Taxation (Tax Administration and Remedial Matters) Act 2011

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

Reprint as at 2 November 2012

Taxation (Tax Administration and Remedial Matters) Act 2011

Public Act2011 No 63
Date of assent29 August 2011
Commencementsee section 2


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.


1 Title

2 Commencement

Part 1
Amendments to Income Tax Act 2007

3 Income Tax Act 2007

4 Available capital distribution amount

5 New section CG 5B

6 Attributed income of investors in multi-rate PIEs

7 New section CW 1B

8 Dividend within New Zealand wholly-owned group

9 Attributed income of certain investors in multi-rate PIEs

10 Distributions to investors in multi-rate PIEs

11 New section CZ 23

12 Taxes, other than GST, and penalties

13 New section DB 3B

14 New section DB 4B

15 Cost of revenue account property

16 New section DB 54B

17 New section DP 9B

18 Cost of timber

19 Disposal of petroleum mining asset to associate

20 Association rebates

21 New section DZ 19

22 Valuation under herd scheme

23 What this subpart does

24 Application of sections EE 48 to EE 52

25 Consideration for purposes of section EE 44

26 Events for purposes of section EE 44

27 Effect of disposal or event

28 Use of money interest payable by Commissioner

29 Use of money interest payable by person

30 Section EF 6 repealed

31 What is included when spreading methods used

32 IFRS financial reporting method

33 When calculation of base price adjustment required

34 Base price adjustment formula

35 Consideration when party changes from fair value method

36 Attributable CFC amount

37 Net attributable CFC income or loss

38 Non-attributing active CFC: test based on accounting standards

39 Limits on choice of calculation methods

40 Fair dividend rate method: usual method

41 Fair dividend rate method and cost method: when periods affected by share reorganisations

42 Additional FIF income or loss if CFC owns FIF

43 New section EZ 23B

44 New section EZ 32C

45 Apportionment of interest by excess debt entity

46 Calculation of debt percentages

47 Rights and obligations of amalgamated companies

48 Leases for inadequate rent

49 Further eligibility requirements relating to investments

50 Portfolio entity tax liability and tax credits of portfolio tax rate entity for period

51 Outline of subpart and relationship with other Parts

52 What is a portfolio investment entity?

53 What is an investor class?

54 Intended effects for multi-rate PIEs and investors

55 New section HM 6B

56 Requirements

57 Residence in New Zealand

58 Investment types

59 Income sources

60 Maximum shareholdings in investments

61 Minimum number of investors

62 New section HM 19B

63 New section HM 19C

64 Exceptions for certain investors

65 When entity no longer meets investment or investor requirements

66 Rules for multi-rate PIEs

67 Rules for and treatment of investors in multi-rate PIEs

68 Proxies for PIE investors

69 New section HM 35C

70 Calculating amounts attributed to investors

71 When superannuation fund investor has conditional entitlement

72 Options for calculation and payment of tax

73 Provisional tax calculation option

74 New section HM 44B

75 Voluntary payments

76 Calculation of tax liability or tax credit of multi-rate PIEs

77 Use of foreign tax credits by PIEs

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

79 New heading and sections HM 55C to HM 55H

80 Prescribed investor rates: schedular rates

81 New section HM 57B

82 Notified investor rates

83 Certain exiting investors zero-rated

84 Use of investor classes' losses

85 Use of land losses of investor classes

86 New section HM 71B

87 When elections take effect

88 New section HR 4B inserted

89 Qualifying companies: transition into look-through companies

90 Common ownership: group of companies

91 Breach in income year in which tax loss component arises

92 New section IQ 1A inserted and amended

93 General treatment

94 Ring-fencing cap on attributed CFC net losses

95 Attributed CFC net loss from tax year before first affected year

96 Ring-fencing cap on FIF net losses

97 Group companies using attributed CFC net losses

98 Section IQ 5 repealed

99 Tax credits for resident withholding tax

100 What this subpart does

101 Calculation of New Zealand tax

102 Repaid foreign tax: effect on income tax liability

103 Repaid foreign tax: effect on FDP liability

104 Tax credits relating to attributed CFC income

105 Tax credits for multi-rate PIEs

106 Tax credits for investors in multi-rate PIEs

107 Family scheme income from amounts derived by dependent children

108 Third requirement: residence

109 Fifth requirement: full-time earner

110 Meaning of employment for this subpart

111 Payment of tax credits

112 ICA payment of tax

113 Reduction of further income tax

114 Co-operative companies' notional distributions that are dividends

115 BETA payment of income tax

116 Section OE 8 repealed

117 New section OK 6B

118 Table O17: Maori authority credits

119 Consolidated BETA payment of income tax

120 Section OP 102 repealed

121 ASCA lost excess available subscribed capital

122 Salary or wages

123 Section RD 67 replaced

124 Resident passive income

125 Tax pooling intermediaries

126 Tax pooling accounts and their use

127 Transfers from tax pooling accounts

128 New section RP 19B inserted

129 Refusals to transfer amounts

130 Definitions

131 No look-through rule for companies in certain cases

132 Corporate spin-outs

133 Directors' knowledge of failure to meet requirements of continuity provision

134 New section YD 3B

135 New section YZ 3

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

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

138 Schedule 32––Recipients of charitable or other public benefit gifts

139 Schedule 39—Items for purposes of definition of special excluded depreciable property

140 Minor textual amendments to Income Tax Act 2007

Part 2
Amendments to Tax Administration Act 1994

141 Tax Administration Act 1994

142 Interpretation

143 Commissioner may access premises to obtain information

144 Power to remove and copy documents

145 Power to remove and retain documents for inspection

146 Information to be furnished on request of Commissioner

147 Court orders for production of information or return

148 Inquiry by Commissioner

149 Privilege for confidential communication between legal practitioners and their clients

150 No requirement to disclose tax advice document

151 Treatment of book or document

152 Claim that book or document is tax advice document

153 Book or document or part of book or document included in tax advice document

154 Person must disclose tax contextual information from tax advice document

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

156 Information requisitions in relation to offshore payments

157 New section 28D

158 Notification requirements for PIEs

159 Notification requirements for multi-rate PIEs

160 Notification of amalgamation to Commissioner

161 Effect of giving notice of entitlement

162 Officers to maintain secrecy

163 New section 81BA inserted

164 Other persons to maintain secrecy

165 Further secrecy requirements

166 Notices of proposed adjustment required to be issued by Commissioner

167 Section 89E repealed

168 Deemed acceptance

169 Where Commissioner accepts adjustment proposed by disputant

170 Late actions deemed to occur within response period

171 Application to High Court

172 Disclosure notices

173 Completing the disputes process

174 New section 89P

175 Time bar for amendment of income tax assessment

176 Time bar for amending GST assessment

177 When disputant entitled to challenge assessment

178 Certain rights of challenge not conferred

179 Effect of disclosure notice: exclusion of evidence

180 Proceedings may be transferred to different hearing authorities

181 Section 138O repealed

182 Absolute liability offences

183 Knowledge offences

184 Evasion or similar offence

185 Evidence in proceedings for failure to furnish returns or information

186 Deduction of tax from payments due to defaulters

187 Procedure in District Court where defendant absent from New Zealand

188 New section 183CB

189 New section 184AA

190 New section 226C added

Part 3
Remedial matters and abolition of gift duty

Amendments to Income Tax Act 2004

191 Income Tax Act 2004

192 New section CW 1B

193 Taxes, other than GST, and penalties

194 New section DB 3B

195 New section DP 8B

196 Cost of timber

197 Disposal of petroleum mining asset to associate

198 Valuation under herd scheme

199 What is included when spreading methods used

200 IFRS method

201 Base price adjustment formula

202 Consideration when change from fair value method under IFRS method

203 Further eligibility requirements relating to investments

204 Portfolio entity tax liability and rebates of portfolio tax rate entity for period

205 Credits arising to Maori authority credit account

206 Modifications to measurement of voting and market value interests in case of continuity provisions

207 New section YA 5C

208 Schedule 22A—Identified policy changes

Amendment to New Zealand Superannuation and Retirement Income Act 2001

209 Section 76 of New Zealand Superannuation and Retirement Income Act 2001 repealed

Amendments to KiwiSaver Act 2006

210 Section 4 of KiwiSaver Act 2006 amended

211 New section 81B of KiwiSaver Act 2006 inserted

Amendments to Taxation Review Authorities Act 1994

212 Taxation Review Authorities Act 1994

213 General jurisdiction of Authorities

214 Section 13B repealed

215 An Authority to be a commission of inquiry

216 Evidence in proceedings before an Authority

217 Challenges appealed to High Court

Amendments to Income Tax Act 1994

218 Income Tax Act 1994

219 New section CB 17

220 Certain deductions not allowed

221 New section DB 2

222 Cost of timber

Amendments to Taxation Review Authorities Regulations 1998

223 Taxation Review Authorities Regulations 1998

224 Interpretation

225 Application of District Court Rules 1992

226 Proceedings generally

227 Form

228 Notice of defence

229 Interlocutory applications

230 Part 3 revoked

231 Requirement for directions hearings

232 Time for directions hearing

233 Schedule

Amendments to Goods and Services Tax Act 1985

234 Goods and Services Tax Act 1985

235 Interpretation

236 Meaning of term supply

237 Value of supply of goods and services

238 Zero-rating of goods

239 Adjustments when person becomes registered after acquiring goods and services

240 Treatment on disposal

241 New section 21HB

242 Group of companies

243 Keeping of records

244 Liability in relation to supplies of land

Abolition of gift duty

245 Estate and Gift Duties Act 1968

Minor textual amendments to Income Tax Act 2007

Reprint notes

The Parliament of New Zealand enacts as follows: