1: Title
This Act is the Taxation (Base Maintenance and Miscellaneous Provisions) Act 2005.
2: Commencement
1: This Act comes into force on the day on which it receives the Royal assent, except as provided in this section.
2: Section 155
3: Section 107
4: Section 118
5: Section 117(11)
6: Section 95
7: Section 117(3) (15)
8: Sections 105 108(1) (2) 109(1) (3) 110 111 117(2) (22) (23) 143 146
9: Sections 106 112 to 115 117(4) (20) 123 to 125 126(1) (2) (3) 129 130 148 159
10: Sections 16 23 26 38 41 47 52 64 65 70 72 73 76(2) 79 87(3) 87(16) 87(17) 87(18) 87(22) 87(27) 90(1) 92 93 120(4) 131 132 144(2) 149 152 153 161
11: Sections 54 to 59 87(12) (13) (14) (15) (20) (21) (23) to (25) (30) to (32) (37) 99 to 104 117(5) (6) (7) to (10) (12) (14) (17) to (19) (21) (24)
12: Sections 4 to 15 18 to 22 24 25 27 to 37 39 40 42 to 46 48 to 51 60 to 63 68 69 71 74 75 76(1) (3) 77 78 80 to 84 85 86 87(2) to (11) (19) (26) to (29) (33) (34) (35) (36) 88 89 91 126 138 139 142 144 151
1: Amendments to Income Tax Act 2004
3: Income Tax Act 2004
1: This Part amends the Income Tax Act 2004
2: A section in this Part applies for income years corresponding to the 2005-06 and later tax years if the section does not provide for a different application.
4: New section CB 6B inserted
After section CB 6
CB 6B: Disposal: Land used for landfill, if notice of election
An amount that a person derives from disposing of land is income of the person if—
a: the person uses the land as a landfill before disposing of the land; and
b: at the time of disposal, the land is not being used as a landfill; and
c: the person acquiring the land is not an associated person under section OD 7
d: the person gives written notice to the Commissioner of an election that the land be subject to this section by the day that is the later of the following:
i: the day that is 12 months after the day on which the person acquires the land:
ii: 24 June 2006; and
e: the person makes an election under paragraph (d)
f: any person associated with the person makes an election under paragraph (d) associated person Commissioner dispose
5: New heading and section CB 24B inserted
After section CB 24 Environmental restoration
CB 24B: Environmental restoration accounts
Income from refund
1: A person who receives a refund for a tax year under section EK 12 Income from transfer from environmental restoration account
2: If there is a transfer from a person's environmental restoration account under section EK 15 Definitions of items in formulas
3: The items in the formulas are defined in subsections (4) to (6) Refund
4: Refund Tax rate
5: Tax rate
a: is stated in schedule 1
b: would apply to the person for the tax year if the person had sufficient taxable income. Transfer
6: Transfer Income arising from renewal of resource consent
7: A person who incurs expenditure of a type listed in schedule 6B paragraphs 2 to 5 schedule 6B subsection (8)
a: the deduction under section DB 37
b: the period of the grant of the resource consent is extended by more than 50% in a later income year or a new resource consent is granted for a period that is more than 50% of the total period of the resource consent. Amount of income
8: The person derives for the income year in which the period of the resource consent is extended, or the new resource consent is granted, an amount of income equal to the greater of zero and the difference between—
a: the total deduction under section DB 37
b: the total deduction for the expenditure that the person would have had under section DB 37 paragraph (a) corresponding income year environmental restoration account income income tax taxable income tax year.
6: Section CB 26 replaced
1: Section CB 26
CB 26: Sale of patent applications or patent rights
If a person derives an amount from the sale of a patent application with a complete specification or from the sale of patent rights, the amount is income of the person. amount income patent rights.
2: Subsection (1) applies to patent applications lodged for the first time after the date on which this Act receives the Royal assent.
7: Royalties
In section CC 9(2)(a) patent, patent, plant variety rights,
8: Elections to make bonus issue into dividend
1: Section CD 7(1)
1: A bonus issue that is not a bonus issue in lieu is a dividend if—
a: the bonus issue—
i: is issued fully paid from reserves of the company:
ii: if a dividend, would not be exempt income under section CW 10
b: the company chooses under this section to treat the bonus issue as a dividend.
2: Subsection (1) applies for an issue of shares made on or after 16 November 2004.
9: Returns of capital: off-market share cancellations
1: Section CD 14(5)
5: If a company is an unlisted widely-held trust not resident in New Zealand and a shareholder cannot obtain sufficient information to calculate the available subscribed capital per share under the ordering rule,—
a: the share is treated as if it were issued under subsection (4)
b: the available subscribed capital under the slice rule is—
i: the amount paid for the issue of the share, if subparagraph (ii)
ii: the value of the money or property in which a beneficial interest would have vested in the share-holder had the share not been issued, if the share is a taxable bonus issue under paragraph (d)
10: Recovered expenditure or loss
In the list of defined terms in section CG 4 , loss income year
11: New section CW 45B inserted
The following is inserted after section CW 45
CW 45B: Non-resident company involved in exploration and development activities
Exempt income
1: An amount of income derived by a non-resident company from exploration and development activities in an offshore permit area is exempt income if it is derived in the period that—
a: starts on the beginning of the 2005-06 income year for the non-resident company; and
b: ends on 31 December 2009. Some definitions
2: In this section,— exploration and development activities
a: operating a ship to provide seismic survey readings:
b: drilling an exploratory well or other well offshore permit area
a: in New Zealand; and
b: on the seaward side of the mean high-water mark; and
c: a permit area or part of a permit area. amount exempt income exploration and development activities exploratory well New Zealand. non-resident company offshore permit area permit area.
12: New heading and section CX 43B inserted
1: After section CX 43 Environmental restoration
CX 43B: Refund from environmental restoration account
A refund to a person under section EK 9 excluded income.
2: Subsection (1) applies for a refund made to a person in an income year starting on or after 10 June 2005.
13: Commercial bills before 31 July 1986
Section CZ 6(3)
14: Expenses of failed or withdrawn application for resource consent
In section DB 13B(1)(b) a resource consent that is depreciable property depreciable property, or otherwise a deduction,
15: Amounts paid for non-compliance and change in use
1: Section DB 16(1)(b)(iv)
iv: in the absence of section DB 37
2: Subsection (1)
16: Research or development
1: In section DB 26(5) for a tax year in an income year
2: In section DB 26(7) tax year income year
3: In section DB 26
a: income year,
b: , tax year
17: Patent rights acquired on or after 1 April 1993
1: In the heading to section DB 31 Patent rights Patent applications or patent rights
2: In section DB 31(1) a patent application with a complete specification or patent rights
3: In section DB 31(2) patent application with a complete specification or patent rights
4: In section DB 31(4) patent application with a complete specification or patent rights
5: Subsections (1) to (4)
18: Preventing pollution of environment
1: In section DB 37(1)(b) industrial waste waste
2: Subsection (1) applies for expenditure incurred by a person in the 2005-06 income year if the income year starts before 10 June 2005.
19: Section DB 37 replaced
1: Section DB 37
DB 37: Avoiding, remedying, or mitigating effects of discharge of contaminant
When this section applies
1: This section applies if a person—
a: carries on a business in New Zealand; and
b: the person incurs, in the business or in ending the operations of the business, expenditure that is—
i: of a type listed in schedule 6B schedule 6B
ii: not incurred in relation to revenue account property other than land that is subject to section CB 6B
c: no other provision allows a deduction for the expenditure. Amount and timing of deduction
2: The person is allowed for an income year a deduction for the expenditure of,—
a: if paragraphs (b) and (c) rate x value:
b: if the operations of the business for which the expenditure was incurred come to an end in the income year, the diminished value or adjusted tax value of the expenditure for the income year:
c: if an improvement on which the expenditure was incurred is destroyed, or is rendered useless for the purposes for which the expenditure was incurred, and paragraph (b) Definition of items in formula
3: The items in the formula in subsection (2)(a) subsections (4) and (5) Rate
4: Rate
a: 100%, if the expenditure is of a type listed in schedule 6B paragraph (b) or (c)
b: the appropriate rate given by subsection (5)
i: the expenditure is of a type listed in schedule 6B
ii: no applicable rate is given by paragraph (c)
c: the rate for the type of expenditure, the income year, the valuation method adopted under subsection (6) section 91AAN of the Tax Administration Act 1994 Banded straight-line rate or corresponding diminishing value rate
5: The rate for expenditure if subsection (4)(b)
a: the straight-line rate given in schedule 11 subsection (7)
b: the diminishing value rate given in schedule 11 paragraph (a) Value
6: Value
a: the adjusted tax value of the expenditure, if the person elects to use the straight-line method:
b: the diminished value of the expenditure for the income year, if the person elects to use the diminishing value method. Formula for rate for expenditure with assumed life
7: The formula for the straight-line rate for a type of expenditure to which subsection (4)(b) Definition of item in formula
8: In the formula in subsection (7) assumed life
a: for expenditure associated with a business activity that does not require a resource consent, 35:
b: for expenditure associated with a business activity that requires a resource consent, the lesser of 35 and the number of the years in the period of the resource consent that include or follow the time at which the expenditure is incurred. Link with subpart DA
9: This section overrides the capital limitation. The general permission must still be satisfied and the other general limitations still apply. amount business capital limitation deduction diminished value general limitation general permission. income year New Zealand.
2: Subsection (1)
20: Cost of timber
1: Section DP 10(1)(b)
b: in the absence of section DB 37
2: Subsection (1)
21: Heading to subpart DQ
In the heading to subpart DQ, and environmental restoration accounts scheme
22: New section DQ 4 added
1: After section DQ 3
DQ 4: Environmental restoration accounts scheme
Deduction for payment
1: A person is allowed a deduction of the amount given by section EK 7 section EK 2 section EK 9 Timing of deduction
2: A deduction under subsection (1) section EK 7 Deduction for transfer
3: A person is allowed a deduction for an income year of the amount given by section EK 8
a: a transfer under section EK 15 section EK 15(4)
b: a transfer under section EK 16(3)(b)
c: a transfer under section EK 19 Timing of deduction
4: A deduction under subsection (3) section EK 8 Link with subpart DA
5: This section supplements the general permission and overrides the capital limitation. The other general limitations still apply. capital limitation deduction general limitation general permission income year pay supplement.
2: Subsection (1) applies for expenditure incurred by a person in an income year starting on or after 10 June 2005.
23: Enhancements to land unamortised at end of 2004-05 year
1: Section DZ 13(1)(a)
a: a person is allowed under section DO 4(1) of the Income Tax Act 1994 section DO 4(3)(a) or (c) of that Act .
2: In section DZ 13(1)(b) claimed as a deduction in later income years; and allowed as a deduction in later income years
3: Section DZ 13(1)(c)
4: Section DZ 13(2)
2: The person is allowed a deduction for the unamortised balance of expenditure in the income year in which the expenditure is of benefit to the business.
24: Section EC 4 repealed
Section EC 4
25: Depreciation methods
In section EE 12(1) loss. loss, and includes a rate determined by the Commissioner under section 91AAF, 91AAG, or 91AAL of the Tax Administration Act 1994
26: Calculation rule: income year in which item disposed of
In section EE 11(5) subsection section
27: Annual rate for fixed life intangible property
In section EE 27(1) (not including an item of excluded depreciable property, for which a rate is set in section EZ 14 , not including—
a: an item of excluded depreciable property for which a rate is set in section EZ 14
b: a patent or patent application for which a rate is set in sections EE 27B or EE 27D
c: plant variety rights for which a rate is set in section EE 27E
28: New sections EE 27B to EE 27E inserted
After section EE 27
EE 27B: Annual rate for patents: applications lodged with complete specifications before 1 April 2005
When this section applies
1: This section applies if—
a: an application for a patent with a complete specification is lodged with the Intellectual Property Office of New Zealand or a similar office in another jurisdiction; and
b: the application is lodged with the complete specification before 1 April 2005; and
c: the patent is granted to a person in an income year of the person that corresponds to the 2005-06 or a later tax year. Income years for which usual rate applies
2: The rate given by subsection (3)
a: after the date on which the patent is granted; and
b: before the date that is 240 months after the patent application date. Usual rate
3: The rate is calculated using the formula— Rate for first income year of use
4: For the patent and the income year that includes the date on which the patent is granted, the rate is found by adding together the following rates:
a: the rate calculated using the formula—
b: the rate calculated for the income year under subsection (3) Effect of change in ownership of patent application
5: If the patent is granted to a person who does not lodge the application for the patent with the complete specification, the rates calculated under subsections (3) and (4) Definition of items in formulas in subsections (3) and (4)
6: The items in the formulas in subsections (3) and (4) subsections (7) to (9) Months
7: Months
a: in which the patent is used or is available for use; and
b: that include or begin after the date on which the patent is granted; and
c: that end before the date that is 240 months after the patent application date. Depreciation months
8: Depreciation months
a: if subsection (5)
b: if subsection (5)
i: include or begin after the patent application date; and
ii: end before the date on which the person acquires the application. Months before grant
9: Months before grant
a: if subsection (5)
i: include or begin after the patent application date; and
ii: end before the date on which the patent is granted:
b: if subsection (5)
i: include or begin after the date on which the person acquires the application; and
ii: end before the date on which the patent is granted. amount income year patent application date
EE 27C: Annual rate for patent applications lodged with complete specifications on or after 1 April 2005
When this section applies
1: This section applies if—
a: an application for a patent with a complete specification is lodged with the Intellectual Property Office of New Zealand or a similar office in another jurisdiction; and
b: the application is lodged with the complete specification on or after 1 April 2005. Income years for which rate applies
2: The rate given by subsection (3)
a: includes or begins after the patent application date; and
b: begins before the date on which—
i: the patent is granted; or
ii: the patent application is refused or withdrawn. Rate
3: The rate is calculated using the formula— Months
4: Months
a: include or begin after the patent application date; and
b: end before the date on which—
i: the patent is granted; or
ii: the patent application is refused or withdrawn. Depreciation months
5: Depreciation months
a: if subsection (6)
b: if subsection (6)
i: include or begin after the patent application date; and
ii: end before the date on which the person acquires the application. Effect of change in ownership of patent application
6: If the person who owns the patent application when the patent is granted, or when the patent application is refused or withdrawn, is not the person who lodges the application for the patent with the complete specification, the rate calculated under subsection (3) amount income year patent application date
EE 27D: Annual rate for patents: applications lodged with complete specifications on or after 1 April 2005
When this section applies
1: This section applies if—
a: an application for a patent with a complete specification is lodged with the Intellectual Property Office of New Zealand or a similar office in another jurisdiction; and
b: the application is lodged with the complete specification on or after 1 April 2005; and
c: the patent is granted to a person in an income year of the person that corresponds to the 2005-06 or a later tax year. Income years for which rate applies
2: The rate given by subsection (3)
a: includes or begins after the date on which the patent is granted; and
b: begins before the date that is 240 months after the patent application date. Rate
3: The rate is calculated using the formula— Months
4: Months
a: include or begin after the date on which the patent is granted; and
b: end before the date that is 240 months after the patent application date. Depreciation months
5: Depreciation months
a: if subsection (6)
b: if subsection (6)
i: include or begin after the patent application date; and
ii: end before the date on which the person acquires the application. Effect of change in ownership of patent application
6: If the patent is granted to a person who does not lodge the application for the patent with the complete specification, the rate calculated under subsection (3) amount income year patent application date
EE 27E: Annual rate for plant variety rights
When this section applies
1: This section applies if—
a: a plant variety right is given provisional protection; and
b: the plant variety right is granted to a person in an income year that corresponds to the 2005-06 or a later tax year. Income years for which usual rate applies
2: The rate given by subsection (3)
a: after the date on which the plant variety right is granted; and
b: before the date on which the plant variety right expires. Usual rate
3: The rate is calculated using the formula— Rate for first income year of use
4: For the plant variety right and the income year that includes the date on which the plant variety right is granted, the rate is found by adding together the following rates:
a: the rate calculated using the formula—
b: the rate calculated for the income year under subsection (3) Definition of items in formulas in subsections (3) and (4)
5: The items in the formulas in subsections (3) and (4) subsections (6) to (8) Months
6: Months is the number in the income year of months, beginning on or a whole number of months after the beginning of the income year,—
a: in which the plant variety right is used or available for use; and
b: that end before the date on which the plant variety right expires. Depreciation months
7: Depreciation months
a: if subsection (9)
i: in which the plant variety right has provisional protection; and
ii: ending before the date on which the plant variety right is granted:
b: if subsection (9) paragraph (a)
i: include or begin after the date on which the plant variety right is given provisional protection; and
ii: end before the date on which the person acquires the application. Months before grant
8: Months before grant
a: if subsection (9)
i: include or begin after the date on which the plan variety right is given provisional protection; and
ii: end before the date on which the plant variety right is granted:
b: if subsection (9)
i: include or begin after the date on which the person acquires the application; and
ii: end before the date on which the plant variety right is granted. Effect of change in ownership of application for plant variety right
9: If the plant variety right is granted to a person who does not lodge the application for the plant variety right, the rates calculated under subsections (3) and (4) amount income year plant variety right.
29: Section EE 28 replaced
Section EE 28
EE 28: Special rate or provisional rate
Rate set for item of depreciable property
1: A special rate or a provisional rate is set for an item of depreciable property under sections 91AAG to 91AAJ of the Tax Administration Act 1994 No special rate for excluded depreciable property
2: A special rate may not be set for an item of excluded depreciable property. No provisional rate for fixed life intangible property or excluded depreciable property
3: A provisional rate may not be set for an item of fixed life intangible property or an item of excluded depreciable property. depreciable property excluded depreciable property fixed life intangible property provisional rate special rate.
30: Items no longer used
Section EE 32(1) When this section applies
1: This section applies when a person in an income year has an item of depreciable property that—
a: is no longer used; and
b: is not a building, unless the item satisfies subsection (1B)
c: has not been depreciated using the pool method. Buildings
1B: This section applies to a building that satisfies subsection (1)(a) and (c)
a: the building has been irreparably damaged and rendered useless for the purpose of deriving income; and
b: the damage occurs—
i: in the 2005-06 or a subsequent income year:
ii: as a result of the extreme climatic conditions that occurred during the month of February 2004 in New Zealand:
iii: as a result of the storm event that occurred during the month of July 2004 in the Bay of Plenty area; and
c: the damage is caused other than as a result of the action or failure to act of the person, an agent of the person, or an associated person.
31: Transfer of depreciable property on or after 24 September 1997
After section EE 34(5) Link with subpart FI
6: If a disposal of property to which subpart FI applies is at market value, this section does not apply to the bequest of property.
32: Consideration for purposes of section EE 37
After section EE 38(2) Link with subpart FI
2B: Subsection (2) sections FI 4 and FI 5
33: Events for purposes of section EE 37
Section EE 40(7)
34: Effect of disposal or event
1: In section EE 41(2) When this section does not apply
3: This section does not apply if the item is a building unless—
a: the building has been irreparably damaged and rendered useless for the purpose of deriving income; and
b: the damage occurs—
i: in the 2005-06 or a subsequent income year:
ii: as a result of the extreme climatic conditions that occurred during the month of February 2004 in New Zealand:
iii: as a result of the storm event that occurred during the month of July 2004 in the Bay of Plenty area; and
c: the damage is caused other than as a result of the action or failure to act of the person, an agent of the person, or an associated person.
2: In the list of defined words in section EE 41 qualifying event
35: Meaning of annual rate
After section EE 52(4) Patents, applications: complete specification before 1 April 2005
4B: The rate is the rate set by section EE 27B section EE 27B Patent applications: lodged with complete specification on or after 1 April 2005
4C: The rate is the rate set by section EE 27C section EE 27C Patents: application lodged with complete specification on or after 1 April 2005
4D: The rate is the rate set by section EE 27D section EE 27D Plant variety rights
4E: The rate is the rate set by section EE 27E section EE 27E
36: Main income equalisation account
In section EH 5(4) Amounts Despite section FI 3
37: Refund on death
In section EH 19(2) The Commissioner Despite section FI 3
38: Other definitions
In section EH 37 specified period tax year accounting year that corresponds to the tax year
39: Refund on death
In section EH 50(2) The Commissioner Despite section FI 3
40: Thinning operations income equalisation account
In section EH 67(4) Amounts Despite section FI 3
41: Other definitions
In section EH 81 specified period tax year accounting year that corresponds to the tax year
42: New subpart EK inserted
1: After subpart EJ, the following is inserted:
EK: Environmental restoration accounts
EK 1: Environmental Restoration Funds Account
Account
1: There is a Crown Bank Account called the Environmental Restoration Funds Account that is operated under the Public Finance Act 1989 Payments from person paid into account
2: Every payment a person makes to the Commissioner under section EK 2
a: is public money; and
b: must be paid into the Environmental Restoration Funds Account. Commissioner
EK 2: Persons who may make payment to environmental restoration account
Business required to restore environment A person may make a payment to the Commissioner for entry in the person's environmental restoration account for an income year if the person—
a: carries on a business in New Zealand; and
b: expects to incur, for a later income year, expenditure that—
i: is not on revenue account property, other than land to which section CB 6B
ii: is of a type listed in schedule 6B, part B
iii: is of a type not listed in schedule 6B, part C
c: makes a provision for such expenditure in financial statements that are—
i: prepared for external reporting purposes; and
ii: audited by an accountant who is a chartered accountant or has equivalent professional qualifications; and
iii: given by the accountant a standard audit opinion, without qualifications on matters relating to the effect of this subpart. business Commissioner environmental restoration account income year revenue account property
EK 3: Payments to environmental restoration account
Upper limit of payment
1: A person must not make a payment for an income year of more than the person's maximum payment for the income year. Lower limit of payment
2: A person must not make a payment for an income year of less than $1,000. Time for making payment
3: A payment made after the day that is 6 months after the end of an income year is not made for the income year unless—
a: the Commissioner has allowed a longer period for the payment; and
b: the payment is made within the period allowed by the Commissioner. Commissioner income year maximum payment
EK 4: Environmental restoration account
Person's account
1: The Commissioner must keep an environmental restoration account in the name of every person who makes a payment to the Commissioner under section EK 2 Payments in account
2: Every payment under section EK 2 Amounts in account
3: The only amounts that may be entered in a person's environmental restoration account are—
a: payments made by the person to the Commissioner under section EK 2
b: transfers made to the account under subsection (6)
c: interest paid under section EK 6 Amounts not available to others
4: Amounts entered in a person's environmental restoration account may not, while they are in the account,—
a: be assigned or charged in any way:
b: pass by operation of law to, or into the custody or control of, someone else, except when the person is bankrupt or has been put into liquidation:
c: be assets for the payment of the person's debts or liabilities, except when the person is bankrupt or has been put into liquidation:
d: be assets for the payment of the debts or liabilities of a dead person's estate. Amounts not available except for refunds or transfers
5: An amount entered in a person's environmental restoration account may not be removed from the environmental restoration account except by a refund under section EK 9 or EK 12 subsection (6) Transfers of amounts
6: An amount may be transferred from the environmental restoration account of a person—
a: to an environmental restoration account of a person to whom the amount has been transferred under section EK 15 or EK 16(3)(b)
b: to the department that is at the time responsible for the administration of the Environment Act 1986 section EK 16(3)(a)
c: to an environmental restoration account of an amalgamated company to which the amount has been transferred under section EK 19 Commissioner may close empty account
7: The Commissioner may close an environmental restoration account of a person if the amount in the environmental restoration account is zero. amalgamating company amount Commissioner environmental restoration account interest liquidation
EK 5: Details to be provided with payment to environmental restoration account
1: A person making a payment to an environmental restoration account must provide the Commissioner with a notice, in a form prescribed by the Commissioner, giving—
a: the name of the person; and
b: the income year for which the payment is made; and
c: a calculation of the maximum payment for the person and the income year; and
d: any additional information that the Commissioner requires.
2: The person must provide the information required by subsection (1) Commissioner environmental restoration account income year maximum payment
EK 6: Interest on payments to environmental restoration account
Interest payable
1: Interest is payable by the Commissioner on—
a: a payment under section EK 2
b: an amount that is treated under section EK 15 or EK 19 Period
2: Interest is computed with daily rests from the day after the date of the payment until the day before the date on which the payment is included in a refund under section EK 12 section EK 15, EK 16, or EK 19 Date to which interest accrues
3: Interest that has accrued on a payment is payable to the person who has the environmental restoration account on the earlier of—
a: 31 March in each year:
b: the day on which the payment is included in a refund under section EK 12 section EK 15, EK 16, or EK 19 Rate
4: The interest rate is 3% per year. Commissioner environmental restoration account interest year
EK 7: Deduction for payment
When this section applies
1: This section applies if a person is allowed a deduction under section DQ 4 section EK 2 Amount of deduction
2: The amount of the deduction is calculated using the formula— Definitions of items in formula
3: The items in the formula are defined in subsections (4) and (5) Payment
4: Payment
a: the person's payment to the Commissioner under section EK 2
b: the person's maximum payment for the income year. Tax rate
5: Tax rate
a: is stated in schedule 1
b: would apply to the person for the tax year if the person had sufficient taxable income. Timing of deduction
6: The person is allowed the deduction for the income year for which the payment is made. Commissioner deduction environmental restoration account income tax income year maximum payment tax year taxable income
EK 8: Deduction for transfer
When this section applies
1: This section applies if a person is allowed a deduction under section DQ 4 section EK 15, EK 16, or EK 19 Amount of deduction
2: The amount of the deduction is calculated using the formula— Definitions of items in formula
3: The items in the formula are defined in subsections (4) and (5) Transfer
4: Transfer section EK 15(3), EK 16, or EK 19 Tax rate
5: Tax rate
a: is stated in schedule 1
b: would apply to the person for the tax year if the person had sufficient taxable income. Timing of deduction
6: The person is allowed the deduction for the income year for which the transfer is made. deduction environmental restoration account income tax income year. maximum payment tax year taxable income
EK 9: Refund of payment if excess, lacking details
When this section applies
1: This section applies if a person's payment under section EK 2
a: more than the person's maximum payment for the income year:
b: made without providing the details required by section EK 5 Refund
2: As soon as practicable after the date on which the payment is received, the Commissioner must refund to the person—
a: the excess, if the payment is more than the person's maximum payment for the income year:
b: the payment, if the payment is described by subsection (1)(b) No interest payable by Commissioner
3: No interest is payable by the Commissioner under section EK 6 Commissioner income year interest maximum payment
EK 10: Certain refunds not income
A refund under section EK 9 section CX 43B excluded income
EK 11: Application for refund
Who may apply
1: A person may apply to the Commissioner for a refund under section EK 12
a: corresponds to expenditure incurred by the person of a type that is listed in schedule 6B schedule 6B
b: represents an excess in the person's environmental restoration account over the maximum account balance for the person's environmental restoration account for the income year. Application
2: An application for a refund must—
a: be in writing; and
b: state the grounds on which the application is made; and
c: provide evidence satisfactory to the Commissioner verifying the existence of the grounds; and
d: state the amount of the refund that the applicant wants. Commissioner environmental restoration account income year
EK 12: Refund
When this section applies
1: This section applies when—
a: a person wants a refund of some or all of the amount in the person's environmental restoration account and none of sections EK 9, EK 15, EK 16, and EK 19
b: the amount in the person's environmental restoration account exceeds the maximum account balance for an income year. Refund if request made
2: The Commissioner must make a refund under this section to a person if—
a: the person applies for a refund and has incurred expenditure—
i: of a type that is listed in schedule 6B schedule 6B
ii: of an amount equal to or greater than the amount given by subsection (3)
iii: after the first date on which the person made to the Commissioner a payment under section EK 2 section EK 15, EK 16, or EK 19
b: the maximum account balance for the latest complete income year for the person's environmental restoration account is less than the amount in the environmental restoration account at the end of that income year. Minimum amount of expenditure incurred
3: The amount of expenditure incurred that corresponds to the amount of a refund is calculated using the formula— Definitions of items in formula
4: The items in the formula are defined in subsections (5) and (6) Amount
5: Amount Tax rate
6: Tax rate
a: is stated in schedule 1
b: would apply to the person for the tax year if the person had sufficient taxable income. Amount of refund if expenditure incurred
7: If a person is entitled to a refund under subsection (2)(a)
a: the refund for which the person applies:
b: the contents of the person's environmental restoration account at the time of the refund:
c: the refund corresponding to the person's expenditure that satisfies subsection (2)(a)(i) to (iii) Amount of refund if maximum account balance decreases
8: If a person is entitled to a refund under subsection (2)(b)
a: the refund for which the person applies:
b: the difference at the end of the latest complete income year between—
i: the amount in the person's environmental restoration account, after any transfer under section EK 15, EK 16, or EK 19
ii: the person's maximum account balance for that income year. Section EK 17 subsections (7) and (8)
9: Section EK 17 subsections (7) and (8) amount Commissioner environmental restoration account income tax income year maximum account balance tax year taxable income
EK 13: Income when refund given on request
A refund under section EK 12 section CB 24B Commissioner income income year
EK 14: Application for transfer
Who may apply
1: A person may apply to the Commissioner for a transfer under section EK 15 Application
2: An application for a transfer must—
a: be in writing; and
b: state the grounds on which the application is made; and
c: state the amount of the transfer that the applicant wants. Commissioner environmental restoration account
EK 15: Transfer on request
When this section applies
1: This section applies if—
a: a person applies under section EK 14
b: the person has transferred to the nominated person the obligations to which the amount relates; and
c: none of sections EK 9, EK 12, EK 16, and EK 19 Transfer if request made
2: The Commissioner must make a transfer under this section to an environmental restoration account of the person nominated in the application. Transfer treated as payment by nominated person if transfer of obligations verified
3: A transfer under subsection (2)
a: the obligations to which the transferred amount relates have been transferred to the nominated person; and
b: in the absence of the transfer, the nominated person would be entitled to make a payment, of the amount of the transfer, to the nominated person's environmental restoration account. Commissioner to reverse transfer if not satisfied under subsection (3)
4: If the nominated person does not satisfy the requirements of subsection (3) subsection (1)(a) Timing of reversal
5: The transfer under subsection (4) subsection (2) Commissioner environmental restoration account
EK 16: Transfer on death, bankruptcy, or liquidation
When this section applies
1: This section applies if a person—
a: has an environmental restoration account; and
b: does one of the following:
i: dies:
ii: becomes bankrupt:
iii: is put into liquidation. Transfer to other person
2: Subsection (3) Transfer to Crown or other person
3: The Commissioner must transfer the amount referred to in subsection (4)
a: the department that is at the time responsible for the administration of the Environment Act 1986
b: an environmental restoration account of the person to whom the obligation has been transferred, if paragraph (a) Amount of transfer
4: The Commissioner must transfer under subsection (3)
a: on the date on which the person dies, if subsection (1)(b)(i)
b: on the date on which the person becomes bankrupt, if subsection (1)(b)(ii)
c: on the date on which the person is put into liquidation, if subsection (1)(b)(iii) Section EK 17 subsection (4)
5: Section EK 17 subsection (4) Year of income
6: The amount of a transfer under this section is income, under section CB 24B subsection (4) amount Commissioner environmental restoration account income liquidation
EK 17: Minimum refund or transfer
The Commissioner must not give a refund or make a transfer under any of sections EK 9, EK 12, EK 15, EK 16, and EK 19
a: $1,000; and
b: the balance in the person's environmental restoration account on the date on which the refund or transfer is made. Commissioner environmental restoration account
EK 18: Payments from which refunds come
Each refund to a person is treated as coming from the total amount in the person's environmental restoration account in the order in which the person made the payments into the account. amount environmental restoration account
EK 19: Environmental restoration account of amalgamating company
If an amalgamating company with an environmental restoration account ceases to exist because of an amalgamation during an income year,—
a: the contents of the environmental restoration account of the amalgamating company are transferred to an environmental restoration account of the amalgamated company on the date of the amalgamation:
b: the amalgamated company is treated as having—
i: made to the amalgamated company's environmental restoration account the payments that the amalgamating company made before the amalgamation to the amalgamating company's environmental restoration account; and
ii: made from the amalgamated company's environmental restoration account the transfers that the amalgamating company made before the amalgamation from the amalgamating company's environmental restoration account; and
iii: received from the amalgamated company's environmental restoration account the refunds that the amalgamating company received before the amalgamation from the amalgamating company's environmental restoration account. amalgamated company amalgamating company amalgamation environmental restoration account income year
EK 20: Environmental restoration account of member of consolidated group
Member may have environmental restoration account
1: A member of a consolidated group may have an environmental restoration account. Nominated company for group may act on behalf of member
2: The nominated company for the consolidated group may make payments and applications and receive refunds under this subpart on behalf of the member. Use of consolidated financial statements for group
3: In making payments and applications under this subpart, the nominated company may rely on the audited consolidated financial statements for the consolidated group. Use of consolidated figures for liabilities anticipated and expenditure incurred
4: If the nominated company relies on the audited consolidated financial statements for the consolidated group, the consolidated figures for the anticipated liabilities and incurred expenditure of the consolidated group are attributed to the members on the basis of the individual obligations of the members to incur expenditure of a type listed in schedule 6B schedule 6B consolidated group environmental restoration account nominated company
EK 21: Commissioner may require notice in electronic format
The Commissioner may require a person to provide a notice under this subpart in an electronic format that the Commissioner prescribes under section 36BC of the Tax Administration Act 1994 Commissioner
EK 22: Meaning of maximum payment
Meaning of maximum payment
1: In this subpart, maximum payment subsection (2) Amount of maximum payment
2: The maximum payment that a person may make for an income year is the lesser of—
a: the amount by which the maximum account balance for the income year for the environmental restoration account exceeds the amount in the environmental restoration account at the end of the income year:
b: the amount, if any, given for the person and the income year by subsection (3) Maximum payment for first 5 years of environmental restoration funds scheme
3: If a person has a maximum account balance for the 2005-06 income year that is more than zero, the amount given by this subsection for the person and for that income year, and for each of the later income years before the 2010-11 income year, is the amount given by the formula— level increase + (year x 0.2 x initial level) – contents. Definitions of items in formula
4: In the formula,—
a: level increase
b: year
c: initial level
d: contents amount business environmental restoration account income year maximum payment
EK 23: Other definitions
Meaning of maximum account balance
1: In this subpart, maximum account balance
a: if the person does not satisfy section EK 2
b: if the person satisfies section EK 2 provision x tax rate. Definitions of items in formula
2: In the formula in subsection (1)(b)
a: provision
i: is of a type listed in schedule 6B
ii: is not of a type listed in schedule 6B
b: tax rate
i: is stated in schedule 1
ii: would apply to the person for the tax year if the person had sufficient taxable income. Meaning of environmental restoration account
3: In this subpart, environmental restoration account section EK 4 business Commissioner environmental restoration account income tax income year taxable income.
2: Subsection (1)
43: When calculation of base price adjustment required
In section EW 29
a: section EW 29(13)
b: in the item Defined in this Act: New Zealand resident, trustee New Zealand resident
44: Consideration when person exits from rules: accrued entitlement
Section EW 36(1)(b)(i)
45: Section EW 39 repealed
Section EW 39
46: Consideration when person exits from rules: accrued obligation
Section EW 41(1)(b)(i)
47: Consideration when person enters rules: accrued entitlement
In section EW 42 ss EH 24(3)(c), EH 50(1A), (2)
48: Section EW 44 repealed
Section EW 44
49: Section EX 55 repealed
Section EX 55
50: Disposal of trading stock
In section FB 3 (whether by way of exchange, or gift, or distribution in terms of a will or on an intestacy, or otherwise (whether by way of exchange, or otherwise, other than by a disposition of property that is not at market value because of the operation of any of sections FI 4 to FI 6
51: Rules for personal property lease asset during term of finance lease
1: In section FC 8B(2) lease term term of the lease
2: In section FC 8B(3) lease term term of the lease
52: Premiums paid to residents of Switzerland and the Netherlands
1: In the heading to section FC 17 and the Netherlands
2: Section FC 17(1)(c)
c: the insurer or other person is treated as being resident in Switzerland for the purposes of a double tax agreement between the government of New Zealand and the government of Switzerland.
53: Patent rights
1: The heading to section FF 8 Patent applications and patent rights
2: In section FF 8 patent rights patent applications with complete specifications or patent rights
3: Subsections (1) and (2)
54: Entities to which apportionment rule potentially applies
1: The heading to section FG 2 Entities to which interest deduction rules potentially apply
2: Section FG 2(1)
1: A taxpayer is not subject for a tax year to the interest apportionment rule in section FG 8 section FG 8B
a: is a non-resident who is not a company:
b: is a company that is a non-resident in which—
i: no person who is resident in New Zealand has a direct ownership interest that is equal to or greater than 50%:
ii: a non-resident has a direct ownership interest that, when aggregated with the direct ownership interests of persons associated with the non-resident, is equal to or greater than 50%:
c: is a company that is resident in New Zealand—
i: in which a non-resident has an ownership interest that is equal to or greater than 50%:
ii: of which a non-resident has control by any other means:
d: is the trustee of a non-qualifying trust for which 50% or more in value of the settlements on the trust is settled by—
i: a non-resident:
ii: persons who are associated with the non-resident.
3: Section FG 2(7)
55: Section FG 3 replaced
Section FG 3
FG 3: When interest apportioned under
section FG 8 section FG 8B
1: A taxpayer who is not excluded by section FG 2 section FG 8 section FG 8
a: at no time in the income year—
i: is a reporting bank for a New Zealand banking group:
ii: is part of a New Zealand banking group for the purpose of section FG 8C
b: has a New Zealand group debt percentage for the income year that—
i: is greater than 75%; and
ii: if the taxpayer is a company or a trustee, exceeds the number obtained by multiplying the worldwide group debt percentage of the taxpayer by 1.1.
2: A taxpayer who is not excluded by section FG 2 section FG 8B section FG 8B
a: at a time in the taxpayer's corresponding income year the taxpayer is the reporting bank for a New Zealand banking group; and
b: the New Zealand banking group has a New Zealand net equity, as defined in section FG 8G section FG 8H section FG 8E
56: Rules for calculating New Zealand group debt percentage
1: In section FG 4(12)(b) New Zealand parent. New Zealand parent; and
c: are not members of the New Zealand banking group of a registered bank.
2: In section FG 4(14C)(b)(iii) New Zealand parent. New Zealand parent; and
c: are not members of the New Zealand banking group of a registered bank.
3: In section FG 4(14D) paragraph (a)
aa: none of the taxpayer and the other companies is a member of a New Zealand banking group; and .
57: Apportionment of interest deductions
1: In the heading to section FG 8 —taxpayer not in New Zealand banking group deductions
2: In section FG 8(1) taxpayer is not in a New Zealand banking group and the if a
58: New sections FG 8B to FG 8J inserted
After section FG 8
FG 8B: Adjustment of annual total deduction—reporting bank
1: For a taxpayer that is a reporting bank and under section FG 3(2)
a: if the New Zealand banking group of the reporting bank has a group funding debt for the tax year that is not zero, the amount calculated using the formula— unadjusted annual total deduction –adjustments:
b: if the New Zealand banking group of the reporting bank has a group funding debt for the tax year of zero, the annual total deduction for the tax year that the taxpayer would have had in the absence of this section and section FG 3(2)
2: In the formula in subsection (1)(a)
a: unadjusted annual total deduction section FG 3(2)
b: adjustments subsection (4)
3: The group funding debt for a tax year for the New Zealand banking group of a reporting bank means the amount calculated using the formula— where—
SFI: is the sum of the amounts for the tax year, each of which is the financial value for the New Zealand banking group of interest-bearing debt calculated under generally accepted accounting practice for a group quarter day
FID: is the sum of the amounts for the tax year, each of which is the financial value for the New Zealand banking group, on a group quarter day, of financial arrangements—
a: for which the consolidated financial statements of the New Zealand banking group would show, in the corresponding income year of the reporting bank, a deduction—
i: under 1 or more of sections DB 6 to DB 8
ii: other than as a consequence of a fluctuation in the value of a currency of a country relative to the value of a currency of another country; and
b: that do not contribute to item SFI
FTE: is the sum of the amounts for the tax year, each of which is the financial value for the New Zealand banking group, on a group quarter day, of shares that contribute to item SFI
NQ: is the number of group quarter days in the corresponding income year of the registered bank.
4: For a measurement day in an income year of a reporting bank, the adjustment amount for a reporting bank is the amount calculated using the formula— where—
NET: is the net equity threshold for the New Zealand banking group for the measurement day
NZE: is the lesser of—
a: the net equity threshold for the New Zealand banking group for the measurement day:
b: the New Zealand net equity for the New Zealand banking group for the measurement day
I: is the financial value for the New Zealand banking group, on the last day of the income year, of expenditure that—
a: is incurred by a member of the New Zealand banking group in the income year; and
b: is an interest expense under generally accepted accounting practice, incurred other than in relation to a share that contributes to item SFI, or is a deduction referred to in paragraph (a) subclause (3)
GFD: is the group funding debt for the tax year for the New Zealand banking group
PD: is the number of days in the measurement period that corresponds to the measurement day
YD: is the number of days in the income year.
5: If this Act requires that the annual total deduction for a reporting bank for an income year be apportioned between 2 or more parts of the income year, the adjustment amount under subsection (4)
6: In this section, group quarter day
a: that is the last day of a quarter in the corresponding income year of the registered bank; and
b: on which the registered bank is a reporting bank.
FG 8C: New Zealand banking group of registered bank
1: The New Zealand banking group
a: a member under subsection (2) subsection (3) or (4)
b: not excluded by an election under subsection (8)
2: If the registered bank—
a: is resident in New Zealand, the registered bank is a member:
b: is not resident in New Zealand, a fixed establishment in New Zealand of the registered bank is treated as being a person who is—
i: separate from the registered bank; and
ii: a member.
3: A person who is a New Zealand resident is a potential member if—
a: the person satisfies subsection (5)
i: the registered bank is resident in New Zealand; and
ii: there is no non-resident who is an ultimate parent of the registered bank under subsection (9)
b: the person satisfies subsection (6)
i: the registered bank is a non-resident; and
ii: there is no non-resident who is an ultimate parent of the registered bank under subsection (9)
c: the person satisfies subsection (7) subsection (9)
4: A fixed establishment in New Zealand of a non-resident is treated as being a person who is separate from the non-resident and a potential member if—
a: the fixed establishment satisfies subsection (6)
i: the registered bank is a non-resident; and
ii: there is no non-resident who is an ultimate parent of the registered bank under subsection (9)
b: the fixed establishment satisfies subsection (7) subsection (9)
5: A person satisfies this subsection if,—
a: under generally accepted accounting practice, consolidated group accounts—
i: are required to include the person and the registered bank:
ii: would be required to include the person and the registered bank but for relevant materiality thresholds:
b: the person is in the same group of companies as the registered bank under section IG 1(2)
6: A person or fixed establishment satisfies this subsection if,—
a: under generally accepted accounting practice, the person or fixed establishment would be required to be included in consolidated group accounts with the registered bank if—
i: the registered bank were resident in New Zealand; and
ii: the relevant materiality thresholds were satisfied:
b: the person is in the same group of companies as the registered bank under section IG 1(2)
7: A person or fixed establishment satisfies this subsection if,—
a: under generally accepted accounting practice, the person or fixed establishment would be required to be included in consolidated group accounts with the ultimate parent of the registered bank if—
i: the ultimate parent were resident in New Zealand; and
ii: the relevant materiality thresholds were satisfied:
b: the person is in the same group of companies as the ultimate parent under section IG 1(2)
8: A reporting bank may elect under this subsection to exclude from the New Zealand banking group of the reporting bank—
a: a person or a fixed establishment, whose main activity is the providing of life insurance:
b: a person who—
i: is resident in New Zealand; and
ii: has a voting interest of 100% in a person who is excluded by an election under paragraph (a)
iii: does not have a main activity that is banking, financing or leasing; and
iv: does not have a main activity that involves the ownership or control of entities having a main activity of banking, financing or leasing:
c: a fixed establishment of a non-resident, if—
i: the non-resident has a voting interest of 100% in a person who is excluded by an election under paragraph (a)
ii: the fixed establishment has a main activity of financing the person who is excluded by the election under paragraph (a)
iii: the fixed establishment does not have a main activity that is banking, financing or leasing, other than the activity referred to in subparagraph (ii)
iv: the fixed establishment does not have a main activity that involves the ownership or control of entities having a main activity of banking, financing or leasing:
d: a person who—
i: is resident in New Zealand; and
ii: under generally accepted accounting practice is required for the making of financial reports to be included in consolidated group accounts with a person or fixed establishment who is excluded by an election under paragraph (a) or (b)
iii: does not have a main activity that is banking, financing or leasing; and
iv: does not have a main activity that involves the ownership or control of entities having a main activity of banking, financing or leasing.
9: For the purposes of this section, the ultimate parent of a registered bank is a company—
a: that has an ownership interest in the registered bank, calculated under section FG 2
b: in which no ownership interest, as calculated under section FG 2 section FG 2
10: For the purposes of this section, the ultimate parent of a fixed establishment in New Zealand of a registered bank is the registered bank.
FG 8D: Reporting bank for New Zealand banking group
1: For a New Zealand banking group that on a day includes a single registered bank, or includes no registered bank but includes a fixed establishment of a single registered bank, the reporting bank for the day is the registered bank.
2: For a New Zealand banking group that on a day includes more than 1 registered bank, the reporting bank for the day is—
a: the registered bank that first gives notice to the Commissioner of an election to be the reporting bank, if the Commissioner receives such a notice by the day that is 6 months after the end of the tax year in which the day occurs:
b: the registered bank chosen by the Commissioner, if paragraph (a)
3: For a New Zealand banking group that on a day includes no registered bank but includes fixed establishments of more than 1 registered bank, the reporting bank for the day is—
a: the registered bank that first gives notice to the Commissioner of an election to be the reporting bank, if the Commissioner receives such a notice by the day that is 6 months after the end of the tax year in which the day occurs:
b: the registered bank chosen by the Commissioner, if paragraph (a)
FG 8E: Measurement periods and measurement days
1: For the New Zealand banking group and income year of a reporting bank, the measurement periods
a: the quarters in the income year, if the reporting bank does not make an election under paragraph (b) or (c)
b: each calendar month of the income year, if the reporting bank elects that the New Zealand banking group have such measurement periods:
c: each day of the income year, if the reporting bank elects that the New Zealand banking group have such measurement periods.
2: For the New Zealand banking group and income year of a reporting bank, the measurement days subsection (1)(a) or (b)
3: If there is a change in the identity of the reporting bank for a New Zealand banking group, the measurement period corresponding to the first measurement day for the new reporting bank begins on the day after the last measurement day for the former reporting bank.
FG 8F: Financial value and regulatory value
1: In sections FG 8B to FG 8J financial value
a: related to the time; and
b: were prepared for external reporting purposes; and
c: were produced consistently with generally accepted accounting practice at the time by—
i: consolidating the financial statements for the members of the New Zealand banking group that are in the same group of companies; and
ii: if more than 1 consolidation is required under subparagraph (i)
2: In sections FG 8B to FG 8J regulatory value Reserve Bank of New Zealand Act 1989
FG 8G: New Zealand net equity of New Zealand banking group
1: The New Zealand net equity EQV – FRS – EID – UPB – INTG – CGA – REV – TXB – CEFA – NAFA – EOI – NOIA – AEQ – AEQI where—
EQV: is the sum of the following amounts for the New Zealand banking group:
a: the financial value for the measurement day of—
i: the shareholders' equity for the New Zealand banking group; and
ii: the branch equity relating to fixed establishments of the New Zealand banking group:
b: the financial value for the measurement day of shares, each of which—
i: is issued by a member of the taxpayer's New Zealand banking group; and
ii: does not contribute to the amount referred to in paragraph (a)
c: the financial value for the measurement day of financial arrangements, each of which is a loan, or the provision of funds by a non-resident to its fixed establishment that—
i: is not taken into account in the calculation of the group funding debt of the New Zealand banking group; and
ii: is made by a non-resident who is not a member of the New Zealand banking group and is associated with a member of the New Zealand banking group under section OD 7 or OD 8(3)
iii: is made to a member of the New Zealand banking group; and
iv: does not contribute to the amount referred to in paragraph (a)
v: does not give rise to interest expenditure other than as a result of a fluctuation in the value of a currency of a country relative to the value of a currency of another country; and
vi: does not relate to a supply of goods or services
FRS: is the financial value for the measurement day of fixed rate shares, each of which is—
a: issued by a member of the New Zealand banking group; and
b: owned by a person who is resident in New Zealand; and
c: included in the value of item EQV; and
d: issued by the member—
i: on or after 1 January 2005:
ii: before 1 January 2005, if the measurement period begins on or after 1 January 2010
EID: is the financial value for the measurement day of financial arrangements, each of which—
a: is taken into account under paragraph (a) or (b)
b: gives rise to a deduction for the tax year under 1 or more of sections DB 6 to DB 8
UPB: is the financial value for the measurement day of unvested policyholder benefit liabilities and policy-holder retained profits that contribute to the value of item EQV
INTG: is the financial value for the measurement day of intangible assets, other than—
a: goodwill relating to a business that is not banking, financing, leasing, or life insurance and that—
i: is acquired from a person who, at the time of acquisition, is not associated under section OD 7 or OD 8(3)
ii: relates to an entity that is acquired from a person who is not associated under section OD 7 or OD 8(3)
b: a film or film right:
c: property that is depreciable property or is expected to become depreciable property
CGA: is the sum for the measurement day of capital gain amounts, each of which arises for the 2004-05 or a later tax year from a transfer of an intangible asset between a member of the New Zealand banking group and a person who—
a: is not a member of the New Zealand banking group; and
b: is associated with a member of the New Zealand banking group under section OD 7 or OD 8(3)
REV: is the financial value for the measurement day of revaluation reserves that contribute to the value of item EQV
TXB: is the financial value for the measurement day of net future tax benefits that are taken into account in determining the value of item EQV and arise from—
a: net losses for the tax year:
b: losses carried forward from an earlier tax year:
c: timing or temporary differences to the extent that the items giving rise to the timing or temporary differences would contribute to a net loss for the tax year if the items were deductible in the tax year
CEFA: is the financial value for the measurement day of the credit enhancements provided by members of the New Zealand banking group, each of which is, for the purpose of the Capital Adequacy Framework that is issued by the Reserve Bank of New Zealand,—
a: a credit enhancement that is provided to an associated funds management and securitisation scheme of a non-member:
b: a credit enhancement that is provided to an affiliated insurance group that is a non-member and has not been expensed
NAFA: is the financial value for the measurement day of advances by members of the New Zealand banking group, each of which is, for the purpose of the Capital Adequacy Framework that is issued by the Reserve Bank of New Zealand, an advance of a capital nature to a connected person who is not a member of the New Zealand banking group
EOI: is the amount that would, if the New Zealand banking group included the potential members of the New Zealand banking group and before any set-off allowed under generally accepted accounting practice, be the financial value for the measurement day of shares in non-residents that—
a: are held by—
i: a member or potential member of the New Zealand banking group:
ii: a company resident in New Zealand in which a member or potential member of the New Zealand banking group holds a direct voting interest of 10% or more and that, in the income year, pays to the member or potential member a dividend to which a conduit tax relief credit is attached; and
b: are not interests in foreign investment funds for which the FIF income or loss is calculated using the comparative value method or the deemed rate of return method; and
c: are not shares in a grey list company that—
i: are listed on the official list of a recognised exchange; and
ii: are revenue account property; and
iii: would not be a sufficient interest in the offshore company if the class of the shares were the only class of share issued by the offshore company
NOIA: is the notional offshore investment amount for the New Zealand banking group for the income year of the reporting bank, as defined in subsection (4)
AEQ: is the financial value for the measurement day of interests, each of which is taken into account in calculating item EQV and is held by a person who—
a: is not a member of the New Zealand banking group; and
b: is not a member of the New Zealand banking group because of an election under section FG 8C(8)
c: is resident in New Zealand or holds the interest through a fixed establishment in New Zealand
AEQI: is the financial value for the measurement day of—
a: shares in persons who are not members of the New Zealand banking group because of an election under section FG 8C(8)
b: loans, other than on arm's-length terms, to persons who are not members of the New Zealand banking group because of an election under section FG 8C(8)
2: Subsection (3) subsection (1)
3: The value of the component is included in a single item for which the value of the component is not less than the value of the component for each of the other items.
4: The notional offshore investment amount where—
FTC: is the total for the tax year of foreign tax credits each of which—
a: is claimed as a credit against the income tax liability for the tax year of—
i: a member of the New Zealand banking group:
ii: a person who is excluded from the New Zealand banking group by an election under section FG 8C(7)
b: does not arise from attributed CFC income or from FIF income; and
c: does not arise from income derived before 1 July 2005
DMT: is the amount—
a: set by the Governor-General by Order in Council as the threshold amount for the application of this subsection; or
b: equal to $5,000,000, if no threshold amount is set under paragraph (a) and paragraph (c)
c: equal to $416,667 multiplied by the number of months beginning on or after 1 July 2005 in the corresponding income year for the reporting bank, if the corresponding income year includes that date and no threshold amount is set under paragraph (a)
CRT: is the rate of tax for companies referred to in schedule 1
IRR: is the amount—
a: set by the Governor-General by Order in Council as the interest rate of return for the purposes of this subsection; or
b: of 7% per year, if no interest rate of return is set under paragraph (a)
NM: is the number of months beginning on or after 1 July 2005 in the income year of the reporting bank for the New Zealand banking group.
5: The Governor-General may, from time to time by Order in Council,—
a: specify a type of instrument that is included in item EQV for the purposes of subsection (1)
b: specify a type of instrument that is not included in item EQV for the purposes of subsection (1)
c: set, replace, or repeal a figure for a threshold amount for a value of an instrument, or aggregate value of a type of instrument, held by a person or group of persons for the purposes of a specification under paragraph (a) or (b)
d: amend or delete a specification under paragraph (a) to (c)
e: set, replace, or repeal a figure for the threshold amount for the purposes of paragraph (a) subsection (4)
f: set, replace, or repeal a figure for the interest rate of return for the purposes of paragraph (a) subsection (4)
6: An Order in Council under subsection (5)
a: come into effect on or after 1 July 2005:
b: apply for measurement periods and quarters that—
i: are in the 2005-06 or a subsequent income year; and
ii: commence on or after 1 July 2005.
FG 8H: Net equity threshold
1: The net equity threshold 0.04 x (RWE – DEQ) where—
RWE: is the sum of the following values for the measurement day:
a: for an asset that is included in a balance sheet, the regulatory value of the asset:
b: for an exposure that is not included in a balance sheet, the regulatory value of the exposure:
c: for goodwill that is not taken into account in calculating item INTG in determining the New Zealand net equity of the New Zealand banking group, the financial value of the goodwill
DEQ: is the total of the regulatory values for the measurement day of items, other than item NOIA, that are deducted from item EQV in determining the New Zealand net equity of the New Zealand banking group.
2: For the purposes of subsection (1)
FG 8I: Valuation of debt and risk-weighted exposures
For the purposes of sections FG 8B to FG 8H
a: in New Zealand currency; and
b: using the close of trading spot exchange rate for the foreign currency on the day.
FG 8J: Treatment of temporary change in New Zealand net equity or net equity threshold
A change in a quantity that, but for this subsection, would produce a temporary change in the New Zealand net equity or net equity threshold of the New Zealand banking group of a registered bank does not affect the value of the New Zealand net equity or net equity threshold if the change is produced by an arrangement that has an effect of defeating the intent and application of sections FG 8B to FG 8I
59: Circumstances in which group excess interest allocation required
Section FH 1(1)
1: Subject to subsection (2) sections FH 5 to FH 8
a: for the imputation year that corresponds with the tax year—
i: is a dividend withholding payment account company or a conduit tax relief company; and
ii: is not a member of a New Zealand banking group for a registered bank; and
b: in the corresponding income year—
i: derives foreign attributed income:
ii: is paid a dividend from which the company must deduct an amount of dividend withholding payment or would have to deduct such an amount but for section NH 7
60: New subpart FI inserted
After subpart H of Part F, the following is inserted:
I: Effect of certain disposals and resulting acquisitions
FI 1: Disposals and resulting acquisitions to which subpart FI applies
1: The purpose of this subpart is to provide a disposal value in respect of the disposals and a cost price in respect of the resulting acquisitions of property for transactions to which subsections (2) and (3)
2: This subpart applies to a transaction that is of a type referred to in subsection (3)
3: This subpart applies to a transaction that is—
a: a distribution of property made by a trustee of a trust to a beneficiary of that trust:
b: a distribution in kind made by a company—
i: to a shareholder of that company, or to a person in a shareholding relationship with that company; and
ii: to which section CD 5
iii: that is a transfer of value to which section CD 3(1)(a)
c: a gift made by one person to another person:
d: a transfer of an estate of a deceased person to an administrator or executor of the estate occurring as a result of the death of a person:
e: a distribution of property made by an administrator, executor, or trustee of the estate of a deceased person to a person who is beneficially entitled to receive the property under a will or an intestacy:
f: a settlement of property by one trust on another trust, if authorised—
i: under a trust instrument as a power of advancement or resettlement:
ii: under section 41 of the Trustees Act 1956
FI 2: Disposal and resulting acquisition of property treated as occurring at market value
1: A transaction to which this subpart applies is to be treated as—
a: a disposal at market value by the person who disposes of the property; and
b: an acquisition at market value by the recipient of the property.
2: In this Act, the market value of property that a person receives from a transaction to which this subpart applies is the market value of the property for the person from whom the property was received.
FI 3: Date on which disposal and resulting acquisition treated as occurring
1: Unless subsection (2) section FI 1
2: On the happening of a transaction to which section FI 1(3)(d)
FI 4: Disposal and resulting acquisition of property by spouse or de facto partner on death of person
On the death of a person, a disposal under the terms of a will or intestacy to the surviving spouse or de facto partner of the deceased person of property to which section FI 1(3)(d) or (e)
a: a person who is not within the second degree of relationship to the deceased is beneficially entitled to property; and
b: the property is—
i: revenue account property:
ii: an interest in a FIF:
iii: a financial arrangement other than a financial arrangement in respect of which the deceased person or a trustee of the deceased person was a cash basis person:
iv: an item in respect of which a person has an amount of depreciation loss under section EE 1(2)
FI 5: Distributions of property to close relatives and others
1: This section applies to a transaction to which section FI 1(3)(e) section CW 36
a: the sole beneficiaries of the property of the deceased person:
b: beneficiaries of the deceased person and the sole beneficiaries of property of the deceased person that is—
i: revenue account property:
ii: an interest in a FIF:
iii: a financial arrangement other than a financial arrangement in respect of which the deceased person or a trustee of the deceased person was a cash basis person:
iv: an item in respect of which a person has an amount of depreciation loss under section EE 1(2)
2: A disposal and acquisition of property to which this section applies is treated as a transaction to which subpart FF applies, if—
a: the terms of the testamentary instrument or intestacy of the deceased person establish no life interest; and
b: other than for the period in which the property is subject to administration or executorship, the terms of the testamentary instrument or intestacy of the deceased person require that no property of the deceased person be held in trust; and
c: in a tax year during which the property is subject to administration or executorship or in which the property is held in trust, the net income of the estate is distributed beneficially to the maximum extent that is allowable under the terms of the will or intestacy and that is consistent with the legal obligations of the trustee.
FI 6: Disposal and resulting acquisition of timber
If a transaction to which section FI 1(3)(d) or (e)
FI 7: Relationship of
section FI 2(2)
1: This section applies to a transaction to which section FI 1(3)(d) or (e)
a: persons who are related within the second degree of relationship to the deceased person receive an interest in property that is land; and
b: the sale of the interest in the land, if sold by the deceased person, would result in income to the deceased person under any of sections CB 7, CB 8, CB 9, or CB 10
2: When this section applies, sections CB 7, CB 8, CB 9, and CB 10 section FI 1(3)(d) or (e)
3: If a disposal of an interest in land by an administrator or executor or beneficiary of the estate of a deceased person within 10 years of its acquisition by the deceased person results in income under any of sections CB 7, CB 8, CB 9, or CB 10
FI 8: Relationship of subpart FI to unexpired prepayments
If property subject to section EA 3 section FI 1(3)(d) or (e) section FI 2 section EA 3(4) to (7)
FI 9: Death occurring before 1 October 2005
1: This section applies to a transaction to which section FI 1
a: the death occurred before 1 October 2005; and
b: in the year in which the transaction occurred,—
i: each beneficiary of the deceased person is a New Zealand resident; and
ii: no amount of the income of the beneficiary is exempt income under section CW 36
c: the tax returns of the deceased person and of the resulting estate that are provided to the Commissioner in respect of the income year in which the death occurred are calculated on the basis that all the property of the deceased person was disposed of immediately before death—
i: at market values; or
ii: at the values given by subpart FF for property of that type; or
iii: at a combination of the values in subparagraphs (i) and (ii)
d: the administrator or executor adopted for taxation purposes the value referred to in paragraph (c)
2: For the purposes of the Income Tax Act 1994
3: Despite subsection (2) Income Tax Act 1994
FI 10: Value of property acquired by beneficiary of trust before 1 October 2005
1: This section applies to a transaction to which section FI 1
a: the transaction occurred before 1 October 2005; and
b: the beneficiary was a New Zealand resident when the beneficiary acquired the property; and
c: no amount of the income of the beneficiary is exempt income under section CW 36
d: the tax returns of the estate and of the beneficiary provided to the Commissioner in respect of the income year in which the transaction occurred are calculated on the basis that—
i: the distributed property was disposed of at market value; or
ii: the disposition of the estate was a disposition and acquisition of the property at values given by subpart FF for property of that type; or
iii: the value of the property was a combination of the values given by paragraphs (d)(i) or (ii)
e: the beneficiary adopted for taxation purposes the value referred to in paragraph (d)
2: For the purposes of the Income Tax Act 1994
3: Despite subsection (2) Income Tax Act 1994
FI 11: Disposal of certain financial arrangements on death
If property is disposed of in a transaction to which section FI 1(3)(d) or (e) section EW 60(1) section FI 2
61: Imputation: arrangement to obtain tax advantage
1: In section GC 22(4)(b) both a tax credit advantage and
2: Subsection (1)
62: Attributing interests in FIFs
Section GD 14(3)(c)
c: the consideration (if any) is not equal to the market value of the interest at the time.
63: Section GD 2 repealed
Section GD 2
64: Interpretation
In section HH 1(7) paragraph (b) the definition
65: Income of beneficiaries
In section HH 3(4)
66: Liability for tax payable by company left with insufficient assets
1: Section HK 11(1)(b)
b: an effect of that arrangement is that the company is unable to satisfy under this Act a liability (called in this section the tax liability
i: income tax:
ii: a civil penalty:
iii: an amount payable under Part 7 of the Tax Administration Act 1994 .
2: In section HK 11(4)(c) (exclusive of any late payment penalty or interest arising under this Act or the Tax Administration Act 1994 (excluding a civil penalty or an amount payable under Part 7 of the Tax Administration Act 1994
3: In section HK 11(4)(d)
a: any late payment penalty or interest arising under this Act or the Tax Administration Act 1994 a civil penalty or an amount payable under Part 7 of the Tax Administration Act 1994
b: (exclusive of any such late payment penalty or interest) (excluding the civil penalty or the amount payable under Part 7 of the Tax Administration Act 1994
67: Rebate for gifts of money
In section KC 5(1)(co) Trust. Trust:
cp: Habitat for Humanity New Zealand Limited.
68: Determination of amount of credit in certain cases
After section LB 1(1)(h)
hb: in the case of an imputation credit carried forward to a later income year under section LB 2(3C) section 177C of the Tax Administration Act 1994 .
69: Credit of tax for imputation credit
1: After section LB 2(2)
2B: Subsection (3)
a: a company:
b: a trustee (other than the Maori Trustee):
c: a Maori authority:
d: a taxpayer whose imputation credit giving rise to the credit of tax is category A income of the trustee of a group investment fund.
2: In section LB 2(3)
a: There is no refund to the taxpayer of any credit of tax under this section For a taxpayer referred to in subsection (2B)
b: in the definition of item b of the formula—
i: in subparagraph (iiia), year; and year.
ii: subparagraph (iv) is omitted.
3: After section LB 2(3A)
3B: For a taxpayer other than a taxpayer referred to in subsection (2B) subsection (2) subsection (3C)
3C: The remaining credit of tax for an income year is treated in the following ways, applied in the alphabetical order of the paragraphs so far as the credit of tax extends:
a: carried forward as a credit of tax to the next income year:
b: reduced by any amount extinguished under section 177C(5B) of the Tax Administration Act 1994
c: reduced by any amount credited against the taxpayer's income tax liability for that next income year:
d: treated under this subsection as a remaining credit of tax for that next income year.
70: Section LC 15 repealed
Section LC 15
71: Resident withholding tax deductions to be credited against income tax assessed
1: In the heading to section LD 3 deductions payments
2: In section LD 3(2)
a: deducted from paid in relation to
b: deduction payment
3: In section LD 3(2) deducted payments
72: Special rules for holding companies
In section LE 3(3)(e) are exempt income are exempt income other than
73: Amount of provisional tax payable
Section MB 2(1)(aa) (ab)
74: Section MB 6 replaced
Section MB 6
MB 6: Voluntary payments
A taxpayer may at any time make voluntary payments to the Commissioner as provisional tax of such amounts as the taxpayer thinks fit, being—
a: tax in respect of the taxpayer's income tax liability for a tax year:
b: tax in excess of the provisional tax payable by the taxpayer for a tax year:
c: tax in excess of the taxpayer's income tax liability for a tax year.
75: Credits arising to imputation credit account
1: After section ME 4(1)(c)
cb: the amount of any credit arising in the imputation credit account as a result of an election under section ME 9B(2)(a)(ii)
cc: the amount of any payment of additional income tax for which the company is liable under section ME 9B(6)
cd: the amount of any payment of additional income tax for which the company is liable under section ME 9C(7) .
2: After section ME 4(2)(b)
bb: in the case of a credit referred to in subsection (1)(cb)
bc: in the case of a credit referred to in subsection (1)(cc)
bd: in the case of a credit referred to in subsection (1)(cd) .
76: Debits arising to imputation credit account
1: After section ME 5(1)(f)
fb: the amount of any debit arising in the imputation credit account as a result of an election under section ME 9B(2)(a)(i) .
2: In section ME 5(1)(h) section LD 8(1)(a) section LD 8(1)(c)
3: After section ME 5(2)(f)
fb: in the case of a debit referred to in subsection (1)(fb) .
77: New sections ME 9B and ME 9C inserted
1: After section ME 9
ME 9B: Imputation credit account company leaving wholly-owned group
1: This section applies to an imputation credit account company (called the leaving company) if, at a time in the income year of the leaving company
a: there is a change in the ultimate owners of the leaving company; and
b: as a result of the change, the leaving company ceases to be a member of a wholly-owned group of companies (called the former group
c: the total amount of the available net losses from the previous tax year for the members of the former group exceeds $1,000,000.
2: If the leaving company at the time has a debit balance in its imputation credit account, the leaving company—
a: may elect that an amount that is not more than the debit balance be—
i: a debit in the imputation credit account of another imputation credit account company that is a member of the former group and for which there is no change in ultimate owners at the time; and
ii: a credit in the imputation credit account of the leaving company:
b: may elect to pay an amount of tax by way of additional income tax that is equal to—
i: the amount of the debit balance, if the leaving company makes no election under paragraph (a)
ii: the amount by which the debit balance exceeds the amount that is subject to the election under paragraph (a)
3: If the leaving company at the time is entitled to an amount in a pooling account or would be entitled, in the absence of section MD 2 section MD 1 subsection (4) excess entitlement
a: zero, if at the time the credit balance in the imputation credit account of the leaving company equals or exceeds the total of the following amounts:
i: the amount that would be the entitlement under section MD 1
ii: the amount in a tax pooling account that has been provided by or for the benefit of the leaving company and would exceed the liability at the time of the leaving company to pay income tax or provisional tax:
b: the total of the amounts referred to in paragraph (a)(i) and (ii)
c: the amount by which the credit balance in the imputation credit account of the leaving company at the time is exceeded by the total of the amounts referred to in paragraph (a)(i) and (ii) paragraphs (a) and (b)
4: If the leaving company at the time has an excess entitlement, the leaving company—
a: may elect that an amount that is not more than the excess tax payment for the company be—
i: treated as having been paid, as income tax or provisional tax, on behalf of another imputation credit account company that is a member of the former group and for which there is no change in ultimate owners at the time; and
ii: not treated as having been paid as income tax or provisional tax by the leaving company:
b: may elect to pay an amount of tax by way of additional income tax equal to—
i: the amount of the excess entitlement, if the leaving company makes no election under paragraph (a)
ii: the amount, by which the excess tax payment exceeds the amount that is subject to the election under paragraph (a)
5: A leaving company or a former group may satisfy a liability to pay additional income tax under subsection (2) or (4)
6: If the leaving company elects to pay an amount of additional income tax under subsection (2)(b) or (4)(b) subsection (5)
7: The former group is jointly liable with the leaving company for additional income tax payable under subsection (6)
8: A payment of additional income tax under subsection (2) or (4)
9: An election under subsection (2) or (4)
a: in a form the Commissioner may require; and
b: made by the leaving company; and
c: accompanied by notice of agreement from the company who receives the debit under subsection (2) subsection (4)
d: be made before the company leaves the group or within a further period that the Commissioner may allow if satisfied that the company had insufficient information to make an appropriate election at the time the company left the group.
10: In this section,—
a: an ultimate owner
i: who has an ownership interest in the company, calculated under section FG 2
ii: in whom no ownership interest, as calculated under section FG 2 section FG 2
b: excess tax payment
ME 9C: Imputation credit account company joining wholly-owned group
1: This section applies to an imputation credit account company (called the joining company
a: the joining company becomes a member of a wholly-owned group of companies (called the new group
b: the joining company was formerly a member of a wholly-owned group (called the former group
c: the total amount of the available net losses from the previous tax year for the members of the former group exceeds $1,000,000.
2: Subsection (3)
a: the joining company at the time has a debit balance in its imputation credit account; and
b: the debit balance includes debits (called the former group debits
i: that arose in the imputation credit account when the joining company was a member of the former group; and
ii: upon which additional income tax under section ME 9B(2)
3: The joining company must pay an amount of tax by way of additional income tax that is equal to the amount of the former group debits.
4: If the joining company at the time is entitled to an amount in a pooling account or would be entitled, in the absence of section MD 2 section MD 1 subsection (5) excess entitlement
a: zero, if at the time the credit balance in the imputation credit account of the joining company equals or exceeds the total of the following amounts:
i: the amount that would be the entitlement under section MD 1
ii: the amount in a tax pooling account that has been provided by or for the benefit of the joining company and would exceed the liability at the time of the joining company to pay income tax and provisional tax:
b: the total of the amounts referred to in paragraph (a)(i) and (ii)
c: the amount by which the credit balance in the imputation credit account of the joining company at the time is exceeded by the total of the amounts referred to in paragraph (a)(i) and (ii) paragraphs (a) and (b)
5: If the joining company at the time has an excess entitlement, the joining company must pay an amount of tax by way of additional income tax equal to the amount of the excess entitlement.
6: A joining company or a new group may satisfy a liability to pay additional income tax under subsection (3) or (5)
7: If the joining company must pay an amount of additional income tax under subsection (3) or (5) subsection (6)
8: The new group is jointly liable with the joining company for additional income tax payable under subsection (3) or (5)
9: A payment of additional income tax under subsection (3) or (5)
10: In this section,—
a: an ultimate owner
i: who has an ownership interest in the company, calculated under section FG 2
ii: in whom no ownership interest, as calculated under section FG 2 section FG 2
b: excess tax payment
2: Subsection (1)
78: Application of specific imputation provisions to consolidated imputation groups
After section ME 14(3)
3B: Sections ME 9B and ME 9C and sections 97, 101, 139B, 140B, 140D, and 180 of the Tax Administration Act 1994
a: it were a single company; and
b: each reference to a provision of this Act were a reference to the equivalent provision applicable to consolidated imputation groups; and
c: each reference to liability of a company for additional income tax, late payment penalty, or imputation penalty tax were (subject to the application of section HB 1(2) to (5)
79: Debits arising to dividend withholding payment account
In section MG 5(1)(e) section LD 8(1)(a) section LD 8(1)(c)
80: Policyholder credit account companies and dividend withholding payment credits
1: In section MG 8B(4)
a: in the definition of policyholder DWP ratio c dividend withholding payment credit account dividend withholding payment account
b: in the definition of reduced deficit debit c imputation credit account dividend withholding payment account
2: Subsection (1)
81: Deduction of resident withholding tax
1: The heading before section NF 2 Liability to pay resident withholding tax
2: The heading to section NF 2 Liability to pay resident withholding tax
3: Before section NF 2(1)
1A: A person is liable to pay to the Commissioner, in relation to a payment that is or includes resident withholding income, a tax (called resident withholding tax subsection (1) or (1B)
a: the person makes the payment and is required to make a deduction of resident withholding tax from the payment:
b: the person is an RWT proxy for the payer of the resident withholding income, the recipient of the resident withholding income, and the resident withholding income.
1AB: A person who makes a payment that is or includes resident withholding income must deduct resident withholding tax from the payment if the person is not excluded by the rest of this section from liability to make the deduction.
4: In section NF 2(1), the words before paragraph (a) are replaced by If a person makes a payment that is or includes resident withholding income and is required to deduct resident withholding tax from the payment, the person must make a deduction—
5: After section NF 2(1)
1B: A person who is an RWT proxy for a payer of resident withholding income and a payment of resident withholding income in the form of a dividend must pay to the Commissioner the amount of resident withholding tax given by the following formula: where—
a: is the appropriate rate of resident withholding tax, expressed as a percentage, specified in schedule 14, clause 1
b: is the amount paid to the recipient of the dividend.
82: New section NF 2AA inserted
After section NF 2
NF 2AA: Election to be RWT proxy
1: A person is an RWT proxy
a: the person gives to the Commissioner a notice of election under subsection (2)
b: the payer is a unit trust who is a non-resident; and
c: the recipient is a natural person or a trustee of a qualifying trust; and
d: the recipient has requested the person to act as an RWT proxy in relation to the payer and the resident withholding income; and
db: the person has agreed to act as an RWT proxy in relation to the recipient; and
e: the resident withholding income is a dividend; and
f: the payment is made while the election in the notice is effective.
2: A notice of election must be in writing and contain—
a: an election by the person to be an RWT proxy for dividends distributed by the payer; and
b: the name and postal address of the payer; and
c: the date from which the election is effective.
3: An election by a person to be an RWT proxy is effective from the date nominated in the notice of election until the later of the following:
a: the date nominated in a written notice of cancellation of the election that the Commissioner receives from the person:
b: the date on which the Commissioner receives from the person a written notice of cancellation of the election.
83: Election to apply higher rate of deduction
1: Section NF 2A(1)
1: A person entitled to receive a payment to which section NF 2(1) or (1B) schedule 14, clause 1(a), (b), or (c)
2: In section NF 2A(3)
a: each deduction each deduction or payment under section NF 2(1B)
b: the deduction the deduction or payment
84: Payment of deductions of resident withholding tax to Commissioner
After section NF 4(8)
9: For the purposes of this section, an RWT proxy who is required to pay resident withholding tax in relation to a payment of resident withholding income is treated as having deducted the resident withholding tax from the payment at the time of the payment.
85: Certificates of exemption
In section NF 9(1)(i) CW 43 CW 44
86: Payment and recovery of dividend withholding payment
In section NH 3(4)(b) penalty under section 150 late payment penalty under section 139B
87: Definitions
1: This section amends section OB 1
2: After the definition of additional capital additional income tax section ME 9B .
3: In paragraph (b)(ii) of the definition of beneficiary income section CC 3 section CC 3(2)
4: After the definition of child tax credit civil penalty section 3(1) of the Tax Administration Act 1994 .
5: After the definition of consolidation rules contaminant section 2(1) of the Resource Management Act 1991 .
6: The definition of diminished valu diminished value a + b – c where—
a: is the amount of expenditure—
a: on an improvement described in section DO 4
b: of a type described in section DB 37
b: is the total amount of income derived under section CB 24B(8)
c: is the total of every amount allowed as a deduction for the expenditure to any person—
a: in any earlier income year under this Act or an earlier Act:
b: in the income year under this Act, except an amount allowed in the income year under section DB 37 section DO 4C DO 4D DO 6 DP 3
7: In the definition of dispose destroy destroy:
f: in subpart FI (Effect of certain disposals and resulting acquisitions), means a disposal of property in the manner provided for in section FI 1 .
8: In the definition of eligible period
e: the composition of a subpart KD credit does not change, other than on the first, or as applicable, the last day .
9: After the definition of entitlement period environmental restoration account section EK 23 .
10: After the definition of expenditure on account of an employee exploration and development activities section CW 45B .
11: The definition of finance lease finance lease
a: when the person enters the lease, involves or is part of an arrangement that involves—
i: the transfer of the ownership of the asset to the lessee or an associate of the lessee during or at the end of the term of the lease:
ii: the lessee or an associate of the lessee having the option of acquiring the asset for an amount that is likely to be substantially lower than the asset's market value on the date of acquisition:
iii: a right of an associate of the lessee to acquire the asset, or a right of the lessor to require an associate of the lessee to acquire the asset, during the term of the lease under an arrangement that does not entitle the associate to receive all of the personal property lease payments that may fall due after the acquisition:
b: when the person enters the lease or from a later time, involves a term of the lease that is more than 75% of the asset's estimated useful life as defined in section EE 54 .
12: After the definition of financial statements financial value section FG 8F .
13: Paragraph (e) of the definition of fixed rate share
e: in sections FG 8G section LF 2(3) .
14: After the definition of gross tax deductions group funding debt section FG 8B .
15: After the definition of group of persons group quarter day section FG 8B(6) .
16: In the definition of interest section DB 1(1)(c) (Taxes, other than GST, and penalties)
17: In the definition of lessee's outstanding balance a – b + c.
18: In the definition of lessor's outstanding balance a – b + c.
19: After the definition of maturity maximum account balance section EK 23 maximum payment section EK 22 .
20: After the definition of maximum pooling value measurement day section FG 8E measurement period section FG 8E .
21: After the definition of net balance due net equity threshold section FG 8H .
22: In paragraph (a) of the definition of net loss amount written off by the Commissioner under section 177C(4) amount extinguished by the Commissioner under section 177C(5)
23: After the definition of New Zealand New Zealand banking group section FG 8C .
24: After the definition of New Zealand group debt percentage New Zealand net equity section FG 8G(1) .
25: After the definition of notional income tax liability notional offshore investment amount section FG 8G(4) .
26: After the definition of offshore development offshore permit area section CW 45B
27: After the definition of partnership net income patent application date .
28: The definition of payment period payment period .
29: After the definition of physical cost of production plant variety rights Plant Variety Rights Act 1987 .
30: After the definition of registered registered bank section 2 of the Reserve Bank of New Zealand Act 1989 .
31: After the definition of registered security regulatory value section FG 8F .
32: After the definition of replacement permit reporting bank section FG 8D .
33: In the definition of resident withholding tax Deduction of resident withholding tax Liability to pay resident withholding tax
34: After the definition of residual income tax resource consent section 2 of the Resource Management Act 1991 .
35: After the definition of royalty RWT proxy section NF 2AA .
36: After the definition of type ultimate owner
a: section ME 9B
b: section ME 9C .
37: Before the definition of unadjusted income tax liability ultimate parent section FG 8C .
88: Determination of residence of company
1: In section OE 2(1) that is not referred to in subsection (1B) A company
2: After section OE 2(1)
1B: For the purposes of this Act, a company acting as trustee of the Cook Islands National Superannuation Fund, as established by the Cook Islands National Superannuation Trust Deed under the Cook Islands National Superannuation Act 2000 (Cook Islands)
89: New schedule 6B inserted
After schedule 6 schedule 6B
90: Schedule 13—Month for payment of provisional tax and terminal tax
1: In schedule 13 ss EF 3, MB 4, MB 5A, MC 1, OB 1
2: In schedule 13, part A, clause 1 month preceding the balance date month of the balance date
91: Schedule 17—Depreciable intangible property
1: In schedule 17
3b: a patent application with a complete specification lodged on or after 1 April 2005
2: In schedule 17
11: plant variety rights granted under the Plant Variety Rights Act 1987
12: a right to use plant variety rights granted under the Plant Variety Rights Act 1987 .
92: Schedule 22A—Identified policy changes
1: In schedule 22A section DO 5
DZ 13: A deduction is allowed for expenditure of an amount given by section DO 4(3)(a) or (c) of the Income Tax Act 1994 section DO 4(1) of that Act
2: Subsection (1) commences on 1 April 2005.
93: Schedule 23 amended
1: In schedule 23
a: in the entry corresponding to section CN 4
i: in column 2, (3)(a) (3)(b) (3)(c)
ii: in column 3, FC 16(3) FC 16(4)-(6)
iii: in column 3, FC 16(4) FC 16(5) FC 16(6)
b: for section CN 4(4)(a) FC 16(2), (3)
2: In schedule 23
a: in the entry for section CQ 2 CG 6(1)(a)
b: in the entry for section CX 3 new
c: in the entry for section DT 10 DM 1(7)(a)
2: Amendments to Income Tax Act 1994
94: Income Tax Act 1994 This Part amends the Income Tax Act 1994
95: New section CB 16 inserted
The following is inserted after section CB 15
CB 16: Non-resident company involved in exploration and development activities
1: An amount of income derived by a non-resident company from exploration and development activities in an offshore permit area is exempt income if it is derived in the period that starts on 1 January 2004 and ends on 31 December 2009.
2: In this section,— exploration and development activities
a: operating a ship to provide seismic survey readings:
b: drilling an exploratory well or other well offshore permit area
a: in New Zealand; and
b: on the seaward side of the mean high-water mark; and
c: a permit area or part of a permit area.
96: Expenditure incurred by superannuation funds
1: After section DI 3(2)
2B: Subsection (2C)
a: for the 2000-01 income year, the balance date of the second superannuation fund is earlier than the balance date of the first superannuation fund; and
b: the first superannuation fund has incurred expenditure of a kind described in subsection (2)(b)
2C: Despite subsection (2)(c) subsection (2)(d) subsection (2)(b)
2: Subsection (1)
97: Expenditure to prevent or combat pollution of environment
1: In section DJ 10(1) industrial waste waste
2: Subsection (1)
a: the taxpayer, before 16 November 2004, makes a return of income, issues a notice of proposed adjustment or response notice, or requests a reassessment, that relates to the income year; and
b: the correctness of the tax position adopted by the taxpayer in the return, notice, or request depends on the interpretation of the meaning of industrial waste section DJ 10
c: the taxpayer's interpretation of industrial waste section DJ 10 subsection (1)
98: Expenditure on unsuccessful application for resource consent
1: In section DJ 14B(b) a resource consent that is depreciable property depreciable property, or allowed as a deduction,
2: Subsection (1)
99: Entities to which apportionment rule potentially applies
1: The heading to section FG 2 Entities to which interest deduction rules potentially apply
2: Section FG 2(1)
1: A taxpayer is not subject for a tax year to the interest apportionment rule in section FG 8 section FG 8B
a: is a non-resident who is not a company:
b: is a company that is a non-resident in which—
i: no person who is resident in New Zealand has a direct ownership interest that is equal to or greater than 50%:
ii: a non-resident has a direct ownership interest that, when aggregated with the direct ownership interests of persons associated with the non-resident, is equal to or greater than 50%:
c: is a company that is resident in New Zealand—
i: in which a non-resident has an ownership interest that is equal to or greater than 50%:
ii: of which a non-resident has control by any other means:
d: is the trustee of a non-qualifying trust for which 50% or more in value of the settlements on the trust is settled by—
i: a non-resident:
ii: persons who are associated with the non-resident.
3: Section FG 2(7)
100: Section FG 3 Section FG 3
FG 3: When interest apportioned under
section FG 8 section FG 8B
1: A taxpayer who is not excluded by section FG 2 section FG 8 section FG 8
a: at no time in the income year—
i: is a reporting bank for a New Zealand banking group:
ii: is part of a New Zealand banking group for the purpose of section FG 8C
b: has a New Zealand group debt percentage for the income year that—
i: is greater than 75%; and
ii: if the taxpayer is a company or a trustee, exceeds the number obtained by multiplying the worldwide group debt percentage of the taxpayer by 1.1.
2: A taxpayer who is not excluded by section FG 2 section FG 8B section FG 8B
a: at a time in the taxpayer's corresponding income year the taxpayer is the reporting bank for a New Zealand banking group; and
b: the New Zealand banking group has a New Zealand net equity, as defined in section FG 8G section FG 8H section FG 8E
101: Rules for calculating New Zealand group debt percentage
1: In section FG 4(12)(b) New Zealand parent. New Zealand parent; and
c: are not members of a New Zealand banking group for a registered bank.
2: In section FG 4(14C)(b)(iii) New Zealand parent. New Zealand parent; and
c: are not members of a New Zealand banking group for a registered bank.
3: In section FG 4(14D)
aa: none of the taxpayer and the other companies is a member of a New Zealand banking group; and .
102: Apportionment of interest deductions
1: In the heading to section FG 8 —taxpayer not in New Zealand banking group deductions
2: In section FG 8(1) taxpayer is not in a New Zealand banking group and the if a
103: New
sections FG 8B to FG 8J After section FG 8
FG 8B: Adjustment of annual total deduction—reporting bank
1: For a taxpayer that is a reporting bank and under section FG 3(2)
a: if the New Zealand banking group of the reporting bank has a group funding debt for the tax year that is not zero, the amount calculated using the formula— unadjusted annual total deduction – adjustments:
b: if the New Zealand banking group of the reporting bank has a group funding debt for the tax year of zero, the annual total deduction for the tax year that the taxpayer would have had in the absence of this section and section FG 3(2)
2: In the formula in subsection (1)(a)
a: unadjusted annual total deduction section FG 3(2)
b: adjustments subsection (4)
3: The group funding debt where—
SFI: is the sum of the amounts for the tax year, each of which is the financial value for the New Zealand banking group of interest-bearing debt calculated under generally accepted accounting practice for a group quarter day
FID: is the sum of the amounts for the tax year, each of which is the financial value for the New Zealand banking group, on a group quarter day, of financial arrangements—
a: for which the consolidated financial statements of the New Zealand banking group would show, in the corresponding income year of the reporting bank, a deduction—
i: under 1 or more of sections DD 1(1)(b), DD 1(2) to (4), and DD 3
ii: other than as a consequence of a fluctuation in the value of a currency of a country relative to the value of a currency of another country; and
b: that do not contribute to item SFI
FTE: is the sum of the amounts for the tax year, each of which is the financial value for the New Zealand banking group, on a group quarter day, of shares that contribute to item SFI
NQ: is the number of group quarter days in the corresponding income year of the registered bank.
4: For a measurement day in an income year of a reporting bank, the adjustment amount for a reporting bank is the amount calculated using the formula where—
NET: is the net equity threshold for the New Zealand banking group for the measurement day
NZE: is the lesser of—
a: the net equity threshold for the New Zealand banking group for the measurement day:
b: the New Zealand net equity for the New Zealand banking group for the measurement day
I: is the financial value for the New Zealand banking group, on the last day of the income year, of expenditure that—
a: is incurred by a member of the New Zealand banking group in the income year; and
b: is an interest expense under generally accepted accounting practice, incurred other than in relation to a share that contributes to item SFI, or is a deduction referred to in paragraph (a) subclause (3)
GFD: is the group funding debt for the tax year for the New Zealand banking group
PD: is the number of days in the measurement period that corresponds to the measurement day
YD: is the number of days in the income year.
5: In this section, group quarter day
a: that is the last day of a quarter in the corresponding income year of the registered bank; and
b: on which the registered bank is a reporting bank.
FG 8C: New Zealand banking group of registered bank
1: The New Zealand banking group of a registered bank for a measurement period consists of every person or fixed establishment that on the measurement day for the measurement period is—
a: a member under subsection (2) subsection (3) or (4)
b: not excluded by an election under subsection (8)
2: If the registered bank—
a: is resident in New Zealand, the registered bank is a member:
b: is not resident in New Zealand, a fixed establishment in New Zealand of the registered bank is treated as being a person who is—
i: separate from the registered bank; and
ii: a member.
3: A person who is a New Zealand resident is a potential member, if—
a: the person satisfies subsection (5)
i: the registered bank is resident in New Zealand; and
ii: there is no non-resident who is an ultimate parent of the registered bank under subsection (9)
b: the person satisfies subsection (6)
i: the registered bank is a non-resident; and
ii: there is no non-resident who is an ultimate parent of the registered bank under subsection (9)
c: the person satisfies subsection (7) subsection (9)
4: A fixed establishment in New Zealand of a non-resident is treated as being a person who is separate from the non-resident and a potential member if—
a: the fixed establishment satisfies subsection (6)
i: the registered bank is a non-resident; and
ii: there is no non-resident who is an ultimate parent of the registered bank under subsection (9)
b: the fixed establishment satisfies subsection (7) subsection (9)
5: A person satisfies this subsection if—
a: under generally accepted accounting practice, consolidated group accounts—
i: are required to include the person and the registered bank:
ii: would be required to include the person and the registered bank but for relevant materiality thresholds:
b: the person is in the same group of companies as the registered bank under section IG 1(2)
6: A person or fixed establishment satisfies this subsection if—
a: under generally accepted accounting practice, the person or fixed establishment would be required to be included in consolidated group accounts with the registered bank if—
i: the registered bank were resident in New Zealand; and
ii: the relevant materiality thresholds were satisfied:
b: the person is in the same group of companies as the registered bank under section IG 1(2)
7: A person or fixed establishment satisfies this subsection if—
a: under generally accepted accounting practice, the person or fixed establishment would be required to be included in consolidated group accounts with the ultimate parent of the registered bank if—
i: the ultimate parent were resident in New Zealand; and
ii: the relevant materiality thresholds were satisfied:
b: the person is in the same group of companies as the ultimate parent under section IG 1(2)
8: A reporting bank may elect under this subsection to exclude from the New Zealand banking group of the reporting hank—
a: a person or fixed establishment whose main activity is the providing of life insurance:
b: a person who—
i: is resident in New Zealand; and
ii: has a voting interest of 100% in a person who is excluded by an election under paragraph (a)
iii: does not have a main activity that is banking, financing or leasing; and
iv: does not have a main activity that involves the ownership or control of entities having a main activity of banking, financing or leasing:
c: a fixed establishment of a non-resident, if—
i: the non-resident has a voting interest of 100% in a person who is excluded by an election under paragraph (a)
ii: the fixed establishment has a main activity of financing the person who is excluded by the election under paragraph (a)
iii: the fixed establishment does not have a main activity that is banking, financing or leasing, other than the activity referred to in subparagraph (ii)
iv: the fixed establishment does not have a main activity that involves the ownership or control of entities having a main activity of banking, financing or leasing:
d: a person who—
i: is resident in New Zealand; and
ii: under generally accepted accounting practice is required for the making of financial reports to be included in consolidated group accounts with a person or fixed establishment who is excluded by an election under paragraph (a) or (b)
iii: does not have a main activity that is banking, financing or leasing; and
iv: does not have a main activity that involves the ownership or control of entities having a main activity of banking, financing or leasing.
9: For the purposes of this section, the ultimate parent
a: that has an ownership interest in the registered bank, calculated under section FG 2
b: in which no ownership interest, as calculated under section FG 2 section FG 2
10: For the purposes of this section, the ultimate parent
FG 8D: Reporting bank for New Zealand banking group
1: For a New Zealand banking group that on a day includes a single registered bank, or includes no registered bank but includes a fixed establishment of a single registered bank, the reporting bank for the day is the registered bank.
2: For a New Zealand banking group that on a day includes more than 1 registered bank, the reporting bank for the day is—
a: the registered bank that first gives notice to the Commissioner of an election to be the reporting bank, if the Commissioner receives such a notice by the day that is 6 months after the end of the tax year in which the day occurs:
b: the registered bank chosen by the Commissioner, if paragraph (a)
3: For a New Zealand banking group that on a day includes no registered bank but includes fixed establishments of more than 1 registered bank, the reporting bank for the day is—
a: the registered bank that first gives notice to the Commissioner of an election to be the reporting bank, if the Commissioner receives such a notice by the day that is 6 months after the end of the tax year in which the day occurs:
b: the registered bank chosen by the Commissioner, if paragraph (a)
FG 8E: Measurement periods and measurement days
1: For the New Zealand banking group and income year of a reporting bank, the measurement periods
a: the quarters in the income year, if the reporting bank does not make an election under paragraph (b) or (c)
b: each calendar month of the income year, if the reporting bank elects that the New Zealand banking group have such measurement periods:
c: each day of the income year, if the reporting bank elects that the New Zealand banking group have such measurement periods.
2: For the New Zealand banking group and income year of a reporting bank, the measurement days are each last day of each measurement period subsection (1)(a) or (b)
3: If there is a change in the identity of the reporting bank for a tax year for a New Zealand banking group, the measurement period corresponding to the first measurement day for the new reporting bank begins on the day after the last measurement day for the former reporting bank.
FG 8F: Financial value and regulatory value
1: In sections FG 8B to FG 8J
a: related to the time; and
b: were prepared for external reporting purposes; and
c: were produced consistently with generally accepted accounting practice at the time by—
i: consolidating the financial statements for the members of the New Zealand banking group that are in the same group of companies; and
ii: if more than 1 consolidation is required under subparagraph (i)
2: In sections FG 8B to FG 8J regulatory value Reserve Bank of New Zealand Act 1989
FG 8G: New Zealand net equity of New Zealand banking group
1: The New Zealand net equity EQV – FRS – EID – UPB – INTG – CGA – REV – TXB – CEFA – NAFA – EOI – NOIA – AEQ – AEQI where—
EQV: is the sum of the following amounts for the New Zealand banking group:
a: the financial value for the measurement day of—
i: the shareholders' equity for the New Zealand banking group; and
ii: the branch equity relating to fixed establishments of the New Zealand banking group:
b: the financial value for the measurement day of shares, each of which—
i: is issued by a member of the taxpayer's New Zealand banking group; and
ii: does not contribute to the amount referred to in paragraph (a)
c: the financial value for the measurement day of financial arrangements, each of which is a loan, or the provision of funds by a non-resident to its fixed establishment that—
i: is not taken into account in the calculation of the group funding debt of the New Zealand banking group; and
ii: is made by a non-resident who is not a member of the New Zealand banking group and is associated with a member of the New Zealand banking group under section OD 7 or OD 8(3)
iii: is made to a member of the New Zealand banking group; and
iv: does not contribute to the amount referred to in paragraph (a)
v: does not give rise to interest expenditure other than as a result of a fluctuation in the value of a currency of a country relative to the value of a currency of another country; and
vi: does not relate to a supply of goods or services
FRS: is the financial value for the measurement day of fixed rate shares, each of which is—
a: issued by a member of the New Zealand banking group; and
b: owned by a person who is resident in New Zealand; and
c: included in the value of item EQV; and
d: issued by the member—
i: on or after 1 January 2005:
ii: before 1 January 2005, if the measurement period begins on or after 1 January 2010
EID: is the financial value for the measurement day of financial arrangements, each of which—
a: is taken into account under paragraph (a) or (b)
b: gives rise to a deduction for the tax year under 1 or more of sections DB 6 to DB 8
UPB: is the financial value for the measurement day of unvested policyholder benefit liabilities and policy-holder retained profits that contribute to the value of item EQV
INTG: is the financial value for the measurement day of intangible assets, other than—
a: goodwill relating to a business that is not banking, financing, leasing, or life insurance and that—
i: is acquired from a person who, at the time of acquisition, is not associated under section OD 7 or OD 8(3)
ii: relates to an entity that is acquired from a person who is not associated under section OD 7 or OD 8(3)
b: a film or film right:
c: property that is depreciable property or is expected to become depreciable property
CGA: is the sum for the measurement day of capital gain amounts, each of which arises for the 2004-05 or a later tax year from a transfer of an intangible asset between a member of the New Zealand banking group and a person who—
a: is not a member of the New Zealand banking group; and
b: is associated with a member of the New Zealand banking group under section OD 7 or OD 8(3)
REV: is the financial value for the measurement day of revaluation reserves that contribute to the value of item EQV
TXB: is the financial value for the measurement day of net future tax benefits that are taken into account in determining the value of item EQV and arise from—
a: net losses for the tax year:
b: losses carried forward from an earlier tax year:
c: timing or temporary differences to the extent that the items giving rise to the timing or temporary differences would contribute to a net loss for the tax year if the items were deductible in the tax year
CEFA: is the financial value for the measurement day of the credit enhancements provided by members of the New Zealand banking group, each of which is, for the purpose of the Capital Adequacy Framework that is issued by the Reserve Bank of New Zealand,—
a: a credit enhancement that is provided to an associated funds management and securitisation scheme of a non-member:
b: a credit enhancement that is provided to an affiliated insurance group that is a non-member and has not been expensed
NAFA: is the financial value for the measurement day of advances by members of the New Zealand banking group, each of which is, for the purpose of the Capital Adequacy Framework that is issued by the Reserve Bank of New Zealand, an advance of a capital nature to a connected person who is not a member of the New Zealand banking group
EOI: is the amount that would, if the New Zealand banking group included the potential members of the New Zealand banking group and before any set-off allowed under generally accepted accounting practice, be the financial value for the measurement day of shares in non-residents that—
a: are held by—
i: a member or potential member of the New Zealand banking group:
ii: a company resident in New Zealand in which a member or potential member of the New Zealand banking group holds a direct voting interest of 10% or more and that, in the income year, pays to the member or potential member a dividend to which a conduit tax relief credit is attached; and
b: are not interests in foreign investment funds for which the FIF income or loss is calculated using the comparative value method or the deemed rate of return method; and
c: are not shares in a grey list company that—
i: are listed on the official list of a recognised exchange; and
ii: are revenue account property; and
iii: would not be a sufficient interest in the offshore company if the class of the shares were the only class of share issued by the offshore company
NOIA: is the notional offshore investment amount for the New Zealand banking group for the income year of the reporting bank, as defined in subsection (4)
AEQ: is the financial value for the measurement day of interests, each of which is taken into account in calculating item EQV and is held by a person who—
a: is not a member of the New Zealand banking group; and
b: is not a member of the New Zealand banking group because of an election under section FG 8C(8)
c: is resident in New Zealand or holds the interest through a fixed establishment in New Zealand
AEQI: is the financial value for the measurement day of—
a: shares in persons who are not members of the New Zealand banking group because of an election under section FG 8C(8)
b: loans, other than on arm's-length terms, to persons who are not members of the New Zealand banking group because of an election under section FG 8C(8)
2: Subsection (3) subsection (1)
3: The value of the component is included in a single item for which the value of the component is not less than the value of the component for each of the other items.
4: The notional offshore investment amount where—
FTC: is the total for the tax year of foreign tax credits each of which—
a: is claimed as a credit against the income tax liability for the tax year of—
i: a member of the New Zealand banking group:
ii: a person who is excluded from the New Zealand banking group by an election under section FG 8C(7)
b: does not arise from attributed CFC income or from FIF income; and
c: does not arise from income derived before 1 July 2005
DMT: is the amount—
a: set by the Governor-General by Order in Council as the threshold amount for the application of this subsection; or
b: equal to $5,000,000, if no threshold amount is set under paragraph (a), and paragraph (c)
c: equal to $416,667 multiplied by the number of months beginning on or after 1 July 2005 in the corresponding income year for the reporting bank, if the corresponding income year includes that date and no threshold amount is set under paragraph (a)
CRT: is the rate of tax for companies referred to in Schedule 1
IRR: is the amount—
a: set by the Governor-General by Order in Council as the interest rate of return for the purposes of this subsection; or
b: of 7% per year, if no interest rate of return is set under paragraph (a)
NM: is the number of months beginning on or after 1 July 2005 in the income year of the reporting bank for the New Zealand banking group.
5: The Governor-General may, from time to time by Order in Council,—
a: specify a type of instrument that is included in item EQV for the purposes of subsection (1)
b: specify a type of instrument that is not included in item EQV for the purposes of subsection (1)
c: set, replace, or repeal a figure for a threshold amount for a value of an instrument, or aggregate value of a type of instrument, held by a person or group of persons for the purposes of a specification under paragraph (a) or (b)
d: amend or delete a specification under paragraph (a) to (c)
e: set, replace, or repeal a figure for the threshold amount for the purposes of paragraph (a) subsection (4)
f: set, replace, or repeal a figure for the interest rate of return for the purposes of paragraph (a) subsection (4)
6: An Order in Council under subsection (5)
a: come into effect on or after 1 July 2005:
b: apply for measurement periods and quarters that commence on or after 1 July 2005.
FG 8H: Net equity threshold
1: The net equity threshold 0.04 x (RWE – DEQ) where—
RWE: is the sum of the following values for the measurement day:
a: for an asset that is included in a balance sheet, the regulatory value of the asset:
b: for an exposure that is not included in a balance sheet, the regulatory value of the exposure:
c: for goodwill that is not taken into account in calculating item INTG in determining the New Zealand net equity of the New Zealand banking group, the financial value of the goodwill
DEQ: is the total of the regulatory values for the measurement day of items that are—
a: excluded from the calculation of item NOIA; and
b: deducted from item EQV in determining the New Zealand net equity of the New Zealand banking group.
2: For the purposes of subsection (1)
FG 8I: Valuation of debt and risk-weighted exposures
For the purposes of sections FG 8B to FG 8H
a: in New Zealand currency; and
b: using the close of trading spot exchange rate for the foreign currency on the day.
FG 8J: Treatment of temporary change in New Zealand net equity or net equity threshold
A change in a quantity that, but for this subsection, would produce a temporary change in the New Zealand net equity or net equity threshold of the New Zealand banking group of a registered bank does not affect the value of the New Zealand net equity or net equity threshold if the change is produced by an arrangement that has an effect of defeating the intent and application of sections FG 8B to FG 8I
104: Circumstances in which group excess interest allocation required
Section FH 1(1)
1: Subject to subsection (2) sections FH 5 to FH 8
a: for the imputation year that corresponds with the tax year—
i: is a dividend withholding payment account company or a conduit tax relief company; and
ii: is not a member of a New Zealand banking group for a registered bank; and
b: in the corresponding income year—
i: derives foreign attributed income:
ii: is paid a dividend from which the company must deduct an amount of dividend withholding payment or would have to deduct such an amount but for section NH 7
105: Imputation-arrangement to obtain tax advantage
In section GC 22(4)(b) both a tax credit advantage and
106: Resident withholding tax deductions to be credited against income tax assessed
1: In the heading to section LD 3 deductions payments
2: In section LD 3(2)
a: deducted from paid in relation to
b: deduction payment
3: In section LD 3(2) deducted payments
107: Section MB 6
1: Section MB 6
MB 6: Voluntary payments
A taxpayer may at any time make voluntary payments to the Commissioner as provisional tax of such amounts as the taxpayer thinks fit, being—
a: tax in respect of the taxpayer's income tax liability for a tax year:
b: tax in excess of the provisional tax payable by the taxpayer for a tax year:
c: tax in excess of the taxpayer's income tax liability for a tax year.
2: Subsection (1)
108: Credits arising to imputation credit account
1: After section ME 4(1)(c)
cb: the amount of any credit arising in the imputation credit account as a result of an election under section ME 9B(2)(a)(ii)
cc: the amount of any payment of additional income tax for which the company is liable under section ME 9B(6)
cd: the amount of any payment of additional income tax for which the company is liable under section ME 9C(7) .
2: After section ME 4(2)(b)
bb: in the case of a credit referred to in subsection (1)(cb)
bc: in the case of a credit referred to in subsection (1)(cc)
bd: in the case of a credit referred to in subsection (1)(cd) .
109: Debits arising to imputation credit account
1: After section ME 5(1)(f)
fb: the amount of any debit arising in the imputation credit account as a result of an election under section ME 9B(2)(a)(i) .
2: In section ME 5(1)(h) section LD 8(1)(a) section LD 8(1)(c)
3: After section ME 5(2)(f)
fb: in the case of a debit referred to in subsection (1)(fb) .
110: New
sections ME 9B and ME 9C
1: After section ME 9
ME 9B: Imputation credit account company leaving wholly-owned group
1: This section applies to an imputation credit account company (called the leaving company
a: there is a change in the ultimate owners of the leaving company; and
b: as a result of the change, the leaving company ceases to be a member of a wholly-owned group of companies (called the former group
c: the total amount of the available net losses from the previous tax year for the members of the former group exceeds $1,000,000.
2: If the leaving company at the time has a debit balance in its imputation credit account, the leaving company—
a: may elect that an amount that is not more than the debit balance be—
i: a debit in the imputation credit account of another imputation credit account company that is a member of the former group and for which there is no change in ultimate owners at the time; and
ii: a credit in the imputation credit account of the leaving company:
b: may elect to pay an amount of tax by way of additional income tax that is equal to—
i: the amount of the debit balance, if the leaving company makes no election under paragraph (a)
ii: the amount by which the debit balance exceeds the amount that is subject to the election under paragraph (a)
3: If the leaving company at the time is entitled to an amount in a pooling account or would be entitled, in the absence of section MD 2 section MD 1 subsection (4) excess entitlement
a: zero, if at the time the credit balance in the imputation credit account of the leaving company equals or exceeds the total of the following amounts:
i: the amount that would be the entitlement under section MD 1
ii: the amount in a tax pooling account that has been provided by or for the benefit of the leaving company and would exceed the liability at the time of the leaving company to pay income tax or provisional tax:
b: the total of the amounts referred to in paragraph (a)(i) and (ii)
c: the amount by which the credit balance in the imputation credit account of the leaving company at the time is exceeded by the total of the amounts referred to in paragraph (a)(i) and (ii) paragraphs (a) and (b)
4: If the leaving company at the time has an excess entitlement, the leaving company—
a: may elect that an amount that is not more than the excess tax payment for the company be—
i: treated as having been paid, as income tax or provisional tax, on behalf of another imputation credit account company that is a member of the former group and for which there is no change in ultimate owners at the time; and
ii: not treated as having been paid as income tax or provisional tax by the leaving company:
b: may elect to pay an amount of tax by way of additional income tax equal to—
i: the amount of the excess entitlement, if the leaving company makes no election under paragraph (a)
ii: the amount by which the excess tax payment exceeds the amount that is subject to the election under paragraph (a)
5: A leaving company or a former group may satisfy a liability to pay additional income tax under subsection (2) or (4)
6: If the leaving company elects to pay an amount of additional income tax under subsection (2)(b) or (4)(b) subsection (5)
7: The former group is jointly liable with the leaving company for additional income tax payable under subsection (6)
8: A payment of additional income tax under subsection (2) or (4)
9: An election under subsection (2) or (4)
a: in a form the Commissioner may require; and
b: made by the leaving company; and
c: accompanied by notice of agreement from the company who receives the debit under subsection (2) subsection (4)
d: be made before the company leaves the group or within a further period that the Commissioner may allow if satisfied that the company had insufficient information to make an appropriate election at the time the company left the group.
10: In this section,—
a: an ultimate owner
i: who has an ownership interest in the company, calculated under section FG 2
ii: in whom no ownership interest, as calculated under section FG 2 section FG 2
b: excess tax payment
ME 9C: Imputation credit account company joining wholly-owned group
1: This section applies to an imputation credit account company (called the joining company
a: the joining company becomes a member of a wholly-owned group of companies (called the new group
b: the joining company was formerly a member of a wholly-owned group (called the former group
c: the total amount of the available net losses from the previous tax year for the members of the former group exceeds $1,000,000.
2: Subsection (3)
a: the joining company at the time has a debit balance in its imputation credit account; and
b: the debit balance includes debits (called the former group debits
i: that arose in the imputation credit account when the joining company was a member of the former group; and
ii: upon which additional income tax under section ME 9B(2)
3: The joining company must pay an amount of tax by way of additional income tax that is equal to the amount of the former group debits.
4: If the joining company at the time is entitled to an amount in a pooling account or would be entitled, in the absence of section MD 2 section MD 1 subsection (5) excess entitlement
a: zero, if at the time the credit balance in the imputation credit account of the joining company equals or exceeds the total of the following amounts:
i: the amount that would be the entitlement under section MD 1
ii: the amount in a tax pooling account that has been provided by or for the benefit of the joining company to pay income tax and provisional tax and would exceed the liability at the time of the joining company:
b: the total of the amounts referred to in paragraph (a)(i) and (ii)
c: the amount by which the credit balance in the imputation credit account of the joining company at the time is exceeded by the total of the amounts referred to in paragraph (a)(i) and (ii) paragraphs (a) and (b)
5: If the joining company at the time has an excess entitlement, the joining company must pay an amount of tax by way of additional income tax equal to the amount of the excess entitlement.
6: A joining company or a new group may satisfy a liability to pay additional income tax under subsection (3) or (5)
7: If the joining company must pay an amount of additional income tax under subsection (3) or (5) subsection (6)
8: The new group is jointly liable with the joining company for additional income tax payable under subsection (3) or (5)
9: A payment of additional income tax under subsection (3) or (5)
10: In this section,—
a: an ultimate owner
i: who has an ownership interest in the company, calculated under section FG 2
ii: in whom no ownership interest, as calculated under section FG 2 section FG 2
b: excess tax payment
2: Subsection (1)
111: Application of specific imputation provisions to consolidated imputation groups
After section ME 14(3)
3B: Sections ME 9B and ME 9C and sections 97, 101, 139B, 140B, 140D, and 180 of the Tax Administration Act 1994
a: it were a single company; and
b: each reference to a provision of this Act were a reference to the equivalent provision applicable to consolidated imputation groups; and
c: each reference to liability of a company for additional income tax, late payment penalty, or imputation penalty tax were (subject to the application of section HB 1(2) to (5)
112: Deduction of resident withholding tax
1: The heading before section NF 2 Liability to pay resident withholding tax
2: The heading to section NF 2 Liability to pay resident withholding tax
3: Before section NF 2(1)
1A: A person is liable to pay to the Commissioner, in relation to a payment that is or includes resident withholding income, a tax (called resident withholding tax subsection (1) or (1B)
a: the person makes the payment and is required to make a deduction of resident withholding tax from the payment:
b: the person is an RWT proxy for the payer of the resident withholding income, the recipient of the resident withholding income, and the resident withholding income.
1AB: A person who makes a payment that is or includes resident withholding income must deduct resident withholding tax from the payment if the person is not excluded by the rest of this section from liability to make the deduction.
4: In section NF 2(1) If a person makes a payment that is or includes resident withholding income and is required to deduct resident withholding tax from the payment, the person must make a deduction—
5: After section NF 2(1)
1B: A person who is an RWT proxy for a payer of resident withholding income and a payment of resident withholding income in the form of a dividend must pay to the Commissioner the amount of resident withholding tax given by the following formula: where—
a: is the appropriate rate of resident withholding tax, expressed as a percentage, specified in schedule 14, clause 1
b: is the amount paid to the recipient of the dividend.
113: New
section NF 2AA After section NF 2
NF 2AA: Election to be RWT proxy
1: A person is an RWT proxy
a: the person gives to the Commissioner a notice of election under subsection (2)
b: the payer is a unit trust who is a non-resident; and
c: the recipient is a natural person or a trustee of a qualifying trust; and
d: the recipient has requested the person to act as an RWT proxy in relation to the payer and the resident withholding income; and
e: the person has agreed to act as an RWT proxy in relation to the recipient; and
f: the resident withholding income is a dividend; and
g: the payment is made while the election in the notice is effective.
2: A notice of election must be in writing and contain—
a: an election by the person to be an RWT proxy for dividends distributed by the payer; and
b: the name and postal address of the payer; and
c: the date from which the election is effective.
3: An election by a person to be an RWT proxy is effective from the date nominated in the notice of election until the later of the following:
a: the date nominated in a written notice of cancellation of the election that the Commissioner receives from the person:
b: the date on which the Commissioner receives from the person a written notice of cancellation of the election.
114: Election to apply higher rate of deduction
1: Section NF 2A(1)
1: A person entitled to receive a payment to which section NF 2(1) or (1B) schedule 14, clause 1(a), (b), or (c)
2: In section NF 2A(3)
a: each deduction each deduction or payment under section NF 2(1B)
b: the deduction the deduction or payment
115: Payment of deductions of resident withholding tax to Commissioner
After section NF 4(8)
9: For the purposes of this section, an RWT proxy who is required to pay resident withholding tax in relation to a payment of resident withholding income is treated as having deducted the resident withholding tax from the payment at the time of the payment.
116: Certificates of exemption
1: In section NF 9(1)(i) and paragraph (1) , (1), and (m)
2: Subsection (1)
117: Definitions
1: This section amends section OB 1
2: After the definition of additional capital additional income tax section ME 9B or ME 9C .
3: After the definition of expenditure portion exploration and development activities section CB 16(2) .
4: The definition of finance lease finance lease
a: when the taxpayer enters the lease, involves or is part of an arrangement that involves—
i: the transfer of the ownership of the lease asset to the lessee or an associate of the lessee during or at the end of the lease term:
ii: the lessee or an associate of the lessee having the option of acquiring the lease asset for an amount that is likely to be substantially lower than the lease asset's market value on the date of acquisition:
iii: a right of an associate of the lessee to acquire the lease asset, or a right of the lessor to require an associate of the lessee to acquire the lease asset, during the lease term under an arrangement that does not entitle the associate to receive all of the lease payments that may fall due after the acquisition:
b: when the taxpayer enters the lease or from a later time, involves a lease term that is more than 75% of the lease asset's estimated useful life .
5: After the definition of financial statements financial value section FG 8F .
6: Paragraph (b) of the definition of fixed rate share
b: is defined in section LF 2(3) section FG 8G .
7: After the definition of gross tax deductions group funding debt section FG 8B .
8: After the definition of group of persons group quarter day section FG 8B(6) .
9: The definition of measurement day measurement day
a: in relation to a calendar year, means each of 31 March, 30 June, 30 September, and 31 December, except for the purposes of Part FG:
b: for an income year of a reporting bank, means 1 of the measurement days for the income year defined in section FG 8E measurement period section FG 8E .
10: Before the definition of net gain net equity threshold section FG 8H .
11: In the definition of net loss written off by the Commissioner under section 177C(4) extinguished by the Commissioner under section 177C(5)
12: After the definition of New Zealand New Zealand banking group section FG 8C .
13: After the definition of New Zealand group debt percentage New Zealand net equity section FG 8G(1) .
14: After the definition of notional income tax liability, notional offshore investment amount section FG 8G(4) .
15: After the definition of offshore development offshore permit area section CB 16(2) .
16: After the definition of partnership net income patent application date .
17: After the definition of registered registered bank section 2 of the Reserve Bank of New Zealand Act 1989 .
18: After the definition of registered security regulatory value section FG 8F .
19: After the definition of replacement price option reporting bank section FG 8D .
20: After the definition of royalty RWT proxy section NF 2AA .
21: In the definition of sufficient interest in Part LF in Part FG, Part LF,
22: In the definition of taxable bonus issue
b: any bonus issue that—
i: is issued fully paid from reserves of the company and, if a dividend, would not be exempt income under section CB 10(2) to (5)
ii: the company elects in accordance with section CF 8(a) section 3(3)(a)(i) of the Income Tax Act 1976 .
23: After the definition of type ultimate owner
a: section ME 9B
b: section ME 9C .
24: Before the definition of unadjusted income tax liability ultimate parent section FG 8C .
25: Subsection (4)
26: Subsection (22)
118: Determination of residence of company
1: In section OE 2(1) that is not referred to in subsection (1B) A company
2: After section OE 2(1)
1B: For the purposes of this Act, a company acting as trustee of the Cook Islands National Superannuation Fund, as established by the Cook Islands National Superannuation Trust Deed under the Cook Islands National Superannuation Act 2000 (Cook Islands)
3: Amendments to Tax Administration Act 1994
119: Tax Administration Act 1994
This Part amends the Tax Administration Act 1994
120: Interpretation
1: This section amends section 3(1) Tax Administration Act 1994
2: After the definition of amount payable approved advisor group section 20B(5) .
3: After the definition of incremental late payment penalty information holder section 20B(1) sections 20B to 20F .
4: In the definition of shortfall penalty 141A 141AA
5: After the definition of tax tax advice document section 20B(3) tax advisor section 20B(4) .
6: After the definition of tax agent tax contextual information section 20F(3) .
121: Court orders for production of information or return
In section 17A(7)(b)(ii) law). law); and
iii: whether or not the information is contained in a tax advice document; and
iv: if the information is contained in a tax advice document, whether or not the information is required to be disclosed under section 20E, 20F, or 20G
122: New sections 20B to 20G inserted
1: After section 20
20B: No requirement to disclose tax advice document
1: A person (called in this section and sections 20C to 20G information holder sections 16 to 19
2: A book or document is eligible to be a tax advice document
a: is confidential; and
b: is created by—
i: the person for the main purpose of instructing a tax advisor to act for the person by giving advice to the person, if the advice is to be about the operation and effect of tax laws:
ii: a tax advisor or, where the tax advisor is in public practice, an employee of the tax advisor's firm, for the main purpose of recording research and analysis, if the research and analysis is performed for the main purpose of enabling the tax advisor to give advice to the person about the operation and effect of tax laws:
iii: a tax advisor or, where the tax advisor is in public practice, an employee of the tax advisor's firm, for the main purpose of the giving of advice by the tax advisor to the person, or the recording of advice given by the tax advisor to the person, if the advice is about the operation and effect of tax laws; and
c: is created for purposes that do not include a purpose of committing, or promoting or assisting the committing of, an illegal or wrongful act.
3: A book or document is a tax advice document for a person if—
a: the book or document is eligible under subsection (2)
b: the person makes a claim, under section 20D
c: the person satisfies the requirements of sections 20E and 20F
4: A tax advisor subsection (5)(a)(ii) and (iii)
5: An approved advisor group
a: includes natural persons who—
i: have a significant function of giving advice on the operation and effect of tax laws; and
ii: are subject to a professional code of conduct in giving the advice; and
iii: are subject to a disciplinary process that enforces compliance with the code of conduct; and
b: is approved by the Commissioner for the purposes of this definition.
20C: Treatment of book or document
1: This section applies to a book or document that is—
a: included in a request for information in relation to a person; and
b: possibly eligible to be a tax advice document for the person.
2: The book or document must be treated as being a tax advice document for the person—
a: from the time of the request for information:
b: until the earlier of—
i: the time by which the person is required by section 20D
ii: the time at which the person informs the Commissioner that the person does not claim that the book or document is a tax advice document for the person.
3: If the person makes a claim under section 20D
a: the District Court rules that the book or document is not a tax advice document for the person:
b: the person agrees in writing that the book or document is not eligible to be a tax advice document for the person:
c: the person withdraws in writing the claim that the book or document is a tax advice document for the person:
d: an approved advisor group informs the Commissioner that a tax advisor is not or was not a member of the approved advisor group at a time—
i: at which the tax advisor is claimed by the person or the tax advisor to be a member of the approved advisor group; and
ii: at which the tax advisor would be required to be a member of an approved advisor group for the document to be a tax advice document.
4: If a book or document must be treated under this section as being a tax advice document for a person, a copy of the book or document must be held in a secure place for the periods referred to in subsections (2) and (3)
20D: Claim that book or document is tax advice document
1: A claim by a person that a book or document is a tax advice document for the person must be made by the person or by a tax advisor who is authorised to act on behalf of the person for the purposes of sections 20C to 20G
2: A claim that a book or document created by a person is a tax advice document for the person must contain the following information:
a: a brief description of the form and contents of the book or document; and
b: the name of the tax advisor for whom the book or document was intended; and
c: the date on which the book or document was created.
3: A claim that a book or document created by a tax advisor, or by an employee of a tax advisor's firm, is a tax advice document for a person must contain the following information:
a: a brief description of the form and contents of the book or document; and
b: the name of the tax advisor giving the tax, advice in relation to which the book or document was created; and
c: the approved advisor group to which the tax advisor belonged when the book or document was created; and
d: the statute or other enactment and the type of revenue that was the subject of the tax advisor's advice in relation to which the book or document was created; and
e: the date on which the book or document was created.
4: A claim that a book or document is a tax advice document for a person must be made—
a: if the requirement to disclose information is under 1 or both of sections 16 and 16B
i: on the day on which the Commissioner or an officer of the Department exercises the right of inspection or removal that leads to the claim:
ii: by a later date to which the Commissioner agrees:
b: if the requirement to disclose information is under section 17
i: the date that is given by the Commissioner in the request for disclosure of the information:
ii: the date that is 28 days after the date of the request by the Commissioner for disclosure of the information:
c: if the requirement to disclose information is under section 17A or section 18
d: if the requirement to disclose information is under section 19
5: If a tax advisor acting on behalf of a person claims that a book or document is a tax advice document for the person, the claim must include written confirmation from the tax advisor that the tax advisor is authorised to act on behalf of the person for the purposes of sections 20C to 20G
20E: Book or document or part of book or document included in tax advice document
An information holder who is required to disclose information in relation to a person is required to provide a copy of a book or document or part of a book or document that—
a: is attached to a book or document that is eligible under section 20B(2)
b: is not eligible under section 20B(2)
20F: Person must disclose tax contextual information from tax advice document
1: An information holder who is required to disclose information relating to a person must disclose under subsection (2) section 20D
2: A disclosure under subsection (1)
a: if the requirement to disclose information is under 1 or both of sections 16 and 16B
b: if the requirement to disclose information is under section 17
i: the date that is given by the Commissioner in the requirement for disclosure of the description:
ii: the date that is 28 days after the date of the requirement by the Commissioner for disclosure of the description:
c: if the requirement to disclose information is under section 17A or section 18
d: if the requirement to disclose information is under section 19
3: Tax contextual information
a: a fact or assumption relating to a transaction that has occurred or is postulated by the person creating the tax advice document:
b: a description of a step involved in the performance of a transaction that has occurred or is postulated by the person creating the tax advice document:
c: advice that does not concern the operation and effect on the person of tax laws:
d: advice that concerns the operation and effect on the person of tax laws relating to the collection by the Commissioner of debts payable to the Commissioner:
e: a fact or assumption relating to advice that is referred to in paragraph (c) or (d)
f: a fact or assumption from, or relating to the preparation of,—
i: financial statements of the person:
ii: a document containing information that the person is required to provide to the Commissioner under an Inland Revenue Act.
4: A disclosure by a person or tax advisor of tax contextual information from a tax advice document for the person must be in a statutory declaration that—
a: is made by a tax advisor who has not been barred under subsection (5)
b: states that the tax advisor is authorised to act on behalf of the person for the purposes of sections 20C to 20G
c: is in the prescribed form.
5: The Commissioner may apply to a District Court Judge for an order that a tax advisor be barred from making statutory declarations under this section, if the tax advisor is convicted of an offence under—
a: section 111 of the Crimes Act 1961
b: section 143(1)(b)
c: section 143A(1)(b) or (c)
d: section 143B(1)(b) or (c)
e: section 143H
20G: Challenge to claim that book or document is tax advice document
1: If a person claims that a book or document is a tax advice document for the person, the Commissioner or the person may apply to a District Court Judge for an order determining whether—
a: the book or document is a tax advice document for the person:
b: information provided by the person is tax contextual information in relation to the book or document:
c: the person should provide a more detailed or better description of tax contextual information in relation to the book or document.
2: For the purposes of determining an application under this section, the District Court Judge may require the book or document to be produced to the District Court Judge.
3: An application under this section may be made in the course of an inquiry under section 18
2: Subsection (1)
123: Resident withholding tax deduction tax certificates
After section 25(10)
11: In this section, a dividend that is resident withholding income under section NF 2(1A)(b) of the Income Tax Act 2004
124: Records to be kept for purposes of resident withholding tax
1: In section 26(1)
a: in the words preceding paragraph (a), deductions of resident withholding tax from payments of resident withholding tax in relation to
b: in paragraph (a) deduction payment
c: in paragraph (b) deduction payment
2: In section 26(2)
a: in the words preceding paragraph (a), deduct resident withholding tax from pay resident withholding tax in relation to
b: in paragraph (a) deduction payment
125: Provision of tax file numbers
In section 27(1)
a: resident withholding tax deduction resident withholding tax payment
b: by a payer
126: Annual returns of income not required
1: In section 33A(1)(b)(iv) Interest Interest or a dividend that is resident withholding income under section NF 2(1A)(b) of the Income Tax Act 2004
2: In section 33A(1)(b)(x)
B: was not resident withholding income under section NF 2(1A)(b) .
3: In section 33A(2) (cb)(ii) (f)
4: In section 33A(2)
kb: has carried forward to the income year a credit of tax under section LB 2(3C) of the Income Tax Act 2004 .
5: Subsection (4) applies for the 2005-06 and subsequent income years.
127: New section 36BC inserted
After section 36BB
36BC: Electronic format for details required under subpart
EK of Income Tax Act 2004 The Commissioner may prescribe 1 or more electronic formats in which details that must be provided under subpart EK of the Income Tax Act 2004
128: Particulars furnished in electronic format
In section 36C(1) or 36BB , 36BB, or 36BC
129: Statement of payment of deductions of withholding tax
In section 50
a: the section heading is replaced by Statement of payment of resident withholding tax
b: deduction payment
130: Resident withholding tax deduction reconciliation statements
After section 51(6)
7: In this section, a dividend that is resident withholding income under section NF 2(1A)(b) of the Income Tax Act 2004
131: Disclosure of interest in foreign company or foreign investment fund
In section 61(1) interest in a foreign investment fund attributing interest in a foreign investment fund
132: Annual imputation return
In section 69(1)(ea)(ii) Part MI subpart MI
133: Officers to maintain secrecy
In section 81(4)(p) Commission. Commission:
q: communicating, for the purpose of section 85H Parental Leave and Employment Protection Act 1987
134: New section 81B inserted
After section 81
81B: Disclosure of information concerning actions of tax advisor
Despite section 81
a: by a person who is, or purports to be, a member of the approved advisor group; and
b: that the Commissioner considers to be a breach of a member's responsibilities under sections 20B to 20G
135: New sections 85H and 85I inserted
After section 85G
85H: Disclosure of information for purposes of
Parental Leave and Employment Protection Act 1987
1: The purpose of this section is to facilitate the exchange of information between the Commissioner and the responsible department for the purposes of providing to the responsible department, applicant information that the Commissioner considers necessary to enable the responsible department to—
a: verify an entitlement to parental leave payments:
b: investigate possible overpayment of parental leave payments.
2: For the purpose of subsection (1)
3: For the purpose of subsection (1) section 71I of the Parental Leave and Employment Protection Act 1987 subsection (2)
4: Where the Commissioner has made a comparison under subsection (3) subsection (1)
5: In this section and in section 85I applicant section 71I of the Parental Leave and Employment Protection Act 1987 applicant information
a: information that relates to the circumstances of the applicant that are relevant to the eligibility of the applicant for parental leave payments under Part 7A of the Parental Leave and Employment Protection Act 1987
b: the applicant's name and tax file number:
c: the name and tax file number of the applicant's employer parental leave section 2 of the Parental Leave and Employment Protection Act 1987 responsible department Parental Leave and Employment Protection Act 1987
85I: Use of Parental Leave and Employment Protection Act 1987
1: For the purpose of section 71G(1) of the Parental Leave and Employment Protection Act 1987 section 71ZA of that Act
a: compare applicant information and information held by the Commissioner:
b: refuse the application for payment of parental leave if a comparison under paragraph (a)
2: The Commissioner may treat information obtained while acting as a delegate of the responsible department under section 71ZA of the Parental Leave and Employment Protection Act 1987
3: The Commissioner may refuse or recover a parental tax credit under section KD 2AB(1) of the Income Tax Act 2004 Part 7A of the Parental Leave and Employment Protection Act 1987
136: Further secrecy requirements
In section 87(5)(a)(i) and (i) , (i) and (q)
137: Election of small claims jurisdiction of Taxation Review Authority
1: In section 89E(1)(a) 89D 89D or 89DA
2: Subsection (1) applies for disputes that begin under Part 4A Tax Administration Act 1994
138: Determination on special rates and provisional rates
1: In section 91AAG(2) must have regard to- may have regard to any factors that are relevant in determining the item's estimated useful life, including an estimate based on a depreciation method or on a valuer's report, or a rate of depreciation that the person uses for the item for financial reporting purposes
2: In section 91AAG(3) after having regard to the factors in subsection (2) using either the formula in section EE 25(4) of the Income Tax Act 2004
3: After section 91AAG(5)
5B: A determination setting a special rate for an item and a person may also be expressed to apply to items, of the same kind as the item, for which the Commissioner considers the special rate is appropriate.
4: Subsections (1) to (3) apply for the 2005-06 and subsequent income years.
139: Applications for determinations
1: In section 91AAM(2) Within Unless subsection (2B)
2: After section 91AAM(2)
2B: Despite subsection (2)
3: Subsections (1) (2)
140: New section 91AAN and heading inserted
After section 91AAM Determinations relating to environmental restoration expenditure
91: AAN Determinations on rates for diminishing value of environmental expenditure
1: A person or a group of persons may request the Commissioner in writing to set a rate or an assumed life for the purpose of section DB 37 of the Income Tax Act 2004
2: The Commissioner may determine that the person, group, or a class of persons is to use for a type of expenditure listed in schedule 6B Income Tax Act 2004 section DB 37(4)(c) of that Act
a: a diminishing value rate that is a banded rate set out in column 1 of schedule 11 of the Income Tax Act 2004
b: a straight-line rate that is a banded rate set out in column 2 of schedule 11 of the Income Tax Act 2004
3: The Commissioner may decline to issue a determination under subsection (1)
a: the information that is supplied to the Commissioner by the person or group is insufficient for the calculation of an appropriate rate:
b: the Commissioner considers that the alternative rate for the expenditure differs from the banded rate set out for the expenditure in schedule 6B of the Income Tax Act 2004
4: In making a determination, the Commissioner may take into account—
a: the length of time for which the expenditure may reasonably be expected to be effective for the purpose for which it was incurred:
b: the length of time for which the expenditure may reasonably be expected to be effective for the purpose of earning income:
c: the treatment of the expenditure in the person's financial reports:
d: the life of any resource consent that is associated with the expenditure:
e: an estimate based on a depreciation method or on a valuer's report.
5: The determination may set out the income year or income years for which it is to apply, but may not apply for income years before the 2005-06 income year.
6: The determination may provide for the extension, limitation, variation, cancellation, or revocation of an earlier determination.
7: A person affected by a determination made under this section may dispute or challenge the determination under Parts 4A and 8A
8: Within 30 days of issuing a determination under subsection (1)
9: Within 30 days of issuing a determination under subsection (1) Gazette
a: gives notice that the determination has been issued; and
b: states where copies of the determination can be obtained.
141: Commissioner to make private rulings on request
Section 91E(6)
142: Taxpayer assessment
1: Section 92(4)
2: Subsection (1) applies for the 2005-06 and later tax years.
143: New section 101B inserted
After section 101
101B: Assessment of additional income tax
1: The Commissioner may, in respect of any company liable to pay additional income tax under section ME 9C of the Income Tax Act 2004
2: Sections 109, 111, and 113
a: in those sections, the term taxpayer
b: in section 113 tax already assessed
3: An assessment made under this section is subject to challenge in the same manner as an assessment of income tax and Part 8A of this Act income tax tax section ME 9C of the Income Tax Act 2004
144: Time bar for amendment of income tax assessment
1: Section 108(1B)
2: Section 108(3B)
3: Subsections (1) (2)
145: Definitions
1: In section 120C(1) date interest starts
f: for unpaid tax, being terminal tax for the tax year in which a disposition of property to which section FI 4 of the Income Tax Act 2004 .
2: In section 120C(1) interest period
3: Subsection (2)
146: Imputation penalty tax payable where end of year debit balance
1: In section 140B(1) or additional income tax under section ME 9C of that Act debit balance
2: Section 140B(2)
2: The amount of the imputation penalty tax payable by a company is 10% of the amount of—
a: further income tax that gives rise to the liability for further imputation penalty tax:
b: additional income tax that gives rise to the liability for further imputation penalty tax.
147: Unacceptable tax position
1: In section 141B(5) interpretation of a tax law tax position
2: Section 141B(6)
6: The time at which a taxpayer takes a tax position for a return period is—
a: the time at which the taxpayer provides the return containing the taxpayer's tax position, if the taxpayer provides a tax return for the return period:
b: the due date for providing the tax return for the return period, if the taxpayer does not provide a tax return for the return period.
148: Reduction of penalties for previous behaviour
In section 141FB(5) subsection (2) subsections (1) and (2)
149: Increased penalty for obstruction
In section 141K(1) 141A 141 AA
150: Publication of names
1: Section 146
2: Subsection (1)
151: Write-off of tax by Commissioner
1: In section 177C subsection (5)
5B: If the Commissioner writes off outstanding tax for a taxpayer who has a credit of tax carried forward under section LB 2(3C) of the Income Tax Act 2004
5C: If a taxpayer has both a net loss to which subsection (5) subsection (5B) subsection (5) subsection (5B)
2: Subsection (1)
152: Obligation to pay tax on foreign investment fund income able to be suspended
1: In section 183(1)(a) has in a fund an interest has in a foreign investment fund an attributing interest
2: Subsection (1)
153: Remission in circumstances of qualifying event
1: In section 183ABA(1) Income Tax Act 1994 Income Tax Act 2004
2: In section 183ABA(4) Income Tax Act 1994 Income Tax Act 2004
3: Subsections (1) (2)
4: Amendments to other enactments
Amendments to Goods and Services Tax Act 1985
154: Goods and Services Tax Act 1985
Sections 155 to 159 Goods and Services Tax Act 1985
155: Meaning of term
supply After section 5(6A)
6AB: For the purposes of this Act, a levy that is paid to the New Zealand Fire Service Commission under section 48 of the Fire Service Act 1975
156: Imposition of goods and services tax on imports
In section 12(4)(d)(ii) does not qualify for an input tax credit in relation to is not entitled to make an input tax deduction under section 20(3)
157: Credit and debit notes
In section 25(2)(a) tax charged by that supplier in relation to a taxable supply tax charged on a taxable supply made by that supplier and be
158: Section 26A replaced
Section 26A
26A: Factored debts
1: This section applies to a registered person who—
a: sells a debt to another person during a taxable period; and
b: is required to account for tax payable on a payments basis.
2: The sale of the debt is treated as being a taxable supply—
a: that is made by the registered person during the taxable period; and
b: on which the amount of tax charged is the tax fraction of the remaining book value of the debt.
159: Refund of excess tax
1: In section 45(1)(a) properly assessed properly payable
2: In section 45(1)(b) expired ended
3: In section 45(2)(a) assessment that changed amendment to an assessment that increased
4: In section 45(2)(b) properly assessed properly payable
5: In section 45(2)(c) made has not expired amended has not ended
6: In section 45(3)
3: Despite section 20(5) .
7: Section 45(3)(c)
c: the Commissioner is satisfied that the person was entitled to receive the amount at the time of the refund but did not; and .
8: In section 45(3)(d) expired ended
9: Subsections (1) to (8) apply for taxable periods beginning on or after 1 April 2005.
160: Cancellation of registration
1: After section 52(5A)
7: In subsections (5) and (5A)
2: Subsection (1) applies to a person who becomes registered under the Goods and Services Tax Act 1985 Amendment to Student Loan Scheme Act 1992
161: Interpretation
In section 2 Student Loan Scheme Act 1992 tax year section OB 1 of the Income Tax Act 2004 . Amendment to Taxation Review Authorities Act 1994
162: Small claims jurisdiction of Authorities
1: In section 13B(1)(b) Taxation Review Authorities Act 1994 of precedent , the decision of which affects or may affect the outcome of a separate and unrelated dispute between the Commissioner and a taxpayer other than the disputant
2: Subsection (1) Part 4A Tax Administration Act 1994 Amendment to Income Tax (Social Assistance Suspensory Loans) Order 1995
163: Social assistance suspensory loans
In clause 2 Income Tax (Social Assistance Suspensory Loans) Order 1995 EH 53 EW 47