COVID-19 Response (Further Management Measures) Legislation Act (No 2) 2020

Schedule 2 Inland Revenue Department

s 3

Part 1 Income Tax Act 2007

1 Amendments to Income Tax Act 2007

This Part amends the Income Tax Act 2007.

Subpart 1—Provisions commencing on 1 July 2020

2 Section DF 1 amended (Government grants to businesses)

(1)

After section DF 1(1)(cb), insert:

(cc)

the payment is not an amount of a loan made under the research and development loan scheme; and

(2)

In section DF 1, list of defined terms, insert “research and development loan scheme”.

3 Section YA 1 amended (Definitions)

In section YA 1, insert in its appropriate alphabetical order:

research and development loan scheme means the research and development loan scheme established by Ministerial direction to Callaghan Innovation under section 112 of the Crown Entities Act 2004, notice number 2020–go2811

4 Schedule 21B amended (Expenditure or loss for research and development tax credits)

In schedule 21B, part B, clause 21, replace “local authority.” with “local authority. However, this expenditure does not include an amount funded through a loan made under the research and development loan scheme.”

Subpart 2—Provisions commencing on 1 April 2021

5 Section MD 9 amended (Fifth requirement: full-time earner)

(1)

In section MD 9(1)(a), replace “full-time earner or derive an amount of compensation described in subsection (4)” with “full-time earner, or derive an amount of compensation described in subsection (4), or not derive income but meet the alternative requirements in subsection (6)”.

(2)

After section MD 9(5), insert:

14 day concession

(6)

A person meets the fifth requirement if they do not derive income or otherwise do not meet the fifth requirement, but have met the fifth requirement within the last 14 days.

6 Section MD 10 amended (Calculation of in-work tax credit)

(1)

In section MD 10(3)(d)(i), replace “section MD 9(1)(b)” with “section MD 9(1)(b), and includes whole periods of 1 week to which the alternative requirement in section MD 9(6) applies”.

(2)

In section MD 10(3)(d)(ii), replace “section MD 9(1)(b)” with “section MD 9(1)(b), and includes whole periods of 1 week to which the alternative requirement in section MD 9(6) applies”.

Part 2 Tax Administration Act 1994

7 Amendments to Tax Administration Act 1994

This Part amends the Tax Administration Act 1994.

Subpart 1—Provisions commencing on 17 March 2020

8 Section 6H amended (COVID-19 response: powers to vary provisions of Inland Revenue Acts)

In section 6H(1), replace “extend” with “extend or otherwise modify”.

9 Section 6I amended (COVID-19 response: Commissioner’s variations)

(1)

In section 6I(1)(a), replace “extending” with “extending or otherwise modifying”.

(2)

After section 6I(1), insert:

Meaning of modifying

(1B)

For the purposes of subsection (1), modifying a due date, deadline, time period, or timeframe may include shortening or reducing it if the Commissioner considers it would be advantageous for persons generally or for a particular class of persons.

Subpart 2—Provisions commencing on 1 July 2020

10 Schedule 7 amended (Disclosure rules)

(1)

In schedule 7, part C, subpart 1, after clause 23B(6)(d), insert:

(e)

Callaghan Innovation.

(2)

In schedule 7, part C, subpart 1, replace clause 38(2) with:

(2)

Section 18 does not prevent the Commissioner communicating to an officer, employee, or agent of Callaghan Innovation or of the Ministry of Business, Innovation, and Employment information reasonably necessary for that person to perform their work in relation to—

(a)

the offer of research and development advice and incentives, including tax incentives, grants, loans, and any related measures aimed at incentivising research and development:

(b)

the grant and administration of a loan made under the research and development loan scheme established by Ministerial direction to Callaghan Innovation under section 112 of the Crown Entities Act 2004, notice number 2020–go2811.

Subpart 3—Provisions commencing on day after date of Royal assent

11 Section 183ABAB amended (Remission for taxpayers affected by COVID-19)

Replace the heading to section 183ABAB with “Remission of interest for taxpayers affected by COVID-19: general rules”.

12 New section 183ABAC inserted (Remission of interest on terminal tax for 2020–21 tax year for provisional taxpayers affected by COVID-19)

After section 183ABAB, insert:

183ABAC Remission of interest on terminal tax for 2020–21 tax year for provisional taxpayers affected by COVID-19

(1)

This section applies for a taxpayer who is liable to pay provisional tax for the 2020–21 tax year if—

(a)

the taxpayer, for the 2020–21 tax year,—

(i)

makes an estimate under section RC 7 of the Income Tax Act 2007 on or before their last instalment date for the 2020–21 tax year; or

(ii)

makes an election under section RC 10(5) of that Act; or

(iii)

does not make an election under section RC 10(5) of that Act, but meets the criteria set out in section 120KE(1)(b) to (e); and

(b)

the taxpayer’s residual income tax for the 2020–21 tax year is less than $1 million; and

(c)

the taxpayer is charged with interest under Part 7—

(i)

on an amount of terminal tax payable for the 2020–21 tax year; and

(ii)

that begins to accrue before the taxpayer’s terminal tax date for the 2020–21 tax year; and

(d)

the taxpayer’s ability to make a reasonably accurate forecast, on 1 or more provisional tax instalment dates for the 2020–21 tax year, of their residual income tax for the 2020–21 tax year was significantly adversely affected by COVID-19 and, as a consequence, the taxpayer failed to pay the relevant portions of the amount by the relevant instalment dates; and

(e)

the requirement to pay the amount does not arise from an election under section IZ 8 of the Income Tax Act 2007 by the taxpayer, or by a company in the same group of companies as the taxpayer.

(2)

The taxpayer may ask the Commissioner to remit interest accrued between 31 March 2020 and the taxpayer’s terminal tax date for the 2020–21 tax year, both dates inclusive (the interest), on the amount.

(3)

The Commissioner may remit the interest if the Commissioner is satisfied that the taxpayer—

(a)

asked for the relief as soon as practicable; and

(b)

has paid their terminal tax for the 2020–21 tax year.

(4)

This section does not limit section 183ABAB.