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Technical tax area: General articles

Third party providers approved to store taxpayer electronic records offshore

Standard Practice Statement (SPS) 13/01 provides guidelines on the retention of business records in electronic format. The SPS applies to taxpayers who are required to keep business and other records under the Inland Revenue Acts and third parties that hold business records for taxpayers offshore.

The Commissioner’s approval to taxpayers or third parties to store business records offshore applies for obligations under the Revenue Acts. The approval does not apply to any other record retention obligations or controls that may apply between taxpayers and other regulatory bodies or Crown agencies.

The following organisations have been approved under section 22(8)(a) of the Tax Administration Act 1994 (TAA) to store taxpayers' electronic records outside of New Zealand:

Approved organisations
ActionStep NZ Ltd Automatic Data Processing Ltd
CargoWise NZ Ltd CCH NZ Ltd
Civica Pty Ltd Common Ledger Ltd
Farm IQ Systems Ltd MYOB NZ Ltd
Reckon NZ Pty Ltd Revolution Software Ltd
TaxLab Ltd Technology One NZ Ltd
Thompson Reuters NZ Ltd (formerly Brookers Ltd) Xero Ltd

Taxpayers who store their business records with these approved organisations do not need to obtain approval under section 22(2BA) to store their business records outside of New Zealand. The Commissioner's approval for third party providers to store electronic records offshore, is conditional on the following:

  • Information and records stored offshore remain accessible by the Commissioner and do not impede her compliance activities;
  • Information and records will be available upon request in an electronic and usable format and at no cost to Inland Revenue; and
  • In the event of a service agreement ending between a third party provider and its client, the third party provider will endeavour to return the data to its client in a meaningful and usable format that the client can use for subsequent reference and them to meet their record keeping obligations under the TAA.

Although a third party provider may be used to store business records, taxpayers remain responsible for their tax obligations including retaining business records for the retention period (usually seven years) required under the Tax Administration Act 1994.

Read our Standard Practice Statement 13/01 for further information.

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Date published: 21 Jul 2015

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