We thought it worth bringing your attention to a business income alert that IRD released …
There were concerns that companies with ‘cloud computing’ IT infrastructures weren’t meeting the legal requirements of Section 22 of the Tax Administration Act 1994 which states that any company in New Zealand must keep adequate records (in English) for the commissioner to readily access their tax information, within NZ physically – that means if it’s in the cloud, it has to be a NZ cloud.
Online accounting & cloud company Xero, were quick to assuage customers that they have been working with IRD on policies around the cloud for quite some time and that NZ’s Xero customers do comply a-ok.
NZ law hasn’t kept up with developments in technology like Cloud computing, and Xero CEO Rod Drury hopes that NZ is in store for an amendment to the legislation similar to that of our Australian neighbours - where there are no restrictions regarding data storage location, only that company tax information can be produced if necessary.
Very interesting…..
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