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New Zealand Legislation: Bills

Bills are proposed Acts

Hon Peter Dunne

Taxation (International Taxation, Life Insurance, and Remedial Matters) Bill

Government Bill

233—2

As reported from the Finance and Expenditure Committee

Contents

~~2 Commencement~~

Part 1
Amendments to Income Tax Act 2007

3 Income Tax Act 2007

4 Income tax liability of person with schedular income

5 Withholding liabilities

6 Other obligations

7 Disposal: land used for landfill, if notice of election

8 Section CB 26 replaced

CB 26 Disposal of certain shares by portfolio investment entities

8B Section CB 27 repealed

~~9 New heading and section CB 36 added~~

~~Emissions units under Climate Change Response Act 2002~~

~~CB 36 Disposal of emissions units~~

9 Heading and section CB 36 replaced

Emissions units under Climate Change Response Act 2002

CB 36 Disposal of emissions units

9B New section CC 8B inserted

CC 8B Certain commercial bills: non-resident holders

~~10 Transfers of value generally~~

10B What is a transfer of value?

~~11 When is a transfer caused by a shareholding relationship?~~

11 When is a transfer caused by a shareholding relationship?

~~12 Returns of capital: off-market share cancellations~~

12 Returns of capital: off-market share cancellations

12B Treasury stock acquisitions

13 Property made available intra-group

14 Employee benefits

15 Foreign investment fund income

~~16 New section CD 36B inserted~~

17 Available subscribed capital (ASC) amount

~~18 Available capital distribution amount~~

18 Available capital distribution amount

18B Heading and sections CD 45 to CD 52 repealed

19 Prevention of double taxation of share cancellation dividends

20 Amounts derived in connection with employment

21 Meaning of expenditure on account of an employee

~~22 Benefits, pensions, compensation, and government grants~~

22 Benefits, pensions, compensation, and government grants

23 New subpart CO inserted

Subpart CO—Income from voluntary activities

~~CO 1 Income from voluntary activities~~

CO 1 Income from voluntary activities

24 Section CP 1 replaced

CP 1 Attributed income of investors in multi-rate PIEs

25 When attributed CFC income arises

26 When FIF income arises

26B Section CQ 7 repealed

27 Heading to subpart CR replaced

28 Sections CR 1 and CR 2 replaced

~~CR 1 Policyholder base income of life insurer~~

~~CR 2 Shareholder base gross income of life insurer~~

CR 1 Policyholder base income of life insurer

CR 2 Shareholder base income of life insurer

~~29 New section CR 4 added~~

~~CR 4 Income for general insurance outstanding claims reserve~~

29 New section CR 4 added

CR 4 Income for general insurance outstanding claims reserve

29B Withdrawals

29C Exclusions of withdrawals of various kinds

29D Exclusion of withdrawal on partial retirement

29E Exclusion of withdrawal when member ends employment

30 Section CV 10 repealed

~~31 New section CW 3B inserted~~

~~CW 3B Pre-1990 forest land emissions units~~

31 Section CW 3B repealed

~~32 Section CW 9 replaced~~

~~CW 9 Dividend derived from foreign company~~

32 Dividend derived by company from overseas

CW 9 Dividend derived from foreign company

33 Proceeds of share disposal by qualifying foreign equity investor

33B Dividends paid by qualifying companies

34 Expenditure on account, and reimbursement, of employees

35 New sections CW 17B and CW 17C inserted

CW 17B Relocation payments

~~CW 17C Payments for overtime meals~~

CW 17C Payments for overtime meals and certain other allowances

36 Section CW 37 repealed

37 Local and regional promotion bodies

38 Charities: business income

38B New section CW 59C inserted

CW 59C Life reinsurance outside New Zealand

39 New section CW 62B inserted

CW 62B Voluntary activities

40 Meaning of fringe benefit

40B Contributions to superannuation schemes

~~41 Section CX 18 replaced~~

42 Benefits provided instead of allowances

43 Section CX 28 replaced

~~CX 28 Accommodation~~

CX 28 Accommodation

44 Section CX 39 repealed

45 Government grants to businesses

45B Section CX 48B repealed

46 New heading and section CX 48C inserted

Government funding of film and television

CX 48C Government funding additional to government screen production payments

47 New heading and section CX 48D inserted

Research and development

CX 48D Tax credits for expenditure on research and development

~~48 New heading and section CX 51B inserted~~

~~Emissions units under Climate Change Response Act 2002~~

~~CX 51B Issue of emissions units~~

48 New heading and section CX 51B inserted

Emissions units under Climate Change Response Act 2002

CX 51B Disposal of pre-1990 forest land emissions units

49 Proceeds from certain disposals by portfolio investment entities or New Zealand Superannuation Fund

50 Section CX 55 replaced

CX 55 Proceeds from disposal of investment shares

50B Portfolio investor allocated income and distributions of income by portfolio investment entities

51 Section CX 56 replaced

CX 56 Attributed income of certain investors in multi-rate PIEs

CX 56B Distributions to investors in multi-rate PIEs

CX 56C Distributions to investors by listed PIEs

52 Section CX 57 replaced

CX 57 Credits for investment fees

52B New section CZ 9B inserted

CZ 9B Available capital distribution amount: 1988 to 2010

52C Determining tax liabilities

53 Interest: not capital expenditure

54 Interest: most companies need no nexus with income

55 Interest: money borrowed to acquire shares in group companies

55B New section DB 10B inserted

DB 10B Interest or expenditure connected to stapled debt security

56 Cost of revenue account property

56B Charitable or other public benefit gifts by company

57 Property misappropriated by employees or service providers

57B Portfolio investment entities: zero-rated portfolio investors and allocated losses

58 Section DB 53 replaced

DB 53 Attributed PIE losses of certain investors

59 Section DB 54 replaced

DB 54 Treatment of credits for investment fees

60 Expenditure incurred in deriving exempt dividend

~~61 New heading and section DB 60 added~~

~~Emissions units under Climate Change Response Act 2002~~

~~DB 60 Acquisition of emissions units~~

61 Heading and section DB 60 replaced

Emissions units and liabilities under Climate Change Response Act 2002

DB 60 Acquisition of emissions units

61B New section DB 61 added

DB 61 Liabilities for emissions

61C Contributions to employees' superannuation schemes

61D Criteria for approval of share purchase schemes: before period of restriction ends

61E Employment-related activities

61F Interpretation: reimbursement and apportionment

62 Heading to subpart DF

63 Government grants to businesses

64 Payments for social rehabilitation

65 New section DF 5 added

DF 5 Government funding additional to government screen production payments

66 When attributed CFC loss arises

67 When FIF loss arises

67B Section DO 11B repealed

67C Forestry business on land bought from the Crown, Maori owners, or holding company: no deduction

68 Sections DR 1 to DR 3 replaced

~~DR 1 Policyholder base gross expenditure or loss of life insurer~~

~~DR 2 Shareholder base gross expenditure or loss of life insurer~~

DR 1 Policyholder base allowable deduction of life insurer

DR 2 Shareholder base income of life insurer

DR 3 Life reinsurance outside New Zealand

DR 4 Life insurers' claims reserves

69 Film production expenditure

70 Meaning of film reimbursement scheme

71 New section DT 1A inserted

DT 1A Ring-fenced allocations

72 Arrangement for petroleum exploration expenditure and sale of property

73 Petroleum development expenditure

74 Disposal of petroleum mining asset to associate

75 Amount written off by holding company

76 Transfer of expenditure to master fund

77 Carry forward of expenditure

77B New section DV 4B inserted and replaced

DV 4B Carry forward of expenditure by member funds investing in portfolio investment entities

DV 4B Carry forward of expenditure by member funds investing in portfolio investment entities

78 Investment funds: transfer of expenditure to master funds

78B Formula for calculating maximum deduction

78C Carry forward of expenditure

78D Maori authorities: donations

~~79 New section DW 4 added~~

~~DW 4 Deduction for general insurance outstanding claims reserve~~

79 New section DW 4 added

DW 4 Deduction for general insurance outstanding claims reserve

80 Section DX 2 repealed

80B Prepayments

81 Meaning of trading stock

82 Low-turnover valuation

~~83 Valuing closing stock under $5000~~

83B New heading and section EC 26B inserted

Partnerships: cost price and national standard cost scheme

EC 26B Entering partners' cost base

~~84 Valuation of excepted financial arrangements~~

84 Valuation of excepted financial arrangements

85 New section ED 1B inserted

~~ED 1B Valuation of emissions units issued for no consideration~~

ED 1B Valuation of emissions units issued for zero price

85B Pool method: calculating amount of depreciation

86 Economic rate for plant, equipment, or building, with high residual value

87 Annual rate for item acquired in person's 1995–96 or later income year

87B Meaning of adjusted tax value

87C Employer's superannuation contribution tax

88 Section EG 3 repealed

89 Expenditure incurred in acquiring film rights in feature films

90 Expenditure incurred in acquiring film rights in films other than feature films

91 Film production expenditure for New Zealand films having no large budget screen production grant

92 Film production expenditure for other films having no large budget screen production grant

93 Section EJ 12 replaced

~~EJ 12 Petroleum development expenditure: default allocation rule~~

~~EJ 12B Petroleum development expenditure: reserve depletion method~~

EJ 12 Petroleum development expenditure: default allocation rule

EJ 12B Petroleum development expenditure: reserve depletion method

94 Relinquishing petroleum mining permit

95 New sections EJ 13B and EJ 13C inserted

EJ 13B Dry well drilled

EJ 13C Well not producing

96 Disposal of petroleum mining asset

97 Sections EJ 19 and EJ 20 replaced

EJ 20 Meaning of petroleum mining development

98 What is an excepted financial arrangement?

~~99 When use of spreading method not required~~

99B What spreading methods do

99C Applying IFRSs to financial arrangements

~~100 IFRS financial reporting method~~

100 IFRS financial reporting method

101 Determination alternatives

102 Expected value method

103 Modified fair value method

103B Mandatory use of some determinations

104 Mandatory use of yield to maturity method for some arrangements

~~105 Straight-line method~~

105B New section EW 21 inserted

EW 21 Financial reporting method

105C Default method

105D Failure to use method for financial reporting purposes

~~106 Consistency of use of straight-line method and market valuation method~~

106B Consistency of use of IFRS method

107 Change of spreading method

108 When calculation of base price adjustment required

108B Base price adjustment formula

~~109 Section EW 54 replaced~~

~~EW 54 Meaning of cash basis person~~

~~110 Section EW 56 repealed~~

~~111 Thresholds~~

~~112 Financial arrangements, income, and expenditure relevant to criteria~~

~~113 Section EW 59 replaced~~

~~EW 59 Exclusion by Commissioner~~

~~114 Trustee of deceased's estate~~

115 Meaning of controlled foreign company

115B Direct control interests

115C Direct income interests

116 Associates and 10% threshold

116B New section EX 18A inserted

EX 18A Scheme for finding person's attributed CFC income or loss

117 Formula for calculating attributed CFC income or loss

118 Taxable distribution from non-complying trust

~~Attributable CFC amount and net attributable CFC income or loss~~

~~EX 20B Attributable CFC amount~~

~~EX 20C Net attributable CFC income or loss~~

~~EX 20D Adjustment of fraction for excessively debt funded CFC~~

119 New heading and sections EX 20B to EX 20E inserted

Attributable CFC amount and net attributable CFC income or loss

EX 20B Attributable CFC amount

EX 20C Net attributable CFC income or loss

EX 20D Adjustment of fraction for excessively debt funded CFC

EX 20E Relative debt-asset ratio for CFC

120 Attributable CFC amount

121 Heading repealed

122 Branch equivalent income or loss: calculation rules

123 New heading and sections EX 21B to EX 21E inserted

Non-attributing active CFCs

EX 21B Non-attributing active CFCs

Tests for non-attributing active CFCs

EX 21C Applicable accounting standards for section EX 21E

EX 21D Non-attributing active CFC: default test

EX 21E Non-attributing active CFC: test based on accounting standard

124 Heading and section EX 22 replaced

Non-attributing Australian CFCs

EX 22 Non-attributing Australian CFCs

125 Section EX 23 repealed

126 Change of CFC's balance date

127 Attributing interests in FIFs

127B Direct income interests in FIFs

128 Exemption for ASX-listed Australian companies

128B Exemption for Australian unit trusts with adequate turnover or distributions

129 CFC rules exemption

130 Grey list company owning New Zealand venture capital company: 10-year exemption

131 Exemption for employee share purchase scheme of grey list company

132 Limits on choice of calculation methods

133 Section EX 47 replaced

EX 47 Method required for certain non-ordinary shares

133B Branch equivalent method

134 Comparative value method

135 Fair dividend rate method: usual method

136 Fair dividend rate method for unit-valuing funds and others by choice

137 Cost method

138 Additional FIF income or loss if CFC owns FIF

139 Codes: comparative value method, deemed rate of return method, fair dividend rate method, and cost method

139B Limits on changes of method

139C Changes in application of FIF exemptions

139D New section EX 66B inserted

EX 66B Entities ceasing to be FIFs

140 Sections EY 1 to EY 5 replaced

~~EY 1 What this subpart does~~

~~EY 2 Policyholder base~~

~~EY 3 Shareholder base~~

~~EY 4 Apportionment of income of particular source or nature, and of tax credits~~

EY 1 What this subpart does

EY 2 Policyholder base

EY 3 Shareholder base

EY 4 Apportionment of income of particular source or nature, and of tax credits

EY 5 Part-year tax calculations

141 Section EY 6 replaced

EY 6 Actuarial advice and guidance

141B Meaning of claim

141C Superannuation schemes providing life insurance

142 Meaning of life reinsurance

~~143 Section EY 15 to EY 47 replaced~~

~~Policyholder base~~

~~Non-participation policies~~

~~EY 15 Policyholder base income: non-participation policies~~

~~EY 16 Policyholder base gross expenditure or loss: non-participation policies~~

~~Profit participation policies~~

~~EY 17 Policyholder base gross income: profit participation policies~~

~~EY 18 Policyholder base gross expenditure or loss: profit participation policies~~

~~Shareholder base~~

~~Non-participation policies~~

~~EY 19 Shareholder base gross income: non-participation policies~~

~~EY 20 Shareholder base gross expenditure or loss: non-participation policies~~

~~Profit participation policies~~

~~EY 21 Shareholder base gross income: profit participation policies~~

~~EY 22 Shareholder base gross expenditure or loss: profit participation policies~~

~~Reserves: non-participation policies~~

~~EY 23 Reserving amounts for life insurers: non-participation policies~~

~~EY 24 Outstanding claims reserving amount: non-participation policies not annuities~~

~~EY 25 Premium smoothing reserving amount: non-participation policies not annuities~~

~~EY 26 Unearned premium reserving amount: non-participation policies not annuities~~

~~EY 27 Capital guarantee reserving amount: non-participation policies not annuities~~

~~Shareholder base other profit: profit participation policies~~

~~EY 28 Shareholder base other profit: profit participation policies~~

~~Transitional adjustments and annuities~~

~~EY 29 Transitional adjustments: life risk~~

~~EY 30 Annuities~~

143 Sections EY 15 to EY 47 replaced

Policyholder base

Non-participation policies

EY 15 Policyholder base income: non-participation policies

EY 16 Policyholder base allowable deductions: non-participation policies

Profit participation policies

EY 17 Policyholder base income: profit participation policies

EY 18 Policyholder base allowable deductions: profit participation policies

Shareholder base

Non-participation policies

EY 19 Shareholder base income: non-participation policies

EY 20 Shareholder base allowable deductions: non-participation policies

Profit participation policies

EY 21 Shareholder base income: profit participation policies

EY 22 Shareholder base allowable deductions: profit participation policies

Non-participation policies: reserves

EY 23 Reserving amounts for life insurers: non-participation policies

EY 24 Outstanding claims reserving amount: non-participation policies not annuities

EY 25 Premium smoothing reserving amount: non-participation policies not annuities

EY 26 Unearned premium reserving amount: non-participation policies not annuities

EY 27 Capital guarantee reserving amount: non-participation policies not annuities

Shareholder base other profit: profit participation policies

EY 28 Shareholder base other profit: profit participation policies that are existing business

EY 29 Shareholder base other profit: profit participation policies that are new business

Transitional adjustments and annuities

EY 30 Transitional adjustments: life risk

EY 31 Annuities

144 Policyholder income formula: FDR adjustment

145 Policyholder income formula: PILF adjustment

146 Non-resident life insurers with life insurance policies in New Zealand

147 Section EZ 31 repealed

148 Section EZ 32B repealed

148B Income and expenditure where financial arrangement redeemed or disposed of

148C New section EZ 52B added

EZ 52B Consistency of use of IFRS method: Determination G3 and 2009–10 income year

149 New headings and sections EZ 53 to EZ 62 added

~~150 New heading and sections EZ 61 to EZ 63 added~~

~~Transitional and other miscellaneous provisions relating to entry into new life insurance regime~~

~~EZ 61 Disposal and re-acquisition upon entry~~

~~EZ 62 Allowance for cancelled amount: spreading~~

~~EZ 63 Reinsurance transition: life financial reinsurance may be life reinsurance~~

150 New section EZ 63 inserted

EZ 63 Disposal and acquisition upon entry

151 Recharacterisation of certain debentures

151B New section FA 2B inserted

FA 2B Stapled debt securities

151C Financial arrangements rules

~~152 What this subpart does~~

153 Transfer at market value

153B Property transferred to charities or to close relatives and others

154 What this subpart does

155 When this subpart applies

156 Section FE 3 replaced

FE 3 Interest apportionment for individuals

157 Some definitions

158 Thresholds for application of interest apportionment rules

159 Apportionment of interest by excess debt entity

160 Calculation of debt percentages

161 Financial arrangements entered into with persons outside group

162 Consolidation of debts and assets

~~163 Total group debt~~

163 Total group debt

164 Total group assets

165 Measurement of debts and assets of worldwide group

166 Banking group's New Zealand net equity

167 New Zealand group for excess debt entity that is a company

168 Identifying New Zealand parent

169 Section FE 28 replaced

FE 28 Identifying members of New Zealand group

170 Section FE 29 replaced

FE 29 Combining New Zealand groups owned by natural persons and trustees

171 Ownership interests in companies outside New Zealand group

172 Worldwide group for corporate excess debt entity

173 New sections FE 31B and FE 31C inserted

FE 31B Worldwide group for excess debt outbound companies

FE 31C CFCs in worldwide group for natural persons or trustees described in section FE 2(1)(g)

174 Section FE 32 replaced

FE 32 Joint venture parties

174B Identifying members of New Zealand banking group

175 Subpart FF repealed

176 Consolidation rules

177 Some general rules for treatment of consolidated groups

178 Heading and sections FM 24 to FM 26 repealed

178B Eligibility rules

179 Imputation rules

179B Trans-Tasman imputation groups and resident imputation subgroups

179C Amortising property

180 Treatment of interest payable under debentures issued before certain date

180B New sections GB 15B and GB 15C inserted

GB 15B Supplies affecting default test for non-attributing active CFC

GB 15C Arrangements related to accounting test for non-attributing active CFC

181 Attribution rule for income from personal services

182 Interpretation of terms used in section GB 27

~~183 Benefits provided to employee's associates~~

184 Section GB 39 repealed

185 Arrangements involving money not at risk

186 Defined terms for sections GB 45 and GB 46

186B Disposals of trading stock at below market value

~~187 New section GC 4B inserted~~

187 Section GC 4B repealed

188 Leases for inadequate rent

189 Insufficient amount receivable by person

190 Compensating arrangement: person receiving more than arm's length amount

191 Requests for matching treatment

192 Section GC 12 replaced

GC 12 Effect on person's withholding obligations

193 New section GZ 2 inserted

GZ 2 Arrangements involving cancellation of conduit tax relief credits

194 Shareholding requirements

195 New section HA 8B inserted

HA 8B No CFC income interests or FIF direct income interests of 10% or more

195B Limit on foreign non-dividend income

195C When requirements no longer met

195D Dividends paid by qualifying companies

196 Fully imputed distributions

197 Section HA 16 replaced

~~HA 16 Dividends paid by qualifying companies to trustee shareholders~~

HA 16 Dividends paid by qualifying companies to trustee shareholders

198 Credit accounts and dividend statements

199 Calculating qualifying company election tax

200 Corpus of trust

200B Trustee income

201 Taxable distributions from non-complying and foreign trusts

201B Distributions from community trusts

202 Who is a settlor?

202B Liability of trustee as agent

202C Beneficiary income of minors

203 Trusts and minor beneficiary rule

203B Companies issuing debentures

203C General provisions relating to disposals

203D Disposal upon final dissolution

HG 4 Disposal upon final dissolution

203E Disposal of partner's interests

203F Disposal of trading stock

203G Disposal of depreciable property

203H Disposal of financial arrangements and certain excepted financial arrangements

203I Disposal of short-term agreements for the sale and purchase of property or services

203J Section HG 10 replaced

HG 10 Disposal of livestock

204 Limitation on deductions by partners in limited partnerships

204B Scheme of subpart

205 Eligibility requirements for entities

206 Effect of failure to meet eligibility requirements for entities

206B Meaning of investor and portfolio investor class

207 Investor membership requirement

207B Investor return adjustment requirement: portfolio tax rate entity

208 Investor interest size requirement

209 Further eligibility requirements relating to investments

210 Unlisted company choosing to become portfolio listed company

211 Becoming portfolio investment entity

211B Treatment of income from interest when entitlement conditional or lacking

212 Portfolio class taxable income and portfolio class taxable loss for portfolio allocation period

213 Credits received by portfolio tax rate entity or portfolio investor proxy

213B Portfolio entity formation loss

214 Subpart HL replaced by subpart HM

Subpart HM—Portfolio investment entities

Introductory provisions

HM 1 Outline of subpart and relationship with other Parts

HM 2 What is a portfolio investment entity?

HM 3 Foreign PIE equivalents

HM 4 Who is an investor?

HM 5 What is an investor class?

HM 6 Intended effects for multi-rate PIEs and investors

Entry rules

HM 7 Requirements

HM 8 Residence in New Zealand

HM 9 Collective schemes

HM 10 Exclusion: life insurance business

HM 11 Investment types

HM 12 Income sources

HM 13 Maximum shareholdings in investments

HM 14 Minimum number of investors

HM 15 Maximum investors’ interests

HM 16 Associates combined

HM 17 Same rights to all investment proceeds

HM 18 Requirements for listed PIEs: unlisted companies

HM 19 Requirements for listed PIEs: fully crediting distributions

HM 20 Re-entering as PIE: 5-year rule

HM 21 Exceptions for certain investors

HM 22 Exceptions for certain funds

HM 23 Exceptions for foreign PIE equivalents

HM 24 Ending of New Zealand residence

HM 25 When entity no longer meets investment or investor requirements

HM 26 Starting life insurance business

HM 27 When multi-rate PIE no longer meets investor interest adjustment requirements

HM 28 When listed PIE no longer meets crediting requirement

HM 29 Choosing to cancel status

HM 30 When foreign PIE equivalent no longer meets requirements

Rules for multi-rate PIEs

Introductory provisions

HM 31 Rules for multi-rate PIEs

HM 32 Rules for and treatment of investors in multi-rate PIEs

HM 33 Proxies for PIE investors

Attributing income to investors

HM 34 Attribution periods

HM 35 Determining net amounts and taxable amounts

HM 36 Calculating amounts attributed to investors

HM 37 When income cannot be attributed

HM 38 When superannuation fund investor has conditional entitlement

HM 39 New investors in existing investor classes

HM 40 Deductions for attributed PIE losses for zero-rated and exiting investors

Calculating and paying tax liability

HM 41 Options for calculation and payment of tax

HM 42 Exit calculation option

HM 43 Quarterly calculation option

HM 44 Provisional tax calculation option

HM 45 Voluntary payments

HM 46 Calculation process

HM 47 Calculation of tax liability or tax credit of multi-rate PIEs

Adjusting investors’ interests

HM 48 Adjustments to investors’ interests or to distributions

Using tax credits

HM 49 Tax credits: when sections HM 50 to HM 55 apply

HM 50 Attributing credits to investors

HM 51 Use of foreign tax credits by PIEs

HM 52 Use of foreign tax credits by zero-rated and certain exiting investors

HM 53 Use of tax credits other than foreign tax credits by PIEs

HM 54 Use of tax credits other than foreign tax credits by investors

HM 55 Tax credits for losses

Prescribed and notified rates for investors in multi-rate PIEs

~~HM 56 Prescribed investor rates for investors, default and optional: 30%~~

HM 56 Prescribed investor rates for investors generally

HM 57 Prescribed investor rates for certain natural person investors: 19.5%

HM 57B Optional investor rates for trustees: 30%, 19.5%

HM 58 Prescribed investor rates for certain investors: 0%

HM 59 Notified rates

HM 60 Certain exiting investors zero-rated

Exit levels and periods

HM 61 Exit levels for investors

HM 62 Exit periods

Treatment of losses by PIEs

Losses of certain multi-rate PIEs

HM 63 Use of investor classes’ losses

HM 64 Use of land losses of investor classes

Formation losses

HM 65 Formation losses carried forward to tax year

HM 66 Formation losses carried forward to first quarter

HM 67 When formation losses carried forward are less than 5% of formation investment value

HM 68 When formation losses carried forward are 5% or more of formation investment value: 3 year spread

HM 69 Maximum amount of formation losses allocated by multi-rate PIEs to investor classes

Elections and consequences

HM 70 Choosing to become PIE

HM 71 When elections take effect

HM 72 Transition: provisional tax

HM 73 Transition: entities with non-standard income years

HM 74 Transition: treatment of shares held in certain companies

HM 75 Transition: FDPA companies

214B Transitional residents

214C New sections HZ 5 and HZ 6 added

HZ 5 Transitional provisions for PIE rules

HZ 6 Saving of binding rules relating to portfolio investment entities

~~215 Tax losses~~

216 Restrictions relating to ring-fenced tax losses

217 Restrictions relating to schedular income

218 Common ownership: group of companies

219 New section IC 13 added

IC 13 Variation of requirements for development companies in Niue

219B Pre-consolidation losses: use by group companies

219C When this subpart applies

220 Ring-fencing cap on attributed CFC net losses

220B New section IQ 2B inserted

IQ 2B Attributed CFC net loss from tax year before first affected year

220C Ring-fencing cap on FIF net losses

221 Group companies using attributed CFC net losses

221B Group companies using FIF net losses

222 Subpart IT replaced

Subpart IT—Cancellation of life insurer's losses

~~IT 1 Cancellation of life insurer's policyholder net losses~~

~~IT 2 Cancellation of life insurer's tax loss when allowed into policyholder base~~

IT 1 Cancellation of life insurer's policyholder net losses

IT 2 Cancellation of life insurer's tax loss when allowed into policyholder base

223 Remaining refundable credits: PAYE, RWT, and certain other items

224 Remaining refundable credits: tax credits for families

225 New section LA 8B inserted

~~LA 8B General rules particular to life insurers~~

LA 8B General rules particular to life insurers

226 Use of tax credits

227 Section LB 1 replaced

LB 1 Tax credits for PAYE income payments

228 Tax credits for resident withholding tax

228B Tax credits for families

229 Tax credits related to personal service rehabilitation payments: providers

230 Tax credits related to personal service rehabilitation payments: payers

230B Tax credits for transitional circumstances

231 Tax credits for housekeeping

232 Subpart LD heading replaced

233 New heading inserted

234 Tax credits for charitable or other public benefit gifts

236 New heading and sections LD 4 to LD 7 added

Payroll donations

LD 4 Tax credits for payroll donations

~~LD 5 When tax credit incorrectly calculated~~

LD 5 Calculating amount of tax credit and filing particulars

LD 6 When donation is paid to ineligible recipient

LD 7 When donation returned to person

LD 8 Meaning and ranking of payroll donation

237 Tax credits for imputation credits

238 Use of remaining credits by companies and trustees

239 New section LE 2B inserted

LE 2B Use of remaining credits by life insurer on policyholder base

240 Use of remaining credits by others

241 Tax credits for FDP credits

242 Subpart LH–Tax credits for expenditure on research and development

~~243 Who this subpart applies to~~

243 Who this subpart applies to

244 Tax credits relating to expenditure on research and development

~~245 Requirements~~

245 Requirements

245B Adjustments to eligible expenditure

247 New section LH 14B inserted

LH 14B Recovery of overpaid tax credit

248 What this subpart does

249 Tax credits for foreign income tax

249B Section LJ 3 replaced

LJ 3 Meaning of foreign income tax

249C Calculation of New Zealand tax

~~250 Repaid foreign tax~~

250 Section LJ 7 replaced by new sections LJ 7 and LJ 8

LJ 7 Repaid foreign tax: effect on income tax liability

LJ 8 Repaid foreign tax: effect on FDP liability

251 Tax credits relating to attributed CFC income

252 Calculation of amount of credit

253 New section LK 5B inserted

LK 5B Credits from tax year before first affected year

254 Subpart LL repealed

254B Use of remaining credits

254C Continuity rules for carrying credits forward

255 Sections LQ 1 to LQ 4 repealed

255B Tax credits for certain investors in portfolio tax rate entities

256 Subpart LS replaced

Subpart LS—Tax credits for multi-rate PIEs and investors

LS 1 Tax credits for multi-rate PIEs

LS 2 Tax credits for investors in multi-rate PIEs

LS 3 Tax credits for zero-rated investors

LS 4 Tax credits for certain exiting investors

256B Meaning of full-time earner for family scheme

256C Some definitions for family scheme

257 Adjustments for calculation of family scheme income

257B Family scheme income of major shareholders in close companies

257C What this subpart does

257D Third requirement: residence

257E When person does not qualify

257F Continuing requirements

257G Principal caregiver

257H Second requirement: principal care

257I Third requirement: residence

257J Fifth requirement: full-time earner

257K Calculation of in-work tax credit

257L Meaning of employment for this subpart

257M Meaning of net family scheme income

257N Recovery of overpaid tax credit

257O Section MF 6 replaced

MF 6 Overpayment or underpayment of tax credit

258 Tax credits for superannuation contributions

259 Eligibility requirements

260B When short payment and unpaid compulsory employer contributions found after tax credit used

~~261 Employees opting out~~

262 What this subpart does

263 Section ML 2 replaced

ML 2 Tax credit for redundancy payments

263B New section MZ 3 added

MZ 3 Exclusions from determination of family scheme income

264 Memorandum accounts

267 Opening balances of memorandum accounts

268 Shareholder continuity requirements for memorandum accounts

269 Section OA 12 repealed

~~270 Calculation of maximum permitted ratios~~

271 General rules for companies with imputation credit accounts

271B Australian companies with imputation credit accounts

272 New section OB 3B inserted

OB 3B General rule for life insurer's policyholder base

273 ICA payment of tax

274 ICA resident withholding tax withheld

275 New section OB 9B inserted

OB 9B ICA company allocated imputation credit with income from PTRE

276 Section OB 9B replaced

OB 9B ICA attributed PIE income with imputation credit

277 Section OB 11 repealed

278 Section OB 17 repealed

278B ICA transfer to master fund

279 ICA refund of income tax

280 ICA amount applied to pay other taxes

281 ICA refund from tax pooling account

282 ICA transfer within tax pooling account

283 New section OB 35B inserted

OB 35B ICA debit for transfer from tax pooling account for policyholder base liability

284 ICA refund of tax credit

284B ICA transfer for net foreign attributed income

285 Section OB 47 replaced

OB 47 Debit for policyholder base imputation credits

285B ICA benchmark dividend rules

285C Imputation additional tax on leaving wholly-owned group

286 Table O1: imputation credits

287 Table O2: imputation debits

288 General rules for companies with FDP accounts

289 New section OC 2B inserted

OC 2B General rule for life insurer's policyholder base

290 When company chooses to stop being FDPA company

291 When company emigrates

292 Section OC 6 repealed

293 Section OC 8 repealed

294 Section OC 9 repealed

295 Section OC 10 repealed

296 FDPA refund of tax credit

297 Section OC 20 replaced

OC 20 Debit for policyholder base FDP credits

298 Section OC 23 repealed

299 Heading before section OC 30 replaced

300 Payment of further FDP for closing debit balance

301 Payment of further FDP when company no longer New Zealand resident

302 Reduction of further FDP

303 Section OC 33 replaced

OC 33 Income tax paid satisfying liability for further income tax

304 Section OC 34 replaced

OC 34 Further income tax paid satisfying liability for income tax

305 Heading and sections OC 35 to OC 39 repealed

306 Table O3: FDP credits

307 Table O4: FDP debits

308 General rules for companies with CTR accounts

308B Choosing to become CTR company

308C When company stops being CTR company

309 Section OD 5 repealed

310 Section OD 8 repealed

311 Section OD 11 repealed

311B CTRA increase in resident shareholding

312 Section OD 23 repealed

313 Section OD 24 repealed

314 Table O5: conduit tax relief credits

315 Table O6: conduit tax relief debits

316 Branch equivalent tax accounts of companies

317 Section OE 6 repealed

~~318 BETA payment of income tax~~

~~319 Heading and sections OE 12 to OE 16 repealed~~

319 Heading and sections OE 12 and OE 13 repealed

319B Sections OE 14 to OE 16 repealed

320 New heading and section OE 16B inserted

Debit if credit balance at beginning of first affected tax year

OE 16B Company with credit balance at beginning of first affected tax year

321 Table O7: branch equivalent tax credits

322 Table O8 repealed

323 General rules for companies with ASC accounts

324 Subpart OJ repealed

325 MACA payment of tax

326 MACA refund of income tax

327 MACA payment of other taxes

328 New section OK 14B inserted

OK 14B MACA refund of tax credit

329 Table O18: Maori authority debits

330 When credits and debits arise only in consolidated imputation group accounts

330B Provisions applying to consolidated imputation groups

331 Consolidated ICA payment of tax

332 Section OP 14 repealed

333 Consolidated ICA resident withholding tax withheld

334 Section OP 20 repealed

335 Section OP 21 repealed

336 Consolidated ICA refund of income tax

337 Consolidated ICA amount applied to pay other taxes

338 New section OP 33B inserted

OP 33B Consolidated ICA debit for transfer from tax pooling account for policyholder base liability

339 Consolidated ICA refund of tax credit

340 Section OP 38 repealed

340B Consolidated ICA transfer to policyholder credit account

341 Section OP 44 replaced

OP 44 Consolidated ICA debit for policyholder base imputation credits

342 Table O19: imputation credits of consolidated imputation groups

343 Table O20: imputation debits of consolidated imputation groups

344 When credits and debits arise only in consolidated FDP group accounts

345 Section OP 56 repealed

346 Section OP 57 repealed

347 Section OP 61 repealed

348 Section OP 62 repealed

349 Consolidated FDPA refund of tax credit

~~350 Section OP 70 repealed~~

351 Section OP 74 replaced

OP 74 Consolidated FDPA debit for policyholder base FDP credits

352 Table O21: FDP credits of consolidated FDP groups

353 Table O22: FDP debits of consolidated FDP groups

353B CTR accounts of consolidated groups

354 When credits and debits arise only in CTR group accounts

355 Section OP 81 repealed

356 Section OP 82 repealed

357 Section OP 88 repealed

358 Section OP 95 repealed

359 Table O23: conduit tax relief credits of consolidated groups

360 Table O24: conduit tax relief debits of consolidated groups

361 Section OP 99 repealed

362 Section OP 100 repealed

~~363 Consolidated BETA payment of income tax~~

364 Heading and sections OP 105 to OP 108 repealed

365 New heading and section OP 108B inserted

Debit if credit balance at beginning of first affected tax year

OP 108B Consolidated BETA group with credit balance at beginning of first affected tax year

366 Table O25: branch equivalent tax credits of consolidated BETA groups

367 Table O26 repealed

368 Headings and sections OP 109 to OP 116 repealed

369 Tables O27 and O28 repealed

370 ASCA lost excess available subscribed capital

371 Modifying ratios for imputation credits and FDP credits

372 New section OZ 18 added

~~OZ 18 Credit-back of PCA balance~~

OZ 18 Credit-back of PCA balance

373 What this Part does

373B Tax obligations for employment-related taxes

374 Withholding and payment obligations for passive income

375 When obligations not met

376 Payment dates for interim and other tax payments

376B Amalgamation of companies

376C Regulations

377 Application of other provisions for purposes of ESCT rules and NRWT rules

377B Payment of terminal tax

377C Schedular income tax liability for filing taxpayers for non-resident passive income

378 Who is required to pay provisional tax?

378B Attribution rule for income from personal services

379 PAYE rules and their application

379B PAYE income payments

~~380 Salary or wages~~

380 Salary or wages

381 Certain benefits and payments

382 Schedular payments

382B Reduction in certain circumstances

383 Multiple payments of salary or wages

383B Advance payments of salary or wages

384 New section RD 13B inserted

RD 13B Adjustments for payroll donations

384B Payments of extra pay with other PAYE income payments

385 Schedular payments without notification

386 Schedular payments to non-resident entertainers

387 PAYE income payment forms for amounts of tax paid to Commissioner

388 Calculation of all-inclusive pay

388B Value of and payments towards fringe benefits

~~389 Close company option~~

389 Close company option

~~390 Small business option~~

390 Small business option

390B Employer's superannuation contributions

390C Calculating amounts of tax for employer's superannuation contributions

390D Choosing to have amount treated as salary or wages

390E Choosing different rates for employer's superannuation contributions

390F Calculating amounts on failure to withhold

390G Amounts of tax treated as paid to and received by superannuation funds

390H Resident passive income

390I Obligation to withhold RWT

391 Persons who have withholding obligations

392 Agents' or trustees' obligations in relation to certain dividends

392B Notification by companies

393 Non-resident passive income

393B Certain dividends

393C When dividends fully imputed or fully credited

394 Non-cash dividends

395 Dividends paid to companies under control of non-residents

395B Section RF 12 replaced by sections RF 12 to RF 12C

RF 12 Interest paid by approved issuers or transitional residents

RF 12B Interest derived jointly with residents

RF 12C Amount derived from non-resident life insurer becoming resident

395C Credit balance in branch equivalent tax account

395D Using loss balances

395E Reduction of payments for conduit tax relief

396 Subpart RG repealed

397 Retirement scheme contributors

~~398 What this subpart does~~

399 Refunds for overpaid tax

400 Overpayment on income statements

401 Using refund to satisfy tax liability

401B Operation of PAYE intermediaries' trust accounts

401C General responsibility of employers

402 Information required from employers

402B Employer's superannuation contributions

402C General responsibilities of PAYE intermediaries

403 Collection, payment, and information requirements

404 Tax pooling intermediaries

405 New section RP 17B inserted

RP 17B Tax pooling accounts and their use

406 Deposits in tax pooling accounts

407 Transfers from tax pooling accounts

407B Standard method: 2008–09 and 2009–10 income years

407C GST ratio method: 2008–09 and 2009–10 income years

408 Definitions

409 Meaning of income tax varied

410 Treatment of qualifying company election tax, FBT, FDP penalty tax, imputation penalty tax, and withdrawal tax

411 Two companies with common control

412 Two companies with common control: 1988 version provisions

413 Some definitions

414 Table, heading, and sections YB 1 to YB 20 replaced

414B Transparency of nominees

414C Heading for subpart YC

~~415 Section YC 1 repealed~~

415 Heading and section YC 1 repealed

415B Look-through rule for corporate shareholders

415C Disregarding certain securities

415D Reverse takeovers

416 New section YC 18B inserted

~~YC 18B Corporate reorganisations not affecting economic ownership~~

YC 18B Corporate reorganisations not affecting economic ownership

417 Residence of natural persons

417B Country of residence of foreign companies

418 Classes of income treated as having New Zealand source

419 Apportionment of income derived partly in New Zealand

420 General rules for currency conversion

420B New section YZ 2 inserted

YZ 2 Saving of effect of section 394L(4A) of Income Tax Act 1976

421 Schedule 1—Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe benefits

422 Schedule 2—Basic tax rates for PAYE income payments

422B Schedule 4—Rates of tax for schedular payments

422C Schedule 5—Fringe benefit values for motor vehicles

423 Schedule 13—Depreciable land improvements

423B Schedule 20—Expenditure on farming, horticultural, aquacultural, and forestry improvements

424 Schedule 21—Expenditure and activities related to research and development

425 Schedule 24—International tax rules: grey list countries

425B Schedule 25—Foreign investment funds

426 Schedule 27—Countries and types of income with unrecognised tax

426B Schedule 28––Requirements for complying fund rules

426C New schedule 29—Portfolio investment entities: excepted investors

427 Schedule 32—Recipients of charitable or other public benefit gifts

428 Schedule 49—Enactments amended

429 Schedule 50—Amendments to Tax Administration Act 1994

429B Schedule 51–Identified changes in legislation

430 Schedule 52—Comparative tables of old and rewritten provisions

431 Consequential amendments: associated person and list of defined terms

Part 2
Amendments to Tax Administration Act 1994

432 Tax Administration Act 1994

433 Interpretation

434 Construction of certain provisions

~~435 New Part 2B~~

435 Part 2B replaced

Tax pooling intermediaries

15O Establishing tax pooling accounts

15P Role of Commissioner

15Q Applications to establish tax pooling accounts

15R Fitness of applicants

15S Requirements for applications to establish tax pooling accounts

15T Winding up tax pooling accounts

436 Information to be furnished on request of Commissioner

437 No requirement to disclose tax advice document

438 Treatment of book or document

439 Claim that book or document is tax advice document

440 Person must disclose tax contextual information from tax advice document

441 Challenge to claim that book or document is tax advice document

442 Keeping of business and other records

443 Records to be kept by employer or PAYE intermediary

444 PAYE tax codes

445 Special tax code certificates

~~446 Variation of requirements~~

446 Variation of requirements

447 New heading and section 24Q inserted

Payroll donations

24Q Transfer of payroll donations by employers

448 Section 28B replaced

28B Notification of investors’ tax rates

449 Portfolio tax rate entity to give statement to investors and request information

450 Section 31B replaced

31B Notification requirements for PIEs

31C Notification requirements for multi-rate PIEs

450B Records to be provided by employer who contributes to superannuation fund

450C Certification requirements for withdrawals subject to section CS 1 of Income Tax Act 2007

451 Applications for RWT exemption certificates

~~452 Section 32N repealed~~

452 Heading and section 32N repealed

453 Returns of income

454 Annual returns of income not required

455 Electronic format of employer monthly schedule and PAYE payment form

456 Section 36AB replaced

36AB Electronic return requirements for multi-rate PIEs

457 Returns to annual balance date

458 Returns by persons with tax credits for housekeeping payments and charitable or other public benefit gifts

459 Return by person claiming rebate on redundancy payment

460 Portfolio tax rate entities and portfolio investor proxies to make returns, file annual reconciliation statement

461 Section 57B replaced

57B Return requirements for multi-rate PIEs

462 Disclosure of trust particulars

463 Disclosure of interest in foreign company or foreign investment fund

464 Section 66 repealed

465 Tax credit relating to KiwiSaver and complying superannuation fund members: member credit form

466 Statements in relation to research and development tax credits: single persons

467 Section 68E replaced

68E Statements in relation to research and development tax credits: internal software development groups

467B New section 68F inserted

68F Requirements for statements in relation to research and development tax credits

468 Section 78E repealed

469 Section 78F repealed

469B New section 80KLB inserted

80KLB Recovery of excess tax credits

469C Effect of extra instalment on entitlement to tax credit

470 Officers to maintain secrecy

471 Disclosure of information for verification of large budget screen production grant entitlement

472 Disclosure of information in relation to Working for Families tax credits

473 Further secrecy requirements

474 New section 89AB inserted

89AB Response periods

475 Taxpayers and others with standing may issue notices of proposed adjustment

476 Taxpayer may issue notice of proposed adjustment for taxpayer assessment

477 Completing the disputes process

478 Determination on economic rate

479 Determination on special rates and provisional rates

480 Commissioner may decline to issue special rate or provisional rate

481 Notice of setting of economic rate

482 Applications for determinations

483 Determination on type of interest in FIF and use of fair dividend rate method

484 New heading and section 91AAQ inserted

Determinations relating to non-attributing active CFCs

91AAQ Determination on insurer as non-attributing active CFC

485 New heading and section 91AAR inserted

Determinations relating to relocation payments

91AAR Determination relating to eligible relocation expenses

485B Assessment of shortfall penalties

486 Section 102 repealed

487 Section 103 repealed

488 Section 103A repealed

489 Section 104 repealed

490 Time bar for amendment of income tax assessment

490B Extension of time bars

491 Amended assessments for research and development tax credits

492 Definitions

493 Section 120EA repealed

493B Provisional tax instalments in transitional years

~~494 Instalments of and due dates for provisional tax~~

495 Where provisional tax paid by company does not count as overpaid tax

496 Variation to definition of date interest starts

496B Interest paid on deposits in tax pooling accounts

497 Section 120R repealed

498 Certain rights of objection not conferred

498B Certain rights of challenge not conferred

498C Non-electronic filing penalty

498D Late payment penalty

499 Imposition of late payment penalties when financial relief sought

499B Imputation penalty tax payable in some circumstances

500 Section 140C repealed

500B FDP penalty tax payable in some circumstances

501 Section 140CA repealed

502 Tax shortfalls

502B Unacceptable tax position

503 Abusive tax position

504 Evasion or similar act

504B Not paying employer monthly schedule amount

504C Limitation on reduction of shortfall penalty

504D New date for payment of tax that is not a penalty

505 Due dates for payment of imputation penalty tax, FDP penalty tax, and underestimation penalty tax

506 Knowledge offences

507 Evasion or similar offence

507B Recovery of civil penalties

508 Taxes that may be recovered

509 Transfer of excess tax within taxpayer's accounts

510 Transfer of excess tax to another taxpayer

511 Instalment arrangements

512 Section 181 repealed

513 Section 183 repealed

514 Remission for reasonable cause

514B Small amounts of penalties and interest not to be charged

515 Remission on application

516 Payments into, and out of, Listed PAYE Intermediary Bank Account

517 Power to make interim payments of WFF tax credit

Part 3
Amendments to Goods and Services Tax Act 1985

518 Goods and Services Tax Act 1985

519 Interpretation

520 Meaning of term supply

520B Supply of certain imported services

521 Time of supply

522 Value of supply of goods and services

523 Zero-rating of goods

~~524 Zero-rating of services~~

524 Zero-rating of services

525 New section 11C inserted

11C Treatment of supplies by operators of loyalty programmes

~~526 Taxable periods~~

526B Fringe benefits and entertainment expenses

~~527 Persons making supplies in course of taxable activity to be registered~~

528 Group of companies

Part 4
Amendments to KiwiSaver Act 2006

529 KiwiSaver Act 2006

~~530 Interpretation~~

530 Interpretation

531 Section 13 repealed

531B Other situations when automatic enrolment rules do not apply

532 Eligibility to be exempt employer

532B Involuntary transfers

533 What happens when initial back-dated validation ends, with no confirmed back-dated validation?

533B Contribution rate

534 How and when interest is paid on refunds

535 Refunds of employer contribution by Commissioner if employee opts out

537 Compulsory employer contribution amount: general rule

538 New sections 101FB and 101FC inserted

101FB Grace periods: employers

~~101FC De minimis: other contributions~~

101FC De minimis: other contributions and hybrid schemes amount

539 Rules: providers

539B Terms relating to members' tax credits implied into trust deed

539C Terms relating to lump sum payments by complying superannuation funds

540 Crown contribution

~~541 Regulations relating to mortgage diversion facility~~

541 Regulations relating to mortgage diversion facility

541B Schedule 1––KiwiSaver scheme rules

9 Withdrawal on death

Part 5
Amendments to Income Tax Act 2004

542 Income Tax Act 2004

542B New section CC 8B inserted

CC 8B Certain commercial bills: non-resident holders

542C What is a transfer of value?

542D Returns of capital: off-market share cancellations

542E Treasury stock acquisitions

543 Foreign investment fund income

543B Available subscribed capital amount

544 Amounts derived in connection with employment

545 Meaning of expenditure on account of an employee

545B Benefits, pensions, compensation, and government grants

546 New section CR 3 added

~~CR 3 Income for general insurance outstanding claims reserve~~

CR 3 Income for general insurance outstanding claims reserve

546B Section CW 3B repealed

547 Expenditure on account, and reimbursement, of employees

548 New sections CW 13B and CW 13C inserted

CW 13B Relocation payments

~~CW 13C Payments for overtime meals~~

CW 13C Payments for overtime meals and certain other allowances

548B Local and regional promotion bodies

549 Benefits provided instead of allowances

549B Section CX 24 replaced

CX 24 Accommodation

549C Government grants to businesses

549D New heading inserted

549E New section CX 44G inserted

CX 44G Disposal of pre-1990 forest land units

549F Determining tax liabilities

549G New section DB 8B inserted

DB 8B Interest or expenditure connected to stapled debt security

549H Cost of revenue account property

550 Gifts of money by company

550B New section DB 46B inserted

DB 46B Liabilities for emissions

550C Criteria for approval of share purchase schemes: before period of restriction ends

550D Employment-related activities

550E Interpretation: reimbursement and apportionment

550F Forestry business on land bought from the Crown, Maori owners, or holding company: no deduction

551 New section DT 1A inserted

DT 1A Ring-fenced allocations

552 Arrangement for petroleum exploration expenditure and sale of property

553 Petroleum development expenditure

554 Disposal of petroleum mining asset to associate

554B Amount written off by holding company

555 New section DW 3 added

~~DW 3 Deduction for general insurance outstanding claims reserve~~

DW 3 Deduction for general insurance outstanding claims reserve

555B Prepayments

555C Pool method: calculating amount of depreciation

556 Economic rate for plant, equipment, or building, with high residual value

557 Annual rate for item acquired in person's 1995–96 or later income year

557B Meaning of adjusted tax value

558 Section EJ 11 replaced

~~EJ 11 Petroleum development expenditure: default allocation rule~~

~~EJ 11B Petroleum development expenditure: reserve depletion method~~

EJ 11 Petroleum development expenditure: default allocation rule

EJ 11B Petroleum development expenditure: reserve depletion method

559 Relinquishing petroleum permit

560 New sections EJ 12B and EJ 12C inserted

EJ 12B Dry well drilled

EJ 12C Well not producing

561 Disposal of petroleum mining asset

562 Sections EJ 17 and EJ 18 replaced

EJ 18 Meaning of petroleum mining development

562B What spreading methods do

563 IFRS taxpayer method

~~564 IFRS method~~

564 IFRS method

565 Determination alternatives to IFRS

566 Expected value method and equity-free fair value method

566B New section EW 21 inserted

EW 21 Financial reporting method

566C Default method

566D Failure to use method for financial reporting purposes

567 Change of spreading method

568 When calculation of base price adjustment required

568B Base price adjustment formula

568C Direct control interests

568D Direct income interests

568E Direct income interests in FIFs

569 Exemptions: direct income interests in FIF in grey list country

570 Use of particular calculation methods required

571 Comparative value method

572 Fair dividend rate method: usual method

573 Fair dividend rate method: method for unit valuers and persons valuing interests daily

574 Cost method

575 Codes: comparative value method, deemed rate of return method, fair dividend rate method, and cost method

576 Measurement of cost

577 Transitional rule for IFRS financial reporting method

578 New sections EZ 51 and EZ 52 added

EZ 51 Transitional rule for financial reporting method

EZ 52 Transitional rule for changes from the fair value method

578B Floating rate of interest on debentures

578C Interest on debentures issued in substitution for shares

578D New section FC 2B inserted

FC 2B Stapled debt securities

578E Rules for calculating New Zealand group debt percentage

578F New Zealand net equity of New Zealand banking group

579 Section GC 14EB repealed

580 Dividends from qualifying company

580B Modification of agency provisions in respect of income from company debentures

581 Effect of failure to meet eligibility requirements for entities

582 Investor membership requirement

583 Investor interest size requirement

584 Further eligibility requirements relating to investments

585 Unlisted company may choose to become portfolio listed company

586 Becoming portfolio investment entity

587 Credits received by portfolio tax rate entity or portfolio investor proxy

588 Determination of amount of credit in certain cases

589 Credit of tax for imputation credit

590 Credit of tax for dividend withholding payment credit in hands of shareholder

591 Credits in respect of dividends to non-resident investors

592 Special rules for holding companies

592B Credits arising to imputation credit account

593 Allocation rules for imputation credits

594 Amount of imputation credit to be attached to cash distribution

595 Notional distribution deemed to be dividend

596 Amount of imputation credit to be attached to cash distribution

597 Notional distribution deemed to be dividend or taxable Maori authority distribution

598 Branch equivalent tax account of company

599 Credits and debits arising to branch equivalent tax account of company

600 Debits and credits arising to group branch equivalent tax account

601 Use of consolidated group credit to reduce dividend withholding payment, or use of group or individual debit to satisfy income tax liability

602 Allocation rules for dividend withholding payment credits

603 Dividend with both imputation credit and dividend withholding payment credit attached

604 Conduit tax relief account

605 Credits arising to conduit tax relief account

606 Debits arising to conduit tax relief account

607 Consolidated group conduit tax relief account

608 Credits arising to group conduit tax relief account

609 Debits arising to group conduit tax relief account

610 Retirement scheme contributors

611 Application of RWT rules

612 Resident withholding tax deductions from dividends deemed to be dividend withholding payment credits

613 Definitions

614 Schedule 16—Depreciable land improvements

Part 6
Amendments to other Acts and regulations

Income Tax Act 1994

615 Income Tax Act 1994 amended

616 Exempt income—employee allowances and expenditure on account of employee

617 Meaning of “fringe benefit”

617B Accrual expenditure

618 Special and provisional economic rates

618B Use of consolidated group credit to reduce dividend withholding payment, or use of group or individual debit to satisfy income tax liability

619 Definitions

619B Schedule 6A—Specified types of entertainment

620 Schedule 16—Depreciable land improvements

Income Tax Act 1976

621 Special and provisional economic rates

622 Schedule 21–Depreciable land improvements

Estate and Gift Duties Act 1968

622B Interpretation

Stamp and Cheque Duties Act 1971

622C Interpretation

Taxation Review Authorities Act 1994

622D Hearing of objections by an Authority

Taxation (Business Taxation and Remedial Matters) Act 2007

623 Use of consolidated group credit to reduce dividend withholding payment or use of group or individual debit to satisfy income tax liability

Acts referring to associated person

624 Consequential amendments to other Acts: associated person

Companies Act 1993

624B Schedule 7—Preferential claims

Insolvency Act 2006

624C Priority of payments to preferential creditors

Income Tax (Depreciation Determinations) Regulations 1993

625 Income Tax (Depreciation Determinations) Regulations 1993

Goods and Services Tax (Grants and Subsidies) Order 1992

626 Schedule—Non-taxable grants and subsidies

KiwiSaver Regulations 2006

627 KiwiSaver Regulations 2006 amended

628 What member of KiwiSaver scheme must do next to participate in mortgage diversion facility

629 What scheme provider must do to participate in mortgage diversion facility

Schedule 1
Consequential amendments to lists of defined terms: associated person

Schedule 2
Consequential amendments to other Acts: associated person

Legislative history

The Parliament of New Zealand enacts as follows: