Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698843698065.pdf (New Zealand)
Reprint as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Public Act Date of assent 2006 No 3 3 April 2006 Contents Title Commencement Part 1 Amendments to Income Tax Act 2004 Income Tax Act 2004 Double tax agreements Heading for section CD 1 replaced New section CD 1B inserted CD 1B Distribution excluded from being dividend Tax credits linked to dividends New sections CD 10B and CD IOC inserted Page 17 17 19 19 19 19 19 19 19 Note Changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in this eprint.
A general outline of these changes is set out in the notes at the end of this eprint, together with other explanatory material about this eprint.
1 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 CD 10B Credit transfer notice CD 10C Dividend reduced if foreign tax paid on company’s income Capital distributions on liquidation New section CD 24B inserted CD 24B Distribution to member of co­operative company based on member’s transactions Available subscribed capital amount Available capital distribution amount When does a person have attributed repatriation from a CFC?
New heading and section CD 43 added Returning share transfers CD 43 Replacement payments Value and timing of beneﬁts under share purchase agreements Meaning of expenditure on account of an employee New heading and section CE 11 inserted Income protection insurance CE 11 Proceeds from claims under policies of income protection insurance New heading and section CE 12 inserted [Repealed] Beneﬁts, pensions, compensation, and government grants [Repealed] Adjustment for closing values of trading stock, livestock, and excepted ﬁnancial arrangements When attributed CFC income arises When FIF income arises Exclusion of withdrawal when member ends employment New section CW 11C inserted CW 11C Proceeds from share or option acquired under venture investment agreement 25 New heading and section CW 22B inserted Certain income of transitional resident 26 27 CW 22B Certain income derived by transitional resident New section CW 28B inserted [Repealed] New section CW 40B inserted CW 40B Income from conducting gaming­machine gambling 28 Private use of motor vehicle 2 19 20 21 21 21 23 24 24 25 25 25 26 27 27 27 27 27 28 28 29 29 30 32 32 32 32 33 33 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 29 30 31 32 33 34 35 36 37 38 39 40 New section CX 6B inserted CX 6B Employer or associated person treated as having right to use vehicle under arrangement Employment­related loans Beneﬁts provided instead of
 allowances New section CX 18B inserted CX 18B Business tools Beneﬁts provided on premises New section CX 20B inserted CX 20B Beneﬁts related to health or safety Beneﬁts provided by charitable organisations New section CX 26B inserted CX 26B Contributions to income protection insurance New section CX 27B inserted CX 27B Goods provided at discount by third parties Government grants to businesses New heading and section CX 44B inserted Share­lending arrangements CX 44B Share­lending collateral under share­lending
 arrangements New section DB 9B inserted DB 9B Base price adjustment under old ﬁnancial arrangements rules 41 New heading and sections DB 12B and DB 12C inserted Share­lending arrangements 42 43 44 45 DB 12B Share­lending collateral under share­lending arrangements DB 12C Replacement payments and imputation credits under share­lending arrangements Research or development Some deﬁnitions Adjustment for opening values of trading stock, livestock, and excepted ﬁnancial arrangements New heading and section DB 45 added Use of motor vehicle under certain arrangements DB 45 Expenditure incurred in operating motor vehicle under agreement or arrangement affected by section CX 6B 46 47 Deductions for business use Heading to subpart DF [Repealed] Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 Government grants to businesses New section DF 4 added [Repealed] When attributed CFC loss arises When FIF loss arises Enhancements to land, except trees Improvements to farm land Improvement destroyed or made useless by qualifying event New section DO 7 added DO 7 Improvement destroyed or made useless Improvement destroyed or made useless by qualifying event Disposal of property New section DV 10B inserted DV 10B Distribution to member of co­operative company, excluded from being dividend Trading stock, livestock, and
 excepted ﬁnancial arrangements New section EC 5B inserted EC 5B Transfer of livestock because of self­assessed adverse event First income year in breeding business Later income years in breeding business Reduction: bloodstock not previously used for breeding in New Zealand Reduction: bloodstock previously used for breeding in New Zealand Replacement breeding stock Valuation of excepted ﬁnancial arrangements Transfers of certain excepted ﬁnancial arrangements within wholly­owned groups What this subpart does
 Section EE 25 replaced EE 25 Setting of economic depreciation rate New sections EE 25B to EE 25E inserted EE 25B Economic rate for certain depreciable property EE 25C Economic rate for buildings EE 25D Economic rate for certain aircraft and motor vehicles EE 25E Economic rate for plant, equipment, or building, with high residual value Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 Annual rate for item acquired in person’s 199596 or later income year New section EE 26B inserted EE 26B Election in respect of certain depreciable property acquired on or after 1 April 2005 Items of low value Consideration for purposes of section EE 37 Effect of disposal or event Other deﬁnitions ACC levies and premiums Meaning of self­assessed adverse event Meaning of self­assessed adverse event Leases: income derived in anticipation New heading and sections EJ 20 and EJ 21 inserted Research, development, and resulting market development EJ 20 Deductions for market developmentproduct of research, development EJ 21 Allocation of deductions for research, development, resulting market development Refund What is an excepted ﬁnancial arrangement?
Consideration when person enters rules: accrued obligation Consideration when person enters rules: accrued entitlement New heading and section EW 52B inserted Treatment of original share acquired under ﬁnancial arrangement EW 52B Share supplier under share­lending arrangement Income interests on days of non­residence Section EX 17 replaced EX 17 Income interest if variations within period Taxable distribution from non­qualifying trust Branch equivalent income or loss: calculation rules Residence in grey list country Grey list exemption Foreign exchange control exemption Immigrant’s 4­year exemption Immigrant’s accrued superannuation entitlement exemption Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 Accounting proﬁts method Comparative value method Deemed rate of return method Additional FIF income or loss if CFC owns FIF 96 97 98 99 100 Migration of persons holding FIF interests 101 New sections EZ 4B and EZ 4C inserted EZ 4B Reduction: bloodstock not previously used for 102 103 104 105 106 breeding in New Zealand: pre­1 August 2006 EZ 4C Reduction: broodmare previously used for breeding in New Zealand: pre­1 August 2006 New section EZ 21B inserted EZ 21B Economic rate for plant or equipment acquired before 1 April 2005 and buildings acquired before 19 May 2005 Section EZ 29 replaced EZ 29 Disclosure restrictions on grey list CFCs before
 201112 Apportionment of income derived partly in New Zealand and partly elsewhere Liability to make return and pay income tax New heading and sections FC 22 to FC 24 added Transitional residents FC 22 Tax treatment of foreign­sourced amounts derived by transitional resident FC 23 General requirements for being transitional resident FC 24 Transitional resident New subpart FCB inserted 107 Subpart FCB—Emigration of resident companies FCB 1 Tax effects of company becoming non­resident to reﬂect tax effects of
 liquidation FCB 2 Emigrating company treated as paying distribution to shareholders FCB 3 Emigrating company treated as disposing of property and immediately reacquiring property Amalgamation of companies: purpose Arrangement to defeat application of depreciation provisions New section GC 14G inserted GC 14G Arrangement to avoid application of rules for returning share transfers Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 New section GC 17B inserted GC 17B Fringe beneﬁt tax: arrangement void Sale or other disposition of trading stock for inadequate consideration Distribution of property to policyholders Returns, assessments, and liability of consolidated group Payment of qualifying company election tax Trusts settled by persons before becoming resident Trustee income Application of other provisions to withdrawal tax Rebate in certain cases for children Rebates in respect of gifts of money Calculation of subpart KD credit In­work payment Calculation of family tax credit Credit of tax for imputation credit Foreign tax credits: CFCs Tax deductions to be credited against tax assessed New section LD 1B inserted [Repealed] Resident withholding tax payments to be credited against income tax assessed
 Credit of tax for dividend withholding payment credit in hands of shareholder Refund to non­resident or exempt shareholders Underlying foreign tax credits generally, and interpretation Amount of underlying foreign tax credit Dividends from grey list companies Procedures with respect to underlying foreign tax credit Provisional taxpayer affected by qualifying event New section MB 11B inserted MB 11B Transitional provisions relating to alignment of dates of payment for provisional tax and GST 137 Subpart MB
 replaced Introductory provisions MB 1 Outline of subpart MB 2 Who pays provisional tax?
MB 3 Becoming provisional taxpayer by election Calculation of provisional tax liability MB 4 Methods for calculating provisional tax liability MB 5 Standard method Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 MB 6 Estimation method MB 7 GST ratio method Instalments of provisional tax MB 8 Provisional tax payable in instalments MB 9 Calculating amount of instalment under standard and estimation methods MB 10 Calculating amount of instalment using GST ratio MB 11 Using GST refund to pay instalment of provisional tax MB 12 Voluntary payments MB 13 Paying 2 instalments for tax year MB 14 Paying 1 instalment for tax year Requirements for using GST ratio MB 15 Who may use GST ratio?
MB 16 Choosing to use GST ratio MB 17 Changing determination method MB 18 Disposal of assets Transitional years MB 19 Calculating residual income tax in transitional years MB 20 Paying provisional tax in transitional years MB 21 Calculating instalments in transitional years: standard method MB 22 Calculating instalments in transitional years: estimation method 101 102 104 109 110 111 111 111 113 114 117 117 119 120 121 122 123 MB 23 Calculating instalments in transitional years: GST 125 ratio method MB 24 Consequences of change in balance date When provisional taxpayers start or stop paying GST, or change taxable periods MB 25 Registering for GST or cancelling registration MB 26 Changing GST cycle MB 27 Payment of provisional tax instalments when GST cycle changed 125 127 128 129 Penalties and interest provisions MB 28 Application of provisions of Tax Administration 131 Act 1994 8 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Treatment of groups of companies and amalgamated companies MB 29 Provisional tax rules and consolidated groups MB 30 Residual income tax of consolidated groups MB 31 Consolidated groups using estimation method MB 32 Consolidated groups using GST ratio method MB 33 Wholly­owned groups of companies MB 34 Amalgamated companies: calculating residual income tax Attribution rule for services MB 35 Attribution rule for services Overpayments and credits MB 36 Overpaid provisional tax MB 37 Further income tax credited
 to provisional tax liability Disaster relief MB 38 Provisional taxpayer affected by self­assessed adverse event or qualifying event Payment of terminal tax Limit on refunds and allocations of tax Limits on refunds of tax in relation to Maori authorities Companies required to maintain imputation credit account Credits arising to imputation credit account Debits arising to imputation credit account Company may attach imputation credit to dividend New section ME 6B inserted ME 6B Share user may attach
 imputation credit to replacement payment Allocation rules for imputation credits Credits arising to imputation credit account of group Debits arising to imputation credit account of group Debiting and crediting between consolidated imputation group and individual companies Use of credit to reduce dividend withholding payment, or use of debit to satisfy income tax liability Company may elect to maintain dividend withholding payment account Credits arising to dividend withholding payment account Debits arising to dividend withholding payment account Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 154 155 156 157 158 159 160 161 162 163 Dividend withholding payment accounts and consolidated groups Credits arising to group dividend withholding payment account Debits arising to group dividend withholding payment account Company may elect to be conduit tax relief company and maintain conduit tax relief account Further dividend withholding payment payable in respect of conduit tax relief account debits Further dividend withholding payment payable in respect of conduit tax relief account debits Credits arising to Maori authority credit account Debits arising to Maori authority credit account New section MZ 8 added MZ 8 Certain
 elections to become provisional taxpayer New section MZ 9 added MZ 9 Amount of provisional tax based on 199798 or earlier tax year 164 New subpart NBB inserted Subpart NBB—Subsidy payable to certain listed PAYE intermediaries NBB 1 Purpose NBB 2 Accreditation of listed PAYE intermediary NBB 3 Obligations of listed PAYE intermediaries NBB 4 Revocation of listing NBB 5 Listed PAYE intermediary claim form NBB 6 Calculation and payment of subsidy to certain listed PAYE intermediaries 150 151 151 152 152 152 153
 153 153 153 154 154 154 154 154 155 156 157 157 NBB 7 Termination of employer arrangements with listed 158 PAYE intermediary 165 166 167 168 169 Application of other provisions to amounts payable under PAYE rules Private use of motor vehicle: value of beneﬁt New section ND 1AB inserted ND 1AB Private use of motor vehicle: 24­hour period Employment­related loans: value of beneﬁt New section ND 1DB inserted ND 1DB Employment­related loans: election to value beneﬁt using market interest 170 New section ND 1IB inserted 159 159 160 160 161 161 161 162 10 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 ND 1IB Beneﬁts provided by charitable organisations Services: value of beneﬁt Unclassiﬁed beneﬁts Adjustments for unclassiﬁed beneﬁts on amalgamation Election to pay fringe beneﬁt tax per quarter Special rule for employer who stops employing staff during tax year New section ND 8B inserted ND 8B Special rule for employer who is charitable organisation providing short­term charge facility Payment of fringe beneﬁt tax on annual basis for employees who are not shareholder­employees Payment of fringe beneﬁt tax on income year basis for shareholder­employees Application of RWT rules Liability to pay resident withholding tax Election to apply higher rate of deduction Companies to notify interest payer Election rates of
 deduction for companies Requirements for agents or trustees to make resident withholding tax deductions on receipt of payments Payment of deductions of resident withholding tax to Commissioner New section NF 8B inserted NF 8B Resident withholding tax deductions from replacement payments treated as imputation credits Application of NRWT rules Non­resident withholding tax imposed Payment of deductions of non­resident withholding tax to Commissioner Application of other provisions to non­resident withholding tax
 Deﬁnitions 191 192 Meaning of source deduction payment: shareholder­employees of close companies [Repealed] 193 Meaning of qualifying company 194 Meaning of income tax 195 Modiﬁcations to measurement of voting and market value interests in case of continuity provisions New section OD 5AA inserted Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 OD 5AA Modiﬁcations to voting and market value interests for application of continuity provisions to reverse takeover Further deﬁnitions of associated persons Determination of residence of person other than company New section YA 5B inserted YA 5B Saving of effect of section 394L(4A) of Income Tax Act 1976 Schedule 2Fringe beneﬁt values Part A Motor vehicles Schedule 3International tax rules: grey list countries Schedule 7Expenditure on farming, aquacultural, and forestry improvements New schedule 11B inserted Schedule 13–Months for payment of provisional tax and terminal tax Schedule 14Rate of resident withholding tax deductions Schedule 18State enterprises Schedule 22AIdentiﬁed policy changes Schedule 23Comparative tables of old and new provisions Part 2 Amendments to Tax Administration Act 1994 Tax Administration Act 1994 Interpretation Keeping of business records Keeping of returns where information transmitted
 electronically Shareholder dividend statement to be provided by company New sections 30B and 30C inserted 30B 30C Statement to share supplier when share user makes replacement payment under share­lending arrangement Credit transfer notice to share supplier and Commissioner when share user transfers imputation credit under share­lending arrangement Annual returns of income not required [Repealed] New section 33C inserted [Repealed] Consequential adjustments on change in balance date 185 186 187 187 187 187 191 191 192
balance date Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 218 219 220 221 222 223 224 225 226 227 228 229 230 231 232 233 234 235 236 237 238 239 240 241 242 243 New section 39B inserted 39B Changes in return dates: taxpayers with provisional tax and GST liabilities Non­resident withholding tax deduction certiﬁcates and annual reconciliations Resident withholding tax deduction reconciliation statements New section 59B inserted Disclosure of foreign trust particulars 59B Disclosure of interest in foreign company or foreign investment fund Co­operative company to provide particulars of deemed dividend Information to be furnished with return by petroleum mining entity making dispositions of shares or trust interests Annual and other returns for policyholder credit account persons Company dividend statement when imputation credit account company declares dividend Annual imputation return Annual dividend withholding payment account return Annual and other returns for branch equivalent tax account persons Ofﬁcers to maintain secrecy Disclosure of information to prevent cessation of beneﬁt payments Notices of proposed adjustment required to be issued by Commissioner Taxpayers and others with standing may issue notices of proposed adjustment Late actions
 deemed to occur within response period Completing the disputes process Test cases Determinations in relation to ﬁnancial arrangements Determination on economic rate Determination on special rates and provisional rates Assessment of fringe beneﬁt tax Commissioner may determine amount of provisional tax Deﬁnitions Section 120K replaced 200 201 202 203 203 204 205 206 206 206 206 206 207 207 207 207 208 208 208 208 209 209 209 210 210 210 211 211 13 Taxation (Depreciation, Payment Dates Alignment, FBT, and
 Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 120KB Provisional tax instalments and due dates generally 120KC Residual income tax of new provisional taxpayer 120KD Provisional tax instalments in transitional years 120KE Provisional tax and rules on use of money interest 244 Meaning of unpaid tax and overpaid tax for provisional tax purposes 245 Where provisional tax paid by company does not count as overpaid tax Due date for underestimation penalty tax Late payment penalty and provisional tax Application of other provisions of Act to imputation penalty tax and dividend withholding payment penalty tax Application of other provisions of Act to Maori authority distribution penalty tax Not taking reasonable care New section 141EA inserted 141EA Shortfall penalty and provisional tax New section 141KB inserted 141KB Discretion to cancel some shortfall penalties Due date for shortfall penalties Absolute liability offences Employers and ofﬁcers New section 147B inserted 147B Directors and ofﬁcers of resident foreign trustee Recovery of excess tax credits allowed Transfer of excess provisional tax if provisional tax paid is more than taxpayer’s provisional tax liability, determined before assessment Transfer of excess provisional tax if taxpayer estimates or revises estimate of residual income tax, determined before assessment Transfer of excess tax if provisional tax is more than taxpayer’s residual income tax, determined after assessment Remission
 in circumstances of qualifying event Remission on written application Payment out of Crown bank account New sections 185C and 185D inserted 185C Establishment of Listed PAYE Intermediary Bank Account Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions)
 Act 2006 185D Payments into, and out of, Listed PAYE 224 Intermediary Bank Account Part 3 Amendments to other Acts Income Tax Act 1994 Income Tax Act 1994 Exclusions from term dividends Interpretation Government grants to businesses Certain expenditure on land used for farming or agricultural purposes Expenditure on land improvements used for farming or agriculture Low value asset write­off New subpart FCB inserted 225 225 225 225 226 226 226 226 Subpart FCB—Emigration of resident companies FCB 1 Tax effects of company becoming non­resident to 226 reﬂect tax effects of liquidation FCB 2 Emigrating company treated as paying distribution 227 to shareholders FCB 3 Emigrating company treated as disposing of property and immediately reacquiring property Company may attach imputation credit to dividend Credits and debits arising to policyholder credit account of company Company may elect to maintain dividend withholding payment account Company may elect to be conduit tax relief company and maintain conduit tax relief account Further dividend withholding payment payable in respect of conduit tax relief account debits Deduction of resident withholding tax Deﬁnitions New section OD 5AA inserted OD 5AA Modiﬁcations to voting and market value interests for application of continuity provisions to reverse takeover 281 Schedule 7Expenditure on Land and Aquacultural Improvements 265 266 267 268 269 270 271 272 273 274 275 276 277 278 279 280 228 228 229 230 230 231 231 232 234 235
 236 15 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 Goods and Services Tax Act 1985 Goods and Services Tax Act 1985 Interpretation 282 283 284 Meaning of term ﬁnancial services 285 Meaning of term supply Time of supply 286 Value of supply of goods and services 287 Zero­rating of goods 288 Exempt supplies 289 New section 15AB inserted 290 15AB Transitional provision: alignment of taxable periods with balance dates Sections 15
 to 15AB replaced Taxable periods 15 Taxable periods aligned with balance dates 15B Changes in taxable periods 15C 15D When change in taxable period takes effect 15E Meaning of end of taxable period Section 16 replaced 16 Special returns Registered person to notify change of status Group of companies Branches and divisions Returns to be furnished in 2 parts for taxable period in which change in rate of tax occurs Taxable period returns Other Acts and Regulations Interpretation New section 74D inserted in Estate and Gift Duties Act 1968 74D Exemption for gifts in respect of distribution by co­operative company or company owned by co­operative company Interim repayments to be paid in same manner as provisional tax Interpretation Totalisator duty 4 Interpretation Totalisator duty Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Schedule 1 New schedule 11B inserted in Income Tax Act 2004 Schedule 2 New schedule 13, part A inserted in Income Tax Act 2004 Schedule 3 New schedule 13, part B inserted in Income Tax Act 2004 s 2 252 253 254 The Parliament of New Zealand enacts as follows: 1 2 (1) (2) (3) (4) (5) (6) (7) (8) (9) Title This Act Alignment, FBT, and Miscellaneous Provisions) Act 2006. is the Taxation
 (Depreciation, Payment Dates Commencement This Act comes into force on the date on which it receives the Royal assent, except as provided in this section.
Sections 267 and 279(6) are treated as coming into force on 1 April 1995.

Sections 274 and 278 are treated as coming into force on 1 April 2003.

Section 231 is treated as coming into force on 25 November 2003.

Sections 121 and 122 are treated as coming into force on 4 June 2004.

Section 281 is treated as coming into force on 1 July 2004.

Sections 230(1), 234, and 270 are treated as coming into force on 21 December 2004.
Sections 11(1), 12, 40, 57, 65, 80, 93, 104, 105, 143(5), 180(1), (2), and (3), 187, 191(9), (12), (21), (49), and (60), 193, 199, 202, 206, 207, 208, 210(19), 211(1) to (4) and (6) to (8), 212, 223 to 229, 237, 240, 257, 284(1) and (3), 287(4) and (5), and 303 are treated as coming into force on 1 April 2005.

Section 73 is treated as coming into force on 19 May 2005.
17 s 2 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 (10) Sections 144(1) and (7), 146, and 191(5) are treated as coming into force on 21 July 2005.
(11) Sections 13, 15(2) and (3), 21, 22, 23, 25, 50, 51, 53, 68, 75, 81, 83(2), 84, 85, 87, 88, 94, 95, 100, 106, 113, 116, 117(1) and (2), 120, 123, 141, 150, 188, 191(10), (15), (17), (18) to (20), (43), (46), (47), (53), (57), and (69), and 198 are treated as coming into force on 1 October 2005.

(12) Section 191(2) and (72) is treated as coming into force on 21 December 2005.
(13) Sections 8(2), 15(1), 16, 17, 28, 29 to 37, 45, 91, 92, 97, 98, 111, 125, 131 to 134, 166 to 178, 191(6), (11), (22), (31), (51), and (70), 194(1) and (2), 197(a), and 200 come into force on 1 April 2006.
(14) Sections 7, 8(1), 14, 20, 39, 41, 44, 59, 66, 67, 83(1), 86, 110, 112, 124, 128 to 130, 142, 143(1) and (3), 145, 147(2) and (4), 148(1) and (3), 152, 153, 155, 156, 179, 180(1) and (6), 181 to 184, 185(1), 186, 191(8), (27), (28), (38), (40), (42), (52), (55), (58), and (59), 197(b), 205, and 214 come into force on 1 July 2006.
(15) Sections 5, 42, 43, 103, 108, 117(3), 119, 191(48), (54), and (68), 210(3), (9), and (11), 211(2), (5), (7), (8)(a), and (9), 221, 222, 230(2), 254, 255, and 256 come into force on 1 October 2006.

(16) Sections 292, 293, and 297(1)(a) come into force on 31 March 2007.

(17) Section 180(7) comes into force on 1 April 2007.
(18) Sections 77, 114, 115, 118, 137 to 140, 143(2) and (4), 147(1) and (3), 148(2), 149, 160 to 163, 165, 190, 191(4), (7), (16), (26), (29), (30), (44), (45), (50), (56), (61), and (65) to (67), 194(3), 204, 210(4), (5) to (7), (8), (10), (12), (14), (17), and (18), 217, 218, 241 to 251, 258 to 260, 283(4) to (9), 291, 294 to 296, and 300 come into force on 1 October 2007.

(19) Sections 18, 19, 26, 47, 49, 127, 192, 215, 216, and 297(1)(b) come into force on 1 April 2008.
(20) Sections 61 to 64, 101, 301, and 302 come into force on 1 August 2006.

18 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 8 Part 1 Amendments to Income Tax Act 2004 Income Tax Act 2004 This Part amends the Income Tax Act 2004.

Double tax agreements In section BH 1(4), “any other enactment,” is replaced by “any other Inland Revenue Act or the Ofﬁcial Information Act 1982 or the Privacy Act 1993,”.
Heading for section CD 1 replaced The heading for section CD 1 is replaced by “Dividend”.

3 4 5 New section CD 1B inserted 6 (1) After section CD 1, the following is inserted: “CD 1B Distribution excluded from being dividend A distribution, derived by a member of a co­operative com­ pany, that is excluded by section CD 24B from being a divi­ dend is income of the member.

“Deﬁned in this Act: co­operative company, dividend, income ”.
Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.

Tax credits linked to dividends In section CD 9(2), “section CD 10” is replaced by “sections CD 10 and CD 10B”.
(2) 7 8 New sections CD 10B and CD IOC inserted (1) After section CD 10, the following is inserted: “CD 10B Credit transfer notice “When this section applies “(1) This section applies if a share user under a share­lending ar­ rangement “(a) derives a dividend for the original share, with an imput­ ation credit attached; and issues a credit transfer notice for the dividend.
“(b) 19 Part 1 s 8 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “Credit not included “(2) The dividend derived by the share user does not include the amount of the imputation credit.

“Income “(3) The amount of the imputation credit is income derived by the share supplier when the credit transfer notice is issued.

“(4) “Deﬁnition In this section, imputation credit includes a dividend with­ holding payment credit.
“Deﬁned in this Act: amount, credit transfer notice, dividend, dividend with­ holding payment credit, imputation credit, original share, share­lending ar­ rangement, share supplier, share user.
” (2) After section CD 10B, the following is inserted: “CD 10C Dividend reduced if foreign tax paid on company’s income “When this section applies “(1) This section applies if a person “(a) derives a dividend from a company that is a foreign company; and “(b) has a liability under the laws of a country or territory outside New Zealand for income tax on income of the company corresponding to the liability that the person would have under the laws of New Zealand for income tax on income of the company if the company were a partnership in which the person were a partner; and pays the income tax; and “(c) “(d) provides to the Commissioner upon request, within the time allowed by the Commissioner, sufﬁcient informa­ tion to satisfy the Commissioner as to the amount of income tax paid.
“Amount of dividend reduced “(2) The amount of the dividend is reduced by the greater of zero and the amount calculated using the formula total tax paid earlier reductions.
“Deﬁnition of items in formula In the formula, “(3) 20 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 10 “(a) “(b) total tax paid is the total amount of income tax on in­ come of the company that the person has paid in the country by the time that the person derives the dividend: earlier reductions is the total amount of reductions under this section that, by the time that the person de­ rives the dividend, have affected other dividends de­ rived by the person from the company.
“Deﬁned in this Act: branch equivalent method, Commissioner, company, con­ trolled foreign company, dividend, FIF income or loss, foreign company, for­ eign investment fund, income, income tax ”.

9 (1) (2) Capital distributions on liquidation In the heading to section CD 18, “or emigration” is added after “liquidation”.
Section CD 18(1), other than the heading, is replaced by the following: “(1) This section applies if a shareholder “(a) “(b) is paid an amount in relation to a share on the liquidation of the company: is treated under section FCB 2 (Emigrating company treated as paying distribution to shareholders) as being paid an amount in relation to a share in the company.” In the list of terms deﬁned in the Act, “emigrating company” is inserted.
Subsections (1) to (3) apply for income years corresponding to the 200506 and subsequent tax years.
(3) (4) New section CD 24B inserted 10 (1) After section CD 24, the following is inserted: “CD 24B Distribution to member of co­operative company based on member’s transactions “Election by co­operative company that distribution not be dividend “(1) A co­operative company may choose that an amount of a dis­ tribution (trading distribution) to a member of the co­opera­ tive company is not a dividend if “(a) the trading distribution is made by the co­operative company, or by a company (subsidiary company) in 21 Part 1 s 10 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 which the co­operative company owns voting interests equal to 100%; and the requirements of subsection (2) are met.
“(b) “Further requirements for election “(2) A co­operative company may make an election under subsec­ tion (1) if “(a) “(b) “(c) “(d) “(e) is resident in New Zealand: the co­operative company is resident in New Zealand for the period to which the trading distribution relates; and the company making the distribution is resident in New Zealand for the period to which the trading distribution relates; and the co­operative company believes on reasonable grounds that the member at the time of the distribution “(i) “(ii) has a ﬁxed establishment in New Zealand; and the value of the trading distribution is determined by the value for the period of transactions between the member and the co­operative company or subsidiary company that satisfy subsection (3); and the number of shares in the co­operative company held by the member determines the value of the transactions with the co­operative company or subsidiary company that the member has a right to enter.
“Transactions must involve trading stock “(3) A transaction must “(a) be the sale and purchase of trading stock of the vendor that is not intangible property; and “(b) not be subject to section FB 3 (Disposal of trading stock) or FB 4(1) (Income derived from disposal of trading stock together with other assets of business).
“Amount excluded from being dividend “(4) The amount of a trading distribution that is excluded under subsection (1) from being a dividend for a member is the lesser of the following: “(a) “(b) the amount of the trading distribution: the amount of the trading distribution relating to shares in the co­operative company that the member acquires 22 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 11 for the purpose of obtaining the right to enter transac­ tions with the co­operative company or subsidiary com­ pany.
“Form of election “(5) The co­operative company makes an election under subsection (1) for an income year containing the period to which a trading distribution relates by giving the Commissioner notice of the election when providing the company’s return of income for the tax year to which the income year corresponds.

“Period of election “(6) The election applies for distributions in the income year re­ ferred to in subsection (5) and for distributions in later income years.
“Deﬁned in this Act: amount, resident in New Zealand, shareholder ”.

Subsection (1) applies for distributions made on or after the date on which this Act receives the Royal assent.
company, co­operative company, foreign­sourced (2) 11 (1) Available subscribed capital amount Section CD 32(15), other than the heading, is replaced by the following: “(15) The subscriptions amount for a company that is an amalga­ mated company resulting from an amalgamation “(a) includes an amount, as if it were consideration received at the time of the amalgamation for the issue of the amalgamated company’s shares, equal to the available subscribed capital, at the time of the amalgamation, of all shares in the amalgamating companies that are “(i) of an equivalent class to the class; and “(ii) not held directly or indirectly by an amalgamat­ ing company; and “(iii) not shares in the amalgamated company: “(b) does not include any other amount for the agreement of shareholders of an amalgamating company to the amal­ gamation and the resulting property acquisitions by the amalgamated company.” (2) After section CD 32(15), the following is inserted: 23 Part 1 s 12 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “Subscriptions amount: emigrating company “(15B) If a company has been treated under section FCB 2 (Emigrat­ ing company treated as paying distribution to shareholders) as paying a distribution to shareholders, the subscriptions amount includes the amount of the distribution that is a dividend.
“(3) Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.

“(4) Subsection (2) applies for income years corresponding to the 200506 and subsequent tax years.” 12 (1) (2) “(b) (3) Available capital distribution amount In section CD 33(2)(c), “capital gain available” is replaced by “capital gain amounts available”.
Section CD 33(7)(b) is replaced by the following: after 31 March 1988, it receives a capital gain, including a gift, and no part is assessable income of the company; the capital gain amount is the amount of the capital gain; or”.

Subsections (1) and (2) apply for income years corresponding to the 200506 and subsequent tax years.

13 When does a person have attributed repatriation from a CFC?
(1) After section CD 34(1)(b), the following is inserted: “(bb) at any time in the accounting period, the person is a New Zealand resident who is not a transitional resident; and”.
In section CD 34(2), the formula is replaced by the following: (2) (3) After section CD 34(2), the following is added: “Deﬁnition of items in formula In the formula, “(a) income interest is the income interest of the person for the period in the accounting period during which the person is a New Zealand resident who is not a transi­ tional resident: repatriation is the New Zealand repatriation amount for the CFC and the accounting period: “(b) “(3) 24 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 15 “(c) days is the number of days in the accounting period during which the person is a New Zealand resident who is not a transitional resident: “(d) days in accounting period is the number of days in the accounting period.” (4) (5) (6) “New Zealand resident” is inserted: “transitional resident” is inserted.
In section CD 34, in the list of terms deﬁned in the Act, (a) (b) Subsections (1) to (4) apply for (a) a person who becomes a transitional resident on or after 1 April 2006; and income years corresponding to the 200506 and subse­ quent tax years.

(b) The law that would apply if subsections (1) to (4) did not come into force applies for (a) a person who becomes a transitional resident before 1 April 2006; and income years corresponding to the 200506 and subse­ quent tax years.
(b) 14 New heading and section CD 43 added After section CD 42, the following is added: “Returning share transfers “CD 43 Replacement payments The amount of a replacement payment derived by a person under a returning share transfer is income of the person when it is paid to the person.

“Deﬁned in this Act: income, pay, replacement payment, returning share trans­ fer ”.
15 Value and timing of beneﬁts under share purchase agreements (1) After section CE 2(7), the following is added: “Disposal of rights under share purchase option “(8) For the purposes of subsection (3), a disposal of rights under a share purchase agreement includes the cancellation of a share option in return for a cash payment.” (2) After section CE 2(8) the following is added: 25 Part 1 s 16 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “Reduction of value of beneﬁt in circumstances relating to non­resident “(9) The value of a beneﬁt arising from a period of employment is reduced, from the value that the beneﬁt would have in the absence of this subsection, “(a) if, when the employee acquires the shares under the share purchase agreement or disposes of the rights under the share purchase agreement, the employee is a transitional resident; and “(b) by an amount given by the following formula: (3) (4) (5) (6) “non­resident” is inserted: “transitional resident” is inserted.
In section CE 2, in the list of terms deﬁned in the Act, (a) (b) Subsection (1) applies for income years beginning on or after 1 April 2006.

Subsections (2) and (3) apply for (a) a person who becomes a transitional resident on or after 1 April 2006; and income years corresponding to the 200506 and subse­ quent tax years.
(b) The law that would apply if subsections (2) and (3) did not come into force applies for (a) a person who becomes a transitional resident before 1 April 2006; and income years corresponding to the 200506 and subse­ quent tax years.
(b) 16 Meaning of expenditure on account of an employee In section CE 5, (a) in subsection (3)(i), “scheme.” is replaced by “scheme:” and the following is added: a premium for income protection insurance that an employer is liable to pay or make a contribution towards for the beneﬁt of an employee.”: (b) in the list of deﬁned terms, “contribution” is inserted.
“(j) 26 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 20 17 New heading and section CE 11 inserted After section CE 10, the following is inserted: “Income protection insurance “CE 11 Proceeds from claims under policies of income protection insurance “When this section applies “(1) This section applies if an employer is liable to pay, or con­ tribute to the payment of, a premium under a policy of income protection insurance for the beneﬁt of a person who is their employee.
“Income “(2) An amount that is or would be derived under the policy is income of the person.

“Deﬁned in this Act: amount, employee, employer, income, pay ”.

18 19 20 (1) “(d) (2) (3) New heading and section CE 12 inserted [Repealed] Section 18: repealed, on 19 December 2007, by section 292 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Beneﬁts, pensions, compensation, and government grants [Repealed] Section 19: repealed, on 19 December 2007, by section 292 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Adjustment for closing values of trading stock, livestock, and excepted ﬁnancial arrangements In section CH 1(1)(c), “arrangements).” is replaced by “ar­ rangements):” and the following is added: a share supplier’s share­lending right, if the original shares that relate to the right are excepted ﬁnancial arrangements de­ scribed in paragraph (c).” In section CH 1(4), “arrangements,” is replaced by “arrange­ ments or share­lending right,”.
In section CH 1, in the list of terms deﬁned in the Act, (a) (b) (c) “original share” is inserted: “share­lending” right is inserted: “share supplier” is inserted.
27 Part 1 s 21 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 (2) (3) (4) (5) 21 When attributed CFC income arises (1) “(d) Section CQ 2(1)(d) is replaced by the following: at any time in the accounting period, the person is a New Zealand resident who is not a transitional resident; and”.
In section CQ 2(1)(e), “accounting period” is replaced by “part of the accounting period during which the person is a New Zealand resident who is not a transitional resident”.

In section CQ 2, in the list of terms deﬁned in the Act, “tran­ sitional resident” is inserted.

Subsections (1) to (3) apply for (a) a person who becomes a transitional resident on or after 1 April 2006; and income years corresponding to the 200506 and subse­ quent tax years.
(b) The law that would apply if subsections (1) to (3) did not come into force applies for (a) a person who becomes a transitional resident before 1 April 2006; and income years corresponding to the 200506 and subse­ quent tax years.
(b) “(e) “(iv) 22 When FIF income arises In section CQ 5(1), (1) (a) paragraph (c)(iv) is replaced by the following: the exemption for a non­resident or transitional resident in section EX 35 (Income interest of non­resident or transitional resident):”: (b) at any time in the year, the person is a New Zealand resident who is not a transitional resident and holds the attributing in­ terest; and”.

In section CQ 5 “transitional resident” is inserted in the list of terms deﬁned in the Act.
Subsections (1) and (2) apply for (a) paragraph (e) is replaced by the following: a person who becomes a transitional resident on or after 1 April 2006; and income years corresponding to the 200506 and subse­ quent tax years.
(2) (3) (b) 28 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 24 (4) 23 (1) The law that would apply if subsections (1) and (2) did not come into force applies for (a) a person who becomes a transitional resident before 1 April 2006; and income years corresponding to the 200506 and subse­ quent tax years.
(b) Exclusion of withdrawal when member ends employment In section CS 7, subsection (4B) is repealed and the following is inserted after subsection (4): “Increases in employer contributions considered consistent by Commissioner “(4B) A withdrawal satisﬁes this subsection if, at the time of the withdrawal, speciﬁed superannuation contributions have been made for the member by the employer, or another employer, such that “(a) the contributions relate to some or all of the period that starts on the 1st day of the tax year that starts 2 “(i) tax years before the tax year in which the member ends their employment; and ends on the day on which the member ends their employment; and “(ii) “(b) “(c) the Commissioner considers that the contributions are consistent in size and frequency with the employer’s speciﬁed superannuation contributions for other em­ ployees in comparable positions; and the Commissioner considers that the contributions are consistent in size and frequency during the period or periods to which the employer’s speciﬁed superannu­ ation contributions for the member relate.” (2) Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.
New section CW 11C inserted 24 (1) After section CW 11B, the following is inserted: 29 Part 1 s 24 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “CW 11C Proceeds from share or option acquired under venture investment agreement “Exempt income: proceeds from share or option “(1) An amount of income that a non­resident derives from the sale or other disposal of a share, or option to buy a share, in a company is exempt income if the requirements of subsections (2) to (5) are satisﬁed.
“Requirement relating to company at time of acquisition “(2) The ﬁrst requirement is that, when the non­resident ﬁrst ac­ quires a share, or option to buy a share, in the company in a way that satisﬁes subsection (3), the company must have in New Zealand “(a) more than 50% in value of the company’s assets; and “(b) more than 50% in number of the company’s employees.
“Requirement relating to acquisition of ﬁrst share or option “(3) The second requirement is that, when the non­resident ﬁrst acquires a share or option to buy a share (ﬁrst interest) in the company, a person (venture capital manager) must acquire, at the same time and on the same terms, “(a) “(b) the ﬁrst interest, on behalf of the non­resident; and another share or option that confers the same rights and imposes the same obligations as the ﬁrst interest “(i) on behalf of the Venture Investment Fund or a company owned by the Venture Investment Fund; and “(ii) under a venture investment agreement.
“Continuing requirement relating to company land development: land ownership: “(4) The third requirement is that, while the non­resident holds the share or option, the company must not have 1 or more of the following as a main activity: “(a) “(b) “(c) mining: “(d) provision of ﬁnancial services: “(e) “(f) “(g) insurance: construction of public infrastructure assets: acquisition of public infrastructure assets: 30 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 24 “(h) investing with a main aim of deriving, from the invest­ ment, income in the form of interest, dividends, rent, or personal property lease payments that are not royalties.
“Requirement relating to situation at disposition of share or option “(5) The fourth requirement is that, when the non­resident disposes of the share or option, “(a) “(b) “(c) the venture capital manager must have complied with the venture capital manager’s obligations under the ven­ ture investment agreement; and the non­resident must have complied with the non­resi­ dent’s obligations under any agreement between the non­resident and the Venture Investment Fund or a company owned by the Venture Investment Fund; and no person who is resident in New Zealand and no group of associated persons who are resident in New Zealand has a direct or indirect interest of more than 10% in the share or option.
“(6) “Venture investment agreement In this section, venture investment agreement means an agreement that “(a) is an agreement, relating to investment in companies, between parties that include “(i) “(ii) a venture capital manager; and the Venture Investment Fund or a company owned by the Venture Investment Fund; and “(b) provides for investments under the agreement to be “(c) managed by the venture capital manager; and provides that an investment under the agreement must be in a company that, when the ﬁrst investment in the company under the agreement is made, has in New Zealand “(i) more than 50% in value of the company’s assets; and “(ii) more than 50% in number of the company’s em­ ployees.
“Deﬁned in this Act: employee, income, interest, non­resident, resident in New Zealand, share, venture investment agreement, Venture Investment Fund ”.

31 Part 1 s 25 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 (2) Subsection (1) applies for shares or options purchased for a non­resident by a venture capital manager in relation to a ven­ ture investment agreement made on or before 31 March 2010.
New heading and section CW 22B inserted 25 (1) After section CW 22, the following is inserted: “Certain income of transitional resident “CW 22B Certain income derived by transitional resident Income derived by a person who is a transitional resident is exempt income if the income is a foreign­sourced amount that is none of the following: “(a) employment income of a type described in section CE 1 (Amounts derived in connection with employment) in connection with employment or service performed while the person is a transitional resident: income from a supply of services.
“(b) “Deﬁned in this Act: employment income, exempt income, foreign­sourced amount, income, transitional resident ”.

Subsection (1) applies for (a) a person who becomes a transitional resident on or after 1 April 2006; and income years corresponding to the 200506 and subse­ quent tax years.
(b) The law that would apply if subsection (1) did not come into force applies for (a) a person who becomes a transitional resident before 1 April 2006; and income years corresponding to the 200506 and subse­ quent tax years.

(b) New section CW 28B inserted [Repealed] Section 26: repealed, on 19 December 2007, by section 292 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
(2) (3) 26 27 New section CW 40B inserted After section CW 40, the following is inserted: 32 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 29 “CW 40B Income from conducting gaming­machine gambling An amount of income derived by a person that is gross gam­ bling proceeds from gaming­machine gambling is exempt in­ come if “(a) the person is authorised to conduct the gaming­ma­ chine gambling under the Gambling Act 2003 by a gaming­machine operator’s licence and a gaming­ma­ chine venue licence; and the person complies with the Gambling Act 2003 in ap­ plying and distributing the net gambling proceeds from the gaming­machine gambling.
“(b) “Deﬁned in this Act: exempt income, gaming­machine gambling, gaming­ma­ chine operator’s licence, gaming ­machine venue licence, gross gambling pro­ ceeds, net gambling proceeds.
” 28 “(b) Private use of motor vehicle Section CX 6(1)(b) is replaced by the following: the person who makes the vehicle available to the employee “(i) “(ii) “(iii) has a right to use the vehicle under an agreement or arrangement with the employee or a person associated with the employee.” owns the vehicle: leases or rents the vehicle: New section CX 6B inserted 29 (1) After section CX 6, the following is inserted: “CX 6B Employer or associated person treated as having right to use vehicle under arrangement “When this section applies “(1) This section applies for the application of the FBT rules to an agreement or arrangement “(a) between an employer, or a person associated with the employer, and an employee, or a person associated with the employee; and transferring to the employer or person associated with the employer a right to use a motor vehicle under terms agreed between the parties.
“(b) 33 Part 1 s 30 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “Person treated as having right to use vehicle uses the vehicle privately: “(2) The employer or associated person is treated as having a right to use the motor vehicle for a period during which the em­ ployee “(a) “(b) has a right to use the vehicle privately.

“Deﬁned in this Act: employee, employer, FBT rules, lease, motor vehicle ”.
Subsection (1) applies for a person and a period beginning on or after 1 April 2006 for which the person or the person’s employer is required to forward a return to the Commissioner under subpart ND (Fringe beneﬁt tax).
(2) 30 (1) “(d) (2) 31 (1) Employment­related loans In section CX 9(2)(c), “fund).” is replaced by “fund):” and the following is added: as an advance of salary and wages, if, “(i) in the period for which the employer is required to for­ ward a return to the Commissioner under subpart ND (Fringe beneﬁt tax), the total outstanding of such ad­ vances to the employee is not more than $2,000; and the contract of employment does not require the em­ ployer to make the advance.” “(ii) Subsection (1) applies for a person and a period beginning on or after 1 April 2006 for which the person or the person’s employer is required to forward a return to the Commissioner under subpart ND (Fringe beneﬁt tax).
Beneﬁts provided instead of allowances In section CX 17, “When not fringe beneﬁt” is inserted as a subsection heading after the section heading and the following is added as subsection (2): “Temporary change in workplace “(2) A beneﬁt that an employer provides to an employee is not a fringe beneﬁt if it “(a) is in substitution for an allowance described in subsec­ tion (1)(b); and 34 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 32 “(b) “(c) is brought about because the employee has a temporary change in their place of work while in the same employ­ ment; and reimburses the employee for transport costs that would have been incurred relating to travel by one or more of the employee’s spouse, civil union partner, or de facto partner, and relatives for the purpose of visiting the em­ ployee in the temporary place of work; and “(d) has a value that is no more than the amount that would be provided under the allowance described in subsec­ tion (1)(b).” In the list of deﬁned words in CX 17, “, relative” is added.
Subsections (1) and (2) apply for a person and a period be­ ginning on or after 1 April 2006 for which the person or the person’s employer is required to forward a return to the Com­ missioner under subpart ND (Fringe beneﬁt tax).
(2) (3) New section CX 18B inserted 32 (1) After section CX 18, the following is inserted: “CX 18B Business tools “When use of business tool not fringe beneﬁt “(1) The private use of a business tool that an employer provides to an employee, and the availability for private use of such a business tool, is not a fringe beneﬁt if “(a) the business tool is provided mainly for business use; and the cost of the business tool to the employer, including the amount of any deduction for the cost of the business tool that the employer may make under section 20(3) of the Goods and Services Tax Act 1985, is not more than $5,000.
“(b) “Use away from employer’s premises “(2) For the purposes of subsection (1), a business tool that is not taken to and used on the employer’s premises may neverthe­ less be provided mainly for business use if the employee per­ 35 Part 1 s 33 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 forms a signiﬁcant part of the employee’s employment duties away from the premises.
“Deﬁned in this Act: business tool, business use, employee, employer, fringe beneﬁt ”.

Subsection (1) applies for a person and a period beginning on or after 1 April 2006 for which the person or the person’s employer is required to forward a return to the Commissioner under subpart ND (Fringe beneﬁt tax).
Beneﬁts provided on premises Section CX 20(1), other than the subsection heading, is re­ placed by the following: (2) 33 (1) “(1) A beneﬁt, other than free, discounted, or subsidised travel, ac­ commodation, or clothing, is not a fringe beneﬁt if the beneﬁt is “(a) provided to the employee by the employer of the em­ ployee and received or used by the employee on the premises of “(i) “(ii) the employer: a company that is in the same group of companies as the employer: “(b) provided to the employee by a company that is in the same group of companies as the employer of the em­ ployee and received or used by the employee on the premises of “(i) “(ii) the employer: the company that provides the beneﬁt.” (2) “(2) Section CX 20(2) is replaced by the following: “Premises of person In this section, the premises of a person “(a) “(b) include premises that the person owns or leases: include premises, other than those referred to in para­ graph (a), on which an employee of the person is re­ quired to perform duties for the person: do not include premises occupied by an employee of the person for residential purposes.” “(c) (3) In the list of deﬁned terms for section CX 20, “company” and “group of companies” are inserted.
36 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 35 (4) Subsections (1) to (3) apply for a person and a period begin­ ning on or after 1 April 2006 for which the person or the per­ son’s employer is required to forward a return to the Commis­ sioner under subpart ND (Fringe beneﬁt tax).
New section CX 20B inserted 34 (1) After section CX 20, the following is inserted: “CX 20B Beneﬁts related to health or safety A beneﬁt that an employer provides to an employee is not a fringe beneﬁt to the extent to which it “(a) “(b) is related to the employee’s health or safety; and is aimed at hazard management in the workplace as con­ templated in the Health and Safety in Employment Act 1992; and “(c) would be excluded by section CX 20 from being a fringe beneﬁt if provided on the employer’s premises.
“Deﬁned in this Act: employee, employer, employment, fringe beneﬁt ”.

Subsection (1) applies for a person and a period beginning on or after 1 April 2006 for which the person or the person’s employer is required to forward a return to the Commissioner under subpart ND (Fringe beneﬁt tax).
Beneﬁts provided by charitable organisations In section CX 21, “When not fringe beneﬁt” is inserted as a subsection heading after the section heading and the following is added as subsections (2) and (3): “When employer provides charge facilities (2) 35 (1) “(2) Subsection (1) does not apply, and the beneﬁt provided is a fringe beneﬁt, if a charitable organisation provides a beneﬁt to an employee by way of short­term charge facilities and the value of the beneﬁt from the short­term charge facilities for the employee in a tax year exceeds 5% of the employee’s salary or wages for the tax year.
“Meaning of short­term charge facilities “(3) For the purposes of the FBT rules, a short­term charge facil­ ity means an arrangement that “(a) enables an employee of a charitable organisation to ob­ tain goods or services that have no connection with the 37 Part 1 s 36 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 organisation or its operations by buying or hiring the goods or services or charging the cost of the goods or services to an account; and “(b) places the liability for some or all of the payment for the goods or services on the organisation; and is not a fringe beneﬁt under section CX 9.” “(c) Subsection (1) applies for a person and a period beginning on or after 1 April 2006 for which the person or the person’s employer is required to forward a return to the Commissioner under subpart ND (Fringe beneﬁt tax).
(2) New section CX 26B inserted 36 (1) After section CX 26, the following is inserted: “CX 26B Contributions to income protection insurance An employer who satisﬁes a liability to pay, or contribute to the payment of, a premium for income protection insurance for the beneﬁt of an employee does not provide a fringe beneﬁt to the employee if a payment of the insurance to the employee would be assessable income of the employee.

“Deﬁned in this Act: contribution, employee, employer, fringe beneﬁt ”.
Subsection (1) applies for a person and a period beginning on or after 1 April 2006 for which the person or the person’s employer is required to forward a return to the Commissioner under subpart ND (Fringe beneﬁt tax).
(2) New section CX 27B inserted 37 (1) After section CX 27, the following is inserted: “CX 27B Goods provided at discount by third parties “When this section applies “(1) This section applies if an employer and a person who is not associated with the employer have an arrangement through which goods are provided by the person at a discount.
“When not fringe beneﬁt “(2) A discount provided by the person to an employee in a group of employees is not a fringe beneﬁt if “(a) the person offers a discount to a group of persons that 38 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 39 “(i) negotiates the discount on an arm’s­length basis; and “(ii) does not include the group of employees; and “(iii) is comparable in number to the group of employ­ ees; and “(b) the discount offered to the group of employees is the same or less than the discount offered to the group de­ scribed in paragraph (a).
“Deﬁned in this Act: arrangement, associated person, employee, employer, fringe beneﬁt ”.

Subsection (1) applies for a person and a period beginning on or after 1 April 2006 for which the person or the person’s employer is required to forward a return to the Commissioner under subpart ND (Fringe beneﬁt tax).
Government grants to businesses Section CX 41(3) is replaced by the following: “Exclusions (2) 38 (1) “(3) This section does not apply to “(a) “(b) a large budget screen production grant: a grant made under the Agriculture Recovery Pro­ gramme for the Lower North Island and Eastern Bay of Plenty, to the extent that the grant relates to expenditure “(i) “(ii) incurred by the recipient before the grant; and for which the recipient would be allowed a de­ duction in the absence of section DF 1 (Govern­ ment grants to businesses).” Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.
New heading and section CX 44B inserted After section CX 44, the following is inserted: (2) 39 39 Part 1 s 40 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “Share­lending arrangements “CX 44B Share­lending collateral under share­lending arrangements An amount of share­lending collateral derived by a person under a share­lending arrangement is excluded income of the person.
“Deﬁned in this Act: amount, excluded income, share­lending arrangement, share­lending collateral ”.
New section DB 9B inserted 40 (1) After section DB 9, the following is inserted: “DB 9B Base price adjustment under old ﬁnancial arrangements rules A person is allowed a deduction for an amount that is a deduc­ tion under section EZ 34(6) (Cash basis holder) or EZ 35(3) or (4) (Income and expenditure where ﬁnancial arrangement redeemed or disposed of).” Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.
New heading and sections DB 12B and DB 12C inserted After section DB 12, the following is inserted: “Share­lending arrangements (2) 41 “DB 12B Share­lending collateral under share­lending arrangements “No deduction “(1) A person is denied a deduction for the amount of expenditure incurred as share­lending collateral under a share­lending ar­ rangement.

“Link with subpart DA and other subject matter “(2) This section overrides the general permission: sections DB 17 to DB 19.
“(a) “(b) “Deﬁned in this Act: amount, deduction, general permission, share­lending arrangement, share­lending collateral 40 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 44 “DB 12C Replacement payments and imputation credits under share­lending arrangements A person is allowed a deduction for “(a) “(b) the amount of expenditure incurred as a replacement payment under a share­lending arrangement: the amount of imputation credit attached under sections ME 6B and NF 8B (which relate to imputation credits) to the replacement payment.
“Deﬁned in this Act: amount, deduction, imputation credit, replacement pay­ ment, share­lending arrangement ”.
Research or development 42 (1) After section DB 26(6), the following is inserted: “Choice for allocation of deduction “(6B) A person who is allowed a deduction under this section for expenditure that is not interest may choose to allocate all or part of the deduction “(a) to an income year after the income year in which the person incurs the expenditure; and in the way required by section EJ 21 (Allocation of de­ ductions for research, development, resulting market development).” “(b) (2) 43 (1) (2) 44 (1) Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.
Some deﬁnitions In section DB 27(1), “section DB 26” is replaced by “sections DB 26, EE 1 (What this subpart does), EJ 20 (Deductions for market development­product of research, development), and EJ 21 (Allocation of deductions for research, development, resulting market development)”.

Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.
Adjustment for opening values of trading stock, livestock, and excepted ﬁnancial arrangements In section DB 40(1)(c), “arrangements).” is replaced by “ar­ rangements):” and the following is added: 41 Part 1 s 45 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(d) (2) (3) a share supplier’s share­lending right, if the original shares that relate to the right are excepted ﬁnancial arrangements de­ scribed in paragraph (c).” In section DB 40(4), “arrangements had” is replaced by “ar­ rangements or share­lending right had”.
In section DB 40, in the list of terms deﬁned in the Act, (a) (b) (c) “original share” is inserted: “share­lending right” is inserted: “share supplier” is inserted.
New heading and section DB 45 added 45 (1) After section DB 44, the following is added: “Use of motor vehicle under certain arrangements “DB 45 Expenditure incurred in operating motor vehicle under agreement or arrangement affected by section CX 6B “Deduction “(1) A party to an agreement or arrangement referred to in sec­ tion CX 6B (Employer or associated person treated as having right to use vehicle under arrangement) is allowed a deduction for expenditure incurred in operating a motor vehicle during a period for which an employer or associated person is treated under that section as having a right to use the vehicle.
“Link with subpart DA “(2) This section overrides the private limitation and exempt in­ come limitation.

The general permission must still be satisﬁed and the other general limitations still apply.

“Deﬁned in this Act: arrangement, deduction, exempt income limitation, FBT rules, general limitation, general permission, lease, motor vehicle ”.

Subsection (1) applies for expenditure incurred on or after 1 April 2006.

(2) 46 Deductions for business use In section DE 2(1)(a), “; or” is replaced by “:”.
42 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 51 47 48 (1) “(e) (2) 49 Heading to subpart DF [Repealed] Section 47: repealed, on 19 December 2007, by section 292 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Government grants to businesses In section DF 1(1)(d), “exist.” is replaced by “exist; and” and the following is added: the payment is excluded income under section CX 41 (Gov­ ernment grants to businesses).” Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.

New section DF 4 added [Repealed] Section 49: repealed, on 19 December 2007, by section 292 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
50 When attributed CFC loss arises (1) “(d) Section DN 2(d) is replaced by the following: at any time in the accounting period, the person is a New Zealand resident who is not a transitional resident; and”.

In section DN 2, “transitional resident” is inserted in the list of terms deﬁned in the Act.

Subsections (1) and (2) apply for (a) a person who becomes a transitional resident on or after 1 April 2006; and income years corresponding to the 200506 and subse­ quent tax years.
(b) (2) (3) (4) The law that would apply if subsections (1) and (2) did not come into force applies for (a) a person who becomes a transitional resident before 1 April 2006; and income years corresponding to the 200506 and subse­ quent tax years.
(b) 51 When FIF loss arises (1) Section DN 6(1)(c)(iv) is replaced by the following: 43 Part 1 s 52 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(iv) (2) “(e) (3) (4) (5) the exemption for a non­resident or transitional resident, in section EX 35 (Income interest of non­resident or transitional resident):”.
Section DN 6(1)(e) is replaced by the following: at any time in the year, the person is a New Zealand resident who is not a transitional resident and holds the attributing in­ terest; and”.

In section DN 6, “transitional resident” is inserted in the list of terms deﬁned in the Act.

Subsections (1) to (3) apply for (a) a person who becomes a transitional resident on or after 1 April 2006; and income years corresponding to the 200506 and subse­ quent tax years.
(b) The law that would apply if subsections (1) to (3) did not come into force applies for (a) a person who becomes a transitional resident before 1 April 2006; and income years corresponding to the 200506 and subse­ quent tax years.
(b) 52 (1) “(g) (2) Enhancements to land, except trees In section DO 1(1), in paragraph (f), “rabbit­proof.” is re­ placed by “rabbit­proof:” and the following is added: the regrassing and fertilising of all types of pasture, if the ex­ penditure is not incurred in the course of a signiﬁcant capital activity.” Subsection (1) applies to expenditure incurred on and after 1 April 2005.
Improvements to farm land 53 (1) After section DO 4(7), the following is inserted: “Order in Council to amend schedule 7 “(8) The Governor­General may from time to time by Order in Council make regulations amending schedule 7 to vary the cat­ egories of improvements and percentages of diminished value of those improvements allowed as a deduction.” 44 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 55 (2) 54 (1) (2) Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.
Improvement destroyed or made useless by qualifying event In the heading to section DO 5B, “by qualifying event” is omitted.
Section DO 5B(1), other than the heading, is replaced by the following: “(1) This section applies if, in an income year of a person, “(a) “(b) “(c) “(d) “(e) the person owns land, or operates a business on land, to which an improvement described in schedule 7 (Ex­ penditure on farming, aquacultural, and forestry im­ provements) has been made for the purposes of the busi­ ness; and the improvement is destroyed or irreparably damaged and made useless for the purpose of deriving income; and the person would be entitled for the income year to a de­ duction under section DO 4 or DO 5 for expenditure on the improvement if the improvement had not been de­ stroyed or irreparably damaged and made useless; and the damage occurs in an income year that corresponds to the 2005­06 or a subsequent tax year; and 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.” (3) In section DO 5B, in the list of terms deﬁned in the Act, “quali­ fying event” is omitted.
55 New section DO 7 added After section DO 6, the following is added: “DO 7 Improvement destroyed or made useless “When this section applies “(1) This section applies if, in an income year of a person, “(a) the person carries on an aquacultural business in New Zealand “(i) that satisﬁes section DO 6(1)(b); and 45 Part 1 s 56 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(ii) for the purposes of which an improvement de­ scribed in schedule 7 (Expenditure on farming, aquacultural, and forestry improvements) has been made; and the improvement is destroyed or irreparably damaged and made useless for the purpose of deriving income; and the person would be entitled for the income year to a de­ duction under section DO 6 for expenditure on the im­ provement if the improvement had not been destroyed or irreparably damaged and made useless; and the damage occurs in an income year that corresponds to the 2005­06 or a subsequent tax year; and 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.
“(b) “(c) “(d) “(e) “Deduction: diminished value of expenditure “(2) The person is allowed a deduction of the amount of the di­ minished value, for the income year, of the expenditure on the improvement.

“Link with subpart DA “(3) This section overrides the general permission and the capital limitation.

The other general limitations still apply.

“Deﬁned in this Act: business, capital limitation, deduction, diminished value, general limitation, general permission, income, income year ”.
Improvement destroyed or made useless by qualifying event In the heading to section DP 3B, “by qualifying event” is omitted.

Section DP 3B(1)(b) is replaced by the following: the improvement is destroyed or irreparably damaged and made useless for the purpose of deriving income “(i) in an income year that corresponds to the 2005­06 or a subsequent tax year; and “(ii) other than as a result of the action or failure to act of the person, an agent of the person, or an associated person; and”.
56 (1) (2) “(b) 46 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 58 (3) 57 (1) (2) In section DP 3B, in the list of terms deﬁned in the Act, “quali­ fying event” is omitted.

Disposal of property In section DR 2(4), “section EY 46(6)” is replaced by “section EY 46(3)”.

Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.
New section DV 10B inserted 58 (1) After section DV 10, the following is inserted: “DV 10B Distribution to member of co­operative company, excluded from being dividend “Deduction “(1) A co­operative company, or a company owned by a co­opera­ tive company, is allowed a deduction for a distribution made for an income year to a member of the co­operative company if an amount of the distribution is excluded by section CD 24B (Distribution to member of co­operative company based on member’s transactions) from being a dividend.
“Amount of deduction “(2) The amount of the deduction is the amount of the distribution that is excluded by section CD 24B from being a dividend.

“Timing of deduction “(3) The deduction for the distribution is allocated to the income year for which the distribution is made.

“Link with subpart DA “(4) This section supplements the general permission.

The general limitations still apply.


“Deﬁned in this Act: company, co­operative company, deduction, general per­ mission, general limitation, income year, shareholder ”.

Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.
(2) 47 Part 1 s 59 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 59 (1) “(d) (2) Trading stock, livestock, and excepted ﬁnancial arrangements In section EA 1(1)(c), “arrangements).” is replaced by “ar­ rangements):” and the following is added: a share supplier’s share­lending right, if the original shares that relate to the right are excepted ﬁnancial arrangements de­ scribed in paragraph (c).” In section EA 1, in the list of terms deﬁned in the Act, (a) (b) (c) “original share” is inserted: “share­lending right” is inserted: “share supplier” is inserted.
New section EC 5B inserted 60 (1) After section EC 5, the following is inserted: “EC 5B Transfer of livestock because of self­assessed adverse event “When this section applies “(1) This section applies to livestock that is donated, or supplied for consideration with a value that is less than the market value of the livestock, to a recipient “(a) for use in a farming or agricultural business that is af­ fected by a self­assessed adverse event; and “(b) by a donor or supplier who is not associated with the recipient.
“Treatment by donor or supplier “(2) The donor or supplier must treat the livestock as having on the day of the transfer of the livestock “(a) “(b) no value, if the livestock is donated to the recipient: the value of the consideration provided by the recipient, otherwise.
“Treatment by recipient “(3) The recipient must treat the livestock as having on the day of the transfer of the livestock “(a) “(b) no value, if the livestock is donated to the recipient: the value of the consideration provided by the recipient, otherwise.

“Deﬁned in this Act: market value, self­assessed adverse event ”.
48 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 65 (2) 61 62 63 Subsection (1) applies for transfers of livestock in income years corresponding to the 200506 and subsequent tax years.

First income year in breeding business In section EC 39(4), “section EC 41 or EC 42” is replaced by “section EC 41, EC 42, EZ 4B, or EZ 4C”.
Later income years in breeding business In section EC 40(4), “section EC 41 or EC 42” is replaced by “section EC 41, EC 42, EZ 4B, or EZ 4C”.
Reduction: bloodstock not previously used for breeding in New Zealand In section EC 41, (a) (b) in subsection (2), “25%” is replaced by “50%”: in subsection (3), “37.5%” is replaced in both places it appears by “75%”: subsections (4) and (5) are repealed: in subsection (6), in the formula, “11” is replaced by “9”: after subsection (7), the following is added: (c) (d) (e) “Relationship with subject matter “(8) This section is overridden by section EZ 4B.” 64 Reduction: bloodstock previously used for breeding in New Zealand In section EC 42, (a) (b) subsections (2) and (3) are repealed: in subsection (4), in the formula, “11” is replaced by “9”: after subsection (5), the following is added: (c) “Relationship with subject matter “(6) This section is overridden by section EZ 4C.” 65 (1) Replacement breeding stock In section EC 48(1)(a)(ii), “applies the proceeds in buying” is replaced by “buys”.
49 Part 1 s 66 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 (2) (3) (4) In section EC 48(1)(b)(ii), “applies the payment in buying” is replaced by “buys”.

In section EC 48(2), “of the proceeds of sale under subsection (1)(a) or payment under subsection (1)(b)” is repealed.

Subsections (1) to (3) apply for income years corresponding to the 200506 and subsequent tax years.
66 (1) Valuation of excepted ﬁnancial arrangements The heading to section ED 1(1) is replaced by “Valuation methods for excepted ﬁnancial arrangements”.

(2) After section ED 1(1), the following is inserted: “Valuation method for right to acquire share under share­lending arrangement “(1B) Despite subsection (1), a share supplier’s share­lending right has the value at the end of each income year that is equal to the amount described in subsection (1D).
“Valuation method for share acquired by share supplier under share­lending arrangement “(1C) Despite subsection (1), the original share or an identical share acquired by a share supplier from a share user under a share­ lending arrangement has the value at the end of each income year that is equal to the amount described in subsection (ID).
“Amount (3) “(1D) For subsections (1B) and (1C), the amount is the value of the original share at cost, determined by applying this section to the share immediately before the share supplier’s disposal of the share under the relevant share­lending arrangement.” In section ED 1, in the list of terms deﬁned in the Act, (a) (b) (c) (d) (e) (f) “identical share” is inserted: “original share” is inserted: “share­lending arrangement” is inserted: “share­lending right” is inserted: “share supplier” is inserted: “share user” is inserted.
50 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 69 67 Transfers of certain excepted ﬁnancial arrangements within wholly­owned groups In section ED 2(1), the following is inserted after paragraph (a): “(ab) the transfer of the excepted ﬁnancial arrangement is not made under a share­lending arrangement; and”.
68 What this subpart does (1) After section EE 1(4), the following is inserted: “Choice for allocation of deduction for depreciation lossproperty used for research, development, market development “(4B) A person who in an income year uses an item for research or development or for market development that gives rise to a deduction allocated under section EJ 20 (Deductions for mar­ ket development product of research, development), and as a result has an amount of depreciation loss for the item for the income year, may choose to allocate all or part of the deduc­ tion for the depreciation loss “(a) to an income year after the income year for which the person has the depreciation loss; and in the way required by section EJ 21 (Allocation of de­ ductions for research, development, resulting market development).” “(b) (2) (3) “development” is inserted: “research” is inserted.
In section EE 1, in the list of terms deﬁned in the Act, (a) (b) Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.
Section EE 25 replaced Section EE 25 is replaced by the following: 69 (1) “EE 25 Setting of economic depreciation rate “Relevant provisions “(1) The economic depreciation rate that applies to a kind of item of depreciable property is set under “(a) section EE 25B, for items that 51 Part 1 s 69 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(b) “(c) “(d) “(e) “(i) are not buildings, ﬁxed life intangible property, excluded depreciable property, or property for which an economic rate is given by section EE 25D or set under section EE 25E; and are acquired on or after 1 April 2005: “(ii) section EE 25C, for items that are buildings and “(i) are acquired on or after 19 May 2005; and “(ii) do not have an economic depreciation rate set under section EZ 21B: section EE 25D, for certain aircraft and motor vehicles acquired on or after 1 April 2005: section EE 25E, for items that “(i) have an estimated residual market value greater than 13.5% of cost: “(ii) would, in the absence of section EE 25E, have an economic depreciation rate set under section EE 25B or EE 25C: section EZ 21B (Economic rate for plant or equipment acquired before 1 April 2005 and buildings acquired before 19 May 2005) for items that “(i) are not buildings, ﬁxed life intangible property, or excluded depreciable property and are ac­ quired before 1 April 2005: “(ii) are buildings acquired before 19 May 2005: “(iii) are buildings acquired on or after 19 May 2005, as
 relationship property or from a company in the same wholly­owned group of companies, from a person who applied to the item an economic depreciation rate set under section EZ 21B or a corresponding provision.
“No rate for ﬁxed life intangible property or excluded depreciable property “(2) An economic depreciation rate must not be set for a kind of item of depreciable property that is ﬁxed life intangible prop­ erty or excluded depreciable property.

“Overriding effect of election under section EE 26B “(3) Subsection (1)(a) is subject to section EE 26B.

“Deﬁned in this Act: depreciable property, economic rate, estimated residual market value, excluded depreciable property, ﬁxed life intangible property ”.
52 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 70 (2) Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.
New sections EE 25B to EE 25E inserted 70 (1) After section EE 25, the following is inserted: “EE 25B Economic rate for certain depreciable property “What this section is about “(1) This section is about setting the economic depreciation rate that applies to a kind of item of depreciable property.
“Exclusion “(2) This section does not apply to buildings, ﬁxed life intangible property, excluded depreciable property, or property for which an economic rate is given by section EE 25D or set under sec­ tion EE 25E.

“Rate set by Commissioner “(3) The Commissioner sets the rate from time to time by “(a) “(b) following the procedure set out in this section; and issuing a determination under section 91AAFof the Tax Administration Act 1994.
“Procedure for setting economic rate “(4) To set the diminishing value rate for a kind of item of depre­ ciable property, the Commissioner “(a) “(b) “(c) gets a ﬁgure by applying the formula in subsection (5) to items of that kind; and rounds the ﬁgure up or down to the nearest rate speci­ ﬁed in schedule 11B, column 1 (Banded rates of depre­ ciation); and sets the same rate for some or all of the kinds of items of depreciable property that are similar to one another, if the Commissioner thinks it is appropriate to do so having regard to “(i) “(ii) the rate calculated for each kind; and the reduction in compliance costs that is likely to be achieved.
“Formula “(5) The formula is 53 Part 1 s 70 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(6) “Deﬁnition of item in formula In the formula, estimated useful life is the estimated useful life of the item expressed in years.
“Deﬁned in this Act: Commissioner, depreciable property, diminishing value rate, economic rate, estimated useful life, excluded depreciable property, ﬁxed life intangible property “EE 25C Economic rate for buildings “What this section is about “(1) This section is about setting the economic depreciation rate that applies to a kind of item of depreciable property that is a building and for which an economic rate is not set under section EE 25E or EZ 21B.
“Rate set by Commissioner “(2) The Commissioner sets the rate from time to time by “(a) “(b) following the procedure set out in this section; and issuing a determination under section 91AAFof the Tax Administration Act 1994.
“Procedure for setting economic rate “(3) To set the straight­line rate for a kind of item of depreciable property, the Commissioner “(a) “(b) “(c) gets a ﬁgure by applying the formula in subsection (4) to items of that kind; and rounds the ﬁgure up or down to the nearest rate speci­ ﬁed in schedule 11B, column 4 (Banded rates of depre­ ciation); and sets the same rate for some or all of the kinds of build­ ings that are similar to one another, if the Commissioner thinks it is appropriate to do so having regard to the rate calculated for each kind; and “(i) the reduction in compliance costs that is likely to “(ii) be achieved.
“Formula “(4) The formula is 54 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 70 “(5) “Deﬁnition of item in formula In the formula, estimated useful life is the estimated useful life of the item expressed in years.
“Contracts existing at 19 May 2005 “(6) Despite subsection (1), a person who before 19 May 2005 en­ ters into a binding contract for the purchase or construction of a building must apply to the building the economic rate for the type of the building determined under section EZ 21B (Eco­ nomic rate for plant or equipment acquired before 1 April 2005 and buildings acquired before 19 May 2005).
“Deﬁned in this Act: Commissioner, depreciable property, diminishing value rate, economic rate, estimated useful life, excluded depreciable property, ﬁxed life intangible property “EE 25D Economic rate for certain aircraft and motor vehicles “What this section does “(1) This section gives the economic depreciation rate for certain aircraft and motor vehicles.
“Rate for certain aircraft “(2) The economic rate for an aircraft is a diminishing value rate of 10% or a straight­line rate of 7% if the aircraft “(a) is self­propelled; and “(b) has ﬁxed wings; and “(c) “(d) is not an international aircraft; and is not a helicopter.
“Rate for certain motor vehicles “(3) The economic rate for a motor vehicle having seats for no more than 12 persons is a diminishing value rate of 30% or a straight­line rate of 21% if the motor vehicle “(a) “(b) is not available for hire: is available for hire for a hire period of more than 1 month: is a taxi: “(c) 55 Part 1 s 70 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 is a minibus.
“(d) “Deﬁned in this Act: diminishing value rate, economic rate, international air­ craft, minibus, straight­line rate “EE 25E Economic rate for plant, equipment, or building, with high residual value “What this section is about “(1) This section is about setting the economic depreciation rate that applies to items of a kind of depreciable property if “(a) the kind of depreciable property is not ﬁxed life in­ tangible property, or excluded depreciable property, for which an economic rate cannot be set; and the items are “(i) “(ii) buildings acquired before 19 May 2005. plant or equipment acquired before 1 April 2005: “(b) “Rate set by Commissioner “(2) The Commissioner sets the rate from time to time by “(a) “(b) following the procedure set out in this section; and issuing a determination under section 91AAFof the Tax Administration Act 1994.
“Procedure for setting economic rate “(3) To set the diminishing value rate for a kind of item of depre­ ciable property, the Commissioner “(a) “(b) “(c) gets a ﬁgure by applying the formula in subsection (4) to items of that kind; and rounds the ﬁgure up or down to the nearest rate speci­ ﬁed in schedule 11, column 1 (Banded rates of depreci­ ation); and sets the same rate for some or all of the kinds of items of depreciable property that are similar to one another, if the Commissioner thinks it is appropriate to do so having regard to “(i) “(ii) the rate calculated for each kind; and the reduction in compliance costs that is likely to be achieved.
“Formula “(4) The formula is 56 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 72 “(5) (2) 71 (1) (2) “Deﬁnition of item in formula In the formula, “(a) residual value is the greater of “(i) estimated residual market value, which is deﬁned in section EE 58: “(b) “(ii) 13.5% of cost: cost is the cost of items of the kind to which the formula is applied: estimated useful life is deﬁned in section EE 54.
“(c) “Deﬁned in this Act: Commissioner, depreciable property, diminishing value rate, economic rate, estimated residual market value, estimated useful life, ex­ cluded depreciable property, ﬁxed life intangible property ”.

Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.
Annual rate for item acquired in person’s 199596 or later income year In section EE 26(1), after “a person acquires”, “, other than under section FCB 3 (Emigrating company treated as dispos­ ing of property and immediately reacquiring property),” is in­ serted.

Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.
New section EE 26B inserted 72 (1) After section EE 26, the following is inserted: “EE 26B Election in respect of certain depreciable property acquired on or after 1 April 2005 “When this section applies “(1) This section applies if a person acquired an item of depreciable property that is not a building “(a) “(b) before the commencement of the person’s income year on or after 1 April 2005; and corresponding to the 200607 tax year.
57 Part 1 s 73 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “Election to use economic depreciation rate determined under section EZ 21B “(2) The person may elect to calculate the depreciation loss for the item of depreciable property for income years corresponding to the 200506 and subsequent tax years in accordance with the economic depreciation rate determined for the type of item under section EZ 21B (Economic rate for plant or equipment acquired before 1 April 2005 and buildings acquired before 19 May 2005).
“Election to be made in return of income “(3) The person must make an election under subsection (2) in the person’s return of income for the 2005­06 tax year.

“Deﬁned in this Act: depreciable property, depreciation loss, economic depre­ ciation rate, income year, return of income, tax year.

”.

Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.
Items of low value Section EE 31(1), other than the heading, is replaced by the following: (2) 73 (1) “(1) This section applies for an item of property that a person ac­ quires, in an income year, if “(a) the total cost for the item is equal to or less than the threshold value given for the item by subsection (1B); and the person uses the item, or has the item available for use, in the income year; and the item would be depreciable property if the person did not deal with it under this section; and the item has not been and will not become part of any other property that is depreciable property; and the person is denied a deduction for the cost of the item if the person does not deal with the item under this sec­ tion; and “(b) “(c) “(d) “(e) “(f) when the item is one of a group of items, acquired at the same time and from the same supplier, to which the same depreciation rate would apply if they were all treated as items of depreciable property, 58 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 76 “(i) “(ii) if subparagraph (ii) does not apply, the total cost for all the items in the group is equal to or less than the threshold value given for the item by subsection (1B): if the items generally constitute the person’s trad­ ing stock, the total cost for all the items in the group not treated by the person solely as trading stock is equal to or less than the threshold value given for the item by subsection (1B).
“Threshold value for item “(1B) The threshold value for an item is $200, if the item is acquired before 19 May 2005: “(a) “(b) $500, if the item is acquired on or after 19 May 2005.” Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.
(2) 74 Consideration for purposes of section EE 37 (1) After section EE 38(1), the following is added: “Amount derived may be nil or negative “(1B) For the purposes of section EE 37, an amount that a person (2) 75 (1) (2) 76 (1) (2) derives as consideration may be nil or a negative amount.” Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.

Effect of disposal or event In section EE 41(3), “This section” is replaced by “Subsection (2)”.
Subsection (1) applies for income years corresponding to the 200506 and later tax years.

Other deﬁnitions In section EE 58, in the deﬁnition of economic rate, “section EE 25” is replaced by “sections EE 25B to EE 25E”.

Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.
59 Part 1 s 77 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 77 (1) (2) ACC levies and premiums In section EF 3(3), “column E (Months for payment of provi­ sional tax and terminal tax) is to be treated as if it were due and payable on the relevant date in column D of that part of the schedule” is replaced by “column H (Dates for payment of provisional tax) is treated as if it were due and payable on the relevant date in schedule 13, part A, column G for the person’s corresponding income year”.
Section EF 3(4), other than the heading, is replaced by the following: “(4) For the purposes of subsection (3), references to the date in schedule 13, part A, columns G and H (which refer to months only and not days) are references to the day in the relevant month that is ﬁxed by the following: “(a) the deﬁnition of instalment date in section OB 1 (Def­ initions); and sections MB 1(3), and MB 19 to 23 (which relate to provisional tax instalments in transitional years), and MC 1(Payment of terminal tax).” “(b) (3) (4) In the list of deﬁned terms for section EF 3, the references to “ﬁrst instalment date”, “second instalment date”, and “third instalment date” are omitted.
Subsections (1) to (3) apply for income years corresponding to the 200809 and subsequent tax years.

78 Meaning of self­assessed adverse event (1) (2) Section EH 36 is repealed.

Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.

79 Meaning of self­assessed adverse event (1) (2) Section EH 63 is repealed.

Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.
80 (1) Leases: income derived in anticipation Section EI 6(3)(b) is replaced by the following: 60 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 81 “(b) (2) the person must give the notice in the tax year following the tax year to which the income year of derivation corresponds:”.

Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.
New heading and sections EJ 20 and EJ 21 inserted 81 (1) After section EJ 19, the following is inserted: “Research, development, and resulting market development “EJ 20 Deductions for market developmentproduct of research, development “When this section applies “(1) This section applies if a person is allowed a deduction for ex­ penditure that is not interest and is incurred “(a) on market development for a product that has resulted from expenditure incurred by the person on research or development; and “(b) before the person begins commercial production or commercial use of the product.
“Choice for allocation of deduction “(2) The person may choose to allocate all or part of the deduction to an income year “(a) after the income year in which the person incurs the expenditure; and in the way required by section EJ 21.
“(b) “Deﬁned in this Act: assessable income, deduction, development, income year, research “EJ 21 Allocation of deductions for research, development, resulting market development “When this section applies “(1) This section applies if a person has “(a) “(b) a deduction, for expenditure incurred on research or de­ velopment, that the person chooses to allocate under section DB 26(6B) (Research or development): a deduction, for depreciation losses for an item used for research or development, that the person chooses 61 Part 1 s 82 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(c) to allocate under section EE 1(4B) (What this subpart does): a deduction, for expenditure incurred on market devel­ opment for a product that has resulted from expenditure incurred on research or development, that the person chooses to allocate under section EJ 20(2).
“Timing of deduction “(2) The person must allocate the deduction to an income year “(a) in which the person derives assessable income that the person would not have derived but for “(i) expenditure that gives rise to a deduction that may be allocated under this section: the use or disposal of an item for which the per­ son has a depreciation loss that may be allocated under this section: “(ii) “(b) to which the person would be permitted by Part 1 (Treat­ ment of net losses) to carry forward a net loss for the in­ come year in which the expenditure or depreciation loss was incurred.
“Amount of deduction allocated to income year “(3) The person must allocate to an income year an amount of de­ ductions referred to in subsection (1) that is equal to or greater than the lesser of “(a) the amount of assessable income referred to in subsec­ tion (2)(a) that the person derives in the income year: the amount of the deductions that has not been allocated to earlier income years.
“(b) (2) 82 “Deﬁned in this Act: assessable income, deduction, depreciation losses, devel­ opment, income year, research ”.

Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.

Refund In the heading to section EK 12, “if request or excess bal­ ance” is added after “Refund”.

83 What is an excepted ﬁnancial arrangement?
(1) After section EW 5(11), the following is inserted: 62 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 84 “Share­lending arrangement “(11B) A share­lending arrangement is an excepted ﬁnancial ar­ rangement.” (2) After section EW 5(15), the following is inserted: “Certain arrangements to which transitional resident is party “(15B) An arrangement to which a transitional resident is a party is an excepted ﬁnancial arrangement for the transitional resident if “(a) no other party to the arrangement is a New Zealand resi­ dent; and the arrangement is not for a purpose of a business car­ ried on in New Zealand by a party to the arrangement.” “(b) (3) (4) (5) “New Zealand resident” is inserted: “non­resident” is inserted: “share­lending arrangement” is inserted: “transitional resident” is inserted.
In section EW 5, in the list of terms deﬁned in the Act, (a) (b) (c) (d) Subsection (2) applies for (a) a person who becomes a transitional resident on or after 1 April 2006; and income years corresponding to the 200506 and subse­ quent tax years.

(b) The law that would apply if subsection (2) did not come into force applies for (a) a person who becomes a transitional resident before 1 April 2006; and income years corresponding to the 200506 and subse­ quent tax years.
(b) 84 (1) Consideration when person enters rules: accrued obligation Section EW 37(1), other than the heading, is replaced by the following: “(1) This section applies to a person who is a party to a ﬁnancial arrangement if, when the person has an accrued obligation to pay consideration under the arrangement, 1 or more of the fol­ lowing situations arise: 63 Part 1 s 84 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(a) “(b) “(c) “(d) “(e) the person is a non­resident who becomes a party to the arrangement for the purpose of a business carried on by the person through a ﬁxed establishment in New Zealand: the person is a non­resident who “(i) becomes a New Zealand resident who is not a transitional resident; and immediately before becoming a New is not, Zealand resident, a party to the arrangement for the purpose of a business carried on by the person through a ﬁxed establishment in New Zealand: “(ii) the person is a transitional resident for whom the ar­ rangement ceases to be an excepted ﬁnancial arrange­ ment described in section EW 5(15B): the person is a transitional resident who becomes a New Zealand resident who is not a transitional resident, re­ sulting in the arrangement ceasing to be an excepted ﬁ­ nancial arrangement described in section EW 5(15B): the person stops using the arrangement for a private or domestic purpose, resulting in the arrangement ceasing to be an excepted ﬁnancial arrangement described in any of section EW 5(16) to (18).” “New Zealand resident” is inserted: “non­resident” is inserted: “resident in New Zealand” is omitted: “transitional resident” is inserted.
In section EW 37, in the list of terms deﬁned in the Act, (a) (b) (c) (d) Subsections (1) and (2) apply for (a) a person who becomes a transitional resident on or after 1 April 2006; and income years corresponding to the 200506 and subse­ quent tax years.

(b) The law that would apply if subsections (1) and (2) did not come into force applies for (a) a person who becomes a transitional resident before 1 April 2006; and income years corresponding to the 200506 and subse­ quent tax years.
(b) (2) (3) (4) 64 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 85 85 (1) Consideration when person enters rules: accrued entitlement Section EW 42(1), other than the heading, is replaced by the following: “(1) This section applies to a person who is a party to a ﬁnancial arrangement if, when the person has an accrued entitlement to receive consideration under the arrangement, 1 or more of the following situations arise: “(a) the person is a non­resident who becomes a party to the arrangement for the purpose of a business carried on by the person through a ﬁxed establishment in New Zealand: the person is a non­resident who “(i) becomes a New Zealand resident who is not a transitional resident; and immediately before becoming a New is not, Zealand resident, a party to the arrangement for the purpose of a business carried on by the person through a ﬁxed establishment in New Zealand: “(ii) the person is a transitional resident for whom the ar­ rangement ceases to be an excepted ﬁnancial arrange­ ment described in section EW 5(15B): the person is a transitional resident who becomes a New Zealand resident who is not a transitional resident, re­ sulting in the arrangement ceasing to be an excepted ﬁ­ nancial arrangement described in section EW 5(15B): the person stops using the arrangement for a private or domestic purpose, resulting in the arrangement ceasing to be an excepted ﬁnancial arrangement described in any of section EW 5(16) to (18).” “(b) “(c) “(d) “(e) (2) (3) “New Zealand resident” is inserted: “non­resident” is inserted: “resident in New Zealand” is omitted: “transitional resident” is inserted.
In section EW 42, in the list of terms deﬁned in the Act, (a) (b) (c) (d) Subsections (1) and (2) apply for (a) a person who becomes a transitional resident on or after 1 April 2006; and 65 Part 1 s 86 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 (b) income years corresponding to the 200506 and subse­ quent tax years.
(4) The law that would apply if subsections (1) and (2) did not come into force applies for (a) a person who becomes a transitional resident before 1 April 2006; and income years corresponding to the 200506 and subse­ quent tax years.
(b) 86 New heading and section EW 52B inserted After section EW 52, the following is inserted: “Treatment of original share acquired under ﬁnancial arrangement “EW 52B Share supplier under share­lending arrangement “When this section applies “(1) This section applies to a person who “(a) “(b) “(c) acquires a share under a ﬁnancial arrangement (original ﬁnancial arrangement); and is the share supplier for a share­lending arrangement; and disposes of the share to the share user as an original share under the share­lending arrangement.
“Treatment of reacquisition of original share If the person reacquires the original share under the share­ lending arrangement, for the purposes of applying the ﬁnan­ cial arrangements rules to the original ﬁnancial arrangement “(a) the person did not dispose of the original share to the share user; and the person continued to own the original share until the time that the person reacquired the original share.
“(b) “Treatment of acquisition of replacement share If the person acquires an identical share under the share­lend­ ing arrangement, for the purposes of the ﬁnancial arrange­ ments rules in relation to the original ﬁnancial arrangement “(a) the identical share is the share that the person acquired under the original ﬁnancial arrangement; and “(2) “(3) 66 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 88 “(b) the person continued to own the identical share until the time that the person acquired the replacement share.
“Deﬁned in this Act: ﬁnancial arrangement, ﬁnancial arrangements rules, iden­ tical share, original share, share, share­lending arrangement, share supplier, share user.

” 87 (1) (2) Income interests on days of non­residence The heading to section EX 16 is replaced by “Income interests for certain purposes”.
Section EX 16(1), other than the heading, is replaced by the following: “(1) This section applies for the purposes of determining the at­ tributed CFC income or loss of a person for a period if the person holds an income interest in the CFC on a day in the period.” Section EX 16(2), other than the heading, is replaced by the following: (3) “(2) For the purposes of calculating the attributed CFC income or loss of a person for a period, the person has an income interest in a CFC of zero on a day in the period if, on the day, the person is “(a) “(b) In section EX 16, “transitional resident” is inserted in the list of terms deﬁned in the Act.
Subsections (1) to (4) apply for (a) a non­resident: a transitional resident.” a person who becomes a transitional resident on or after 1 April 2006; and income years corresponding to the 200506 and subse­ quent tax years.

(4) (b) (5) (6) The law that would apply if subsections (1) to (4) did not come into force applies for (a) a person who becomes a transitional resident before 1 April 2006; and income years corresponding to the 200506 and subse­ quent tax years.
(b) 88 (1) Section EX 17 replaced Section EX 17 is replaced by the following: 67 Part 1 s 89 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “EX 17 Income interest if variations within period “When this section applies “(1) This section applies if a person’s income interest in a CFC, calculated under sections EX 8 to EX 16, varies between days in a period.
“Weighted average “(2) The person’s income interest for the period is the total of the amounts for the period, each of which is calculated using the formula in subsection (3) for a day in the period.
“Formula “(3) The formula is “Deﬁnition of items in formula In the formula, “(a) income interest for day is “(i) the income interest during the day, if the income interest does not vary during the day: the income interest at the start of the day, if the income interest varies during the day: “(ii) “(b) days in period is the number of days in the period.

“Deﬁned in this Act: CFC, income interest ”.

Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.
Taxable distribution from non­qualifying trust In section EX 19(5), “200607” is replaced by “201112”.

Subsection (1) applies for income years corresponding to the 200607 and subsequent tax years.

Branch equivalent income or loss: calculation rules In section EX 21(35), “200607” is replaced by “201112”.

Subsection (1) applies for income years corresponding to the 200607 and subsequent tax years.
“(4) (2) 89 (1) (2) 90 (1) (2) 68 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 92 91 (1) Residence in grey list country Section EX 24(1), except for the heading, is replaced by the following: “(1) For the purposes of this subpart and subparts CQ (Attributed income from foreign equity), DN (Attributed losses from for­ eign equity), and LF (Underlying foreign tax credits), a CFC is resident in a country listed in schedule 3, part A (International tax rules: grey list countries) if “(a) the CFC is liable in the country to income tax on the CFC’s income because the CFC is domiciled in the country: “(i) is resident in the country: “(ii) “(iii) is incorporated in the country: “(iv) has its place of management in the country: the CFC is organised under the laws of the country and the country “(i) imposes on persons holding income interests in the CFC the liability for income tax on the CFC’s income; and “(b) “(ii) under the laws of the country, is the source of 80% or more of the income of the CFC.” Subsection (1) applies for income years corresponding to the 200607 and subsequent tax years.
Grey list exemption Section EX 33(1), except for the heading, is replaced by the following: (2) 92 (1) “(1) A person’s rights in a FIF in an income year are not an attribut­ ing interest if, at all times in the income year, “(a) the FIF is not an entity described in schedule 4, part B (Foreign investment funds); and a country listed in schedule 3, part A (International tax rules: grey list countries), in relation to the FIF, satisﬁes at least 1 of the grounds for exemption given by subsec­ tions (1B) and (1C).
“(b) “First ground for exemption “(1B) The country “(a) is the residence of the FIF under section OE 2(3) to (6) (Determination of residence of company); and 69 Part 1 s 93 “(b) Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 imposes on the FIF liability for income tax on the FIF’s income because the FIF is domiciled in the country: “(i) “(ii) is resident in the country: “(iii) is incorporated in the country: “(iv) has its place of management in the country.
“Second ground for exemption “(1C) The country “(a) is the country under whose laws the FIF is organised; and imposes on persons holding income interests in the FIF liability for income tax on the FIF’s income; and under the laws of the country, is the source of 80% or more of the income of the FIF.” “(b) “(c) (2) 93 (1) (2) Subsection (1) applies for income years corresponding to the 200607 and subsequent tax years.
Foreign exchange control exemption In section EX 34, in the list of provisions for comparison, “CG 15(2)(c), (e)” is replaced by “CG 15(2)(e)”.

Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.

(2) 94 (1) Immigrant’s 4­year exemption The heading to section EX 35 is replaced by “Income interest of non­resident or transitional resident”.
Section EX 35(2) is replaced by the following: “ Exemption for non­resident or transitional resident A person’s rights in a FIF at any time are not an attributing interest if “(a) “(b) the person is a natural person; and the person acquires the rights when a non­resident or transi­ tional resident; and at the time, the person is a non­resident or transitional resi­ dent.” In section EX 35, in the list of terms deﬁned in the Act, “non­ resident” and “transitional resident” are inserted.
Subsection (2) applies for “(c) (3) (4) 70 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 95 (a) (b) a person who becomes a transitional resident on or after 1 April 2006; and income years corresponding to the 200506 and subse­ quent tax years.
(5) 95 (1) (2) The law that would apply if subsection (2) did not come into force applies for (a) a person who becomes a transitional resident before 1 April 2006; and income years corresponding to the 200506 and subse­ quent tax years.

(b) Immigrant’s accrued superannuation entitlement exemption In the heading to section EX 36, “Immigrant’s” is replaced by “New resident’s”.
Section EX 36(2) is replaced by: “Rights accruing before or after becoming resident “(2) The rights must have accrued during a period “(a) “(b) for which the person is not a New Zealand resident: for which the person is a New Zealand resident and that begins when the person becomes a New Zealand “(i) resident; and ends before the ﬁrst day of the ﬁfth income year following the income year in which the person becomes a New Zealand resident.” Section EX 36(3), other than the heading, is replaced by the following: “(ii) (3) “(3) The extent to which the rights have accrued during a period referred to in subsection (2) is calculated using the formula” closing value opening value.
(4) “(a) In section EX 36(4), paragraphs (a) and (b) are replaced by the following: closing value is the market value of the rights on the day that ends the period: “(b) opening value is the market value of the rights on the day that begins the period.” Subsections (2) to (4) apply for (5) 71 Part 1 s 96 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 (a) (b) a person who becomes a New Zealand resident on or after 1 April 2006; and income years corresponding to the 200506 and subse­ quent tax years.
(6) The law that would apply if subsections (2) to (4) did not come into force applies for (a) a person who becomes a New Zealand resident before 1 April 2006; and income years corresponding to the 200506 and subse­ quent tax years.

(b) 96 (1) Accounting proﬁts method In section EX 42(1), the formula is replaced by the following: (accounting proﬁts or losses foreign tax) income interest.
(2) After section EX 42(3), the following is inserted: “(3B) Foreign tax is the total for the accounting period of income tax on the income of the FIF “(a) for which the person is liable under the laws of a country or territory outside New Zealand; and “(b) paid by the person in the accounting period.” Subsections (1) and (2) apply for income years corresponding to the 200607 and subsequent tax years.
Comparative value method In section EX 44(6), the deﬁnition of costs is replaced by the following: (3) 97 (1) “Costs is the total for the income year of “(a) all expenditure, if any, that the person incurs in acquiring or increasing the interest: income tax on the income of the FIF “(i) for which the person is liable under the laws of a country or territory outside New Zealand; and “(ii) paid by the person in the income year.” Subsection (1) applies for income years corresponding to the 200607 and subsequent tax years.
“(b) (2) 72 “(ii) (2) “(ii) (3) 99 (1) (2) Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 100 98 (1) Deemed rate of return method In section EX 45(6)(b), the deﬁnition of costs is replaced by the following: “costs is the total for the part of the income year of “(i) all expenditure, if any, that the person incurs in acquiring or increasing the interest: income tax on the income of the FIF for which the person is liable under the laws of a country or territory outside New Zealand and which is paid by the person in the part of the income year:”.
In section EX 45(8)(b), the deﬁnition of costs is replaced by the following: “costs is the total for the income year or part of the income year of “(i) all expenditure, if any, that the person incurs in acquiring or increasing the interest: income tax on the income of the FIF for which the person is liable under the laws of a country or territory outside New Zealand and which is paid by the person in the income year or part of the income year:”.
Subsections (1) and (2) apply for income years corresponding to the 200607 and subsequent tax years.

Additional FIF income or loss if CFC owns FIF In section EX 46(7), “200607” is replaced by “2011­12”.

Subsection (1) applies for income years corresponding to the 200607 and subsequent tax years.
100 Migration of persons holding FIF interests (1) “(a) “(ab) becomes a New Zealand resident who is not a transitional resi­ Section EX 52(3)(a) is replaced by the following: is a non­resident or a transitional resident; and (2) (3) “(a) dent; and”.

In section EX 52(3)(c), “change of residence” is replaced by “change of residence or status”.
Section EX 52(5)(a) is replaced by the following: ceases to be “(i) a New Zealand resident who is not a transitional resi­ dent, and becomes a non­resident: 73 Part 1 s 101 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(ii) a non­resident, and becomes a New Zealand resident who is not a transitional resident: “(iii) a transitional resident, and becomes a New Zealand resi­ (4) (5) (6) dent who is not a transitional resident; and”.
In section EX 52, in the list of terms deﬁned in the Act, (a) (b) (c) (d) Subsections (1) to (4) apply for (a) “New Zealand resident” is inserted: “non­resident” is inserted: “resident of New Zealand” is omitted: “transitional resident” is inserted.

a person who becomes a transitional resident on or after 1 April 2006; and income years corresponding to the 200506 and subse­ quent tax years.
(b) The law that would apply if subsections (1) to (4) did not come into force applies for (a) a person who becomes a transitional resident before 1 April 2006; and income years corresponding to the 200506 and subse­ quent tax years.
(b) 101 New sections EZ 4B and EZ 4C inserted After section EZ 4, the following is inserted: “EZ 4B Reduction: bloodstock not previously used for breeding in New Zealand: pre­1 August 2006 “Bloodstock to which this section applies “(1) This section applies to bloodstock that “(a) was not used for breeding in New Zealand before 16 December 1991; and “(b) before a person (person A) acquired it, was not used for breeding in New Zealand by any other person, unless “(i) the other person transferred the bloodstock to to person A under a matrimonial agreement which section FF 12 (Bloodstock) applies; or the other person and person A were companies in the same wholly­owned group at the time person A acquired the bloodstock from the other person; and “(ii) 74 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 101 “(c) section EC 39(1) or (2) applies to, “(i) “(ii) before 1 August 2006; or for an income year ending on or after 1 August 2006, if a requirement in paragraphs (a) to (c) of section EC 39(1) or (2) is ﬁrst met before 1 August 2006.
“Stallion “(2) For the purposes of sections EC 39 and EC 40, the reduction applying to the value of a stallion is 25% of the cost price of the stallion unless person A chooses to value the stallion by the reducing value method.

“Stallion valued by reducing value method “(3) When person A chooses to value the stallion by the reduc­ ing value method, the reduction applying to the value of the stallion is 37.5% of its cost price in the ﬁrst income year and 37.5% of its opening value in each later income year.
Person A must give notice to the Commissioner of their election in their return of income for the ﬁrst income year.

“Broodmare when ﬁrst used before 1 April 2001 “(4) For the purposes of sections EC 39 and EC 40, the reduction applying to the value of a broodmare is calculated using the formula “(5) “Deﬁnition of item in formula In the formula, age of broodmare is “(a) “(b) 12 years of age; or the actual age in years, if the broodmare is 11 years of age or less at the end of the income year.
“Broodmare when ﬁrst used on or after 1 April 2001 but before 1 August 2006 “(6) For the purposes of sections EC 39 and EC 40, the reduc­ tion applying to the value of a broodmare to which section EC 39(2) applies is calculated using the formula 75 Part 1 s 101 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(7) “Deﬁnition of item in formula In the formula, age of broodmare is “(a) “(b) 8 years of age; or the actual age in years, if the broodmare is 7 years of age or less at the end of the income year.
“Deﬁned in this Act: bloodstock, broodmare, Commissioner, company, cost price, income year, matrimonial agreement, New Zealand, notice, return of income, stallion, wholly­owned group, year “EZ 4C Reduction: broodmare previously used for breeding in New Zealand: pre­1 August 2006 “Broodmare to which this section applies “(1) This section applies to a broodmare that section EC 39(1) or (2) applies to, “(a) “(b) before 1 August 2006; or for an income year ending on or after 1 August 2006, if a requirement in paragraphs (a) to (c) of section EC 39(1) or (2) is ﬁrst met before 1 August 2006.
“Broodmare when ﬁrst used before 1 April 2001 “(2) For the purposes of sections EC 39 and EC 40, the reduc­ tion applying to the value of a broodmare to which section EC 39(1) applies and sections EC 41 and EZ 4B do not apply is calculated using the formula “(3) “Deﬁnition of item in formula In the formula, age of broodmare is “(a) “(b) 12 years of age; or the actual age in years, if the broodmare is 11 years of age or less at the end of the income year.
“Broodmare when ﬁrst used on or after 1 April 2001 but before 1 August 2006 “(4) For the purposes of sections EC 39 and EC 40, the reduc­ tion applying to the value of a broodmare to which section EC 39(2) applies and sections EC 41 and EZ 4B do not apply is calculated using the formula 76 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 102 “(5) “Deﬁnition of item in formula In the formula, age of broodmare is “(a) “(b) 8 years of age; or the actual age in years, if the broodmare is 7 years of age or less at the end of the income year.
“Deﬁned in this Act: broodmare, cost price, income year, year ”.
102 New section EZ 21B inserted (1) After section EZ 21, the following is inserted: “EZ 21B Economic rate for plant or equipment acquired before 1 April 2005 and buildings acquired before 19 May 2005 “What this section is about “(1) This section is about setting the economic depreciation rate that applies to items of a kind of depreciable property if “(a) “(b) plant or equipment acquired before 1 April 2005: the kind of depreciable property is not ﬁxed life in­ tangible property, or excluded depreciable property, for which an economic rate cannot be set; and the items are “(i) “(ii) buildings acquired before 19 May 2005: “(iii) buildings acquired on or after 19 May 2005, as relationship property or from a company in the same wholly­owned group of companies, from a person who applied to the item an economic de­ preciation rate set under this section or a corres­ ponding provision.
“Rate set by Commissioner “(2) The Commissioner sets the rate from time to time by “(a) “(b) following the procedure set out in this section; and issuing a determination under section 91AAFof the Tax Administration Act 1994.
“Procedure for setting economic rate “(3) To set the diminishing value rate for a kind of item of depre­ ciable property, the Commissioner 77 Part 1 s 103 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(a) “(b) “(c) gets a ﬁgure by applying the formula in subsection (4) to items of that kind; and rounds the ﬁgure up or down to the nearest rate speci­ ﬁed in schedule 11, column 1 (Banded rates of depreci­ ation); and sets the same rate for some or all of the kinds of items of depreciable property that are similar to one another, if the Commissioner thinks it is appropriate to do so having regard to “(i) “(ii) the rate calculated for each kind; and the reduction in compliance costs that is likely to be achieved.
“Formula “(4) The formula is “(5) (2) “Deﬁnition of item in formula In the formula, “(a) residual value is the greater of “(i) estimated residual market value, which is deﬁned in section EE 58 (Other deﬁnitions): “(b) “(c) “(ii) 13.5% of cost: cost is the cost of items of the kind to which the formula is applied: estimated useful life is deﬁned in section EE 54 (Mean­ ing of estimated useful life).
“Deﬁned in this Act: Commissioner, depreciable property, diminishing value rate, economic rate, estimated residual market value, estimated useful life, ex­ cluded depreciable property, ﬁxed life intangible property ”.

Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.
103 Section EZ 29 replaced (1) Section EZ 29 is replaced by the following: 78 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 103 “EZ 29 Disclosure restrictions on grey list CFCs before 201112 “No attributed CFC income from taxable distribution “(1) No attributed CFC income arises under section EX 19 (Taxable distribution from non­qualifying trust) in respect of a person’s income interest in a CFC if subsection (4) applies.
“No branch equivalent income or loss “(2) No branch equivalent income or loss arises under section EX 21 (Branch equivalent income or loss: calculation rules) in respect of a person’s income interest in a CFC if subsection (4) applies.

“No FIF income or loss “(3) No FIF income or loss arises under section EX 46 (Additional FIF income or loss if CFC owns FIF) in respect of a person’s income interest in a CFC if subsection (5) applies.
“Application of subsections (1) and (2) “(4) Subsection (1) or (2) applies in respect of a person’s income interest for an accounting period in a CFC if “(a) the income interest arises from an interest of the person in a CFC that satisﬁes subsection (6); and the person holds information that would, if considered by the Commissioner, satisfy the Commissioner under subsection (7).
“(b) “Application of subsection (3) “(5) Subsection (3) applies in respect of a person’s income interest for an accounting period in a CFC if “(a) “(b) the income interest satisﬁes subsection (6); and the person holds information that would, if considered by the Commissioner, satisfy the Commissioner under subsection (7).
“Relevant grey list CFC “(6) An interest in a CFC satisﬁes this subsection for an accounting period if the CFC is, throughout the accounting period, “(a) resident in a country on the grey list; and “(b) quoted on the ofﬁcial list of a recognised exchange in the country; and under the law of the country or the rules of the exchange, “(c) 79 Part 1 s 104 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(i) “(ii) prevented from disclosing to the person informa­ tion necessary for calculating attributed CFC in­ come or loss or FIF income or loss: required, as a result of the disclosure, to make a further disclosure of information that would be harmful to the commercial interests of the CFC.
“Person must satisfy Commissioner “(7) For this section to apply in respect of a person’s income inter­ est for an accounting period in a CFC, the person must hold information that would satisfy the Commissioner that, for the accounting period, an effect of the law or rules referred to in subsection (6) is that the person cannot calculate the attributed CFC income or loss or FIF income or loss in respect of the in­ come interest.
“Section terminates after 201011 income year “(8) This section does not apply to the tax on income derived by a person in an income year after the income year that corres­ ponds to the 201011 tax year.

“Deﬁned in this Act: accounting period, attributed CFC income, attributed CFC income or loss, branch equivalent income or loss, Commissioner, CFC, FIF, FIF income or loss, grey list, income, income interest, income year, recognised exchange, tax, tax year ”.
Subsection (1) applies for income years corresponding to the 200607 and subsequent tax years.

(2) 104 Apportionment of income derived partly in New Zealand (1) (2) (3) and partly elsewhere In section FB 2(2)(a), “section OE (1)” is replaced by “section OE 4(1)”.

In section FB 2(2)(b), “section OE (1)(a)” is replaced by “sec­ tion OE 4(1)(a)”.

Subsections (1) and (2) apply for income years corresponding to the 200506 and subsequent tax years.
105 Liability to make return and pay income tax (1) In section FC 16(7), “section NF 9(1)(a) to (c)” is replaced by “section NF 9(1)(a) and (b)”.

80 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 106 (2) Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.
106 New heading and sections FC 22 to FC 24 added (1) After section FC 21, the following is added: “Transitional residents “FC 22 Tax treatment of foreign­sourced amounts derived by transitional resident The intended effect of this section and sections FC 23 and FC 24 and related provisions of the Act is that, for the purposes of the Act, a person who derives a foreign­sourced amount is treated as being a non­resident in relation to the amount if the person derives the amount when the person is a transitional resident.
“FC 23 General requirements for being transitional resident A person satisﬁes the general requirements for being a transi­ tional resident if “(a) the person has a permanent place of abode in New Zealand; and immediately before acquiring a permanent place of abode in New Zealand, the person was a non­resident for a continuous period (non­residence period) of at least 10 years; and the person was not a transitional resident before the non­ residence period.
“(b) “(c) “FC 24 Transitional resident A natural person who satisﬁes the general requirements given by section FC 23 is a transitional resident for a period “(a) beginning from the ﬁrst day of the month in which the person acquires a permanent place of abode in New Zealand; and ending on the day that is the earlier of the following: “(i) the day before the person ceases to be a New Zealand resident: “(b) 81 Part 1 s 107 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(ii) the last day of the 48th month after the month in which the person acquires a permanent place of abode in New Zealand.” (2) (3) Subsection (1) applies for a person who becomes a transitional resident on or after 1 April 2006.
The law that would apply if subsection (1) did not come into force applies for a person who satisﬁes the requirements to be a transitional resident before 1 April 2006.
107 New subpart FCB inserted (1) After subpart FC, the following is inserted: “Subpart FCB—Emigration of resident companies “FCB 1 Tax effects of company becoming non­resident to reﬂect tax effects of liquidation “(1) This subpart applies to an emigrating company, which is a company that “(a) “(b) is a New Zealand resident; and ceases to be a New Zealand resident.
“(2) The intended effect of this subpart and related provisions of the Act is that, for the purposes of the Act, the effects on an emigrating company and its shareholders when the emigrating company becomes a non­resident reﬂect the effects that would have resulted if, “(a) immediately before the emigration time, “(i) the emigrating company disposed of its property at market value; and the emigrating company went into liquidation; and “(ii) “(b) “(iii) the amount available for distribution in the li­ quidation were distributed as dividends to the shareholders of the emigrating company; and at the emigration time, the emigrating company were reformed as a foreign company that “(i) had the same ownership and business activities as those of the emigrating company immediately before the emigration time; and 82 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 107 “(ii) had acquired at market value the property of the emigrating company immediately before the emigration time.
“FCB 2 Emigrating company treated as paying distribution to shareholders Immediately before the emigration time for an emigrating company, “(a) the emigrating company is treated as paying, as divi­ dends, a distribution in money to shareholders of the amount that would be available for distribution to the immediately before the emigration shareholders if, time, the emigrating company “(i) “(ii) went into liquidation; and each shareholder in the emigrating company is treated as being paid by the emigrating company, as a divi­ dend, a distribution in money of the amount to which the shareholder would be entitled in such a liquidation.
disposed of its property at market value; and “(b) “FCB 3 Emigrating company treated as disposing of property and immediately reacquiring property An emigrating company is treated as, immediately before the emigration time for the emigrating company, “(a) disposing of the property of the emigrating company to another person for consideration equal to the market value of the property at the emigration time; and acquiring the property referred to in paragraph (a) from the other person for consideration equal to the amount referred to in paragraph (a).” “(b) (2) Subsection (1) applies for (a) a company that becomes a non­resident on or after 21 March 2005 and does not, (i) before 21 March 2005, satisfy the requirements of sections 351(c), 352, 353, and 354 of the Companies Act 1993 for deregistration under that Act; and 83 Part 1 s 108 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 (ii) before 21 March 2005, apply for incorporation under the laws of another country or territory; and (b) income years corresponding to the 200506 and subse­ quent tax years.
(3) The law that would apply if subsection (1) did not come into force applies for (a) a company that (i) (ii) becomes a non­resident before 21 March 2005: becomes a non­resident on or after 21 March 2005 and for which subsection (1) does not ap­ ply; and (b) income years corresponding to the 200506 and subse­ quent tax years.

108 Amalgamation of companies: purpose (1) (2) In section FE 1(2)(a), “MB 11” is replaced by “MB 34”.
Subsection (1) applies for income years corresponding to the 200708 and subsequent tax years.

109 Arrangement to defeat application of depreciation (1) provisions In section GC 6, (a) “For the purposes of sections EZ 16 to EZ 18 and FF 15, where” is replaced by “If”: “a deduction so” is replaced by “a deduction for an amount of depreciation loss so”.

(b) (2) Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.
110 New section GC 14G inserted After section GC 14F, the following is inserted: “GC 14G Arrangement to avoid application of rules for returning share transfers If a person enters into an arrangement that has an effect of avoiding a requirement of the deﬁnition of returning share transfer in section OB 1 so as to defeat the intention and ap­ 84 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 112 plication of this Act, the Commissioner may, despite the ar­ rangement, treat “(a) “(b) the arrangement as a returning share transfer; and a person affected by the arrangement as a share user or a share supplier, under the returning share transfer.” 111 New section GC 17B inserted (1) After section GC 17, the following is inserted: “GC 17B Fringe beneﬁt tax: arrangement void “(1) If an arrangement is void under section BG 1, the amount of excluded income under section CX 3 of a person affected by the arrangement may be adjusted by the Commissioner in the manner the Commissioner thinks appropriate, so as to counter­ act any tax advantage obtained by that person from or under the arrangement, and without limiting the generality of this subsection, the Commissioner may have regard to “(a) the amount of excluded income as, in the Commis­ sioner’s opinion, the person would have, or might be expected to have, or would in all likelihood have, had if the arrangement had not been made or entered into; or the amount of excluded income as, in the Commis­ sioner’s opinion, the person would have had if they had been allowed the beneﬁt of some or all of the excluded income, as the Commissioner considers proper, derived by any other person or persons as a result of the arrange­ ment.
“(b) “(2) (2) If an amount of excluded income is included in the income of a person under subsection (1), then, for the purposes of this Act, that amount is not included in the income of any other person.” Subsection (1) applies for a person and a period beginning on or after 1 April 2006 for which the person or the person’s employer is required to forward a return to the Commissioner under subpart ND (Fringe beneﬁt tax).
112 (1) Sale or other disposition of trading stock for inadequate consideration In section GD 1(1), “subsection (2)” is replaced by “subsec­ tions (1B) and (2)”.
85 Part 1 s 113 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 (2) After section GD 1(1), the following is inserted: “Exclusion (3) “(b) “(1B) Subsection (1) does not apply to a share disposed of by a share user to a share supplier, or by a share supplier to a share user, under a share­lending arrangement.” Section GD 1(4)(b) is replaced by the following: is donated, or supplied for consideration worth less than the market value of the trading stock, to a person “(i) for use in a farming, agricultural, or ﬁshing business that is affected by a self­assessed adverse event; and “(ii) by a donor or supplier who is not associated with the person.” (4) Subsection (3) applies for transfers of trading stock in income years corresponding to the 200506 and subsequent tax years.
113 Distribution of property to policyholders In section GD 7, in the words before paragraph (a), “sections GD 1 and GD 2 (which relate to the sale of trading stock for inadequate consideration, and the distribution of trading stock to shareholders of companies)” is replaced by “section GD 1”.

114 Returns, assessments, and liability of consolidated group In section HB 1(5)(b), “section MB 7(1) does” is replaced by (1) “sections MB 29 and MB 30 do”.
Subsection (1) applies for income years corresponding to the 2008–09 and subsequent tax years.

(2) 115 Payment of qualifying company election tax (1) In section HG 12(2)(c), “section 120K” is replaced by “sec­ tions 120KB to 120KE”.

Subsection (1) applies for income years corresponding to the 2008–09 and subsequent tax years.
(2) 116 Trusts settled by persons before becoming resident (1) Section HH 2(1) is replaced by the following: “(1A) This section applies to a trust if “(a) a settlor of the trust is a natural person who on a day (the transition day) 86 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 117 “(i) “(ii) becomes a New Zealand resident who is not a transitional resident: ceases to be a transitional resident and continues to be a New Zealand resident; and the trust would be a foreign trust in relation to a distri­ bution made from property of the trust if the distribution were made on the day immediately before the settlor be­ came a New Zealand resident.
“(b) (2) “(1) A settlor, trustee, or beneﬁciary of the trust may, within 12 months of the transition day, elect under section HH 4(7) to satisfy the income tax liability in respect of the taxable income of the trustee of the trust.” In section HH 2(3)(a), “the day on which the settlor ﬁrst be­ came resident in New Zealand” is replaced by “the transition day”.
Subsections (1) and (2) apply for (a) a person who becomes a transitional resident on or after 1 April 2006; and income years corresponding to the 200506 and subse­ quent tax years.

(3) (b) (4) The law that would apply if subsections (1) and (2) did not come into force applies for (a) a person who becomes a transitional resident before 1 April 2006; and income years corresponding to the 200506 and subse­ quent tax years.
(b) 117 Trustee income (1) “(a) (2) Section HH 4(3)(a) is replaced by the following: any settlor of the trust is a New Zealand resident who is not a transitional resident; or”.

In section HH 4(3B), in the words before paragraph (a), “resi­ dent in New Zealand at any time during the tax year” is re­ placed by “at any time in the tax year a New Zealand resident who is not a transitional resident”.
(3) After section HH 4(3B), the following is inserted: “(3BB) Subsection (3B) does not apply for an income year to the resident foreign trustees of a foreign trust to which sections 87 Part 1 s 118 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 22(2)(fb) and (m) and 59B of the Tax Administration Act 1994 apply if a resident foreign trustee “(a) is not a qualifying resident foreign trustee for the in­ come year; and is convicted of an offence under section 143A of the Tax Administration Act 1994; and has committed the offence in relation to information re­ lating to the income year.
“(b) “(c) “(3BC) Subsection (3BB) does not apply for an income year to the resident foreign trustees of a foreign trust if a resident foreign trustee is convicted of an offence under section 143A(1)(b) of the Tax Administration Act 1994 if “(a) the conviction is in relation to information relating to the income year; and the information is supplied to the Commissioner after the conviction is entered.” “(b) (4) Subsections (1) and (2) apply for income years corresponding to the 200506 and subsequent tax years.
118 Application of other provisions to withdrawal tax (1) In section 1Z 7(b), “section 120K” is replaced by “sections 120KB to 120KE”.

Subsection (1) applies for income years corresponding to the 200809 and subsequent tax years.

(2) 119 Rebate in certain cases for children (1) “(e) (2) Section KC 2(e) is replaced by the following: $351:”.

Subsection (1) applies for income years corresponding to the 200607 and subsequent tax years.
120 Rebates in respect of gifts of money (1) In section KC 5(1)(co), “Trust.” is replaced by “Trust:” and the following is added: “(cp) Habitat for Humanity New Zealand Limited.” (2) Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.
88 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 121 121 Calculation of subpart KD credit (1) In section KD 2(6), as the provision applies for an income year corresponding to the 200506 tax year, in the deﬁnition of full­year abatement, (a) in paragraph (a), “spouse” is replaced by “spouse, civil union partner, or de facto partner”: in paragraph (b), (i) (b) (ii) (iii) (iv) in the words before subparagraph (i), “spouse” is replaced by “spouse, civil union partner, or de facto partner”: in subparagraph (i), “their spouse’s speciﬁed in­ come” is replaced by “the speciﬁed income of the person’s spouse, civil union partner, or de facto partner”: in subparagraph (ii), “their spouse’s speciﬁed in­ come” is replaced by “the speciﬁed income of the person’s spouse, civil union partner, or de facto partner”: in subparagraph (iii), “their spouse’s speciﬁed in­ come” is replaced by “the speciﬁed income of the person’s spouse, civil union partner, or de facto partner”.
(2) In section KD 2(6), as the provision applies for income years corresponding to the 200607 and subsequent tax years, in the deﬁnition of full­year abatement, (a) in paragraph (a), “spouse” is replaced by “spouse, civil union partner, or de facto partner”: in paragraph (b), (i) (b) in the words before subparagraph (i), “spouse” is replaced by “spouse, civil union partner, or de facto partner”: “their spouse’s speciﬁed income”, wherever it appears, is replaced by “the speciﬁed income of the person’s spouse, civil union partner, or de facto partner”.
(ii) (3) In section KD 2(6B), as the provision applies for an income year corresponding to the 200506 tax year, in the deﬁnition of full­year abatement, 89 Part 1 s 122 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 (a) (b) in paragraph (a), “spouse” is replaced by “spouse, civil union partner, or de facto partner”: in paragraph (b), “spouse” is replaced in both places that it occurs by “spouse, civil union partner, or de facto partner”.
(4) (5) (6) 122 In section KD 2(6B), as the provision applies for income years corresponding to the 200607 and subsequent tax years, in the deﬁnition of full­year abatement, (a) in paragraph (a), “spouse” is replaced by “spouse, civil union partner, or de facto partner”: in paragraph (b), “spouse” is replaced in both places that it occurs by “spouse, civil union partner, or de facto partner”.

(b) Subsections (1) and (3) apply for an income year correspond­ ing to the 200506 tax year.
Subsections (2) and (4) apply for income years corresponding to the 200607 and subsequent tax years.

In­work payment In section KD 2AAA(5)(a)(ii), “of the Schedule” is inserted after “Part E”.

123 Calculation of family tax credit (1) In section KD 3(1), after paragraph (b) of the deﬁnition of qualifying person, the following is inserted: “(bb) is not a transitional resident; and “(bc) is not the spouse, civil union partner, or de facto partner of a transitional resident; and”.
Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.

The law that would apply if subsection (1) did not come into force applies for (a) a person who becomes a transitional resident before 1 April 2006; and income years corresponding to the 200506 and subse­ quent tax years.
(b) (2) (3) 90 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 125 124 Credit of tax for imputation credit After section LB 2(1), the following is inserted: “(1B) A taxpayer who receives an imputation credit as a share user in a returning share transfer is not entitled under subsection (1) to a credit of tax.
“(1C) A taxpayer who is issued with a credit transfer notice is en­ titled under subsection (1) to a credit of tax equal to the amount of imputation credit shown in the notice.” Section LC 4(1) is replaced by the following: 125 Foreign tax credits: CFCs (1) “(1) Subject to this section, a person who has attributed CFC in­ come for an income year in respect of an income interest in a controlled foreign company is allowed a credit against the person’s income tax liability for “(a) income tax paid or payable in New Zealand or another country or territory by the controlled foreign company in respect of the attributed CFC income: “(b) withholding tax paid or payable in New Zealand or an­ other country or territory on behalf of the controlled for­ eign company in respect of the attributed CFC income: income tax paid or payable in a country or territory out­ side New Zealand by the person in respect of the at­ tributed CFC income.
“(c) “(1B) For the purposes of this section, income tax or withholding tax paid or payable in a currency other than New Zealand currency must be converted into New Zealand currency by, at the option of the person who has the attributed CFC income, “(a) applying the close of trading spot exchange rate applic­ able on the date when the income tax or withholding tax was paid or became payable; or applying the average of the close of trading spot ex­ change rates for the 15th day of each complete month falling within the period to which the attributed CFC in­ come relates.
“(b) “(1C) The Commissioner must amend an assessment of a person for an income year to reﬂect the amount of a credit under subsec­ tion (1) to which the person is entitled if 91 Part 1 s 126 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(a) “(b) the amount of the credit cannot be determined before the time by which the person must ﬁle a return of income for the income year; and the Commissioner receives a written request for the amended assessment from the person within 4 years af­ ter the end of the income year.” (2) Subsection (1) applies for income years corresponding to the 200607 tax years.
126 Tax deductions to be credited against tax assessed (1) In section LD 1(2), the words before paragraph (a) are replaced by “If, for a tax year, the Commissioner has received an em­ ployer monthly schedule showing tax deductions from source deduction payments in relation to an employee, the amount of the tax deductions must be credited successively agains”.
In section LD 1(2A), the words before paragraph (a) are re­ placed by “The amount credited or refunded must not exceed the amount of the tax deductions received by the Commis­ sioner, if” and the following is inserted: (2) “(aa) the employee is employed by a close company; and”.

Section LD 1(6)(b) is replaced by the following: (3) exceeds the amount of the tax deductions received by the Com­ “(b) missioner, if subsection (2A) applies to the employee,”.
127 New section LD 1B inserted [Repealed] Section 127: repealed, on 19 December 2007, by section 292 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

128 Resident withholding tax payments to be credited against income tax assessed In section LD 3(1), “other than a replacement payment,” is inserted after “Where a person derives an amount of resident withholding income”.
In section LD 3(2), in the words before paragraph (a), “, not being a replacement payment made under a share­lending ar­ rangement,” is inserted after “any amount of resident with­ holding income”.
(1) (2) 92 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 131 129 Credit of tax for dividend withholding payment credit in hands of shareholder After section LD 8(1), the following is inserted: “(1B) A taxpayer who receives a dividend withholding payment credit is not entitled under subsection (1) to a credit of tax if they issue a credit transfer notice in respect of the dividend withholding payment credit.
“(1C) A taxpayer who is issued with a credit transfer notice is en­ titled under subsection (1) to a credit of tax equal to the amount of dividend withholding payment credit shown in the notice.” 130 Refund to non­resident or exempt shareholders (1) After section LD 9(1) the following is inserted: “(1B) The Commissioner must, except as otherwise provided in this section, pay to a person by way of a refund of dividend with­ holding payment credit an amount equal to the amount of the dividend withholding payment credit shown in a credit trans­ fer notice issued to the person if “(a) “(b) the person is not resident in New Zealand: the person is resident in New Zealand and the dividend is exempt income otherwise than by virtue of sections CW 9 to CW 11.” (2) “(c) In section LD 9(2)(b), “tax.” is replaced by “tax:” and the fol­ lowing is added: in the case of an amount of the dividend withholding payment credit shown in a credit transfer notice, must be reduced by any amount of dividend withholding payment credit applied in accordance with section NG 2(2) to reduce an amount of non­ resident withholding tax in respect of the dividend to which the credit transfer notice relates.” 131 Underlying foreign tax credits generally, and “(a) interpretation Section LF 1(1)(a) is replaced by the following: allows in certain circumstances a company resident in New Zealand to claim a credit against a liability to pay a dividend withholding payment in respect of a foreign withholding pay­ ment dividend paid by a foreign company;
 and 93 Part 1 s 132 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(ab) provides that the amount of the credit, in general terms, be calculated to reﬂect a proportionate share of the New Zealand and foreign income tax paid, or deemed to be paid, “(i) on the income of the foreign company that gives rise to the foreign withholding payment dividend; and “(ii) by the company, the foreign company, or another com­ pany directly or indirectly funding the foreign withhold­ ing payment dividend; and”.
132 Amount of underlying foreign tax credit In section LF 3(1), (a) in the deﬁnition of item a, “and without any reduction under section CD 10B” is inserted after “withholding tax”: in the deﬁnition of item b, “by the company” is replaced by “on the income of the company”.
(b) 133 Dividends from grey list companies (1) “(b) Section LF 5(1)(b) is replaced by the following: for all eligible accounting years, a country or territory speciﬁed in schedule 3, part A “(i) is the residence of the company under section OE 2(3) to (6) and imposes on the company liability for income tax on the company’s income because the company is domiciled in the country, is resident in the country, is incorporated in the country, or has its place of manage­ ment in the country: is the country under whose laws the company is organ­ ised and imposes on persons holding income interests in the company a liability for income tax on the com­ pany’s income and is the source of 80% or more of the company’s income; and”.
“(ii) In section LF 5(1)(c), “the company has in respect of all eli­ gible accounting years, for the purposes of income tax in the country or territory, calculated its income liable to income tax” is replaced by “for all eligible accounting years, the income of the company that is liable to income tax in the country or ter­ ritory is calculated”.
(2) 94 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 136 134 Procedures with respect to underlying foreign tax credit In section LF 6(4), “a company is treated as having no amount of income tax paid or payable with respect to its earnings” is replaced by “no amount of income tax is paid or payable in respect of earnings of a company”.
135 Provisional taxpayer affected by qualifying event (1) In the heading to section MB 3B, “qualifying event” is re­ placed by “self­assessed adverse event or qualifying event”.
Section MB 3B(1) is replaced by the following: (2) “(1) This section applies to a taxpayer with a farming, agricultural, or ﬁshing business that is signiﬁcantly affected by a self­as­ sessed adverse event or with a business that is signiﬁcantly affected by a qualifying event.” In section MB 3B(3), (a) the taxpayer’s business is signiﬁcantly affected by the self­ assessed adverse event or qualifying event; and”: (b) paragraph (a) is replaced by the following: in paragraph (b), in the words before subparagraph (i), “a qualifying event” is replaced by “the self­assessed adverse event or qualifying event”.
“(a) (3) (4) Subsections (1) to (3) apply for income years corresponding to the 200506 and subsequent tax years.
136 New section MB 11B inserted (1) After section MB 11, the following is inserted: “MB 11B Transitional provisions relating to alignment of dates of payment for provisional tax and GST “Aligning taxable periods “(1) For a provisional taxpayer with a GST liability, if a change in balance date means that the taxpayer’s taxable period is not aligned with the balance date, an adjustment must be made to their taxable period under section 15AB of the Goods and Services Tax Act 1985.
“Application of subsections (3) and (4) “(2) Subsections (3) and (4) apply when a provisional taxpayer with a GST liability changes under section 15AB of the Goods and Services Tax Act 1985 their cycle of taxable periods.
95 Part 1 s 137 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “When taxable periods aligned “(3) The change takes effect as described in section 15AB of that Act if the following coincide: “(a) the end of the taxable period in which the taxpayer “(i) applies to change the basis on which the tax­ payer’s taxable period is set: is required to change the basis on which the tax­ payer’s taxable period is set: “(ii) “(b) the start of the taxable period in the taxpayer’s new cycle.
“(4) (2) “When taxable periods not aligned If subsection (3) does not apply, the taxpayer must continue to use the taxpayer’s existing cycle until the end of the next taxable period for which the end coincides with the start of a taxable period in the new cycle.” Subsection (1) applies for income years corresponding to the 200708 tax year.
137 Subpart MB replaced (1) Sections MB 2 to MB 12 are replaced by the following: “Introductory provisions “MB 1 Outline of subpart “When this subpart applies “(1) Sections MB 2 to MB 38 apply for the purposes of the provi­ sional tax rules to determine “(a) who pays provisional tax: “(b) a taxpayer’s provisional tax liability for a tax year, and the methods for calculating the amount payable: the number of instalments and the instalment dates for an income year: “(c) “(d) how the amount of an instalment is determined: “(e) “(f) the payment of provisional tax in transitional years: the application of the rules relating to use of money interest, late payment penalties, and shortfall penalties.
“Amount treated as income tax “(2) The provisions of this Act and the Tax Administration Act 1994 apply in relation to an amount that a person is liable to 96 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 137 “(3) pay under the provisional tax rules as if the amount were in­ come tax imposed under section BB 1 (Imposition of income tax).
“Instalment dates In this subpart, a reference to an instalment classiﬁed by the letters A to H is a reference to a date in the table in schedule 13, part A (Months for payment of provisional tax and terminal tax) on which an instalment of provisional tax (A to F) or ter­ minal tax (G and H) is payable by a provisional taxpayer for an income year that corresponds to a tax year.
“Deﬁned in this Act: amount, income tax, income year, instalment date, pay, provisional tax, provisional tax rules, provisional taxpayer, shortfall penalty, tax year, terminal tax, transitional year “MB 2 Who pays provisional tax?

“Meaning of provisional taxpayer “(1) A provisional taxpayer, for a tax year, means “(a) “(b) a person whose residual income tax for the tax year is more than $2,500; or a person who chooses under section MB 3 to be a pro­ visional taxpayer.
“Exclusions “(2) The following persons are not provisional taxpayers: “(a) “(b) “(c) a company that does not have a ﬁxed establishment in New Zealand and is not treated as resident in New Zealand: a person to whom section 33A of the Tax Administra­ tion Act 1994 applies: a non­resident contractor as deﬁned in regulation 2 of the Income Tax (Withholding Payments) Regulations 1979 who has not been issued with an exemption certiﬁ­ cate by the Commissioner for the tax year under regu­ lation 5.
97 Part 1 s 137 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “No obligation “(3) A person has no obligation to pay provisional tax for a tax year if their residual income tax for the preceding tax year is $2,500 or less.
“Deﬁned in this Act: company, ﬁxed establishment, New Zealand, non­resi­ dent, provisional taxpayer, resident in New Zealand, residual income tax, tax year “MB 3 Becoming provisional taxpayer by election A taxpayer, when ﬁrst providing a return of income for a tax year, may choose to be a provisional taxpayer for the tax year if “(a) they have paid provisional tax of more than $2,500 on or before “(i) the date of instalment F for the corresponding income year; or “(ii) the ﬁnal instalment date in a transitional year; and they have, on the day on which the ﬁrst payment of provisional tax is made for the tax year, a reasonable expectation that they are a provisional taxpayer for the tax year, other than by this election.
“(b) “Deﬁned in this Act: corresponding income year, ﬁnal instalment, instalment date, provisional tax, provisional taxpayer, return of income, tax year, taxpayer, transitional year “Calculation of provisional tax liability “MB 4 Methods for calculating provisional tax liability “Choice of method “(1) The provisional tax payable by a provisional taxpayer for a tax year must be calculated using 1 of the methods described in subsections (3) to (7).
“Meaning of next affected instalment date “(2) Next affected instalment date for a tax year means the instal­ ment date for the tax year that next follows the date on which the calculation is made.
“Standard method “(3) Under the standard method, the amount of provisional tax payable for the tax year is 98 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 137 “(a) 105% of the taxpayer’s residual income tax for the pre­ ceding tax year, determined under section MB 5, if para­ graph (b) does not apply; or “(b) 110% of the taxpayer’s residual income tax for the tax “(ii) year before the preceding tax year if “(i) the taxpayer is required to provide a return of income for the preceding tax year; and the return is not due on or before the ﬁrst instal­ ment date for the tax year through the application of section 37 of the Tax Administration Act 1994 or an extension granted under that section; and “(iii) the taxpayer has not provided the return on or “(iv) before the instalment date; and the instalment date is not the date of instalment F for the corresponding income year.
“Other methods: relationship with standard method “(4) Subsections (5) to (7) override subsection (3).

“Estimation method “(5) A taxpayer may make an estimate of their residual income tax under section MB 6 as their provisional tax liability for the tax year.

“GST ratio method “(6) A taxpayer who is eligible under section MB 15 may choose to use a GST ratio under section MB 7 for the purposes of determining their provisional tax liability for the tax year.
“(7) “Commissioner’s determination If the Commissioner determines a taxpayer’s provisional tax liability under section 119 of the Tax Administration Act 1994, the amount is that last determined by the Commissioner and notiﬁed to the taxpayer at least 30 days before the instalment date.

The 30­day requirement does not apply in a case to which section 119(1)(d) applies (which relates to an estimate of re­ sidual income tax that is not fair and reasonable).
“Life insurance business “(8) A provisional taxpayer, who carries on a business of providing life insurance and who is liable for income tax under the life in­ surance rules, must at the time they determine their provisional 99 Part 1 s 137 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 tax liability provide the Commissioner with details of the cal­ culation of that liability, in particular, the extent to which the amount of that provisional tax relates to the policyholder base.
“Deﬁned in this Act: amount, business, Commissioner, corresponding income year, GST ratio, instalment date, life insurance, life insurance rules, notify, pay, policyholder base, provisional tax, provisional taxpayer, qualifying event, residual income tax, return of income, tax year, taxpayer “MB 5 Standard method “When this section applies “(1) This section applies for the purposes of section MB 4(3) and the calculation of the amount of provisional tax payable for a tax year under the standard method.
“Assessment for preceding tax year “(2) The taxpayer’s residual income tax for a tax year is based on their assessment for the preceding tax year unless the Com­ missioner has issued a notice of assessment for the tax year at least 30 days before the relevant instalment date, in which case it is based on the Commissioner’s assessment for the preced­ ing tax year.
“Commissioner’s assessment for preceding tax year “(3) The taxpayer’s residual income tax is based on the Commis­ sioner’s assessment for the preceding tax year, whenever the assessment is made, if “(a) the taxpayer is required under section 37 of the Tax Ad­ ministration Act 1994 to provide a return of income for the preceding tax year but has failed to do so by the rele­ vant instalment date; or the taxpayer is not required under section 37 to provide a return by the relevant instalment date, and subsections (2) and (4) do not apply.
“(b) “Residual income tax for preceding tax year “(4) The amount of provisional tax payable for a tax year is the amount of residual income tax for the preceding tax year if “(a) the taxpayer is not required to provide a return of in­ come for the preceding tax year; or the taxpayer’s residual income tax for that tax year was $2,500 or less and they were not required to provide, “(b) 100 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 137 and have not provided, a return of income for that tax year by the date of instalment F for the corresponding income year.
“(5) “Later increased assessment If the Commissioner assesses a taxpayer’s income tax liability after the due date for an instalment of provisional tax and the taxpayer’s residual income tax is increased by the assessment, the residual income tax is treated for the purposes of the pro­ visional tax rules as if it had not been increased.

“Transitional years and consolidated groups “(6) Residual income tax in transitional years is calculated under section MB 19.
For consolidated groups of companies, the calculation is made under section MB 30.
“Deﬁned in this Act: amount, assessment, Commissioner, consolidated group, corresponding income year, income tax liability, instalment date, notice, pay, provisional tax, residual income tax, return of income, tax year, taxpayer, tran­ sitional year “MB 6 Estimation method “When this section applies “(1) This section applies for the purposes of section MB 4(5) and the calculation of the amount of provisional tax payable for a tax year under the estimation method.
“Fair and reasonable estimate “(2) On or before an instalment date, a provisional taxpayer may make a fair and reasonable estimate of their residual income tax for the tax year by informing the Commissioner of the es­ timate.

The estimate may be a revised estimate.


“Reasonable care in making and maintaining assessment “(3) A taxpayer who makes an estimate under subsection (2) must take reasonable care in making it, and must revise the estimate for the tax year if, at some time in the tax year, the amount estimated is no longer fair and reasonable.
“(4) “Estimation higher than provisional tax payable If a taxpayer estimates their residual income tax and the esti­ mate is more than the provisional tax that is payable for the 101 Part 1 s 137 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(5) tax year, they are treated as having taken reasonable care in making the estimate.
“Changing determination method from GST ratio If, under section MB 17(5), a taxpayer changes they way they determine the amount of provisional tax after the date of an instalment, they must estimate their residual income tax for the income year, and must pay provisional tax on whichever of instalment dates B, D, and F for their corresponding income year occur after 30 days from their last ratio instalment date.
“Disaster relief “(6) A taxpayer who is signiﬁcantly affected by a self­assessed adverse event may make an estimate of their provisional tax under section MB 38, and that section overrides this section.
“Deﬁned in this Act: amount, Commissioner, corresponding income year, GST ratio, income year, instalment date, pay, provisional tax, provisional taxpayer, ratio instalment date, residual income tax, self­assessed adverse event, tax year, taxpayer “MB 7 GST ratio method “Using GST ratio “(1) A provisional taxpayer who meets the requirements of section MB 15 may choose to use a GST ratio to determine the amount of provisional tax payable for a tax year.
“Meaning of GST ratio “(2) A taxpayer’s GST ratio is the percentage ﬁgure that is obtained by dividing their residual income tax for the preceding tax year by their total taxable supplies for the corresponding income year.

The amount of residual income tax and the amount of total taxable supplies are called the base amounts in this sec­ tion.
“When amounts based on tax year before preceding tax year If the base amounts for the preceding tax year or correspond­ ing income year have not been assessed, the GST ratio is the percentage based on the assessment for the tax year and cor­ responding income year that are immediately before the pre­ ceding tax year and corresponding income year.
“(3) 102 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 137 “Commissioner’s calculation and notiﬁcation “(4) The Commissioner must calculate a taxpayer’s GST ratio, no­ tifying them by “(a) including the percentage ﬁgure on the taxpayer’s pre­ printed GST return form; or advising them in writing or by telephone; or some other means.
“(b) “(c) “Adjustment to GST ratio “(5) The Commissioner must adjust a taxpayer’s GST ratio if the base amounts are revised through, among other reasons, “(a) an assessment or an amended assessment of the tax­ payer’s income tax return for the preceding tax year; or a change in the value of the total taxable supplies for the corresponding income year; or the disposal of an asset to which section MB 18 applies.
“(b) “(c) “New GST ratio “(6) When subsection (5) applies, the Commissioner must notify the taxpayer of the new GST ratio.

The new ratio applies in relation to the relevant instalment dates that occur 30 days after the date of notiﬁcation.
“(7) “(8) “Transitional years If a taxpayer has paid instalments of provisional tax in a tran­ sitional year, for the tax year that follows the transitional year, for the purposes of this section and section MB 10, they must ignore the transitional year when determining their re­ “(a) sidual income tax or total taxable supplies; and “(b) base their determination of residual income tax and total taxable supplies on the tax year preceding the transi­ tional year.
“Total taxable supplies In subsections (2), (5), and (7), and in sections MB 10, MB 15, MB 18, and MB 32, total taxable supplies for a person and a period means the amount that is the total value, including GST, of taxable supplies of the person for the period.
“Deﬁned in this Act: amount, assessment, base amount, Commissioner, corres­ ponding income year, GST, GST ratio, instalment date, notify, pay, provisional tax, provisional taxpayer, residual income tax, tax year, taxable supply, total taxable supplies, transitional year 103 Part 1 s 137 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “Instalments of provisional tax “MB 8 Provisional tax payable in instalments “General principle “(1) The general principle for the standard and estimation methods is that the amount of a taxpayer’s residual income tax must be spread evenly over the applicable number of instalments, so that equal amounts are paid on each instalment date.
If the amount of residual income tax is not divisible into exactly equal instalments, the ﬁnal instalment carries the difference.

“Provisional tax payable in 3 instalments “(2) Provisional tax is payable in 3 instalments on the interest in­ stalment dates for the tax year in the months set out in schedule 13, part A, columns B, D, and F for the taxpayer’s correspond­ ing income year.

The amount of each instalment is calculated under section MB 9.

Subsection (3) overrides this subsection.
“Exclusions “(3) Subsection (2) does not apply “(a) “(b) “(c) “(d) pays GST on a 6­monthly basis: to a provisional taxpayer who “(i) “(ii) uses a GST ratio to determine the amount of pro­ visional tax payable, or who changes their deter­ mination method under section MB 17(5): “(iii) changes the cycle of their taxable periods under section 15C of the Goods and Services Tax Act 1985: pays GST on a 6­monthly basis: to a new provisional taxpayer who “(i) “(ii) pays GST on a monthly or 2­monthly basis, and starts a taxable activity after the day that is 30 days before the date of instalment B in their cor­ responding income year: to a provisional taxpayer who has not provided a return of income for the preceding tax year, and whose residual income tax for the tax year immediately before the pre­ ceding tax year was $2,500 or less: in a transitional year.
104 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 137 “Provisional tax when GST paid on 6­monthly basis “(4) A provisional taxpayer who pays GST on a 6­monthly basis must pay provisional tax on the 2 interest instalment dates for the tax year in the months set out in schedule 13, part A, columns C and F for the taxpayer’s corresponding income year.
This subsection applies to a new provisional taxpayer other than one who pays GST on a 6­monthly basis and starts a taxable activity after the day that is 30 days before the date of instalment C. “Provisional tax determined using GST ratio “(5) A provisional taxpayer who uses a GST ratio to determine the amount of provisional tax payable for a tax year, must pay provisional tax on the 6 ratio instalment dates in the months set out in schedule 13, part A, columns A to F for the taxpayer’s corresponding income year.
The amount of each instalment is calculated under section MB 10.

“Changing determination method “(6) A provisional taxpayer who is unable or decides not to use a GST ratio, changing their determination method under section MB 17, must pay the provisional tax payable for the tax year on the relevant instalment dates under the replacement method.

The amount of each instalment is calculated under section MB 6 or MB 9, as applicable.
“Changing cycle of taxable periods “(7) A provisional taxpayer who changes the cycle of their taxable periods under section 15C of the Goods and Services Tax Act 1985 must pay provisional tax for the tax year on the instal­ ment dates speciﬁed in section MB 27 after the change in tax­ able period takes effect under section MB 26.

The amount of each instalment is calculated under section MB 9.
“New provisional taxpayers “(8) A new provisional taxpayer who starts a taxable activity in a tax year in relation to which they pay GST must pay provi­ sional tax for the tax year “(a) in 3 instalments under subsection (2) if they start a tax­ able activity at some time in the period that starts at the 105 Part 1 s 137 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(b) beginning of the corresponding income year and ends 30 days before the date of instalment B: in 2 instalments “(i) “(ii) in a case to which section MB 13 applies; or if they start a taxable activity at some time in the period that starts at the beginning of the corres­ ponding income year and ends 30 days before the date of instalment C: “(c) in 1 instalment in a case to which section MB 14 applies.
“Extension of time for return “(9) A provisional taxpayer who has not provided a return of in­ come for a preceding tax year and whose residual income tax for the tax year before the preceding tax year was $2,500 or less must pay provisional tax for the tax year on the instal­ ment dates set out in section MB 13 or MB 14, as applicable.

“Transitional years “(10) In a transitional year, provisional tax is due and payable as set out in section MB 20 and schedule 13, part B.
The amount of each instalment is calculated under sections MB 21 to MB 23.

“Voluntary payments “(11) A provisional taxpayer may pay an instalment of provisional tax under section MB 12 at any time.
“Deﬁned in this Act: amount, corresponding income year, GST, GST ratio, in­ come year, instalment date, interest instalment date, new provisional taxpayer, pay, provisional tax, provisional taxpayer, ratio instalment date, residual in­ come tax, return of income, tax year, taxable activity, taxable period, taxpayer, transitional year “ Table MB 8—Categories for payment of provisional tax 106 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 137 Table MB 8—continued Cat­ egor­ ies: or­ din­ ary Stan­ dard MB 4(3) Esti­ ma­ tion MB 4(5) GST ratio MB 4(6) GST6­ month MB 8(4) Vari­ ables Method In­ stal­ ments Cal­ cula­ tion In­ stal­ ment dates Inter­ est, penal­ ties MB5 3—MB 8(2) B, D, F MB 9 120KE(1), (2) MB 6 3—MB 8(2) B, D, F MB 9 120KB MB 7 1 month 6—MB 8(5) A to F MB 120KE(3) 10 MB 7 MB 5 2 month stan­ dard 6—MB 8(5) A to F MB 10(3) 120KE(3), 139C 2—MB 8(4) C and F MB 9 120KE(1) MB 6 2—MB 8(4) C and F MB 9 120KB esti­ ma­ tion 107 Part 1 s 137 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 Table MB 8—continued Vari­ ables Method In­ stal­ ments Cal­ cula­ tion In­ stal­ ment dates Inter­ est, penal­ ties 120KC MB 9 (MB 13(3)) D and F, or F as re­ quired 120KD MB 21, MB 22 MB 9 B, D, F, or C, F as re­ quired B, D, F, or C, F as re­ quired MB 8(8), MB 13(2), MB 14(2) MB 20 (MB 8(10)) MB 27 (MB 8(7) MB 5 or MB 6 MB 19 MB 25, MB 26, and 15C and 15D
 of GST Act Cat­ egor­ ies: ex­ cep­ tional New provi­ sional tax­ payers Tran­ si­ tional years Chang­ ing tax­ able period (or start­ ing and stop­ ping GST regis­ tra­ tion) 108 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 137 Table MB 8—continued B, D, F, or C, F as re­ quired MB 4(3) or (5) (MB 6, MB 8(6)) MB 17 MB 12 MB 9 120KE(5)­ (7) 120E Chang­ ing deter­ min­ ation method Vol­ untary pay­ ments Note:
 References in the last column are to sections of the Tax Administration Act 1994 .
“MB 9 Calculating amount of instalment under standard and estimation methods “When this section applies “(1) This section applies for the purposes of “(a) “(b) “(c) “(d) section MB 4(3) and (5) (which relates to the calculation of a provisional tax liability): section MB 8(2) and (4) (which relates to payment of instalments): sections MB 13 and MB 14 (which relate to new pro­ visional taxpayers and taxpayers with an extension of time for providing a return): sections MB 25 to MB 27 (which relate to changes in taxable periods).
“Calculation “(2) The amount of an instalment of provisional tax for a tax year is calculated using the formula “Deﬁnition of items in formula In the formula, “(3) 109 Part 1 s 137 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(a) “(b) “(c) residual tax is a provisional taxpayer’s residual income tax, as applicable “(i) “(ii) for the preceding tax year, uplifted by 5%; or for the tax year immediately before the preceding tax year, uplifted by 10%; or “(iii) the amount estimated by the taxpayer: instalment number is the number of the taxpayer’s in­ stalment for the tax year, whether ﬁrst, second, or third: total instalments is the total number of the taxpayer’s instalments for the tax year: “(d) provisional tax is the amount of the taxpayer’s provi­ sional tax liabilities for the tax year to date.
“Instalment amounts after change in balance date or taxable period If a change occurs to the balance date or cycle of taxable periods of a provisional taxpayer, the calculation of the amount of an instalment is made under this section, applying the up­ dated ﬁgures to the items in the formula.
“Deﬁned in this Act: amount, balance date, new provisional taxpayer, pay, provisional tax, provisional taxpayer, residual income tax, return of income, tax year, taxable period “(4) “MB 10 Calculating amount of instalment using GST ratio “Calculation “(1) The amount of provisional tax payable on an instalment date by a provisional taxpayer who uses a GST ratio for a tax year is calculated using the formula GST ratio for tax year taxable supplies.
“(2) “Item in formula: taxable supplies In the formula, taxable supplies is the amount of the tax­ payer’s taxable supplies in the taxable period that matches the instalment period.
“Taxable supplies when taxpayer pays on monthly basis “(3) For the purposes of subsection (1), a taxpayer who pays GST on a 1­month cycle under section 15 of the Goods and Services Tax Act 1985 must apply the GST ratio to the sum of their taxable supplies in the current taxable period and the preced­ 110 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 137 ing taxable period; that is, the taxable supplies in the 2­month period matching the instalment period.
“Deﬁned in this Act: amount, GST, GST ratio, instalment period, pay, provi­ sional tax, provisional taxpayer, tax year, taxable period, taxable supply “MB 11 Using GST refund to pay instalment of provisional tax “(1) “(2) “Offsetting amount If a provisional taxpayer has an excess of deductions over ag­ gregate output tax in a taxable period under section 20(5) of the Goods and Services Tax Act 1985, they may choose to use an amount of the excess to pay some or all of an instalment of provisional tax that is due on the same instalment date.
If a person makes an election under subsection (1) affecting an amount of an excess of deductions over aggregate output tax (elected amount) and the Commissioner makes an amended assessment reducing the amount of the excess to less than the elected amount, the person’s payment of provisional tax aris­ ing from the GST refund is the amount of the excess after the reassessment.
“Deﬁned in this Act: amount, Commissioner, GST, instalment date, pay, pro­ visional tax, provisional taxpayer, taxable period “MB 12 Voluntary payments A taxpayer may at any time make a voluntary payment of an amount of provisional tax that “(a) relates to their income tax liability for a tax year in which they are not a provisional taxpayer: is more than the provisional tax payable by them for the tax year: is more than the income tax payable by them for the tax year.
“(b) “(c) “Deﬁned in this Act: amount, income tax liability, pay, provisional tax, provi­ sional taxpayer, tax year, taxpayer “MB 13 Paying 2 instalments for tax year “Who this section applies to “(1) This section applies for a tax year to 111 Part 1 s 137 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(a) “(b) a new provisional taxpayer whose ﬁrst business day oc­ curs in the period that starts 30 days before the date of instalment B and ends 30 days before the date of instal­ ment D; or a taxpayer whose return of income for the preceding tax year is provided in the period that starts on the date of instalment B and ends on the date of instalment D if “(i) the taxpayer was required to provide a return for the preceding tax year but, under section 37 of the Tax Administration Act 1994 or an extension under that section, the taxpayer is not required to provide the return by the date of instalment B; and their residual income tax for the tax year before the preceding tax year was $2,500 or less.
“(ii) “Who this section does not apply to “(2) Despite subsection (1), this section does not apply to a provi­ sional taxpayer who pays GST on a 6­monthly basis.

“When instalments are due “(3) The instalments are due and payable on the date of instalments D and F for the taxpayer’s corresponding income year.

“Formula for amount of instalment “(4) The amount of each instalment is calculated under section MB 9.
“Deﬁned in this Act: amount, corresponding income year, ﬁrst business day, new provisional taxpayer, pay, residual income tax, return of income, tax year, taxpayer Example: Section MB 13 Mr Red, who is not registered for GST, starts business on 20 August and has a March balance date.

The ﬁrst business day falls in the period that starts on 29 July (30 days before instalment B) and ends on 21 December (30 days before instalment D).
Mr Red has 2 payments of provisional tax for the year, due on 20 January and 28 April.
112 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 137 “MB 14 Paying 1 instalment for tax year “Who this section applies to “(1) This section applies for a tax year to “(a) “(b) “(c) a new provisional taxpayer whose ﬁrst business day oc­ curs in the period that starts 30 days before the date of instalment D and ends at the end of the corresponding income year: a taxpayer whose return of income for the preceding tax year is not provided on or before the date of instalment D if “(i) the taxpayer was required to provide a return for the preceding tax year but, under section 37 of the Tax Administration Act 1994 or an extension under that section, is not required to provide the return by the date of instalment D; and their residual income tax for the tax year before the preceding tax year was $2,500 or less: a person who pays GST on a 6­monthly basis if “(i) their ﬁrst business day occurs in the period that starts 30 days before the date of instalment C and ends at the end of the corresponding income year: they meet the requirements of paragraph (b)(i) and (ii) as if the reference to instalment D in para­ graph (b)(i) were a reference to instalment C. “(ii) “(ii) “When instalment due “(2) The instalment is due and payable on the date of instalment F for the taxpayer’s corresponding income year.
113 Part 1 s 137 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “Amount of instalment “(3) The amount of the instalment is calculated under section MB 9.
“Deﬁned in this Act: amount, corresponding income year, ﬁrst business day, GST, new provisional taxpayer, pay, provisional tax, residual income tax, return of income, tax year, taxpayer Example: Section MB 14 Ms Orange, who is registered for GST on a 2­monthly basis, starts business on 1 January and has a March balance date.

Ms Orange is ordinarily liable to pay provisional tax in 3 in­ stalments aligned with her GST payment dates (s MB 8(2)).
However, because her ﬁrst business day falls in the period that starts on 21 December (30 days before instalment D) and ends on 31 March, Ms Orange has 1 payment of provi­ sional tax for the year, due on 28 April.

“Requirements for using GST ratio “MB 15 Who may use GST ratio?
“General eligibility “(1) A provisional taxpayer may choose to use a GST ratio to de­ termine under section MB 4(6) the amount of provisional tax payable for a tax year only if they meet all the requirements in subsections (2) and (3) in relation to the same entity.
“Requirements for preceding tax year “(2) For the purposes of determining their eligibility for a tax year, the taxpayer must meet the following requirements in the pre­ ceding tax year: “(a) their residual income tax, as assessed, was more than $2,500 but no more than $150,000; and they were a person registered under section 51 of the Goods and Services Tax Act 1985 for the whole tax “(b) 114 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 137 year, and provided returns under that Act for an entity whose business or taxable activity did not begin oper­ ations in that tax year; and the ratio of their residual income tax to total taxable supplies, as calculated under section MB 7(2) and ex­ pressed as a percentage, is between zero and 100%.
“(c) “Requirement for current year “(3) For the tax year in which the taxpayer uses a GST ratio, they must be liable to ﬁle a return under the Goods and Services Tax Act 1985 for a 2­month or a 1­month period under section 15(1)(b) and (c) of that Act.

“When election applies “(4) An election to use a GST ratio applies for the tax year for which the election is made and in later tax years, unless the tax­ payer changes their determination method under section MB 17.
The election is made under section MB 16.
“Requirement to discontinue use of GST ratio “(5) Despite subsections (1) to (4), a taxpayer must discontinue the use of the GST ratio for the tax year and must apply section MB 17(4) or (5) if “(a) “(b) their GST registration ends in the tax year; or they no longer qualify under subsection (2) as a result of an amended assessment of their income tax liability or their GST liability for the preceding tax year; or they no longer qualify under subsection (3) as a result of a change in their taxable period.
“(c) “Failure to provide GST returns “(6) A taxpayer must not use, or must discontinue the use of, a GST ratio for a tax year if the taxpayer “(a) is liable to provide a return under the Goods and Ser­ vices Tax Act 1985 for a period in the taxpayer’s cor­ responding income year; and “(b) becomes in default under this subsection by failing to provide the return before the date that is 60 days after the due date for ﬁling the return.
115 Part 1 s 137 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(7) “Provisional tax instalments for periods following default If a taxpayer is required by subsection (6) to discontinue the use of a GST ratio for a determination method, the taxpayer must make provisional tax instalments as required by section MB 17 for instalment periods “(a) beginning on or after the due date for ﬁling of the re­ turn for which the taxpayer becomes in default under subsection (6)(b); and “(b) not affected by a notice issued by the Commissioner under subsection (8).
“Further use of GST ratio “(8) A taxpayer who would otherwise be prohibited by subsection (6) from using a GST ratio for a determination method for an instalment period referred to in subsection (7)(a) may never­ theless use that determination method for the instalment period if the taxpayer “(a) “(b) applies in writing for the Commissioner to issue a notice under this subsection; and satisﬁes the Commissioner that “(i) the failure referred to in subsection (6)(b) is a result of an event or circumstance beyond the control of the taxpayer; and as a consequence of that event or circumstance, the taxpayer has a reasonable justiﬁcation or ex­ cuse for the failure; and “(ii) “(iii) the taxpayer corrected the failure as soon as prac­ ticable; and “(c) is sent a notice in writing by the Commissioner that the taxpayer may use the GST ratio for a determination method for the instalment period.
“Standard of satisfaction “(9) The taxpayer must satisfy the Commissioner under subsec­ tion (8)(b) to a standard that would justify the remission of a penalty under section 183A of the Tax Administration Act 1994.
“Effect of later default “(10) A notice to a taxpayer under subsection (8) does not apply to an instalment period if 116 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 137 “(a) “(b) “(c) the taxpayer becomes in default under subsection (6) in relation to a return for which the due date is after the date of the notice; and the default is not expressly anticipated and taken into account in the notice; and the instalment period begins on or after the due date referred to in paragraph (a).
“References to preceding tax year “(11) In this section, a reference to a preceding tax year includes a reference to the tax year immediately before the preceding tax year if that earlier tax year is used for the purposes of calcu­ lating a GST ratio.
“Deﬁned in this Act: amount, assessment, business, corresponding income year, GST ratio, income tax liability, instalment period, pay, provisional tax, provisional taxpayer, registered person, residual income tax, tax year, taxable activity, taxable period, taxable supply “MB 16 Choosing to use GST ratio A taxpayer who meets the requirements referred to in section MB 15(1) for a tax year may use a GST ratio for the corres­ ponding income year if the taxpayer, before the start of the corresponding income year, informs the Commissioner of the election to use a GST ratio for the tax year.
“Deﬁned in this Act: Commissioner, corresponding income year, GST ratio, notice, notify, provisional taxpayer, tax year “MB 17 Changing determination method “When this section applies “(1) This section applies if, after having chosen to use a GST ratio for a tax year, a provisional taxpayer either “(a) chooses another way to determine the amount of provi­ sional tax payable for the corresponding income year; or is required under section MB 15(5) or (6) to discontinue the use of a GST ratio for the corresponding income year.
“(b) “Notifying Commissioner of decision to change “(2) The taxpayer must notify the Commissioner of their decision under subsection (1)(a), and may do this either in writing or by 117 Part 1 s 137 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 telephone.

Subsection (3) or (4) then applies for the remaining instalments for the income year.
“Date on which use of GST ratio discontinued “(3) For the purposes of subsection (1)(b), the date on which the taxpayer discontinues their use of a GST ratio is, as applicable, “(a) “(b) the date their GST registration ends; or the date of the amended assessment of their income tax liability or GST liability for the preceding tax year; or the effective date of a change in taxable period; or the end of the period in which a return is liable to be provided under the Goods and Services Tax Act 1985.
“(c) “(d) “(4) “(5) “(6) “Changing method before ﬁrst instalment date If the taxpayer is unable or decides not to use a GST ratio before the date of instalment A, they may choose to determine the amount of provisional tax payable under section MB 4(3) or (5), as if the election to use the GST ratio had not been made.
“Changing method after instalment date If the taxpayer is unable or decides not to use the GST ratio after an instalment date, they must determine the amount of provisional tax payable on instalment for the remainder of the income year under section MB 4(5) on the basis of an estimate of their residual income tax for the tax year.

For this purpose, the taxpayer may provide the estimate in writing or by tele­ phone.
“Date of application when method changed If a taxpayer changes their determination method under sub­ section (4) or (5), the date on which the change applies may be a future date agreed between the taxpayer and the Commis­ sioner.
“Other consequences of changing method “(7) For the purposes of this section, “(a) the frequency and the instalment dates remaining for an income year depend on “(i) the requirements of the determination method chosen by the taxpayer when they stop using the GST ratio; and 118 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 137 “(b) “(c) “(ii) the cycle of taxable periods chosen by the tax­ payer, being either a monthly or 2­monthly basis: a taxpayer may change from using a GST ratio to a 6­monthly cycle of taxable periods only if “(i) the requirements in section 15C of the Goods and Services Tax Act 1985 are met; and their 6­month taxable period is aligned with their balance date under section 15B of the Goods and Services Tax Act 1985: “(ii) section 120KE(5) to (7) (Provisional tax and rules on use of money interest) of the Tax Administration Act 1994 applies to determine whether and when use of money interest is payable in relation to instalments under the new determination method.
“Deﬁned in this Act: amount, balance date, Commissioner, corresponding in­ come year, GST ratio, income year, instalment date, notify, pay, provisional tax, provisional taxpayer, residual income tax, tax year, taxable period “MB 18 Disposal of assets “When this section applies “(1) This section applies if, as part of the business of an entity de­ scribed in section MB 15(1), a provisional taxpayer disposes of an asset “(a) “(b) that is not revenue account property; and the value of the supply of which is not less than the greater of “(i) an amount equal to 5% of the total taxable sup­ plies of the business for the previous 12 months: “(ii) $1,000.
“Adjustment to GST ratio for current and next income year “(2) The taxpayer may choose to take the disposal of the asset into account by adjusting their taxable supplies for the relevant tax­ able period and income year.
The adjustment must be made to both “(a) the amount of the taxpayer’s taxable supplies for the purposes of the formula in section MB 10(1), by sub­ tracting an amount that equals the value of the supply of the asset (as determined under section 10 of the Goods 119 Part 1 s 137 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(b) and Services Tax Act 1985) from the amount of taxable supplies for the relevant taxable period; and the base amount of the taxpayer’s taxable supplies for the next income year, by subtracting the amount that equals the value of the supply of the asset referred to in paragraph (a) from total taxable supplies in working out the GST ratio under section MB 7(2).
“Notifying Commissioner “(3) For the purposes of subsection (2), the taxpayer must notify the Commissioner of both the disposal of the asset and the value of its supply, and may do this either in writing or by telephone.

“(4) “Rounding percentages In the determination of the value of the supply of the asset under subsection (1)(b)(i), the amount must be rounded to a whole percentage number.
“Deﬁned in this Act: amount, base amount, business, Commissioner, GST ra­ tio, income year, instalment date, notify, provisional taxpayer, revenue account property, taxable period, taxable supply “Transitional years “MB 19 Calculating residual income tax in transitional years “Calculation for transitional year “(1) This section applies for the purposes of section MB 4(3) and the calculation of a taxpayer’s residual income tax for a tax year if “(a) “(b) the preceding tax year is a transitional tax year: the tax year before the preceding tax year is a transi­ tional tax year.
“Calculation for transitional year “(2) The amount of residual income tax for the transitional year must be increased or decreased by the amount given by the formula in subsection (3) so as to reﬂect the amount that would apply in a 12­month period.
“Formula “(3) The amount is calculated using the formula 120 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 137 “Deﬁned in this Act: amount, ﬁrst business day, new provisional taxpayer, residual income tax, tax year, taxpayer, transitional year “MB 20 Paying provisional tax in transitional years “Total amount payable “(1) The total amount of provisional tax payable in a transitional year is the sum of all instalments of provisional tax due in the transitional year.
“(2) “When instalments due Instalments other than a ﬁnal instalment of provisional tax are due on “(a) the 28th day of the months set out in schedule 13, part B (Months for payment of provisional tax and terminal tax), reﬂecting the instalment dates set out in part A of the schedule, unless paragraph (b) applies: the 15th day of January, when the month set out in schedule 13, part A is December.
“(b) “When ﬁnal instalment due “(3) Payment of the ﬁnal instalment is due on “(a) “(b) the 28th day of the month following the ﬁnal month in the transitional year; or the 15th day of January, when November is the ﬁnal month.
“Modiﬁcations to instalment dates “(4) For the purposes of subsection (2), provisional tax is not due and payable on “(a) “(b) “(c) the date of instalment B, if section MB 13 would have applied had the tax year not been a transitional year; or the dates of instalments B and D, if section MB 14(1)(a) and (b) would have applied had the tax year not been a transitional year; or the dates of instalments B, D, and F, if the taxpayer is a new provisional taxpayer whose ﬁrst business day occurs after the day that is 30 days before the date of instalment F; or 121 Part 1 s 137 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(d) “(e) the date of instalment C, if section MB l4(1)(c) would have applied had the tax year not been a transitional year; or the dates of instalments C and F, if the taxpayer is a new provisional taxpayer who pays GST on a 6­monthly basis whose ﬁrst business day occurs after the day that is 30 days before the date of instalment F. “(5) “Counting months in transitional years In this section, and in sections MB 21 to MB 24, and in sched­ ule 13, part B (Months for payment of provisional tax and ter­ minal tax), the number of months in a transitional year is de­ termined as follows: “(a) the ﬁrst month in a taxpayer’s transitional year is the ﬁrst whole month in the transitional year: the ﬁnal month in a transitional year is the month in which the taxpayer’s new balance date under section 39 of the Tax Administration Act 1994 occurs: each month falling between the ﬁrst and ﬁnal months must be included in determining the length of the tran­ sitional year.
“(b) “(c) “Deﬁned in this Act: amount, ﬁnal instalment, ﬁrst business day, new provi­ sional taxpayer, pay, provisional tax, tax year, transitional year “MB 21 Calculating instalments in transitional years: standard method “When this section applies “(1) This section applies to instalments of provisional tax payable in a transitional year under section MB 20 by a provisional tax­ payer using the standard method to calculate their provisional tax liability.
“Instalment other than ﬁnal instalment “(2) The amount payable on an instalment date other than the ﬁnal instalment date is calculated using the formula “Deﬁnition of items in formula in subsection (2) In the formula in subsection (2), “(3) 122 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 137 “(a) provisional tax is the provisional tax liability under “(b) “(c) section MB 4(3): instalments due is the number of instalments due in the transitional year on or before the instalment date: total instalments is whichever of the following applies: 3, for provisional taxpayers who pay on instal­ “(i) ment dates B, D, and F; or “(ii) 2, for provisional taxpayers who pay on instal­ ment dates C and F: “(d) tax previously due is the amount for the transitional year of provisional tax that is due and payable before the instalment date.
“Final instalment “(4) The amount payable on a ﬁnal instalment date is calculated using the formula “(5) “Deﬁnition of items in formula in subsection (4) In the formula in subsection (4), “(a) provisional tax is the provisional tax liability under “(b) section MB 4(3): transitional year days is the number of days in the transitional year: “(c) preceding year days is the number of days in the pre­ “(d) ceding tax year: tax previously due is the amount for the preceding tax year of provisional tax that is due and payable before the instalment date.
“Deﬁned in this Act: amount, instalment date, ﬁnal instalment date, pay, pro­ visional tax, provisional taxpayer, tax year, transitional year “MB 22 Calculating instalments in transitional years: estimation method “When this section applies “(1) This section applies to instalments of provisional tax payable in a transitional year under section MB 20 by a provisional 123 Part 1 s 137 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 taxpayer using the estimation method to calculate their provi­ sional tax liability.
“Instalment other than ﬁnal instalment “(2) The amount payable on an instalment date other than the ﬁnal instalment date is calculated using the formula “(3) “Deﬁnition of items in formula in subsection (2) In the formula, “(a) “(b) “(c) “(d) tax estimate is the provisional tax liability last esti­ mated by the taxpayer under section MB 4(5): instalments due is either “(i) 4 multiplied by the number of instalments in the transitional year that are due on or before the instalment date, for provisional taxpayers who pay on the equivalent of instalment dates B, D, and F; or “(ii) 6 multiplied by the number of instalments in the transitional year that are due on or before the instalment date, for provisional taxpayers who pay on the equivalent of instalment dates C and F: transitional months is the number of months in the transitional year: tax previously due is the amount for the transitional year of provisional tax that is due and payable before the instalment date.
“Final instalment “(4) The amount payable on a ﬁnal instalment date is the amount of provisional tax determined under section MB 4(5) less the amount of any instalment previously due and payable.
“Deﬁned in this Act: amount, instalment date, ﬁnal instalment date, pay, pro­ visional tax, provisional taxpayer, transitional year 124 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 137 “MB 23 Calculating instalments in transitional years: GST ratio method “What this section applies to “(1) This section applies to instalments of provisional tax payable in a transitional year by a provisional taxpayer using a GST ratio.
“Adjustment if required “(2) The taxpayer must apply the GST ratio under section MB 10 to any period or part period before the start of the new income year on whichever dates of instalments A to F for their corres­ ponding income year occur in the transitional year.
“Deﬁned in this Act: GST ratio, income year, pay, provisional tax, provisional taxpayer, transitional year “MB 24 Consequences of change in balance date “(1) “Continuing frequency If a provisional taxpayer changes their balance date, until the new balance date is reached, the taxpayer must continue to use the instalment dates that applied before the change in balance date was approved.
“How amounts determined “(2) Sections MB 19 to MB 23 and schedule 13, part B (Months for payment of provisional tax and terminal tax) apply for the transitional year in subsection (1) to determine the amount and due date of the instalments.
“(3) “Estimation method In a transitional year, a provisional taxpayer who uses the es­ timation method must, “(a) before the date on which the Commissioner notiﬁes a change in balance date, estimate the residual income tax as if no change in balance date is or will be approved; and after the date on which the Commissioner notiﬁes a change in balance date, re­estimate the residual income tax.
“(b) 125 Part 1 s 137 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “GST ratio method “(4) Subsection (5) applies when a provisional taxpayer who uses a GST ratio to determine the provisional tax payable for a tax year, changes their balance date and moves from “(a) a set of instalment dates in even­numbered months to a set of instalment dates in odd­numbered months; or a set of instalment dates in odd­numbered months to a set of instalment dates in even­numbered months.
“(b) “Adjustment to liability “(5) The taxpayer must adjust their provisional tax liability for the income year for the part period of 1 month before the start of the new income year.

The part period is their ﬁnal taxable period, and the instalment of provisional tax is due 28 days after the end of that period.
“Aligning taxable periods “(6) For a provisional taxpayer with a GST liability, if a change in balance date means that the taxpayer’s taxable period is not aligned with the balance date, an adjustment must be made to their taxable period under section 15B(3) or 15C of the Goods and Services Tax Act 1985.
“Deﬁned in this Act: amount, balance date, Commissioner, GST ratio, income year, instalment date, notify, pay, provisional tax, provisional taxpayer, residual income tax, tax year, taxable period Example: Sections MB 20 to MB 24 Mr Yellow, who has a March balance date, decides to change to a May balance date.

The transitional year is 14 months long.

He starts business and becomes a new provisional taxpayer on 31 July, estimating provisional tax at $15,000 for the income year.
At the end of the year, Mr Yellow’s residual income tax is $20,000.

126 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 137 Instalments in transitional year: 28th day of 5th, 9th, and 13th months after balance date, and ﬁnal instalment on 28th day of month following ﬁnal month in transitional year (s MB 22 and schedule 13, part B).
But the ﬁrst business day falls within 30 days of the date that would be the ﬁrst instal­ ment, 28 August (s MB 13), so no instalment is due.

Amounts payable on the instalment dates are calculated under s MB 22.
First instalment due 20 January: $15,000 x 4/14 = $4,285 Second instalment due 28 April: $15,000 x 8/14 ­ $4,285 = $4,286 Final instalment due 28 June: $15,000 ­ $8,571 = $6,429 “When provisional taxpayers start or stop paying GST, or change taxable periods “MB 25 Registering for GST or cancelling registration “When this section applies “(1) This section applies if a provisional taxpayer who uses the standard or estimation method to determine the amount of pro­ visional tax payable for a tax year “(a) applies to the Commissioner to become a registered per­ son under section 51 of the Goods and Services Tax Act 1985; or is treated as registered under section 51B of that Act; or “(b) 127 Part 1 s 137 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(c) asks the Commissioner to cancel their GST registration, or has their GST registration cancelled under section 52 of that Act.
“Starting or ending GST registration: monthly or 2­monthly basis “(2) For a taxpayer who becomes registered for GST paying on a monthly or 2­monthly basis, or who cancels or has their GST registration cancelled having paid on that basis, the in­ stalments of provisional tax payable by them for the tax year are unaffected.
“Starting GST registration: 6­monthly basis “(3) For a taxpayer who becomes registered for GST paying on a 6­monthly basis, instalments of provisional tax are due and payable on whichever dates of instalments C and F for their corresponding income year coincide with the cycle of their taxable periods after they become a registered person.
“Ending GST registration: 6­monthly basis “(4) For a taxpayer who pays GST on a 6­monthly basis and cancels their GST registration or has their registration cancelled, in­ stalments of provisional tax are due and payable on whichever dates of instalments B, D, and F for their corresponding in­ come year occur after 30 days from the date of cancellation.
“Date of cancellation “(5) For the purposes of subsection (4) and the provisional tax rules, the date of cancellation is the date on which the can­ cellation of GST registration is notiﬁed.

“Formula for amount of instalment “(6) The amount of each instalment is calculated under section MB 9.
“Deﬁned in this Act: amount, corresponding income year, GST, pay, provi­ sional tax, provisional taxpayer, registered person, tax year, taxable period “MB 26 Changing GST cycle “When this section applies “(1) This section applies when a provisional taxpayer with a GST liability changes under section 15C of the Goods and Services Tax Act 1985 their cycle of taxable periods.
128 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 137 “When taxable periods aligned “(2) The change takes effect as described in section 15D of the Goods and Services Tax Act 1985 if the following coincide: “(a) the end of the taxable period in which the taxpayer “(i) applies to change the basis on which the tax­ payer’s taxable period is set: is required to change the basis on which the tax­ payer’s taxable period is set: “(ii) “(3) “(b) the start of the taxable period in the taxpayer’s new cycle.
“When taxable periods not aligned If subsection (2) does not apply, the taxpayer must continue to use the taxpayer’s existing cycle until the end of the next taxable period for which the end coincides with the start of a taxable period in the new cycle.

This section overrides section 15D(2) of the Goods and Services Tax Act 1985.
“Deﬁned in this Act: instalment dates, interest instalment date, provisional tax, provisional taxpayer, tax year, taxable period “MB 27 Payment of provisional tax instalments when GST cycle changed “When subsection (2) applies “(1) Subsection (2) applies in a tax year to a provisional taxpayer who “(a) uses the standard or estimation method to determine the amount of provisional tax payable; and “(b) has been paying GST on a monthly or 2­monthly basis; “(c) and changes to a 6­monthly basis under section 15C(1) of the Goods and Services Tax Act 1985.
“When instalments are due: changing to 6­monthly basis Instalments of provisional tax are due and payable on whichever dates of instalments C and F for the taxpayer’s corresponding income year occur after the change in taxable period takes effect under section MB 26.
“(2) 129 Part 1 s 137 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “When subsection (4) applies “(3) Subsection (4) applies in a tax year to a provisional taxpayer who “(a) uses the standard or estimation method to determine the amount of provisional tax payable; and “(b) has been paying GST on a 6­monthly basis; and “(c) changes to a monthly or 2­monthly basis under section 15C(2) or (3) of the Goods and Services Tax Act 1985.
“(4) “(5) “When instalments due: changing to monthly or 2­monthly basis tax are due and payable on Instalments of provisional whichever dates of instalments B, D, and F for the taxpayer’s corresponding income year occur after the change in taxable period takes effect under section MB 26.
“Interest instalment dates in new cycle If an instalment of provisional tax due on an instalment date in the new cycle is payable in relation to a period in the taxpayer’s original cycle and was, under that original cycle, an interest instalment date, it remains an interest instalment date in the new cycle.

However, if the instalment is due and payable on an instalment date other than an interest instalment date, the change does not affect the nature of the instalment.
“Formula for amount of instalment “(6) The amount of each instalment is calculated under section MB 9.
“Deﬁned in this Act: amount, corresponding income year, GST, provisional tax, provisional taxpayer, tax year, taxable period Examples: Sections MB 26 and MB 27 (using March bal­ ance dates) 1 Professor Green starts the income year registered for GST on a monthly basis, and on 10 June asks to change to a 6­monthly basis: • the change takes effect on 30 September (s MB 26(2)) 130 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 137 2 3 4 • • provisional tax instalment payable on old cycle on 28 August provisional tax instalment due on 28 April (s MB 27(2)) Ms Blue starts the income year registered for GST on a 6­monthly basis, and on 10 June asks to change to a monthly basis: • • • the change takes effect on 30 September (s MB 26(2)) provisional tax instalment payable on old cycle on 28 October provisional tax instalments due on 20 January, 28 April (s MB 27(4)) Mr Indigo starts the income year registered for GST on a monthly basis, and on 20 October asks to change to a 6­monthly basis: • • the change takes effect on following 31 March provisional tax instalments paid on old cycle on 28 August, 20 January, 28 April (ss MB 26(3), MB 27(5)) Miss Violet starts the income year registered for GST on a 6­monthly basis, and on 10 June ends her GST registration: • the change takes effect for provisional tax purposes on 10 June (s MB 25(5)) provisional tax instalments due on 28 August, 20 January, 28 April (s MB 25(4)) • “Penalties and
 interest provisions “MB 28 Application of provisions of Tax Administration Act 1994 “(1) “Safe harbour for standard method If a provisional taxpayer meets the requirements in section 120KE(1) of the Tax Administration Act 1994, their residual 131 Part 1 s 137 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 income tax is treated as due and payable in 1 instalment on their terminal tax date.
“GST ratio method “(2) A provisional taxpayer who uses a GST ratio in a tax year to determine the amount of an instalment of provisional tax is li­ able to pay an amount of use of money interest, a late payment penalty, or a shortfall penalty only in the circumstances set out in, as applicable, the following sections of the Tax Adminis­ tration Act 1994: “(a) “(b) “(c) “Deﬁned in this Act: amount, GST ratio, pay, provisional taxpayer, residual income tax, shortfall penalty, tax year, terminal tax date sections 120KB to 120KE: section 139C(1B): section 141EA.
“Treatment of groups of companies and amalgamated companies “MB 29 Provisional tax rules and consolidated groups “Single company “(1) The provisional tax rules apply, with the necessary modiﬁca­ tions, to a consolidated group of companies as if it were a sin­ gle company.
“Joint and several liability “(2) Each company in a consolidated group in a tax year is jointly and severally liable for the amount of provisional tax payable by the consolidated group to be credited against the income tax liability of the group for the tax year.

The individual liability of a company for income tax for the tax year is substituted by that joint and several liability to the extent to which the liabil­ ity arises while the company is a member of the consolidated group.
“Relationship with section HB 1 “(3) Section HB 1(5) (Returns, assessments, and liability of con­ solidated group) overrides this section.
“Deﬁned in this Act: amount, company, consolidated group, income tax, in­ come tax liability, pay, provisional tax, provisional tax rules, tax year 132 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 137 “MB 30 Residual income tax of consolidated groups “When this section applies “(1) This section applies for the purposes of the provisional tax rules if a company is a member of a consolidated group of companies in a tax year but was not a member of the group for all or part of the preceding tax year.
“Increased residual income tax “(2) The residual income tax of the consolidated group for the pre­ ceding tax year is treated as increased by an amount equal to the residual income tax of the company for the preceding tax year.

If the company is a member of the group for part of the current tax year, the amount of residual income tax is increased as a proportion on the basis of the part of the tax year during which the company is a member of the group.
“(3) “Instalments due after company becomes member If the company is a member of a group for part of the tax year, this section applies only to instalments of provisional tax payable after the date on which the company becomes a member.
“Deﬁned in this Act: amount, company, consolidated group, pay, provisional tax, provisional tax rules, residual income tax, tax year “MB 31 Consolidated groups using estimation method “When subsection (2) applies “(1) Subsection (2) applies for the purposes of the provisional tax rules if a company is a member of a consolidated group of companies for all or part of a tax year but is not a member of the group for all or part of the following tax year.
“Estimation before ﬁnal instalment date “(2) The company must estimate its residual income tax on or be­ fore the date of instalment F for the following income year that corresponds to the tax year, and the company is treated as a provisional taxpayer to which section MB 6 applies for the purposes of its estimate.
“When company member of another consolidated group “(3) The consolidated group, in the case of a company that is a member of another consolidated group, must make an estimate 133 Part 1 s 137 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(4) of residual income tax on or before the date of instalment F for the following income year that corresponds to the tax year, and the consolidated group is treated as a provisional taxpayer to which section MB 6 applies for the purposes of its estimate.
“When company no longer member If a company stops being a member of the consolidated group in the following tax year, the company’s estimate applies only to instalments of provisional tax payable after the date on which it stopped being a member.
“Deﬁned in this Act: company, consolidated group, corresponding income year, pay, provisional tax rules, provisional taxpayer, residual income tax, tax year “MB 32 Consolidated groups using GST ratio method Sections MB 7, MB 8(5), MB 10, and MB 15 to MB 18 ap­ ply to a consolidated group of companies with the following modiﬁcations: “(a) “(ii) if a consolidated group that is eligible to use, or is using, a GST ratio for a tax year is joined by a new member, the following subparagraphs apply: “(i) if the new member joins at the start of the tax year and, as a result, the threshold in section MB 15(2)(a) is exceeded, the group is no longer eli­ gible to use a GST ratio: if the new member joins at the start of the tax year, and the group, allowing for the inclusion of the new member, is eligible under section MB 15(1), the group may use a GST ratio, subject to the recalculation of the ratio under paragraph (c): “(iii) if the new member joins at some time in the tax year, the group may continue to use a GST ratio for the tax year, as recalculated under paragraph (c), provided the requirements for eligibility other than the threshold in section MB 15(2)(a) are met: “(b) if a consolidated group that does not determine provi­ sional tax payable for a tax year using a GST ratio is joined by a new member that is using a GST ratio for 134 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 137 “(c) the tax year, the group may not start
 using a GST ratio for this purpose for the tax year: for the purposes of paragraph (a), “(i) the group must recalculate the GST ratio apply­ ing for a tax year to include the residual income tax of the new member for the preceding tax year and the total taxable supplies of the new member for the corresponding income year, applying sec­ tion MB 7(3) if required; and the recalculated GST ratio applies to provisional tax payments made for the corresponding income year on or after the date on which the new mem­
 ber joins the group: “(ii) “(d) section MB 15(3) and section MB 17(4) or (5), as ap­ plicable, apply to a company that leaves a consolidated group at some time in a tax year.
“Deﬁned in this Act: consolidated group, corresponding income year, GST ratio, pay, provisional tax, residual income tax, tax year, taxable supply “MB 33 Wholly­owned groups of companies “When this section applies “(1) This section applies for the purposes of the provisional tax rules and Part 7 of the Tax Administration Act 1994 in relation to a company (company A) that is a member in a tax year of a wholly­owned group of companies that includes another company (company B).
Section MD 2 (Limits on refunds and allocations of tax) overrides this section.

“(2) “Company A allocating overpayment to company B If, for a tax year, company A has paid an amount of provisional tax that is more than the residual income tax payable for the tax year, the company may allocate some or all of the overpayment to company B to the extent to which the amount of provisional tax paid by company B is less than their residual income tax for the tax year.
Company A must notify the Commissioner under subsection (4).

“When allocation made “(3) Company A may allocate an amount under subsection (2) on or after the later of 135 Part 1 s 137 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(a) “(b) the day on which company A overpays the provisional tax; or the day on which the ﬁrst instalment of provisional tax for the tax year becomes payable by company B.
“Notice “(4) A notice under subsection (2) must “(a) “(b) “(c) name company B, and the amount to be allocated; and state the date on which the overpayment is treated as allocated to company B; and be provided to the Commissioner “(i) within the time for providing a return of income for the tax year for company B: “(ii) within any extension of time that the Commis­ sioner allows.
“When allocation made, and how allocation treated “(5) For the purposes of this section, “(a) an allocation under subsection (2) is treated as made on the date stated in the notice; and “(b) provisional tax allocated to company B by company A is treated as provisional tax paid by company B and not by company A.
“Deﬁned in this Act: amount, Commissioner, company, notice, notify, pay, provisional tax, provisional tax rules, residual income tax, return of income, tax year, wholly­owned group of companies “MB 34 Amalgamated companies: calculating residual income tax “When this section applies “(1) This section applies if an amalgamating company ceases to exist on an amalgamation occurring in an income year of the amalgamated company that corresponds to a tax year.
“Residual income tax for preceding tax year “(2) The residual income tax of the amalgamated company for the preceding tax year is the amount that would have been the re­ sidual income tax of the amalgamated company for the pre­ ceding tax year if the amalgamating company and the amalga­ mated company had always been 1 company.
136 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 137 “Exception: instalments of provisional tax “(3) Subsection (2) does not apply for the purposes of the provi­ sional tax rules in relation to instalments of provisional tax payable before the amalgamation.
“Deﬁned in this Act: amalgamated company, amalgamating company, amal­ gamation, amount, company, pay, provisional tax, provisional tax rules, re­ sidual income tax, tax year “Attribution rule for services “MB 35 Attribution rule for services “When this section applies “(1) This section applies for the purposes of the provisional tax rules and Part 7 of the Tax Administration Act 1994 for pro­ visional tax paid for income from personal services to which section GC 14B (Attribution rule for personal services) may apply.
“(2) “(3) “Person B allocating amount to person C If, in a tax year, person B pays an amount of provisional tax that is more than the residual income payable for the tax year, person B may allocate some or all of the overpayment to per­ son C to the extent to which the amount of provisional tax paid by person C is less than their residual income tax for the tax year.
“Person C allocating amount to person B If, in a tax year, person C pays an amount of provisional tax that is more than the residual income payable for the tax year, person C may allocate some or all of the overpayment to per­ son B to the extent that the amount of provisional tax paid by person B is less than their residual income tax for the tax year.
“When allocation made “(4) Persons B and C may allocate an amount under subsection (2) or (3) on or after the later of “(a) “(b) the day on which the overpayment of provisional tax is paid by person B or person C, as applicable; or the day on which the ﬁrst instalment of provisional tax payable for the tax year becomes payable by “(i) person C, if person B is making the allocation; or 137 Part 1 s 137 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(ii) person B, if person C is making the allocation.
“Notice “(5) The Commissioner must be notiﬁed of an allocation under sub­ section (2) or (3) in a notice that “(a) “(b) “(c) names the person to whom an allocation is made, and the amount to be allocated; and states the date on which the overpayment is treated as allocated to person B or person C, as applicable; and is provided within the time for providing a return of in­ come for the tax year for the person to whom the allo­ cation is made.
“When allocation made, and how allocation treated “(6) For the purposes of this section, “(a) an allocation under subsection (2) or (3) is treated as made on the day stated in the notice; and “(b) provisional tax allocated to person C by person B for a tax year is treated as provisional tax paid by person C and not by person B; and provisional tax allocated to person B by person C is treated as provisional tax paid by person B and not by person C. “(c) “Deﬁned in this Act: amount, Commissioner, notice, notify, pay, provisional tax, provisional tax rules, residual income tax, return of income, tax year “Overpayments and credits “MB 36 Overpaid provisional tax “When this section applies “(1) This section applies when the amount of provisional tax payable by a provisional taxpayer for a tax year is reduced by the taxpayer, or by the Commissioner under section 119(2) of the Tax Administration Act 1994.
“Reduction in amount of provisional tax payable If the taxpayer applies for a refund of the amount of provi­ sional tax already paid that is as a result of the reduction more than the amount that would have been payable in relation to earlier instalment dates for the tax year, the Commissioner must “(2) 138 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 137 “(a) “(b) apply the overpayment as the taxpayer asks under sec­ tion 173T of the Tax Administration Act 1994 or, if no request is made, in a way that the Commissioner de­ termines in payment of tax or another amount that is payable by them; and refund any balance of the overpayment.
“(3) “Reduction in assessment If the taxpayer’s residual income tax is assessed as not more than $2,500, and they apply for the refund of an amount of provisional tax that has been determined under section MB 8 and already paid (other than on a ﬁnal instalment), the Com­ missioner must “(a) apply the amount as the taxpayer asks under section 173T of the Tax Administration Act 1994 or, if no re­ quest is made, in a way the Commissioner determines in payment of tax or another amount that is payable by them; and refund any balance of the amount.
“(b) “Treatment of amount refunded or credited “(4) When an overpayment or amount of provisional tax for a tax year has been applied or refunded under subsection (2) or (3), a later instalment payable under section MB 9 or MB “(a) 10, as applicable, is calculated as if the total instalments previously payable were reduced by the amount of the overpayment or amount; and the overpayment or amount applied or refunded is, from the date of action taken by the Commissioner, treated as not being provisional tax paid for the tax year.
“Deﬁned in this Act: amount, Commissioner, instalment date, pay, provisional tax, provisional taxpayer, residual income tax, tax, tax year “(b) “MB 37 Further income tax credited to provisional tax liability “When this section applies “(1) This section applies for the purposes of sections MB 8 to MB 10 if, under section ME 9 (Further tax payable where end of year debit balance or when company ceases to be imputation credit account company), a company applies an amount of fur­ ther income tax to pay an instalment of provisional tax for 139 Part 1 s 137 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 which the company becomes liable after the date of payment of the further income tax.
“Amount treated as provisional tax “(2) The instalment is satisﬁed to the extent of the amount of further income tax.

The amount is treated as provisional tax paid on the date on which the instalment was due and payable.
“Order “(3) The Commissioner must credit the amount of the further in­ come tax in payment successively of “(a) the instalment of provisional tax that is ﬁrst due and payable after the date of payment of the further income tax; and to the extent of the amount of further income tax, to later instalments in the order in which they are due and payable.
“(b) “Deﬁned in this Act: amount, company, further income tax, pay, provisional tax “MB 38 Provisional taxpayer affected by self­assessed adverse “Disaster relief event or qualifying event “Who this section applies to “(1) This section applies to a provisional taxpayer with a business that is signiﬁcantly affected by a self­assessed adverse event or qualifying event.

This section overrides section MB 6.


“Taxpayer’s request “(2) The provisional taxpayer may ask the Commissioner to accept an estimate or a revised estimate of the residual income tax payable by them for a tax year.
“Acceptance of estimate “(3) The Commissioner may accept an estimate or revised estimate described in subsection (2) if all the following requirements are met: “(a) the business is signiﬁcantly affected by the self­assessed adverse event or qualifying event; and it is not reasonable to require the taxpayer to provide under section MB 6 an estimate or revised estimate of “(b) 140 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 138 residual income tax payable by them for the tax year; and the basis on which the taxpayer has chosen to pay pro­ visional tax is now inappropriate; and the taxpayer asks to revise their estimate as soon as practicable.
“(c) “(d) “Treatment of revised estimate If a revised estimate is accepted under subsection (3), it is treated as the estimate applying on the date of instalment F. “Deﬁned in this Act: Commissioner, provisional tax, provisional taxpayer, qualifying event.

” Subsection (1) applies for provisional tax payments for the income years corresponding to the 200809 and subsequent tax years.
“(4) (2) 138 Payment of terminal tax In section MC 1(1), (1) (a) in paragraph (a), “part A for the payment of terminal tax for the tax year, unless January is speciﬁed; and” is re­ placed by “part A, column G or H, for the person’s cor­ responding income year, unless January is speciﬁed:”: paragraph (b) is replaced by the following: (b) the 15th day of January, if January is speciﬁed in schedule 13, part A, column G or H for the person’s corresponding income year.” Section MC 1(2) is replaced by the following: For the purposes of subsection (1), the month speciﬁed in schedule 13, part A for the taxpayer’s corresponding income year is the month in column H, if “(i) the person’s return of income for the tax year was linked to a tax agent: the Commissioner has been notiﬁed that a tax agent will respond to an income statement for the tax year that the person has requested under section 80C of the Tax Administration Act 1994 or that the Commissioner has issued under section 80D of that Act: the month in column G, in any other case.” “(ii) “(b) (2) (2) “(a) “(b) 141 Part 1 s 139 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 (3) Subsections (1) and (2) apply for income years corresponding to the 200809 and subsequent tax years.
139 Limit on refunds and allocations of tax (1) In section MD 2, (a) (b) in subsections (1) to (4) and (5A), “section MB 9” is replaced by “section MB 33” in all the places it occurs: in subsection (4), “the date of payment of the ﬁrst in­ stalment of provisional tax for that tax year” is replaced by “the date of instalment B speciﬁed in schedule 13, part A, for the company’s income year that corresponds to that tax year”.
(2) Subsection (1) applies for income years corresponding to the 200809 and subsequent tax years.

140 Limits on refunds of tax in relation to Maori authorities (1) In section MD 2B(3), “the date of the ﬁrst instalment of pro­ visional tax for the tax year” is replaced by “the date of in­ stalment B speciﬁed in schedule 13, part A, for the authority’s income year that corresponds to the tax year”.

Subsection (1) applies for income years corresponding to the 200809 and subsequent tax years.
(2) 141 Companies required to maintain imputation credit (1) (2) account Section ME 1(2)(a) is repealed.

Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.
142 Credits arising to imputation credit account (1) In section ME 4(1), the following is inserted after paragraph (ea): “(eb) the amount of any imputation credit attached under section ME 6B to a replacement payment paid under a share­lending arrangement to the company during the imputation year: “(ec) the amount of any imputation credit treated under section NF 8B as being attached to a replacement payment paid under a 142 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 143 share­lending arrangement to the company during the imput­ ation year: “(ed) the amount of imputation credit shown in a credit transfer no­ tice that the company is issued with during the imputation year:”.
In section ME 4(2), the following is inserted after paragraph (cb): (2) “(cc) in the case of the credits referred to in subsection (1)(eb) and (ec), on the date the replacement payment is paid: “(cd) in the case of the credit referred to in subsection (1)(ed), on the date the credit transfer notice is issued:”.
143 Debits arising to imputation credit account (1) In section ME 5(1), the following is inserted after paragraph (a): “(ab) the amount of any imputation credit attached under section ME 6B to a replacement payment paid under a share­lending arrangement by the company during the imputation year: “(ac) the amount of any imputation credit attached to a dividend that is paid to the company during the imputation year as a share user or as a person associated with a share user, in a returning share transfer that is not a share­lending arrangement: “(ad) the amount of any imputation credit attached to a dividend that is paid to the company during the imputation year, if the imputation credit is shown in a credit transfer notice issued by the company:”.
In section ME 5(1)(d), “section MB 9” is replaced by “section MB 33”.

In section ME 5(2), the following is inserted after paragraph (a): (2) (3) “(ab) in the case of a debit referred to in subsection (1)(ab), on the date the replacement payment is paid: “(ac) in the case of a debit referred to in subsection (1)(ac) or (ad), (4) (5) on the date the relevant dividend is paid:”.

In section ME 5(2)(d), “section MB 9” is replaced by “section MB 33”.
In section ME 5(2)(ia), “subsection (1)(jb)” is replaced by “subsection (1)(ja)”.

143 Part 1 s 144 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 (6) (7) Subsections (2) and (4) apply for income years corresponding to the 200809 and subsequent tax years.

Subsection (5) applies for income years corresponding to the 200506 and subsequent tax years.
144 Company may attach imputation credit to dividend (1) After section ME 6(1), the following is inserted: “(1B) Notwithstanding subsection (1), an imputation credit account company is not allowed to attach an imputation credit to a dividend if “(a) the Income Tax Assessment Act 1997 (Aust) applies to the payment of the dividend by the company; and the dividend is paid in relation to a share that is, or forms part of, a debt interest under that Act; and the payment of the dividend is included in a return of income made by the company to the Australian Federal Commissioner of Taxation.
“(b) “(c) “(1C) Subsection (1B) does not apply in relation to a share issued “(b) before 21 July 2005 if, when the dividend is paid, “(a) the shareholder and the imputation credit account com­ pany are not in the same group of companies: the shareholder and the imputation credit account com­ pany are “(i) in the same wholly­owned group of companies; and “(ii) not resident in New Zealand.
“(1D) Subsection (1B) does not apply in relation to a share issued before 21 July 2005 if “(a) the shareholder and the imputation credit account com­ pany are in the same group of companies; and the shareholder acquired the share “(i) “(ii) as part of a business of sharebroking: as an investment held by the shareholder as part of a business of insurance: “(iii) as security for a loan given as part of a business of lending money: “(iv) as a trustee for a beneﬁciary who is not a com­ pany in the same group of companies as the shareholder: “(b) 144 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 144 “(v) for reasons not including the fact that the share­ holder and the imputation credit account com­ pany were members of the same group of com­ panies.” Section ME 6(2) is replaced by the following: (2) “(2) Notwithstanding subsection (1), a company may retrospect­ ively attach an imputation credit to a dividend arising from a transfer pricing adjustment or under subpart FCB if “(a) the company is an imputation credit account company that “(i) “(ii) pays a non­cash dividend; and is subject to an adjustment under section GD 13(3) or (4) in respect of the arrangement giving rise to the dividend: “(b) the company is an emigrating company that “(i) is an imputation credit account company imme­ diately before the emigration time; and is treated under section FCB 2 as paying a distri­ bution to shareholders.” “(ii) (3) In section ME 6(3), “subsection (2)” is replaced by “subsection (2)(a)”.
(4) After section ME 6(3), the following is inserted: “(3B) The amount of imputation credit attached retrospectively under subsection (2)(b) must not exceed the credit balance, if any, in the company’s imputation credit account immediately before the emigration time.” In section ME 6(5)(a), “subsection (2)” is replaced by “sub­ section (2)(a)”.
(5) (6) After section ME 6(5), the following is added: “(6) If an amount of tax paid by an emigrating company is at­ tributable to income derived before the emigration time by the emigrating company or to the application of subpart FCB to the emigrating company, the amount of tax is treated for the purposes of this subpart as being paid immediately before the emigration time if “(a) the company determines under subsection (2)(b) to at­ tach an imputation credit to a dividend; and the imputation credits that the company attaches are not less than the amount of tax; and “(b) 145 Part 1 s 145 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 (7) “(c) the company notiﬁes the Commissioner when providing the company dividend statement required by subsection (4)(b).” Subsection (1) applies for a dividend that is paid by an imput­ ation credit account company to a shareholder (a) (b) in relation to a share issued on or after 21 July 2005: on or after 1 April 2006 in relation to a share issued before 21 July 2005, if, when the dividend is paid, the shareholder is in the same group of companies as the imputation credit account company.
(8) Subsections (2) to (6) apply for the 2005­06 and subsequent imputation years.
145 New section ME 6B inserted After section ME 6, the following is inserted: “ME 6B Share user may attach imputation credit to replacement payment A share user under a share­lending arrangement may, on mak­ ing a replacement payment, attach to the replacement payment an imputation credit of an amount less than or equal to the amount of any imputation credits attached to dividends “(a) received by the share user before the replacement pay­ ment is made; and to which the replacement payment relates.” “(b) 146 Allocation rules for imputation credits After section ME 8(5), the following is added: “(6) Nothing in subsections (2) to (4) applies to an imputation credit account company in relation to a dividend to which the imputation credit account company is not allowed to attach an imputation credit.” 147 Credits arising to imputation credit account of group (1) In section ME 11(1)(b), “section MB 9” is replaced by “section MB 33”.
In section ME 11(1), the following is inserted after paragraph (e): (2) 146 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 148 “(eb) the amount of any imputation credit attached under section ME 6B to a replacement payment paid under a share­lending arrangement to a company that is at the time of the payment a member of the consolidated imputation group: “(ec) the amount of any imputation credit treated under section NF 8B as being attached to a replacement payment paid under a share­lending arrangement to a company that is at the time of the payment a member of the consolidated imputation group: “(ed) the amount of imputation credit shown in a credit transfer no­ tice a company is issued with, if the company is a member of the consolidated imputation group at the time the credit trans­ fer notice is issued:”.
In section ME 11(2)(b), “section MB 9” is replaced by “section MB 33”.

In section ME 11(2), the following is inserted after paragraph (c): (4) (3) “(cb) in the case of the credits referred to in subsection (1)(eb) and (ec), on the date the replacement payment is paid: “(cc) in the case of the credit referred to in subsection (1)(ed), on (5) the date the credit transfer notice is issued:”.

Subsections (1) and (3) apply for income years corresponding to the 200809 and subsequent tax years.
148 Debits arising to imputation credit account of group (1) In section ME 12(1), the following is inserted after paragraph (a): “(ab) the amount of any imputation credit attached under section ME 6B to a replacement payment paid under a share­lending arrangement during the imputation year by a company that is, at the time of the payment, a member of the consolidated imputation group: “(ac) the amount of any imputation credit attached to a dividend that is paid during the imputation year to a company, if “(i) at the time of the payment, the company is a member of the consolidated imputation group; and the dividend is paid to the company as a share user or as a person associated with a share user, in a returning share transfer that is not a share­lending arrangement: “(ii) 147 Part 1 s 149 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(ad) the amount of any imputation credit attached to a dividend that is paid during the imputation year to a company that is, at the time of the payment, a member of the consolidated imputation group, if the imputation credit is shown in a credit transfer notice issued by the company:”.
In section ME 12(1)(c), “section MB 9” is replaced by “section MB 33”.

In section ME 12(2), the following is inserted after paragraph (a): (3) (2) “(ab) in the case of a debit referred to in subsection (1)(ab), on the date the replacement payment is paid: “(ac) in the case of a debit referred to in subsection (1)(ac) or (ad), (4) on the date the relevant dividend is paid:”.

Subsection (2) applies for income years corresponding to the 200809 and subsequent tax years.
149 Debiting and crediting between consolidated imputation (1) (2) group and individual companies In section ME 13(6)(e), “section MB 10” is replaced by “sec­ tion MB 37”.

Subsection (1) applies for income years corresponding to the 2008–09 and subsequent tax years.
150 Use of credit to reduce dividend withholding payment, or (1) “(7) use of debit to satisfy income tax liability Section MF 5(7) is replaced by the following: If an election under subsection (4) relates to an amount that ex­ ceeds the income tax liability, for the income year, of the com­ pany that receives the offset under subsection (6), the excess amount is treated as giving rise to a net loss of the company for the purpose of subparts IF and IG.
“(8) The amount of the net loss under subsection (7) is given by the following formula:” where a is the amount of the excess: 148 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 152 b is the rate of income tax, expressed as a percentage, stated in (a) schedule 1, part A, clause 5, if the company is not a Maori authority; or schedule 1, part A, clause 2, if the company is a Maori authority.
(b) (2) Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.

151 Company may elect to maintain dividend withholding (1) payment account In section MG 2(5)(a), “account” is inserted after “dividend withholding payment”.
(2) After section MG 2(5), the following is added: “(6) If an emigrating company is a dividend withholding payment account company immediately before the emigration time for the emigrating company, the emigrating company ceases to be a dividend withholding payment account company at the emigration time.
“(7) A company that ceases to be a dividend withholding payment account company as a result of subsection (6) must “(a) furnish, within the time limit in section 71 of the the annual dividend Tax Administration Act 1994, with­holding payment account return required from the company as a dividend withholding payment account company for the imputation year in which the company becomes a non­resident; and “(b) pay any further dividend withholding payment that may be payable under section MG 9 by the company as a dividend withholding payment account company for the imputation year.” (3) Subsections (1) and (2) apply for the 2005­06 and subsequent imputation years.
152 Credits arising to dividend withholding payment account In section MG 4(1), the following is inserted after paragraph (1) (bc): 149 Part 1 s 153 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(bd) the amount of dividend withholding payment credit shown in a credit transfer notice that the company is issued with during the imputation year:”.
In section MG 4(2), the following is inserted after paragraph (bc): (2) “(bd) in the case of the credit referred to in subsection (1)(bd), on the date the credit transfer notice is issued:”.
153 Debits arising to dividend withholding payment account (1) In section MG 5(1), the following is inserted after paragraph (a): “(ab) the amount of any dividend withholding payment credit at­ tached to a dividend that is paid to the company during the imputation year, if the dividend withholding payment credit is shown in a credit transfer notice issued by the company:”.
In section MG 5(2), the following is inserted after paragraph (a): (2) “(ab) in the case of a debit referred to in subsection (1)(ab), on the date the relevant dividend is paid:”.

154 Dividend withholding payment accounts and consolidated (1) groups In section MG 13(5)(c)(i), “account” is inserted after “divi­ dend withholding payment”.
(2) After section MG 13(5), the following is added: “(6) Subsection (7) applies to a consolidated group that maintains a group dividend withholding payment account if “(a) a member of the consolidated group is an emigrating company; and the emigrating company is a dividend withholding pay­ ment account company immediately before the emigra­ tion time for the emigrating company.
“(b) “(7) The consolidated group must “(a) “(b) cease to maintain a group dividend withholding pay­ ment account at the emigration time for the member; and if there is a debit balance in the group dividend with­ holding payment account immediately before the emi­ 150 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 156 “(c) gration time of the member, pay to the Commissioner a further dividend withholding payment of an amount equal to the debit balance; and furnish, within the time limit under sections 71 and 73 of the Tax Administration Act 1994, the annual dividend withholding payment account return required from the group for the imputation year in which the member be­ comes a non­resident.” (3) Subsections (1) and (2) apply for the 2005­06 and subsequent imputation years.
155 Credits arising to group dividend withholding payment (1) account In section MG 14(1), the following is inserted after paragraph (b): “(bb) the amount of dividend withholding payment credit shown in a credit transfer notice a company is issued with, if the company is a member of the consolidated group at the time the credit transfer notice is issued:”.
In section MG 14(2), the following is inserted after paragraph (a): (2) “(ab) in the case of the credit referred to in subsection (1)(bb), on the date the credit transfer notice is issued:”.
156 Debits arising to group dividend withholding payment (1) account In section MG 15(1), the following is inserted after paragraph (a): “(ab) the amount of any dividend withholding payment credit at­ tached to a dividend that is paid during the imputation year to a company that is, at the time of the payment, a member of the consolidated group, if the dividend with­holding payment credit is shown in a credit transfer notice issued by the com­ pany:”.
In section MG 15(2), the following is inserted after paragraph (a): (2) “(ab) in the case of a debit referred to in subsection (1)(ab), on the date the relevant dividend is paid:”.
151 Part 1 s 157 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 157 Company may elect to be conduit tax relief company and maintain conduit tax relief account (1) After section MI 2(7), the following is added: “(8) A company that ceases to be a dividend withholding payment account company as a result of section MG 2(6) “(a) ceases to be a conduit tax relief company; and “(b) must furnish, within the time limit in section 69 of the Tax Administration Act 1994, the annual imputation re­ turn required from the company for the imputation year in which the company becomes a non­resident; and “(c) must pay any dividend withholding payment that may be payable under section MI 10(3) by the company as a dividend withholding payment account company for the imputation year.” (2) Subsection (1) applies for the 2005­06 and subsequent imput­ ation years.
158 Further dividend withholding payment payable in respect (1) (2) (3) (4) of conduit tax relief account debits In the heading to section MI 10, “Further dividend” is re­ placed by “Dividend”.

In section MI 10(1), “a further amount” is replaced by “an amount”.

In section MI 10(2), “further amount” is replaced by “amount”.

Subsections (1) to (3) apply for the 2005­06 and subsequent imputation years.
159 Further dividend withholding payment payable in respect of conduit tax relief account debits The heading to section MI 21 is replaced by “Dividend with­ holding payment payable in respect of group conduit tax relief account debits”.

In section MI 21(1), “a further amount” is replaced by “an amount”.

In section MI 21(2), “further amount” is replaced by “amount”.
(1) (2) (3) 152 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 162 (4) Subsections (1) to (3) apply for the 2005­06 and subsequent imputation years.

160 Credits arising to Maori authority credit account (1) In section MK 4(1)(b), “section MB 9(5)” is replaced by “sec­ tion MB 33(5)(b)”.

Subsection (1) applies for income years corresponding to the 2008–09 and subsequent tax years.
(2) 161 Debits arising to Maori authority credit account (1) In section MK 5, (a) in subsection (1)(b), “section MB 9(5)” is replaced by “section MB 33(5)(b)”: in subsection (2)(b), “section MB 9” is replaced by “sec­ tion MB 33(4)”.

(b) (2) Subsection (1) applies for income years corresponding to the 2008–09 and subsequent tax years.
162 New section MZ 8 added (1) After section MZ 7, the following is added: “MZ 8 Certain elections to become provisional taxpayer “(1) This section applies if a taxpayer has a non­standard income year and has, between 10 October 2000 and the date on which the Taxation (Relief, Refunds and Miscellaneous Provisions) Act 2002 received the Royal assent, ﬁled a return of income for the 1998­99 or a later income year on the basis that section MB 3(a) applied (being section MB 2A(1)(a)(i) as it was before the enactment of section 50(1) of the Taxation (Relief, Refunds and Miscellaneous Provisions) Act 2002).
“(2) The taxpayer may elect to be a provisional taxpayer for the in­ come year for which the return was ﬁled if the taxpayer has paid provisional tax of more than $2,500 on or before the date of instalment F for the non­standard income year that corres­ ponds to the tax year for which the return was ﬁled.” Subsection (1) applies for income years corresponding to the 2008–09 and subsequent tax years.
(2) 153 Part 1 s 163 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 163 New section MZ 9 added (1) After section MZ 8, as added by section 162, the following is added: “MZ 9 Amount of provisional tax based on 199798 or earlier tax year For the purposes of sections MB 4 and MB 5 (other than sec­ tion MB 5(3) and (4)), and for a taxpayer who is a New Zealand superannuitant for the 199798 tax year, the taxpayer’s residual income tax for that tax year or for an earlier tax year is the amount that would have been the taxpayer’s residual income tax if the taxpayer “(a) had not been liable to pay the New Zealand superannu­ itant surcharge; and “(b) had not paid any New Zealand superannuitant surcharge by way of surcharge deduction.” (2) Subsection (1) applies for income years corresponding to the 2008–09 and subsequent tax years.
164 New subpart NBB inserted (1) After subpart BA “Subpart NBB—Subsidy payable to certain listed PAYE intermediaries “NBB 1 Purpose The purpose of this subpart is to prescribe the requirements for a listed PAYE intermediary to receive a subsidy payment under this subpart.
“NBB 2 Accreditation of listed PAYE intermediary “(1) The Commissioner may list an applicant as a listed PAYE intermediary if the Commissioner is satisﬁed that, “(a) the applicant is an accredited PAYE intermediary under subpart NBA, the listing of which is consistent with section 6(1) of the Tax Administration Act 1994; and the period for which the applicant requests listing as a listed PAYE intermediary does not exceed the period for which the applicant is an accredited PAYE intermedi­ ary; and “(b) 154 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 164 “(c) “(d) “(e) “(f) “(g) the applicant.
has completed and provided the tax re­ turns required from the applicant; and the applicant has made the required payments of tax due from the applicant; and in the case of an applicant who acted as an accredited PAYE intermediary for an employer or who made PAYE payments for an employer before the date of the appli­ cation, “(i) the applicant completed and provided the re­ quired tax returns by their due dates; and the applicant made the payments of tax by their due dates; and “(ii) the applicant has available the administrative (including information technology) systems necessary to perform the obligations of a listed PAYE intermediary; and if the application is approved, the applicant will, before acting as a listed PAYE intermediary for an employer, inform each employer who contracts the services of the applicant as a listed PAYE intermediary that the Com­ missioner does not guarantee payments by the applicant to employees of the employer or the performance of any part of the services provided by the applicant.
“(2) The Commissioner may specify a period for which a person is accredited as a listed PAYE intermediary.

“NBB 3 Obligations of listed PAYE intermediaries “(1) A listed PAYE intermediary must, throughout the period of their listing, “(a) maintain the status of an accredited PAYE intermediary under subpart NBA; and “(b) perform in a timely manner the obligations of an ac­ “(c) credited PAYE intermediary; and continuously meet the standards listed in section NBB 2(1)(c) to (g).
“(2) A listed PAYE intermediary must, throughout the period of their listing, maintain working access to administrative and in­ formation technology systems that will enable the listed PAYE intermediary to correctly return by electronic means a listed PAYE intermediary claim form that 155 Part 1 s 164 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(a) “(b) employs the electronic format prescribed by the Com­ missioner; and correctly calculates the amount of subsidy claimed under section NBB 5.
“(3) For the purposes of section 22 of the Tax Administration Act 1994, a listed PAYE intermediary must keep such records as are necessary to verify the information contained in each listed PAYE intermediary claim form.
“NBB 4 Revocation of listing “(1) The Commissioner may revoke the listing of a listed PAYE intermediary if “(a) the person’s accreditation as a PAYE intermediary is revoked: the person does not provide a listed PAYE intermediary claim form by the date and in the format prescribed by the Commissioner: the person fails to comply with any of the obligations of a listed PAYE intermediary or ceases to be a person which the Commissioner may list under section NBB 2: the Commissioner considers revocation is necessary in order to protect the integrity of the tax system.
“(b) “(c) “(d) “(2) The Commissioner must give 30 days of his intention to re­ voke an accreditation under subsection (1) and of the reasons for the intended revocation.

If the listed PAYE intermediary does not resolve the matters listed in the notice of intended revocation to the satisfaction of the Commissioner, the Commissioner may give 14 days notice of revocation.

“(3) “(4) At the expiration of a notice under subsection (3), the listing of the listed PAYE intermediary is revoked.
“(5) A decision made by the Commissioner under this section may not be challenged.” (2) After section NBB 4, as inserted by subsection (1), the follow­ ing is added: 156 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 164 “NBB 5 Listed PAYE intermediary claim form “(1) A listed PAYE intermediary claim form must be ﬁled within one month of the date of ﬁling of the employer monthly sched­ ule to which it relates.
“(2) The Commissioner may, within 2 years of receipt of a listed PAYE intermediary claim form, amend the particulars in order to rectify an error in the particulars supplied by the listed PAYE intermediary.

“(3) The Commissioner must give the listed PAYE intermediary who provided the listed PAYE intermediary claim form 14 days notice of the amendment proposed under subsection (2) before making the amendment.
“(4) An overpayment or underpayment that results from the amendment must be paid by the listed PAYE intermediary or the Commissioner, as the case may be, within 30 days of the giving of the Commissioner’s notice under subsection (3).

“(5) Despite subsection (3), the Commissioner may elect to offset an overpayment that results from an amendment under that subsection against a claim for payment of subsidy made after expiry of the 14­day period prescribed in that subsection.
“NBB 6 Calculation and payment of subsidy to certain listed PAYE intermediaries “(1) The Commissioner may pay a subsidy to a listed PAYE inter­ mediary in respect of payroll services provided to an employer to whom sections NC 15(1)(c) or (d) applies if the listed PAYE intermediary “(a) has contracted with the employer for the provision of those services; and “(b) has met the obligations of the listed PAYE intermediary under subpart NBA; and “(c) ﬁles a correct listed PAYE intermediary claim form under section NBB 5.
“(2) Within 14 days of the date on which the Commissioner pays a subsidy to a listed PAYE intermediary under subsection (1), the Commissioner must give notice by electronic means to the listed PAYE intermediary of 157 Part 1 s 164 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(a) “(b) “(c) the amount of subsidy paid in respect of each employer; and the period to which the amount relates; and other information relevant to the payroll services pro­ vided by the listed PAYE intermediary that the Com­ missioner considers appropriate.
“(3) The amount of the subsidy must be calculated in the manner provided by regulations made under this section and a payment of a subsidy under this section must be made electronically to a bank account “(a) nominated by the listed PAYE intermediary for the pur­ pose; or if an overpayment has been made to the listed PAYE intermediary, to the Listed PAYE Intermediary Bank Account.
“(b) “(4) A claim for payment of an amount of subsidy calculated under this section is to be made in the manner provided in section NBB 5.
“(5) The Commissioner must pay the amount of subsidy that is payable in respect of a listed PAYE intermediary claim form within 30 days of receipt the last of “(a) the employer monthly schedule to which the listed PAYE intermediary claim form relates: “(b) payment of the PAYE deductions to which the listed “(c) PAYE intermediary claim form relates: the listed PAYE intermediary claim form.
“(6) The Governor­General may from time to time, by Order in Council, prescribe the amount of the subsidy to be paid in re­ spect of each employee of an employer who contracts the ser­ vices of a listed PAYE intermediary under this subpart.

“NBB 7 Termination of employer arrangements with listed PAYE intermediary “(1) An employer or a listed PAYE intermediary may end an ar­ rangement by giving notice to the other party and to the Com­ missioner.
158 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 166 “(2) A notice must state the date on which the arrangement will end, being a date that occurs not less than 14 days after the date on which the notice is given.
“(3) A person who, for whatever reason, ceases to be a listed PAYE intermediary for an employer has the rights and obligations under the PAYE rules and SSCWT rules of a listed PAYE inter­ mediary in relation to funds that “(a) the employer pays to the person as a listed PAYE inter­ mediary; and the person is holding at the time that the person ceases to be a listed PAYE intermediary for the employer.” “(b) (3) Subsection (2) applies for pay periods beginning on or after 1 October 2006.
165 Application of other provisions to amounts payable under (1) (2) PAYE rules In section NC 20(1), “section 120K” is replaced by “sections 120KB to 120KE”.

Subsection (1) applies for income years corresponding to the 2008–09 and subsequent tax years.
166 Private use of motor vehicle: value of beneﬁt (1) After section ND 1A(1), the following is inserted: “(1B) In the ﬁrst return under this subpart (initial return) by an employer for a vehicle, the employer may calculate the value of the beneﬁt using either of the valuation methods set out in schedule 2, part A.
“(1C) The employer must use the method from the initial return in calculating the value of the beneﬁt in a return for the vehicle for a period beginning “(a) “(b) before the earliest of the following: after the end of the period of the initial return; and the date of disposal of the vehicle: “(i) “(ii) the date on which the vehicle ceases to be leased: “(iii) the date 5 years after the beginning of the period of the initial return.
“(1D) In a return for the vehicle for a period beginning 5 years or more after the beginning of the period of the initial return, the 159 Part 1 s 167 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 employer may calculate the value of the beneﬁt using either of the valuation methods set out in schedule 2, part A.” Subsection (1) applies for a person’s liability for fringe beneﬁt tax for a period beginning on or after 1 April 2006.
(2) 167 New section ND 1AB inserted (1) After section ND IA, the following is inserted: “ND 1AB Private use of motor vehicle: 24­hour period “(1) This section applies for the purposes of the calculation of the “(2) value of a beneﬁt under section ND IA.
In section ND 1A(5)(a) and (b), in relation to a motor vehicle and the item days in the formulas in section ND 1A(2) and (4), a day is “(a) a 24­hour period starting at midnight, if the person who owns or leases the motor vehicle does not make an elec­ tion under paragraph (b): a 24­hour period starting from the time in a day that is elected under this section by the person who owns or leases the motor vehicle.
“(b) “(3) For the purposes of subsection (2)(b), the person must “(a) choose a starting point for the day that is a whole num­ ber of hours after midnight; and “(b) notify the Commissioner of the election when providing the next return that relates to the motor vehicle.

“(5) “(4) An election under subsection (3) is effective from the start of the quarter, income year, or tax year to which the return relates, and applies to all motor vehicles in relation to which the person provides a return.
If the person chooses a particular hour in the 24­hour period as the starting point of the day under subsection (3), that hour continues to apply to the use of the motor vehicle or vehicles from the start of the relevant quarter, income year, or tax year as applicable, for a minimum period of 2 income years.
“(6) An employer may apply to the Commissioner to amend the starting point of the 24­hour period or to treat the election as revoked if the employer’s circumstances have changed in a way that “(a) is more than minor; and 160 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 169 “(b) makes the starting point no longer relevant to the em­ ployer’s business.” (2) Subsection (1) applies for a person’s liability for fringe beneﬁt tax for a period beginning on or after 1 April 2006.
168 Employment­related loans: value of beneﬁt (1) In the heading to section ND 1D, “using prescribed interest” is inserted after “beneﬁt”.

In section ND 1D, in the words before paragraph (a), “by an employer who does not make an election under section ND 1DB” is inserted after “employment­related loan”.

Subsections (1) and (2) apply for a person’s liability for fringe beneﬁt tax for a period beginning on or after 1 April 2006.
(2) (3) 169 New section ND 1DB inserted (1) After section ND 1D, the following is inserted: “ND 1DB Employment­related loans: election to value beneﬁt using market interest “(2) “(1) An employer in the business of lending money to members of the public may choose that the value of a beneﬁt provided by the employer by way of an employment­related loan be determined using the market interest on the loan.
If an employer makes an election under subsection (1), the value of a beneﬁt provided by the employer by way of an em­ ployment­related loan in a period is the amount by which the market interest on the loan is more than “(a) the amount of interest that accrued on the loan in that period; or “(b) when the loan is a ﬁnancial arrangement and it is ap­ propriate having regard to the nature of the loan, the in­ come that would have accrued to the employer’s beneﬁt in that period as calculated under the yield to maturity method.
“(3) Having made an election under subsection (1), an employer must use the method for the income year to which the choice relates and for the next following income year.
“(4) An employer may not change the method of calculating the value of the beneﬁt for an income year unless the employer no­ 161 Part 1 s 170 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(5) tiﬁes the Commissioner of the proposed change at least 1 year before the beginning of the income year in which the change is to occur.
In this section, market interest means the amount of interest calculated at the interest rate that would apply to a borrower belonging to a group of persons to whom a loan of the kind provided to the employee is offered when that group meets the following requirements: “(a) the group is assessed as having a comparable credit risk to the group to which the employee belongs; and “(b) membership of the group arises from factors that do not include a link between a member and the employer; and the group is of sufﬁcient number to ensure a transaction on an arm’s­length basis.
“(c) “(6) For the purposes of a calculation under subsection (5), the amount of interest is the amount accrued on the loan during the quarter or tax year calculated on the daily balance of that loan at the rate referred to in that subsection.” Subsection (1) applies for a person’s liability for fringe beneﬁt tax for a period beginning on or after 1 April 2006.
(2) 170 New section ND 1IB inserted (1) After section ND 1I, the following is inserted: “ND 1IB Beneﬁts provided by charitable organisations The value under section CX 21(2) of a beneﬁt provided by a charitable organisation by way of a short­term charge facility is the sum of “(a) the amount that the organisation pays for or towards the purchase or the hire of the goods and services obtained by the employee under the short­term charge facility: any interest incurred in relation to the purchase or hire of the goods and services: if the short­term charge facility is a credit card or charge card provided for an employee’s use solely for purposes unconnected with the organisation or its operations, the associated account or service fees.” “(b) “(c) Subsection (1) applies for a person’s liability for fringe beneﬁt tax for a period beginning on or after 1 April 2006.
(2) 162 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 173 171 Services: value of beneﬁt (1) After section ND 1K(1), the following is inserted: “(1B) For the purposes of subsection (1), a person providing ser­ vices to an employee belonging to a group of employees is to be treated as providing the same or similar services to the public in the open market in New Zealand on ordinary trade or professional terms if the person provides the same or similar services to a group of persons that “(a) “(b) Subsection (1) applies for a person’s liability for fringe beneﬁt tax for a period beginning on or after 1 April 2006. negotiates the transaction on an arm’s­length basis; and is comparable in number to the group of employees.” (2) 172 Unclassiﬁed beneﬁts (1) In section ND 1Q, (a) in subsection (2), (i) (ii) (iii) “$450” is in paragraph (a), “$75” is replaced by “$200”: in paragraph (b), “the quarter” is replaced by “the last four quarters including the current quarter”: in paragraph (b), replaced by “$15,000”: in subsection (3), (i) (ii) in paragraph (a), “$300” is replaced by “$800”: in paragraph (b), “$1,800” is replaced by “$15,000”: in subsection (4), (i) (ii) in paragraph (a), “$300” is replaced by “$800”: in paragraph (b), “$1,800” is replaced by “$15,000”.
(b) (c) (2) Subsection (1) applies for a person’s liability for fringe beneﬁt tax for a period beginning on or after 1 April 2006.
173 Adjustments for unclassiﬁed beneﬁts on amalgamation (1) In section ND 1R(2), (a) (b) “$450” is replaced by “$15,000”: the formula is replaced by the following: 163 Part 1 s 174 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 (2) In section ND 1R(3), (a) (b) “$450” is replaced by “$15,000”: the formula is replaced by the following: (3) “(4) “(5) Section ND 1R(4) is replaced by the following: If the amalgamating company pays fringe beneﬁt tax annually, an adjustment must be made for the year in which the amal­ gamation occurs reducing the ﬁgure of $15,000 referred to in section ND 1Q(3)(b) by an amount calculated using the for­ mula If the amalgamated company pays fringe beneﬁt tax annually, and the amalgamated company is a new company established on amalgamation, an adjustment must be made for the year in which the amalgamation occurs reducing the ﬁgure of $15,000 referred to in section ND 1Q(3)(b) by an amount calculated using the formula” (4) Subsections (1) to (3) apply for a person’s liability for fringe beneﬁt tax for a period beginning on or after 1 April 2006.
174 Election to pay fringe beneﬁt tax per quarter (1) In section ND 2, subsection (3) is replaced by the following: “(3) An employer may make an election under this section by pro­ (2) viding a return stipulating the rate chosen.” Subsection (1) applies for a person’s liability for fringe beneﬁt tax for a period beginning on or after 1 April 2006.
175 Special rule for employer who stops employing staff during tax year In section ND 8, the following is added: (1) “(3) As an alternative to the application of section ND 5(4) or ND 6(2), an employer may choose to pay fringe beneﬁt tax at the 164 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 176 rate of 64% of the taxable value of a fringe beneﬁt provided or granted to an employee, “(a) making the calculation in relation to the period from the start of the tax year to the date on which the employer stops employing staff; and taking into account any earlier payments of fringe bene­ ﬁt tax made in relation to the employee.” “(b) (2) Subsection (1) applies for a person’s liability for fringe beneﬁt tax for a period beginning on or after 1 April 2006.
176 New section ND 8B inserted (1) After section ND 8, the following is added: “ND 8B Special rule for employer who is charitable organisation providing short­term charge facility “(1) This rule applies to an employer who is a charitable organisa­ tion if “(a) “(b) “(c) the employer provides to an employee in a tax year a beneﬁt by way of a short­term charge facility that is a fringe beneﬁt under section CX 21(2); and the employer is required to pay fringe beneﬁt tax for the tax year on a quarterly basis; and the value of the beneﬁts by way of short­term charge facilities provided by the employer to the employee in the ﬁrst quarter of the tax year does not exceed 5% of the employee’s salary or wages for the tax year.
“(2) The employer’s liability to pay fringe beneﬁt tax on the bene­ ﬁts provided in a quarter of the tax year depends on whether the taxable value of the beneﬁts (accumulated beneﬁt value) provided by the employer to the employee in the period from the beginning of the tax year to the end of the quarter exceeds 5% of the employee’s salary or wages for the tax year (thresh­ old beneﬁt value).
“(3) The employer is liable to pay fringe beneﬁt tax for a quarter of the tax year on “(a) “(b) nil, if the accumulated beneﬁt value for the quarter does not exceed the threshold beneﬁt value; or the accumulated beneﬁt value, if the quarter is the earli­ est in the tax year for which the accumulated beneﬁt value exceeds the threshold beneﬁt value; or 165 Part 1 s 177 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(c) the taxable value of the beneﬁts provided to the em­ ployee in the quarter, if neither of paragraphs (a) and (b) applies.” (2) Subsection (1) applies for a person’s liability for fringe beneﬁt tax for a period beginning on or after 1 April 2006.
177 Payment of fringe beneﬁt tax on annual basis for (1) (2) employees who are not shareholder­employees In section ND 13(2), “Commissioner” is replaced by “Com­ missioner, either in writing or by telephone,”.

Subsection (1) applies for a person’s liability for fringe beneﬁt tax for a period beginning on or after 1 April 2006.
178 Payment of fringe beneﬁt tax on income year basis for (1) shareholder­employees In section ND 14, (a) in subsection (2), “Commissioner” is replaced by “Commissioner, either in writing or by telephone,”: after subsection (2), the following is inserted: (b) “(2B) If an employer has been paying fringe beneﬁt tax on a quar­ terly basis under sections ND 2, ND 9, and ND 10 and elects under this section to change to payment on an income year basis, a calculation must be made under section ND 10 for the period “(a) beginning immediately after the end of the last full tax year for which the employer pays fringe beneﬁt tax on a quarterly basis: ending immediately before the beginning of the ﬁrst in­ come year for which the election applies.” “(b) (2) Subsection (1) applies for a person’s liability for fringe beneﬁt tax for a period beginning on or after 1 April 2006.
179 Application of RWT rules (1) In section NF 1(2), the following is inserted after paragraph (c): a replacement payment, paid to a person under a share­lending arrangement:”.

“(d) 166 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 180 (2) In the proviso to section NF 1(2), “paragraphs (a), (b) and (c)” is replaced by “paragraphs (a) to (d)”.
180 Liability to pay resident withholding tax (1) “ c In section NF 2(1)(b), item c is replaced by the following: is the total of the following amounts: “(i) “(ii) if the dividend is paid in relation to shares issued by an imputation credit account company, the amount of any imputation credit attached to the dividend: if the dividend is paid in relation to shares issued by a company not resident in New Zealand, the amount of foreign withholding tax paid or payable in respect of the amount of the dividend: (2) “ c (3) “ c “(iii) if the dividend is paid in relation to shares issued by a company resident in New Zealand, the amount of any dividend withholding payment credit attached to the dividend; and”.
In section NF 2(1)(c), item c is replaced by the following: is the total of the following amounts: “(i) if the dividend is paid in relation to shares issued by an imputation credit account company, the amount of any imputation credit attached to the dividend: if the dividend is paid in relation to shares issued by a company not resident in New Zealand, the amount of foreign withholding tax paid or payable in respect of the amount of the dividend: “(ii) “(iii) if the dividend is paid in relation to shares issued by a company resident in New Zealand, the amount of any dividend withholding payment credit attached to the dividend; and”.
In section NF 2(1)(d), item c is replaced by the following: is the total of the following amounts: “(i) if the dividend is paid in relation to shares issued by an imputation credit account company, the amount of any imputation credit attached to the dividend: if the dividend is paid in relation to shares issued by a company not resident in New Zealand, the amount of foreign withholding tax paid or payable in respect of the amount of the dividend: “(ii) 167 Part 1 s 180 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(iii) if the dividend is paid in relation to shares issued by a company resident in New Zealand, the amount of any dividend withholding payment credit attached to the dividend; and”.
In section NF 2(1)(f), “zero.” is replaced by “zero; and” and the following is added: to the extent that the payment is a replacement payment paid to a person under a share­lending arrangement, of an amount calculated according to the formula (4) “(g) where a b c d e is the rate of resident withholding tax, expressed as a percentage, speciﬁed in schedule 14, clause 2: is the amount of the replacement payment, not including imputation credits attached under section ME 6B: is the amount of imputation credits attached to the re­ placement payment under section ME 6B: is the amount of imputation credits shown in a credit transfer notice that relates to the replacement payment: is the amount of dividend withholding payment credit shown in a credit transfer notice that relates to the re­ placement payment.
(5) In section NF 2(4)(a), subparagraph (ii) and the proviso are replaced by the following: “(ii) not resident in New Zealand for the purposes of this Act but “(A) carrying on a taxable activity in New Zealand through a ﬁxed establishment in New Zealand; and “(B) not prevented by subsection (4B) from satisfying this paragraph; and”.
(6) “(v) In section NF 2(4)(b)(iv), “distribution.” is replaced by “dis­ tribution; or” and the following is added: that payment is a replacement payment paid under a share­ lending arrangement.” (7) After section NF 2(4), the following is inserted: “(4B) A person (payer) who is not resident in New Zealand for the purposes of this Act and is carrying on a taxable activity in New Zealand through a ﬁxed establishment in New Zealand 168 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 184 is treated as not satisfying subsection (4)(a) in relation to a payment if, “(a) in the case of a payment of interest or of dividends payable in respect of shares issued by another person, the payer satisﬁes the Commissioner that “(i) the payment is attributable to or effectively con­ nected with a ﬁxed establishment of the payer outside New Zealand; and the amounts payable in relation to the money lent or shares to which the payment relates are payable in a currency other than New Zealand currency: “(ii) “(b) in the case of a payment of dividends payable in re­ spect of shares issued by the payer, the payer satisﬁes the Commissioner that the payer is not required by gen­ erally accepted accounting practice to express its ﬁnan­ cial statements in New Zealand currency.” 181 Election to apply higher rate of deduction In section NF 2A(1), “section NF 2(1)” is replaced by “section NF 2(1), other than section NF 2(1)(g),”.
182 Companies to notify interest payer In section NF 2B(1), “section NF 2(1)” is replaced by “section NF 2(1), other than section NF 2(1)(g),”.

183 Election rates of deduction for companies In section NF 2D(1), “section NF 2(1)” is replaced by “section NF 2(1), other than section NF 2(1)(g),”.
184 Requirements for agents or trustees to make resident withholding tax deductions on receipt of payments Section NF 3(2) is replaced by the following: “(2) Subsection (1) does not apply to require a recipient of a pay­ ment of resident withholding income to make a deduction of resident withholding tax if the recipient “(a) “(i) holds at the time of payment a valid certiﬁcate of exemption; and 169 Part 1 s 185 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(ii) receives the payment as trustee of a trust that is not a bare trust: the payment is a replacement payment under a share­ lending arrangement.” “(b) 185 Payment of deductions of resident withholding tax to (1) Commissioner In section NF 4(4), “dividends” is replaced by “dividends, re­ placement payments,”.
(2) After section NF 4(6), the following is inserted: “(6B) An emigrating company who is treated under section FCB 2 as paying a distribution to shareholders must, on or before the date that is 3 months after the emigration date, pay to the Commissioner all resident withholding tax deductions made by the company from the distribution.” Subsection (2) applies for income years corresponding to the 200506 and subsequent tax years.
(3) 186 New section NF 8B inserted After section NF 8A, the following is inserted: “NF 8B Resident withholding tax deductions from replacement payments treated as imputation credits If a share user under a share­lending arrangement deducts resi­ dent withholding tax in accordance with the RWT rules from a replacement payment, the deduction “(a) is treated for the share supplier as an imputation credit attached to the replacement payment in addition to any imputation credit that the share user attaches to the re­ placement payment under section ME 6B; and “(b) does not give rise under section LD 3 to a credit of tax or refund for the share supplier.” 187 Application of NRWT rules (1) In section NG 1(2), in the words before paragraph (a), “apply to income” is replaced by “apply to assessable income”.
Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.
(2) 170 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 190 188 Non­resident withholding tax imposed (1) After section NG 2(1)(b)(i), the following is inserted: “(ib) interest, other than interest to which paragraph (ab) applies, that is paid by a transitional resident in respect of money bor­ rowed by the transitional resident when the transitional resi­ dent was a non­resident, and not in relation to a business car­ ried on by the transitional resident through a ﬁxed establish­ ment in New Zealand, and is derived by a person who is not an associated person of the transitional resident; or”.
Subsection (1) applies for (a) a person who becomes a transitional resident on or after 1 April 2006; and income years corresponding to the 200506 and subse­ quent tax years.

(b) The law that would apply if subsection (1) did not come into force applies for (a) a person who becomes a transitional resident before 1 April 2006; and income years corresponding to the 200506 and subse­ quent tax years.
(b) (2) (3) 189 Payment of deductions of non­resident withholding tax to Commissioner (1) After section NG 11(4), the following is inserted: “(4B) An emigrating company who is treated under section FCB 2 (Emigrating company treated as paying distribution to share­ holders) as paying a distribution to shareholders must, on or before the date that is 3 months after the emigration date, pay to the Commissioner all non­resident withholding tax deduc­ tions made by the company from the distribution.” Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.
(2) 190 Application of other provisions to non­resident (1) withholding tax In section NG 17(2), “section 120K” is replaced by “sections 120KB to 120KE”.

171 Part 1 s 191 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 (2) Subsection (1) applies for income years corresponding to the 200809 and subsequent tax years.
191 Deﬁnitions (1) (2) After the deﬁnition of attributing interest, the following is This section amends section OB 1. inserted: “Australian ﬁnancial year is deﬁned in section CV 4 (Regulations: Australian wine producer rebate) for the purposes of that section”.

(3) In the deﬁnition of balance date, after “purposes of”, “subpart MB and” is inserted.
(4) After the deﬁnition of banking company, the following is in­ serted: “base amount is deﬁned in section MB 7(2) (GST ratio method) for the purposes of that section”.
(5) The deﬁnition of benchmark dividend is replaced by the fol­ lowing: “benchmark dividend means the ﬁrst dividend paid by a company in an imputation year that is not 1 of the following kinds “(a) a distribution of a co­operative company for which the com­ pany has made a determination under section ME 35 (Co­op­ erative company may make annual determination to attach im­ putation credit to certain distributions): a dividend to which the company is not allowed by section ME 6 (Company may attach imputation credit to dividend) to attach an imputation credit”.
“(b) (6) After the deﬁnition of business purposes, the following is in­ serted: “business tool means an item that is used by an employee in the performance of their work duties and in the absence of section CX 18B (Business tools) would give rise to an unclassiﬁed beneﬁt”.

(7) In the deﬁnition of consolidation rules, in paragraph (a)(vii), “section MB 7 (Provisional tax of consolidated group mem­ bers)” is replaced by “sections MB 29 to MB 32 (relating to provisional tax of consolidated group members)”.
(8) After the deﬁnition of credit of tax, the following is inserted: 172 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 191 “credit transfer notice means a credit transfer notice issued under section 30C of the Tax Administration Act 1994”.

(9) In the deﬁnition of Crown Research Institute, “section 12” is replaced by “section 2”.
In the deﬁnition of development, “and DB 27” is replaced by “, DB 27, EE 1 (What this subpart does), EJ 20 (Deductions for market development­product of research, development), and EJ 21 (Allocation of deductions for research, development, resulting market development)”.

In the deﬁnition of dispose, after paragraph (c), the following is inserted: (10) (11) “(a) “(cb) is deﬁned in section CE 2 for the purposes of that section:”.
(12) In the deﬁnition of eligible accounting year, paragraphs (a) and (b) are replaced by the following: an accounting year in which the person has at all times in the accounting year a sufﬁcient interest in the company and that is the accounting year in which the dividend is paid: “(i) the accounting year immediately before the accounting “(ii) year in which the dividend is paid: “(iii) the accounting year immediately before an eligible ac­ counting year:”.
(13) After the deﬁnition of emergency call, the following is in­ serted: “emigrating company is deﬁned in section FCB 1(1) (Tax effects of company becoming non­resident to reﬂect tax effects of liquidation) “emigration time, for an emigrating company, is the time at which the emigrating company becomes a non­resident”.
(14) In the deﬁnition of estimated useful life, after paragraph (c), the following is added: for a type of pasture, means the period of time over which the pasture might reasonably be expected to be useful to a person in deriving income or carrying on a farming or agricultural business on land in New Zealand”.
“(d) (15) After the deﬁnition of excess expenditure, the following is inserted: 173 Part 1 s 191 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “excess tax payment “(a) “(b) “(a) (18) (19) (20) (21) (22) is deﬁned in section ME 9B(10) (Imputation credit account company leaving wholly­owned group) for the purposes of that section: is deﬁned in section ME 9C(l0) (Imputation credit account company joining wholly­owned group) for the purposes of that section”.
(16) The deﬁnition of ﬁrst instalment date is repealed.

(17) In the deﬁnition of ﬁshing business, paragraph (a) is replaced by the following: is deﬁned in section EH 37 (Other deﬁnitions) for the pur­ poses of this Act except the provision to which paragraph (b) refers:”.

In the deﬁnition of foreign exempt entity, “section CW 11B(3)” is replaced by “section CW 11B(4)”.

In the deﬁnition of foreign exempt partnership, “section CW 11B(3)” is replaced by “section CW 11B(4)”.
In the deﬁnition of foreign exempt person, “section CW 11B(3)” is replaced by “section CW 11B(4)”.

In the deﬁnition of foreign trust, in paragraph (b), “settler” is replaced by “settlor”.

In the deﬁnition of fringe beneﬁt tax rules, in paragraph (a)(ii), “GC 17” is replaced by “GC 17B”.
(23) After the deﬁnition of futures contract, the following is in­ serted: “gaming­machine gambling means class 4 gambling, as deﬁned in section 30 of the Gambling Act 2003, that utilises or involves a gam­ ing machine “gaming­machine operator’s licence means a class 4 operator’s li­ cence as deﬁned in section 4 of the Gambling Act 2003 “gaming­machine venue licence means a class 4 venue licence as deﬁned in section 4 of the Gambling Act 2003”.
(24) The deﬁnition of grey list company is replaced by the follow­ ing: 174 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 191 “grey list company means a company that is resident in a company or territory speciﬁed in schedule 3, part A (International tax rules: grey list countries) “(a) for the purposes of the international tax rules other than those referred to in paragraph (b), under section OE 2 (Determin­ ation of residence of company): for the purposes of subparts CQ (Attributed income from foreign equity), DN (Attributed losses from foreign equity), EX (Controlled foreign company and foreign investment fund rules), and LF (Underlying foreign tax credits), under section EX 24 (Residence in grey list country)”.
“(b) (25) After the deﬁnition of gross, the following is inserted: “gross gambling proceeds means gross proceeds, as deﬁned in regu­ lation 3(1) of the Gambling (Class 4 Net Proceeds) Regulations 2004, plus prizes”.

(26) After the deﬁnition of GST payable, the following is inserted: “GST ratio has the meaning given in section MB 7(2) (GST ratio method)”.
(27) After the deﬁnition of identical goods, the following is in­ serted: “identical share means a share that confers the same rights and im­ poses the same obligations on a holder as an original share”.

(28) In the deﬁnition of imputation credit, after paragraph (b), the following is added: is further deﬁned in section CD 10C(4) (Credit transfer notice) for the purposes of that section”.
“(c) (29) The deﬁnition of instalment date is replaced by the following: “instalment date means a date for payment of provisional tax for a tax year that is the day and month speciﬁed for a provisional taxpayer in schedule 13 part A (Months for payment of provisional tax and terminal tax)”.
(30) After the deﬁnition of interest, the following is inserted: “interest instalment date means an instalment date “(a) on which an instalment of provisional tax is due and payable under section MB 8 (Provisional tax payable in instalments); and after which, except in a case to which section 120KC(1) ap­ plies, an instalment amount that is overpaid or underpaid at­ “(b) 175 Part 1 s 191 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 tracts use of money interest, a late payment penalty, or a short­ fall penalty, as applicable”.
In the deﬁnition of lease, after paragraph (a), the following is inserted: (31) “(ab) is deﬁned in section CX 6(6) (Private use of motor vehicle) for the purposes of the FBT rules:”.
(32) The deﬁnition of limited attribution company is replaced by the following: “limited attribution company is a company that is “(a) “(b) a building society: a co­operative company registered under the Co­operative Companies Act 1956, Part 2 or 3 of the Co­operative Com­ panies Act 1996, the Co­operative Dairy Companies Act 1949, the Co­operative Freezing Companies Act 1960, or the Co­operative Forestry Companies Act 1978: a listed company: “(c) a widely­held company: “(d) “(e) a foreign company that is not a closely­held company”.
(33) The deﬁnition of limited attribution foreign company is re­ pealed.

(34) The deﬁnition of listed company is replaced by the following: “listed company means, at any time, a company any shares in which are at that time quoted on an ofﬁcial list of a recognised exchange”.
(35) After the deﬁnition of listed horticultural plant, the follow­ ing is inserted: “listed PAYE intermediary means a person which the Commis­ sioner may list under section NBB 2(1) (Accreditation of listed PAYE intermediary) “listed PAYE intermediary claim form means a form that a listed PAYE intermediary must provide to the Commissioner in an elec­ tronic format prescribed by the Commissioner, showing “(a) “(b) the tax ﬁle number of the listed PAYE intermediary; and the tax ﬁle number and name of each employer in respect of which a subsidy is claimed; and the tax ﬁle number and name of each employee of each em­ ployer in respect of which a subsidy is claimed under section NBB 3 (Obligations of listed PAYE intermediaries); and the period to which the form relates; and “(c) “(d) 176 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 191 “(e) “(f) the number of source deduction payments made by the listed PAYE intermediary to each employee in the period to which the form relates; and the amount of subsidy that the listed PAYE intermediary claims in respect of the period to which the form relates”.
(36) After the deﬁnition of Maori owners, the following is in­ serted: “market interest is deﬁned in section ND 1DB(5) for the purposes of that section”.

(37) After the deﬁnition of net equity threshold, the following is inserted: “net gambling proceeds means net proceeds as deﬁned in section 4 of the Gambling Act 2003”.
(38) After the deﬁnition of ordering rule, the following is inserted: “original share means a share in a company that is described as the original share in the deﬁnition of returning share transfer”.

(39) After the deﬁnition of own, the following is inserted: “ownership interest is deﬁned in section OD 5AA(7) (Modiﬁcations to voting and market value interests for application of continuity pro­ visions to reverse takeover) for the purposes of that section”.
(40) In the deﬁnition of pay, in paragraph (g), “way” is replaced by “way:”, and the following is added: for a replacement payment and share­lending collateral, in­ cludes, for a person, “(i) “(ii) “(iii) to deal with in their interest or on their behalf in some to distribute to them; or to credit to them; or “(h) other way”.

(41) In the deﬁnition of PAYE rules, after paragraph (a)(iv), the following is inserted: “(ivb) subpart NBB (Subsidy payable to certain listed PAYE inter­ (42) (43) mediaries):”.
In the deﬁnition of payment, “(g)” is replaced by “(h)”.

In the deﬁnition of principal caregiver, after paragraph (a), the following is inserted: “(ab) does not include a transitional resident or the spouse, civil union partner, or de facto partner of a transitional resident; and”.
177 Part 1 s 191 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 (44) In the deﬁnition of provisional tax rules, (a) in paragraph (a)(iii), “sections MB 2 to MB 6” is re­ placed by “sections MB 1 to MB 28”: in paragraph (a)(iv), “sections MB 8 to MB 10 (which relate to provisional tax):” is replaced by “sections MB 33, and MB 35 to 38 (which relate to provisional tax):”: paragraph (a)(v) is repealed.
(b) (c) (45) The deﬁnition of provisional taxpayer is replaced by the fol­ lowing: “provisional taxpayer has the meaning given in section MB 2 (Who pays provisional tax?)”.

(46) In the deﬁnition of qualifying foreign equity investor, “sec­ tion CW 11B(3)” is replaced by “section CW 11B(4)”.
In the deﬁnition of qualifying person, after paragraph (a)(ii), the following is inserted: “(iib) is not a transitional resident; and “(iic) is not the spouse, civil union partner, or de facto partner of a (47) transitional resident; and.”.

(48) After the deﬁnition of qualifying person, the following is in­ serted: “qualifying resident foreign trustee is deﬁned in section 3(1) of the Tax Administration Act 1994”.
(49) In the deﬁnition of qualifying trust, in paragraph (a)(ii), “sec­ tion BD 1(2)” is replaced by “section BD 1(4)”.

(50) After the deﬁnition of quarter, the following is inserted: “ratio instalment date means an instalment date of a taxpayer who uses a GST ratio for a tax year, and is an instalment date for a payment in relation to which no amount of use of money interest or penalties apply other than a late payment penalty or a shortfall penalty”.
(51) In the deﬁnition of relative, in paragraph (a), “CX 17 (Beneﬁts provided instead of allowances),” is inserted after “sections”.

(52) After the deﬁnition of replaced area fraction, the following is inserted: “replacement payment means, for a returning share transfer, a pay­ ment to a person of an amount that is “(a) economically equivalent to a dividend or part of a dividend for an original share: increased by an imputation credit attached to the payment”.
“(b) 178 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 191 (53) In the deﬁnition of research, “and DB 27” is replaced by “, DB 27, EE 1 (What this subpart does), EJ 20 (Deductions for market development­product of research, development), and EJ 21 (Allocation of deductions for research, development, resulting market development)”.
(54) After the deﬁnition of resident, the following is inserted: “resident foreign trustee is deﬁned in section 3(1) of the Tax Ad­ ministration Act 1994”.
(55) After the deﬁnition of return of the taxpayer’s income, the following is inserted: “returning share transfer means an arrangement “(a) for which “(i) “(ii) a share in a company (original share) is transferred from a share supplier to a share user; and the original share is listed on an ofﬁcial list of a recog­ nised exchange; and “(iii) it is conditionally or unconditionally agreed that the share user or an associated person pays a replacement payment to the share supplier or an associated person, if a dividend is payable on the original share; and it is conditionally or unconditionally agreed that the ori­ ginal share or an identical share may be transferred from the share user to the share supplier or an associated per­ son; and “(iv) that is not a warrant or instalment receipt”.
“(b) (56) The deﬁnition of second instalment date is repealed.
(57) The deﬁnition of self­assessed adverse event is replaced by the following: “self­assessed adverse event, for a person and a farming, agricul­ tural, or ﬁshing business of the person, means an event that “(a) is one of the following: “(i) “(ii) disease or sickness among livestock; and drought, ﬁre, ﬂood, or some other natural event: “(b) materially affects the business; and “(c) is described, together with the effect on the business, by the person in a statutory declaration given to the Commissioner”.
(58) After the deﬁnition of share, the following is inserted: 179 Part 1 s 191 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “share­lending arrangement means an arrangement, entered into on or after 1 July 2006, that is a returning share transfer, and “(a) “(b) the agreed term of the arrangement is 1 year or less; and the terms and conditions of the arrangement, including the share­lending collateral, are ordinary commercial terms and conditions consistent with those that would apply between par­ ties negotiating at arm’s length; and the amount of resident withholding tax given by section NF 2(1)(g) (Liability to pay resident withholding tax) for a re­ placement payment, if any, is paid; and the share user disposes of the original share or an identical share to the share supplier during the agreed term of the ar­ rangement or within a further period allowed by the Commis­ sioner; and the share user “(i) “(c) “(d) “(e) agrees to issue, and issues, a credit transfer notice in relation to a dividend paid for the original share: establishes and maintains an imputation credit account, if a dividend is payable for the original share during the agreed term of the arrangement “(ii) “share­lending collateral means an amount, or an adjustment to the amount, that “(a) is related to the market value of an original share under a share­ lending arrangement, and the amount is paid to a person, “(i) by a share user or an associated person to secure the transfer of the original share to the share user: “(ii) by a share supplier or an associated person for the re­transfer of the original share or an identical share to them; and is not a replacement payment “(b) “share­lending right means, for a share supplier under a share­lend­ ing arrangement, a conditional or unconditional right to acquire the original share or an identical share under the share­lending arrange­ ment”.
(59) After the deﬁnition of share purchase scheme, the following is inserted: “share supplier means a person, described as a share supplier in the deﬁnition of returning share transfer, from whom a share user acquires an original share under a returning share transfer 180 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 191 “share user means a person, described as a share user in the def­ inition of returning share transfer, who acquires an original share under a returning share transfer”.
(60) The deﬁnition of shares of the same class is replaced by the following: “shares of the same class means any 2 or more shares of a company “(a) that carry the same right “(i) “(ii) to exercise voting power and participate in any deci­ sion­making at any time concerning the distributions to be made by the company, the constitution of the com­ pany, any variation in the capital of the company, and the appointment or election of directors of the company; and in terms of priority, amount payable per share, and otherwise, to receive or have dealt with in the share­ holder’s interest or on the shareholder’s behalf proﬁts that may be distributed at any time by the company and distributions of assets of the company on an acquisition, redemption, or other cancellation by the company of its shares or other reduction in or return of share capital of the company, whether on its liquidation or otherwise: “(b) for which “(i) the owner, or the amount paid for the issue, of each share is the same, and each share is part of a group of shares that satisfy para­ graph (a); and “(ii) “(iv) “(iii) the company gives notice to the Commissioner, in a form approved by the Commissioner, that the company chooses to treat the shares as a separate class; and the company treats each share as not falling within a class consisting of shares that satisfy paragraph (a); and the company can at all times from the time of issue of each share identify and distinguish the share from any other shares in the company”.
“(v) (61) After the deﬁnition of shearing shed hand, the following is inserted: “shortfall penalty is deﬁned in section 3(1) of the Tax Administra­ tion Act 1994”.
181 Part 1 s 191 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 (62) After the deﬁnition of short­term bailment, the following is inserted: “short­term charge facility is deﬁned in section CX 21(3) (Beneﬁts provided by charitable organisations) for the purposes of the FBT rules”.
(63) After the deﬁnition of sickness, accident, or death beneﬁt fund, the following is inserted: “signiﬁcant capital activity, in section DO 1(1B) (Enhancements to land, except trees) and schedule 7 (Expenditure on farming, aqua­ cultural, and forestry improvements), and in relation to a farming or agricultural business on land in New Zealand, “(a) means an activity that enables a change in the nature or char­ acter of a farming activity from that undertaken on the land immediately before the change; and excludes an activity that enables a change in the intensity of a farming practice employed in a farming activity on the land”.
In the deﬁnition of subsidised transport, (a) (64) “(b) in the words before paragraph (a), “by an employer to an employee” is replaced by “to an employee by the employer, or by a company (group company) in the same group of companies as the employer,”: in paragraphs (a), (b), and (d), “employer” wherever it occurs is replaced by “employer or group company”.
(b) (65) The deﬁnition of taxable period is replaced by the following: “taxable period has the meaning given in section 2(1) of the Goods and Services Tax Act 1985”.

(66) The deﬁnition of third instalment date is repealed.
(67) After the deﬁnition of total debt, the following is inserted: “total taxable supplies is deﬁned in section MB 7(8) (GST ratio method) for the purposes of that section and sections MB 15, MB 18, and MB 32 (which relate to the calculation and payment of pro­ visional tax using the GST ratio method)”.
(68) In the deﬁnition of trading stock, in paragraph (a), the follow­ ing is inserted before subparagraph (i): “(ia) section CD 24B (Distribution to member of co­operative com­ pany based on member’s transactions):”.
(69) After the deﬁnition of transitional capital amount, the fol­ lowing is inserted: 182 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 191 “transitional resident is deﬁned in section FC 24 (Transitional resi­ dent)”.

(70) In the deﬁnition of trust rules, in paragraph (b), “section 59” is replaced by “sections 59 and 59B”.
(71) After the deﬁnition of variation in control or income inter­ ests, the following is inserted: “venture investment agreement is deﬁned in section CW 11C(6) (Proceeds from share or option acquired under venture investment agreement) for the purposes of that section “Venture Investment Fund means the company called New Zealand Venture Investment Fund Limited that is listed in Schedules 4, 5, and 6 of the Public Finance Act 1989”.
(72) After the deﬁnition of windfall credit, the following is in­ serted: “wine is deﬁned in section CV 4 (Regulations: Australian wine pro­ ducer rebate) for the purposes of that section”.

(73) Subsections (14) and (63) apply to expenditure incurred on and after 1 April 2005.

(74) Subsections (9), (10), (12), (13), (18) to (20), (21), (48), (49), (53), and (60) apply for income years corresponding to the 200506 and subsequent tax years.
(75) Subsections (47) and (69) apply for (a) (b) a person who becomes a transitional resident on or after 1 April 2006; and income years corresponding to the 200506 and subse­ quent tax years.

(76) Subsections (6), (11), (22), (31), and (51) apply for a person’s liability for fringe beneﬁt tax for a period beginning on or after 1 April 2006.

(77) Subsections (17) and (57) apply for income years correspond­ ing to the 200506 and subsequent tax years.
(78) Subsections (48) and (54) apply for income years correspond­ ing to the 200607 and subsequent tax years.

(79) Subsections (4), (7), (16), (26), (29), (30), (44), (45), (50), (56), (61), (65), (66), and (67) apply for income years corres­ ponding to the 200809 and subsequent tax years.
183 Part 1 s 192 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 192 Meaning of source deduction payment: shareholder­employees of close companies [Repealed] Section 192: repealed, on 19 December 2007, by section 292 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

193 Meaning of qualifying company (1) In section OB 3(1)(b)(i), “subsection (2)” is replaced by “sub­ section (3)”.
Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.

(2) 194 Meaning of income tax (1) In section OB 6(1)(b), “CD 11, CW 11B, CW 45, EG 1” is replaced by “CD 10B, CD 11, CW 11B, CW 45, EG 1, EX 44, EX 45”.

Section OB 6(3)(a) is replaced by the following: (2) “(a) Part B, except for “(i) “(ii) sections BB 3(2) and BH 1, if subparagraph (ii) does not apply: sections BB 3(1) and (2), BG 1, and BH 1, for the pur­ poses of the fringe beneﬁt tax rules; and”.
In section OB 6(3)(k), “MB 7” is replaced by “MB 29 to MB 32”.

Subsection (2) applies for a person’s liability for fringe beneﬁt tax for a period beginning on or after 1 April 2006.

Subsection (3) applies for income years corresponding to the 200809 and subsequent tax years.

(3) (4) (5) 195 Modiﬁcations to measurement of voting and market value interests in case of continuity provisions Section OD 5(10) is repealed.
196 New section OD 5AA inserted (1) After section OD 5, the following is inserted: 184 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 196 “OD 5AA Modiﬁcations to voting and market value interests for application of continuity provisions to reverse takeover “(1) This section modiﬁes the application of sections OD 3 to OD 5 for the purposes of the continuity provisions.
“(2) Subsections (3) and (4) apply if “(a) “(b) “(c) “(d) “(e) “(f) a limited attribution company (initial parent) is treated under section OD 5(6)(b) as holding ownership interests in another company (subsidiary); and there is a change in the ownership of the initial parent, or the initial parent ceases to exist as the result of an amalgamation, at a time (changeover); and immediately before the changeover, the initial parent is treated under section OD 5(6)(b) as holding all owner­ ship interests in the subsidiary; and immediately after the changeover, another limited attri­ bution company (new parent) is treated under section OD 5(6)(b) as holding all ownership interests in the sub­ sidiary; and immediately after the changeover, all or part of the own­ ership interests in the new parent are treated under sec­ tion OD 5(6)(b) as being held by the persons (initial owners) who hold ownership interests in the initial par­ ent immediately before the changeover; and each initial owner holds “(i) immediately before the changeover, a proportion of the total ownership interests in the initial par­ ent at that time; and immediately after the changeover, a proportion of the total ownership interests in the new parent that the initial owners hold at that time as a result of having held the total ownership interests in the initial parent; and “(ii) “(iii) a proportion referred to in subparagraph (ii) that is equal to the proportion referred to in subpara­ graph (i).
“(3) If the initial owners hold a total of 49% or more of the ownership interests in the new parent immediately after the changeover, the new parent is treated for the purposes of Part I as 185 Part 1 s 197 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(4) “(5) “(6) (2) “(a) holding, immediately after the changeover, the owner­ ship interests in the subsidiary that the initial parent held immediately before the changeover; and “(b) having held the ownership interests for the period for which the ownership interests were treated as being held by the initial parent.
If the initial owners hold a total of 66% or more of the ownership interests in the new parent immediately after the changeover, the new parent is treated for the purposes of subparts ME and MG as “(a) holding, immediately after the changeover, the owner­ ship interests in the subsidiary that the initial parent held immediately before the changeover; and “(b) having held the ownership interests for the period for which the ownership interests were held by the initial parent.
If the requirements of a continuity provision are not satisﬁed in relation to a company and would be satisﬁed but for the application of this section, the requirements of the continuity provision are treated as being satisﬁed in relation to the com­ pany.
In this section, ownership interests for a company means “(a) voting interests in the company as determined under section OD 3(3)(d), if paragraph (b) does not apply: “(b) market value interests in the company as determined under section OD 4(3)(d), if a market value circum­ stance exists for the company.” (b) Subsection (1) applies for a person for a change of ownership of a company occurring (a) after the date on which this Act receives the Royal as­ sent: before the date on which this Act receives the Royal assent, if before that date the person ﬁles a return of income on the basis that the requirements of a continuity provision are satisﬁed in relation to the company and the change of ownership.
197 Further deﬁnitions of associated persons In section OD 8(3), in the words before paragraph (a), 186 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 200 (a) (b) “CX 6(1)(b), CX 6B,” is inserted before “DB 10”: “sections NH 7,” is replaced by “section NH 7, the def­ initions in section OB 11 of returning share transfer and share­lending arrangement, and sections”.
198 Determination of residence of person other than company (1) After section OE 1(2), the following is inserted: “(2B) If, in the absence of subsection (2), a person would become a transitional resident under section FC 24 on a day, subsection (2) does not apply to the person for the period of 12 months ending before the day.” Subsection (1) applies for a person who becomes a transitional resident on or after 1 April 2006.
The law that would apply if subsection (1) did not come into force applies for a person who satisﬁes the requirements to be a transitional resident before 1 April 2006.
(2) (3) 199 New section YA 5B inserted (1) After section YA 5, the following is inserted: “YA 5B Saving of effect of section 394L(4A) of Income Tax Act 1976 Section 394L(4A) of the Income Tax Act 1976 (Further tax payable where end of year debit balance, or when company ceases to be an imputation credit account company) continues to apply in the same manner as it applied immediately before the repeal of that Act by the Income Tax Act 1994.” Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.
(2) 200 Schedule 2Fringe beneﬁt values (1) Schedule 2, part A is replaced by the following: “Part A “Motor vehicles “1 The following paragraphs apply to determine the value of the beneﬁt that an employee has for a quarter or tax year, or income year when section ND 14 applies, if in the quarter, tax year, or income year, a motor vehicle is 187 Part 1 s 200 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(b) provided by a person for the private use of an employee, or is made available for their private use: “(a) “(ii) if the vehicle is owned by the person, jointly or otherwise, “(i) on the basis of the cost price of the vehicle to the person: for a quarter, 5% of the cost price, and for a tax year or income year, 20% of the cost price: subject to clause 6, on the basis of the tax value of the vehicle to the person: for a quarter, 9% of the tax value, and for a tax year or income year, 36% of the tax value: if the vehicle is leased or rented by the person from another person, whether they are associated or not, “(i) on the basis of the cost price of the vehicle to its owner at the time the beneﬁt is pro­ vided to the employee: for a quarter, 5% of the cost price, and for a tax year or in­ come year, 20% of the cost price: subject to clause 6, on the basis of the tax value of the vehicle to its owner at the time the beneﬁt is provided to the employee: for a quarter, 9% of the tax value, and for a tax year or income year, 36% of the tax value.
“(ii) “2 188 If a motor vehicle to which this schedule applies is 1 of a number of motor vehicles, each of which is available for private use as described in clause 1, the value of the beneﬁt is determined as follows: “(a) if the employee mainly uses the same vehicle, clause 1 applies to that vehicle: if paragraph (a) does not apply, and the employee is employed in a business engaged in the selling of motor vehicles, and the vehicles available for use are trading stock of the business, clause 1 applies to the quotient obtained by dividing the “(b) Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 200 “(c) sum of either the cost price of the vehicles or their tax value, by the total number of those vehicles: if paragraphs (a) and (b) do not apply, clause 1 applies to the highest value of any vehicle used by the employee.
“3 “4 “5 “6 In this schedule, a motor vehicle’s tax value is the value of the vehicle in a quarter or tax year or income year “(a) as determined under subpart EE (Depreciation) for the beginning of the tax year or income year, if paragraph (b) does not apply; or the cost of the vehicle, if the vehicle is acquired after the beginning of the tax year or income year.
“(b) To determine the value of a beneﬁt under clause 1, any GST paid on the acquisition of a vehicle by the owner or lessor of the vehicle is “(a) included in the cost price of the motor vehicle or in the calculation of the motor vehicle’s tax value; and “(b) not reduced by an amount of input tax on the supply of the vehicle to the owner or lessor.
Despite clause 4, a person who in a quarter, tax year, or income year provides a beneﬁt that is valued under clause 1 may choose to value the vehicle on the basis of its cost price exclusive of GST or its tax value calculated exclusive of GST using clause 1 as modiﬁed by clause 6.
The following paragraphs apply to a person who values a vehicle on the basis of its cost price exclusive of GST or its tax value calculated exclusive of GST: “(a) the terms cost price and tax value in clause 1 do not include an amount of GST payable: 189 Part 1 s 200 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(b) “(c) “(d) “(e) the references to 5% in clause 1 are treated as if they were references to a percentage calculated using the formula 5 + (5 rate of GST applying in last day of relevant quarter): the references to 9% in clause 1 are treated as if they were references to a percentage calculated using the formula 9 + (9 rate of GST applying in last day of relevant quarter): the references to 20% in the clause are treated as if they were references to a percentage calculated using the formula 20 + (20 rate of GST applying in last day of relevant tax year or corresponding income year): the references to 36% in the clause are treated as if they were references to a percentage calculated using the formula 36 + (36 rate of GST applying in last day of relevant tax year or corresponding income year): The cost price of a vehicle that is leased or rented to the person after the vehicle has been leased or rented to another person is the market value of the vehicle if “(a) the person is not associated with the other person; and the person is not associated with the lessor or owner of the vehicle; and the employee is not the lessor or owner of the vehicle; and the employee is not associated with the lessor or owner of the vehicle.
“(b) “(c) “(d) If the vehicle is leased or rented by the person from an­ other person and the lessee requests that the lessor dis­ close the cost price or tax value of the vehicle for the “7 “8 190 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 1 s 202 lessor, the lessor must disclose to the lessee the infor­ mation requested.
“9 (2) The minimum tax value of a motor vehicle to which this schedule applies is $8,333.” Subsection (1) applies for a person’s liability for fringe beneﬁt tax for a period beginning on or after 1 April 2006.
201 Schedule 3International tax rules: grey list countries (1) In schedule 3, part A, the following is added: 8 Kingdom of Spain (2) In schedule 3, part B, the following is added: 7 In the case of the Kingdom of Spain, any special allowances, reliefs, or exemptions with respect to activities that are carried on in, or by an enterprise registered in, the following: (a) Canary Islands: (b) Ceuta: (c) Melilla: (d) Alava: (e) Guipuzcoa: (f) Vizcaya: (g) Navarra.
(3) Subsections (1) and (2) apply for income years corresponding to the 200607 and subsequent tax years.
202 Schedule 7Expenditure on farming, aquacultural, and forestry improvements In schedule 7, part A, 191 Part 1 s 203 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 (a) (b) in clause 1, “preparation” is replaced by “unless clause 1B applies, preparation” ; and after clause 1, the following is inserted: 1B 45 regrassing and fertilising all types of pasture in the course of a signiﬁcant capital activity that relates to a type of pasture with an estimated useful life of more than 1 year 203 New schedule 11B inserted (1) After schedule 11, schedule 11B in schedule 1 of this Act is (2) inserted.
Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.

204 Schedule 13–Months for payment of provisional tax and (1) (2) (3) terminal tax Part A of schedule 13 is replaced by schedule 2 of this Act.

Part B of schedule 13 is replaced by schedule 3 of this Act.

Subsections (1) and (2) apply for income years corresponding to the 2008–09 and subsequent tax years.
205 Schedule 14Rate of resident withholding tax deductions In schedule 14, clause 2, “being dividends” is replaced by “be­ ing dividends or replacement payments”.

206 Schedule 18State enterprises (1) In schedule 18, “New Zealand Symphony Orchestra Limited” is omitted.

Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.
(2) 192 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 2 s 210 207 Schedule 22AIdentiﬁed policy changes (1) In schedule 22A, after the ﬁrst entry, the following is inserted: CB 9(1)(b) The test of whether or not a person is in business as a builder is applied at the time improvements to land commence, rather than at the time land is acquired.
(2) Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.

208 Schedule 23Comparative tables of old and new provisions In schedule 23, (a) in the third column of Part A, the entry corresponding to section CG 15(2)(c) is replaced by “EX 36(1)”: in the second column of Part B, the entry corresponding to section EX 34 is replaced by “CG 15(2)(e)”.
(b) Part 2 Amendments to Tax Administration Act 1994 209 Tax Administration Act 1994 This Part amends the Tax Administration Act 1994.

Interpretation This section amends section 3.

Subsections (3) to (18) amend section 3(1).
210 (1) (2) (3) After the deﬁnition of approved advisor group, the following is inserted: “approved organisation is an organisation “(a) whose members include natural persons “(i) who are subject to a professional code of conduct; and “(ii) who are subject to a disciplinary process intended to enforce compliance with the code; and “(b) whose members 193 Part 2 s 210 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(i) “(ii) typically provide trustee services in the course of their business activities: satisfy other criteria acceptable to the Commissioner; and “(c) that has been approved by the Commissioner for the purposes of this deﬁnition”.
(4) After the deﬁnition of bank, the following is inserted: “base amount has the same meaning as in section OB 1 of the In­ come Tax Act 2004”.

(5) After the deﬁnition of GST payable, the following is inserted: “GST ratio has the same meaning as in section OB 1 of the Income Tax Act 2004”.

(6) In the deﬁnition of instalment date, “section 120K” is re­ placed by “sections 120KB to 120KE”.
(7) After the deﬁnition of instalment date, the following is in­ serted: “interest instalment date has the same meaning as in section OB 1 of the Income Tax Act 2004”.

(8) After the deﬁnition of provisional tax payable, the following is inserted: “provisional taxpayer has the same meaning as in section OB 1 of the Income Tax Act 2004”.
(9) After the deﬁnition of qualifying person, the following is in­ serted: “(b) “qualifying resident foreign trustee means a person who is a resi­ dent foreign trustee and who, “(a) if a natural person, is a member of an approved organisation; and if not a natural person, has a director, or other natural person in a position allowing signiﬁcant inﬂuence over the management or administration of the person, who is “(i) resident in New Zealand within the meaning of section OE 1 of the Income Tax Act 2004; and a member of an approved organisation”.
(10) After the deﬁnition of qualifying resident foreign trustee, the “(ii) following is inserted: 194 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 2 s 210 “ratio instalment date has the same meaning as in section OB 1 of the Income Tax Act 2004”.
(11) After the deﬁnition of relinquishment, the following is in­ serted: “resident foreign trustee means a person who, “(a) “(b) (12) (13) “(a) “(c) either alone or jointly with another person, acts as a trustee of a foreign trust that is not registered as a charitable entity under the Charities Act 2005; and is resident in New Zealand within the meaning of section OE 1 or section OE 2 of the Income Tax Act 2004”.
In the deﬁnition of residual income tax, paragraph (a), “sec­ tion 120K” is replaced by “section 120KB(4)”.
In the deﬁnition of response period, (a) the 2­month period starting on the date of issue of the initiating notice, if “(i) “(ii) the initiating notice is a notice of proposed adjustment: the initiating notice is a notice of a disputable decision and the notice is not a notice of proposed adjustment issued by a disputant: paragraph (a) is replaced by the following: “(iv) “(v) “(iii) the initiating notice is a notice revoking or varying a disputable decision that is not an assessment and the notice is not a notice of proposed adjustment issued by a disputant: the initiating notice is a disclosure notice: the initiating notice is a notice issued by the Com­ missioner rejecting an adjustment proposed by a disputant:”: paragraphs (c) and (d) are replaced by the following: (b) the 4­month period starting on the date of issue of the initiating notice, if “(i) the initiating notice is a notice of disputable decision issued by the Commissioner and the notice is a notice of proposed adjustment issued by a disputant: the initiating notice is a notice revoking or varying a disputable decision that is not an assessment and the notice is a notice of proposed adjustment issued by a disputant: “(ii) 195 Part 2 s 211 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(d) the 4­month period starting on the date on which the initiating notice is received at an ofﬁce of the department, if the initiating notice is a notice of assessment issued by the taxpayer and the notice is a notice of proposed adjustment issued by the taxpayer under section 89DA”.
(14) The deﬁnition of second instalment date is repealed.

(15) In the deﬁnition of tax, after paragraph (a)(xii), the following is inserted: (16) “(xiii) the amount of a subsidy payable under section NBB 6 of the Income Tax Act 2004 to a listed PAYE intermediary:”.

In the deﬁnition of tax position, after paragraph (n), the fol­ lowing is added: the amount of a subsidy claimed under section NBB 6 of the Income Tax Act 2004 to a listed PAYE intermediary”.
“(o) (17) The deﬁnition of third instalment date is repealed.

(18) The deﬁnition of trustee income is repealed.

(19) Section 3(3) and (4) is repealed.

(20) Subsection (19) applies for income years corresponding to the 200506 and subsequent tax years.

(21) Subsection (13) applies for an initiating notice that is issued (a) (b) in relation to a GST return period commencing on or after 1 April 2005: on or after 1 April 2005, if the initiating notice is issued other than in relation to a GST return period.
(22) Subsections (4), (5) to (7), (8), (10), (12), (14), (17), and (18) apply for income years corresponding to the 200809 and subsequent tax years.

211 Keeping of business records (1) In section 22(1), (a) (b) in the words before paragraph (a), “tax year” is replaced by “income year”: in paragraph (c)(iv), “tax year” is replaced by “income year”: in paragraph (e), “tax year” is replaced by “income year”.
In section 22(2), (c) (2) 196 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 2 s 211 (a) (b) in the words before paragraph (a), “(2B),” is inserted after “subsections”: in paragraph (f), “credit account person,” is replaced by “credit account person:”, and the following is added: “(fb) is a resident foreign trustee of a foreign trust in any income year,”: (c) in paragraph (1), “making it,” is replaced by “making it; and” and the following is added: the ﬁnancial position of the foreign trust,”.
In section 22(2), in the words after paragraph (1), “tax year” is replaced by “income year, or (for paragraphs (k) and (kb)) imputation year,”.
“(m) (3) (4) After section 22(2), the following is inserted: “(2B) A taxpayer referred to in subsection (2)(e) who is required by subsection (2) to retain records is not required to retain those records for a period of more than 7 years after the end of the income year to which the records relate.” (6) (7) (5) After section 22(2), the following is inserted: “(2C) If there are more than one resident foreign trustee of a foreign trust, the resident foreign trustees may appoint one of them­ selves as an agent for the purposes of keeping the records re­ quired by subsection (2).” In section 22(3), “tax year” is replaced by “income year”.
In section 22(5), “subsection (2)” is replaced by “subsection (2) or (2B)”.

In section 22(6), in the words before paragraph (a), “or (2B),” is inserted after “subsection (2)”: (a) (b) “income year or” is inserted before “tax year”.
In section 22(7)(c), “this Act.” is replaced by “this Act:”, and the following is added: in the case of a foreign trust, other than for the period for which section 59B(3) applies, “(i) documents that evidence the creation and constitution of the foreign trust; and “(d) (9) (8) “(ii) particulars of settlements made on, and distributions made by, the foreign trust, including the date of the settlement or distribution, the name and address (if known) of the settlor of the settlement, the name and 197 Part 2 s 212 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 address (if known) of the recipient of the distribution; and “(iii) a record of “(A) the assets and liabilities of the foreign trust; and “(B) all entries from day to day of all sums of money received and expended by the trustee in relation to the foreign trust and the matters in respect of which the receipt and expenditure takes place; and if the trust carries on a business, the charts and codes of accounts, the accounting instruc­ tion manuals, and the system and programme documentation which describes the accounting system used in each income year in the adminis­ tration of the trust.” “(C) (10) Subsections (1), (3), (4), (6), and (8)(b) apply for income years corresponding to the 200506 and subsequent tax years.
212 Keeping of returns where information transmitted (1) (2) electronically In section 23(1)(a), “tax year” is replaced by “income year”.

Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.

213 Shareholder dividend statement to be provided by (1) company In section 29(1), in the words before paragraph (a), “; shall at the time of payment of the dividend,” is replaced by “must”.
(2) After section 29(1B), the following is inserted: “(1C) The company must give the shareholder dividend statement to the shareholder “(a) at the time of payment of the dividend, if paragraph (b) does not apply; or “(b) before the date that is 3 months after the emigration date, if the company is treated under section FCB 2 of the Income Tax Act 2004 (which relates to an emigrat­ ing company) as paying the dividend.” 198 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 2 s 214 (3) Subsections (1) and (2) apply for income years corresponding to the 200506 and subsequent tax years.
214 New sections 30B and 30C inserted After section 30A, the following is inserted: “30B Statement to share supplier when share user makes replacement payment under share­lending arrangement A share user under a share­lending arrangement who pays a replacement payment to the share supplier must at the time of paying the replacement payment give to the share supplier a replacement payment statement in a form approved by the Commissioner showing “(a) “(b) “(c) “(d) the name of the share user: the date on which the replacement payment is paid: the name and address of the share supplier: the amount of any resident withholding tax deducted by the share user: the amount of the replacement payment after the deduc­ tion of resident withholding tax: the amount of any imputation credit attached under sec­ tion ME 6B of the Income Tax Act 2004 to the replace­ ment payment: the aggregate of the amount of any imputation credit re­ ferred to in paragraph (f) and the amount of the imput­ ation credit arising under section NF 8B of the Income Tax Act 2004 for the share supplier from the deduction of resident withholding tax: the aggregate of the amount of any imputation credit re­ ferred to in paragraph (f) and the amount of the imput­ ation credit arising under section NF 8B of the Income Tax Act 2004 for the share supplier and the amount of the replacement payment after the deduction of resident withholding tax.
“(e) “(f) “(g) “(h) 199 Part 2 s 215 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “30C Credit transfer notice to share supplier and Commissioner when share user transfers imputation credit under share­lending arrangement “(1) A credit transfer notice may be issued by a share user under a share­lending arrangement when a dividend is paid for an original share, by complying with this section.
“(2) A credit transfer notice must “(a) “(b) “(c) “(d) “(e) be in a form approved by the Commissioner: show the amount of imputation credit, if any, and the amount of dividend withholding payment credit, if any, attached to the dividend, if the dividend is derived by the share user: state that any imputation credit and any dividend with­ holding payment credit is to be transferred to the share supplier, if the dividend is derived by the share user: attach a copy of the shareholder dividend statement for the dividend, if the dividend is derived by the share user: be given to the relevant share supplier and the Commis­ sioner when the dividend is paid or as soon as possible after it is paid.” 215 Annual returns of income not required [Repealed] Section 215: repealed, on 19 December 2007, by section 292 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
216 New section 33C inserted [Repealed] Section 216: repealed, on 19 December 2007, by section 292 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

217 Consequential adjustments on change in balance date (1) In section 39, “transitional income year” is replaced by “tran­ sitional year” in both places it occurs.

Subsection (1) applies for income years corresponding to the 2008–09 and subsequent tax years.
(2) 218 New section 39B inserted (1) After section 39, the following is inserted: 200 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 2 s 218 “39B Changes in return dates: taxpayers with provisional tax and GST liabilities “(1) Subsection (2) applies if a provisional taxpayer “(a) “(b) is a person registered under the Goods and Services Tax Act 1985, and pays GST on a 2­month cycle or a 6­month cycle; and elects under section 38(1) to change their balance date at some time in an income year; and “(c) moves from “(i) a balance date in an even­numbered month to a balance date in another even­numbered month; or a balance date in an odd­numbered month to a balance date in another odd­numbered month.
“(ii) “(2) Until the new balance date is reached, the taxpayer must “(a) “(b) continue with the due dates for their provisional tax in­ stalments that applied before the change in balance date was approved; and apply sections MB 19 to MB 23, as relevant, and sched­ ule 13, part B of the Income Tax Act 2004 for the tran­ sitional period to determine the due date and amount of an instalment.
“(3) Subsection (4) applies if a provisional taxpayer “(a) “(b) is a person registered under the Goods and Services Tax Act 1985, and pays GST on a 2­month cycle or a 6­month cycle; and elects under section 38(1) to change their balance date at some time in an income year; and “(c) moves from “(i) a balance date in an even­numbered month to a balance date in an odd­numbered month; or a balance date in an odd­numbered month to a balance date in an even­numbered month.
“(ii) “(4) Until the new balance date is reached, the taxpayer must “(a) “(b) continue with the due dates for their provisional tax in­ stalments that applied before the change in balance date was approved; and apply sections MB 20 to MB 23, as relevant, and sched­ ule 13, part B of the Income Tax Act 2004 for the tran­ 201 Part 2 s 219 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 sitional period to determine the due date and amount of an instalment; and “(c) make an adjustment to their provisional tax liability for the income year for the part of the taxable period in which the new balance date falls.
If a change in balance date means that the taxpayer’s taxable period is not aligned with their balance date, the Commissioner must make an adjustment to the taxable period under section 15B of the Goods and Services Tax Act 1985.” Subsection (1) applies for income years corresponding to the 2008–09 and subsequent tax years.
“(5) (2) 219 Non­resident withholding tax deduction certiﬁcates and (1) (2) annual reconciliations In section 49(1), in the words between paragraphs (b) and (c), “shall prepare, and shall by not later than 31 May in the fol­ lowing year” is replaced by “must prepare and”.

In section 49(4) “shall furnish to the Commissioner within 40 working days after the end of that month” is replaced by “must furnish to the Commissioner”.
(3) After section 49(4), the following is inserted: “(4B) An emigrating company that is treated under section FCB 2 of the Income Tax Act 2004 as paying a dividend to shareholders must furnish to the Commissioner, as if the emigration date were the end of a year, “(a) any non­resident withholding tax deduction certiﬁcates required to be prepared by the company; and an annual reconciliation statement.
“(b) “(4C) A company must furnish to the Commissioner the tax deduc­ tion certiﬁcates and annual reconciliation statement required under this section for a year “(a) by not later than 31 May in the year following the year to which the certiﬁcates and statement relate, if paragraphs (b) and (c) do not apply; or “(b) before the date that is 40 working days after the end of the month referred to in subsection (4), if that subsection applies and paragraph (c) does not apply; or 202 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 2 s 221 “(c) before the date that is 3 months after the emigration date, if the company is an emigrating company.” Subsections (1) to (3) apply for income years corresponding to the 200506 and subsequent tax years.
(4) 220 Resident withholding tax deduction reconciliation (1) (2) (3) statements In section 51(1), in the words after paragraph (b), “shall, by not later than 31 May following the end of that year,” is replaced by “must”.

In section 51(4) “and within 40 working days after the end of that month” is repealed.

In section 51(5) “and within 40 working days after the end of that month” is repealed.
(4) After section 51(5) the following is inserted: “(5B) An emigrating company that is treated under section FCB 2 of the Income Tax Act 2004 as paying a dividend to shareholders must provide to the Commissioner the information required under this section, as if the emigration date were the end of a year.
“(5C) A company must furnish to the Commissioner the information required under subsection (4), (5), or (5B) “(a) on or before the date that is 40 working days after the end of the month referred to in subsection (4), if that subsection applies and paragraphs (b) and (c) do not apply; or “(c) “(b) on or before the date that is 40 working days after the end of the month referred to in subsection (5), if that subsection applies and paragraph (c) does not apply; or before the date that is 3 months after the emigration date, if the company is an emigrating company.” Subsections (1) to (4) apply for income years corresponding to the 200506 and subsequent tax years.
(5) 221 New section 59B inserted After section 59, the following is inserted: 203 Part 2 s 221 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “59B Disclosure of foreign trust particulars “(1) A resident foreign trustee for a foreign trust must disclose to the Commissioner the following particulars for the foreign trust: “(a) the name or other identifying particulars (for example, the date of the settlement on the trust) that relate to the foreign trust; and the name and contact particulars of the resident foreign trustees; and “(b) “(c) whether a settlor is resident in the Commonwealth of “(d) “(e) Australia; and if a resident foreign trustee claims to be a qualifying resident foreign trustee, “(i) “(ii) the name of the approved organisation; and the name and contact particulars of the natural person whose membership of the approved or­ ganisation is claimed to satisfy the requirements of paragraph (a) or (b)(ii) of the deﬁnition of qualifying resident foreign trustee ; and if a resident foreign trustee has been appointed by an­ other resident foreign trustee as an agent under subsec­ tion (7) or section 22(2C), “(i) “(ii) the name of the trustee appointed as agent; and the name of the appointing trustee.
“(2) A resident foreign trustee must disclose to the Commissioner an alteration to a particular to which subsection (1) refers.
“(3) The disclosure required by subsections (1) and (2) and the ap­ plication of section 22(2)(fb) and (m) is delayed for a period of 2 years (calculated from the date on which the trustee be­ comes a New Zealand resident) for a trustee who is a natural person and who was appointed a trustee of the foreign trust before becoming a New Zealand resident if the trustee “(a) becomes a New Zealand resident on or after 1 October 2006; and is not in the business of providing trustee services; and has not been resident in New Zealand on any day in the period of 5 years that ends immediately before the trustee becomes a New Zealand resident.
“(b) “(c) 204 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 2 s 222 “(4) “(5) If subsection (3) does not apply, the disclosure required by subsection (1) must be made by the date that is, “(a) if the person is appointed on or after 1 October 2006, 30 days after the later of the following: “(i) “(ii) the date of the person’s appointment as a trustee: the date of the person’s arrival in New Zealand; or “(b) if the person is appointed before 1 October 2006, 60 days after the later of the following: “(i) “(ii) the date of the commencement of this section: the date of the person’s arrival in New Zealand.
If subsection (3) does apply, the disclosure required by subsec­ tion (1) must be made by the date that is 30 days after the end of the period of 2 years that begins when the trustee becomes a New Zealand resident.
“(6) The disclosure required by subsection (2) must be made by, “(a) “(b) if subsection (3) does not apply, the date that is 30 days after the date on which the alteration becomes known to the trustee: if subsection (3) does apply, the date that is the later of the date that is 30 days after the end of the period “(i) of 2 years that begins when the trustee becomes a New Zealand resident: the date that would be given by paragraph (a) if subsection (3) did not apply.
“(ii) “(7) If there are more than one resident foreign trustee of a foreign trust, the resident foreign trustees may appoint one of them­ selves as an agent for the purposes of making disclosure under this section.” 222 Disclosure of interest in foreign company or foreign investment fund After section 61(1), the following is inserted: “(1B) A resident foreign trustee of a foreign trust who makes the disclosure required by section 59B is exempt from the require­ ments of subsection (1).” 205 Part 2 s 223 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 223 Co­operative company to provide particulars of deemed (1) (2) 224 (1) (2) dividend In section 64(a), “tax year” is replaced by “income year”.
Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.

Information to be furnished with return by petroleum mining entity making dispositions of shares or trust interests In section 65, “tax year” is replaced by “income year”.

Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.
225 Annual and other returns for policyholder credit account (1) (2) (3) (4) (5) (6) (7) persons In section 66(1), “tax year” is replaced by “income year”.

In section 66(2)(a), “tax year” is replaced by “income year”.

In section 66(2)(b), “tax year” is replaced by “income year”.

In section 66(3), “tax year” is replaced by “income year” in both places that it occurs.

In section 66(5), “tax year” is replaced by “income year” in both places that it occurs.
In section 66(6), “a tax year” is replaced by “an income year”.

Subsections (1) to (6) apply for income years corresponding to the 200506 and subsequent tax years.

226 Company dividend statement when imputation credit (1) (2) account company declares dividend In section 67(2), “a tax year” is replaced by “an income year”: (a) (b) “that tax year” is replaced by “that income year”.

Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.
227 Annual imputation return (1) (2) In section 69(1B)(a), “income year” is replaced by “tax year”.

In section 69(1B)(b), “income year” is replaced by “tax year”.

206 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 2 s 231 (3) Subsections (1) and (2) apply for income years corresponding to the 200506 and subsequent tax years.
228 Annual dividend withholding payment account return (1) In section 71, in the words before paragraph (a), “a tax year” is replaced by “an income year”: (a) (b) “that tax year” is replaced by “that income year”.

Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.

(2) 229 Annual and other returns for branch equivalent tax (1) (2) (3) (4) (5) (6) (7) account persons In section 78(1), “tax year” is replaced by “income year”.
In section 78(2)(a), “tax year” is replaced by “income year”.

In section 78(2)(b), “tax year” is replaced by “income year”.

In section 78(3), “tax year” is replaced by “income year” in both places that it occurs.

In section 78(5), “tax year” is replaced by “income year”.

In section 78(6), “a tax year” is replaced by “an income year”.

Subsections (1) to (6) apply for income years corresponding to the 200506 and subsequent tax years.
230 Ofﬁcers to maintain secrecy (1) “(f) In section 81(4)(f), the portion before subparagraph (i) is re­ placed by the following: communicating to any person, being an ofﬁcer, employee, or agent of the responsible department or of the Accident Com­ pensation Corporation or of the Ministry of Justice, any infor­ mation, being information”.

(2) In section 81(4), after paragraph (m), the following is inserted: “(mb) publishing a list of organisations that are approved organisa­ tions:”.
231 Disclosure of information to prevent cessation of beneﬁt payments In section 82A(5), “section 81(4)(n)” is replaced by “section 81(4)(o)”.

207 Part 2 s 232 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 232 Notices of proposed adjustment required to be issued by Commissioner In section 89C(db), “income year” is replaced by “period”.
233 Taxpayers and others with standing may issue notices of proposed adjustment After section 89D(2C), the following is inserted: “(2D) For the purpose of subsection (2C), section 16(3) of the Goods and Services Tax Act 1985 does not apply.” 234 Late actions deemed to occur within response period (1) “(a) In section 89K(1), paragraph (a) is replaced by the following: the Commissioner considers that an exceptional circumstance has prevented a disputant from, within the applicable response period, “(i) rejecting an adjustment contained in a notice of pro­ posed adjustment issued by the Commissioner; or issuing a notice of proposed adjustment under section 89D or 89DA in respect of a disputable decision; or “(ii) (2) “(iii) issuing a statement of position; and”.
Subsection (1) applies to disputes that are commenced under Part 4A of the Tax Administration Act 1994 on or after 1 April 2005.

235 Completing the disputes process (1) In section 89N(1)(c)(vi), (a) “a request under a statute for information” is replaced by “a requirement under a statute to produce informa­ tion”: “the request” is replaced by “the requirement”, in both places that it occurs.
(b) Section 89N(5) is replaced by the following: If the Commissioner makes an application under subsection (3), the Commissioner must make an amended assessment by the last day of the period that “(a) begins on the day following the day by which the Com­ missioner, in the absence of the suspension, would be required under the Inland Revenue Acts to make the amended assessment; and (2) “(5) 208 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 2 s 238 “(b) contains the total of “(i) the number of days between the date on which the Commissioner ﬁles the application in the High Court and the earliest date on which the applica­ tion is decided by the High Court or the applica­ tion or dispute is resolved: the number of days allowed by an order of a court as a result of the application.” “(ii) 236 Test cases Section 89O(5) is replaced by the following: “(5) The Commissioner must make an amended assessment, or per­ form an action, that is the subject of a suspended dispute by the later of the following: “(a) the day that is 60 days after the last day of the suspen­ sion: the last day of the period that “(i) “(b) begins on the day following the day by which the Commissioner, in the absence of the suspension, would be required under the Inland Revenue Acts to make the amended assessment, or perform the action; and contains the same number of days as does the period of the suspension.” “(ii) 237 Determinations in relation to ﬁnancial arrangements (1) (2) In section 90(1)(c), “tax year” is replaced by “income year”.
Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.

238 Determination on economic rate (1) In section 91AAF(1), “section EE 25” is replaced by “section EE 25B, EE 25C, EE 25E, or EZ 21B”.

In section 91AAF(4)(b), “or is an item of property to which section EE 25B, EE 25C, EE 25E, or EZ 21B of the Income Tax Act 2004 applies” is inserted after “reacquired”.
(2) (3) After section 91AAF(4), the following is added: 209 Part 2 s 239 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(5) A determination made under this section may apply to an item of depreciable property to which section EE 25B, EE 25C, or EE 25E of the Income Tax Act 2004 applies if the item is acquired or used by a person before the commencement of this section.” Subsections (1) to (3) apply for income years corresponding to the 200506 and subsequent tax years.
(4) 239 Determination on special rates and provisional rates (1) Section 91AAG(3) is replaced by the following: “(3) The Commissioner may issue a determination setting a special rate using “(a) “(b) “(c) “(d) the formula in section EE 25B; or the formula in section EE 25C; or the formula in section EE 25E; or the straight­line method other than under paragraph (b).” (2) (3) In section 91AAG(4)(b), “or schedule 11B” is inserted after “schedule 11”.
Subsections (1) and (2) apply for income years corresponding to the 200506 and subsequent tax years.

240 Assessment of fringe beneﬁt tax (1) (2) In section 93(1), “tax year” is replaced by “income year”.

Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.
241 Commissioner may determine amount of provisional tax (1) In section 119(1), (a) (b) “section MB 3” is replaced by “section MB 6”: in paragraph (d)(ii), “date.” is replaced by “date; or” and the following is added: the person is required, under sections MB 6(5) and MB 17(5) of the Income Tax Act 2004, to estimate their residual income tax for a tax year, and fails to provide an estimation or re­esti­ mation to the Commissioner.” Subsection (1) applies for income years corresponding to the 2008–09 and subsequent tax years.
“(e) (2) 210 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 2 s 243 242 Deﬁnitions (1) In section 120C(1), in the deﬁnition of date interest starts, after paragraph (a)(ii), the following is added: (a) “(iii) for a provisional taxpayer to whom section 120KE(7) applies, the day after whichever dates of instalments B, D, and F for their corresponding income year occur 30 days after their last ratio instalment date; and”: (b) in paragraph (b)(i), the words before subsubparagraph (A) are replaced by “if a taxpayer pays too much tax by or after a due date and subparagraph (iv) does not apply”: after paragraph (b)(iii), the following is added: (c) for a provisional taxpayer other than one to whom section 120KE(1) or (3) applies, the ﬁrst day of the income year; and for a provisional taxpayer to whom section 120KE(6) applies, the later of “(A) the day after the date set out in section MB 17(2) or MB 17(3), as applicable: the day after their last ratio instalment date; and”.
“(B) Subsection (1) applies for income years corresponding to the 2008–09 and subsequent tax years.

“(iv) “(v) (2) Section 120K is replaced by the following: 243 Section 120K replaced (1) “120KB Provisional tax instalments and due dates generally “(1) This section applies “(a) “(b) in a tax year other than a transitional year: to a provisional taxpayer who is not a new provisional taxpayer.
“(3) “(2) A provisional taxpayer’s residual income tax is due and payable as set out in section MB 8 of the Income Tax Act 2004.

If a provisional taxpayer uses a GST ratio to determine the amount of provisional tax payable, and an adjustment to a base amount referred to in section MB 7 of the Income Tax Act 2004 will, or is likely to, change the amount payable, the tax­ payer may ask the Commissioner to make the adjustment and reassess their liability.
211 Part 2 s 243 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(4) For the purposes of this section and sections 120KC to 120KE, residual income tax means a person’s residual income tax for a tax year as deﬁned in section OB 1 of the Income Tax Act 2004 “(a) as increased by an amount calculated in relation to the person and the income year under section KD 4(2)(c) of the Income Tax Act 2004; or as reduced by an amount calculated in relation to the person and the income year under section KD 4(2)(d) of the Income Tax Act 2004.
“(b) “120KC Residual income tax of new provisional taxpayer “(1) In a tax year other than a transitional year, and for the purposes of this Part, a new provisional taxpayer’s residual income tax is treated as due and payable “(a) in 3 equal instalments on the interest instalment dates B, D, and F for the taxpayer’s corresponding income year, if section MB 8(8)(a) of the Income Tax Act 2004 applies: in 2 equal instalments on the interest instalment dates C and F for the taxpayer’s corresponding income year if section MB 8(8)(b) applies: in 1 instalment on the interest instalment date F for the taxpayer’s corresponding income year, if section MB 8(8)(c) applies.
“(b) “(c) “(2) In this section, a reference to an instalment classiﬁed by the letters A to F is a reference to an instalment date in the table in schedule 13, part A of the Income Tax Act 2004 on which an instalment of provisional tax is payable by a provisional taxpayer for an income year that corresponds to a tax year.

Example: Section 120KC Mr Yellow, who has a March balance date, decides to change to a May balance date.

The transitional year is 14 months long.


He starts business on 31 July, estimating provisional tax at $15,000 212 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 2 s 243 Example: Section 120KC—continued for the income year.

At the end of the year, Mr Yellow’s residual income tax is $20,000.

He is not subject to GST.


Instalments in transitional year: 28th day of 5th, 9th, and 13th months after balance date, and ﬁnal instalment on 28th day of month following ﬁnal month in transitional year (s MB 20(2) and schedule 13, part B).

But ﬁrst business day falls within 30 days of the date that would be the ﬁrst instalment, 28 August (s MB 20(4)(a)), so no instalment is due.

Amounts payable on the instalment dates are calculated under s MB 22.
“First instalment due 20 January: $15,000 × 4/14 = $4,285 “Second instalment due 28 April: $15,000 × 8/14 − $4,285 = $4,286 “Final instalment due 28 June: $15,000 − $8,571 = $6,429 Three interest start dates apply: 21 January, 29 April, and 29 June (s 120KD(2)).
“First instalment 20 January on RIT: $20,000 × 4/14 = $5,714 interest payable from 21 January on: ($5,714 − $4,285) = $1,429 “Second instalment 28 April on RIT: $20,000 × 4/14 = $5,714 interest payable from 29 April on: ($5,714 − $4,286) = $1,428 “Final instalment 28 June on RIT: $20,000 − ($5,714 + $5,714) = $8,572 interest payable from 29 June on RIT: ($8,572 − $6,429) = $2,143 “• “• “• “120KD Provisional tax instalments in transitional years “(1) For a transitional year to which schedule 13, part B of the In­ come Tax Act 2004 applies, the residual income tax of a provi­ sional taxpayer, other than a person to whom section 120KE(1) 213 Part 2 s 243 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 applies, is due and payable as determined under sections MB 20 to MB 23 of the Income Tax Act 2004.
“(2) A provisional taxpayer in a transitional year is liable for use of money interest for unpaid tax in relation to the instalments of provisional tax payable in the months set out in schedule 13, part B of the Income Tax Act 2004.

The date interest starts is the day after the 28th day of the month on which an instalment is payable.
“(3) For the purposes of calculating the amount of interest due in relation to an instalment of provisional tax other than a ﬁnal instalment, the amount of residual income tax payable on the instalment date is calculated using the formula “(4) In the formula, the instalment period is either “(a) 4, for provisional taxpayers who pay on the equivalent of instalment dates B, D, and F; or “(b) 6, for provisional taxpayers who pay on the equivalent of instalment dates C and F. “(5) For the purposes of calculating the amount of interest due in relation to a ﬁnal instalment of provisional tax, the amount of residual income tax payable is the residual income tax for the tax year minus any amount treated as due on an instalment date referred to in subsection (3).
In this section, a provisional taxpayer includes a new provi­ sional taxpayer.

“(6) Example: Section 120KD Dr Beige starts the income year (March balance date) using a GST ratio to determine the amount of provisional tax payable.

He makes payments in June and August.

On 10 September 2007, Dr Beige decides to change his determination method.
He must then estimate his residual income tax for the income year (s MB 17(5) Income Tax Act 2004), and pay 2 instalments under the estimation method on instalment dates D and F (s MB 6(5) of that Act).

Dr Beige provides a return for the income year that shows residual income tax of $30,000.
214 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 2 s 243 Example: Section 120KD—continued Four interest start dates apply: • for credit interest, the interest start date is 11 September 2007 (s 12OKE(6)): for debit interest, the interest start dates are: • “11 September for unpaid instalments under the GST ratio method (s 120KE(7)) “21 January 2008 for unpaid instalments under es­ timation method (s 120C(1)(a)(i)(A)) “29 April 2008 for unpaid instalments under esti­ mation method (s 120C(1)(a)(i)(A)).
Files return for year and RIT is $30,000 Balance is $25,500 ($30,000 ­ $4,500) Estimation instalments: interest calculated on unpaid tax of: “on 21 Jan 2008 on $9,750 ($12,750 ­ $3,000) 120C(2)(b)) “on 29 April 2008 on $9,750 ($12,750 ­ $3,000) (s 120C(2)(b)) (s “120KE Provisional tax and rules on use of money interest “(1) A provisional taxpayer’s residual income tax for a tax year is due and payable in 1 instalment on their terminal tax date if “(a) they are a natural person, other than in their capacity as trustee; and their residual income tax is less than $35,000 for the tax year; and they have not estimated their residual income tax under section MB 6 of the Income Tax Act 2004 for the tax year; and “(b) “(c) 215 Part 2 s 243 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(d) “(e) they have not used a GST ratio under section MB 7 of the Income Tax Act 2004 in the tax year to determine the amount of provisional tax payable for the tax year; and they have not at any time in the tax year held a valid certiﬁcate of exemption under section NF 9(12) of the Income Tax Act 2004.
“(2) When subsection (1) applies, in relation to the payment of pro­ visional tax under section MB 8(2) or (4) or MB 20, the pro­ visional taxpayer “(a) is not liable for use of money interest under section 120D for unpaid tax until their terminal tax date: is not entitled to use of money interest under section 120D for overpaid tax until their terminal tax date.
“(b) “(3) A provisional taxpayer’s residual income tax for a tax year is due and payable in 1 instalment on their terminal tax date if “(a) they use a GST ratio to determine the amount of provi­ sional tax payable for the tax year; and they use the GST ratio as the determination method for the whole of the corresponding income year.
“(b) “(4) When subsection (3) applies, in relation to the amount of pro­ visional tax paid or payable for the period in the corresponding income year in which the GST ratio is used, the provisional taxpayer “(a) is not liable for use of money interest under section 120D for unpaid tax until their terminal tax date: is not entitled to use of money interest under section 120D for overpaid tax until their terminal tax date.
“(b) “(5) Subsections (6) and (7) apply if, under section MB 17 of the Income Tax Act 2004, a provisional taxpayer changes the way they determine the amount of provisional tax.

“(6) For credit interest, the taxpayer is entitled to use of money interest from the later of “(a) the day after the date set out in section MB 17(2) or (3), as applicable: the day after their last ratio instalment date.
“(7) For debit interest, the taxpayer is liable for use of money in­ “(b) terest 216 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 2 s 246 “(a) “(b) for the period of the tax year in which they use the GST ratio, from the later of the dates set out in subsection (6): for the period of the tax year in which they estimate their provisional tax, from whichever dates of instalments B, D, and F for their corresponding income year occur 30 days after their last ratio instalment date.
“(8) (2) In this section, a reference to an instalment classiﬁed by the letters A to F is a reference to a date in the table in schedule 13, part A of the Income Tax Act 2004 on which an instalment of provisional tax is payable by a provisional taxpayer for an income year that corresponds to a tax year.” Subsection (1) applies for income years corresponding to the 2008–09 and subsequent tax years.
244 Meaning of unpaid tax and overpaid tax for provisional (1) (2) tax purposes In section 120L(1), “section 120K” is replaced by “section 120KB (4)”.

Subsection (1) applies for income years corresponding to the 2008–09 and subsequent tax years.

245 Where provisional tax paid by company does not count (1) (2) as overpaid tax In section 120M(b), “section MB 10” is replaced by “section MB 37”.

Subsection (1) applies for income years corresponding to the 2008–09 and subsequent tax years.
246 Due date for underestimation penalty tax (1) In section 120Q, “the taxpayer’s third instalment date” is re­ placed by “the date of instalment F set out in schedule 13, part A of the Income Tax Act 2004, for the taxpayer’s correspond­ ing income year”.

Subsection (1) applies for income years corresponding to the 2008–09 and subsequent tax years.
(2) 217 Part 2 s 247 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 247 Late payment penalty and provisional tax (1) In section 139C(1), “Subsection (1B) overrides this subsec­ tion.” is added.
(2) After section 139C(1), the following is inserted: “(1B) Subsection (IC) applies if “(a) “(b) a person makes an election under section MB 11 of the Income Tax Act 2004 that an amount of a GST refund (elected amount) be used to pay an amount of provi­ sional tax due on an instalment date; and the Commissioner reassesses the amount of the GST refund as being less than the elected amount.
“(1C) The person is not liable for a late payment penalty in relation to the amount of any shortfall in the person’s payment of pro­ visional tax that arises as a result of the reassessment referred to in subsection (1B) until “(a) the date that is 30 days after the date on which the Com­ missioner gives notice of the reassessment, if the Com­ missioner does not set a date under paragraph (b); or a date set by the Commissioner that is later than the date referred to in paragraph (a).” “(b) in the deﬁnition of provisional tax (3) In section 139C(2), payable, (a) “section MB 5” is replaced by “section MB 9” wherever it occurs: in paragraph (a)(ii), “section MB 2” is replaced by “sec­ tion MB 4”: in paragraph (aa)(ii), “item p of the formulae in section MB 5A(5) and MB 5A(7)” is replaced by “item residual income tax in the formula in section MB 9(2)”: in paragraph (aa), “section MB 5A” is replaced by “sec­ tions MB 9 and MB 20” wherever it occurs.
(b) (c) (d) (4) Subsections (1) to (3) apply for income years corresponding to the 2008–09 and subsequent tax years.

248 Application of other provisions of Act to imputation penalty tax and dividend withholding payment penalty tax In section 140D(2)(d) and (3)(d), “section 120K” is replaced by “sections 120KB to 120KE”.
(1) 218 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 2 s 251 (2) Subsection (1) applies for income years corresponding to the 2008–09 and subsequent tax years.

249 Application of other provisions of Act to Maori authority (1) (2) distribution penalty tax In section 140DB(2)(b), “section 120K” is replaced by “sec­ tions 120KB to 120KE”.
Subsection (1) applies for income years corresponding to the 2008–09 and subsequent tax years.
250 Not taking reasonable care (1) After section 141A(4), the following is added: “(5) If the Commissioner assesses a shortfall penalty under this sec­ tion in relation to a tax position of a taxpayer after deciding under section 141KB(1) that the taxpayer is not liable to pay a shortfall penalty that has been assessed under section 141B in relation to the tax position, the liability for the shortfall penalty under this section is treated as arising at the time of the deci­ sion under section 141KB(1).” Subsection (1) applies for a tax position taken by a taxpayer after 1 April 2003.
(2) 251 New section 141EA inserted (1) After section 141E, the following is inserted: “141EA Shortfall penalty and provisional tax Despite sections 141A to 141E, a provisional taxpayer who uses a GST ratio in a tax year to determine the amount of an instalment of provisional tax payable for the tax year is not liable to pay a shortfall penalty in the following circumstances: the taxpayer pays by the instalment date the amount, “(a) determined using the GST ratio, of the instalment but underpays their annual liability: the taxpayer pays by the instalment date the amount, determined using the GST ratio, of the instalment but the GST ratio is changed after the instalment date by a reassessment of their residual income tax.” “(b) (2) Subsection (1) applies for income years corresponding to the 2008–09 and subsequent tax years.
219 Part 2 s 252 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 252 New section 141KB inserted (1) After section 141K, the following is inserted: “141KB Discretion to cancel some shortfall penalties “(1) The Commissioner may decide in the circumstances given by subsection (2) that a taxpayer is not liable to pay a shortfall penalty that would otherwise be imposed by section 141B in relation to a tax position.
“(2) The Commissioner may exercise the discretion given by sub­ section (1) if “(a) the Commissioner is satisﬁed that “(i) “(ii) the tax position is taken as a result of a clear mistake or simple oversight; and the tax shortfall arising from the tax position is or would be subject to a reduced penalty under sec­ tion 141G(1)(a) as a result of a voluntary disclos­ ure or is a temporary tax shortfall under section 141I(3); and “(iii) it is appropriate that the taxpayer not be liable to pay a shortfall penalty under section 141B in relation to the tax position; and “(b) the Commissioner “(i) “(ii) does not assess the shortfall penalty before exer­ cising the discretion: assesses the shortfall penalty before 1 April 2006 and receives before 1 October 2006 a written re­ quest from the taxpayer for a decision under sub­ section (1).
If the Commissioner decides under subsection (1) that a tax­ payer is not liable to pay a shortfall penalty that the Commis­ sioner has assessed, the assessment of the shortfall penalty is treated as not having been made.
If the Commissioner decides under subsection (1) that a tax­ payer is not liable to pay a shortfall penalty that would other­ wise be imposed by section 141B in relation to a tax position, the taxpayer is not excluded from liability to pay a shortfall penalty under section 141A in relation to the tax position.” Subsection (1) applies for a tax position taken by a taxpayer after 1 April 2003.
“(3) “(4) (2) 220 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 2 s 255 In section 142B, the following is added as subsection (2): 253 Due date for shortfall penalties (1) “(2) Subsection (1)(a) does not apply for a shortfall penalty as­ sessed under section 141A if section 141A(5) determines the time at which liability for the shortfall penalty is treated as arising.” Subsection (1) applies for a tax position taken by a taxpayer after 1 April 2003.
(2) 254 Absolute liability offences After section 143(1), the following is inserted: “(1B) No person who is a resident foreign trustee may be convicted of an offence against subsection (1)(a) for not keeping books and documents required to be kept under section 22 if the per­ son proves that “(a) the person did not know of the requirements of section 22: another resident foreign trustee has been appointed under section 22(2C) as agent of the resident foreign trustees for the purposes of section 22 and the Com­ missioner has been notiﬁed of the appointment.
“(b) “(1C) No person who is a resident foreign trustee may be convicted of an offence against subsection (1)(b) for not disclosing in­ formation required to be disclosed under section 59B if the person proves that “(a) the person did not know of the requirements of section 59B: another resident foreign trustee has been appointed under section 59B(7) as agent of the resident foreign trustees for the purposes of section 59B and the Com­ missioner has been notiﬁed of the appointment.” “(b) 255 Employers and ofﬁcers After section 147(2), the following is inserted: “(2B) A natural person is not liable under this section in relation to an offence by a resident foreign trustee that is a body corporate if section 147B imposes liability for an offence relating to the offence of the resident foreign trustee.” 221 Part 2 s 256 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 256 New section 147B inserted After section 147, the following is inserted: “147B Directors and ofﬁcers of resident foreign trustee A natural person who is resident in New Zealand commits an offence against this Act if “(a) the natural person, in relation to a resident foreign trustee that is not a natural person, is “(i) “(ii) a director of the resident foreign trust: in a position in the resident foreign trustee allow­ ing signiﬁcant inﬂuence over the management or administration of the resident foreign trustee; and the resident foreign trustee commits an offence against
 section 143A (principal offence); and the cause of the principal offence was “(i) “(ii) “(iii) through knowledge attributable to the person.” an act done or carried out by the person: an omission of the person: “(b) “(c) 257 Recovery of excess tax credits allowed In section 165A(1), “Income Tax Act 1994” is replaced by “Income Tax Act 2004”.
(1) 258 Transfer of excess provisional tax if provisional tax paid is more than taxpayer’s provisional tax liability, determined before assessment In section 173P(2), in paragraph (a) of the item provisional tax paid, “section MB 6” is replaced by “section MB 12”.

Subsection (1) applies for income years corresponding to the 2008–09 and subsequent tax years.
(2) 259 Transfer of excess provisional tax if taxpayer estimates or revises estimate of residual income tax, determined before assessment In section 173Q, (a) (1) in subsection (1)(b)(ii), “section MB 2(1)(a) or section MB 2(1)(b)” is replaced by “section MB 4(3)”: in subsection (2), in paragraph (a) of the item provi­ sional tax paid, “section MB 6” is replaced by “section MB 12”: (b) 222 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 2 s 262 (c) in subsection (2), in the item estimated RIT, “section 120K(4)” is replaced by “section 120KE(1)”.
(2) Subsection (1) applies for income years corresponding to the 2008–09 and subsequent tax years.

260 Transfer of excess tax if provisional tax is more than taxpayer’s residual income tax, determined after assessment In section 173R, (a) in subsection (2), in paragraph (a) of the item provi­ sional tax paid, “section MB 6” is replaced by “section MB 12”: in subsection (2), in the item residual income tax, “sec­ tion 120K(4)” is replaced by “section 120KE(1)”.
Subsection (1) applies for income years corresponding to the 2008–09 and subsequent tax years.
(b) (1) (2) (2) 261 Remission in circumstances of qualifying event Section 183ABA(2) is replaced by the following: (1) If this section applies and an affected taxpayer has been “(2) charged with interest under Part 7, the affected taxpayer may request the Commissioner to remit the interest charged.” In section 183ABA(3), (a) in the words before paragraph (a), “penalty and” is omit­ ted: in paragraph (a), “penalty or” is omitted.
(b) In section 183ABA(4), “and section MB 3B of the Income Tax Act 2004” is omitted.

Subsections (1) to (3) apply for income years corresponding to the 200506 and subsequent tax years.

(3) (4) 262 Remission on written application (1) (2) “(a) make a written request to the Commissioner, if the requested In the heading to section 183H, “written” is omitted.
Section 183H(a) is replaced by the following: remission is of “(i) imputation penalty tax imposed by section 140B: 223 Part 2 s 263 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(ii) dividend withholding payment penalty tax imposed by section 140C: “(iii) Maori authority distribution penalty tax imposed by section 140CB: interest under Part 7; and”.
“(iv) a shortfall penalty imposed by section 141AA: “(v) Subsections (1) and (2) apply for requests made after the day on which this Act receives the Royal assent.

(3) 263 Payment out of Crown bank account In section 185(1)(f), “Income Tax Act 2004” is replaced by “Income Tax Act 2004; or” and the following is added: in accordance with section NBB 6 of the Income Tax Act 2004”.
“(g) 264 New sections 185C and 185D inserted After section 185B, the following is inserted: “185C Establishment of Listed PAYE Intermediary Bank Account An account called the Listed PAYE Intermediary Bank Ac­ count is established by this section.

“185D Payments into, and out of, Listed PAYE Intermediary Bank Account “(1) All payments received by the Commissioner from a listed PAYE intermediary and made under subpart NBB of the Income Tax Act 2004 must be paid into the Listed PAYE Intermediary Bank Account.
“(2) Such amount as is necessary to meet the payments required to be made under section NBB 6 of the Income Tax Act 2004 must be paid into the Listed PAYE Intermediary Bank Ac­ count.
“(3) The money standing to the credit of the Listed PAYE Inter­ mediary Bank Account must be applied in making payments under section NBB 6 of this Act.” 224 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 3 s 268 Part 3 Amendments to other Acts Income Tax Act 1994 265 Income Tax Act 1994 Sections 266 to 281 amend the Income Tax Act 1994.
266 Exclusions from term dividends (1) In section CF 3(1)(c), “, or treated under section FCB 2 as being distributed in respect of any share in the company,” is inserted after “liquidation of the company”.

Subsection (1) applies for the 2004­05 income year.
(2) 267 Interpretation In section CG 14(3), (a) in the words before the formula, “, or in the period of 4 income years from the end of the income year in which the person becomes resident in New Zealand,” is in­ serted after “New Zealand”: in the deﬁnition of item a, “day on which the person ﬁrst” is replaced by “last day of the fourth income year following the income year in which the person becomes resident in New Zealand”.
(b) 268 Government grants to businesses (1) In section DC 1(1)(a), “a payment to which section CC 3 or section DL 3 (except section DL 3(6)), applies:” is replaced by the following: to which section CC 3 applies: to which section DL 3, other than DL 3(6), applies: “a payment “(i) “(ii) “(iii) of a grant made under the Agriculture Recovery Programme for the Lower North Island and Eastern Bay of Plenty, to the extent that the grant is made in respect of expenditure incurred by the taxpayer before the grant:”.
Subsection (1) applies for the 2003­04 and subsequent income years.
(2) 225 Part 3 s 269 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 269 Certain expenditure on land used for farming or (1) “(h) (2) agricultural purposes In section DO 3(1), in paragraph (g), “rabbit­proof.” is re­ placed by “rabbit­proof:” and the following is added: the regrassing and fertilising of all types of pasture, if the ex­ penditure is not incurred in the course of a signiﬁcant capital activity.” Subsection (1) applies to expenditure incurred on and after 1 July 2004.
270 Expenditure on land improvements used for farming or (1) (2) agriculture In the proviso to subsection DO 4(4), the words before para­ graph (a) are replaced by “Provided that this subsection shall not apply to any vines or trees”.

Subsection (1) applies for the 2003­04 and subsequent income years.
271 Low value asset write­off (1) In section EG 16(1), the words preceding paragraph (a) are replaced by the following: “(1) Unless subsection (1B) applies, the cost of any low value prop­ erty that, on or before 19 May 2005, is”.
(2) After section EG 16(1), the following is inserted: “(1B) For the 2004­05 income year and for a taxpayer with a late balance date, in paragraph (a) of the deﬁnition of low value property in section OB 1, ‘$200’ must be read as ‘$500’.” Subsections (1) and (2) apply for (a) (b) the 2004­05 income year; and property acquired on or after 19 May 2005.
(3) 272 New subpart FCB inserted (1) After subpart FC, the following is inserted: “Subpart FCB—Emigration of resident companies “FCB 1 Tax effects of company becoming non­resident to reﬂect tax effects of liquidation “(1) This subpart applies to a company (emigrating company) that 226 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 3 s 272 “(a) “(b) is a New Zealand resident; and ceases to be a New Zealand resident.
“(2) The intended effect of this subpart and related provisions of the Act is that, for the purposes of the Act, the effects on an emigrating company and its shareholders when the emigrating company becomes a non­resident reﬂect the effects that would have resulted if “(a) immediately before the emigration time “(i) the emigrating company disposed of its property at market value; and the emigrating company went into liquidation; and “(ii) “(b) “(iii) the amount available for distribution in the li­ quidation were distributed as dividends to the shareholders of the emigrating company; and at the emigration time, the emigrating company were reformed as a foreign company that “(i) had the same ownership and business activities as those of the emigrating company immediately before the emigration time; and acquired at market value the property of the emi­ grating company at the emigration time.
“(ii) “FCB 2 Emigrating company treated as paying distribution to shareholders Immediately before the emigration time for an emigrating company, “(a) the emigrating company is treated as paying, as divi­ dends, a distribution in money to shareholders of the amount that would be available for distribution to the shareholders if, at the emigration time, the emigrating company “(i) “(ii) went into liquidation; and each shareholder in the emigrating company is treated as being paid by the emigrating company, as a divi­ dend, a distribution in money of the amount to which the shareholder would be entitled in such a liquidation.
disposed of its property at market value; and “(b) 227 Part 3 s 273 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “FCB 3 Emigrating company treated as disposing of property and immediately reacquiring property An emigrating company is treated as, immediately before the emigration time for the emigrating company, “(a) disposing of the property of the emigrating company to another person for consideration equal to the market value of the property at the emigration time; and acquiring the property referred to in paragraph (a) from the other person for consideration equal to the amount referred to in paragraph (a).” “(b) (2) (3) Subsection (1) applies for (a) a company that becomes a non­resident on or after 21 March 2005 and does not, (i) before 21 March 2005, satisfy the requirements of sections 351(c), 352, 353, and 354 of the Companies Act 1993 for deregistration under that Act; and before 21 March 2005, apply for incorporation under the laws of another country or territory; and (ii) the 2004­05 income year.
(b) The law that would apply if subsection (1) did not come into force applies for (a) a company that (i) (ii) becomes a non­resident before 21 March 2005: becomes a non­resident on or after 21 March 2005 for which subsection (1) does not apply; and (b) income years corresponding to the 200506 and subse­ quent tax years.
273 Company may attach imputation credit to dividend (1) Section ME 6(2) is replaced by the following: “(2) Notwithstanding subsection (1), a company may retrospect­ ively attach an imputation credit to a dividend arising from a transfer pricing adjustment or under subpart FCB if “(a) the company is an imputation credit account company that “(i) pays a non­cash dividend; and 228 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 3 s 274 “(ii) is subject to an adjustment under section GD 13(3) or (4) in respect of the arrangement giving rise to the dividend: “(b) the company is an emigrating company that “(i) is an imputation credit account company imme­ diately before the emigration time; and is treated under section FCB 2 as paying a distri­ bution to shareholders.” “(ii) (2) In section ME 6(3), “subsection (2)” is replaced by “subsection (2)(a)”.
(3) After section ME 6(3), the following is inserted: “(3B) The amount of imputation credit attached retrospectively under subsection (2)(b) must not exceed the credit balance, if any, in the company’s imputation credit account immediately before the emigration time.” In section ME 6(5)(a), “subsection (2)” is replaced by “sub­ section (2)(a)”.
(4) (5) After section ME 6(5), the following is added: “(6) If an amount of tax paid by an emigrating company is at­ tributable to gross income derived before the emigration time by the emigrating company or to the application of subpart FCB to the emigrating company, the amount of tax is treated for the purposes of this subpart as being paid immediately be­ fore the emigration time if “(a) the company determines under subsection (2)(b) to at­ tach an imputation credit to a dividend; and the imputation credits that the company attaches are not less than the amount of tax; and the company notiﬁes the Commissioner when providing the company dividend statement required by subsection (4)(b).” “(b) “(c) (6) Subsections (1) to (5) apply for the 2004­05 imputation year.
274 Credits and debits arising to policyholder credit account of company Section ME 18(1)(a)(i) is replaced by the following: under section ME 14 by the nominated company for an imput­ ation group to which the company belongs, if the company is “(i) 229 Part 3 s 275 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 a member of an imputation group and not a member of a con­ solidated group; or”.
275 Company may elect to maintain dividend withholding payment account (1) After section MG 2(5), the following is added: “(6) If an emigrating company is a dividend withholding payment account company immediately before the emigration time for the emigrating company, the emigrating company ceases to be a dividend withholding payment account company at the emigration time.
“(7) A company that ceases to be a dividend withholding payment account company as a result of subsection (6) must “(a) furnish, within the time limit in section 71 of the Tax Administration Act 1994, the annual dividend with­ holding payment account return required from the company as a dividend withholding payment account company for the imputation year in which the company becomes a non­resident; and “(b) pay any further dividend withholding payment that may be payable under section MG 9 by the company as a dividend withholding payment account company for the imputation year.” (2) Subsection (1) applies for (a) a company that becomes a non­resident on or after 1 April 1997; and the 1997­98 and subsequent imputation years.
(b) 276 Company may elect to be conduit tax relief company and maintain conduit tax relief account (1) After section MI 2(7), the following is added: “(8) A company that ceases to be a dividend withholding payment account company as a result of section MG 2(6) ceases to be a conduit tax relief company; and “(a) “(b) must furnish, within the time limit in section 69 of the Tax Administration Act 1994, the annual imputation re­ turn required from the company for the imputation year in which the company becomes a non­resident; and 230 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 3 s 278 “(c) must pay any dividend withholding payment that may be payable under section MI 10(3) by the company as a dividend withholding payment account company for the imputation year.” (2) Subsection (1) applies for (a) a company that becomes a non­resident on or after 1 April 1997; and the 1997­98 and subsequent imputation years.
(b) 277 Further dividend withholding payment payable in respect (1) (2) (3) (4) of conduit tax relief account debits In the heading to section MI 10, “Further dividend” is re­ placed by “Dividend”.

In section MI 10(1), “a further amount” is replaced by “an amount”.

In section MI 10(2), “further amount” is replaced by “amount”.

Subsections (1) to (3) apply for the 1997­98 and subsequent imputation years.
278 Deduction of resident withholding tax (1) “ c In section NF 2(1)(b), item c is replaced by the following: is the total of the following amounts: “(i) “(ii) if the dividend is paid in relation to shares issued by an imputation credit account company, the amount of any imputation credit attached to the dividend: if the dividend is paid in relation to shares issued by a company not resident in New Zealand, the amount of foreign withholding tax paid or payable in respect of the amount of the dividend: “(iii) if the dividend is paid in relation to shares issued by a company resident in New Zealand, the amount of any dividend withholding payment credit attached to the dividend; and”.
(2) “ c In section NF 2(1)(c), item c is replaced by the following: is the total of the following amounts: 231 Part 3 s 279 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(i) “(ii) if the dividend is paid in relation to shares issued by an imputation credit account company, the amount of any imputation credit attached to the dividend: if the dividend is paid in relation to shares issued by a company not resident in New Zealand, the amount of foreign withholding tax paid or payable in respect of the amount of the dividend: “(iii) if the dividend is paid in relation to shares issued by a company resident in New Zealand, the amount of any dividend withholding payment credit attached to the dividend; and”.
(3) “ c In section NF 2(1)(d), item c is replaced by the following: is the total of the following amounts: “(i) if the dividend is paid in relation to shares issued by an imputation credit account company, the amount of any imputation credit attached to the dividend: if the dividend is paid in relation to shares issued by a company not resident in New Zealand, the amount of foreign withholding tax paid or payable in respect of the amount of the dividend: “(ii) “(iii) if the dividend is paid in relation to shares issued by a company resident in New Zealand, the amount of any dividend withholding payment credit attached to the dividend; and”.
279 Deﬁnitions (1) (2) This section amends section OB 1.

In the deﬁnition of available subscribed capital, (a) the formula is replaced by the following: after the deﬁnition of item c, the following is added: a + b c + d in the case of a company that has been an emigrat­ ing company, the amount of the company’s distribution under section FCB 2 that is a dividend: in any other case, nil:”.
“(ii) The deﬁnition of beneﬁciary income is replaced by the fol­ lowing: (b) is “(i) “ d (3) 232 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 3 s 279 “beneﬁciary income, for an income year and for a person who is a beneﬁciary of a trust that is not a unit trust, means an amount that “(a) is derived by a trustee of the trust in the accounting year of the trustee that corresponds to the income year, to the extent that the amount “(i) is income of the trustee and, in the accounting year, vests absolutely in interest in the beneﬁciary: is a foreign­sourced amount that would have been in­ come of the trustee had a settlor of the trust been resi­ dent in New Zealand at any time in the accounting year and, in the accounting year, vests absolutely in interest in the beneﬁciary: “(ii) “(iv) “(iii) is income of the trustee and, before the beneﬁciary in­ come deadline for the income year, is paid or applied by the trustee to the beneﬁciary or for the beneﬁt of the beneﬁciary: is a foreign­sourced amount that would have been in­ come of the trustee had a settlor of the trust been resi­ dent in New Zealand at any time in the accounting year and, before the beneﬁciary income deadline for the in­ come year, is paid or applied by the trustee to the bene­ ﬁciary or for the beneﬁt of the beneﬁciary; and is not income derived by a trustee of the trust in an accounting year of the trustee in which the trust is a superannuation fund; and is not
 income of a trustee of the trust to which section CE 1(1)(c) applies “(b) “(c) “beneﬁciary income deadline, for an income year and for a person who is a beneﬁciary of a trust that is not a unit trust, means the later of the following “(a) the date that is 6 months after the end of the accounting year of the trustee that corresponds to the income year: the date that is 6 months after the end of the income year”.
“(b) (4) After the deﬁnition of emergency call, the following is in­ serted: “emigrating company is deﬁned in section FCB 1(1) “emigration time, for an emigrating company, is the time at which the emigrating company becomes a non­resident”.
233 Part 3 s 280 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 (5) “(d) (6) (7) In the deﬁnition of estimated useful life, after paragraph (c), the following is added: for a type of pasture, means the period of time over which the pasture might reasonably be expected to be useful to a person in deriving income or carrying on a farming or agricultural business on land in New Zealand”.
In the deﬁnition of interest in an employment­related foreign superannuation scheme, in the words before paragraph (a), “, or in the period of 4 income years from the end of the income year in which the person becomes resident in New Zealand,” is inserted after “New Zealand”.

In the deﬁnition of low value property, “$200” is replaced by “$500”.

(8) After the deﬁnition of “owner of land”, the following is in­ serted: “ownership interests is deﬁned in section OD 5AA(6) for the pur­ poses of that section”.
(9) After the deﬁnition of sick, accident, or death beneﬁt fund, the following is inserted: “signiﬁcant capital activity, in section DO 3 and schedule 7, and in relation to a farming or agricultural business on land in New Zealand, “(a) means an activity that enables a change in the nature or char­ acter of a farming activity from that undertaken on the land immediately before the change; and excludes an activity that enables a change in the intensity of a farming practice employed in a farming activity on the land”.
(10) Subsection (3) applies for the 1995­96 and subsequent income “(b) years.

(11) Subsections (5) and (9) apply to expenditure incurred on and after 1 July 2004.

(12) Subsections (2) and (4) apply for the 2004­05 income year.

(13) Subsection (7) applies for an asset acquired after 19 May 2005.

(14) Subsection (8) applies for the 1998­99 and subsequent income years.
280 New section OD 5AA inserted (1) After section OD 5, the following is inserted: 234 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 3 s 280 “OD 5AA Modiﬁcations to voting and market value interests for application of continuity provisions to reverse takeover “(1) This section modiﬁes the application of sections OD 3 to OD 5 for the purposes of the continuity provisions.
“(2) Subsections (3) and (4) apply if “(a) “(b) “(c) “(d) “(e) “(f) a limited attribution company (initial parent) is treated under section OD 5(6)(b) as holding ownership interests in another company (subsidiary); and there is a change in the ownership of the initial parent, or the initial parent ceases to exist as the result of an amalgamation, at a time (changeover); and immediately before the changeover, the initial parent is treated under section OD 5(6)(b) as holding all owner­ ship interests in the subsidiary; and immediately after the changeover, another limited attri­ bution company (new parent) is treated under section OD 5(6)(b) as holding all ownership interests in the sub­ sidiary; and immediately after the changeover, all or part of the own­ ership interests in the new parent are treated under sec­ tion OD 5(6)(b) as being held by the persons (initial owners) who hold ownership interests in the initial par­ ent immediately before the changeover; and each initial owner holds “(i) immediately before the changeover, a proportion of the total ownership interests in the initial par­ ent at that time; and immediately after the changeover, a proportion of the total ownership interests in the new parent that the initial owners hold at that time as a result of having held the total ownership interests in the initial parent; and “(ii) “(iii) a proportion referred to in subparagraph (ii) that is equal to the proportion referred to in subpara­ graph (i).
“(3) If the initial owners hold a total of 49% or more of the ownership interests in the new parent immediately after the changeover, the new parent is treated for the purposes of Part I as 235 Part 3 s 281 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(a) holding, immediately after the changeover, the owner­ ship interests in the subsidiary that the initial parent held immediately before the changeover; and “(b) having held the ownership interests for the period for which the ownership interests were treated as being held by the initial parent.
If the initial owners hold a total of 66% or more of the ownership interests in the new parent immediately after the changeover, the new parent is treated for the purposes of subparts ME and MG as “(a) holding, immediately after the changeover, the owner­ ship interests in the subsidiary that the initial parent held immediately before the changeover; and “(b) having held the ownership interests for the period for which the ownership interests were held by the initial parent.
If the requirements of a continuity provision are not satisﬁed in relation to a company and would be satisﬁed but for the application of this section, the requirements of the continuity provision are treated as being satisﬁed in relation to the com­ pany.
In this section, ownership interests for a company means “(a) voting interests in the company as determined under section OD 3(3)(d), if paragraph (b) does not apply: “(b) market value interests in the company as determined under section OD 4(3)(d), if a market value circum­ stance exists for the company.” Subsection (1) applies for a person for a change of ownership of a company occurring in the 1998­99 or a subsequent income year if, before the date on which this Act receives the Royal assent, the person ﬁles a return of income on the basis that the requirements of a continuity provision are satisﬁed in relation to the company and the change of ownership.
“(4) “(5) “(6) (2) 281 Schedule 7Expenditure on Land and Aquacultural Improvements In schedule 7, part A, (a) in clause 4, “The preparation” is replaced by “Unless clause 4B applies, the preparation” ; and 236 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 3 s 283 (b) after clause 4, the following is inserted: 4B 45 regrassing and fertilising all types of pasture in the course of a signiﬁcant capital activity that relates to a type of pasture with an estimated useful life of more than 1 year Goods and Services Tax Act 1985 282 Goods and Services Tax Act 1985 Sections 283 to 297 amend the Goods and Services Tax Act 1985.
Interpretation This section amends section 2.
Before the deﬁnition of challenge, the following is inserted: 283 (1) (2) “associated supply means “(a) a supply for which the supplier and recipient are associated persons: a supply of a right, under an equity security or participatory security, to receive for no consideration, or consideration at other than the open market value, a supply of goods and ser­ vices that is “(i) “(ii) not a supply relating to the control of the issuer of the not an exempt supply; and “(b) equity security or participatory security”.
(3) After the deﬁnition of associated supply, as inserted by sub­ section (2), the following is inserted: “balance date is deﬁned in section 15AB for the purposes of that section”.

(4) The deﬁnition of balance date, as inserted by subsection (3), is replaced by the following: 237 Part 3 s 284 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “balance date is deﬁned in section 15B for the purposes of that sec­ tion”.
(5) After the deﬁnition of hospital, the following is inserted: “income year means an income year as deﬁned in section OB 1 of the Income Tax Act 2004”.

(6) After the deﬁnition of person, the following is inserted: “provisional tax means provisional tax as deﬁned in section OB 1 of the Income Tax Act 2004.”.

(7) After the deﬁnition of return, the following is inserted: “return of income means a return of income required under section 33 of the Tax Administration Act 1994”.
(8) After the deﬁnition of tax payable, the following is inserted: “tax year means a tax year as deﬁned in section OB 1 of the Income Tax Act 2004”.

(9) In the deﬁnition of taxable period, “section 15 or section 15A” is replaced by “sections 15 to 15E”.

(10) Subsection (3) applies for taxable periods of a registered per­ son that begin on or after the beginning of the person’s 200708 income year.
(11) Subsections (4) to (9) apply for a registered person for (a) (b) a taxable period that begins on or after the beginning of the registered person’s 200809 income year, if the reg­ istered person derives assessable income in that income year: a taxable period that begins on or after 1 April 2008, if paragraph (a) does not apply.
284 Meaning of term ﬁnancial services (1) In section 3(2), the deﬁnition of credit contract is replaced by the following: “credit contract means a credit contract as deﬁned in section 3 of the Credit Contracts Act 1981 immediately before the repeal of that Act”.

(2) (3) After section 3(3), the following is inserted: “(3B) Despite subsection (2), a person who is a party to an arrange­ ment that is a credit contract but is not a credit contract under Section 3(3)(b) is omitted.
238 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 3 s 286 section 7 of the Credit Contracts and Consumer Finance Act 2003 may elect that the arrangement be treated under this sec­ tion as not being a credit contract in relation to the person.
“(3C) Despite subsection (2), a person who is a party to an arrange­ ment that is not a credit contract but is a credit contract under section 7 of the Credit Contracts and Consumer Finance Act 2003 may elect that the arrangement be treated under this sec­ tion as being a credit contract in relation to the person.” Subsection (2) applies for supplies of ﬁnancial services that are made on or after the date on which this Act receives the Royal assent.
(4) 285 Meaning of term supply (1) “(a) Section 5(11I)(a) is replaced by the following: an adhesive label, or a mark or design, that is “(i) “(ii) “(iii) indicates pre­payment of the fee chargeable for the car­ issued or sold by a person to another person; and afﬁxed to, impressed on, or printed on stationery; and riage of a letter, parcel, or other article; and “(iv) not intended to distinguish the article to which it relates from similar articles carried by the same person:”.
(2) After section 5(14), the following is inserted: “(14B) If part of a supply of an equity security or participatory se­ curity is the supply of a right to receive supplies of goods and services that are not exempt supplies, the supply of the right is treated as being a supply of goods and services made for a consideration.” Subsection (1) applies for supplies that are made on or after the date on which this Act receives the Royal assent.
Subsection (2) applies for supplies of ﬁnancial services that are made on or after the date on which this Act receives the Royal assent.

(4) (3) 286 Time of supply In section 9(2)(a), the words before subparagraph (i) are re­ placed by the following: if the supply is an associated supply,”.
“(a) 239 Part 3 s 287 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 287 Value of supply of goods and services (1) In section 10(3), in the words before paragraph (a), “(3AB),” is inserted after “subsections (3A),”.

Section 10(3)(b) is replaced by the following: (2) “(b) the supply is an associated supply; and”.
(3) After section l0(3A), the following is inserted: “(3AB) Subsection (3) does not apply to a supply of goods and ser­ vices if the recipient “(a) “(b) acquires the supply for no consideration; and from the time of the supply, applies the goods and ser­ vices for the purpose of making taxable supplies.” In section 10(5A), the deﬁnition of credit contract is replaced by the following: (4) “credit contract has the same meaning as in section 3 of the Credit Contracts Act 1981 immediately before the repeal of that Act”.
(5) After section 10(5A), the following is inserted: “(5B) Despite subsection (5A), a person who is a party to an arrange­ ment that is a credit contract but is not a credit contract under section 7 of the Credit Contracts and Consumer Finance Act 2003 may elect that the arrangement be treated under this sec­ tion as not being a credit contract in relation to the person.
“(5C) Despite subsection (5A), a person who is a party to an arrange­ ment that is not a credit contract but is a credit contract under section 7 of the Credit Contracts and Consumer Finance Act 2003 may elect that the arrangement be treated under this sec­ tion as being a credit contract in relation to the person.” Subsections (1) and (3) apply for supplies made on or after 1 October 1986.
(6) 288 Zero­rating of goods (1) “(j) Section 11(1)(j) is replaced by the following: the goods are not situated in New Zealand at the time of supply and “(i) the goods are not situated in New Zealand at the time of delivery to the recipient: the recipient pays tax under section 12 on the import­ ation of the goods into New Zealand; or”.
“(ii) 240 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 3 s 290 (2) Subsection (1) applies for supplies made on or after 19 May 2005.

289 Exempt supplies (1) In section 14(1)(a), (a) “not being” is replaced by “not being a supply referred to in subsection (1B):”: subparagraphs (i) and (ii) are omitted.
(2) After section 14(1), the following is inserted: “(1B) The following supplies are excluded from the exemption (b) under subsection (1): “(a) “(b) “(c) a supply of ﬁnancial services that, in the absence of subsection (1)(a), would be charged with tax at the rate of zero per cent under section 11A: a supply described in paragraph (b) of the associated supply: a supply of goods and services which (although being part of a supply of goods and services which, but for this paragraph, would be an exempt supply under subsection (1)(a)) is not in itself, as between the supplier of that ﬁrst­mentioned supply and the recipient, a supply of ﬁnancial services in respect of which subsection (1)(a) applies.” (3) Subsection (2) applies in relation to the insertion of section 14(1B)(b) for supplies of ﬁnancial services that are made on or after the date on which this Act receives the Royal assent.
290 New section 15AB inserted (1) After section 15A, the following is inserted: “15AB Transitional provision: alignment of taxable periods with balance dates “(1) This section applies to a registered person who has a provi­ sional tax liability in the person’s 200708 income year.

“(2) The registered person may have a taxable period that is a 1­month period if the person applies to the Commissioner for such a period.
“(3) The registered person must have a taxable period that is a 1­month period if the person’s total taxable supplies in a 241 Part 3 s 290 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(4) 12­month period are more, or are likely to be more, than $24,000,000.

If neither of subsections (2) and (3) applies to the registered person, the registered person must have a taxable period that is a 2­month period or a 6­month period.
“(5) The registered person must pay a GST liability in a set of in­ stalments that is aligned with the registered person’s balance date under section 33 or 38 of the Tax Administration Act 1994, reﬂecting the applicable payment dates in schedule 13, part A of the Income Tax Act 2004.
“(6) For the purposes of subsection (5), a registered person whose “(7) “(b) balance date changes during an income year must, “(a) before the new balance date, use the payment frequency applying at the start of the income year: after the new balance date, use the cycle of taxable periods starting on the ﬁrst day of the new income year.
If the registered person’s GST cycle is not aligned with the per­ son’s balance date and the person has a provisional tax liability for a tax year, the Commissioner must adjust the person’s tax­ able periods by truncating the last taxable period before the balance date so that the taxable period and income year end on the same date.
“(8) The Commissioner may make the adjustment in subsection (7) if “(a) “(9) the registered person’s income tax liability indicates that a provisional tax liability is likely to arise: the registered person asks for the adjustment.
“(b) If there is a change in the basis on which the registered person’s taxable period is set and the change could result in the per­ son’s taxable period not being aligned with the person’s bal­ ance date, the Commissioner must adjust the effective date of the change in taxable period to produce alignment.
“(10) In this section, balance date for a registered person means, “(a) if neither of paragraphs (b) and (c) applies, the person’s annual balance date for their accounts for the income year corresponding to the tax year for which the person must provide a return of income under the Tax Admin­ istration Act 1994: 242 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 3 s 291 “(c) “(b) if the person has an income year that coincides with the tax year or is not required to provide a return of income for the tax year, 31 March: if the person is a non­resident company that does not have a ﬁxed establishment in New Zealand, 31 March.” Subsection (1) applies for taxable periods of a registered per­ son that begin on or after the beginning of the person’s 200708 income year.
(2) Sections 15 to 15AB are replaced by the following sections: 291 Sections 15 to 15AB replaced (1) “15 Taxable periods “(1) A registered person’s taxable period must be 1 of the follow­ ing: “(a) “(b) “(c) a 6­month period, if subsection (2) applies: a 2­month period: a 1­month period, if subsection (3) or (4) applies.
“(2) A person’s taxable period may be a 6­month period if “(a) “(b) the person’s taxable supplies in a 12­month period are no more, and are not likely to be more, than $250,000; and the person applies to the Commissioner to pay on this basis.

“(3) A person’s taxable period may be a 1­month period if the per­ son applies to the Commissioner to pay on that basis.
“(4) A person’s taxable period must be a 1­month period if the per­ son’s taxable supplies in a 12­month period are more, or are likely to be more, than $24,000,000.
“(5) For the purposes of subsections (2) and (4), “(a) “(b) the 12­month period is a period that starts on the ﬁrst day of a month and ends on the last day of a month: the amount of a person’s taxable supplies does not in­ clude the amount of taxable supplies arising as part of the ending, including a premature ending, of a “(i) taxable activity carried on by the person: a substantial and permanent reduction in the size or scale of a taxable activity carried on by the person: “(ii) 243 Part 3 s 291 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(c) “(iii) the replacement of plant or a capital asset used in a taxable activity carried on by the person: the Governor­General, from time to time, may declare by Order in Council another amount as the limit apply­ ing to the value of a person’s taxable supplies.
“15B Taxable periods aligned with balance dates “(1) Unless section 15(3) or (4) applies, a person with a provisional tax liability must have a taxable period that is either a 2­month period or a 6­month period.

“(2) A person must have a taxable period that is aligned with the person’s balance date under section 33 or 38 of the Tax Ad­ ministration Act 1994, reﬂecting the applicable payment dates in schedule 13, part A of the Income Tax Act 2004.
“(3) For the purposes of subsection (2), a person whose balance “(b) date changes during an income year must, “(a) before the new balance date, use the payment frequency applying at the start of the income year: after the new balance date, use the cycle of taxable periods starting on the ﬁrst day of the new income year.
If a person’s GST cycle is not aligned with the person’s balance date and the person has a provisional tax liability for a tax year, the Commissioner must adjust the person’s taxable periods by truncating the last taxable period before the balance date so that the taxable period and income year end on the same date.
“(5) The Commissioner may make the adjustment in subsection (4) “(4) if “(a) the person’s income tax liability indicates that a provi­ sional tax liability is likely to arise: the person asks for the adjustment.
“(b) In this section, balance date for a registered person means, “(a) if neither of paragraphs (b) and (c) applies, the person’s annual balance date for their accounts for the income year corresponding to the tax year for which the person must provide a return of income under the Tax Admin­ istration Act 1994: “(6) 244 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 3 s 291 “(b) “(c) if the person has an income year that coincides with the tax year or is not required to provide a return of income for the tax year, 31 March: if the person is a non­resident company that does not have a ﬁxed establishment in New Zealand, 31 March.
“15C Changes in taxable periods “(1) A person to whom section 15(1)(b) or (c) applies may apply to the Commissioner, in a way acceptable to the Commissioner, to change the person’s taxable period to a 6­month period.
“(2) The factors that the Commissioner must consider in directing a change of taxable period are “(a) the person’s history in ﬁling returns and paying tax li­ abilities: the person’s ﬁnancial reporting practices: the nature and volume of the person’s taxable supplies: the previous use of a 6­month cycle.

“(b) “(c) “(d) “(3) A person to whom section 15(1)(a) applies may apply to the Commissioner, in a way acceptable to the Commissioner, to change the person’s taxable period to a 2­month period.
“(4) A person whose taxable period is based on a 6­month or 2­month cycle is treated as having changed to a 1­month cycle if “(a) the threshold in section 15(4) applies at the end of a taxable period to the person’s taxable supplies; and the person has not notiﬁed the Commissioner of a change of status under section 53(1)(ca) before the end of the next taxable period.
“(b) “(5) A return provided after a change in taxable period must not include amounts for a period for which a return has already been provided.
“15D When change in taxable period takes effect “(1) This section applies if a registered person, who qualiﬁes under section 15, “(a) applies under section 15B(5)(b), or 15C(1) or (2) to change the basis on which the person’s taxable period is set; or 245 Part 3 s 292 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 “(b) is required because of section 39B of the Tax Adminis­ tration Act 1994 to change the basis on which the per­ son’s taxable period is set.
“(2) A change in taxable period takes effect at the end of the taxable period in which the person applies or is required to change the basis on which the person’s taxable period is set.

“(3) Despite subsection (2), for a person to whom section 15B ap­ plies, the Commissioner must adjust the effective date of the change in taxable period if, as a result of the change, the per­ son’s taxable period is not aligned with the person’s balance date.
“(4) Sections MB 26 and MB 27 of the Income Tax Act 2004 over­ ride this section.

“15E Meaning of end of taxable period “(1) A taxable period ends on the last day of a month.

“(2) Despite subsection (1), a registered person may apply to the Commissioner to have a taxable period ending on a day that is not more than 7 days before or after the last day of a month.
“(3) Subsection (4) applies if 1 or more of the following events occurs in relation to a registered person: “(a) “(b) the natural person dies or is made bankrupt: the company goes into liquidation or receivership, or ceases to exist on amalgamation (as deﬁned in section OB 1 of the Income Tax Act 2004).
“(4) Despite subsection (1), if an event referred to in subsection (3) occurs, the date of the event is treated as the end of the person’s taxable period.” Subsection (1) applies for a registered person for (a) (2) a taxable period that begins on or after the beginning of the registered person’s income year corresponding to the 2008–09 tax year, if the registered person derives assessable income in that income year: a taxable period that begins on or after 1 April 2008, if paragraph (a) does not apply.
(b) 292 Section 16 replaced (1) Section 16 is replaced by the following: 246 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 3 s 294 “16 Taxable period returns “(1) A registered person must provide a return setting out the amount of tax payable by them for a taxable period, calcu­ lated under section 20.
“(2) A return required by subsection (1) must be provided on or before “(a) “(b) the 28th day of the month following the end of the tax­ able period, if paragraph (b) does not apply; or the 15th day of January, if the month following the end of the taxable period is December.

“(3) If the circumstances of a non­proﬁt body or a particular case mean a variation is required in the date on which a return must be provided, the Commissioner may vary the date.
“(4) A person who ceases to be a registered person must provide a ﬁnal return for the part of the last taxable period for which they were registered.

“(5) A return required by subsection (4) must be provided on or before “(a) “(b) the 28th day of the month following the end of the tax­ able period, if paragraph (b) does not apply; or the 15th day of January, if the month following the end of the taxable period is December.
“(6) A return must contain a notice of the assessment that must be made under section 92B of the Tax Administration Act 1994.” Subsection (1) applies for taxable periods ending on or after 31 March 2007.

(2) 293 Special returns (1) In section 17(1), “the last working day” is replaced by “the 28th day”.

Subsection (1) applies for taxable periods ending on or after 31 March 2007.

(2) 294 Registered person to notify change of status In section 53(1)(c), “section 15(3)” is replaced by “section 15(2)”.
247 Part 3 s 295 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 295 Group of companies In section 55(7)(b), “section 15 or section 15A” is replaced by “sections 15 to 15E”.

296 Branches and divisions (1) (2) In section 56(6), “sections 15, 15A” is replaced by “sections 15 to 15E” in both places where it appears.
Subsection (1) applies for a registered person for (a) a taxable period that begins on or after the beginning of the registered person’s income year corresponding to the 200809 tax year, if the registered person derives assessable income in that income year: a taxable period that begins on or after 1 April 2008, if paragraph (a) does not apply.
(b) 297 Returns to be furnished in 2 parts for taxable period in which change in rate of tax occurs In section 78A, (a) in subsection (4), “section 16(2)” is replaced by “section 16(4)” ; and in subsection (5), “section 15(7)” is replaced by “section 15E”.

(b) Subsection (1)(a) applies for taxable periods ending on or after 31 March 2007.
Subsection (1)(b) applies for a registered person for (a) a taxable period that begins on or after the beginning of the registered person’s income year corresponding to the 200809 tax year, if the registered person derives assessable income in that income year: a taxable period that begins on or after 1 April 2008, if paragraph (a) does not apply.
(b) Other Acts and Regulations Interpretation In section 245R(1) of the Income Tax Act 1976, in the def­ inition of interest in an employment­related foreign super­ annuation scheme, in the words before paragraph (a), “, or in the period of 4 income years from the end of the income year (1) (2) (3) 298 (1) 248 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 3 s 300 (2) (3) in which the person became resident in New Zealand,” is in­ serted after “New Zealand”.
In section 245R(4) of the Income Tax Act 1976, (a) in the words before the formula, “, or in the period of 4 income years from the end of the income year in which the person becomes resident in New Zealand,” is in­ serted after “New Zealand”: in the deﬁnition of item a, “day on which the person ﬁrst” is replaced by “last day of the fourth income year following the income year in which the person becomes resident in New Zealand”.
(b) Subsections (1) and (2) apply for income derived in (a) the 199192 income year for taxpayers with a corres­ ponding non­standard accounting year ending after 2 July 1992: the 199293 and subsequent income years.
(b) 299 New section 74D inserted in Estate and Gift Duties Act 1968 (1) After section 74C of the Estate and Gift Duties Act 1968, the following is inserted: “74D Exemption for gifts in respect of distribution by co­operative company or company owned by co­operative company No gift shall constitute a dutiable gift if the donor is a co­op­ erative company or a company owned by a co­operative com­ pany, the donee is a member of the co­operative company, and the gift is an amount of a distribution that is excluded from being a dividend by section CD 24B of the Income Tax Act 2004.” Subsection (1) applies for gifts made after 1 October 2005.
Interim repayments to be paid in same manner as provisional tax In section 28(3) of the Student Loan Scheme Act 1992, (a) in paragraph (a), “subsections (1)(a) and (2) of sec­ tion MB 2” is replaced by “sections MB 2(3) and MB 4(3)(a)”: (2) 300 (1) 249 Part 3 s 301 (b) Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 in paragraph (b), (i) in the words before subparagraph (i), “sec­ tion MB 2(1)(b)” is replaced by “section MB 4(3)(b)”: in subparagraph (ii), “date.” is replaced by “date; and”: (ii) “(c) “(d) “(e) “(f) (2) 301 (1) after paragraph (b), the following is added: (c) section MB 7 of the Income Tax Act 2004 (under which a pro­ visional taxpayer may use the GST ratio method to determine an amount of provisional tax payable) shall not apply to any amount of interim payments; and section MB 8(3)(a)(i) and (ii) and (b)(i) of the Income Tax Act 2004 (which provide for exceptions to the requirements of section MB 8(2) of that Act) shall not apply to any amount of interim payments; and section MB 8(4) of the Income Tax Act 2004 (which provides for payments of provisional tax by a provisional taxpayer who pays GST on a 6­monthly basis) shall not apply to any amount of interim payments; and sections MB 10, MB 15, MB 17, MB 18, MB 23, and MB 32 of the Income Tax Act 2004 (which provide for the use by a provisional taxpayer of the GST ratio method) shall not apply to any amount of interim payments.” Subsection (1) applies for student loan
 repayment obligations relating to the 2008–09 and subsequent tax years.
Interpretation In section 3 of the Gaming Duties Act 1971, the deﬁnition of winning dividend is replaced by the following: “winning dividend “(a) means the amount paid to a person for placing a winning bet; and includes an amount paid to a person from an accumulated divi­ dend prize pool, but only when that prize pool is paid out.” Subsection (1) applies for all racing betting and sports betting on events for which results have been declared on and after 1 August 2006, treating an event held over 2 or more days as having been held in the month in which the last day occurs.
“(b) (2) 250 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Part 3 s 303 302 Totalisator duty (1) Section 4 of the Gaming Duties Act 1971 is replaced by the following: Totalisator duty “4 “(1) A totalisator duty is payable to the Crown at the rate of 4% of betting proﬁts.
“(2) Betting proﬁts for totalisator racing betting, sports betting, and ﬁxed­odds racing betting is calculated in accordance with the formula amounts refunds winning dividends where amounts is the total of all amounts received by the Board or its agents (including the net return from bets laid off) for totalisator racing betting: (a) sports betting: (b) (c) ﬁxed­odds racing betting refunds is the amount of refunds paid winning dividends is the amount of all winning dividends paid out in respect of amounts described above.
Subsection (1) applies for all racing betting and sports betting on events for which results have been declared on and after 1 August 2006, treating an event held over 2 or more days as having been held in the month in which the last day occurs.

Interpretation In regulation 2(1) of the Income Tax (Withholding Payments) Regulations 1979, in the deﬁnition of non­resident contrac­ tor, “(within the meaning of section OB 1 of the Act)” is omit­ ted.
Subsection (1) applies for income years corresponding to the 200506 and subsequent tax years.
(2) 303 (1) (2) 251 Schedule 1 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 Schedule 1 New schedule 11B inserted in Income Tax Act 2004 Schedule 11B Banded rates of depreciation ss EE 25B, EE 25C s 203 Other assets (excluding ﬁxed life intangible property, excluded depreciable property, and buildings) Buildings Column 1 Column 2 Column 3 Column 4 D.V rate Straight­line rate D.V.
rate Straight­line rate (%) 100 67 40 30 21 17.5 13.5 10.5 8.5 7 6 4 (%) (%) 0 0 0 0 0 0 0 13.5 11 8.5 6.5 4.5 0 0 0 0 0 0 0 8 6.5 5 4 3 (%) 100 67 50 40 30 25 20 16 13 10 8 6 252 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Schedule 2 Schedule 11B—continued 4 2 3 1.5 3 1.3 2 1 Schedule 2 New schedule 13, part A inserted in Income Tax Act 2004 s 204(1) “A “Dates for payment of provisional tax and terminal tax Month of balance date October Novem­ ber Decem­ ber January February March April A B C D E F G H 28 Jan 28 Feb 28 Mar 28 Apr 28 May 28 Jun 28 Jul 28 Mar 28 Apr 28 May 28 Jun 28 Jul 28 Aug 28 Sep 28 May 28 Jul 28 Jun 28 Jul 28 Aug 28 Sep 28 Aug 28 Oct 28 Sep 28 Oct 28 Nov 28 Nov 15 Jan 28 Jan 28 Sep 28 Oct 28 Nov 15 Jan 28 Jan 28 Feb 28 Mar 28 Nov 15 Jan 28 Jan 28 Feb 28 Mar 28 Apr 28 May Sep Nov Oct Dec Nov Jan Dec Feb Jan Mar Feb Apr Feb Apr 253 Schedule 3 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 A—continued May June July August Septem­ ber 28 Aug 28 Sep 28 Oct 28 Nov 15 Jan 28 Oct 28 Nov 15 Jan 28 Jan 28 Feb 15 Jan 28 Jan 28 Feb 28 Mar 28 Apr 28 May 28 Feb 28 Apr 28 Jun 28 Mar 28 May 28 Jul 28 Apr 28 Jun 28 Aug 28 Jun 28 Jul 28 Aug 28 Sep 28 Oct Feb Apr Feb Apr Feb Apr Feb Apr Feb Apr “For the purposes of this schedule, balance date, in relation to provi­ sional tax or terminal tax payable by a person for a tax year to which an income year
 corresponds, means “(a) if neither of paragraphs (b) and (c) apply, the person’s annual balance date for their accounts for the income year: if the person has an income year that coincides with the tax year or is not required to provide a return of income for the tax year, 31 March: if the person is a non­resident company that does not have a ﬁxed establishment in New Zealand, 31 March.” Schedule 3 New schedule 13, part B inserted in Income Tax Act 2004 s 204(2) “B “Months for payment under sections MB 8 and
 MB 21 to MB 24 “(b) “(c) 254 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Schedule 3 B—continued Monthly and 2­monthly non­ratio and non­GST provisional taxpayers New instalment months Transi­ tional year length 0­4 mths 1 month following ﬁnal month 5­8 mths 9­12 mths 13­16 mths 17­20 mths 21­24 mths 5th month, month following ﬁnal month 5th, 9th months, month following ﬁnal month 5th, 9th, 13th months, month following ﬁnal month 5th, 9th, 13th, 17th months, month following ﬁnal month 5th, 9th, 13th, 17th, 21st months, month following ﬁnal month 6­monthly non­ratio provisional taxpayers New instalment months Transi­ tional year length 0­6 mths 1 month following ﬁnal month 7­12 mths 13­18 mths 19­24 mths 2 3 4 7th month, month following ﬁnal month 7th, 13th months, month following ﬁnal month 7th, 13th, 19th months, month following ﬁnal month 255 Schedule 3 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Reprinted as at 19 December 2007 B—continued GST ratio provisional taxpayers New instalment months Transi­ tional year length 0­2 mths 1 month following ﬁnal month 3­4 mths 5­6 mths 7­ mths 9­10 mths 11­12 mths 13­14 mths 15­16 mths 17­18 mths 19­20 mths 21­22 mths 23­24 mths 3rd, month, month following ﬁnal month 3rd, 5th months, month following ﬁnal month 3rd, 5th, 7th months, month following ﬁnal month 3rd, 5th,
 7th, 9th months, month following ﬁnal month 3rd, 5th,7th, 9th, 11th months, month following ﬁnal month 3rd, 5th, 7th, 9th, 11th, 13th months, month following ﬁnal month 3rd, 5th, 7th, 9th, 11th, 15th months, month following ﬁnal month 3rd, 5th, 7th, 9th, 11th, 13th, 15th, 17th months, month following ﬁnal month 10 3rd, 5th, 7th, 9th, 11th, 13th, 15th, 17th, 19th months, month following ﬁnal month 11 3rd, 5th, 7th, 9th, 11th, 13th, 15th, 19th, 21th months, month following ﬁnal month 12 3rd, 5th, 7th, 9th,
 11th, 13th, 15th, 19th, 21th, 23rd months, month following ﬁnal month “For the purposes of counting months under this schedule, the num­ ber is reckoned as set out in section MB 20(5).” 256 Reprinted as at 19 December 2007 Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 Notes Contents 1 2 3 General About this eprint List of amendments incorporated in this eprint (most recent ﬁrst) Notes 1 It incorporates all General This is an eprint of the Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006. the amendments to the Taxation (Depreciation, Payment Dates Alignment, FBT, and Miscellaneous Provisions) Act 2006 as at 19 December 2007.
The list of amendments at the end of these notes speciﬁes all the amendments incorporated into this eprint since 10 September 2007.

Relevant provisions of any amending enactments that contain transitional, savings, or application provisions are also included, after the Principal enactment, in chronological order.

2 3 About this eprint This eprint has not been ofﬁcialised.
For more information about ofﬁcialisation, please see “Making online legislation ofﬁcial” under “Status of legislation on this site” in the About section of this website.

List of amendments incorporated in this eprint (most recent ﬁrst) Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109): section 292 257