Tax changes to stop overseas asset lease schemes

The government announced on 20 June 2007 legislative moves against tax avoidance schemes that enable New Zealand taxpayers to claim depreciation deductions on assets leased overseas, and in which they have no economic interest. The schemes entail assets purchased from overseas and then leased back to the original overseas owner, who continues to use the asset under an operating lease and bear the economic risks of ownership. Since the overseas owner is not subject to taxation…