IRD warns show organisers against tax evasion

The Island Revenue Department (IRD) has said that show organisers and event managers must comply with the prevalent tax laws, failing which they may be prosecuted for tax evasion and related offences.

Indian Newslink understands that some businesses, community organisations and individuals, registered as commercial, charitable or social entities, have failed to remit GST and other taxes relating to entertainment, cultural and other programmes involving local and overseas artistes.

Legal action

An IRD spokesman told us that the Department will initiate appropriate action including prosecution against those who do not meet their tax obligations and deliberately do not comply with the rules in force.

“If you are organising a show or managing an event, you must fill out a tax return each year and send it to us by the due date. When completing your tax return, you must include income from all sources and work out the tax on your total taxable income. Further information is available on our website,” he said.

Some questions

Following requests from readers, we asked IRD the following questions: (1) Are the fees paid to visiting artistes, technicians and others taxable? (2) Do these include air tickets, accommodation, food and other costs? (3) Who has to pay? (4) How does IRD track these? (5) If the visiting artistes do not pay taxes here saying that they would do so in their home country and default, is there a way of tracking them?

The spokesman replied that in most cases, the visiting artistes may have to pay tax in their home state.

“However, if New Zealand has taxing right on that income, then most countries with which we have a tax agreement may allow credit for taxes paid here. If this is the case, the artistes would require proof of payment of tax paid in New Zealand in order to get that tax credit. Our website contains information for non-resident entertainers.”

The official said that everyone with a turnover of $60,000 in a 12-month cycle must register with IRD. Others with a lesser turnover may choose to register, and they would be considered as ‘Voluntary Registration.’

Liquidated Company

If a company is put into liquidation by someone else (as in the case of the Shahrukh Khan show), how can IRD collect its dues?

According to the official, IRD is a ‘preferred creditor’ in most cases but the ranking would depend on outstanding taxes; for instance, PAYE and GST would rank higher than income tax. Liquidators will always work with creditors including IRD to ensure that they are paid to the fullest extent possible.

Photo Caption: Inland Revenue would examine if organiser of ‘Temptation Reloaded 2013’ Agastya Pesara (right) and Hindi film stars Shahrukh Khan (left) and Madhuri Dixit (Centre) paid taxes on their income in New Zealand or India

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