Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010

If you need more information about this Act, please contact the administering agency: Inland Revenue Department

Reprint as at 1 May 2011

Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010

Public Act2010 No 109
Date of assent7 September 2010
Commencementsee section 2
Note

Changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in this reprint.

A general outline of these changes is set out in the notes at the end of this reprint, together with other explanatory material about this reprint.

This Act is administered by the Inland Revenue Department.

Contents

1 Title

2 Commencement

Part 1
Annual rates of income tax

3 Annual rates of income tax for 2010–11 tax year

Part 2
Amendments to Income Tax Act 2007

4 Income Tax Act 2007

5 Amounts derived by mutual associations

6 Disposal of emissions units

7 Distribution excluded from being dividend

8 Section CD 34 repealed

9 New section CD 34B inserted

CD 34B Distributions to members of co-operative companies

10 Available subscribed capital (ASC) amount

11 Income for general insurance outstanding claims reserve

12 Subpart CS repealed

13 New section CW 29B inserted

CW 29B Amounts from Australian complying superannuation schemes reinvested in KiwiSaver schemes

14 Non-resident company involved in exploration and development activities

15 Voluntary activities

16 Employment-related loans

17 Benefits provided to employees who are shareholders or investors

18 New section CX 51C inserted

CX 51C Disposal of fishing quota emissions units

19 Available capital distribution amount

20 Acquisition of emissions units

21 Liabilities for emissions

22 Section DB 61 replaced

DB 61 Surrender of certain emissions units for post-1989 forest land emissions

23 Film production expenditure

24 Distribution to member of co-operative company, excluded from being dividend

25 Association rebates

26 Deduction for general insurance outstanding claims reserve

27 Apportionment on disposal of business assets that include trading stock

28 Valuation of excepted financial arrangements

29 Valuation of emissions units issued for zero price

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

31 Total deductions in section EE 56

32 Expenditure incurred in acquiring film rights in feature films

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

34 Film production expenditure for New Zealand films having no government screen production payment

35 Film production expenditure for other films having no government screen production payment

36 Determination alternatives

37 Expected value method

38 Modified fair value method

39 Change of spreading method

40 Spreading method adjustment formula

41 Base price adjustment formula

42 Meaning of controlled foreign company

43 Attributable CFC amount

44 Non-attributing active CFC: default test

45 Part-year tax calculations

46 Outstanding claims reserving amount: non-participation policies not annuities

47 Premium smoothing reserving amount: non-participation policies not annuities

48 Unearned premium reserving amount: non-participation policies not annuities

49 Capital guarantee reserving amount: non-participation policies not annuities

50 Transitional adjustments: life risk

51 New sections EZ 52C and EZ 52D

EZ 52C Change of spreading method: Determination G22 to Determination G22A

EZ 52D Base price adjustment: financial arrangements to which Determination G22 and Determination G22A applied

52 Expenditure when deduction would be denied to consolidated group

53 Close company remuneration to shareholders, directors, or relatives

54 Disposals of trading stock at below market value

GC 1 Disposals of trading stock at below market value

55 Disposals of timber rights or standing timber

56 New section GC 3B inserted

GC 3B Disposals of emissions units

57 What this subpart does

58 Corporate requirements

59 When requirements no longer met

60 New section HA 11B inserted

HA 11B When requirements no longer met: LAQCs

61 Treatment of tax losses other than certain foreign losses

62 Attribution when balance dates differ

63 Trustees' obligations

64 Effect of failure to meet eligibility requirements for entities

65 Investor interest size requirement

66 Treatment of portfolio class taxable loss and portfolio class land loss for tax year

67 When entity no longer meets investment or investor requirements

68 When income cannot be attributed

69 New section HM 42B

HM 42B Part-year tax calculations for PIEs under the exit calculation option for the 2010–11 tax year

70 Use of tax credits other than foreign tax credits by PIEs

71 Transition of rate for certain investors

72 Notified investor rates

73 Use of land losses of investor classes

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

75 Transitional residents

76 Cross-heading replaced

77 RMBS special purpose vehicles

78 New section HR 9B inserted

HR 9B Bankruptcy-remote property during application of section HR 9

79 What happens when vehicle stops being RMBS special purpose vehicle?

80 Transitional provisions for PIE rules

81 Restrictions relating to ring-fenced tax losses

82 Common ownership: group of companies

83 Bad debts or decline of value of shares

84 Breach in tax year in which loss balance is grouped

85 Treatment of remaining credits

86 Child's income

87 Tax credits for housekeeping

88 Tax credits for supplementary dividends

89 Limitation on deductions

90 Tax credits for certain investors in portfolio tax rate entities

91 Tax credits for investors in multi-rate PIEs

92 Tax credits for certain zero-rated portfolio investors

93 Tax credits for zero-rated investors

94 Treatment of tax credits on permanent emigration

95 ICA transfer from tax pooling account

96 ICA attribution for personal services

97 ICA refund of income tax

98 ICA refund from tax pooling account

99 ICA transfer within tax pooling account

100 Imputation additional tax on leaving wholly-owned group

101 Imputation additional tax on joining wholly-owned group

102 New section OB 72B inserted

OB 72B Limit on using entitlement to refund after joining wholly-owned group

103 New heading and section OE 11B inserted

Treatment of debits from conduit relief

OE 11B Company with debit balance, including debits from conduit relief, in some income years

104 Heading and section OE 16B repealed

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

106 Consolidated ICA transfer from tax pooling account

107 Consolidated ICA refund from tax pooling account

108 Consolidated ICA transfer to tax pooling account

109 New heading and section OP 104B inserted

Treatment by consolidated BETA groups of BETA debits from conduit relief

OP 104B Consolidated BETA group with debit balance, including debits from conduit relief, in certain income years

110 Heading and section OP 108B repealed

111 Tax credits for non-resident investors

112 Payment dates for terminal tax

113 Alternate rate option

114 Heading and section RD 72 repealed

115 Interest

116 Payments made by RWT proxies

117 Definitions

118 General rules for currency conversion

119 New section YF 2 added

YF 2 Other rules for currency conversion: approved alternatives

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

4 Interest: most companies

121 Schedule 4––Rates of tax for schedular payments

122 Schedule 6—Prescribed rates: PIE investments and retirement scheme contributions

123 Schedule 29—Portfolio investment entities: listed investors

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

Part 3
Amendments to Tax Administration Act 1994

125 Tax Administration Act 1994

126 Interpretation

127 Exemption certificates for schedular payments

128 Special tax rate certificates for schedular payments

129 Use of inconsistent RWT rates

130 RWT withholding certificates

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

132 Section 32B repealed

133 Section 32C repealed

134 Particulars furnished in electronic format

135 General requirements for returns

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

137 RWT withholding reconciliation statements

138 Disclosure of interest payments when no requirement to withhold RWT

139 Determinations in relation to financial arrangements

140 Notification of determinations and notices

141 Determinations in relation to apportionment of interest costs

142 Determinations in relation to standard-cost household service

143 Determinations relating to types and diminishing values of listed horticultural plants

144 Publication and revocation of determinations relating to livestock

145 Commissioner may decline to issue special rate or provisional rate

146 Notice of setting of economic rate

147 Applications for determinations

148 Determinations on rates for diminishing value of environmental expenditure

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

150 Determination on insurer as non-attributing active CFC

151 Determination relating to eligible relocation expenses

152 Content and notification of a public ruling

153 Withdrawal of a public ruling

154 Commissioner to make private rulings on request

155 Effect of a private ruling

156 Application of a private ruling

157 Assumptions in making a private ruling

158 Content and notification of a private ruling

159 New section 91EJ inserted

91EJ Treatment of information

160 Commissioner may make product rulings

161 Effect of a product ruling

162 Application of a product ruling

163 Applying for a product ruling

164 Disclosure requirements

165 Assumptions in making a product ruling

166 Content and notification of a product ruling

167 Withdrawal of a product ruling

168 New section 91FK inserted

91FK Treatment of information

169 New section 120W inserted

120W Commissioner's official opinions

170 Transitional imputation penalty tax payable in some circumstances

171 Unacceptable tax position

172 Definition of promoter

173 Section 165AA repealed

174 Remission for GST transitional taxable periods

Part 4
Amendments to KiwiSaver Act 2006

175 KiwiSaver Act 2006

176 Interpretation

177 Employees must give information to employers

178 Eligibility to be exempt employer

179 How to apply to be exempt employer

180 How applications to be exempt employer must be dealt with

181 How to opt in

182 Opting in by persons under 18

183 Initial back-dated validation

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

185 PAYE rules apply to deductions

186 Interest rate

187 Application of other provisions of Superannuation Schemes Act 1989

188 Regulations relating to mortgage diversion facility

189 Schedule 1––KiwiSaver scheme rules

4B Amounts from Australian complying superannuation schemes

14B Exceptions to clause 14 for Australian permanent emigration

Part 5
Amendments to other Acts and regulations

Goods and Services Tax Act 1985

190 Goods and Services Tax Act 1985

191 Zero-rating of services

192 Goods and services tax incurred in making certain supplies of financial services

193 New section 78AA inserted

78AA Exceptions to effect of increase of tax

194 Adjustments to tax payable for persons furnishing returns on payments basis following change in rate of tax

Estate and Gift Duties Act 1968

195 Exemption for gifts to charities and certain bodies

Income Tax Act 2004

196 Income Tax Act 2004

197 Foreign investment fund income

198 Benefits provided to employees who are shareholders or investors

199 Total deductions in section EE 47

200 Determination alternatives to IFRS

201 Expected value method and equity-free fair value method

202 Meaning of CFC

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

204 Treatment of portfolio class taxable loss and portfolio class land loss for tax year

205 Credit for investor for tax paid by entity if portfolio investor allocated income not excluded income

206 Credit for zero-rated portfolio investor for tax paid by entity in relation to portfolio investor allocated income

207 Definitions

208 Schedule 22A—Identified policy changes

Taxation (Budget Measures) Act 2010

209 Section 4 repealed

210 Alternate rate option

Local Government Act 2002

211 Schedule 9—Council-controlled organisations and transfer of undertakings

Tax Administration (Binding Rulings) Regulations 1999

212 Waiver of fees

213 Fees inclusive of goods and services tax

Schedule 1
Amendments to Income Tax Act 2007, schedule 1

Schedule 2
Amendments to Income Tax Act 2007, schedule 6

Reprint notes

The Parliament of New Zealand enacts as follows: