Revenue Department (IRD) is moving to tighten up the tax regime for contractors in the agricultural, horticultural and viticultural industries. Currently, when employers make withholding payments to a contractor who is trading as a company, they do not deduct any withholding tax.
That will change from 1 April - employers hiring any type of contractor (individual, partnership, trust or company) for services or work related to the pruning or thinning of fruit trees or vines, or the picking or packing of fruit or grapes, must deduct withholding tax at the rate of 15 cents in the dollar, unless the contractor has a certificate of exemption, or a special tax code certificate authorising deductions at a lower rate. Further, all payments for such activities will need to be recorded on the payer's employer monthly schedule, whether they deduct withholding tax or not.
Apart from gathering additional revenue, IRD says the new regime will "level the playing field" between contractors, some of whom are apparently unable to compete against contractors being paid under the table.
Contact for Enquiries
The Ministry of Agriculture and Forestry
Pastoral House
25 The Terrace
PO Box 2526, Wellington
Tel: +64 4 894 0100
Fax: +64 4 894 0720
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