Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698841969184.pdf (New Zealand)
Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Public Act Date of assent 2004 No 111 21 December 2004 Contents Title Commencement Part 1 Amendments to Income Tax Act 1994 Income Tax Act 1994 Non­residents’ exempt income Other exempt income Meaning of term dividends Exclusions from term dividends Election whether bonus issue taxable Branch equivalent income calculation Cases where assessable income calculation cannot be undertaken Certain withdrawal amounts are gross income of superannuation fund Exception for withdrawal when member ceases employment Expenditure relating to determination of liability to tax Patent expenses New section DJ 11B inserted DJ 11B Expenditure incurred by company in respect of dividend from foreign company Page 12 12 13 13 20 20 21 21 21 21 21 22 23 23 24 24 1 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 New section DJ 14B inserted DJ 14B Expenditure on unsuccessful application for resource consent Expenditure on land improvements used for farming or agriculture New sections DO 4B to DO 4D inserted DO 4B Accounting for expenditure on listed horticultural plants under sections DO 4C and DO 4D DO 4C Expenditure on land­planting of listed horticultural plants DO 4D Expenditure on land—horticultural replacement planting Amalgamated company entitled to deductions for farming, agriculture, and aquaculture expenditure Accrual expenditure Disposition of depreciable property Deduction to lessee in non­speciﬁed
 lease Application of subpart Deﬁned terms for subpart Deferral of surplus allowable deductions from arrangement Section EZ 9 replaced EZ 9 New start grants for farmers New section EZ 9B EZ 9B Deduction for diminished value of expenditure on improvements destroyed or rendered useless by qualifying event Rules for lease asset during term of ﬁnance lease Taxation of hire purchase agreements Special provisions relating to dispositions of property Companies that may constitute imputation group Income assessable
 to beneﬁciaries Sale of trading stock for inadequate consideration Part HC repealed Gross income assessable to beneﬁciaries Election to become Maori authority Distributions by Maori authority Amount distributed to member by Maori authority Table HI 8—Transitional rules No offset in calculating some income tax liabilities Net losses may be offset against future net income Net loss offset between group companies No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 Rebate for gifts of money Granting of underlying foreign tax credit New Part MBC inserted Subpart BC—Early­payment discount of income tax MBC 1 Purpose MBC 2 Availability of early­payment discount MBC 3 Credit treated as being payment as income tax Refund of excess tax Limits on refunds of tax in relation to Maori authorities Application of income tax or dividend withholding payments not refunded Companies required to maintain imputation credit account Companies electing to maintain imputation credit account Amount of dividend for imputation rules if paid in Australian currency Consolidated imputation group to maintain separate imputation credit account Credits arising to imputation credit account of group Debits arising to imputation
 credit account of group Credits and debits arising to policyholder credit account of company Election to use credit balance as credit against policyholder base income tax liability or as credit in imputation credit account Credits and debits arising to group policyholder credit account Credits and debits arising to branch equivalent tax account of company Use of credit to reduce dividend withholding payment, or use of debit to satisfy income tax liability Debits and credits arising to group branch equivalent
 tax account Use of consolidated group credit to reduce dividend withholding payment, or use of group or individual debit to satisfy income tax liability Debits arising to dividend withholding payment account Allocation rules for dividend withholding payment credits New section MG 8B inserted MG 8B Policyholder credit account companies and dividend withholding payment credits 40 40 40 41 41 43 43 44 45 46 46 46 46 47 47 47 49 49 50 50 51 52 52 53 53 54 3 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 Further dividend withholding payment payable by company Transfer of credit balance to imputation credit account Debits arising to group dividend withholding payment account Application of speciﬁc dividend withholding provisions to consolidated groups Further tax payable for end of year debit balance or when Maori authority ceases to exist Accreditation requirements of PAYE intermediaries Employer having PAYE intermediary—responsibilities and status under PAYE rules and SSCWT rules PAYE intermediary—responsibilities and status under PAYE rules and SSCWT rules Operation of trust account Amounts of tax deductions Delivery of withholding declaration Amount of tax deductions for pay period current when tax deductions altered Special ﬁling rule for employer who stops employing staff during year Application of RWT rules Liability to make deduction in respect of foreign withholding payment dividend Application of speciﬁc dividend withholding
 payment provisions to consolidated groups Deﬁnitions Meaning of income tax Voting interests Further deﬁnitions of associated persons Schedule 7—Expenditure on land and aquaculture improvements Part 2 Amendments to Tax Administration Act 1994 Tax Administration Act 1994 Purpose of Act Interpretation Information to be furnished on request of Commissioner Section 33B repealed Ofﬁcers to maintain secrecy Disclosure of information for matching purposes Disclosure of address information in relation to debtors 57 57 58
information in relation to debtors No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 Content of notice of proposed adjustment Further secrecy requirements Notices of proposed adjustment required to be issued by Commissioner Taxpayers and others with standing may issue notices of proposed adjustment Taxpayer may issue notice of proposed adjustment for taxpayer assessment Election of small claims jurisdiction of Taxation Review Authority Section 89F replaced 89F Issue of response notice Late actions deemed to occur within response period Disclosure notices New sections 89N and 89O inserted 89N 89O Determinations in relation to ﬁnancial arrangements Determinations relating to ﬁnancial arrangements Notiﬁcation of determinations Section 90AE replaced 90AE Four­year period in which determination not Completing the disputes process Test cases required to be applied Determinations in relation to apportionment of interest costs Determinations in relation to standard­cost household service New section 91AAB inserted 91AAB Determinations relating to types and diminishing Taxpayer assessment of GST values of listed horticultural plants Commissioner to make private rulings on request Taxpayer assessment New section 92B inserted
 92B Assessment where default made in furnishing returns Time bar for assessment of GST Extension of time bars Commissioner to give notice of assessment to taxpayer Commissioner may at any time amend assessments Section 114 replaced 114 Validity of assessments Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 120 Variation to deﬁnitions for determining interest chargeable or
 payable to PAYE intermediaries 121 When disputant entitled to challenge assessment Certain rights of challenge not conferred 122 Challenging disputable decisions which are not 123 assessments Late ﬁling penalties Tax shortfalls New section 141AA inserted 141AA Shortfall penalty if non­resident contractor 124 125 126 relieved from all liability to pay tax on contract payment Section 141FB replaced 141FB Reduction of penalties for previous behaviour Section 141FC repealed New section 141FD inserted 141FD Shareholders of loss attributing qualifying companies Application of Part 9 to PAYE intermediaries Recovery of tax deductions from employers or PAYE intermediaries Employer or PAYE intermediaries failing to make tax deductions Unpaid tax deductions, etc, to constitute charge on employer’s or PAYE intermediary’s property Transfer of excess tax within taxpayer’s accounts 134 135 Write­off of tax by Commissioner 136 137 Relief to taxpayers to whom new start grants payable New section 181D inserted 181D Remission of late payment penalties and interest incurred due to obligation by Maori authority to pay further income tax Remission for reasonable cause Remission consistent with collection of highest net revenue over time Payment out of Crown Bank Account Regulations—income tax related Power to extend time for doing anything under Act 2004
96 96 97 97 97 97 97 98 98 98 98 99 99 99 99 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 3 Amendments to other Acts and Regulations Amendments to Goods and Services Tax Act 1985 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 Goods and Services Tax Act 1985 Interpretation Zero­rating of services Taxable period returns Special returns Particulars to be furnished and prepared where change in accounting basis Calculation of tax payable Goods and services tax incurred relating to
 determination of liability to tax Goods and services tax incurred in making certain supplies of ﬁnancial services Application of section 21F Payment of tax Part 4 repealed Section 45 replaced 45 Relief from tax where new start grant made in respect of drought relief Section 50 repealed New section 51B inserted 51B Section 61B repealed Section 80 repealed Section 81 repealed Supplies of services made before insertion of section 8(4B) Persons treated as registered Refund of excess tax Amendment to Taxation Review Authorities Act 1994 163 Small claims jurisdiction of authorities Amendment to Income Tax Act 1976 164 Interpretation­voting and market interests Amendments to Taxation Review Authorities Regulations 1998 165 166 Interpretation Decisions 99 99 100 100 100 100 101 101 102 102 102 102 102 103 104 104 104 104 105 105 105 105 106 106 106 107 7 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 Part 4 Amendments to Income Tax Act 2004 167 168 169 Income Tax Act 2004 New sections CD 7B and CD 7C inserted CD 7B Interests in money or property of foreign unit trust CD 7C Bonus issue by foreign unit trust instead of money or property New section CD 21B inserted CD 21B Transfer by unit trust of legal interest after beneﬁcial interest vests 170 When attributed CFC income arises Calculation of FIF income 171 172 Withdrawals 173 174 Exclusion of withdrawal when member ends employment New section CW 11B inserted CW 11B Proceeds of share disposal by
 qualiﬁed foreign 175 176 177 178 179 equity investor Section CW 49 replaced CW 49 Providing standard­cost household service New section CX 41B inserted CX 41B Amounts remitted as condition of new start grant Determining tax liabilities New section DB 13B inserted DB 13B Expenses of failed or withdrawn application for resource consent New section DB 28B inserted DB 28B Expenses of failed or withdrawn patent application 180 New heading and new section DB 44 inserted Exempt income 181 182 183 DB 44 Expenditure
 incurred in deriving exempt dividend Calculation of FIF loss Improvements to farm land New sections DO 4B to DO 4E inserted DO 4B Expenditure on land: planting of listed horticultural plants DO 4C Expenditure on land: horticultural replacement planting DO 4D Accounting for expenditure on listed horticultural plants under sections DO 4B and DO 4C No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 DO 4E Some deﬁnitions Farming expenditure of lessor or sublessor New section DO 5B inserted DO 5B Improvement destroyed or made useless by qualifying event New section DP 3B inserted DP 3B Improvement destroyed or made useless by qualifying event Cost of acquiring timber: forestry business on land bought from Crown, Maori owners, or holding company Amalgamated company: expenditure on improvements for farming, aquacultural, and forestry businesses Partnership interests and disposal of part of asset before 16 December 1991 Petroleum mining operations outside New Zealand before 16 December 1991 Prepayments Calculation rule: income year in which item disposed of Effect of disposal or event New section EW 47B inserted EW 47B Consideration when debtor released as condition of new start grant Direct control interests Associates and 10% threshold Branch equivalent income or loss: calculation rules Rules for personal property lease asset during
 term of ﬁnance lease Taxation of hire purchase agreements Premiums derived by non­resident general insurers treated as being derived from New Zealand Special provisions relating to dispositions of property Companies that may constitute imputation group Amalgamation not to result in deemed income or remission of liabilities Application of sections GC 29 to GC 31 Deﬁned terms for sections GC 29 to GC 31 Deferral of surplus deductions from arrangement Sale of trading stock for inadequate consideration
 Subpart HC repealed Election to become Maori authority Distributions by Maori authority Amount distributed to member by Maori authority Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 Treatment of companies and trusts that elect to apply this subpart No offset in calculating some income tax liabilities Net losses may be offset against future net income Net loss offset between group companies Calculations of rebates producing negative amounts Rebate in respect of gifts of money Determination of net income Parental tax credit Ascertainment of New Zealand income tax liability Granting of underlying foreign tax credit Estimated provisional tax New section MB 3B inserted MB 3B Provisional taxpayer affected by qualifying event New subpart MBB inserted Subpart MBB—Early­payment discount of income tax MBB 1 Purpose MBB 2 Availability of early­payment discount MBB 3 Credit treated as being payment as income tax MBB 4 Some deﬁnitions Refund of excess tax Limits on refunds of tax in relation to Maori authorities Companies required to maintain imputation credit account Companies electing to maintain imputation credit account Amount of dividend for imputation rules if paid in Australian currency Consolidated
 imputation group to maintain separate imputation credit account Credits arising to imputation credit account of group Debits arising to imputation credit account of group Credits and debits arising to policyholder credit account of company Election to use credit balance as credit against policyholder base income tax liability or as credit in imputation credit account Credits and debits arising to group policyholder credit account Credits and debits arising to branch equivalent tax account of company Use of
 credit to reduce dividend withholding payment, or use of debit to satisfy income tax liability No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 238 239 240 241 242 243 244 245 246 247 248 249 250 251 252 253 254 255 256 257 258 259 260 Debits and credits arising to group branch equivalent tax account Use of consolidated group credit to reduce dividend withholding payment, or use of group or individual debit to satisfy income tax liability Debits arising to dividend withholding payment account Allocation rules for dividend withholding payment credits New section MG 8B inserted MG 8B Policyholder credit account companies and dividend withholding payment credits Further dividend withholding payment payable by company Transfer of credit balance to imputation credit account Debits arising to group dividend withholding payment account Application of speciﬁc dividend withholding provisions to consolidated groups Allocation rules for Maori authority credit account credits Further tax payable for end of year debit balance or when Maori authority ceases to exist Section MZ 7 repealed Accreditation requirements of PAYE intermediaries Employer having PAYE intermediary: responsibilities and status under PAYE rules and
 SSCWT rules PAYE intermediary: responsibilities and status under PAYE rules and SSCWT rules Operation of trust account Amounts of tax deductions Delivery of withholding declaration Amount of tax deductions for pay period current when tax deductions altered Special ﬁling rule for employer who stops employing staff during year Application of RWT rules Liability to make deduction in respect of foreign withholding payment dividend Application of speciﬁc dividend withholding payment provisions to consolidated
 groups Deﬁnitions 261 262 Meaning of income tax 263 Further deﬁnitions of associated persons 149 150 150 151 151 151 154 154 154 155 155 155 156 156 156 158 158 159 159 160 160 160 160 160 160 166 166 11 s 1 264 265 266 267 268 269 270 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 Schedule 7—Expenditure on farming, aquacultural, and forestry improvements Schedule 9—Categories of livestock for which national standard costs to be declared Schedule 21—Enactments amended Schedule 22—Amendments to Tax Administration Act 1994 Schedule 22A—Identiﬁed policy changes Schedule 23—Comparative tables of old and new provisions Amendments contained in schedule Schedule Other amendments to Income Tax Act 2004 166 167 167 168 172 172 179 179 The Parliament of New Zealand enacts as follows: Title This Act is the Taxation (Venture Capital and Miscellaneous Provisions) Act 2004.
Commencement This Act comes into force on the date on which it receives the Royal assent, except as provided in this section.

Sections 22 and 81(13)(a)(i) are treated as coming into force on 20 May 1999.

Section 77 is treated as coming into force on 1 April 2000, subject to subsection (4).
Subsection (3) does not apply to an employer in relation to a period for which the employer has, before 29 March 2004, ﬁled a fringe beneﬁt tax return that relies on section ND 12 as that section was before the enactment of section 77.

Section 152 is treated as coming into force on 10 October 2000.

Section 81(19) is treated as coming into force on 1 July 2002.

Sections 31, 49, 52 to 54, 55(1) and (4), 56, 81(34) and 124 are treated as coming into force on 1 April 2003.
Section 51 is treated as coming into force on 1 October 2003.

1 2 (1) (2) (3) (4) (5) (6) (7) (8) 12 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 1 s 4 (9) Sections 5, 40, 81(35), 90, 109 and 162 are treated as coming into force on 25 November 2003.

(10) Sections 70 to 73 are treated as coming into force on 15 Janu­ ary 2004.

(11) Sections 20, 21, 26, 27, 33, 81(3), 81(20), 81(28), 136 and 156 are treated as coming into force on 1 February 2004.
(12) Sections 4, 81(29) and 82 are treated as coming into force on 1 April 2004.

(13) Sections 34, 36 to 43, 46, 47, 69, 81(4) and (39), 112 and 137 come into force on 1 October 2004.

(14) Sections 145 and 151 come into force on 1 January 2005.

(15) Sections 13, 87, 88(3), and (5), 111, 115, 134, 138, 139, 165, 250 to 260, 261(3), 261(4), 261(8), 261(17), 261(19), 261(22), 261(36) and 265 to 269 come into force on 1 April 2005.
(16) Sections 168 to 249, 261(2), 261(5) to (7), 261(9) to (16), 261(18), 261(21), 261(23) to (35) and 262 to 264 come into force on 1 October 2005.

Part 1 Amendments to Income Tax Act 1994 3 Income Tax Act 1994 This Part amends the Income Tax Act 1994.
4 (1) “(g) Non­residents’ exempt income In section CB 2(1)(f), “company.” is replaced by “company:” and the following is added: any amount derived by a person from the sale or other dis­ position by a qualifying foreign equity investor of a share, or option to buy a share, in a company (called in this paragraph the resident company) that is resident in New Zealand, if— the share or option, or an option or convertible note “(i) relating to the share, is purchased on a day that is 12 months or more before the day of the sale or other dis­ position; and the person who purchases the share or option, or the option or convertible note relating to the share, and sells or disposes of the share or option is a qualifying foreign “(ii) 13 Part 1 s 4 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 equity investor from the time of the purchase to the time of the sale or other disposition; and “(iii) the shares of the resident company are quoted on no ofﬁcial list of a recognised exchange— “(A) at the time of the purchase referred to in subpara­ graph (i): “(B) at some time in the 12­month period that begins from the time of the purchase referred to in sub­ paragraph (i); and “(iv) land development: land ownership: throughout the period referred to in subparagraph (ii), the resident company does not have a main activity that is one or more of— “(A) “(B) “(C) mining: “(D) provision of ﬁnancial services: “(E) “(F) “(G) acquisition of public infrastructure assets: “(H) insurance: construction of
 public infrastructure assets: investing with a main aim of deriving, from the investment, gross income in the form of interest, dividends, or lease payments that are not royal­ ties: any amount derived by a person from the sale or other dis­ position by a qualifying foreign equity investor of a share, or option to buy a share, in a company (called in this paragraph the resident company) that is resident in New Zealand, if— the share or option, or an option or convertible note “(i) relating to the share, is
 purchased on a day that is 12 months or more before the day of the sale or other dis­ position; and the person who purchases the share or option, or the option or convertible note relating to the share, and sells or disposes of the share or option is a qualifying foreign equity investor throughout the period that— “(A) begins at the time of the purchase referred to in “(ii) subparagraph (i); and “(B) ends on the day of the sale or other disposition; and “(h) 14 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 1 s 4 “(iv) “(iii) the shares of the resident company are quoted on no ofﬁcial list of a recognised exchange at some time in the 12­month period that begins from the time of the purchase referred to in subparagraph (i); and throughout the period referred to in subparagraph (ii), the main activity of the resident company is providing capital in the form of debt or equity funding to other companies; and each other company that is referred to in subparagraph (iv) and is resident in New Zealand— “(A) does not have, as a main activity, an activity that is referred to in paragraph (g)(iv)(A) to (C) and (E) to (G); and “(v) “(B) does not have, as a main activity, an activity that is referred to in paragraph (g)(iv)(D) or (H) and is not the provision of capital to other companies; and “(C) does not provide capital, directly or indirectly, to a company that is resident in New Zealand and has, as a main activity, an activity that is
 referred to in paragraph (g)(iv)(A) to (C) and (E) to (G); and “(D) does not provide capital, directly or indirectly, to a company that is resident in New Zealand and has, as a main activity, an activity that is referred to in paragraph (g)(iv)(D) or (H) and is not the provision of capital to other companies; and “(vi) each other company that is referred to in subparagraph (iv) and is not resident in New Zealand does not pro­ vide capital, directly or indirectly, to a company that is resident in New Zealand
 and has, as a main activity, an activity that is referred to in paragraph (g)(iv)(A) to (H); and “(vii) for each other company that is referred to in subpara­ graph (iv), there is a time in the period referred to in subparagraph (ii) at which— the shares of the other company are quoted on no ofﬁcial list of a recognised exchange; and “(A) 15 Part 1 s 4 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “(B) the shares of the resident company are quoted on no ofﬁcial list of a recognised exchange.” (2) In section CB 2(4), after the deﬁnition of pleasure craft, the following is added: “qualifying foreign equity investor means a person who is not resi­ dent in New Zealand and who is one or more of the following “(a) a person who— “(i) is resident in a territory that is approved for the purpose of this deﬁnition by the Governor­General by an Order in Council; and is not part of an unincorporated body that satisﬁes para­ graph (b)(i) to (v); and “(ii) “(iii) is not a legal entity that satisﬁes paragraph (c)(i) to (iii); “(iv) “(v) and is treated by the taxation laws of the territory referred to in subparagraph (i), or by the taxation laws of a part of the territory, as the person who derives the proceeds from a sale or other disposition of shares or options that are held by the person; and is not a person who— “(A) would, under this Act and in the absence of sec­ tion CB 2(1)(g) and (h), be subject to tax on an amount derived from a sale or other
 disposition of shares or options to which section CB 2(1)(g) or (h) would apply; and “(B) would in any circumstances, under the taxation laws of the territory referred to in subparagraph (i) or under the taxation laws of part of the terri­ tory, be entitled to receive from the government of the territory or of the part of the territory a ﬁ­ nancial beneﬁt in the form of a payment, credit, rebate, forgiveness or other compensation for a payment of the tax referred to in subsubparagraph (A): “(b) a person
 who is a non­resident and is part of an unincorporated body that— “(i) is established under the laws of a territory that is ap­ proved for the purpose of this deﬁnition by the Gov­ 16 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 1 s 4 ernor­General by an Order in Council or under the laws of a part of such a territory; and consists of persons who include the person (called in this paragraph partners); and “(ii) “(iii) is treated by the taxation laws of the territory, or by the taxation laws of a part of the territory, as not being subject to a tax on income other than as a body that handles income of the partners; and “(iv) has at least 1 partner (called in this paragraph a general partner) who is liable for all debts of the unincorpor­ ated body and who has signiﬁcant involvement in, and control of, the business activities of the unincorporated body; and “(v) has at least 1 partner (called in this paragraph a special partner) whose liability for debts of the unincorporated body is limited and who has limited involvement in, and control of, the business activities of the unincorporated body; and “(vi) does not have a general partner who is not resident in a territory that is approved for the purpose of this deﬁn­ ition by the Governor­General by an Order in Council; and “(vii) does not have a partner who— “(B) “(A) has, when treated as holding the interests of any person who is associated with the partner under section OD
 8(1), an interest of 10% or more in the capital of the unincorporated body; and is resident in a territory that is not approved for the purpose of this deﬁnition by the Governor­ General by an Order in Council; and “(viii) does not have a partner who, when treated as holding the interests of any person who is associated with the partner under section OD 8(1), has an interest of 10% or more in the capital of the unincorporated body and— “(A) would, under this Act and in the absence of sec­ tion CB 2(1)(g) and
 (h), be subject to tax on an amount derived from a sale or other dispos­ ition of shares to which section CB 2(1)(g) or (h) would apply; and 17 Part 1 s 4 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “(B) would in any circumstances, under the taxation laws of the territory in which the partner is resi­ dent or under the taxation laws of part of the ter­ ritory, be entitled to receive from the government of the territory or of the part of the territory a ﬁ­ nancial beneﬁt in the form of a payment, credit, rebate, forgiveness or other compensation for a payment of the tax referred to in subsubparagraph (A): a person who— “(i) is established as a legal entity under the laws of a terri­ tory that is approved for the purpose of this deﬁnition by the Governor­General by an Order in Council or under the laws of a part of such a territory; and “(ii) has persons (called in this paragraph members) who hold interests in the capital of the legal entity and who are entitled to shares of the income of the legal entity; and “(iii) is treated by the taxation laws of the territory referred to in subparagraph (i), or by the taxation laws of the part of the territory, as not being subject to a tax on income other than as a body that handles income of the members; and is resident in no territory that has laws that treat the legal entity as being subject to a tax on income other than as a body that handles income of the members; and “(iv) “(v) does not
 have a member who— “(B) “(A) has, when treated as holding the interests of any person who is associated with the member under section OD 8(1), an interest of 10% or more in the capital of the legal entity; and is not resident in a territory that is approved for the purpose of this deﬁnition by the Governor­ General by an Order in Council; and “(vi) does not have a member who, when treated as holding the interests of any person who is associated with the member under section OD 8(1), has an interest of 10%
 or more in the capital of the legal entity and who— “(c) 18 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 1 s 4 “(A) would be entitled to receive an amount derived from a sale or other disposition, to which section CB 2(1)(g) or (h) would apply, of shares or op­ tions held by the legal entity; and “(B) would receive an amount referred to in subsub­ paragraph (A) that, in the absence of section CB 2(1)(g) and (h), would have been reduced by a tax imposed by this Act on the amount or on the pro­ ceeds of the sale or other disposition in the hands of the legal entity; and “(C) would in any circumstances, under the taxation laws of the territory in which the member is resi­ dent or under the taxation laws of part of the ter­ ritory, be entitled to receive from the government of the territory or of the part of the territory a ﬁ­ nancial beneﬁt in the form of a payment, credit, rebate, forgiveness or other compensation for the reduction referred to in subsubparagraph (B).” (3) After section CB 2(5), the following is added: “(6) For the purpose of subsection (1)(g) and (h) and the deﬁn­ ition of qualifying foreign equity investor in subsection (4), whether a person is resident in a territory other than New Zealand is determined— “(a) in the presence of a double tax agreement between New Zealand and the territory that is in force under the terms of the double tax agreement, under the double tax agree­ ment: in the absence of a double tax agreement between New Zealand and the territory that is in force under the terms of the double tax agreement, under the laws of the ter­ ritory.
“(b) “(7) The Governor­General may, from time to time by Order in Council— “(a) approve a territory for the purpose of the deﬁnition of qualifying foreign equity investor in subsection (4): “(b) withdraw the approval of a territory for the purpose of the deﬁnition of qualifying foreign equity investor in subsection (4).
“(8) An Order in Council under subsection (7) may— 19 Part 1 s 5 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “(a) “(b) come into force on a date that is not earlier than 1 April 2004: apply for income years that do not precede the 2004­05 income year.” Other exempt income 5 (1) After section CB 9(g), the following is inserted: “(gb) any amount derived from providing a standard­cost household service if— “(i) “(ii) the amount does not exceed the total amount of the costs that, under a determination of the Commissioner under section 91AA of the Tax Administration Act 1994, may be treated as being incurred by the taxpayer in deriving the amount; and the taxpayer, in calculating the taxpayer’s income tax liability for the income year, elects to include in the tax­ payer’s annual allowable deductions no amount that, in the absence of this paragraph, would be an allowable de­ duction incurred by the taxpayer in providing the stan­ dard­cost house­hold service:”.
(2) 6 (1) “(i) Subsection (1) applies for the 2003­04 and subsequent income years.
Meaning of term dividends Section CF 2(1)(i) is replaced by the following: all distributions by a unit trust to a unit holder and all other payments to and transactions with a unit holder, in relation to the unit holder’s interest in the unit trust, that— “(i) would be dividends if made to or with a shareholder in “(ii) relation to shares in a company; and are not the transfer to the unit holder of money or prop­ erty referred to in paragraph (ib): “(ib) money or property, of a unit trust that is a foreign company, in which a beneﬁcial interest vests absolutely in a unit holder:”.
(2) After section CF 2(6)(a), the following is inserted: “(ab) a taxable bonus issue, within the meaning of paragraph (c) of the deﬁnition of that term, is the value of the money or property in which a beneﬁcial interest would have vested in the unit holder if the taxable bonus issue had not been made; and”.
20 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 1 s 11 (3) Subsections (1) and (2) apply for beneﬁcial interests that vest on or after the day on which this Act receives the Royal assent.
7 (1) “(ii) (2) 8 9 (1) (2) 10 11 (1) Exclusions from term dividends Section CF 3(2)(c)(ii) is replaced by the following: the available subscribed capital per share will be deemed to be equal to— “(A) the value of the money or property in which a beneﬁ­ cial interest would have vested in the shareholder had the share not been issued, if the share is a taxable bonus issue within the meaning of paragraph (c) of the deﬁn­ ition of that term; or the amount paid to the trust in respect of the issue of the share, if subsubparagraph (A) does not apply.” Subsection (1) applies for shares that are issued on or after the day on which this Act receives the Royal assent.
“(B) Election whether bonus issue taxable In the words before section CF 8(a), “or a distribution that sat­ isﬁes paragraph (c) of the deﬁnition of taxable bonus issue” is inserted after “bonus issue in lieu”.

Branch equivalent income calculation In section CG 11(7), “, DO 4B, DO 4C, DO 4D,” is inserted after “DO 4”.

Subsection (1) applies for the 2003­04 and subsequent income years.
Cases where assessable income calculation cannot be undertaken In the heading to section CG 25, “assessable income” is re­ placed by “foreign attribution”.
Certain withdrawal amounts are gross income of superannuation fund In section CL 4(2)— (a) the formula is replaced by the following: 21 Part 1 s 12 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 (b) after “where—”, the following is inserted: “withdrawal is the amount withdrawn “other contributions is the part, if any, of the amount withdrawn that the trustee of the superannuation fund establishes is not employer contributions to superannuation savings”.
Section CL 4(6) is omitted.

(2) Subsections (1) and (2) apply to a withdrawal from a super­ (3) annuation fund that is made on or after 14 September 2000.
12 Exception for withdrawal when member ceases employment Section CL 8(2) is replaced by the following: “(2) Subsection (3) applies for a withdrawal if, when the member ceases employment with the employer— “(a) the member has been in employment throughout the period (called in this subsection and subsection (2B) the minimum employment period) that— “(i) begins on the 1st day of the 2nd­to­last of the income years that end on or before the day on which the member ceases employment; and ends on the day on which the member ceases employment; and “(ii) the employer or another employer has made, on behalf of the member, speciﬁed superannuation contributions that— “(i) have been made to the superannuation fund or to another superannuation fund that has transferred to the superannuation fund, whether directly or indirectly, the funds relating to the member; and “(ii) have not been part of a withdrawal, other than as a result of a transfer between superannuation funds that is referred to in subparagraph (i); and the speciﬁed superannuation contributions that are part of the withdrawal— “(i) satisfy subsection (2B): “(b) “(c) 22 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 1 s 14 “(ii) do not include employer contributions to super­ annuation savings that exceed the amount found by multiplying $5,000 by the number of income years for which the speciﬁed superannuation con­ tributions were made on behalf of the member.
“(2B) Speciﬁed superannuation contributions that are made on be­ half of a member satisfy this subsection if— “(a) the contributions have been made for all or part of the minimum employment period and— “(i) have not, for each of the complete income years in the minimum employment period, been 150% or more of the speciﬁed superannuation contribu­ tions made on behalf of the member in the previ­ ous income year; and “(ii) do not, for the income year in which the mem­ ber ceases employment, have an annualised value that is 150% or more of the speciﬁed superannu­ ation contributions made on behalf of the mem­ ber in the previous income year: “(b) the contributions have been made for all or part of the minimum employment period and the Commissioner considers that the contributions made by each employer are— “(i) consistent in size and frequency with the speci­ ﬁed superannuation contributions made by the employer on behalf of other employees in com­ parable positions; and consistent in size and frequency during the period or periods to which the speciﬁed superannuation contributions relate.” “(ii) 13 Expenditure relating to determination of liability to tax In section DJ 5(4), in paragraph (b)(i) of the deﬁnition of goods and services tax payable, “section 27(6)” is replaced by “sec­ tion 51B”.
14 (1) Patent expenses Before section DJ 6(1), the following is inserted: 23 Part 1 s 15 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “(1A) A taxpayer who applies for the grant of a patent and is re­ fused the grant or withdraws the application is allowed, in the income year of the refusal or withdrawal, a deduction for ex­ penditure— “(a) that the taxpayer incurs in relation to the application; and that would have been part of the cost of ﬁxed life intan­ gible property if the application had been granted; and for which the taxpayer is not allowed a deduction under another provision.” “(b) “(c) (2) Subsection (1) applies for applications of a taxpayer that are refused or withdrawn in the 2004­05 and subsequent income years.
15 New section DJ 11B inserted After section DJ 11, the following is inserted: “DJ 11B Expenditure incurred by company in respect of dividend from foreign company Despite section BD 2(2)(b), a company that incurs expenditure in deriving a dividend that is exempt income of the company under section CB 10(1) is allowed a deduction of— “(a) the amount of expenditure, if the company is not a con­ duit tax relief company: the amount calculated using the following formula if the company is a conduit tax relief company: “(b) a x (1 ­­ b) where— a b is the amount of the expenditure incurred by the company in deriving the dividend is the fraction of the company’s shareholders that are not resident in New Zealand, as calculated under section NH 7(2) and (4).
New section DJ 14B inserted 16 (1) After section DJ 14, the following is inserted: 24 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 1 s 18 “DJ 14B Expenditure on unsuccessful application for resource consent A taxpayer who applies for the grant of a resource consent under the Resource Management Act 1991 and is refused the grant or withdraws the application is allowed, in the income year of the refusal or withdrawal, a deduction for expend­ iture— “(a) that the taxpayer incurs in relation to the application; and that would have been part of the cost of a resource con­ sent that is depreciable property if the application had been granted; and for which the taxpayer is not allowed a deduction under another provision.” “(b) “(c) Subsection (1) applies for applications of a taxpayer that are refused or withdrawn in the 2004­05 and subsequent income years.
Expenditure on land improvements used for farming or agriculture In section DO 4— (a) in subsection (1), “Subject to sections DO 4B, DO 4C and DO 4D,” is inserted before “Any taxpayer”: in subsection (2), “Subject to sections DO 4B, DO 4C and DO 4D,” is inserted before “Any taxpayer”: in subsection (4), “vines or trees” is replaced by “non­ listed horticultural plants”.

(b) (c) (2) 17 (1) (2) Subsection (1) applies for the 2003­04 and subsequent income years.
18 New sections DO 4B to DO 4D inserted (1) After section DO 4, the following are inserted: “DO 4B Accounting for expenditure on listed horticultural “(1) plants under sections DO 4C and DO 4D In this section and sections DO 4C and DO 4D “planting for a taxpayer and an income year means 1 or more listed horticultural plants that are involved in the business of the taxpayer during the income year and for which the tax­ 25 Part 1 s 18 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 payer must account under sections DO 4C and DO 4D, for the income year, separately from other listed horticultural plants, if any, that are involved in the business of the taxpayer “plot means the land occupied by the listed horticultural plants in a planting “replaced area fraction for a planting and an income year means the amount calculated using the formula— where— a b is the area, at the end of the income year, of the part of the plot on which listed horticultural plants in the planting are planted or regrafted during the income year as replacement plants is the total area, at the end of the income year, of the plot.
“(2) Subject to subsection (3), a taxpayer to whom section DO 4C applies and who has had an allowable deduction under section DO 4D for either or both of the 2 income years that immedi­ ately precede an income year must, for the income year and subsequent income years, account separately under sections DO 4C and DO 4D for the listed horticultural plants that— “(a) the taxpayer acquires in the income year; and “(b) beneﬁt the business of the taxpayer in the income year; and are not replacement plants.
“(c) “(3) A taxpayer to whom section DO 4C applies and who has had no allowable deduction under section DO 4D for listed horti­ cultural plants for both of the 2 income years that immediately precede an income year may account under sections DO 4C and DO 4D for the listed horticultural plants as 1 planting for the income year and subsequent income years.
“DO 4C Expenditure on land­planting of listed horticultural plants “(1) This section applies to a taxpayer if— 26 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 1 s 18 “(a) “(b) the taxpayer carries on a farming or agricultural busi­ ness (including a horticultural business) on land in New Zealand; and the land is developed by the planting on the land of listed horticultural plants.
“(2) Subject to subsection (3), in an income year in which the de­ velopment of the land beneﬁts the business, the taxpayer has an allowable deduction relating to expenditure incurred by the taxpayer, or by another person, in the development of the land.
“(3) The taxpayer does not have an allowable deduction under sub­ section (2) in an income year in which— “(a) if the taxpayer owns the land, the taxpayer disposes of the land; or if the taxpayer does not own the land, the taxpayer ceases carrying on the business on the land.
“(4) Subject to subsections (5) and (6), the amount of the allowable “(b) deduction is calculated using the formula 1.2 x a × b “(5) where— a is the percentage rate determined for the type of listed horticultural plant by the Commissioner under section 91AAB of the Tax Administration Act 1994 is the diminished value of the expenditure.
b If a listed horticultural plant of the taxpayer ceases in an in­ come year to exist or to be used in deriving gross income and the taxpayer has no allowable deduction under section DO 4D for the income year for expenditure incurred in replacing the listed horticultural plant, the taxpayer has an allowable deduc­ tion— “(a) of the amount of the diminished value of the expend­ iture on the listed horticultural plant at the time that the listed horticultural plant ceases to exist or to be used in deriving income: for the income year.
“(b) “(6) A taxpayer who has an allowable deduction under section DO 4D for an income year for expenditure incurred on a replace­ ment plant in a planting may, by taking a tax position in a tax return for the income year— 27 Part 1 s 18 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “(a) “(b) elect to increase the diminished value, at the end of the income year, of the expenditure on listed horticultural plants that are in the planting at the end of the income year by the diminished value, immediately before the replacement, of the expenditure on a listed horticultural plant that is replaced; and choose a method of making the increase referred to in paragraph (a).
“DO 4D Expenditure on land—horticultural replacement planting “(b) “(1) This section applies to a taxpayer who carries on a horticultural business on land in New Zealand and who, in an income year (called the current income year)— “(a) plants, or causes to be planted, on the land a listed horti­ cultural plant as a replacement plant: regrafts, or causes to be regrafted, a listed horticultural plant on the land as a replacement plant.
“(2) The taxpayer has an allowable deduction for the current in­ come year, of the amount given by one of subsections (3) and (4) for the expenditure incurred in the current income year by the taxpayer in replacing a listed horticultural plant if, in the current income year— “(a) “(b) the replacement plant beneﬁts the business; and the taxpayer does not dispose of the land on which the listed horticultural plant is cultivated; and the taxpayer elects, by taking a tax position in a tax return for the current year, that this section apply to the expenditure.
“(c) “(3) For a taxpayer who has had no allowable deduction under this section for either or both of the 2 income years that immedi­ ately precede the current income year, the amount of the allow­ able deduction under subsection (2) for expenditure incurred in replacing a listed horticultural plant in a planting is calcu­ lated using the formula— 28 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 1 s 18 where— c d is the amount of the expenditure incurred by the tax­ payer is the greater of 7.5% and the replaced area fraction for the planting for the current year.
“(4) For a taxpayer who has had an allowable deduction under this section for a planting for both of the 2 income years that im­ mediately precede the current income year, the amount of the allowable deduction under subsection (2) for expenditure in­ curred in replacing a listed horticultural plant in the planting is the smaller of— “(a) the amount that is calculated using the formula where— c is the amount of the expenditure incurred by the taxpayer is the greater of 7.5% and the replaced area frac­ tion for the planting for the current year: the amount that is calculated using the formula: d “(b) where— c f e is the amount of the expenditure incurred by the taxpayer is the replaced area fraction for the planting for the current year is the smaller of 7.5% and the replaced area frac­ tion for the planting for the earlier of the 2 income years that immediately precede the current year is the smaller of 7.5% and the replaced area frac­ tion for the planting for the later of the 2 income years that immediately precede the current year.
Subsection (1) applies for the 2003­04 and subsequent income years.

g (2) 29 Part 1 s 19 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 19 (1) (2) Amalgamated company entitled to deductions for farming, agriculture, and aquaculture expenditure In section DO 8(c), “or section DO 5” is replaced by “, DO 4C, DO 4D or DO 5”.

Subsection (1) applies for the 2003­04 and subsequent income years.
Accrual expenditure Section EF 1(5)(a) is replaced by the following: 20 (1) “(a) where the expenditure relates to the purchase of goods, the amount of expenditure incurred on goods that— are not used in deriving gross income; and “(i) are not destroyed or rendered useless for the purpose of “(ii) deriving gross income:”.

(2) Subsection (1) applies for the 2003­04 and subsequent income years.
Disposition of depreciable property Section EG 19(3) is replaced by the following: 21 (1) “(3) Subject to subsection (4), a taxpayer who in an income year disposes of depreciable property for a consideration that is less than the adjusted tax value of the property at the time of dispos­ ition is allowed for the income year a deduction that is equal to the amount by which the adjusted tax value of the property on the date of disposition exceeds the consideration derived by the taxpayer if the depreciable property— “(a) “(b) is not a building; or is a building that is destroyed or rendered useless for the purpose of deriving gross income as a result of an event that is a qualifying event under paragraph (a) or (b) of the deﬁnition of that term.” Subsection (1) applies for the 2003­04 and subsequent income years.
Deduction to lessee in non­speciﬁed lease In section EO 2(1), “or a ﬁnance lease” is inserted after “spe­ ciﬁed lease”.

(2) 22 (1) 30 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 1 s 23 (2) 23 (1) In section EO 2(2), “or a ﬁnance lease” is inserted after “spe­ ciﬁed lease”.
Application of subpart In section ES 1(1)(b)— (a) in the words before subparagraph (i)(A), “or losses” is omitted: subparagraph (i)(B) is replaced by the following: (b) “(B) net losses of a loss attributing qualifying company, to the ex­ tent that shareholders with effective interests in the company are deemed under section HG 16 to have allowable deductions that correspond to the net losses; and:”: (c) in subparagraph (ii), “and losses” is omitted.
In section ES 1(1)(e)(i), “date:” is replaced by “date; and”.

In section ES 1(1)(e)(ii)(F), “section CH 2.” is replaced by “section CH 2:” and the following is added: (2) (3) (5) (4) “(G) shares in a foreign company, if the proceeds of a disposition of the shares would not be gross income of the holder other than under the FIF rules.” In section ES 1(2), “gross income, allowable deductions and losses” is replaced by “gross income and allowable deduc­ tions”.
In section ES 1(3), “gross income, allowable deductions and losses” is replaced by “gross income and allowable deduc­ tions”.

Subsections (1) to (5) apply for the 2004­05 and subsequent income years subject to subsection (7).
Subsections (1) to (5) do not apply to a participant for an ar­ rangement that the participant enters before the 2004­05 in­ come year unless— (a) (6) (7) at the time of entering the arrangement, the participant could reasonably expect that 10 or more persons would acquire an interest in the arrangement; and 70% or more of the allowable deductions of the partici­ pant from the arrangement for the income year, calcu­ lated on the same basis as for section ES 1(1)(b)(i) of the Income Tax Act 1994 as amended by subsection (1), arise from an interest of the participant in— (b) 31 Part 1 s 24 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 (i) (ii) ﬁxed life intangible property: software.
Deﬁned terms for subpart In section ES 2(3)(c), in the words before subparagraph (i), “a purpose or effect of achieving” is omitted.
Section ES 2(3)(d) is replaced by the following: involves money that is provided by— “(i) a lender who is not an associated person of the borrower under a provision of section OD 7 or OD 8(3) and who does not provide the money on arm’s­length terms and who— “(A) is not a person who regularly provides money to persons on arm’s­length terms under arrange­ ments that do not satisfy paragraphs (a) to (c): is not resident in New Zealand under section OE 1 or OE 2 and does not carry on business in New Zealand through a ﬁxed establishment in New Zealand; or “(B) “(ii) a lender who is an associated person of the borrower under a provision of section OD 7 or OD 8(3) and who obtains the money under an arrangement that satisﬁes paragraphs (a) to (c).” Subsection (2) applies for the 2004­05 and subsequent income years, subject to subsection (4).
Subsection (2) does not apply to a participant for an arrange­ ment that the participant enters before the 2004­05 income year unless— (a) at the time of entering the arrangement, the participant could reasonably expect that 10 or more persons would acquire an interest in the arrangement; and 70% or more of the allowable deductions of the partici­ pant from the arrangement for the income year, calcu­ lated on the same basis as for section ES 1(1)(b)(i) of the Income Tax Act 1994 as amended by section 23(1), arise from an interest of the participant in— ﬁxed life intangible property: (i) software.
(ii) (b) 24 (1) (2) “(d) (3) (4) 32 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 1 s 25 25 (1) “(i) “(i) (2) “a “b including any allowable deduction including any allowable deduction paragraph (a)(i) is replaced by the following: Deferral of surplus allowable deductions from arrangement In section ES 3(1)— (a) allowable deductions, under subsection (3) or section HG 16; and”: (b) (c) allowable deductions, under subsection (3) or section HG 16; and”: (d) In section ES 3(2)— (a) in paragraph (a)(ii), “and losses” is omitted: paragraph (b)(i) is replaced by the following: in paragraph (b)(ii), “and losses” is omitted.
the deﬁnitions of items a and b are replaced by the fol­ lowing: is the amount for the income year by which the allowable de­ ductions, including any allowable deduction under subsection (3) or section HG 16, of the participant from the arrangement exceed the gross income, other than under this section, of the participant from the arrangement is the total amount for the income year by which the allowable deductions, including any allowable deduction under subsec­ tion (3) or section HG 16, from the arrangement exceed the gross income, other than under this section, from the arrange­ ment for the group that consists of— “(a) “(b) the participant; and the affected associates of the participant who are not a loss attributing qualifying company and who each have for the income year allowable deductions, including any allowable deduction under subsection (3) or section HG 16, from the arrangement that in total exceed the gross income, other than under this section, from the arrange­ ment”.
paragraph (a) of the deﬁnition of item c is replaced by the following: (b) “(a) the total amount for the income year by which the allowable deductions, including any allowable deduction under subsec­ tion (3) or section HG 16, from the arrangement exceed the gross income, other than under this section, from the arrange­ ment for the group that consists of— 33 Part 1 s 26 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 (3) (4) “(i) “(ii) the participant; and the affected associates of the participant who are not a loss attributing qualifying company that has incurred a net loss from the arrangement for the income year; and”.
Subsections (1) and (2) apply for the 2004­05 and subsequent income years subject to subsection (4).
Subsections (1) and (2) do not apply to a participant for an arrangement that the participant enters before the 2004­05 in­ come year unless— (a) at the time of entering the arrangement, the participant could reasonably expect that 10 or more persons would acquire an interest in the arrangement; and 70% or more of the allowable deductions of the partici­ pant from the arrangement for the income year, calcu­ lated on the same basis as for section ES 1(1)(b)(i) of the Income Tax Act 1994 as amended by section 23(1), arise from an interest of the participant in— ﬁxed life intangible property: (i) software.
(ii) (b) Section EZ 9 replaced Section EZ 9 is replaced by the following: 26 (1) “EZ 9 New start grants for farmers “(1) This section applies to a taxpayer if— animal husbandry: the taxpayer carries on a business of— “(i) “(ii) poultry­keeping: “(iii) beekeeping: “(iv) breeding horses other than bloodstock: “(v) horticulture: “(vi) cropping; and the taxpayer is paid a new start grant in respect of the business for an event that is a qualifying event; and the taxpayer in carrying on the business incurs, before the declaration of the state of emergency that relates to the qualifying event, a liability— “(i) to make a payment under a ﬁnancial arrange­ ment: “(a) “(b) “(c) 34 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 1 s 26 “(ii) for expenditure or loss that is, before the date that is 3 months after the expiration of the state of emergency, taken into account in calculating the taxpayer’s taxable income for an income year: as a prerequisite for the payment of the new start grant and on or before 30 September 2005, the liability re­ ferred to in paragraph (c) is forgiven or otherwise re­ mitted; and but for this section, the amount of the remitted liability would be gross income of the taxpayer under the accrual rules or under section CE 4.
“(d) “(e) “(2) The amount of a remitted liability referred to in subsection (1) is not gross income of the taxpayer to the extent that the amount cannot be set off— “(a) against a loss that is incurred by the taxpayer in carrying on the business in the income year in which the liability is remitted: “(b) under section IE 1, IE 2 or IF 1, against a loss that is in­ curred by the taxpayer in carrying on the business and is available to be set off against the taxpayer’s net income in the income year in which the liability is remitted: under subsection (3).
“(c) “(3) The Commissioner may, despite sections IE 1, IE 2 and IF 1, require that an amount of a remitted liability referred to in subsection (1) be set off against a loss of another person if— the other person and the taxpayer are associated per­ “(a) sons; and the other person— “(i) “(b) “(ii) also carries on or has carried on the business in respect of which the new start grant is paid; or is or was the owner of an estate in fee simple or leasehold estate in land used in the business in respect of which the new start grant is paid; and the Commissioner is satisﬁed that the taxpayer has— “(i) a substantial degree of control over the other per­ son: a substantial identity of interests with the other person; and “(ii) “(c) “(d) the loss of the other person is— 35 Part 1 s 27 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “(i) incurred in respect of the business or the land that is used in the business; and “(ii) of a kind referred to in subsection (2)(a) and (b).
In determining the amount that is set off under subsection (3), the Commissioner must have regard to the interests of the as­ sociated person that are separate from those of the taxpayer.

“(4) “(5) The Commissioner must give to the associated person notice (2) in writing of a determination under subsection (3).” Subsection (1) applies for the 2003­04 and subsequent income years.
New section EZ 9B 27 (1) After section EZ 9, the following is inserted: “EZ 9B Deduction for diminished value of expenditure on improvements destroyed or rendered useless by qualifying event Subject to section DJ 1, a taxpayer is allowed for an income year a deduction that is equal to the diminished value for the in­ come year of expenditure of a kind that is referred to in Sched­ ule 7 if— “(a) the taxpayer or another person incurred the expenditure on improvements in preparing or developing a business or land that is used in a business; and the improvements were destroyed or rendered useless for the purpose of deriving gross income as a result of an event that is a qualifying event under paragraph (a) or (b) of the deﬁnition of that term; and the taxpayer would have been entitled for the income year to a deduction under section DL 2, DO 4 or DO 5 for the expenditure if the improvement had not been destroyed or rendered useless.” “(b) “(c) Subsection (1) applies for the 2003­04 and subsequent income years.
Rules for lease asset during term of ﬁnance lease In section FC 8B(2), “before or” is inserted before “on the date”.

(2) 28 (1) 36 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 1 s 33 (2) (3) 29 30 (1) (2) In section FC 8B(3), “at the end of the lease term” is replaced by “by the date that the lease term ends”.

Subsections (1) and (2) apply for an arrangement that is en­ tered on or after 29 March 2004.
Taxation of hire purchase agreements In section FC 10(8)(a), “consideration paid to the lessee for the hire purchase agreement” is replaced by “consideration pro­ vided to the lessee under the hire purchase agreement”.

Special provisions relating to dispositions of property In section FD 10(3)(b), “DO 4C, DO 4D,” is inserted after “DO 4,”.

Subsection (1) applies for the 2003­04 and subsequent income years.

Companies that may constitute imputation group Section FDB 1(1)(e) is repealed.
31 (1) (2) After section FDB 1(2)(a), the following is inserted: “(ab) all members of the consolidated group are or would be mem­ bers of the imputation group; and”.

In section FDB 1(2)(b), the words before subparagraph (i) are replaced by “for an imputation group that contains or will con­ tain members of more than 1 consolidated group, all of the consolidated groups have been part of a single wholly­owned group of companies throughout the period that—”.
Income assessable to beneﬁciaries In the heading to section GC 14, “assessable to” is replaced by “of”.

Sale of trading stock for inadequate consideration In the heading to section GD 1, “Sale” is replaced by “Sale or other disposition”.
Section GD 1(4) is replaced by the following: (2) “(4) This section does not apply in respect of any trading stock that— 37 (3) 32 33 (1) Part 1 s 34 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “(a) “(b) is transferred to a person under a relationship agree­ ment; or is donated, or supplied for consideration worth less than the market value of the trading stock, to a person as a result of an event that is a qualifying event under para­ graph (a) or (b) of the deﬁnition of that term.” Subsections (1) and (2) apply for the 2003­04 and subsequent income years.
Part HC repealed Part HC is repealed.

Subsection (1) applies to gross income and allowable deduc­ tions of a partner from a special partnership for the 2004/05 and subsequent income years.

Gross income assessable to beneﬁciaries In the heading to section HH 3, “assessable to” is replaced by “of”.
(3) 34 (1) (2) 35 Election to become Maori authority Section HI 3(3) is replaced by the following: 36 (1) “(3) A person who elects to become a Maori authority becomes a Maori authority— “(a) on the ﬁrst day of the income year in which the per­ son gives notice of the election to the Commissioner, if paragraph (b) does not apply: “(b) on the ﬁrst day of the income year immediately succeed­ ing the income year in which the person gives notice of the election to the Commissioner, if the person nomin­ ates that date in the notice of the election.” Subsection (1) applies for the 2004­05 and subsequent income years.
Distributions by Maori authority In section HI 4(1)(e), “consideration.” is replaced by “consid­ eration:” and the following is added: a taxable bonus issue.” (2) 37 (1) “(f) 38 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 1 s 41 (2) Subsection (1) applies for the 2004­05 and subsequent income years.
Amount distributed to member by Maori authority 38 (1) After section HI 5(3), the following is added: “(4) A taxable bonus issue that is made by a Maori authority to a (2) 39 (1) 4 (2) 40 (1) (2) member is a taxable Maori authority distribution.” Subsection (1) applies for the 2004­05 and subsequent income years.
Table HI 8—Transitional rules In the transitional rules in Table HI 8, row 4 is replaced by the following: a Maori authority a trust that is not a Maori authority taxable income derived by the Maori authority is treated as trustee income Subsection (1) applies for the 2004­05 and subsequent income years.

No offset in calculating some income tax liabilities Section ID 1(2) is omitted.

Subsection (1) applies for the 2003­04 and subsequent income years.
Net losses may be offset against future net income 41 (1) After section IE 1(2), the following is inserted: “(2B) A taxpayer who is a partner in a special partnership may not under this section carry forward a net loss if— “(a) the taxpayer has a deduction in an income year that arises from the activities of the special partnership; and the net loss arises from the deduction; and during the income year, the taxpayer derives no gross income, whether from the activities of the special part­ nership or otherwise.
“(b) “(c) 39 Part 1 s 42 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “(2C) A taxpayer may not carry forward under this section a net loss to the extent that the net loss is offset against a remitted amount of an associated person as determined by the Commissioner under section EZ 9.” Subsection (1) applies to a net loss of a taxpayer for the 2004­05 and subsequent income years.
(2) 42 (1) “(i) (2) 43 (1) Net loss offset between group companies Section IG 2(2)(a)(i) is replaced by the following: a net loss for the year of offset that does not consist of a mining outgoing excess and is not prevented by section IE 1(2B) or (2C) from being carried forward under sections IE 1 and IF 1:”.

Subsection (1) applies to a net loss of a taxpayer for the 2004–05 and subsequent income years.
Rebate for gifts of money In section KC 5(1)(cl), “Zealand.” is replaced by “Zealand:” and the following is added: “(cm) Medicine Mondiale: “(cn) New Zealand Jesuits in India Trust: “(co) Operation Vanuatu Charitable Trust.” (2) Subsection (1) applies for the 2004­05 and subsequent income years.
Granting of underlying foreign tax credit 44 (1) After section LF 2(2)(d), the following is inserted: “(db) if the company, as a result of the payment of the dividend, is liable to pay no income tax in relation to an amount, or part of an amount, from which the dividend is sourced; or”.

Subsection (1) applies for dividends that are derived on or after the day on which this Act receives the Royal assent.
(2) New Part MBC inserted 45 (1) After Part MBB, the following is inserted: 40 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 1 s 45 “Subpart BC—Early­payment discount of income tax “MBC 1 Purpose “(1) The purpose of this subpart is to encourage, by means of a discount of income tax, payments of amounts as income tax by small­business taxpayers in the income year that precedes the income year in which the taxpayers are ﬁrst required to pay provisional tax.
In this subpart— “early­payment discount means a discount of income tax under this subpart “small­business taxpayer means a taxpayer who— “(a) conducts a business on the taxpayer’s own account, act­ ing alone or as a partner in a partnership; and “(2) “(b) does not use a company or a trust in the conduct of the “(c) business; and derives gross income that is predominantly— “(i) “(ii) not interest, dividends, royalties, rents or beneﬁ­ from the business; and ciary income.
“MBC 2 Availability of early­payment discount “(1) This section applies to a small­business taxpayer for an income year if the small­business taxpayer— “(a) is not required to make payments of provisional tax in the income year; and “(c) “(b) on or before the taxpayer’s balance date for the income year, makes payments as income tax for the income year; and throughout the period from the taxpayer’s balance date for the income year to the taxpayer’s terminal tax date for the income year, has a credit in an account with the Commissioner that is greater than or equal to the lesser of the following: “(i) the amount that, on or before the small­business taxpayer’s balance date for the income year, the small­business taxpayer pays as income tax for the income year: 41 Part 1 s 45 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “(ii) the amount of terminal tax for the income year for which the taxpayer would be liable in the absence of this section; and “(d) has, for earlier income years— “(i) never been required to make payments of provi­ sional tax and— “(A) never received an early­payment discount; or “(B) derived gross income from a business at no time in a period of 4 income years that be­ gan after the latest income year for which the small­business taxpayer received an early­payment discount; or “(ii) derived gross income from a business at no time in a period of 4 income years that began after the latest income year for which the small­business taxpayer was required to make payments of pro­ visional tax.
“(2) If a small­business taxpayer to whom this section applies makes a return of income for the income year and applies for an early­payment discount, the Commissioner must credit the income tax account of the small­business taxpayer with an early­payment discount found by multiplying the discount rate referred to in subsection (4) by the lesser of the following: the amount that, on or before the small­business tax­ “(a) payer’s balance date for the income year, the small­busi­ ness taxpayer paid as income tax for the income year: “(b) 105% of the small­business taxpayer’s residual income tax for the income year.
“(3) The small­business taxpayer must make the application re­ quired by subsection (2) on or before the date given by section 37(5) of the Tax Administration Act 1994 as the last date for ﬁling a return of income for the income year to which the ap­ plication relates.

“(4) The discount rate is— “(a) “(b) 6.7% if no rate is prescribed under paragraph (b): the rate prescribed by the Governor­General by Order in Council.
42 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 1 s 46 “MBC 3 Credit treated as being payment as income tax A credit of an early­payment discount for a small­business tax­ payer for an income year is treated as being a payment made on the day after the last day of the income year by the small­busi­ ness taxpayer as income tax for the income year.” Subsection (1) applies for income years commencing on and after 1 April 2005.
(2) Refund of excess tax Section MD 1(1) is replaced by the following: 46 (1) “(1) Subject to sections MD 2, MD 2A, MD 2B, MD 3 and NH 4, and subsection (2), the Commissioner must refund an amount that a taxpayer has paid as tax if— “(a) the Commissioner is satisﬁed that the amount represents an excess over the tax properly payable by the taxpayer; and the 4­year period referred to in section 108 of the Tax Administration Act 1994 has not expired.” “(b) Section MD 1(2) is replaced by the following: (2) “(2) Subject to sections MD 2, MD 2A, MD 2B, MD 3, and NH 4, the Commissioner must refund an amount that a taxpayer has paid as tax if— “(a) the taxpayer paid the amount as a result of an amend­ ment to an assessment that increased the amount of tax payable by the taxpayer; and the Commissioner is satisﬁed that the amount represents an excess over the tax properly payable by the taxpayer; and the 4­year period beginning at the end of the income year in which the assessment was amended has not ex­ pired.
“(b) “(c) “(2B) The Commissioner may refund an amount of an overpayment of tax that is referred to in subsection (1) or (2) after the end of the 4­year period referred to in the subsection if— “(a) the overpayment arises from— “(i) a clear mistake or simple oversight of the tax­ payer: an entitlement of the taxpayer to a rebate of in­ come tax under Part KD; and “(ii) 43 Part 1 s 47 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “(b) “(ii) the refund is made— “(i) within the period of 4 years beginning from the end of the 4­year period referred to in the subsec­ tion: as a result of an application by or on behalf of the taxpayer that the Commissioner receives before or within the period of 4 years beginning from the end of the 4­year period referred to in the subsection.” Subsections (1) and (2) apply for the 2004­05 and subsequent income years.
Limits on refunds of tax in relation to Maori authorities In section MD 2B(1)(a), “the end” is replaced by “unless sub­ section (1B) applies, the end”.
(3) 47 (1) (2) After section MD 2B(1), the following is inserted: “(1B) Despite subsection (1)(a), a Maori authority that furnishes its Maori authority credit account return for an imputation year before the end of the next imputation year may be refunded income tax in accordance with section MD 1 if— “(a) the Maori authority has furnished the Maori authority credit account return within an extension of time given by the Commissioner; and the amount of the refund does not exceed the credit balance in the Maori authority’s Maori authority credit account on the last day of the imputation year for which the Maori authority credit account return was furnished.” “(b) (3) In section MD 2B(4), “If income” is replaced by “Unless sub­ section (4B) applies, if income”.
(4) After section MD 2B(4), the following is inserted: “(4B) Despite subsection (4), the income tax not refunded may be credited on a provisional tax instalment date if residual income tax is treated as being payable on the date speciﬁed in Part 7 of the Tax Administration Act 1994.” Subsections (1) to (4) apply for the 2004­05 and subsequent income years.
(5) 44 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 1 s 48 48 (1) Application of income tax or dividend withholding payments not refunded This section amends section MD 4 as it read before being repealed by section 41 of the Taxation (GST, Trans­Tasman Imputation and Miscellaneous Provisions) Act 2003.
Section MD 4 is amended by adding the following: (2) “(2) Subsection (1) does not prevent a credit (called a permitted credit), of an amount given by subsection (3), arising in an imputation credit account or dividend withholding payment account if— “(a) “(b) “(c) “(d) a company or consolidated group is entitled to a refund of overpaid income tax or overpaid dividend withhold­ ing payment; and the Commissioner transfers the refundable amount to another period or another tax type; and after the overpayment that gives rise to the entitlement to a refund and before the transfer, a debit in the imput­ ation credit account or dividend withholding payment account arises under section ME 5(1)(i), ME 12(1)(h), MG 5(1)(i) or MG 15(1)(i); and a credit would have arisen to the account of the com­ pany or consolidated group in the event that— “(i) the refundable amount had been refunded by the Commissioner at the time of the transfer; and the company or consolidated group had immedi­ ately paid the amount of the refund to the Com­ missioner in payment of a tax liability for the other period or tax type; and “(ii) “(e) the company or consolidated group requests at any time that this subsection apply to the transfer of the refund­ able amount.
“(3) The amount of the permitted credit to which subsection (2) refers is the amount of the credit to which subsection (2)(d) refers, reduced by the amount of the debit that would have arisen under section ME 5(1)(e), ME 12(1)(d), MG 5(1)(d) or MG 15(1)(d) at the time of the refund to which subsection (2)(d)(i) refers.” Subsection (2) applies for the 1997­98 and subsequent income years.
(3) 45 Part 1 s 49 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 Companies required to maintain imputation credit account Section ME 1(2)(a) is replaced by the following: resident in a country other than New Zealand; or”.
Companies electing to maintain imputation credit account Section ME 1B(4)(a) is replaced by the following: for the purpose of section ME 6, from— “(i) the date that is 30 days after the date on which the Com­ missioner receives the notice, if none of subparagraphs (ii) to (iv) apply; or “(ii) 1 October 2003, if the Commissioner receives the notice before 1 April 2004 and notiﬁes the company that the notice is effective from 1 October 2003; or “(iv) “(iii) 1 April 2004, if the Commissioner receives the notice before 1 April 2005 and notiﬁes the company that the notice is effective from 1 April 2004; or the beginning of the imputation year in which the Com­ missioner receives the notice, if the company is formed in the imputation year or becomes eligible under this section in the imputation year and the Commissioner notiﬁes the company that the notice is effective from the beginning of the imputation year:”.
Amount of dividend for imputation rules if paid in Australian currency In section ME 1C, the formula is replaced by the following: a × b Consolidated imputation group to maintain separate imputation credit account Section ME 10(1D)(b) is replaced by the following: arise in relation to a company that, at the time the debit or credit arises— “(i) will be a member of the resident imputation sub­group, if the debit or credit arises before the formation of the resident imputation subgroup: 49 “(a) 50 “(a) 51 52 “(b) 46 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 1 s 55 “(ii) is a member of the resident imputation subgroup, if the debit or credit arises at or after the formation of the resident imputation subgroup.” Credits arising to imputation credit account of group 53 (1) After section ME 11(1)(f), the following is inserted: “(fb) an amount forming all or part of a credit balance in the divi­ dend withholding payment account of a company that is a member of the consolidated imputation group, if the company elects under section MG 11 that the amount be a credit to the imputation credit account of the consolidated imputation group:”.
(2) After section ME 11(1)(j), the following is inserted: “(jb) an amount forming all or part of a credit balance in the pol­ icyholder credit account of a company, if the company elects under section ME 19(3)(a) during the imputation year that the amount be a credit to the imputation credit account of the con­ solidated imputation group:”.

In section ME 11(2)(d), “paragraphs (g) and (k)” is replaced by “paragraphs (fb), (g) and (k)”.
(3) (4) After section ME 11(2)(e), the following is inserted: “(eb) in the case of the credit referred to in paragraph (jb) of that subsection, on the date the relevant debit arose under section ME 18(4)(b):”.
54 “(b) Debits arising to imputation credit account of group Section ME 12(1)(b) is replaced by the following: an amount forming all or part of a credit balance in the imput­ ation credit account of the consolidated imputation group, if the nominated company of the consolidated imputation group elects under section ME 14(1) during the imputation year that the amount be a credit to the policyholder credit account of the consolidated imputation group or of a member of the consoli­ dated imputation group:”.
55 (1) Credits and debits arising to policyholder credit account of company In section ME 18(1)(a)— 47 Part 1 s 55 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 (a) (b) (c) “under section ME 7 by” is omitted: in subparagraph (i), “under section ME 14 by” is in­ serted before “nominated company”: in subparagraph (ii), “under section ME 7 by” is inserted before “the company,”.
(2) After section ME 18(1)(b), the following is inserted: “(bb) an amount equal to any allocation deﬁcit debit that arises in the company’s dividend withholding payment account under section MG 8B, if the amount of the allocation deﬁcit debit is given by section MG 8B(3)(a): “(bc) an amount equal to the credit balance in the company’s dividend withholding payment account immediately before an allocation deﬁcit debit arises in the company’s dividend withholding payment account under section MG 8B, if the amount of the allocation deﬁcit debit is given by section MG 8B(3)(b):”.
(3) After section ME 18(2)(b), the following is inserted: “(bb) in the case of a credit referred to in paragraph (bb) or (bc) of that subsection, at the end of the imputation year in respect of which the credit arises:”.

In section ME 18(3)(b)— (a) in subparagraph (i), “and not a member of a consoli­ dated group” is omitted: in subparagraph (ii), “or of a consolidated group that is a consolidated imputation group” is omitted.
(b) (4) In section ME 18(4)(b), “company’s imputation credit ac­ count” is replaced by “imputation credit account of the company or imputation group”.

Subsections (2) and (3) apply for the 2004­05 and subsequent imputation years.

Subsections (2) and (3) apply to a company for an imputation year that begins after 31 March 1995 and before 1 April 2004 if the company makes an election under section MG 8B of the Income Tax Act 1994 that applies for the company for the imputation year.
Subsections (2) and (3) apply for an imputation year that be­ gins after 31 March 1995 and before 1 April 2004 to a com­ pany that was an amalgamating company if the amalgamated (5) (6) (7) (8) 48 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 1 s 57 company makes an election under section MG 8B of the In­ come Tax Act 1994 that applies for the amalgamating com­ pany for the imputation year.
56 (1) (2) (3) (4) Election to use credit balance as credit against policyholder base income tax liability or as credit in imputation credit account In section ME 19(3)(a), “and not a member of a consolidated group” is omitted.

In section ME 19(3)(b), “or of a consolidated group that is a consolidated imputation group” is omitted.

In section ME 19(4)(b)(i), “and not a member of a consolidated group” is omitted.
In section ME 19(4)(b)(ii), “, if the company is not a member of an imputation group or of a consolidated group that is a consolidated imputation group” is omitted.
57 Credits and debits arising to group policyholder credit account “(e) (1) After section ME 26(2)(c), the following is added: “(d) an amount equal to any allocation deﬁcit debit that arises in the consolidated group’s dividend withholding payment account under section MG 8B, if the amount of the allocation deﬁcit debit is given by section MG 8B(3)(a): an amount equal to the credit balance in the consolidated group’s dividend withholding payment account immediately before an allocation deﬁcit debit arises in the consolidated group’s dividend withholding payment account under section MG 8B, if the amount of the allocation deﬁcit debit is given by section MG 8B(3)(b):”.
(2) After section ME 26(3)(c), the following is inserted: “(d) in the case of a credit referred to in paragraph (d) or (e) of that subsection, at the end of the imputation year in respect of which the credit arises:”.

Subsections (1) and (2) apply for the 2004­05 and subsequent imputation years.
Subsections (1) and (2) apply for an imputation year that be­ gins after 31 March 1995 and before 1 April 2004 for a con­ (3) (4) 49 Part 1 s 58 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 solidated group if the nominated company for the consolidated group makes an election under section MG 8B of the Income Tax Act 1994 that applies for the consolidated group for the imputation year.
58 (1) (2) (3) 59 Credits and debits arising to branch equivalent tax account of company In section MF 4(2)(a), “or paragraph (b)” is omitted.

Subsection (1) applies for the 1997­98 and subsequent income years, subject to subsection (3).
Subsection (1) does not apply to a taxpayer for an income year if— (a) the taxpayer has, before 26 June 2003, ﬁled a return of income for the income year; and the return of income relies on section MF 4 of the In­ come Tax Act 1994 as that section was before the enact­ ment of section 60 of the Taxation (GST, Trans­Tasman Imputation and Miscellaneous Provisions) Act 2003.

(b) Use of credit to reduce dividend withholding payment, or use of debit to satisfy income tax liability Section MF 5(2) is repealed.
Section MF 5(6B) is replaced by the following: (1) (2) “(6B) If an election under subsection (4) relates to an amount that exceeds the income tax liability, for the income year, of the company that receives the offset under subsection (6), the ex­ cess amount is treated as giving rise to a net loss of the com­ pany for the purpose of Parts IF and IG of an amount given by the following formula:” where— a b is the amount of the excess is the basic rate of income tax, expressed as a percentage, stated in— (a) Schedule 1, Part A, clause 5, if the com­ pany is not a Maori authority; or 50 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 1 s 60 (b) Schedule 1, Part A, clause 2, if the com­ pany is a Maori authority.
(3) (4) 60 (1) (2) (3) (4) Subsections (1) and (2) apply for the 1997­98 and subsequent income years, subject to subsection (4).
Subsections (1) and (2) do not apply to a taxpayer for an in­ come year if— (a) the taxpayer has, before 26 June 2003, ﬁled a return of income for the income year; and the return of income relies on section MF 5 of the In­ come Tax Act 1994 as that section was before the enact­ ment of section 61 of the Taxation (GST, Trans­Tasman Imputation and Miscellaneous Provisions) Act 2003.
(b) (b) Debits and credits arising to group branch equivalent tax account In section MF 8(2)(a)— (a) in the deﬁnition of item “d”, “or LC 5” is replaced by “, LC 5 or LC 16”: in the deﬁnition of item “e”, “companies that are mem­ bers of the consolidated group” is replaced by “other companies”.

In section MF 8(3)(a)— (a) “the credits referred to in paragraphs (a) and (b)” is re­ placed by “a credit referred to in paragraph (a)”: “those paragraphs” is replaced by “that paragraph”.
(b) Subsections (1) and (2) apply for the 1997­98 and subsequent income years, subject to subsection (4).

Subsections (1) and (2) do not apply to a taxpayer for an in­ come year if— (a) the taxpayer has, before 26 June 2003, ﬁled a return of income for the income year; and the return of income relies on section MF 8 of the In­ come Tax Act 1994 as that section was before the enact­ ment of section 63 of the Taxation (GST, Trans­Tasman Imputation and Miscellaneous Provisions) Act 2003.
(b) 51 Part 1 s 61 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 61 Use of consolidated group credit to reduce dividend withholding payment, or use of group or individual debit to satisfy income tax liability Section MF 10(2) is repealed.
Section MF 10(5B) is replaced by the following: (1) (2) “(5B) If an election under subsection (3) or (4) relates to an amount that exceeds the income tax liability, for the income year, of the company or group that receives the offset under subsection (5), the excess amount is treated as giving rise to a net loss of the company or group for the purpose of Parts IF and IG of an amount given by the following formula:” where— a b is the amount of the excess is the basic rate of income tax, expressed as a percentage, stated in— (a) Schedule 1, Part A, clause 5, if the com­ pany is not a Maori authority or the group does not consist of Maori authorities; or Schedule 1, Part A, clause 2, if the com­ pany is a Maori authority or the group con­ sists of Maori authorities.
(b) Subsections (1) and (2) apply for the 1997­98 and subsequent income years, subject to subsection (4).

Subsections (1) and (2) do not apply to a taxpayer for an in­ come year if— (a) the taxpayer has, before 26 June 2003, ﬁled a return of income for the income year; and the return of income relies on section MF 10 of the In­ come Tax Act 1994 as that section was before the enact­ ment of section 64 of the Taxation (GST, Trans­Tasman Imputation and Miscellaneous Provisions) Act 2003.
(b) Debits arising to dividend withholding payment account In section MG 5(1)(c), “company’s imputation credit account” is replaced by “imputation credit account of the company or of an imputation group to which the company belongs”.

(3) (4) 62 (1) 52 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 1 s 64 (2) (3) (4) (5) (6) 63 (1) (2) (3) (4) In section MG 5(1)(f), “section MG 8” is replaced by “section MG 8(4)”.
In section MG 5(1)(g), “section MG 8(5)” is replaced by “sec­ tion MG 8B”.

Subsection (3) applies for the 2004­05 and subsequent imput­ ation years.

Subsection (3) applies to a company for an imputation year that begins after 31 March 1995 and before 1 April 2004 if the company makes an election under section MG 8B of the Income Tax Act 1994 that applies for the company for the imputation year.
Subsection (3) applies for an imputation year that begins after 31 March 1995 and before 1 April 2004 to a company that was an amalgamating company if the amalgamated company makes an election under section MG 8B of the Income Tax Act 1994 that applies for the amalgamating company for the imputation year.

Allocation rules for dividend withholding payment credits Section MG 8(5) to (7) are repealed.

Subsection (1) applies for the 2004­05 and subsequent imput­ ation years.
Subsection (1) applies to a company for an imputation year that begins after 31 March 1995 and before 1 April 2004 if the company makes an election under section MG 8B of the Income Tax Act 1994 that applies for the company for the imputation year.
Subsection (1) applies for an imputation year that begins after 31 March 1995 and before 1 April 2004 to a company that was an amalgamating company if the amalgamated company makes an election under section MG 8B of the Income Tax Act 1994 that applies for the amalgamating company for the imputation year.
64 New section MG 8B inserted After section MG 8, the following is inserted: 53 Part 1 s 64 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “MG 8B Policyholder credit account companies and dividend withholding payment credits “(1) This section applies to a policyholder credit account company (called the company) that is not a conduit tax relief company and an imputation year (called the dividend year) in which the company pays a dividend with a dividend withholding pay­ ment credit attached.
“(2) An allocation deﬁcit debit of an amount given by subsection (3) arises at the end of the dividend year in the company’s dividend withholding payment account if— “(a) the total of the amounts of the company’s policyholder income and policyholder net loss for the DWP reference period, found using the policyholder base calculation for each imputation year, is greater than nil; and the shareholder DWP ratio for the DWP reference period exceeds the policyholder DWP ratio for the DWP reference period.
“(b) “(3) The amount of the allocation deﬁcit debit that arises under subsection (2) is— “(a) “(b) equal to the maximum deﬁcit debit, if the maximum deﬁcit debit is less than or equal to the credit balance that is in the company’s dividend withholding payment account immediately before any allocation deﬁcit debit arises under this section: equal to the reduced deﬁcit debit, if paragraph (a) does not apply.
In this section— “DWP reference period means the period that consists of— “(a) “(b) the dividend year: the longest period of consecutive imputation years— “(i) that begins on or after the date on which this section applies for the company; and that ends immediately before the dividend year; and “(ii) “(iii) in which the company paid no dividend that had a dividend withholding payment credit attached “(4) 54 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 1 s 64 “maximum deﬁcit debit means the quantity that is given by the following formula (a ­ b) x d x (1 ­ r) where— a is the company’s shareholder DWP ratio for the DWP reference period: is the company’s policyholder DWP ratio for the DWP reference period: is the total of the amounts of the company’s policy­ holder income and policyholder net loss found for the DWP reference period using the policyholder base cal­ culation: is the basic rate of income tax, expressed as a percent­ age, stated in— (a) Schedule 1, Part A, clause 5, if the company is not a Maori authority: Schedule 1, Part A, clause 2, if the company is a Maori authority (b) “policyholder DWP ratio means the quantity that is given by the following formula where— c is the total for the DWP reference period of all the credits that have arisen in the company’s policyholder credit account as a result of an election by the company under section MG 7 in relation to a credit balance in the company’s dividend withholding payment account is the total of the amounts of the
 company’s policy­ holder income and policyholder net loss found for the DWP reference period using the policyholder base cal­ culation is the basic rate of income tax, expressed as a percent­ age, stated in— (a) Schedule 1, Part A, clause 5, if the company is not a Maori authority: Schedule 1, Part A, clause 2, if the company is a Maori authority (b) 55 b d r d r Part 1 s 64 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “reduced deﬁcit debit means the quantity that is given by
 the following formula where— c d e f g r is the total for the DWP reference period of all the credits that have arisen in the company’s policyholder credit account as a result of an election by the company under section MG 7 in relation to a credit balance in the company’s dividend withholding payment account is the total of the amounts of the company’s policy­ holder income and policyholder net loss found for the DWP reference period using the policyholder base cal­ culation is the credit balance in the company’s dividend with­ holding payment account at the end of the dividend year immediately before any allocation deﬁcit debit arises under this section is the total amount of DWP credits that the company has attached to dividends paid by the company in the DWP reference period is the total amount of dividends paid by the company in the DWP reference period is the basic rate of income tax, expressed as a percent­ age, stated in— (a) Schedule 1, Part A, clause 5, if the company is not a Maori authority: Schedule 1, Part A, clause 2, if the company is a Maori authority (b) “shareholder DWP ratio means the quantity given by the fol­ lowing formula where— f is the total amount of DWP credits that the company has attached to dividends paid by the company in the DWP reference period 56 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 1 s 66 g is the total amount of dividends paid by the company in the DWP reference period.
“(5) This section does not apply to a dividend that is the subject of a determination made by a statutory producer board or a co­operative company under section ME 30 or section ME 35.

“(6) This section applies for the 2004­05 and subsequent imput­ “(7) “(8) “(9) 65 (1) (2) 66 ation years.

If a company makes an election in writing for an imputation year that begins after 31 March 1995 and before 1 April 2004, this section applies for the company for the imputation year and for subsequent imputation years.
If an amalgamated company makes an election in writing for an imputation year that begins after 31 March 1995 and before 1 April 2004 and for a company that was an amalgamating company in relation to the amalgamated company, this section applies for the amalgamating company for the imputation year and for subsequent imputation years.
If a nominated company for a consolidated group makes an election in writing for an imputation year that begins after 31 March 1995 and before 1 April 2004, this section applies for the consolidated group for the imputation year and for subse­ quent imputation years.” Further dividend withholding payment payable by company In section MG 9(5C)(b), “payment of income tax” is replaced by “dividend withholding payment”.

Subsection (1) applies for imputation years that begin on and after 1 April 1998.
Transfer of credit balance to imputation credit account Section MG 11(1) is replaced by the following: “(1) A company that is not a conduit tax relief company and has a credit balance in the dividend withholding payment account of the company at the end of an imputation year, or immediately before a debit arises in the account under section MG 5(1)(j), may elect that all or part of the credit balance be, for the im­ putation year in which the credit balance occurs— 57 Part 1 s 67 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 67 (1) (2) (3) (4) 68 “(a) “(b) a debit to the dividend withholding payment account of the company; and a credit to the imputation credit account of the company, or of an imputation group of which the company is a member at the time the credit balance occurs.” Debits arising to group dividend withholding payment account In section MG 15(1)(f), “section MG 8” is replaced by “section MG 8(4)”.
In section MG 15(1)(g), “section MG 8(5)” is replaced by “section MG 8B”.

Subsection (1) applies for the 2004­05 and subsequent imput­ ation years to a company that is at the time of payment a mem­ ber of the consolidated group.
Subsection (1) applies to a consolidated group for an imput­ ation year that begins after 31 March 1995 and before 1 April 2004 if the nominated company for the consolidated group makes an election under section MG 8B of the Income Tax Act 1994 that applies for the consolidated group for the im­ putation year.
Application of speciﬁc dividend withholding provisions to consolidated groups Section MG 16A(1) is replaced by the following: (1) “(1) Section MG 8 applies with any necessary modiﬁcations to a consolidated group— “(a) “(b) as if the consolidated group were a company; and for the purpose of section MG 8(2) to (4), without tak­ ing into account any dividend that is paid by a member of the consolidated group to another member of the con­ solidated group.
“(1B) Section MG 8B applies with any necessary modiﬁcations to a consolidated group that has a policyholder credit account— “(a) “(b) as if the consolidated group were a company; and as if a reference to section MG 7 were a reference to section NH 6(2); and 58 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 1 s 70 (2) (3) 69 “(c) without taking into account any dividend that is paid by a member of the consolidated group to another member of the consolidated group.” Subsection (1) applies for the 2004­05 and subsequent imput­ ation years.
Subsection (1) applies for a consolidated group for an imput­ ation year that begins after 31 March 1995 and before 1 April 2004 if the nominated company for the consolidated group makes an election under section MG 8B of the Income Tax Act 1994 that applies for the consolidated group for the im­ putation year.
Further tax payable for end of year debit balance or when Maori authority ceases to exist Section MK 8(5) is replaced by the following: (1) “(5) A Maori authority that pays an amount of further income tax for which the authority is liable may elect, with effect from the date on which the Commissioner receives the payment, that the amount paid be also credited in payment of a liability of the authority to pay income tax or provisional tax in relation to an income year that corresponds to an imputation year in which the authority was required to establish and maintain a Maori authority credit account.
“(5B) A Maori authority that pays an amount of income tax in re­ lation to an income year in which the authority was required to establish and maintain a Maori authority credit account and that is liable to pay further income tax in relation to an imput­ ation year may elect, with effect from the date on which the Commissioner receives the payment, that the amount of the payment of tax be also credited in payment of the liability of the authority to pay the further income tax.” Subsection (1) applies for the 2004­05 and subsequent income years.
(2) 70 (1) Accreditation requirements of PAYE intermediaries In section NBB 2(1)(c), the words before subparagraph (i) are replaced by “the applicant, if a natural person or corporation sole, or each member of the applicant, if the applicant is an un­ 59 Part 1 s 71 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 (2) 71 incorporated body, or each of the persons acting as a director, secretary or statutory ofﬁcer of the applicant, if the applicant is a body corporate, and any principal of the applicant”.
In section NBB 2(4)(b), the words before subparagraph (i) are replaced by “the person, if a natural person or corporation sole, or a member of the person, if the person is an unincorporated body, or a person acting as a director, secretary or statutory ofﬁcer of the person, if the person is a body corporate, or a principal of the person”.
Employer having PAYE intermediary—responsibilities and status under PAYE rules and SSCWT rules Section NBB 4(1) is replaced by the following: (1) “(1) An employer who is in an arrangement with a PAYE inter­ mediary that applies to an employee and a pay period must— if the employer has authorised the PAYE intermediary to “(a) direct the transfer of amounts from a bank account of the employer in satisfaction of the obligations under the ar­ rangement of the PAYE intermediary to make payments on behalf of the employer, ensure that, at a time speci­ ﬁed by the PAYE intermediary, the funds in the bank ac­ count of the employer that are available for transfer are sufﬁcient to satisfy the obligations of the PAYE inter­ mediary that relate to the employee and the pay period; or if the employer has not authorised the PAYE intermedi­ ary as described in paragraph (a), pay into the trust ac­ count established by the PAYE intermediary and identi­ ﬁed in the employer’s notice to the Commissioner under section NBB 3— “(i) “(b) if subparagraph (ii) does not apply, the em­ ployee’s gross salary or wages for the pay period after deduction of any amount that is owed by the employee to the employer and may be law­ fully withheld by the employer from the salary or wages: if the employer has paid salary or wages to the employee in the way authorised by subsection (4), the amount that the employer is required by “(ii) 60 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 1 s 72 subsection (4)(d) to make available to the PAYE intermediary: “(iii) if the PAYE intermediary has agreed to assume obligations of the employer under the SSCWT rules, the speciﬁed superannuation contributions that are made in the pay period by the employer on behalf of the employee.
“(1B) An employer who is in an arrangement with a PAYE inter­ mediary that applies to an employee and a pay period must— keep records of the gross salary or wages of the em­ “(a) ployee for the pay period and the amounts withheld by the employer for the pay period; and “(b) provide information requested by the PAYE intermedi­ ary within the time agreed by the employer and the PAYE intermediary.” In section NBB 4(2), “subsection (1)” is replaced by “subsec­ tions (1) and (1B)”.
In section NBB 4(3), “subsection (1)” is replaced by “subsec­ tions (1) and (1B)”.
Section NBB 4(4)(c) and (d) are replaced by the following: the employer makes from the gross salary or wages of the em­ ployee the deduction that the PAYE rules and SSCWT rules would require of an employer who did not have a PAYE inter­ mediary; and the employer makes available to the PAYE intermediary, in the way required by subsection (1), the amount of the deduction referred to in paragraph (c).” PAYE intermediary—responsibilities and status under PAYE rules and SSCWT rules In section NBB 5(1), “and (1B)” is inserted after “section NBB 4(1)” in both places that it occurs.
(2) (3) (4) “(c) “(d) 72 (1) (2) After section NBB 5(1), the following is inserted: “(1B) If a PAYE intermediary has been authorised by an employer to direct the transfer of amounts from a bank account of the employer as described in section NBB 4(1)(a), the PAYE inter­ mediary must direct that, at or before the time of the transfer of the amount of salary or wages owing to the employee, an 61 Part 1 s 73 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 amount representing the deductions from the gross salary or wages of the employee that are required by the PAYE rules and SSCWT rules be transferred to— “(a) “(b) the Commissioner: the trust account established by the PAYE intermediary and identiﬁed in the employer’s notice to the Commis­ sioner under section NBB 3.” In section NBB 5(2B), “and (1B)” is inserted after “section NBB 4(1)” in both places that it occurs.
Operation of trust account In section NBB 6(2), the following is inserted before para­ graph (a): (3) 73 “(aa) deductions from gross salary or wages that are required by the PAYE rules and SSCWT rules:”.

Amounts of tax deductions Section NC 6(1) is repealed.

In section NC 6(1A), “For a period for which the amount of a tax deduction is not ﬁxed by an annual taxing Act, the” is replaced by “A”.

In section NC 6(1B), “by an annual taxing Act or” is omitted.
In section NC 6(1C), “by an annual taxing Act or” is omitted.

Section NC 6(2) is repealed.
Delivery of withholding declaration Section NC 7(2) is replaced by the following: If a person who is making a withholding payment has not re­ ceived the withholding declaration required by subsection (1), the person must make from the withholding payment a tax de­ duction that is equal to the sum of the amount of the tax de­ duction that would, apart from this subsection, be made from the withholding payment and an amount equal to— “(a) 15% of the amount of the withholding payment, if nei­ ther of paragraphs (b) and (c) applies; or “(b) 5% of the amount of the withholding payment, if— “(i) the person receiving the withholding payment is a company that is a non­resident contractor for 74 (1) (2) (3) (4) (5) 75 (1) “(2) 62 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 1 s 79 “(ii) the purposes of the Income Tax (Withholding Payments) Regulations 1979; and the person referred to in subparagraph (i) receives the withholding payment other than directly or indirectly as a result of a choice that is made for purposes that include a purpose of defeating the intent and application of paragraph (a); and “(c) “(iii) paragraph (c) does not apply; or nil, if the withholding payment is a payment of the class speciﬁed in clause 4(b) of Part B of the Schedule of the Income Tax (Withholding Payments) Regulations 1979.” Subsection (1) applies for withholding payments made on or after the date on which this Act receives the Royal assent.
Amount of tax deductions for pay period current when tax deductions altered In section NC 12(1), “by an annual taxing Act or” is omitted.

Special ﬁling rule for employer who stops employing staff during year In section ND 12, “section ND 10(4) and ND 10(5)” is re­ placed by “section ND 10(3) to (5)”.
(2) 76 77 78 (1) “(xi) (2) (3) Application of RWT rules In section NF 1(2)(a)(x), “Commissioner.” is replaced by “Commissioner; or” and the following is added: interest payable on overpaid tax in accordance with section 120D of the Tax Administration Act 1994.” Section NF 1(3) and (3A) are repealed.

Subsections (1) and (2) apply to payments of interest made on or after 1 April 2005.
79 (1) “(a) Liability to make deduction in respect of foreign withholding payment dividend Section NH 1(2)(a) is replaced by the following: a dividend that is paid by a foreign company and that— 63 Part 1 s 80 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “(i) “(ii) is derived by a company that is resident in New Zealand; and is exempt income under section CB 10(1), (4) or (5) for the company that is resident in New Zealand; and “(iii) would not, in the absence of section CB 10, be exempt income under section CB 3(b) or CB 4 for the company that is resident in New Zealand:”.
Section NH 1(3) is repealed.

Subsections (1) and (2) apply for a dividend that is derived in or after the 1997­98 income year.

Application of speciﬁc dividend withholding payment provisions to consolidated groups Section NH 6(3) and (4) are repealed.

In section NH 6(6)(a)(ii), “payment” is inserted after “divi­ dend withholding”.

Subsection (1) applies for the 2004­05 and subsequent imput­ ation years.
Subsection (1) applies for a consolidated group for an imput­ ation year that begins after 31 March 1995 and before 1 April 2004 if the nominated company for the consolidated group makes an election under section MG 8B of the Income Tax Act 1994 that applies for the consolidated group for the im­ putation year.

Deﬁnitions This section amends section OB 1.

In the deﬁnition of allocation deﬁcit debit, “or section MG 8(5)” is replaced by “or MG 8B”.

The deﬁnition of business of farming is omitted.


In the deﬁnition of community trust, “section 2” is replaced by “section 4”.

In paragraph (b) of the deﬁnition of depreciable property— (a) “DO 4D,” is inserted after “DO 3,”: “DO 4C,” is inserted after “DO 4,”: in subparagraph (vi)— (i) (ii) in subparagraph (viii), “DO 4, DO 4C,” is inserted after “DO 3,”.
(b) (2) (3) 80 (1) (2) (3) (4) 81 (1) (2) (3) (4) (5) 64 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 1 s 81 (6) In the deﬁnition of diminished value— (a) (b) in the introductory words, “DO 4C” is inserted after “sections DL 2, DO 4,”: in paragraph (b), “sections DL 2, DO 4, DO 4C, DO 4D and DO 5” replaces “section DL 2 or section DO 4 or section DO 5”.
(7) After the deﬁnition of dual resident company, the following is inserted: “DWP reference period is deﬁned in section MG 8B(4) for the pur­ pose of that section”.

(8) After the deﬁnition of early income year, the following is inserted: “early­payment discount is deﬁned in section MBC 1 for the pur­ pose of Part MBC”.
(9) In the deﬁnition of estimated useful life, the following is added: in respect of a listed horticultural plant, the period of time over which the listed horticultural plant might reasonably be ex­ pected to be useful to a person in deriving income or in carry­ ing on a business in New Zealand, with the expectation based on an assumption of normal and reasonable maintenance”.
“(c) (10) The deﬁnition of ﬁnance lease is replaced by the following: “ﬁnance lease for a taxpayer means a lease of a lease asset that at the time of entry by the taxpayer involves or is part of an arrangement that involves— “(a) the transfer of the ownership of the lease asset to the lessee or an associate of the lessee during or at the end of the lease term: the lessee or an associate of the lessee having the option of acquiring the lease asset for an amount that is likely to be sub­ stantially lower than the lease asset’s market value on the date of acquisition: a lease term that is more than 75% of the lease asset’s estimated useful life: a right of an associate of the lessee to acquire the lease as­ set, or a right of the lessor to require an associate of the lessee to acquire the lease asset, during the lease term under an ar­ rangement that does not entitle the associate to receive all of the lease payments that may fall due after the acquisition”.
“(b) “(c) “(d) 65 Part 1 s 81 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 (11) The deﬁnition of insurer is replaced by the following: “insurer, in the deﬁnition of insured person and in sections CN 4 and OE 4, means a person who assumes liability under a contract of insurance”.

(12) The deﬁnition of land tax is repealed.


(13) In paragraph (f) of the deﬁnition of lease— (a) in the words preceding subparagraph (i)— (i) (ii) after subparagraph (ii), the following is inserted: “operating lease,” is inserted after “lease term,”: “FC 8G” is replaced by “FC 8I”: (b) (15) “(iib) includes a licence to use intangible property; and”.

(14) In paragraph (b) of the deﬁnition of lessee, “, hires, or bails” is omitted.
In paragraph (a) of the deﬁnition of lessee’s acquisition cost, “means the consideration provided to the lessee for the ﬁnance lease asset (as determined under the deﬁnition of consider­ ation)” is replaced by “for a ﬁnance lease asset, means the consideration provided to the lessee under the ﬁnance lease, as determined under the deﬁnition of consideration,”.
(16) After the deﬁnition of listed company the following is in­ serted: “listed horticultural plant, in sections DO 4B, DO 4C and DO 4D— “(a) means a horticultural plant, tree, vine, bush, cane, or similar plant that is cultivated on land, that is of a type that is listed in a determination made by the Commissioner under section 91AAB of the Tax Administration Act 1994: “(b) does not include— “(i) “(ii) a tree planted mainly for the purpose of timber produc­ tion: a tree or other similar plant planted mainly for the pur­ pose of ornament: “(iii) a vine planted mainly for the purpose of producing grapes for wine production”.
(17) After the deﬁnition of Maui ﬁeld, the following is inserted: “maximum deﬁcit debit is deﬁned in section MG 8B(4) for the pur­ pose of that section”.

(18) After the deﬁnition of minibus, the following is inserted: 66 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 1 s 81 “minimum employment period is deﬁned in section CL 8(2) for the purpose of that section”.

(19) In the deﬁnition of net loss, “section 177C(4)” is replaced by “section 177C(5)”.
(20) The deﬁnition of new start grant is replaced by the following: “new start grant means a grant of money that is designated by the Minister of Agriculture as a new start grant and is paid by the Gov­ ernment of New Zealand to a person in respect of— “(a) “(b) (21) After the deﬁnition of non­ﬁling taxpayer, the following is an adverse event: an event that is a qualifying event”.
inserted: “non­listed horticultural plant, in sections DO 4 and Schedule 7, Part A, item 12— “(a) means— “(i) a horticultural plant, tree, vine, bush, cane, or similar plant that is cultivated on land, that is not a listed horti­ cultural plant: a tree or other similar plant planted mainly for the pur­ pose of ornament: “(ii) “(b) does not include a tree planted mainly for the purpose of timber production”.
(22) The deﬁnition of non­taxable bonus issue is replaced by the following: “non­taxable bonus issue means a bonus issue that is not a taxable bonus issue”.

(23) In paragraph (a)(ii) of the deﬁnition of PAYE intermediary, “section NBB 3; or” is replaced by “section NBB 3; and” and the following is added: “(iii) has entered agreements that have been approved by the Com­ missioner under section NBB 3 with not less than 10 employ­ ers; or”.
(24) After the deﬁnition of physical cost of production, the fol­ lowing is inserted: “planting is deﬁned in section DO 4B(1) for the purpose of sections DO 4B, DO 4C and DO 4D”.

(25) After the deﬁnition of pleasure craft, the following is in­ serted: 67 Part 1 s 81 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “plot is deﬁned in section DO 4B(1) for the purpose of sections DO 4B, DO 4C and DO 4D”.
(26) After the deﬁnition of policyholder credit account person, the following is inserted: “policyholder DWP ratio is deﬁned in section MG 8B(4) for the purpose of that section”.

(27) In the deﬁnition of premium, paragraph (b) is replaced by the following: in the deﬁnition of insured person, and in sections CN 4, GD 13 and OE 4, means a premium, guarantee fee or other amount payable in respect of a contract of insurance”.
“(b) (28) The deﬁnition of qualifying event is replaced by the follow­ ing: “qualifying event means— “(a) “(b) “(c) the extreme climatic conditions that occurred during the month of February 2004 in New Zealand: the storm event that occurred during the month of July 2004 in the Bay of Plenty area: any naturally­occurring event that occurs after the month of July 2004 and— “(i) in respect of which a state of emergency is declared under the Civil Defence Act 1983 or under Part 4 of the Civil Defence Emergency Management Act 2002; and that the Governor­General by Order in Council declares to be a qualifying event”.
“(ii) (29) After the deﬁnition of qualifying event, the following is in­ serted: “qualifying foreign equity investor is deﬁned in section CB 2(4) for the purpose of that section”.

(30) In the deﬁnition of recognised exchange, “CB 2(1),” is in­ serted after “sections”.

(31) After the deﬁnition of reduced deduction, the following is inserted: “reduced deﬁcit debit is deﬁned in section MG 8B(4) for the purpose of that section”.
(32) After the deﬁnition of rents, the following is inserted: “replaced area fraction is deﬁned in section DO 4B(1) for the pur­ pose of sections DO 4B, DO 4C and DO 4D”.
68 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 1 s 81 (33) After the deﬁnition of replacement permit, the following is inserted: “replacement plant, in sections DO 4, DO 4B, DO 4C and DO 4D, means a listed horticultural plant that replaces a listed horticultural plant, whether or not it is of the same type of listed horticultural plant”.

(34) In the deﬁnition of resident in Australia, paragraph (a) is omitted.
In the deﬁnition of schedular gross income, paragraph (g) is omitted.

(35) (36) After the deﬁnition of shareholder dividend statement, the following is inserted: “shareholder DWP ratio is deﬁned in section MG 8B(4) for the purpose of that section”.

(37) After the deﬁnition of signiﬁcant ﬁnancial hardship, the fol­ lowing is inserted: “small­business taxpayer is deﬁned in section MBC 1 for the pur­ pose of Part MBC”.
(38) In the deﬁnition of special corporate entity, after paragraph (h), the following is added: any body incorporated under the Incorporated Societies Act 1908, for an income year in which the body on no day in the income year has shares on issue to the members of the body”.

(39) The deﬁnition of tax credit advantage is replaced by the fol­ “(j) lowing: “tax credit advantage is deﬁned in— “(a) “(b) (40) section GC 22(9) for the purpose of that section: section GC 27B(10) for the purpose of that section”.
In the deﬁnition of taxable bonus issue, the following is added after paragraph (b): a bonus issue that is made by a unit trust that is a foreign com­ pany to a unit holder under an arrangement or decision that the unit trust will make the bonus issue instead of causing a beneﬁcial interest in money or property of the unit trust to vest absolutely in the unit holder”.

In the deﬁnition of taxable period, “1975” is replaced by “1985”.
“(c) (41) 69 Part 1 s 81 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 (42) Subsection (38), other than in the application of Part IG, ap­ plies for the 1995­96 and subsequent income years.
(43) Subsection (38), in the application of Part IG— (a) (b) in relation to a society and an income year for which section OD 3(4) does not apply, applies for an income year that is— (i) one of the 1995­96 to 1999­2000 income years if before 29 March 2004 the society makes a tax return for the income year in which the society adopts a tax position that is consistent with the amendment made by subsection (38); or the 2000­01 or a subsequent income year: (ii) in relation to a society and an income year for which section OD 3(4) does apply, applies— (i) for the purpose of section IG 2(1) and (2)(e), for an income year that is— (A) one of the 1995­96 to 1999­2000 income years if before 29 March 2004 the society makes a tax return for the income year in which the society adopts a tax position that is consistent with the amendment made by subsection (38); or the 2000­01 or a subsequent income year: (B) other than for the purpose of section IG 2(1) and (2)(e), for an income year that is— (A) (ii) the 1995­96 or 1996­97 income year if be­ fore 29 March 2004 the society makes a tax return for the income year in which the society adopts a tax position that is consis­ tent with the amendment made by subsec­ tion (38); or the 2003­04 or a subsequent income year.
(44) Subsection (13)(a)(i) does not apply for a taxpayer and an in­ come year if before 29 March 2004 the taxpayer furnishes a tax return for the income year in which the taxpayer takes a tax position that is consistent with the deﬁnition of lease that would apply for the income year but for the amendment made by subsection (13)(a)(i).
(B) 70 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 1 s 83 (45) Subsections (10), (13)(b) and (14) apply for an arrangement entered on or after 29 March 2004.

(46) Subsections (22) and (40) apply for bonus issues that are made on or after the day on which this Act receives the Royal assent.

(47) Subsections (3), (5), (6), (9), (16), (20), (21), (24), (25), (32), (33) and (35) apply for the 2003­04 and subsequent income years.
(48) Subsections (4) and (39) apply for the 2004 05 and subsequent income years.

(49) Subsections (2), (7), (17), (26), (31) and (36) apply for the 2004­05 and subsequent imputation years.
(50) Subsections (2), (7), (17), (26), (31) and (36) apply for a com­ pany or consolidated group for an imputation year that begins after 31 March 1995 and before 1 April 2004 if the company or the nominated company for the consolidated group makes an election under section MG 8B of the Income Tax Act 1994 that applies for the company or consolidated group for the im­ putation year.
(51) Subsection (2) applies for an imputation year that begins after 31 March 1995 and before 1 April 2004 for a company that was an amalgamating company if the amalgamated company makes an election under section MG 8B of the Income Tax Act 1994 that applies for the amalgamating company for the imputation year.

(52) Subsection (23) applies for pay periods beginning on or after 1 April 2004.

(53) Subsections (8) and (37) apply for income years commencing on and after 1 April 2005.
82 Meaning of income tax In section OB 6(1)(b), “CB 2,” is inserted before “CB 10”.
Voting interests 83 (1) After section OD 3(3), the following is added: “(4) For the purpose of Part IG, other than section IG 2(1) and (2)(e)— “(a) if a society that is incorporated under the Incorporated Societies Act 1908 has issued no shares, each member 71 Part 1 s 84 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 of the society, while being a member, is treated as hold­ ing a share issued by the society: a person who is a member of a society at the begin­ ning of the 1997­98 income year is treated as holding a share referred to in paragraph (a) for all previous in­ come years: a share referred to in paragraph (a) is treated as holding all the types of right that are shareholder decision­mak­ ing rights: all the shareholder decision­making rights in the society are treated as being carried by the shares that the society is treated as having issued under paragraph (a): section OD 3(3)(d) does not apply to a share referred to in paragraph (a).” “(b) “(c) “(d) “(e) (2) After section OD 3(4), as inserted by subsection (1), the fol­ lowing is added: “(5) For the purpose of Part IG, other than section IG 2(1) and (2)(e), the members at the beginning of the 2003­04 income year of a society are treated as being the members of the so­ ciety for the 1997­98 to 2002­03 income years if the society is— “(a) subject to subsection (3) for the 2002­03 income year; and a special corporate entity at 2003­04 income year.” the beginning of the “(b) Subsection (1) applies for a taxpayer and a tax position taken by the taxpayer for the 1997­98 to 2002­03 income years.
Subsection (2) applies for a taxpayer and a tax position taken by the taxpayer for the 2003­04 and subsequent income years.

Further deﬁnitions of associated persons In section OD 8(1), “CB 2(4),” is inserted after “sections”.

Schedule 7—Expenditure on land and aquaculture improvements In Schedule 7, Part A, item 12, “vines or trees on the land other than trees planted primarily and principally for the purposes of timber production” is replaced by “non­listed horticultural plants on the land”.
(3) (4) 84 85 (1) 72 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 2 s 88 (2) Subsection (1) applies for the 2003­04 and subsequent income years.

Part 2 Amendments to Tax Administration Act 1994 Tax Administration Act 1994 This Part amends the Tax Administration Act 1994.

Purpose of Act In section 2(4), “that are not in Part 6 (which relates to assess­ ments) and” is inserted after “provisions of this Act”.

86 87 Interpretation This section amends section 3(1).
88 (1) (2) After the deﬁnition of contested tax, the following is inserted: “contract payment, for the purpose of section 141AA, has the mean­ ing given by regulation 2(1) of the Income Tax (Withholding Pay­ ments) Regulations 1979”.

(3) In paragraph (b)(iii) of the deﬁnition of disputable decision, “Part 8A:” is replaced by “Part 8A; or” and the following is added: that is left to the Commissioner’s discretion under sections 89K, 89L, 89M(8) and (10) and 89N(3)”.
“(iv) (4) After the deﬁnition of disputant’s statement of position, the following is inserted: “disqualifying offence is deﬁned in section 141FB(3) for the pur­ pose of section 141FB “disqualifying penalty is deﬁned in section 141FB(3) for the pur­ pose of section 141FB”.

(5) After the deﬁnition of GST, the following is inserted: “GST payable has the meaning given to tax payable by section 2 of the Goods and Services Tax Act 1985”.

(6) In the deﬁnition of late payment penalty, “21Q” is replaced by “12Q”.
The deﬁnition of response period is replaced by the follow­ ing: (7) 73 Part 2 s 88 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “response period for a notice in response to another notice (called the initiating notice) means— “(a) the 2­month period starting on the date of issue of the initiating notice, if the initiating notice is— “(i) “(ii) “(iii) a notice revoking or varying a disputable decision that a notice of proposed adjustment: a notice of disputable decision: is not an assessment: “(iv) a disclosure notice: “(v) a notice from the Commissioner rejecting an adjustment proposed by a disputant: “(c) “(b) the 2­month period starting on the date of issue of the initiat­ ing notice, if the initiating notice is a disputant’s statement of position: if the notice is a notice of proposed adjustment that is issued by a taxpayer under section 89D and the initiating notice is a notice of assessment issued by the Commissioner, the 4­month period starting on the date of the initiating notice: if the notice is a notice of proposed adjustment that is issued by a taxpayer under section 89DA and the initiating notice is a notice of assessment issued by the taxpayer, the 4­month period starting on the date on which the taxpayer’s notice of assessment is received at an ofﬁce of the department”.
(8) After the deﬁnition of response period, the following is in­ “(d) serted: “responsible department, in sections 81(4)(f) and (o), 82 and 85, means— “(a) in relation to a beneﬁt that is not a student allowance, the de­ partment for the time being responsible for administration of the Social Security Act 1964: in relation to a student allowance, the department for the time being responsible for administration of Part 25 of the Educa­ tion Act 1989”.
“(b) (9) After the deﬁnition of status ruling, the following is inserted: “student allowance means an allowance paid under regulations made under section 303 of the Education Act 1989”.
(10) Subsection (7) applies— (a) for notices issued in relation to GST return periods that commence on or after 1 April 2005: 74 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 2 s 92 (b) for notices that are not issued in relation to GST return periods and that are issued on or after 1 April 2005.
Information to be furnished on request of Commissioner In section 17(1C)(a)(i), “in the knowledge, possession or con­ trol of” is replaced by “held by”, in both places where it ap­ pears.

Section 33B repealed Section 33B is repealed.

Subsection (1) applies for the 2003­04 and subsequent income years.
Ofﬁcers to maintain secrecy In section 81(4)(f), in the portion preceding subparagraph (i), “the department for the time being responsible for the admin­ istration of the Social Security Act 1964” is replaced by “the responsible department”.

In section 81(4)(o), “the department for the time being respon­ sible for the administration of the Social Security Act 1964” where it ﬁrst appears is replaced by “the responsible depart­ ment” and where it appears for the second time is replaced by “that department”.
Disclosure of information for matching purposes In section 82(1), “the department for the time being responsi­ ble for the administration of the Social Security Act 1964” is replaced by “the responsible department”.

In section 82(2), “the department for the time being responsi­ ble for the administration of the Social Security Act 1964” is replaced by “the responsible department”.
In section 82(6), “the department for the time being responsi­ ble for the administration of the Social Security Act 1964” is replaced by “the responsible department”.

In section 82(7), “the department for the time being responsi­ ble for the administration of the Social Security Act 1964” is replaced by “the responsible department”.
89 90 (1) (2) 91 (1) (2) 92 (1) (2) (3) (4) (5) After section 82(7), the following is inserted: 75 Part 2 s 93 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “(7B) If the Commissioner supplies under subsection (6) or (7) in­ formation about a person to the responsible department, the Commissioner may also supply to that department the follow­ ing additional information that is held by the Department and that relates to the person: “(a) “(b) the full name and date of birth of the person: if the information held by the Department includes in­ formation about the person’s employment— “(i) the telephone number of each employer of the person: “(ii) the email address of each employer of the person: “(iii) the tax code or codes applicable to the person during each period for which the person received a beneﬁt.” (6) In section 82(9)— (a) in paragraph (a) of the deﬁnition of authorised ofﬁcer, “the department for the time being responsible for the administration of the Social Security Act 1964” is re­ placed by “the responsible department”: the deﬁnition of beneﬁciary is replaced by the follow­ ing: (b) “beneﬁciary means— “(a) “(b) “(c) a person who is receiving, or has received, a beneﬁt or earnings related compensation: an applicant for a beneﬁt or earnings related compensation: in the case of a beneﬁt that is a student allowance, a person who is a spouse of the recipient of the beneﬁt under regulation 2 of the Student Allowances Regulations 1998”: (c) after the deﬁnition of beneﬁciary
 information, the fol­ lowing is inserted: “beneﬁt includes a beneﬁt payable under the Social Security Act 1964 and a student allowance payable under Part 25 of the Educa­ tion Act 1989”.
Disclosure of address information in relation to debtors Section 85(1) is replaced by the following: 93 (1) “(1) The purpose of this section is to facilitate the exchange of in­ formation between the Inland Revenue Department and the re­ sponsible department for the purpose of assisting the respon­ 76 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 2 s 95 (2) (3) (4) sible department to recover money owed by debtors to the re­ sponsible department, acting in the name of the Crown.” In section 85(2), “the department for the time being responsi­ ble for the administration of the Social Security Act 1964” is replaced by “the responsible department”.
In section 85(3), “the department for the time being responsi­ ble for the administration of the Social Security Act 1964” is replaced by “the responsible department”.
Section 85(6) is amended by— (a) in the deﬁnition of authorised ofﬁcer, replacing “the department for the time being responsible for the ad­ ministration of the Social Security Act 1964” by “the responsible department”: after paragraph (c) of the deﬁnition of debtor, adding the following: (b) “(d) a person who is not currently receiving a student allowance and from whom a debt relating to an allowance (as deﬁned in section 302 of the Education Act 1989) is recoverable under section 307B of that Act”.
94 (1) (2) 95 Further secrecy requirements In section 87(5)(a)(i), “(eb),” is inserted after “(e),”.

Subsection (1) applies for secrecy certiﬁcates that are signed on or after the date on which this Act receives the Royal assent.
Notices of proposed adjustment required to be issued by Commissioner (1) After section 89C(d), the following is inserted: “(db) the assessment is made in relation to a matter for which the material facts and relevant law are identical to those for an assessment of the taxpayer for another income year that is at the time the subject of court proceedings; or”.
(2) After section 89C(e), the following is inserted: “(eb) the Commissioner has reasonable grounds to believe that the taxpayer has left New Zealand and may have been involved in fraudulent activity; or”.

Subsections (1) and (2) apply to assessments for which notices are issued on or after 1 April 2005.
(3) 77 Part 2 s 96 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 96 Taxpayers and others with standing may issue notices of proposed adjustment (1) After section 89D(2B) the following is inserted: “(2C) A taxpayer who has not provided a GST tax return for a GST return period may not dispute the assessment made by the Commissioner other than by providing a GST return for the GST return period.” Section 89D(4) is repealed.
Subsections (1) and (2) apply for GST return periods that begin on or after 1 April 2005.

(2) (3) 97 (1) Taxpayer may issue notice of proposed adjustment for taxpayer assessment In section 89DA(1), “or a GST return period” is inserted after “income year”.
Section 89DA(2) is replaced by the following: (2) “(2) A notice of proposed adjustment under this section is not ef­ fective unless it is issued within the response period for the notice.” Subsections (1) and (2) apply to notices issued in relation to GST return periods that begin on or after 1 April 2005.

(3) 98 (1) (2) Election of small claims jurisdiction of Taxation Review Authority In section 89E(1), wherever it appears, “$15,000” is replaced by “$30,000”.
Subsection (1) applies to disputes that are commenced under Part 4A of the Tax Administration Act 1994 on or after 1 April 2005.

Section 89F replaced Section 89F is replaced by the following: 99 (1) “89F Content of notice of proposed adjustment “(1) A notice of proposed adjustment must— “(a) contain sufﬁcient detail of the matters described in sub­ sections (2) and (3) to identify the issues arising be­ tween the Commissioner and the disputant; and “(b) be in the prescribed form.
78 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 2 s 100 “(2) A notice of proposed adjustment issued by the Commissioner must— “(a) identify the adjustment or adjustments proposed to be made to the assessment; and “(b) provide a concise statement of the key facts and the law in sufﬁcient detail to inform the disputant of the grounds for the Commissioner’s proposed adjustment or adjustments; and state how the law applies to the facts.
“(c) “(3) A notice of proposed adjustment issued by a disputant must— identify the adjustment or adjustments proposed to be made to the assessment; and “(a) “(c) “(d) “(b) provide a statement of the facts and the law in sufﬁcient detail to inform the Commissioner of the grounds for the disputant’s proposed adjustment or adjustments; and state how the law applies to the facts; and include copies of the documents of which the disputant is aware at the time that the notice is issued that are signiﬁcantly relevant to the issues arising between the Commissioner and the disputant.” (2) Subsection (1) applies to disputes that are commenced under Part 4A of the Tax Administration Act 1994 on or after 1 April 2005.
Issue of response notice 100 Section 89G(2) is replaced by the following: (1) “(2) A notice of response must state concisely— “(a) the facts or legal arguments in the notice of proposed adjustment that the issuer of the notice of response con­ siders are wrong; and “(b) why the issuer of the notice of response considers those “(c) facts or legal arguments to be wrong; and any facts and legal arguments relied on by the issuer of the notice of response; and “(d) how the legal arguments apply to the facts; and “(e) the quantitative adjustments to any ﬁgure referred to in the notice of proposed adjustment that result from the facts and legal arguments relied on by the issuer of the notice of response.” 79 Part 2 s 101 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 (2) Subsection (1) applies to disputes that are commenced under Part 4A of the Tax Administration Act 1994 on or after 1 April 2005.
101 Late actions deemed to occur within response period (1) In section 89K(1)(a)(ii), “GST tax return” is replaced by “GST tax return; or” and the following is added: “(iii) issuing a statement of position”.

(2) In section 89K(1)(a)(ii), “in respect of a disputable decision or a GST tax return,—” is replaced by “or 89DA in respect of a disputable decision; or”.

(3) After section 89K(1)(a)(ii), the following is added: “(iii) issuing a statement of position,—”.
(4) (5) In section 89K(1)(b)(ii)(A), “or GST tax return” is omitted.

In section 89K(1)(b)(ii)(B), “section 89F” is replaced by “sec­ tion 89F; or” and the following is added: “(iii) a statement of position”.

(6) In section 89K(1)(d), “proposed adjustment” is replaced by “proposed adjustment; or”, and the following is added: the disputant’s statement of position”.
Section 89K(3)(a) and (b) are replaced by the following: an exceptional circumstance arises if— “(i) an event or circumstance beyond the control of a dis­ putant provides the disputant with a reasonable justiﬁ­ cation for not rejecting a proposed adjustment, or for not issuing a notice of proposed adjustment or statement of position, within the response period for the notice: a disputant is late in issuing a notice of proposed adjust­ ment, notice of response or statement of position but the Commissioner considers that the lateness is minimal, or results from 1 or more statutory holidays falling in the response period: “(ii) “(e) (7) “(a) “(b) an act or omission of an agent of a disputant is not an excep­ tional circumstance unless— “(i) it was caused by an event or circumstance beyond the control of the agent that could not have been anticipated, and its effect could not have been avoided by compli­ 80 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 2 s 103 “(ii) ance with accepted standards of business organisation and professional conduct; or the agent is late in issuing a notice of proposed adjust­ ment, notice of response or statement of position but the Commissioner considers that the lateness is minimal, or results from 1 or more statutory holidays falling in the response period.” (8) Subsections (1) to (7) apply to disputes that are commenced under Part 4A of the Tax Administration Act 1994 on or after 1 April 2005.
102 Disclosure notices (1) In section 89M(1), “the Commissioner may issue” is replaced by “and subject to section 89N, the Commissioner must issue”.
(2) After section 89M(6), the following is inserted: “(6B) In subsections (4)(b) and (6)(b), evidence refers to the avail­ able documentary evidence on which the person intends to rely, but does not include a list of potential witnesses, whether or not identiﬁed by name.” Section 89M(7) is replaced by: (3) “(7) A disputant who does not issue a statement of position in the prescribed form within the response period for the statement of position, is treated as follows: “(a) if the Commissioner has proposed the adjustment to the assessment, the disputant is treated as having accepted the Commissioner’s notice of proposed adjustment or statement of position: if the disputant has proposed the adjustment to the as­ sessment, the disputant is treated as not having issued a notice of proposed adjustment.” “(b) (4) Subsections (1) to (3) apply to disputes that are commenced under Part 4A of the Tax Administration Act 1994 on or after 1 April 2005.
103 New sections 89N and 89O inserted (1) After section 89M, the following are inserted: “89N Completing the disputes process “(1) This section applies if— 81 Part 2 s 103 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “(a) “(b) “(c) a notice of proposed adjustment has been issued; and the dispute has not been resolved by agreement between the Commissioner and the disputant; and none of the following applies: “(i) the Commissioner notiﬁes the disputant that, in the Commissioner’s opinion, the disputant in the course of the dispute has committed an offence under an Inland Revenue Act that has had an ef­ fect of delaying the completion of the disputes process: the Commissioner has reasonable grounds to be­ lieve that the disputant may take steps in relation to the existence or location of the disputant’s as­ sets to avoid or delay the collection of tax from the disputant: “(ii) “(iv) “(iii) the Commissioner has reasonable grounds to be­ lieve that a person who is, under section OD 8(3) of the Income Tax Act 2004, an associated per­ son of the disputant may take steps in relation to the existence or location of the disputant’s assets to avoid or delay the collection of tax from the disputant: the disputant has begun judicial review proceed­ ings in relation to the dispute: a person who is, under section OD 8(3) of the Income Tax Act 2004, an associated person of the disputant and is involved in another dispute with the Commissioner involving similar issues has begun judicial review
 proceedings in relation to the other dispute: “(v) “(vi) during the disputes process, the disputant re­ ceives from the Commissioner a request under a statute for information relating to the dispute and fails to comply with the request within a period that is speciﬁed in the request: “(vii) the disputant elects under section 89E to have the dispute heard by a Taxation Review Authority acting in its small claims jurisdiction: 82 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 2 s 103 “(viii) the disputant and the Commissioner agree in writing that they have reached a position in which the dispute would be resolved more efﬁciently by being submitted to the court or Taxation Re­ view Authority without completion of the dis­ putes process: the disputant and the Commissioner agree in writing to suspend proceedings in the dispute pending a decision in a test case referred to in section 89O.
“(ix) “(2) If this section applies, the Commissioner may not amend an assessment under section 113 before one of the following oc­ curs: “(a) the Commissioner or the disputant accepts a notice of proposed adjustment, notice of response, or statement of position issued by the other: the Commissioner considers a statement of position is­ sued by the disputant.
“(b) “(3) Despite subsection (2), the Commissioner may apply to the High Court for an order that allows more time for the comple­ tion of the disputes process, or for an order that completion of the disputes process is not required.

“(4) The Commissioner must make an application under subsection (3) within the period of time during which the Commissioner would otherwise be required, under the Inland Revenue Acts, to make an amended assessment.
If the Commissioner makes an application under subsection (3), the period of time during which the Commissioner must make an amended assessment is the total of— “(a) “(5) “(b) the period of time within which the Commissioner, in the absence of the application, would be required under the Inland Revenue Acts to make the amended assess­ ment: the period of time that starts on the date on which the Commissioner ﬁles the application in the High Court and ends on the earliest of— “(i) the date of the High Court’s decision of the ap­ plication: 83 Part 2 s 103 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “(ii) the date on which the application is otherwise resolved: “(iii) the date on which the dispute is otherwise re­ solved: “(c) any further period of time that is allowed by an order of a court as a result of the application.
“89O Test cases “(1) This section applies if— “(a) “(b) a dispute between a disputant and the Commissioner has been identiﬁed; and the Commissioner has designated a separate challenge as a test case.

“(2) The disputant and the Commissioner may agree in writing to suspend the proceedings in the dispute because there is sig­ niﬁcant similarity between the facts and questions of law in the dispute and the facts and questions of law in the challenge that has been designated as a test case.
“(3) A suspension that is agreed under subsection (2) starts on the date of the agreement and ends on the earliest of— “(a) “(b) “(c) the date of the court’s decision in the test case: the date on which the test case is otherwise resolved: the date on which the dispute is otherwise resolved.

“(5) “(4) The Commissioner may make an assessment or perform an action in relation to a suspended dispute that is consistent with the resolution of the test case.
If a suspension is agreed under subsection (2), the period of time during which the Commissioner must make an amended assessment, or perform an action, that is the subject of the suspended dispute is the total of— “(a) the period of time within which the Commissioner, in the absence of the suspension, would be required under the Inland Revenue Acts to make the amended assess­ ment or perform the action: the period of the suspension that is described in subsec­ tion (3).” “(b) 84 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 2 s 106 (2) Subsection (1) applies to disputes that are commenced under Part 4A of the Tax Administration Act 1994 on or after 1 April 2005.
104 Determinations in relation to ﬁnancial arrangements (1) “(6) The Commissioner may at any time— Section 90(6) is replaced by the following: “(a) make a determination that varies, cancels, restricts or extends in scope an earlier determination made under this section: issue a notice that cancels a determination made under this section.
“(b) “(6B) A person who acquires or issues a ﬁnancial arrangement be­ fore the date of notiﬁcation or publication of a determination, or notice, that is authorised by subsection (6) is not required to apply the determination to the ﬁnancial arrangement, or treat the notice as affecting the ﬁnancial arrangement, until the date that is 4 years after that date of notiﬁcation or publication.” In section 90(7)— (a) “and notices issued by the Commissioner under subsec­ tion (6)(b)” is inserted after “subsection (1)”: “or notice” is inserted after “determination”.
(b) In section 90(8), “or notice” is inserted after “determination”.
(2) (3) 105 Determinations relating to ﬁnancial arrangements Section 90AC(6) is replaced by the following: “(6) The Commissioner may at any time— “(a) make a determination that varies, cancels, restricts or extends in scope an earlier determination under this sec­ tion: issue a notice that cancels a determination made under this section.” “(b) 106 Notiﬁcation of determinations (1) In the heading to section 90AD, “and notices” is added after “determinations”.
In section 90AD(1), “or notice” is inserted after “determin­ ation” wherever it occurs.

(2) 85 Part 2 s 107 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 (3) In section 90AD(2), “or notice” is inserted after “determin­ ation”.
107 Section 90AE replaced Section 90AE is replaced by the following: “90AE Four­year period in which determination not required to be applied A person who enters into a ﬁnancial arrangement before the date of notiﬁcation or publication of a determination, or no­ tice, that is authorised by section 90AC(6) is not required to apply the determination to the ﬁnancial arrangement, or treat the notice as affecting the ﬁnancial arrangement, until the date that is 4 years after that date of notiﬁcation or publication.” 108 Determinations in relation to apportionment of interest costs Section 90A(6) is replaced by the following: (1) “(6) The Commissioner may at any time— “(a) make a determination that varies, cancels, restricts or extends in scope an earlier determination under this sec­ tion: issue a notice that cancels a determination under this section.
“(b) “(6B) A person who enters into a ﬁnancial arrangement before the date of notiﬁcation or publication of a determination, or notice, that is authorised by subsection (6) is not required to apply the determination to the ﬁnancial arrangement, or treat the notice as affecting the ﬁnancial arrangement, until the ﬁrst income year that commences after that date of notiﬁcation or publica­ tion.” In section 90A(7)— (a) “and notices issued by the Commissioner under subsec­ tion (6)(b)” is inserted after “subsection (1)”: “or notice” is inserted after “determination” (b) In section 90A(8), “or notice” is inserted after “determin­ ation”.
(2) (3) 86 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 2 s 110 109 Determinations in relation to standard­cost household (1) (2) (3) (4) service In the words before section 91AA(2)(a), “gross income” is replaced by “an amount”.

In section 91AA(2)(a), “section CB 9(h)” is replaced by “sec­ tion CB 9(gb) and (h) of the Income Tax Act 1994”.

In section 91AA(3), “gross income” is replaced by “an amount”.
Subsections (1) to (3) apply for the 2003­04 and subsequent income years.
110 New section 91AAB inserted (1) After section 91AA, the following is inserted: “91AAB Determinations relating to types and diminishing values of listed horticultural plants “(1) For the purpose of sections DO 4B, DO 4C, and DO 4D of the Income Tax Act 1994, the Commissioner may determine— “(a) that a type of horticultural plant, tree, vine, bush, cane, or other similar plant that is cultivated on land, is a type of listed horticultural plant: the banded rate set out in column 1 of Schedule 11 of the Income Tax Act 1994 that is to be used to calculate the diminishing value for a type of listed horticultural plant.
“(b) “(2) In making a determination, the Commissioner must take into account the estimated useful life of the type of plant, and may also take into account— “(a) the main purpose for which the type of plant is culti­ vated: the manner in which the type of plant is cultivated and managed.

“(b) “(3) The determination may set out the income year or income years for which it is to apply, but may not apply for income years before the 2003­04 income year.
“(4) The determination may provide for the extension, limitation, variation, cancellation or revocation of an earlier determin­ ation.

87 Part 2 s 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “(5) A person affected by a determination made under this section may dispute or challenge the determination under Parts 4A and 8A.
“(6) Within 30 days of issuing a determination under this section, the Commissioner must publish a notice in the Gazette that— gives notice that the determination has been issued; and “(a) states where copies of the determination can be ob­ “(b) tained.” (2) Subsection (1) applies for the 2003­04 and subsequent income years.

111 Commissioner to make private rulings on request Section 91E(6)(d) is repealed.
112 Taxpayer assessment (1) The heading to section 92 is replaced by “Taxpayer assessment of income tax”.

Section 92(2) is replaced by the following: (2) “(2) An assessment under this section is made on the date on which the taxpayer’s return of income is received at an ofﬁce of the Department.” Section 92(3) is repealed.

Subsections (1) to (3) apply for the 2004­05 and subsequent income years.
(3) (4) 113 New section 92B inserted (1) After section 92A, the following is inserted: “92B Taxpayer assessment of GST “(1) A taxpayer who is required under the Goods and Services Tax Act 1985 to provide a GST tax return for a GST return period must make an assessment of the amount of GST payable by the taxpayer for the return period.

“(2) An assessment under this section is made on the date on which the taxpayer’s GST tax return is received at an ofﬁce of the Department.
“(3) This section does not apply to a taxpayer for a GST return period if the Commissioner has made an assessment of the GST payable by the taxpayer for the return period.” 88 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 2 s 115 (2) Subsection (1) applies for GST return periods beginning on or after 1 April 2005.
114 Assessment where default made in furnishing returns (1) After section 106(1C), the following is inserted: “(1D) If a person who is required to provide a GST tax return for a GST return period does not provide a GST tax return for the return period, or provides a GST tax return with which the Commissioner is not satisﬁed, the Commissioner may make an assessment of the GST payable by the person for the return period.
“(1E) A person who is assessed under subsection (1D) is liable to pay the GST assessed unless the person establishes in proceed­ ings challenging the assessment that the assessment is exces­ sive, or that the person is not chargeable with GST.” Subsection (1) applies for GST return periods beginning on or after 1 April 2005.

(2) 115 Time bar for assessment of GST (1) The heading to section 108A is replaced by “Time bar for amending GST assessment”.
Section 108A(1) is replaced by the following: (2) “(1) Subject to this section and section 108B, if a taxpayer provides a GST tax return for a GST return period and an assessment has been made, the Commissioner may not amend the assessment to increase the amount assessed if 4 years have passed from the end of the GST return period in which the tax return was provided.” Section 108A(2) is repealed.
Section 108A(3) is replaced by the following: (3) (4) “(3) The Commissioner may, at any time, amend an assessment to increase the amount of the assessment if the Commissioner considers that the person assessed has knowingly or fraudu­ lently failed to disclose to the Commissioner all of the mater­ ial facts that are necessary for determining the amount of GST payable for a GST return period.” Subsections (1) to (4) apply for GST return periods beginning on or after 1 April 2005.
(5) 89 Part 2 s 116 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 116 Extension of time bars (1) “(1) The application of a time bar that is referred to in subsection Section 108B(1) is replaced by the following: (3) may be delayed for a taxpayer by a waiver— “(a) for not more than 12 months from the time at which the time bar would otherwise apply, by written agreement between the Commissioner and the taxpayer: for a further 6 months from the end of the 12­month period referred to in paragraph (a), by written notice given by the taxpayer.
“(b) (2) “(1B) A waiver under subsection (1) does not affect the application of a time bar to an assessment of the taxpayer by the Commis­ sioner on a ground that was not identiﬁed and known to the taxpayer and the Commissioner before the time at which the time bar would have applied but for subsection (1).” In section 108B(3)(f), “for which the GST return was provided or, as the case may be, the assessment made; and” is replaced by “in which the GST tax return was provided.” Section 108B(3)(g) is repealed.
Subsection (1) applies to disputes that are commenced under Part 4A of the Tax Administration Act 1994 on or after 1 April 2005.

Subsections (2) and (3) apply for GST return periods begin­ ning on or after 1 April 2005.
(3) (4) (5) 117 Commissioner to give notice of assessment to taxpayer (1) After section 111(7), the following is added: “(8) If the Commissioner makes an assessment in relation to goods that are treated under section 5(2) of the Goods and Services Tax Act 1985 as being supplied by a person, the Commissioner must send a copy of the notice referred to in subsection (1) to whichever of the person whose goods were sold and the person selling the goods is the person who is not assessed.” Subsection (1) applies to notices that are issued on or after 1 April 2005.
(2) 90 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 2 s 121 118 Commissioner may at any time amend assessments (1) In section 113(1), “The Commissioner may from time to time and at any time make all such alterations in or additions to” is replaced by “Subject to section 89N, the Commissioner may from time to time, and at any time, amend”.

In section 113(2), “alteration or addition” is replaced by “amendment”.
Subsection (1) applies to amendments for which notices are issued on or after 1 April 2005.
(2) (3) 119 Section 114 replaced Section 114 is replaced by the following: “114 Validity of assessments An assessment made by the Commissioner is not invali­ dated— “(a) through a failure to comply with a provision of this Act or another Inland Revenue Act; or “(b) because the assessment is made wholly or partially in compliance with— “(i) a direction or recommendation made by an au­ thorised ofﬁcer on matters relating to the assess­ ment: a current policy or practice approved by the Com­ missioner that is applicable to matters relating to the assessment.” “(ii) 120 Variation to deﬁnitions for determining interest (1) (2) (3) chargeable or payable to PAYE intermediaries In section 120OB(1)(a), “section NBB 4(1)(b)” is replaced by “section NBB 4(1)”.
In section 120OB(1)(b), “section NBB 4(1)(d)” is replaced by “section NBB 4(1B)(b)”.

Subsections (1) and (2) apply for pay periods beginning on or after 1 April 2004.
121 When disputant entitled to challenge assessment In section 138B(3)(b), “adjusted.” is replaced by “adjusted; and”, and the following is added: 91 Part 2 s 122 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “(c) for the purposes of paragraph (b), the written disputable de­ cision from the Commissioner is not limited to the Commis­ sioner’s notice of response.” 122 Certain rights of challenge not conferred In section 138E(1)(e)(iv), “Act,—” is replaced by “Act; or” and the following is added: any of Parts 4, 6, 7 and 11 (other than section 76) of the Goods and Services Tax Act 1985—”.
“(v) 123 Challenging disputable decisions which are not assessments In section 138F(1), “under section 138B” is inserted after “challenge”.

124 Late ﬁling penalties In section 139A(5), “annual imputation return or” is omitted.

125 Tax shortfalls (1) In section 141(2), “, subject to section 141AA(1)” is inserted after “penalty”.

Subsection (1) applies for withholding payments made on or after 1 April 2005.
(2) “(1) 126 New section 141AA inserted (1) After section 141, the following is inserted: “141AA Shortfall penalty if non­resident contractor relieved from all liability to pay tax on contract payment If a person makes a withholding payment that is a contract payment to a person who is a non­resident contractor for the purposes of the Income Tax (Withholding Payments) Regu­ lations 1979 and the non­resident contractor is not liable to pay income tax on the contract payment, whether because of a double tax agreement or otherwise, the person who makes the contract payment to the non­resident contractor is liable to pay a shortfall penalty of $250 for each return period— “(a) for which the person is required to deliver to the Com­ missioner an employer monthly schedule; and 92 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 2 s 127 “(b) in which the person fails to make a required tax deduc­ tion from a contract payment to the non­resident con­ tractor.
“(2) A person who is liable to pay a shortfall penalty under subsec­ tion (1) is not liable to pay a shortfall penalty based on the tax shortfall that, but for this section, would be calculated under section 141 in relation to the required tax deduction.
“(3) The liability under subsection (1) of a person is limited to a total of $1,000 for each return period for which the person is required to deliver to the Commissioner an employer monthly schedule.” Subsection (1) applies for withholding payments made on or after 1 April 2005.
(2) 127 Section 141FB replaced Section 141FB is replaced by the following: “141FB Reduction of penalties for previous behaviour “(1) A shortfall penalty (called the current penalty) for which a taxpayer is liable under section 141E is reduced, to 50% of the amount that would be payable by the taxpayer in the absence of this section, if the taxpayer is not— “(a) “(b) convicted of an offence that is a disqualifying offence: liable for another shortfall penalty that is a disqualifying penalty for the purpose of this subsection.
“(2) A shortfall penalty (called the current penalty) for which a taxpayer is liable under any of sections 141A to 141D is re­ duced, to 50% of the amount that would be payable by the taxpayer in the absence of this section, if the taxpayer is not— convicted of an offence that is a disqualifying offence: “(a) liable for another shortfall penalty that is a disqualifying “(b) penalty for the purpose of this subsection.
“(3) For the purpose of this section “disqualifying offence means— “(a) an offence under section 143A, 143B, 143F, 143G, 143H or 145 for which a conviction is entered— “(i) “(ii) before the taxpayer takes the tax position to on or after 26 March 2003; and which the current penalty relates: 93 Part 2 s 127 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “(b) an offence under section 143 or 144 that relates to the type of tax to which the current penalty relates and for which a conviction is entered— “(i) “(ii) on or after 26 March 2003; and after the date that precedes, by the period speci­ ﬁed in subsection (4), the date on which the tax­ payer takes the tax position to which the current penalty relates; and “(iii) before the taxpayer takes the tax position to which the current penalty relates “disqualifying penalty means— “(a) for the purpose of subsection (1), a shortfall penalty that— “(i) relates to the type of tax to which the current penalty relates; and is for evasion or a similar act; and “(ii) “(iii) is not reduced for voluntary disclosure by the tax­ “(iv) payer; and relates to a tax position that is taken on or after 26 March 2003 and before the date on which the taxpayer takes the tax position to which the cur­ rent penalty relates: for the purpose of subsection (2), a shortfall penalty that— “(i) relates to the type of tax to which the current penalty relates; and if the current penalty is— “(A) “(ii) for gross carelessness or taking an abusive tax position, is a
 shortfall penalty for eva­ sion or a similar act or for gross careless­ ness or taking an abusive tax position: for not taking reasonable care or taking an unacceptable tax position, is a shortfall penalty of any sort; and “(B) “(iii) is not reduced for voluntary disclosure by the tax­ “(iv) payer; and relates to a tax position that is taken— “(A) on or after 26 March 2003; and “(b) 94 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 2 s 128 “(B) after the date that precedes, by the period speciﬁed in subsection (4), the date on which the taxpayer takes the tax position to which the current penalty relates; and “(C) before the date on which the taxpayer takes the tax position to which the current penalty relates.
“(4) The period referred to in the deﬁnitions of disqualifying of­ fence and disqualifying penalty, in subsection (3), and in sub­ section (5) is— “(a) 2 years, if the current penalty relates to— the taxpayer’s application of the PAYE rules: “(i) “(ii) fringe beneﬁt tax: “(iii) goods and services tax: “(iv) resident withholding tax: “(b) 4 years, if the period is not given by paragraph (a).
“(5) For the purpose of subsection (2), a shortfall penalty that re­ lates to a tax shortfall arising from a tax position taken by a taxpayer is determined as if the taxpayer were not liable for a shortfall penalty that relates to a tax shortfall arising from an­ other tax position taken by the taxpayer, if— “(a) “(b) the Commissioner becomes aware of both tax shortfalls as a consequence of a single investigation or voluntary disclosure; and the taxpayer— “(i) “(ii) takes both tax positions on the same date: is not liable for a shortfall penalty at any time in the period speciﬁed in subsection (4) that ends on the earliest date on which the taxpayer takes a tax position that gives rise to a tax shortfall of which the Commissioner becomes aware as a consequence of the investigation or disclosure to which paragraph (a) refers.” 128 Section 141FC repealed (1) (2) Section 141FC is repealed.
Subsection (1) applies with respect to a shortfall penalty that is imposed in relation to a return period beginning on or after 1 April 2005.
95 Part 2 s 129 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 129 New section 141FD inserted (1) After section 141FB, the following is inserted: “141FD Shareholders of loss attributing qualifying companies “(1) This section applies to a shortfall penalty under Part 9 that arises because— “(a) “(b) a loss attributing qualifying company attributes a net loss to a person who, on any day in the income year for which the company had the net loss, is a shareholder of the loss attributing qualifying company; and the net loss is subsequently reduced because— “(i) deductions claimed by the loss attributing quali­ fying company for the income year are dis­ allowed: the gross income of the loss attributing qualifying company for the income year is increased.
“(ii) “(2) The shortfall penalty that would be imposed on the loss at­ tributing qualifying company in the absence of this section may not be imposed on the loss attributing qualifying com­ pany.

“(3) A shortfall penalty may be imposed on the shareholder in rela­ tion to the amount of a deduction that the shareholder claimed in respect of the attributed net loss.
“(4) No shortfall penalty under Part 9 relating to the reduction of the attributed net loss of the company may be imposed on the shareholder other than the shortfall penalty permitted by sub­ section (3).” Subsection (1) applies with respect to a shortfall penalty that is imposed in relation to a return period beginning on or after 1 April 2005.

(2) 130 Application of Part 9 to PAYE intermediaries (1) In section 141JB(1)(a), “section NBB 4(1)(b)” is replaced by “section NBB 4(1)”.
In section 141JB(1)(b), “section NBB 4(1)(d)” is replaced by “section NBB 4(1B)(b)”.

Subsections (1) and (2) apply for pay periods beginning on or after 1 April 2004.

(2) (3) 96 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 2 s 135 131 Recovery of tax deductions from employers or PAYE (1) (2) (3) intermediaries In section 167(2B)(b)(i), “section NBB 4(1)(b)” is replaced by “section NBB 4(1)”.
In section 167(2B)(b)(ii), “section NBB 4(1)(d)” is replaced by “section NBB 4(1B)(b)”.

Subsections (1) and (2) apply for pay periods beginning on or after 1 April 2004.

132 Employer or PAYE intermediaries failing to make tax (1) (2) (3) deductions In section 168(4)(a), “section NBB 4(1)(b)” is replaced by “section NBB 4(1)”.

In section 168(4)(b), “section NBB 4(1)(d)” is replaced by “section NBB 4(1B)(b)”.

Subsections (1) and (2) apply for pay periods beginning on or after 1 April 2004.
(1) 133 Unpaid tax deductions, etc, to constitute charge on employer’s or PAYE intermediary’s property In section 169(1B)(a), “section NBB 4(1)(b)” is replaced by “section NBB 4(1)”.

In section 169(1B)(b), “section NBB 4(1)(d)” is replaced by “section NBB 4(1B)(b)”.

Subsections (1) and (2) apply for pay periods beginning on or after 1 April 2004.

(3) (2) 134 Transfer of excess tax within taxpayer’s accounts In section 173L(2)(a), “taxable period” is replaced by “GST return period”.
Section 177C(6) is replaced by the following: 135 Write­off of tax by Commissioner (1) “(6) For the purpose of subsection (5), the net loss that may be extinguished is the net loss of the taxpayer at the time at which the outstanding tax is written off and the Commissioner may use a ﬁgure for that net loss based on the most recent return of income furnished by the taxpayer.” 97 Part 2 s 136 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 (2) Subsection (1) applies to tax that is written off on and after the date on which this Act receives the Royal assent.
136 Relief to taxpayers to whom new start grants payable (1) In section 177D(2)(a), “section EZ 9(3)” is replaced by “sec­ tion EZ 9(3) and (4)”.

In section 177D(3), “adverse event” is replaced by “event that is a qualifying event, as deﬁned by section OB 1 of the Income Tax Act 1994”.

Subsections (1) and (2) apply for the 2003­04 and subsequent income years.
(2) (3) 137 New section 181D inserted (1) After section 181C, the following section is inserted: “181D Remission of late payment penalties and interest incurred due to obligation by Maori authority to pay further income tax An amount that is interest under section 120D of the Tax Ad­ ministration Act 1994, or a late payment penalty relating to further income tax, and that is paid or payable by a Maori au­ thority and to which section MK 8(5) or (5B) of the Income Tax Act 1994 applies must be remitted by the Commissioner to the extent that the amount of further income tax charged in re­ lation to an imputation year is equal to or less than the amount of unpaid income tax”.
Subsection (1) applies for the 2004­05 and subsequent income years.
(2) 138 Remission for reasonable cause Section 183A(1) is replaced by the following: “(1) This section applies to— “(a) “(b) “(c) “(d) “(e) a late ﬁling penalty: a non­electronic ﬁling penalty: a late payment penalty: imputation penalty tax imposed by section 140B: dividend withholding payment penalty tax imposed by section 140C: 98 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 3 s 144 “(f) Maori authority distribution penalty tax imposed by section 140CB: a shortfall penalty imposed by section 141AA.” “(g) 139 Remission consistent with collection of highest net revenue over time After section 183D(1)(b), the following is inserted: “(bb) a shortfall penalty imposed by section 141AA; and”.
140 Payment out of Crown Bank Account In section 185(1)(a), “or the Goods and Services Tax Act 1985” is added after “Income Tax Act 1994”.

141 Regulations—income tax related (1) (2) The heading to section 225 is replaced by “Regulations”.

In section 225(1), “or Goods and Services Tax Act 1985” is added after “Income Tax Act 1994” in all the places that it occurs.
142 Power to extend time for doing anything under Act In section 226, “or the Goods and Services Tax Act 1985” is inserted after “Income Tax Act 1994” in both places that it occurs.

Part 3 Amendments to other Acts and Regulations Amendments to Goods and Services Tax Act 1985 143 Goods and Services Tax Act 1985 Sections 144 to 162 amend the Goods and Services Tax Act 1985.
144 (1) Interpretation In section 2(1), in the words before paragraph (a) of the pro­ viso to the deﬁnition of resident, “that section” is replaced by “those sections”.

99 Part 3 s 145 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 (2) (3) in paragraph (a) of the deﬁnition of tax In section 2(1), payable, “section 27(6)” is replaced by “section 51B”.

Subsection (2) applies for taxable periods beginning on or after 1 April 2005.
145 Zero­rating of services (1) Section 11A(1B), as inserted by section 149(6) of the Taxation (GST, Trans­Tasman Imputation and Miscellaneous Provisions) Act 2003, is replaced by the following: “(1B) Subsection (1)(j) does not apply to a supply of services that is treated by section 8(4B) as being made in New Zealand un­ less the nature of the services is such that the services can be physically received at no time and place other than the time and place at which the services are physically performed.” Section 11A(5), as added by section 149(8) of the Taxation Imputation (GST, and Miscellaneous Trans­Tasman Provisions) Act 2003, is repealed and the following is added: (2) “(6) The availability of a deduction under subsection (1)(q) and (r) must be determined using a method allowed by section 20E.” 146 Taxable period returns (1) After section 16(2), the following is added: “(3) 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 beginning on or after 1 April 2005.
(2) 147 Special returns (1) After section 17(2), the following is added: “(3) 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 beginning on or after 1 April 2005.
(2) 148 Particulars to be furnished and prepared where change in accounting basis (1) After section 19B(2), the following is inserted: 100 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 3 s 150 “(2B) The particulars required by subsection (1) must be furnished in a return that contains a notice of the assessment that must be made under section 92B of the Tax Administration Act 1994.” Subsection (1) applies for taxable periods beginning on or after 1 April 2005.
(2) 149 Calculation of tax payable (1) The proviso that follows section 20(3)(i) is replaced by the following: “Provided that a registered person who is entitled to deduct an amount from the output tax attributable to a taxable period may deduct that amount from the output tax attributable to a later taxable period if the amount has not previously been deducted from the output tax of the registered person and— “(a) the later tax period begins on or before the date that is the 2nd anniversary of the earlier of the following: “(i) the date on which the registered person makes the pay­ ment for the taxable supply to which the deduction re­ lates: the date on which a tax invoice is issued for the taxable supply to which the deduction relates: “(ii) “(b) the failure of the registered person to make the deduction in the earlier taxable period arises from— “(i) an inability of the registered person to obtain a tax in­ voice: a dispute over the proper amount of the payment for the taxable supply to which the deduction relates: “(iii) a mistaken understanding on the part of the registered person that the supply to which the deduction relates was not a taxable supply: “(ii) “(iv) a clear mistake or simple oversight of the registered per­ son.” (2) Subsection (1) applies for taxable periods beginning on or after 1 April 2005.
150 Goods and services tax incurred relating to determination (1) of liability to tax In section 20A(1)(b), in the deﬁnition of goods and services tax payable, “section 27(6)” is replaced by “section 51B”.

101 Part 3 s 151 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 (2) Subsection (1) applies for taxable periods beginning on or after 1 April 2005.
151 Goods and services tax incurred in making certain “a Trans­Tasman supplies of ﬁnancial services In section 20C, as inserted by section 155 of the Taxation (GST, and Miscellaneous Imputation Provisions) Act 2003, the deﬁnition of item a is replaced by the following: is the total amount in respect of the taxable period that the registered person— “(a) would not be able to deduct under section 20(3) in the absence of this section; and “(b) would be able to deduct under section 20(3), other than under section 20(3)(h), if all supplies of ﬁnancial ser­ vices by the registered person were taxable supplies:”.
152 Application of section 21F (1) In section 21E(4), in the words preceding paragraph (a), “if—” is replaced by “to the extent that—”.

In section 21E(4)(a), “sections 21 and 21I” are replaced by “section 21 or 21I”.

(2) 153 Payment of tax (1) (2) Section 23(3) is repealed.

Subsection (1) applies for taxable periods beginning on or after 1 April 2005.

154 Part 4 repealed (1) (2) Part 4 is repealed.

Subsection (1) applies for taxable periods beginning on or after 1 April 2005.
155 Section 45 replaced (1) Section 45 is replaced by the following: 102 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 3 s 155 “45 Refund of excess tax “(1) Subject to this Part, and to Part 11 of the Tax Administration Act 1994, the Commissioner must refund an amount that a person has paid as tax if— “(a) the Commissioner is satisﬁed that the amount represents an excess over the amount properly assessed for a tax­ able period; and the 4­year period referred to in section 108A of the Tax Administration Act 1994 has not expired.
“(b) “(2) Despite section 20(5), the Commissioner must refund an amount that a person has paid as tax if— “(a) the Commissioner is satisﬁed that the person paid the amount as a result of an assessment that changed the amount of tax payable by the registered person; and the Commissioner is satisﬁed that the amount represents an excess over the amount properly assessed for a tax­ able period; and the 4­year period beginning from the end of the year in which the assessment was made has not expired.
“(b) “(c) “(3) Despite section 20(5), the Commissioner must refund an “(c) “(b) amount that a person has paid as tax if— “(a) the Commissioner is satisﬁed that the amount represents an excess over the amount properly assessed for a tax­ able period; and the person has received a refund under section 19C(8), 20(5) or 46; and the Commissioner is satisﬁed that the amount was prop­ erly refundable to the person at the time of the refund but was not refunded at that time; and the 4­year period beginning from the end of the year in which the refund was made has not expired.
“(4) The Commissioner may refund an overpayment of tax that is referred to in subsection (2) or (3) after the end of the 4­year period referred to in the subsection, if— “(a) the overpayment of tax is the result of a clear mistake or simple oversight of the person; and the refund is made— “(b) “(d) 103 Part 3 s 156 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “(ii) “(i) within the period of 4 years beginning from the end of the 4­year period referred to in the subsec­ tion: as a result of an application by or on behalf of the person that the Commissioner receives before or within the period of 4 years beginning from the end of the 4­year period referred to in the subsection.” (2) Subsection (1) applies for taxable periods beginning on or after 1 April 2005.
156 Relief from tax where new start grant made in respect (1) (2) “(1) (3) (4) of drought relief In the heading to section 48A, “in respect of drought relief” is omitted.

Section 48A(1) is replaced by the following: In this section, new start grant has the meaning given to the term by section OB 1 of the Income Tax Act 1994.” In section 48A(3), in the words after paragraph (c), “section EZ 9(3)” is replaced by “section EZ 9(3) and (4)”.
Subsections (1) to (3) apply for the 2003­04 and subsequent income years.

157 Section 50 repealed Section 50 is repealed.
158 New section 51B inserted (1) After section 51, the following is inserted: “51B Persons treated as registered “(1) For the purposes of Parts 3 and 6, and of Part 9 of the Tax Ad­ ministration Act 1994, the following are treated as registered persons: “(a) a person who is not otherwise a registered person but who supplies goods or services, representing that tax is charged on the supply: if goods are treated by section 5(2) as being supplied by a person— “(b) 104 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 3 s 162 “(i) “(ii) the person selling the goods, if subparagraph (ii) does not apply; or the person whose goods are sold, if the person supplies a written statement under section 5(2)(a) to the person selling the goods and the Commis­ sioner considers that the written statement is in­ correct: “(c) a person whose registration has been cancelled under section 52(5) with effect from the original date of regis­ tration.
If a person referred to in subsection (1) represents that tax is being charged on a supply that they make in a taxable period, the person is liable to pay the amount of the tax.

If a person is treated by subsection (1)(c) as being a registered person, the person is treated as being registered from the ori­ ginal date of registration to the date when the Commissioner cancels the registration.” Subsection (1) applies for taxable periods beginning on or after 1 April 2005.
“(2) “(3) (2) 159 Section 61B repealed Section 61B is repealed.

160 Section 80 repealed Section 80 is repealed.

161 Section 81 repealed Section 81 is repealed.

(2) 162 Supplies of services made before insertion of section 8(4B) In section 84B(2), “given by section 9 or sections 21 to 21H” (1) is replaced by “the services are performed”.

In section 84B(3), in the words preceding paragraph (a), “the time given by” is omitted.
In section 84B(3)(a), “section 9 or sections 21 to 21H” is re­ placed by “the time the services are performed”.

(3) 105 (2) 164 (1) “(j) (2) (3) Part 3 s 163 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 Amendment to Taxation Review Authorities Act 1994 163 Small claims jurisdiction of authorities (1) In section 13B(1)(a) of the Taxation Review Authorities Act 1994, “$15,000” is replaced by “$30,000”.
Subsection (1) applies to disputes that are commenced under Part 4A of the Tax Administration Act 1994 on or after 1 April 2005.
Amendment to Income Tax Act 1976 Interpretation­voting and market interests In section 8B of the Income Tax Act 1976, the deﬁnition of special corporate entity (as that deﬁnition was on 31 March 1994) is amended by adding the following: any body incorporated under the Incorporated Societies Act 1908, for an income year in which the body on no day in the income year has shares on issue to the members of the body:”.
Subsection (1), other than in the application of sections 191 and 191A of the Income Tax Act 1976, applies for the 1992­93 to 1994­95 income years.
Subsection (1), in the application of sections 191 and 191A of the Income Tax Act 1976, applies for an incorporated body for an income year that is one of the 1992­93 to 1994­95 income years if— (a) the incorporated body before 29 March 2004 makes a tax return for the income year; and the incorporated body adopts a tax position in the tax return that is consistent with the amendment made by subsection (1).
(b) Amendments to Taxation Review Authorities Regulations 1998 165 Interpretation In regulation 2 of the Taxation Review Authorities Regulations 1998, the deﬁnition of disputable decision is replaced by the following: 106 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 4 s 168 “disputable decision has the meaning given to it by section 3 of the Tax Administration Act 1994”.
166 Decisions (1) After regulation 18(5) of the Taxation Review Authorities “(6) (2) Regulations 1998, the following is added: In subclause (5), precedent means a decision of the Authority that affects or may affect the outcome of a separate and unre­ lated dispute between the Commissioner and a taxpayer other than the disputant.” Subsection (1) applies to disputes that are commenced under Part 4A of the Tax Administration Act 1994 on or after 1 April 2005.
Part 4 Amendments to Income Tax Act 2004 167 (1) (2) Income Tax Act 2004 Sections 168 to 269 amend the Income Tax Act 2004.

Sections 168 to 249, 261(2) to (21), 261(23) to (36), and 262 to 269 apply for the 2005­06 and subsequent income years.
168 New sections CD 7B and CD 7C inserted After section CD 7, the following is inserted: “CD 7B Interests in money or property of foreign unit trust “(1) “Interest absolutely vested in unit holder If a beneﬁcial interest in money or property of a unit trust that is a foreign company vests absolutely in a unit holder, the money or property is a dividend for the unit holder.

“Amount of dividend “(2) The amount of the dividend is the value of the money or prop­ erty.
“Deﬁned in this Act: dividend, foreign company, unit holder, unit trust 107 Part 4 s 169 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “CD 7C Bonus issue by foreign unit trust instead of money or property “Interest absolutely vested in unit holder “(1) A bonus issue made to a unit holder by a unit trust that is a foreign company is a dividend for the unit holder if the issue is made under an arrangement or decision that the unit trust will make the bonus issue instead of causing a beneﬁcial interest in money or property of the unit trust to vest absolutely in the unit holder.
“Amount of dividend “(2) The amount of the dividend is the value of the money or prop­ erty in which a beneﬁcial interest would have vested in the unit holder if the bonus issue had not been made.

“Deﬁned in this Act: bonus issue, dividend, foreign company, unit holder, unit trust ”.
169 New section CD 21B inserted After section CD 21, the following is inserted: “CD 21B Transfer by unit trust of legal interest after beneﬁcial interest vests “ Transfer of legal interest in money or property that is dividend If money or property of a unit trust is a dividend under section CD 7B for a unit holder, a transfer to the unit holder of the legal interest in the money or property is not a dividend.

“Deﬁned in this Act: dividend, unit holder, unit trust ”.
170 When attributed CFC income arises In section CQ 2(1)(e), “EX 16” is replaced by “EX 17”.

171 Calculation of FIF income In section CQ 6, “EX 42” is replaced by “EX 38”.
172 Withdrawals (1) Section CS 1(2) is replaced by the following: 108 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 4 s 173 “Income of superannuation fund from withdrawal “(2) The superannuation fund derives from the withdrawal an amount of assessable income that is given by the following formula: (2) (3) In section CS 1(3), “subsections (4) and (5)” is replaced by “subsections (4) to (5)”.
Section CS 1(4) is replaced by the following: “Withdrawal “(4) Withdrawal is the total of— “(a) “(b) the amount of money that is withdrawn from the super­ annuation fund: the market value of the part of the withdrawal that is not an amount of money, on the date of the withdrawal.
“Other contributions “(4B) Other contributions is the part of the withdrawal that the trustee of the superannuation fund establishes is not em­ ployer’s contributions to superannuation savings.” 173 Exclusion of withdrawal when member ends employment Section CS 7(2) and (3) are replaced by the following: (1) “Ending employment after period of speciﬁed superannuation contributions “(2) Section CS 1 does not apply to a withdrawal from a super­ annuation fund of speciﬁed superannuation contributions that have been made for the member by the employer, or another employer, if— “(a) the member has been in employment throughout the period that— “(i) starts on the 1st day of the tax year that starts 2 tax years before the start of 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) the speciﬁed superannuation contributions are made to the superannuation fund or to a superannuation fund 109 Part 4 s 173 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 that has transferred, whether directly or indirectly, the funds relating to its members to the superannuation fund; and the speciﬁed superannuation contributions have not been part of a withdrawal, other than a transfer between superannuation funds that is referred to in paragraph (b); and the withdrawal— “(i) “(ii) “(iii) does not include employer contributions to super­ annuation savings of more than the amount found by multiplying $5,000 by the number of income years for which the speciﬁed superannuation con­ tributions were made on behalf of the member; and satisﬁes subsections (3) and (4): satisﬁes subsection (4B): the withdrawal is made at the time described in subsec­ tion (5).
“(c) “(d) “(e) “Limited increase in employer contributions between income years “(3) 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 a period of employment that— “(i) starts on the 1st day of the tax year that starts 2 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) in each of the ﬁrst 2 tax years in the period referred to in paragraph (a), the contributions— “(i) are in total less than 150% of the total of speciﬁed superannuation contributions made for the mem­ ber in the previous tax year: satisfy subparagraph (i) after the application of subsection (4); and “(ii) 110 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 4 s 174 “(c) in the tax year in which the member ends their employ­ ment, the contributions— “(i) have an annualised value that is less than 150% of the speciﬁed superannuation contributions made for the member in the previous tax year: satisfy subparagraph (i) after the application of subsection (4).” “(ii) (2) The heading to section CS 7(4) is replaced by the following: “Increases disregarded under subsection (3)(b)(i) or (c)(i)”.
(3) After section CS 7(3), the following is inserted: “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— “(i) starts on the 1st day of the tax year that starts 2 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.” 174 New section CW 11B inserted After section CW 11, the following is inserted: “CW 11B Proceeds of share disposal by qualiﬁed foreign equity investor “(1) An amount that a person derives from the sale or other disposal by a qualifying foreign equity investor of a share, or option to 111 Part 4 s 174 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 buy a share, in a company (called the resident company) is exempt income if— “(a) “(b) the resident company is resident in New Zealand; and the share or
 option, or an option or convertible note relating to the share, is bought on a day that is 12 months or more before the day of the sale or other disposal; and the person who buys the share or option, or the option or convertible note relating to the share, and disposes of the share or option is a qualifying foreign equity in­ vestor from the time of the purchase to the time of the disposal; and at some time in the 12­month period that starts from the time of the purchase referred to in paragraph (b), the shares of the resident company are quoted on no ofﬁcial list of a recognised exchange; and the resident company satisﬁes either or both of subsec­ tions (2) and (3).
“(c) “(d) “(e) “Requirements relating to main activity of resident company land development: land ownership: “(2) A resident company satisﬁes this subsection if, throughout the period referred to in subsection (1)(c), the resident company does not have as a main activity 1 or more of— “(a) “(b) “(c) mining: “(d) provision of ﬁnancial services: “(e) “(f) “(g) “(h) insurance: construction of public infrastructure assets: acquisition of public infrastructure assets: 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.
“Requirements relating to resident company that provides capital to others “(3) A resident company that has a main activity of providing cap­ ital in the form of debt or equity funding to other companies satisﬁes this subsection if— “(a) throughout the period referred to in subsection (1)(c), each other company that is resident in New Zealand— 112 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 4 s 174 “(i) does not have, as a main activity, an activity that is referred to in subsection (2)(a) to (c) and (e) to (g); and “(ii) does not have, as a main activity, an activity that is referred to in subsection (2)(d) and (h) and is not the provision of capital to other companies; and “(iii) does not provide capital, directly or indirectly, to a company that is resident in New Zealand and has, as a main activity, an activity that is referred to in subsection (2)(a) to (c) and (e) to (g); and “(b) “(c) “(iv) does not provide capital, directly or indirectly, to a company that is resident in New Zealand and has, as a main activity, an activity that is referred to in subsection (2)(d) and (h) and is not the provision of capital to other companies; and throughout the period referred to in subsection (1)(c), each other company that is not resident in New Zealand does not provide capital, directly or indirectly, to a company that is resident in New Zealand and has, as a main activity, an activity that is referred to in subsection (2)(a) to (h); and for each other company there is a time in the period referred to in subsection (1)(c) at which— “(i) the shares of the other company are quoted on no ofﬁcial list of a recognised exchange; and the shares of the resident company are quoted on no ofﬁcial list of a recognised exchange.
“(ii) “(4) “Some deﬁnitions In this section— “foreign exempt entity means a person who— “(a) is established as a legal entity under the laws of a terri­ tory that is approved for the purposes of this section by the Governor­General by an Order in Council or under the laws of a part of such a territory; and “(b) has persons (called in this deﬁnition members) who hold interests in the capital of the legal entity and who are entitled to shares of the income of the legal entity; and 113 Part 4 s 174 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 is treated by the taxation laws of the territory referred to in paragraph (a), or by the taxation laws of the part of the territory, as not being subject to a tax on income other than as a body that handles income of the members; and is resident in no territory that has laws that treat the legal entity as being subject to a tax on income other than as a body that handles income of the members; and does not have a member who— “(i) has, when treated as holding the interests of any person who is associated with the member under section OD 8(1) (Further deﬁnitions of associ­ ated persons), an interest of 10% or more in the capital of the legal entity; and is resident in no territory that is approved for the purpose of this section by the Governor­General by an Order in Council; and “(ii) does not have a member who, when treated as holding the interests of any person who is associated with the member under section OD 8(1) (Further deﬁnitions of
 associated persons), has an interest of 10% or more in the capital of the legal entity and who— “(i) would be entitled to receive an amount derived from a disposal to which this section would ap­ ply; and “(ii) would receive an amount referred to in subpara­ graph (i) that, in the absence of this section, would have been reduced by a tax imposed by the Act on the amount or on the proceeds of the disposal in the hands of the legal entity; and “(iii) would in any circumstances, under the taxation laws of the
 territory in which the member is resi­ dent or under the taxation laws of part of the ter­ ritory, be entitled to receive from the government of the territory or of the part of the territory a ﬁ­ nancial beneﬁt in the form of a payment, credit, rebate, forgiveness or other compensation for the reduction referred to in subparagraph (ii) “(c) “(d) “(e) “(f) 114 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 4 s 174 “foreign exempt partnership means an unincorporated body that— “(a) is established under the laws of a territory that is ap­ proved for the purposes of this section by the Gov­ ernor­General by an Order in Council or under the laws of a part of such a territory; and consists of persons (called in this deﬁnition partners); and is treated by the taxation laws of the territory, or by the taxation laws of the part of the territory, as not being subject to a tax on income other than as a body that handles income of the partners; and “(b) “(c) “(e) “(d) has at least 1 partner (called in this deﬁnition a general partner) who is liable for all debts of the unincorpor­ ated body and who has signiﬁcant involvement in, and control of, the business activities of the unincorporated body; and has at least 1 partner (called in this deﬁnition a special partner) whose liability for debts of the unincorporated body is limited and who has limited involvement in, and control of, the business activities of the unincorporated body; and does
 not have a general partner who is resident in no territory that is approved for the purposes of this section by the Governor­General by an Order in Council; and “(f) “(g) does not have a partner who— “(i) “(ii) has, when treated as holding the interests of any person who is associated with the partner under section OD 8(1) (Further deﬁnitions of associ­ ated persons), an interest of 10% or more in the capital of the unincorporated body; and is resident in no territory that is approved for the purpose of
 this section by the Governor­General by an Order in Council; and “(h) does not have a partner who, when treated as holding the interests of any person who is associated with the partner under section OD 8(1) (Further deﬁnitions of associated persons), has an interest of 10% or more in the capital of the unincorporated body and who— 115 Part 4 s 174 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “(i) would, under the Act in the absence of this sec­ tion, be subject to tax on an amount derived from a disposal to which this section would apply; and “(ii) would in any circumstances, under the taxation laws of the territory in which the partner is resi­ dent or under the taxation laws of part of the ter­ ritory, be entitled to receive from the government of the territory or of the part of the territory a ﬁ­ nancial beneﬁt in the form of a payment, credit, rebate, forgiveness or other compensation for a payment of the tax referred to in subparagraph (i) “foreign exempt person means a person who— “(a) is resident in a territory that is approved for the purposes of this section by the Governor­General by an Order in Council; and is not part of an unincorporated body that satisﬁes para­ graphs (a) to (c) of the deﬁnition of foreign exempt partnership ; and is not a legal entity that satisﬁes paragraphs (a) to (c) of the deﬁnition of foreign exempt entity ; and is treated by the taxation laws of the territory, or by the taxation laws of a part
 of the territory, as the person who derives the proceeds from a disposal of shares or options that are held by the person; and is not a person who— “(i) would, under the Act in the absence of this sec­ tion, be subject to tax on an amount derived from a disposal to which this section would apply; and “(ii) would in any circumstances, under the taxation laws of the territory in which the person is resi­ dent or under the taxation laws of part of the ter­ ritory, be entitled to receive from the government
 of the territory or of the part of the territory a ﬁ­ nancial beneﬁt in the form of a payment, credit, rebate, forgiveness or other compensation for a payment of the tax referred to in subparagraph (i) “(b) “(c) “(d) “(e) 116 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 4 s 175 “qualifying foreign equity investor means a person who is not resident in New Zealand and who is 1 or more of the fol­ lowing “(a) “(b) “(c) a foreign exempt entity: a person who is part of a foreign exempt partnership: a foreign exempt person.
“Residency of territory “(5) For the purpose of this section, whether a person is resident in a territory other than New Zealand is determined— “(a) in the presence of a double tax agreement between New Zealand and the territory that is in force under the terms of the double tax agreement, under the double tax agree­ ment: in the absence of a double tax agreement between New Zealand and the territory that is in force under the terms of the double tax agreement, under the laws of the ter­ ritory.
“(b) “Approval and withdrawal of approval for territory “(6) The Governor­General may, from time to time by Order in Council— “(a) approve a territory for the purpose of this section: “(b) withdraw the approval of a territory for the purpose of this section.
“Deﬁned in this Act: amount, business, company, dividend, double tax agree­ ment, exempt income, foreign exempt entity, foreign exempt partnership, for­ eign exempt person, income, insurance, interest, land, payment, personal prop­ erty lease payment, qualifying foreign equity investor, recognised exchange, resident in New Zealand, royalty, share, tax ”.
175 Section CW 49 replaced Section CW 49 is replaced by the following: “CW 49 Providing standard­cost household service An amount of income derived in an income year by a natural person from providing a standard­cost household service is exempt income if— “(a) the amount is exempt income under a determination made under section 91AA(2)(a) of the Tax Administra­ tion Act 1994: the person— “(b) 117 Part 4 s 176 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “(ii) “(i) may be treated, under a determination made under section 91AA of the Tax Administration Act 1994, as incurring an amount of costs that is greater than or equal to the amount of income; and in calculating the person’s income tax liability for the income year, elects to include in the tax­ payer’s annual total deduction no amount that, in the absence of this paragraph, would be a de­ duction incurred by the taxpayer in providing the standard­cost household service.
“Deﬁned in this Act: amount, annual total deduction, exempt income, income, income tax liability, income year, standard­cost household service ”.
176 New section CX 41B inserted After section CX 41, the following is inserted: “CX 41B Amounts remitted as condition of new start grant “When this section applies “(a) animal husbandry: “(1) This section applies if in an income year of a person— the person carries on a business of— “(i) “(ii) poultry­keeping: “(iii) beekeeping: “(iv) breeding horses other than bloodstock: “(v) horticulture: “(vi) cropping; and the person is paid a new start grant for the business for an event that is a qualifying event; and the person in carrying on the business— “(i) “(b) “(c) incurs a liability for expenditure or loss before the declaration of the state of emergency that re­ lates to the qualifying event; and “(ii) before the date that is 3 months after the end of the state of emergency, takes the liability into ac­ count in calculating the person’s taxable income for an income year; and the liability referred to in paragraph (c)(i) is forgiven or otherwise remitted— “(d) 118 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 4 s 176 “(i) as a prerequisite for the payment of the new start grant; and “(ii) before the date that is 18 months after the end of the state of emergency; and “(e) the amount of the remitted liability is income of the person under section CG 2 (Remitted amounts).
“Excluded income “(2) The remitted liability is excluded income of the person to the extent that is the greater of zero and the amount calculated under the formula— remitted amount ­­ current loss ­­ available loss ­­ other loss “(3) “Deﬁnition of items in formula In the formula— “(a) “(b) remitted amount is the amount of the remitted liability: current loss is the net loss that the person would have for the income year in which the liability is remitted in the absence of this section: available loss is the available net losses that are avail­ able to the person for offset against net income for the income year in which the liability is remitted: “(c) “(d) other loss is a loss that— “(i) “(ii) is incurred by a person associated with the person who receives the new start grant; and satisﬁes subsection (4).
“Loss incurred by associated person from business or land “(4) The loss referred to in subsection (3)(d)— “(a) is incurred by a person who— “(i) carries on or has carried on the business for which the new start grant is paid or owns or has owned an estate in fee simple or leasehold estate in land used in the business; and in the opinion of the Commissioner, is under a substantial degree of control by the person; and “(iii) in the opinion of the Commissioner, has a sub­ stantial identity of interests with the person; and “(ii) “(b) is incurred from— “(i) “(ii) the business referred to in paragraph (a)(i): land that is used in the business; and 119 Part 4 s 177 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “(c) “(d) is, for the income year in which the liability is remit­ ted,— “(i) “(ii) a net loss of the associated person: an available net loss for the associated person; and is included in the calculation in subsection (3) to an extent that the Commissioner determines, having regard to the interests of the associated person that are separate from those of the person.
“Notice to associated person “(5) The Commissioner must give to the associated person written notice of a determination under subsection (4)(d).

“Deﬁned in this Act: business, capital limitation, deduction, diminished value, general limitation, general permission, income, income year, qualifying event ”.
177 Determining tax liabilities In the deﬁnition of GST payable in section DB 3(3), para­ graph (b)(ii) is replaced by the following: an amount referred to in section 17(2) or 51B of the Goods and Services Tax Act 1985”.
“(ii) 178 New section DB 13B inserted After section DB 13, the following is inserted: “DB 13B Expenses of failed or withdrawn application for resource consent “Deduction “(1) A person who applies for the grant of a resource consent under the Resource Management Act 1991 and is refused the grant or withdraws the application is allowed a deduction for expend­ iture— “(a) “(b) that the person incurs in relation to the application; and that would have been part of the cost of a resource con­ sent that is depreciable property if the application had been granted; and for which the person is not allowed a deduction under another provision.
“(c) 120 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 4 s 180 “Timing of deduction “(2) The deduction is allocated to the income year in which the grant is refused or the application is withdrawn.

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

The general per­ mission and other general limitations still apply.

“Deﬁned in this Act: accounting year, capital limitation, deduction, general limitation, general permission, income year ”.
179 New section DB 28B inserted After section DB 28, the following is inserted: “DB 28B Expenses of failed or withdrawn patent application “Deduction “(1) A person who applies for the grant of a patent and is refused the grant or withdraws the application is allowed a deduction for expenditure— “(a) “(b) that the person incurs in relation to the application; and that would have been part of the cost of ﬁxed life intan­ gible property if the application had been granted; and for which the person is not allowed a deduction under another provision.
“(c) “Timing of deduction “(2) The deduction is allocated to the income year in which the grant is refused or the application is withdrawn.

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

The general per­ mission and other general limitations still apply.

“Deﬁned in this Act: capital limitation, deduction, ﬁxed life intangible property, general limitation, general permission, income year ”.
180 New heading and new section DB 44 inserted After section DB 43, the following is inserted: “Exempt income “DB 44 Expenditure incurred in deriving exempt dividend “Deduction “(1) A company that derives a dividend that is exempt income of the company under section CW 9 is allowed a deduction of— 121 Part 4 s 181 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “(a) “(b) the amount of the expenditure incurred by the company in deriving the dividend, if the company is not a conduit tax relief company: the amount calculated using the following formula, if the company is a conduit tax relief company: expenditure x (1 ­­ non­resident shareholding) “Deﬁnition of items in formula In the formula,— “(a) expenditure is the amount of the expenditure incurred by the company in deriving the dividend: “(b) non­resident shareholding is the fraction of the com­ pany’s shareholders that are non­residents, calculated under section NH 7(2) and (4).
“(2) “Link with subpart DA “(3) This section overrides the exempt income limitation.

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

“Deﬁned in this Act: company, conduit tax relief company, deduction, divi­ dend, exempt income, exempt income limitation, general limitation, general permission, non­resident, shareholder ”.

181 Calculation of FIF loss In section DN 7, “EX 42” is replaced by “EX 38”.
182 (1) “(c) (2) Improvements to farm land In section DO 4(1)(b), “land.” is replaced by “land; and” and the following is added: the expenditure on the improvement is not expenditure to which sections DO 4B to DO 4D apply.” In section DO 4(6), “vines or trees” is replaced by “non­listed horticultural plants”.
183 New sections DO 4B to DO 4E inserted After section DO 4, the following is inserted: “DO 4B Expenditure on land: planting of listed horticultural plants “Application of section “(1) This section applies if— 122 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 4 s 183 “(a) “(b) a person carries on a farming or agricultural business (including a horticultural business) on land in New Zealand; and the land has been developed by the planting of listed horticultural plants on the land.
“Deduction and timing “(2) For an income year in which the planting beneﬁts the busi­ ness and for which subsection (3) does not apply, the person is allowed a deduction relating to expenditure incurred by the person, or by another person, in developing the land.
“Income year in which no deduction “(3) The person is not allowed a deduction under subsection (2) for an income year in which— “(a) if the person owns the land, the person disposes of the land: if the person does not own the land, the person ceases carrying on the business on the land.
“(b) “Amount of deduction other than under subsections (6) and (7) “(4) For expenditure to which subsections (6) and (7) do not apply for the income year, the amount of the deduction under sub­ section (2) is calculated using the formula: 1.2 x rate x diminished value.
“(5) “(6) “Deﬁnition of items in formula In the formula— “(a) rate is the percentage rate determined for the type of listed horticultural plant by the Commissioner under section 91AAB of the Tax Administration Act 1994: “(b) diminished value is the diminished value of the ex­ penditure.
“Deduction: expenditure on replaced plant if no deduction under section DO 4C If a listed horticultural plant in a planting of the person ceases in an income year to exist or to be used in deriving assessable income and the person has no deduction under section DO 4C for the income year for the expenditure incurred in replacing the listed horticultural plant— 123 Part 4 s 183 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “(a) “(b) “(c) the person is allowed a deduction: the amount of the deduction is the diminished value of the expenditure on the listed horticultural plant at the time that the listed horticultural plant ceases to exist or to be used in deriving assessable income: the deduction is allocated to the income year in which the listed horticultural plant ceases to exist or to be used in deriving income.
“(7) “Treatment of expenditure on replaced plant if deduction under section DO 4C If a listed horticultural plant in a planting of the person ceases in an income year to exist or to be used in deriving assessable income and the person has a deduction under section DO 4C for the income year for all or some of the expenditure incurred in replacing the listed horticultural plant— “(a) the person is not allowed a deduction under this section; and the person may add the diminished value, immediately before the replacement, of the expenditure on the listed horticultural plant to the diminished values, at the end of the income year, of the expenditure on listed horti­ cultural plants that are in the planting at the end of the income year; and the person may elect the method of making the addition by applying the method in a return of income for the income year.
“(b) “(c) “Link with subpart DA “(8) This section overrides the general permission and the capital limitation.

The other general limitations still apply.
“Deﬁned in this Act: assessable income, business, capital limitation, deduction, diminished value, general limitation, general permission, income year, listed horticultural plant, planting, return of income 124 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 4 s 183 “DO 4C Expenditure on land: horticultural replacement planting “Application of section “(1) This section applies to a person who carries on a horticultural business on land in New Zealand and who, in an income year (called the current income year)— “(a) plants, or causes to be planted, on the land a listed horti­ cultural plant as a replacement plant: regrafts, or causes to be regrafted, a listed horticultural plant on the land as a replacement plant.
“(b) “Deduction “(2) The person is allowed a deduction of an amount given by 1 of subsections (3) and (5) if, in the current income year— “(a) “(b) “(c) “(d) the person incurs expenditure in replacing a listed horti­ cultural plant; and the replacement plant beneﬁts the business; and the person does not dispose of the land on which the listed horticultural plant is cultivated; and the person elects that this section apply to the expend­ iture by making a return of income for the current in­ come year on that basis.
“(3) “(4) “Amount of deduction if no deduction in 1 or both of 2 preceding income years If the person has had no deduction under this section for 1 or both of the 2 income years preceding the current income year, the amount of the deduction under subsection (2) is calculated using the formula— “Deﬁnition of items in formula In the formula— “(a) replacement expenditure is the amount of the expend­ iture incurred by the person in replacing the listed horti­ cultural plant: fraction is the greater of 7.5% and the replaced area fraction for the planting for the current income year.
“(b) 125 Part 4 s 183 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “(5) “Amount of deduction if deduction in both of 2 preceding income years If the person has had a deduction under this section for a plant­ ing for both of the 2 income years preceding the current in­ come year, the amount of the deduction under subsection (2) is the lesser of— “(a) the amount that is calculated using the formula in sub­ section (6): the amount that is calculated using the formula in sub­ section (8).
“(b) “Formula for ﬁrst amount “(6) The ﬁrst amount is calculated using the formula “(7) “Deﬁnition of items in formula In the formula— “(a) replacement expenditure is the amount of the expend­ iture incurred by the person: fraction is the greater of 7.5% and the replaced area fraction for the planting for the current income year.
“(b) “Formula for second amount “(8) The second amount is calculated using the formula— “Deﬁnition of items in formula In the formula— “(a) replacement expenditure is the amount of the expend­ iture incurred by the person: earlier fraction is the lesser of 7.5% and the replaced area fraction for the planting for the earlier of the 2 income years preceding the current income year: later fraction is the lesser of 7.5% and the replaced area fraction for the planting for the later of the 2 income years preceding the current income year: replaced area fraction is the replaced area fraction for the planting for the current income year.
“(b) “(c) “(d) “(9) 126 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 4 s 183 “Timing of deduction “(10) The deduction is allocated to the current income year.

“Link with subpart DA “(11) This section overrides the general permission and the capital limitation.

The other general limitations still apply.
“Deﬁned in this Act: assessable income, business, capital limitation, deduction, diminished value, general limitation, general permission, income year, listed horticultural plant, planting, replaced area fraction, replacement plant, return of income “DO 4D Accounting for expenditure on listed horticultural plants under sections DO 4B and DO 4C “Separate accounting for additional listed horticultural plants if deduction under section DO 4C “(1) A person to whom section DO 4B applies must, for an income year and for later income years for which subsection (2) does not apply, account separately under sections DO 4B and DO 4C for listed horticultural plants if— “(a) the person has had a deduction under section DO 4C for 1 or both of the 2 income years preceding the income year; and the person acquires the listed horticultural plants in the income year; and the listed horticultural plants beneﬁt the business of the person in the income year; and the listed horticultural plants are not replacement plants.
“(b) “(c) “(d) “Combined accounting for listed horticultural plants if no deduction under section DO 4C “(2) A person may, despite subsection (1), account under sections DO 4B and DO 4C for listed horticultural plants as 1 planting for an income year and later income years if the person has had no deduction under section DO 4C for both of the 2 income years preceding the income year.
“Deﬁned in this Act: deduction, income year, listed horticultural plant, planting, replacement plant “DO 4E Some deﬁnitions In this section and sections DO 4B to DO 4D— 127 Part 4 s 184 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “planting for a person and an income year means 1 or more listed horticultural plants— “(a) that are involved in the business of the person during the income year; and for which the person must account under sections DO 4B and DO 4C, for the income year, separately from any other listed horticultural plants that are involved in the business of the person “(b) “plot means the land occupied by the listed horticultural plants in a planting “replaced area fraction for a planting and an income year means the amount calculated using the formula— where— replacement area is the area, at the end of the income year, of the part of the plot on which listed horticultural plants in the planting are planted or regrafted during the income year as replacement plants plot area is the total area, at the end of the income year, of the plot.
“Deﬁned in this Act: business, deduction, income year, listed horticultural plant, planting, plot, replaced area fraction, replacement plant ”.

184 Farming expenditure of lessor or sublessor (1) In the heading to section DO 5, “or horticulture” is inserted after “Farming”.

In section DO 5(1)(c)(i), “or DO 4B or DO 4C” is inserted after “DO 4”.

In section DO 5(1)(c)(ii), “or DO 4B(2) or DO 4C” is inserted after “DO 4(2)”.
In the heading to section DO 5(2), “or DO 4B or DO 4C” is inserted after “DO 4” In section DO 5(2), “or DO 4B or DO 4C” is inserted after “DO 4”.
(2) (3) (4) (5) 185 New section DO 5B inserted After section DO 5, the following is inserted: 128 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 4 s 186 “DO 5B Improvement destroyed or made useless by qualifying event “When this section applies “(1) This section applies if in an income year of a person— “(a) “(b) “(c) the person owns land, or operates a farming or agricul­ tural business on land, to which there has been made an improvement; and the improvement is destroyed or made useless for the purpose of deriving income as a result of an event that is a qualifying event under paragraph (a) or (b) of the deﬁnition of that term; and the person would be entitled for the income year to a deduction under section DO 4 or DO 5 for expenditure on the improvement if the improvement had not been destroyed or made useless.
“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, qualifying event ”.
186 New section DP 3B inserted After section DP 3, the following is inserted: “DP 3B Improvement destroyed or made useless by qualifying event “When this section applies “(1) This section applies if, in an income year of a person,— “(a) “(b) the person operates a forestry business on land, to which there has been made an improvement; and the improvement is destroyed or made useless for the purpose of deriving income as a result of an event that is a qualifying event under paragraph (a) or (b) of the deﬁnition of that term; and 129 Part 4 s 187 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “(c) the person would be entitled for the income year to a de­ duction under section DP 3 for expenditure on the im­ provement if the improvement had not been destroyed or made useless.
“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, qualifying event ”.
187 Cost of acquiring timber: forestry business on land bought from Crown, Maori owners, or holding company In section DP 8(3)(a), “cost of timber” is replaced by “cost of the timber”.

(2) (1) 188 Amalgamated company: expenditure on improvements for farming, aquacultural, and forestry businesses In the heading to section DV 13, “horticultural,” is inserted after “farming,”.
In section DV 13(1), “DO 4B (Expenditure on land: planting of listed horticultural plants), DO 4C (Expenditure on land: horticultural replacement planting),” is inserted before “or DO 6”.

In section DV 13(2), “DO 4B (Expenditure on land: planting of listed horticultural plants), DO 4C (Expenditure on land: horticultural replacement planting),” is inserted before “or DO 6”.
(3) 189 Partnership interests and disposal of part of asset before 16 December 1991 In the words before section DZ 6(a), “DZ 2” is replaced by “DZ 3”.

130 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 4 s 194 190 Petroleum mining operations outside New Zealand before 16 December 1991 In section DZ 7, “DZ 2” is replaced by “DZ 3”.
191 Prepayments Section EA 3(4), except for the heading, is replaced by the following: “(4) An amount of expenditure on goods is unexpired at the end of an income year if, by the end of the income year,— “(a) the person has not used up the goods in deriving income; and the goods are not destroyed or rendered useless for the purpose of deriving income.” “(b) 192 Calculation rule: income year in which item disposed of In section EE 11(5), “EE 42” is replaced by “FB 7(6) (Depre­ ciation: partial income­producing use)”.
193 Effect of disposal or event (1) In section EE 41(2), the second sentence is replaced by “This subsection does not apply if the item is a building unless the item has been destroyed or rendered useless for the purpose of deriving income as a result of an event that is a qualifying event for the purpose of paragraph (a) or (b) of the deﬁnition of that term.” In the list of deﬁned words in section EE 41, “income year” is replaced by “income, income year, qualifying event”.
(2) 194 New section EW 47B inserted After section EW 47, the following is inserted: “EW 47B Consideration when debtor released as condition of new start grant “When this section applies “(a) “(1) This section applies if, in an income year of a person,— the person carries on a business of— “(i) “(ii) poultry­keeping: “(iii) beekeeping: animal husbandry: 131 Part 4 s 194 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “(b) “(c) “(d) “(iv) breeding horses other than bloodstock: “(v) horticulture: “(vi) cropping; and the person is paid a new start grant for the business for an event that is a qualifying event; and the person incurs a liability to make a payment under a ﬁnancial arrangement— “(i) “(ii) before the declaration of the state of emergency in carrying on the business; and that relates to the qualifying event; and the liability referred to in paragraph (c)(i) is forgiven or otherwise remitted— “(i) as a prerequisite for the payment of the new start grant; and “(ii) before the date that is 18 months after the end of the state of emergency; and “(e) in the absence of this section, the amount of the remitted liability would be income of the person.
“Consideration “(2) The person is treated as having paid, on the date on which the liability is forgiven or remitted, the part of the amount owing that is the greater of zero and the amount calculated under the formula— remitted amount ­­ current loss ­­ available loss ­­ other loss.
“Deﬁnition of items in formula In the formula— “(a) “(b) remitted amount is the amount of the remitted liability: current loss is the net loss that the person would have for the income year in which the liability is remitted in the absence of this section: available loss is the available net losses that are avail­ able to the person for offset against net income for the income year in which the liability is remitted: “(c) “(d) other loss is a loss that— “(i) “(ii) is incurred by a person associated with the person who receives the new start grant; and satisﬁes subsection (4).
“(3) 132 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 4 s 196 “Loss incurred by associated person from business or land “(4) The loss referred to in subsection (3)(d)— “(a) “(b) “(c) “(d) is incurred by a person who— “(i) carries on or has carried on the business in respect of which the new start grant is paid or owns or has owned an estate in fee simple or leasehold estate in land used in the business; and in the opinion of the Commissioner, is under a substantial degree of control by the person; and “(iii) in the opinion of the Commissioner, has a sub­ stantial identity of interests with the person; and “(ii) the business referred to in paragraph (a)(i): land that is used in the business; and is incurred in respect of— “(i) “(ii) is, for the income year in which the liability is remit­ ted,— “(i) “(ii) a net loss of the associated person: an available net loss for the associated person; and is included in the calculation in subsection (3) to an extent that the Commissioner determines, having regard to the interests of the associated person that are separate from those of the person.
“Notice to associated person “(5) The Commissioner must give to the associated person a writ­ ten notice of a determination under subsection (4)(d).

“Deﬁned in this Act: business, deduction, diminished value, income, income year, qualifying event.

”.

195 Direct control interests In section EX 5(4), “of shareholder decision­making rights” is inserted after “deﬁnition”.

196 Associates and 10% threshold In section EX 15(1), “EX 46(1)(b)” is replaced by “EX 46(1)(a)”.
133 Part 4 s 197 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 197 Branch equivalent income or loss: calculation rules In section EX 21(14)(b), “to DO 4D,” is inserted after “DO 4”.

198 Rules for personal property lease asset during term of (1) (2) ﬁnance lease In section FC 8B(2), “on the date that the term of the lease ends or terminates” is replaced by “by the date on which the lease term ends”.
In section FC 8B(3)— (a) “at the end of the term of the lease” is replaced by “by the date on which the lease term ends”: “that” is replaced by “on which”.

(b) 199 Taxation of hire purchase agreements In section FC 10(8)(a), “consideration paid to the lessee for the hire purchase agreement” is replaced by “consideration pro­ vided to the lessee under the hire purchase agreement”.
200 Premiums derived by non­resident general insurers treated as being derived from New Zealand In the deﬁnition of premium in section FC 13(9), paragraphs (a) to (c) are replaced by the following: in relation to insurance of the kind described in subsection (2), an amount payable in respect of a contract of insurance entered by an insured person: in relation to insurance of the kinds described in subsections (3) and (4), an amount payable in respect of a guarantee of a contract of insurance entered by an insured person.” “(a) “(b) 201 Special provisions relating to dispositions of property In section FD 10(3)(b), “DO 4B, DO 4C,” is inserted after “DO 4,”.
Section FDA 1(1)(e) is repealed.

202 Companies that may constitute imputation group (1) (2) After section FDA 1(2)(a), the following is inserted: “(ab) all members of the consolidated group are or would be mem­ bers of the imputation group; and”.
134 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 4 s 205 (3) In section FDA 1(2)(b), the words before subparagraph (i) are replaced by “for an imputation group that contains or will con­ tain members of more than 1 consolidated group, all the mem­ bers of the consolidated groups have been members of a sin­ gle wholly­owned group of companies throughout the period that—”.
203 Amalgamation not to result in deemed income or remission of liabilities In section FE 9, “IE 1(4)” is replaced by “DB 38”.
204 Application of sections GC 29 to GC 31 (1) In section GC 29(1)(b)— (a) in the words before subparagraph (i)(A), “or losses” is omitted: subparagraph (i)(B) is replaced by the following: (b) “(B) net losses of a loss attributing qualifying company, to the ex­ tent that shareholders with effective interests in the company are deemed under section HG 16 to incur amounts of loss that correspond to the net losses; and”: (c) In section GC 29(1)(b)(ii), “assessable” is inserted before “in­ come” in both places that it occurs.
In section GC 29(1)(e)(i), “date:” is replaced by “date; and”.

In section GC 29(1)(e)(ii)(F), “CE 4.” is replaced by “CE 4:” and the following is added: in subparagraph (ii), “and losses” is omitted.

(3) (4) (2) (5) “(G) shares in a foreign company, if the proceeds of a disposal of the shares would not be assessable income of the holder other than under the FIF rules.” In section GC 29(2), “income, deductions, and losses” is re­ placed by “assessable income and deductions”.
In section GC 29(3), “income, deductions, and losses” is re­ placed by “assessable income and deductions”.

(6) 205 Deﬁned terms for sections GC 29 to GC 31 (1) In section GC 30(3)(c), in the words before subparagraph (i), “a purpose or effect of achieving” is omitted.
Section GC 30(3)(d) is replaced by the following: (2) 135 Part 4 s 206 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “(d) involves money that is provided by— “(i) a lender who is not an associated person of the borrower under a provision of section OD 7 or OD 8(3) and who does not provide the money on arm’s­length terms and who— “(A) is not a person who regularly provides money to persons on arm’s­length terms under arrange­ ments that do not satisfy paragraphs (a) to (c): is not resident in New Zealand under section OE 1 or OE 2 and does not carry on business in New Zealand through a ﬁxed establishment in New Zealand; or “(B) “(ii) a lender who is an associated person of the borrower under a provision of section OD 7 or OD 8(3) and who obtains the money under an arrangement that satisﬁes paragraphs (a) to (c).” 206 Deferral of surplus deductions from arrangement (1) paragraph (a)(i) is replaced by the following: In section GC 31(1)— (a) deductions, including any deduction under subsection (3) or section HG 16; and”.
(b) in paragraph (a)(ii)— (i) (ii) paragraph (b)(i) is replaced by the following: “assessable” is inserted before “income”: “and losses” is omitted: (c) deductions, including any deduction under subsection (3) or section HG 16; and”: (d) in paragraph (b)(ii)— (i) (ii) “assessable” is inserted before “income”: “and losses” is omitted.
In section GC 31(2)— (a) in the words before the formula, “assessable” is inserted before “income”: the deﬁnitions of items a and b are replaced by the fol­ lowing: (b) is the amount for the income year by which the deductions, in­ cluding any deduction under subsection (3) or section HG 16, of the participant from the arrangement exceed the assessable “(i) “(i) (2) “a 136 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 4 s 207 “b income, other than under this section, of the participant from the arrangement is the total amount for the income year by which the deduc­ tions, including any deduction under subsection (3) or section HG 16, from the arrangement exceed the assessable income, other than under this section, from the arrangement for the group that consists of— “(a) “(b) the participant; and the affected associates of the participant who are not a loss attributing qualifying company and who each have for the income year allowable deductions, including any allowable deduction under subsection (3) or section HG 16, from the arrangement that in total exceed the assess­ able income, other than under this section, from the ar­ rangement” paragraph (a) of the deﬁnition of item c is replaced by the following: (c) “(a) (3) (4) the total amount for the income year by which the deductions, including any deduction under subsection (3) or section HG 16, from the arrangement exceed the assessable income, other than under this section, from the arrangement for the group that consists of— “(i) “(ii) the participant; and the affected associates of the participant who are not a loss attributing qualifying company that has incurred a net loss from the arrangement for the income year; and”.
In section GC 31(3), “amount of income” is replaced by “amount of assessable income”.

In section GC 31(4)(b), “assessable” is inserted before “in­ come”.

207 Sale of trading stock for inadequate consideration (1) In the heading to section GD 1, “Sale” is replaced by “Sale or other disposal”.
Section GD 1(4) is replaced by the following: (2) “(4) This section does not apply in respect of any trading stock that— “(a) is transferred to a person under a relationship agree­ ment; or 137 Part 4 s 208 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “(b) is donated, or supplied for consideration worth less than the market value of the trading stock, to a person as a result of an event that is a qualifying event under para­ graph (a) or (b) of the deﬁnition of that term.” 208 Subpart HC repealed Subpart HC is repealed.
209 Election to become Maori authority Section HI 3(3) is replaced by the following: “(3) A person who elects to become a Maori authority becomes a Maori authority— “(a) on the ﬁrst day of the income year in which the per­ son gives notice of the election to the Commissioner, if paragraph (b) does not apply: “(b) on the ﬁrst day of the income year immediately succeed­ ing the income year in which the person gives notice of the election to the Commissioner, if the person nomin­ ates that date in the notice of the election.” 210 Distributions by Maori authority In section HI 4(1)(e), “consideration:” is replaced by “consid­ eration:” and the following is added: a taxable bonus issue.” “(f) 211 Amount distributed to member by Maori authority After section HI 5(3), the following is added: “(4) A taxable bonus issue that is made by a Maori authority to a member is a taxable Maori authority distribution.” 212 Treatment of companies and trusts that elect to apply this subpart In section HI 8, row 4 of Table HI 8 is replaced by the follow­ ing: 138 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 4 s 217 4 a Maori authority a trust that is not a Maori authority taxable income derived by the Maori authority is treated as trustee income 213 No offset in calculating some income tax liabilities Section ID 1(2) is omitted.
214 Net losses may be offset against future net income After section IE 1(2), the following is inserted: “(2B) A taxpayer who is a partner in a special partnership may not under this section carry forward a net loss if— “(a) the taxpayer has a deduction in an income year that arises from the activities of the special partnership; and the net loss arises from the deduction; and during the income year, the taxpayer derives no assess­ able income, whether from the activities of the special partnership or otherwise.
“(b) “(c) “(2C) A taxpayer may not carry forward under this section a net loss to the extent that the net loss is offset against a remitted amount of an associated person as determined by the Commissioner under section CX 41B or EW 47B.” 215 Net loss offset between group companies “(i) Section IG 2(2)(a)(i) is replaced by the following: a net loss for the year of offset that does not consist of a mining outgoing excess and is not prevented by section IE 1(2B) or (2C) from being carried forward under sections IE 1 and IF 1:”.
216 Calculations of rebates producing negative amounts In section KB 3, “subpart” is replaced by “Part”.
217 Rebate in respect of gifts of money In section KC 5(1)(cl), “Zealand.” is replaced by “Zealand:” and the following is added: 139 Part 4 s 218 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “(cm) Medicine Mondiale: “(cn) New Zealand Jesuits in India Trust: “(co) Operation Vanuatu Charitable Trust.” 218 Determination of net income (1) In section KD 1(1)(e)(ii), “EI 3, EI 7, and EJ 1” is replaced by “EI 1, EI 3, and EI 7”.
In section KD 1(3)(c)(ii), “counted income” is replaced by “as­ sessable income”.

(2) 219 Parental tax credit In section KD 2AB(3)(b), “fortnightly” is omitted.

220 Ascertainment of New Zealand income tax liability In section LC 14(1), in the deﬁnition of item b, “counted in­ come” is replaced by “assessable income”.
221 Granting of underlying foreign tax credit After section LF 2(2)(d), the following is inserted: “(db) if the company, as a result of the payment of the dividend, is liable to pay no income tax in relation to an amount, or part of an amount, from which the dividend is sourced; or”.
222 Estimated provisional tax After section MB 3(6), the following is added: “(7) This section is subject to section MB 3B.” 223 New section MB 3B inserted After section MB 3, the following is inserted: “MB 3B Provisional taxpayer affected by qualifying event “(1) This section applies to a taxpayer who is signiﬁcantly affected by a qualifying event.
“(2) A taxpayer to whom this section applies may, despite section MB 3(1), request the Commissioner to accept an estimate or a revised estimate of the residual income tax payable by the taxpayer in respect of an income year.
“(3) The Commissioner may, despite section MB 3(1), accept an estimate or a revised estimate of residual income tax payable 140 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 4 s 224 by a taxpayer to which this section applies in respect of an income year if the Commissioner is satisﬁed that— “(a) the taxpayer is signiﬁcantly affected by a qualifying event; and an effect on the taxpayer of the occurrence of a qualify­ ing event is that— “(i) it is not reasonable to require the taxpayer to de­ liver an estimate or a revised estimate of residual income tax payable by the taxpayer in respect of the income year in accordance with section MB 3(1): the basis on which the taxpayer has chosen to pay provisional tax is now inappropriate; and the taxpayer’s request that the Commissioner accept the estimate or revised estimate was made as soon as was practicable.
“(ii) “(b) “(c) “(4) If a revised estimate is accepted under subsection (3), the re­ vised estimate is treated as applying on the third instalment date.” 224 New subpart MBB inserted After subpart MBA, the following is inserted: “Subpart MBB—Early­payment discount of income tax “MBB 1 Purpose The purpose of this subpart is to encourage, by means of a discount of income tax, payments of amounts as income tax by small­business taxpayers in the income year preceding the income year in which the taxpayers are ﬁrst required to pay provisional tax.
“MBB 2 Availability of early­payment discount “(1) This section applies to a small­business taxpayer for an income year if the small­business taxpayer— “(a) is not required to make payments of provisional tax in the income year; and 141 Part 4 s 224 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “(c) “(b) on or before the taxpayer’s balance date for the income year, makes payments as income tax for the income year; and throughout the period from the taxpayer’s balance date for the income year to the taxpayer’s terminal tax date for the income year, has a credit in an account with the Commissioner that is greater than or equal to the lesser of the following: “(i) the amount that, on or before the small­business taxpayer’s balance date for the income year, the small­business taxpayer pays as income tax for the income year: the amount of terminal tax for the income year for which the taxpayer would be liable in the absence of this section; and “(ii) “(d) has, for earlier income years— “(i) never been required to make payments of provi­ sional tax and— “(A) never received an early­payment discount; or “(B) derived assessable income from a busi­ ness at no time in a period of 4 income years that began after the latest income year for which the small­business taxpayer received an early­payment discount; or “(ii) derived assessable income from a business at no time in a period of 4 income years that began after the latest income year for which the small­busi­ ness taxpayer was required to make payments of provisional tax.
If a small­business taxpayer to whom this section applies makes a return of income for the income year and applies for an early­payment discount, the Commissioner must credit the income tax account of the small­business taxpayer with an early­payment discount found by multiplying the discount rate referred to in subsection (4) by the lesser of the following: the amount that, on or before the small­business tax­ “(a) payer’s balance date for the income year, the small­busi­ ness taxpayer paid as income tax for the income year: “(2) 142 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 4 s 225 “(b) 105% of the small­business taxpayer’s residual income tax for the income year.
“(3) The small­business taxpayer must make the application re­ quired by subsection (2) on or before the date given by section 37(5) of the Tax Administration Act 1994 as the last date for ﬁling a return of income for the income year to which the ap­ plication relates.

“(4) The discount rate is— “(a) “(b) 6.7% if no rate is prescribed under paragraph (b): the rate prescribed by the Governor­General by Order in Council.
“MBB 3 Credit treated as being payment as income tax A credit of an early­payment discount for a small­business tax­ payer for an income year is treated as being a payment made on the day after the last day of the income year by the small­busi­ ness taxpayer as income tax for the income year.
“MBB 4 Some deﬁnitions In this subpart— “early­payment discount means a discount of income tax under this subpart “small­business taxpayer means a taxpayer who— “(a) conducts a business on the taxpayer’s own account, act­ ing alone or as a partner in a partnership; and “(b) does not use a company or a trust in the conduct of the “(c) business; and derives assessable income that is predominantly— “(i) “(ii) not interest, dividends, royalties, rents or beneﬁ­ from the business; and ciary income.” Section MD 1(1) is replaced by the following: 225 Refund of excess tax (1) “(1) Subject to sections MD 2, MD 2A, MD 2B, MD 3 and NH 4, and subsection (2), the Commissioner must refund an amount that a taxpayer has paid as tax if— 143 Part 4 s 226 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “(a) “(b) the Commissioner is satisﬁed that the amount represents an excess over the tax properly payable by the taxpayer; and the 4­year period referred to in section 108 of the Tax Administration Act 1994 has not ended.” Section MD 1(2) is replaced by the following: (2) “(2) Subject to sections MD 2, MD 2A, MD 2B, MD 3, and NH 4, the Commissioner must refund an amount that a taxpayer has paid as tax if— “(a) the taxpayer paid the amount as a result of an amend­ ment to an assessment that increased the amount of tax payable by the taxpayer; and the Commissioner is satisﬁed that the amount represents an excess over the tax properly payable by the taxpayer; and the 4­year period beginning at the end of the income year in which the assessment was amended has not ended.
“(b) “(c) “(2B) The Commissioner may refund an amount that is referred to in subsection (1) or (2) after the end of the 4­year period referred to in the subsection, if— “(a) the refund arises from— “(i) a clear mistake or simple oversight of the tax­ payer: an entitlement of the taxpayer to a rebate of in­ come tax under subpart KD; and “(ii) “(b) the refund is made— “(i) within the period of 4 years beginning from the end of the 4­year period referred to in the subsec­ tion: as a result of an application by or on behalf of the taxpayer that the Commissioner receives before or within the period of 4 years beginning from the end of the 4­year period referred to in the subsection.” “(ii) 226 Limits on refunds of tax in relation to Maori authorities (1) In section MD 2B(1)(a), “the end” is replaced by “unless sub­ section (1B) applies, the end”.
144 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 4 s 228 (2) After section MD 2B(1), the following is inserted: “(1B) Despite subsection (1)(a), a Maori authority that furnishes its Maori authority credit account return for an imputation year before the end of the next imputation year may be refunded income tax in accordance with section MD 1 if— “(a) the Maori authority has furnished the Maori authority credit account return within an extension of time given by the Commissioner; and the amount of the refund does not exceed the credit balance in the Maori authority’s Maori authority credit account on the last day of the imputation year for which the Maori authority credit account return was furnished.” “(b) (3) In section MD 2B(4), “If income” is replaced by “Unless sub­ section (4B) applies, if income”.
(4) After section MD 2B(4), the following is inserted: “(4B) Despite subsection (4), the income tax not refunded may be credited on a provisional tax instalment date if residual income tax is treated as being payable on the date speciﬁed in Part 7 of the Tax Administration Act 1994.” 227 Companies required to maintain imputation credit account Section ME 1(2)(a) is replaced by the following: resident in a country other than New Zealand; or”.
“(a) 228 Companies electing to maintain imputation credit account “(a) Section ME 1A(4)(a) is replaced by the following: for the purpose of section ME 6, from— “(i) the date that is 30 days after the date on which the Com­ missioner receives the notice, if none of subparagraphs (ii) to (iv) apply; or “(ii) 1 October 2003, if the Commissioner receives the notice before 1 April 2004 and notiﬁes the company that the notice is effective from 1 October 2003; or “(iii) 1 April 2004, if the Commissioner receives the notice before 1 April 2005 and notiﬁes the company that the notice is effective from 1 April 2004; or 145 Part 4 s 229 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “(iv) the beginning of the imputation year in which the Com­ missioner receives the notice, if the company is formed in the imputation year or becomes eligible under this section in the imputation year and the Commissioner notiﬁes the company that the notice is effective from the beginning of the imputation year:”.
229 Amount of dividend for imputation rules if paid in Australian currency In section ME 1B, the formula is replaced by the following: a × b 230 Consolidated imputation group to maintain separate “(b) imputation credit account Section ME 10(1C)(b) is replaced by the following: arise in relation to a company that, at the time the debit or credit arises— “(i) will be a member of the resident imputation sub­group, if the debit or credit arises before the formation of the resident imputation subgroup: is a member of the resident imputation subgroup, if the debit or credit arises at or after the formation of the resident imputation subgroup.” “(ii) 231 Credits arising to imputation credit account of group (1) After section ME 11(1)(f), the following is inserted: “(fb) an amount forming all or part of a credit balance in the divi­ dend withholding payment account of a company that is a member of the consolidated imputation group, if the company elects under section MG 11 that the amount be a credit to the imputation credit account of the consolidated imputation group:”.
(2) After section ME 11(1)(j), the following is inserted: “(jb) an amount forming all or part of a credit balance in the pol­ icyholder credit account of a company, if the company elects under section ME 19(3)(a) during the imputation year that the amount be a credit to the imputation credit account of the con­ solidated imputation group:”.
146 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 4 s 233 (3) In section ME 11(2)(d), “subsection (1)(g) and (k)” is replaced by “subsection (1)(fb), (g) and (k)”.

(4) After section ME 11(2)(e), the following is inserted: “(eb) in the case of the credit referred to in subsection (1)(jb), on the date the relevant debit arose under section ME 18(4)(b):”.
“(b) 232 Debits arising to imputation credit account of group Section ME 12(1)(b) is replaced by the following: an amount forming all or part of a credit balance in the imput­ ation credit account of the consolidated imputation group, if the nominated company of the consolidated imputation group elects under section ME 14(1) during the imputation year that the amount be a credit to the policyholder credit account of the consolidated imputation group or of a member of the consoli­ dated imputation group:”.
233 Credits and debits arising to policyholder credit account (1) of company In section ME 18(1)(a)— (a) (b) “under section ME 7 by” is omitted: in subparagraph (i), “under section ME 14 by” is in­ serted before “the nominated company”: in subparagraph (ii), “under section ME 7 by” is inserted before “the company,”.
(c) (2) After section ME 18(1)(b), the following is inserted: “(bb) an amount equal to any allocation deﬁcit debit that arises in the company’s dividend withholding payment account under section MG 8B, if the amount of the allocation deﬁcit debit is given by section MG 8B(3)(a): “(bc) an amount equal to the credit balance in the company’s dividend withholding payment account immediately before an allocation deﬁcit debit arises in the company’s dividend withholding payment account under section MG 8B, if the amount of the allocation deﬁcit debit is given by section MG 8B(3)(b):”.
(3) After section ME 18(2)(b), the following is inserted: “(bb) in the case of a credit referred to in paragraph (bb) or (bc) of that subsection, at the end of the imputation year in respect of which the credit arises:”.
147 Part 4 s 234 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 (4) (5) In section ME 18(3)(b)— (a) in subparagraph (i), “and not a member of a consoli­ dated group” is omitted: in subparagraph (ii), “or of a consolidated group that is a consolidated imputation group” is omitted.

(b) In section ME 18(4)(b), “company’s imputation credit ac­ count” is replaced by “imputation credit account of the company or imputation group”.
234 Election to use credit balance as credit against (1) (2) (3) (4) policyholder base income tax liability or as credit in imputation credit account In section ME 19(3)(a), “and not a member of a consolidated group” is omitted.

In section ME 19(3)(b), “or of a consolidated group that is a consolidated imputation group” is omitted.

In section ME 19(4)(b)(i), “and not a member of a consolidated group” is omitted.
In section ME 19(4)(b)(ii), “, if the company is not a member of an imputation group or of a consolidated group that is a consolidated imputation group” is omitted.
235 Credits and debits arising to group policyholder credit account (1) After section ME 26(2)(c), the following is added: “(d) an amount equal to any allocation deﬁcit debit that arises in the consolidated group’s dividend withholding payment account under section MG 8B, if the amount of the allocation deﬁcit debit is given by section MG 8B(3)(a): an amount equal to the credit balance in the consolidated group’s dividend withholding payment account immediately before an allocation deﬁcit debit arises in the consolidated group’s dividend withholding payment account under section MG 8B, if the amount of the allocation deﬁcit debit is given by section MG 8B(3)(b):”.
“(e) (2) After section ME 26(3)(c), the following is inserted: 148 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 4 s 238 “(d) in the case of a credit referred to in paragraph (d) or (e) of that subsection, at the end of the imputation year in respect of which the credit arises:”.

236 Credits and debits arising to branch equivalent tax account of company In section MF 4(2)(a), “or paragraph (b)” is omitted.
237 Use of credit to reduce dividend withholding payment, or use of debit to satisfy income tax liability Section MF 5(2) is repealed.
Section MF 5(6B) is replaced by the following: (1) (2) “(6B) If an election under subsection (4) relates to an amount that exceeds the income tax liability, for the income year, of the company that receives the offset under subsection (6), the ex­ cess amount is treated as giving rise to a net loss of the com­ pany for the purpose of subparts IF and IG of an amount given by the following formula:” where— a b is the amount of the excess is the basic rate of income tax, expressed as a percentage, stated in— (a) schedule 1, part A, clause 5, if the com­ pany is not a Maori authority; or schedule 1, part A, clause 2, if the com­ pany is a Maori authority.
(b) 238 Debits and credits arising to group branch equivalent (1) tax account In section MF 8(2)(a)— (a) (b) in the deﬁnition of item d, “or LC 5” is replaced by “, LC 5 or LC 16”: in the deﬁnition of item e, “companies that are members of the consolidated group” is replaced by “other com­ panies”.
(2) In section MF 8(3)(a)— 149 Part 4 s 239 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 (a) (b) “the credits referred to in subsection (2)(a) and (b)” is replaced by “a credit referred to in subsection (2)(a)”: “those paragraphs” is replaced by “that paragraph”.

239 Use of consolidated group credit to reduce dividend (1) (2) “(6) withholding payment, or use of group or individual debit to satisfy income tax liability Section MF 10(2) is repealed.
Section MF 10(6) is replaced by the following: If an election under subsection (3) or (4) relates to an amount that exceeds the income tax liability, for the income year, of the company or group that receives the offset under subsection (5), the excess amount is treated as giving rise to a net loss of the company or group for the purpose of subparts IF and IG of an amount given by the following formula:” where— a b is the amount of the excess is the basic rate of income tax, expressed as a percentage, stated in— (a) schedule 1, part A, clause 5, if the com­ pany is not a Maori authority or the group does not consist of Maori authorities; or schedule 1, part A, clause 2, if the com­ pany is a Maori authority or the group con­ sists of Maori authorities.
(b) 240 Debits arising to dividend withholding payment account (1) In section MG 5(1)(c), “company’s imputation credit account” is replaced by “imputation credit account of the company or of an imputation group to which the company belongs”.

In section MG 5(1)(f), “section MG 8” is replaced by “section MG 8(4)”.

In section MG 5(1)(g), “section MG 8(5)” is replaced by “sec­ tion MG 8B”.
(2) (3) 150 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 4 s 242 241 Allocation rules for dividend withholding payment credits Section MG 8(5) to (7) are repealed.
242 New section MG 8B inserted After section MG 8, the following is inserted: “MG 8B Policyholder credit account companies and dividend withholding payment credits “(1) This section applies to a policyholder credit account company (called the company) that is not a conduit tax relief company and an imputation year (called the dividend year) in which the company pays a dividend with a dividend withholding pay­ ment credit attached.
“(2) An allocation deﬁcit debit of an amount given by subsection (3) arises at the end of the dividend year in the company’s dividend withholding payment account if— “(a) the total of the amounts of the company’s policyholder income and policyholder net loss for the DWP reference period, found using the policyholder base calculation for each imputation year, is greater than zero: the shareholder DWP ratio for the DWP reference period exceeds the policyholder DWP ratio for the DWP reference period.
“(b) “(3) The amount of the allocation deﬁcit debit that arises under subsection (2) is— “(a) “(b) equal to the maximum deﬁcit debit, if the maximum deﬁcit debit is less than or equal to the credit balance that is in the company’s dividend withholding payment account immediately before any allocation deﬁcit debit arises under this section: equal to the reduced deﬁcit debit, if paragraph (a) does not apply.
In this section— “DWP reference period means the period that consists of— “(a) “(b) the dividend year: the longest period of consecutive imputation years— “(i) that begins on or after the date on which this section applies for the company; and “(4) 151 Part 4 s 242 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “(ii) that ends immediately before the dividend year; and “(iii) in which the company paid no dividend that had a dividend withholding payment credit attached “maximum deﬁcit debit means the quantity that is given by the following formula (a ­­ b) x d x (1 ­­ r) where— a b d r is the company’s shareholder DWP ratio for the DWP reference period: is the company’s policyholder DWP ratio for the DWP reference period: is the total of the amounts of the company’s policy­ holder income and policyholder net loss found for the DWP reference period using the policyholder base cal­ culation: is the basic rate of income tax, expressed as a percent­ age, stated in— (a) schedule 1, part A, clause 5, if the company is not a Maori authority: schedule 1, part A, clause 2, if the company is a Maori authority (b) “policyholder DWP ratio means the quantity that is given by the following formula where— “c is the total for the DWP reference period of all the credits that have arisen in the company’s policyholder credit account as a result of an election by the company under section MG 7 in relation to a credit balance in the company’s dividend withholding payment credit ac­ count is the total of
 the amounts of the company’s policy­ holder income and policyholder net loss found for the DWP reference period using the policyholder base cal­ culation “d 152 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 4 s 242 “r is the basic rate of income tax, expressed as a percent­ age, stated in— “(a) schedule 1, part A, clause 5, if the company is not a Maori authority: schedule 1, part A, clause 2, if the company is a Maori authority “(b) “reduced deﬁcit debit means the
 quantity that is given by the following formula where— c d e f g r is the total for the DWP reference period of all the credits that have arisen in the company’s policyholder credit account as a result of an election by the company under section MG 7 in relation to a credit balance in the company’s imputation credit account is the total of the amounts of the company’s policy­ holder income and policyholder net loss found for the DWP reference period using the policyholder base cal­ culation is the credit balance in the company’s dividend with­ holding payment account at the end of the dividend year immediately before any allocation deﬁcit debit arises under this section is the total amount of DWP credits that the company has attached to dividends paid by the company in the DWP reference period is the total amount of dividends paid by the company in the DWP reference period is the basic rate of income tax, expressed as a percent­ age, stated in— (a) schedule 1, part A, clause 5, if the company is not a Maori authority: schedule 1, part A, clause 2, if the company is a Maori authority (b) 153 Part 4 s 243 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “shareholder DWP ratio means the quantity given by the fol­ lowing formula where— f g is the total amount of DWP credits that the company has attached to dividends paid by the company in the DWP reference period is the total amount of dividends paid by the company in the DWP reference period.
“(5) This section does not apply to a dividend that is the subject of a determination made by a statutory producer board or a co­op­ erative company under section ME 30 or section ME 35.” 243 Further dividend withholding payment payable by company In section MG 9(5A)(b), “payment of income tax” is replaced by “dividend withholding payment”.
244 Transfer of credit balance to imputation credit account Section MG 11(1) is replaced by the following: “(1) A company that is not a conduit tax relief company and has a credit balance in the dividend withholding payment account of the company at the end of an imputation year, or immediately before a debit arises in the account under section MG 5(1)(j), may elect that all or part of the credit balance be, for the im­ putation year in which the credit balance occurs— “(a) a debit to the dividend withholding payment account of the company; and a credit to the imputation credit account of the company, or of an imputation group of which the company is a member at the time the credit balance occurs.” “(b) 245 Debits arising to group dividend withholding payment account In section MG 15(1)(f), “section MG 8” is replaced by “section MG 8(4)”.
(1) 154 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 4 s 248 (2) In section MG 15(1)(g), “section MG 8(5)” is replaced by “section MG 8B”.
246 Application of speciﬁc dividend withholding provisions to consolidated groups Section MG 16A(1) is replaced by the following: “(1) Section MG 8 applies with any necessary modiﬁcations to a consolidated group— “(a) “(b) as if the consolidated group were a company; and for the purpose of section MG 8(2) to (4), without tak­ ing into account any dividend that is paid by a member of the consolidated group to another member of the con­ solidated group.
“(1B) Section MG 8B applies with any necessary modiﬁcations to a consolidated group that has a policyholder credit account— “(a) “(b) as if the consolidated group were a company; and as if a reference to section MG 7 were a reference to section NH 6(2); and “(c) without taking into account any dividend that is paid by a member of the consolidated group to another member of the consolidated group.” 247 Allocation rules for Maori authority credit account credits In section MK 7(5), “distributions”, where it appears after “where—”, is replaced by the following: “distributions is the total of all taxable Maori authority distributions made by the Maori authority during the imputation year, exclusive of any Maori authority credit attached to the distributions”.
248 Further tax payable for end of year debit balance or when Maori authority ceases to exist Section MK 8(5) is replaced by the following: “(5) A Maori authority that pays an amount of further income tax for which the authority is liable may elect, with effect from the date on which the Commissioner receives the payment, that the amount paid be also credited in payment of a liability of the authority to pay income tax or provisional tax in relation to an income year that corresponds to an imputation year in which 155 Part 4 s 249 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 the authority was required to establish and maintain a Maori authority credit account.
“(5B) A Maori authority that pays an amount of income tax in re­ lation to an income year in which the authority was required to establish and maintain a Maori authority credit account and that is liable to pay further income tax in relation to an imput­ ation year may elect, with effect from the date on which the Commissioner receives the payment, that the amount of the payment of tax be also credited in payment of the liability of the authority to pay the further income tax.” 249 Section MZ 7 repealed Section MZ 7 is repealed.
250 Accreditation requirements of PAYE intermediaries (1) In section NBA 2(1)(c), the words before subparagraph (i) are replaced by “the applicant, if a natural person or corporation sole, or each member of the applicant, if the applicant is an un­ incorporated body, or each of the persons acting as a director, secretary or statutory ofﬁcer of the applicant, if the applicant is a body corporate, and any principal of the applicant”.
In section NBA 2(4)(b), the words before subparagraph (i) are replaced by “the person, if a natural person or corporation sole, or a member of the person, if the person is an unincorporated body, or a person acting as a director, secretary or statutory ofﬁcer of the person, if the person is a body corporate, or a principal of the person”.
(2) 251 Employer having PAYE intermediary: responsibilities and status under PAYE rules and SSCWT rules Section NBA 4(1) is replaced by the following: (1) “(1) An employer who is in an arrangement with a PAYE inter­ mediary that applies to an employee and a pay period must— if the employer has authorised the PAYE intermediary to “(a) direct the transfer of amounts from a bank account of the employer in satisfaction of the obligations under the ar­ rangement of the PAYE intermediary to make payments on behalf of the employer, ensure that, at a time speci­ ﬁed by the PAYE intermediary, the funds in the bank ac­ 156 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 4 s 251 “(b) count of the employer that are available for transfer are sufﬁcient to satisfy the obligations of the PAYE inter­ mediary that relate to the employee and the pay period; or if the employer has not authorised the PAYE intermedi­ ary as described in paragraph (a), pay into the trust ac­ count established by the PAYE intermediary and identi­ ﬁed in the employer’s notice to the Commissioner under section NBA 3— “(i) if subparagraph (ii) does not apply, the em­ ployee’s gross salary or wages for the pay period after deduction of any amount that is owed by the employee to the employer and may be law­ fully withheld by the employer from the salary or wages: if the employer has paid salary or wages to the employee in the way authorised by subsection (4), the amount that the employer is required by subsection (4)(d) to make available to the PAYE intermediary: “(ii) “(iii) if the PAYE intermediary has agreed to assume obligations of the employer under the SSCWT rules, the speciﬁed superannuation contributions that are made in the pay period by the employer on behalf of the employee.
“(1B) An employer who is in an arrangement with a PAYE inter­ mediary that applies to an employee and a pay period must— keep records of the gross salary or wages of the em­ “(a) ployee for the pay period and the amounts withheld by the employer for the pay period; and “(b) provide information requested by the PAYE intermedi­ ary within the time agreed by the employer and the PAYE intermediary.” In section NBA 4(2), “subsection (1)” is replaced by “subsec­ tions (1) and (1B)”.
In section NBA 4(3), “subsection (1)” is replaced by “subsec­ tions (1) and (1B)”.
Section NBA 4(4)(c) and (d) are replaced by the following: (2) (3) (4) 157 Part 4 s 252 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “(c) “(d) the employer makes from the gross salary or wages of the em­ ployee the deduction that the PAYE rules and SSCWT rules would require of an employer who did not have a PAYE inter­ mediary; and the employer makes available to the PAYE intermediary, in the way required by subsection (1), the amount of the deduction referred to in paragraph (c).” 252 PAYE intermediary: responsibilities and status under (1) PAYE rules and SSCWT rules In section NBA 5(1), “and (1B)” is inserted after “section NBA 4(1)” in both places that it occurs.
(2) After section NBA 5(1), the following is inserted: “(1B) If a PAYE intermediary has been authorised by an employer to direct the transfer of amounts from a bank account of the em­ ployer as described in section NBA 4(1)(a), the PAYE inter­ mediary must direct that, at or before the time of the transfer of the amount of salary or wages owing to the employee, an amount representing the deductions from the gross salary or wages of the employee that are required by the PAYE rules and SSCWT rules be transferred to— “(a) “(b) the Commissioner: the trust account established by the PAYE intermediary and identiﬁed in the employer’s notice to the Commis­ sioner under section NBA 3.” (3) In section NBA 5(2A), “and (1B)” is inserted after “section NBA 4(1)” in both places that it occurs.
253 Operation of trust account (1) In section NBA 6(2), paragraphs (aa) and (ab) are replaced by the following: “(ab) deductions from gross salary or wages that are required by the PAYE rules and SSCWT rules: “(ac) speciﬁed superannuation contributions paid by employers: “(ad) deductions under section NBA 4(4) made by employers from (2) salary or wages:”.
In section NBA 6(3), paragraphs (aa) and (ab) are replaced by the following: “(ab) speciﬁed superannuation contributions paid by employers: 158 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 4 s 255 “(ac) deductions under section NBA 4(4) made by employers from salary or wages:”.

254 Amounts of tax deductions Section NC 6(1) is repealed.
(1) In section NC 6(1A), “For a period for which the amount of (2) a tax deduction is not ﬁxed by an annual taxing Act, the” is replaced by “A”.

In section NC 6(1B), “by an annual taxing Act or” is omitted.

In section NC 6(1C), “by an annual taxing Act or” is omitted.

Section NC 6(2) is repealed.
(3) (4) (5) 255 Delivery of withholding declaration “(2) Section NC 7(2) is replaced by the following: If a person who is making a withholding payment has not re­ ceived the withholding declaration required by subsection (1), the person must make from the withholding payment a tax de­ duction that is equal to the sum of the amount of the tax de­ duction that would, apart from this subsection, be made from the withholding payment and an amount equal to— “(a) 15% of the amount of the withholding payment, if nei­ ther of paragraphs (b) and (c) applies; or “(b) 5% of the amount of the withholding payment, if— “(i) “(ii) the person receiving the withholding payment is a company that is a non­resident contractor for the purposes of the Income Tax (Withholding Payments) Regulations 1979; and the person referred to in subparagraph (i) receives the withholding payment other than directly or indirectly as a result of a choice that is made for purposes that include a purpose of defeating the intent and application of paragraph (a); and “(c) “(iii) paragraph (c) does not apply; or zero, if the withholding payment is a payment of the class speciﬁed in clause 4(b) of part B of the Schedule to the Income Tax (Withholding Payments) Regulations 1979.” 159 Part 4 s 256 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 256 Amount of tax deductions for pay period current when tax deductions altered In section NC 12(1), “by an annual taxing Act or” is omitted.
257 Special ﬁling rule for employer who stops employing staff during year In section ND 12, “section ND 10(4) and (5)” is replaced by “section ND 10(3) to (5)”.

258 Application of RWT rules (1) After section NF 1(2)(a)(x), the following is added: “(xi) interest payable on overpaid tax in accordance with section 120D of the Tax Administration Act 1994:”.

Section NF 1(3) and (3A) are repealed.
(2) 259 Liability to make deduction in respect of foreign (1) “(a) withholding payment dividend Section NH 1(2)(a) is replaced by the following: a dividend that is paid by a foreign company and that— “(i) is derived by a company that is resident in New Zealand; and is exempt income under section CW 9 or CW 11 for the company that is resident in New Zealand; and “(iii) is not exempt income under 1 or more of sections CW 29 to CW 33 and CW 35 to CW 40 for the company that is resident in New Zealand:”.
“(ii) (2) Section NH 1(3) is repealed.

260 Application of speciﬁc dividend withholding payment (1) (2) provisions to consolidated groups Section NH 6(3) and (4) are repealed.

In section NH 6(6)(a)(ii), “payment” is inserted after “divi­ dend withholding”.

261 Deﬁnitions (1) (2) This section amends section OB 1.

In the deﬁnition of allocation deﬁcit debit, “or (5)” is replaced by “or MG 8B”.
160 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 4 s 261 (3) In the deﬁnition of community trust, “section 2” is replaced by “section 4”.
(4) After the deﬁnition of cost, the following is inserted: “cost of timber, for some timber, means the amount given for the timber by section DP 10(1) (Cost of timber) that is a deduction under section DP 10(2).” (5) In the deﬁnition of diminished value— (a) in the introductory words, “DO 4B (Expenditure on land: planting of listed horticultural plants), DO 4C (Expenditure on land: horticultural replacement plant­ ing),” is inserted before “DO 6”: in paragraph (b), “DO 4B (Expenditure on land: plant­ ing of listed horticultural plants), DO 4C (Expenditure on land: horticultural replacement planting),” is in­ serted before “DO 6”.
(b) (6) After the deﬁnition of dual resident company, the following is inserted: “DWP reference period is deﬁned in section MG 8B(4) (Policy­ holder credit account companies and dividend withholding payment credits) for the purposes of that section”.

(7) After the deﬁnition of early balance date, the following is inserted: “early­payment discount is deﬁned in section MBB 4 (Some deﬁ­ nitions) for the purpose of subpart MBB”.
(8) In paragraph (e) of the deﬁnition of eligible period, “changes” is replaced by “does not change”.

In the deﬁnition of estimated useful life, the following is added: for a listed horticultural plant, means the period of time over which the listed horticultural plant might reasonably be ex­ pected to be useful to a person in deriving income or in carry­ ing on a business in New Zealand, with the expectation based on an assumption of normal and reasonable maintenance”.
In the deﬁnition of ﬁnance lease, paragraph (b) is replaced by the following: involves or is part of an arrangement that involves— (9) “(c) (10) “(b) 161 Part 4 s 261 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “(i) “(ii) the transfer of the ownership of the lease asset to the lessee or an associate of the lessee during or at the end of the lease term: the lessee or an associate of the lessee having the option of acquiring the asset for an amount that is likely to be substantially lower than the asset’s market value on the date of acquisition: “(iii) a lease term that is more than 75% of the asset’s esti­ mated useful life as that term is deﬁned in section EE 53 (Meaning of estimated useful life): “(iv) a right of an associate of the lessee to acquire the lease asset, or a right of the lessor to require an associate of the lessee to acquire the lease asset, during the lease term under an arrangement that does not entitle the associate to receive all of the lease payments that may fall due after the acquisition”.
(11) After the deﬁnition of foreign dividend, the following is in­ serted: “foreign exempt entity is deﬁned in section CW 11B(3) (Proceeds of share disposition by qualiﬁed foreign equity investor) for the pur­ poses of that section “foreign exempt partnership is deﬁned in section CW 11B(3) (Pro­ ceeds of share disposition by qualiﬁed foreign equity investor) for the purposes of that section “foreign exempt person is deﬁned in section CW 11B(3) (Proceeds of share disposition by qualiﬁed foreign equity investor) for the pur­ poses of that section”.
(12) The deﬁnition of insurer is replaced by the following: “insurer— “(a) means a person who assumes liability under a contract of in­ surance: is deﬁned in section FC 13(9) (Premiums derived by non­ resident general insurers treated as being derived from New Zealand) for the purposes of sections FC 13 to FC 17 (which relate to non­resident general insurers)”.
In paragraph (d) of the deﬁnition of lease— (a) in the words preceding subparagraph (i) “FC 8G” is replaced by “FC 8I”: (i) “(b) (13) 162 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 4 s 261 (ii) “operating lease,” is inserted before “outstanding balance,”: (b) after subparagraph (ii), the following is inserted: (15) “(iib) includes a licence to use intangible property; and”.

(14) In paragraph (b)(i) of the deﬁnition of lessee, “, hires, or bails” is omitted.
In paragraph (a) of the deﬁnition of lessee’s acquisition cost, “means the consideration provided to the lessee for a ﬁnance lease asset (as determined under the deﬁnition of consider­ ation)” is replaced by “for a ﬁnance lease asset, means the consideration provided to the lessee under the ﬁnance lease, as determined under the deﬁnition of consideration,”.
(16) After the deﬁnition of listed company, the following is in­ serted: “listed horticultural plant, in sections DO 4B to DO 4E— “(a) means a horticultural plant, tree, vine, bush, cane, or similar plant that is cultivated on land, that is of a type that is listed in a determination made by the Commissioner under section 91AAB of the Tax Administration Act 1994: “(b) does not include— “(i) “(ii) a tree planted mainly for the purpose of timber produc­ tion: a tree or other similar plant planted mainly for the pur­ pose of ornament: “(iii) a vine planted mainly for the purpose of producing grapes for wine production”.
(17) In paragraph (b)(viii) of the deﬁnition of local authority, “sec­ tion CW 32(4)(c)” is replaced by “section CW 32(4) (Local authorities)”.

(18) After the deﬁnition of maturity, the following is inserted: “maximum deﬁcit debit is deﬁned in section MG 8B(4) (Policy­ holder credit account companies and dividend withholding payment credits) for the purposes of that section”.

(19) In paragraph (a) of the deﬁnition of net loss, “section 177C(4)” is replaced by “section 177C(5)”.
(20) After the deﬁnition of new provisional taxpayer, the follow­ ing is inserted: 163 Part 4 s 261 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “new start grant means a grant of money that is designated by the Minister of Agriculture as a new start grant and is paid by the Gov­ ernment of New Zealand to a person in respect of— “(a) “(b) (21) After the deﬁnition of non­ﬁling taxpayer, the following is an adverse event: an event that is a qualifying event”.
inserted: “non­listed horticultural plant, in section DO 4 and schedule 7, part A, item 8— “(a) means— “(i) a horticultural plant, tree, vine, bush, cane, or similar plant that is cultivated on land, that is not a listed horti­ cultural plant: a tree or other similar plant planted mainly for the pur­ pose of ornament: “(ii) “(b) does not include a tree planted mainly for the purpose of timber (22) production”.
In paragraph (a)(ii) of the deﬁnition of PAYE intermediary, “PAYE intermediary); or” is replaced by “PAYE intermedi­ ary); and” and the following is added: “(iii) has entered agreements that have been approved by the Com­ missioner under section NBA 3 (Approval by Commissioner of employer arrangements with PAYE intermediary) with not less than 10 employers:”.
(23) After the deﬁnition of physical cost of production, the fol­ lowing is inserted: “planting is deﬁned in section DO 4E (Some deﬁnitions) for the pur­ poses of sections DO 4B to DO 4E”.

(24) After the deﬁnition of pleasure craft, the following is in­ serted: “plot is deﬁned in section DO 4E (Some deﬁnitions) for the purposes of sections DO 4B to DO 4E”.
(25) After the deﬁnition of policyholder credit account person, the following is inserted: “policyholder DWP ratio is deﬁned in section MG 8B(4) (Policy­ holder credit account companies and dividend withholding payment credits) for the purposes of that section”.
164 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 4 s 261 (26) After the deﬁnition of qualifying debenture, the following is inserted: “qualifying event means— “(a) “(b) “(c) the extreme climatic conditions that occurred during the month of February 2004 in New Zealand: the storm event that occurred during the month of July 2004 in the Bay of Plenty area: any naturally­occurring event that occurs in a subsequent year and— “(i) for which a state of emergency is declared under the Civil Defence Act 1983 or Part 4 of the Civil Defence Emergency Management Act 2002; and that the Governor­General by Order in Council declares to be a qualifying event “(ii) “qualifying foreign equity investor is deﬁned in section CW 11B(3) (Proceeds of share disposition by qualiﬁed foreign equity investor) for the purposes of that section”.
(27) After the deﬁnition of reduced deduction, the following is inserted: “reduced deﬁcit debit is deﬁned in section MG 8B(4) (Policyholder credit account companies and dividend withholding payment credits) for the purposes of that section”.

(28) After the deﬁnition of repairs, the following is inserted: “replaced area fraction is deﬁned in section DO 4E (Some deﬁni­ tions) for the purposes of sections DO 4B to DO 4E”.
(29) After the deﬁnition of replacement permit, the following is inserted: “replacement plant, in sections DO 4 and DO 4B to DO 4E, means a listed horticultural plant that replaces a listed horticultural plant, whether or not it is of the same type of listed horticultural plant”.

(30) In the deﬁnition of resident in Australia, paragraph (a) is omitted.

In the deﬁnition of schedular income, paragraph (i) is omit­ ted.
(31) (32) After the deﬁnition of shareholder dividend statement, the following is inserted: 165 Part 4 s 262 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 “shareholder DWP ratio is deﬁned in section MG 8B(4) (Policy­ holder credit account companies and dividend withholding payment credits) for the purposes of that section”.
(33) After the deﬁnition of slice rule, the following is inserted: “small­business taxpayer is deﬁned in section MBB 4 (Some deﬁ­ nitions) for the purposes of subpart MBB”.

(34) In the deﬁnition of special corporate entity, after paragraph (i), the following is added: any body incorporated under the Incorporated Societies Act 1908, for an income year in which the body on no day in the income year has shares on issue to the members of the body”.
(35) The deﬁnition of taxable bonus issue is replaced by the fol­ “(j) lowing: “taxable bonus issue means— “(a) “(b) a bonus issue in lieu: a bonus issue that a company chooses to treat as a dividend under section CD 7 (Elections to make bonus issue into divi­ dend): in the case of a bonus issue made before the enactment of this Act, a bonus issue that a company chose to treat as a dividend under a provision of an earlier Act corresponding to section CD 7 (Elections to make bonus issue into dividend): a bonus issue that is a dividend under section CD 7C (Bonus issue by foreign unit trust instead of money or property)”.
In the deﬁnition of timber, paragraph (e) is omitted.

“(c) “(d) (36) 262 Meaning of income tax In section OB 6(1)(b), “CW 11B,” is inserted after “CD 11,”.

263 Further deﬁnitions of associated persons In section OD 8(1), “CW 11B,” is inserted after “sections”.

264 Schedule 7—Expenditure on farming, aquacultural, and forestry improvements In the heading to schedule 7, “horticultural,” is inserted after “farming,”.
In schedule 7, part A, item 8, “vines or trees on the land other than trees planted mainly for the purposes of timber pro­ (1) (2) 166 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 4 s 266 duction” is replaced by “non­listed horticultural plants on the land”.
265 Schedule 9—Categories of livestock for which national standard costs to be declared In schedule 9, column 2, in the entry that corresponds to the item “Pigs”, “Growing pigs 10 to 18 weeks of age” is replaced by “Growing pigs 10 to 17 weeks of age”.

266 Schedule 21—Enactments amended This section amends schedule 21.
(1) The amendment to section 48A of the Goods and Services Tax (2) Act 1985 is replaced by the following: “In section 48A(3)(a), replace ‘section EZ 9(3) of the Income Tax Act 1994’ by ‘section CX 41B(4) or EW 47B(4) of the Income Tax Act 2004’.
“In the words after section 48A(3)(c), replace ‘section EZ 9(3) and (4) of the Income Tax Act 1994’ by ‘section CX 41B(4) and (5) or section EW 47B(4) and (5) of the Income Tax Act 2004’.” (3) The amendment to section 49(2) of the Student Loan Scheme Act 1992 is replaced by the following: “In section 49(2), replace ‘an income year’ by ‘a tax year’.
In section 49(2), replace ‘that income year’ by ‘that tax year’.” (4) In the heading to the amendments to the Taxation Review Authorities Act 1994, “1994 No 156” is replaced by “1994 No 165”.

The amendment to the Financial Reporting Order 1994 is re­ placed by the following: (5) “In clause 4, replace ‘rates permitted under the Income Tax Act 1976’ in all places in which it appears by ‘rates permitted under the Income Tax Act 2004’.
“In clause 4, replace ‘section 222A of the Income Tax Act 1976’ by ‘section OB 1 of the Income Tax Act 2004’.” 167 Part 4 s 267 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 267 Schedule 22—Amendments to Tax Administration Act (5) (4) (3) (2) (1) 1994 In the amendment to section 2(4), “that are not in Part 6 (which relates to assessments) and” is inserted after “provisions of this Act”.
In the deﬁnition of notice that is inserted in section 3(1), “14A or 14B” is replaced by “14B or 14C”.

In the heading to the 2nd of the sections that replace section 14, “14A” is replaced by “14B”.

In the heading to the 3rd of the sections that replace section 14, “14B” is replaced by “14C”.

In the subsection that is inserted after section 33A(2), “(2A)” is replaced by “(2B)”.

In the ﬁrst amendment to section 33A(3), “(2A)” is replaced by “(2B)”.
In the amendment to section 33A(5), “(2A)” is replaced by “(2B)”.

The amendments to section 33B are omitted.

In subsection (3) of the section that is inserted after section 44B, “the deﬁnitions of listed horticultural plant and non­ listed horticultural plant in section OB 1 of the Income Tax Act 2004 and under” is inserted after “arises under”.
(10) The amendment to section 90A(6) is replaced by the follow­ (8) (9) (7) (6) ing: “In section 90A(6B), replace ‘income year’ by ‘tax year’.” (11) In the subsection that is inserted after section 91(1), “(1A)” is replaced by “(1B)”.

In the amendment to section 91AA(2)(a), “CB 9(h)” is re­ placed by “CB 9(gb) or (h) of the Income Tax Act 1994”.

In the amendment that follows the amendment to section 91AA(7), “section 91AA” is replaced by “section 91AAB”.
(12) (13) (14) After the amendment to section 91AA(7), the following are inserted: “In section 91AAB(1), replace ‘sections DO 4B, DO 4C, and DO 4D of the Income Tax Act 1994’ by ‘sections DO 4B to DO 4E of the Income Tax Act 2004’.
168 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 4 s 267 “In section 91AAB(1)(b), replace ‘column 1 of Schedule 11 of the Income Tax Act 1994’ by ‘schedule 11, column 1 of the Income Tax Act 2004’.” (15) (16) (17) (18) (19) (20) (21) (22) In the heading to the 1st of the sections that are inserted by the amendment referred to in subsection (13), “91AAA” is replaced by “91AAC”.
In the heading to the 2nd of the sections that are inserted by the amendment referred to in subsection (13), “91AB” is replaced by “91AAD”.

In the heading to the 3rd of the sections that are inserted by the amendment referred to in subsection (13), “91AC” is replaced by “91AAE”.

In the heading to the 4th of the sections that are inserted by the amendment referred to in subsection (13), “91AD” is replaced by “91AAF”.
In the 5th of the sections that are inserted by the amendment referred to in subsection (13) (a) (b) (c) (d) In the 6th of the sections that are inserted by the amendment referred to in subsection (13)— (a) (b) In the 7th of the sections that are inserted by the amendment referred to in subsection (13)— (a) (b) in the heading, “91AE” is replaced by “91AAG”: in subsection (1)(a), “91AD” is replaced by “91AAF”: in subsection (1)(b), “91AD” is replaced by “91AAF”: in subsection (6), “91AD” is replaced by “91AAF”.
in the heading, “91AF” is replaced by “91AAH”: in subsection (1), “91AE” is replaced by “91AAG”.

in the heading, “91AG” is replaced by “91AAI”: in subsection (4)(a), “91AAM(5)”.
“91AK(5)” is replaced by In the 8th of the sections that are inserted by the amendment referred to in subsection (13)— (a) (b) (c) in the heading, “91AH” is replaced by “91AAJ”: in subsection (1)(a), “91AE” is replaced by “91AAG”: in subsection (1)(b)— (i) (ii) “91AE” is replaced by “91AAG”: “91AE(5)(b)” is replaced by “91AAG(5)(b)”.
169 Part 4 s 267 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 (23) (24) (25) (26) In the 9th of the sections that are inserted by the amendment referred to in subsection (13)— (a) (b) in the heading, “91AI” is replaced by “91AAK”: in the words before paragraph (a), “91AD” is replaced by “91AAF”.

In the heading to the 10th of the sections that are inserted by the amendment referred to in subsection (13), “91AJ” is replaced by “91AAL”.
In the 11th of the sections that are inserted by the amendment referred to in subsection (13)— (a) (b) in the heading, “91AK” is replaced by “91AAM”: in the words before subsection (1)(a), “91AE” is re­ placed by “91AAG”: in the words before subsection (4)(a), “91AE(4)” is re­ placed by “91AAG(4)”: in the words before subsection (5)(a), “91AG(2)” is re­ placed by “91AAI(2)”.
(c) (d) In the paragraph that is inserted after section 91C(1)(e)— (a) (b) “(ea)” is replaced by “(eb)”: in subparagraph (iv), “91AB or 91AC” is replaced by “91AAD or 91AAE”: in subparagraph (v), “91AD to 91AK” is replaced by “91AAF to 91AAM”.

(c) (27) (28) (29) In the subsection that is inserted after section 108(3), “(3A)” is replaced by “(3B)”.

In the heading to the 1st of the sections that are inserted after section 113, “113A” is replaced by “113B”.
In the heading to the 2nd of the sections that are inserted after section 113, “113B” is replaced by “113C”.

(30) The amendments to section 120OB are replaced by the follow­ ing: “In section 120OB(1)(a), replace ‘section NBB 4(1) of the Income Tax Act 1994’ by ‘section NBA 4(1) of the Income Tax Act 2004’.

“In section 120OB(1)(b), replace ‘section NBB 4(1B)(b) of the In­ come Tax Act 1994’ by ‘section NBA 4(1B)(b) of the Income Tax Act 2004’.” (31) The amendments to section 141FC are omitted.
170 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 4 s 267 (32) The amendments to section 141JB are replaced by the follow­ ing: “In section 141JB(1)(a), replace ‘section NBB 4(1) of the Income Tax Act 1994’ by ‘section NBA 4(1) of the Income Tax Act 2004’.
“In section 141JB(1)(b), replace ‘section NBB 4(1B)(b) of the In­ come Tax Act 1994’ by ‘section NBA 4(1B)(b) of the Income Tax Act 2004’.” (33) The amendments to section 167 are replaced by the following: “In section 167(2B)(b)(i), replace ‘section NBB 4(1) of the Income Tax Act 1994’ by ‘section NBA 4(1) of the Income Tax Act 2004’.
“In section 167(2B)(b)(ii), replace ‘section NBB 4(1B)(b) of the In­ come Tax Act 1994’ by ‘section NBA 4(1B)(b) of the Income Tax Act 2004’.” (34) The amendments to section 168(4) are replaced by the follow­ ing: “In section 168(4)(a), replace ‘section NBB 4(1) of the Income Tax Act 1994’ by ‘section NBA 4(1) of the Income Tax Act 2004’.
“In section 168(4)(b), replace ‘section NBB 4(1B)(b) of the Income Tax Act 1994’ by ‘section NBA 4(1B)(b) of the Income Tax Act 2004’.” (35) The amendments to section 169 are replaced by the following: “In section 169(1B)(a), replace ‘section NBB 4(1) of the Income Tax Act 1994’ by ‘section NBA 4(1) of the Income Tax Act 2004’.
“In section 169(1B)(b), replace ‘section NBB 4(1B)(b) of the Income Tax Act 1994’ by ‘section NBA 4(1B)(b) of the Income Tax Act 2004’.” (36) The amendment to section 177C(6) is omitted.
(37) The amendment to section 177D is replaced by the following: “In section 177D(2)(a), replace ‘section EZ 9(3) and (4) of the In­ come Tax Act 1994’ with ‘section CX 41B(4) and (5) or section EW 47B(4) and (5) of the Income Tax Act 2004’.” (38) After the amendment to section 181C, the following is in­ serted: “In section 181D, replace ‘Income Tax Act 1994’ by Income Tax Act 2004.” 171 Part 4 s 268 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 268 Schedule 22A—Identiﬁed policy changes (1) In schedule 22A, in the heading to column 1, “Income Tax Act 2002” wherever it appears is replaced by “Income Tax Act 2004”.
In schedule 22A in column 1, “CB 7(2),” is inserted after “CB 6,”.
(2) 269 Schedule 23—Comparative tables of old and new provisions In schedule 23, part A, column 3— (a) in the entry that corresponds to section CB 5(1)(a), “CW 23(1)(a)” is replaced by “CW 23(1)(a), (b)”: in the entry that corresponds to section CD 2, “CC 10(1)” is replaced by “CC 9(1)”: in the entry that corresponds to section DK 2, “DT 16(1), (2)” is replaced by “DT 15”: in the entry that corresponds to section DM 1(2)(b), “DT 5” is replaced by “DT 5(2)”: in the entry that corresponds to section DM 7(1), “CT 5” is replaced by “CT 5, DT 20”: in the entry that corresponds to section EB 1(1), “BD 3(3)” is replaced by “BD 3(4)”: in the entry that corresponds to section ED 5, “CC 9” is replaced by “CC 8”: in the entry that corresponds to section EG 3(2), “EE 12(1)” is replaced by “EE 12(2)(b)”: in the entry that corresponds to section EG 3(3), “EE 12(3)” is replaced by “EE 12(3), (4)”: in the entry that corresponds to section EG 3(4), “EE 12(4), (5)” is replaced by “EE 12(5), (6)”: in the entry that corresponds to section EG 3(5), “EE 12(6)” is replaced by “EE 12(2)(c)”.
In schedule 23, part A, column 3 (a) in the entry that corresponds to section EF 1(3), “91AAA” is replaced by “91AAC”: in the entry that corresponds to section EF 1(4), “91AAA” is replaced by “91AAC”: in the entry that corresponds to section EG 4(2), “91AD” is replaced by “91AAF”: (1) (2) 172 (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (b) (c) 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 4 s 269 (d) (e) (f) (g) (h) (i) (j) (k) (l) (m) (n) (o) (p) (q) (r) (s) (t) (u) (v) in the entry that corresponds to section EG 4(6), “91AD” is replaced by “91AAF”: in the entry that corresponds to section EG 4(7), “91AD” is replaced by “91AAF”: in the entry that corresponds to section EG 10(1), “91AE” is replaced by “91AAG”: in the entry that corresponds to section EG 10(2), “91AE” is replaced by “91AAG”: in the entry that corresponds to section EG 10(3), “91AE” is replaced by “91AAG”: in the entry that corresponds to section EG 10(4), “91AF” is replaced by “91AAH”: in the entry that corresponds to section EG 10(5), “91AE” is replaced by “91AAG”: in the entry that corresponds to section EG 10(6), “91 AG” is replaced by “91AAI”: in the entry that corresponds to section EG 10(7), “91AG” is replaced by “91AAI”: in the entry that corresponds to section EG 10(8), “91 AH” is replaced by “91AAJ”: in the entry that corresponds to section EG 10(9), “91AH” is replaced by “91AAJ”: in the entry that corresponds to section EG 11(6), “91AJ” is replaced by “91AAL”: in the entry that corresponds to section EG
 11(7), “91AJ” is replaced by “91AAL”: in the entry that corresponds to section EG 13, “91AK” is replaced by “91AAM”: in the entry that corresponds to section EG 14(1), “91AK” is replaced by “91AAM”: in the entry that corresponds to section EG 14(2), “91AK” is replaced by “91AAM”: in the entry that corresponds to section EG 14(2)(b), “91AI” is replaced by “91AAK”: in the entry that corresponds to section EL 3A(2), “91AC” is replaced by “91AAE”: in the entry that corresponds to section EL 3A(3), “91AC” is
 replaced by “91AAE”: 173 Part 4 s 269 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 (w) (x) (y) (z) (zb) in the entry that corresponds to section EL 4(6), “91AB” is replaced by “91AAD”: in the entry that corresponds to section EL 4(7), “91AC” is replaced by “91AAE”: in the entry that corresponds to section EL 4(8), “91AC” is replaced by “91AAE”: in the entry that corresponds to section EL 8(2), “91AC” is replaced by “91AAE”: in the entry that corresponds to section EL 8(3), “91AC” is replaced by “91AAE”.
(3) In schedule 23, part A— (a) after the entry that corresponds to section EG 19(2), the following entry is inserted: 2A omitted (b) (c) (d) after the entry that corresponds to section EO 4(1), the following entry is inserted: 1B DS 2(3) in the 3rd column, in the entry that corresponds to sec­ tion EO 4B, “DS 3(3)” is replaced by “DS 3(6)”: after the entry that corresponds to section GC 27, the following entry is inserted: GC 27B (e) HI 6 HI 7 HI 8 HI 9 after the entry that corresponds to section HI 5, the fol­ lowing entries are inserted: GC 27A HI 6 HI 7 HI 8 HI 9 (f) after the entry that corresponds to section LD 3, the following entry is inserted: LD 3B 174 LD 3A 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 4 s 269 (g) (h) the entry that corresponds to section MB 2AB is omit­ ted: after the entry that corresponds to section MB 12, the following entries are inserted: Subpart MBB MBB 1 MBB 2 MBB 3 MBB 4 MBB 5 MBB 6 MBB 7 MBB 8 MBB 9 MBA 1 MBA 2 MBA 3 MBA 4 MBA 5 MBA 6 MBA 7 MBA 8 MBA 9 (i) after the entry that corresponds to section MD 2A, the following entry is inserted: MD 2B (j) after the entry that corresponds to section MJ 8, the following entries are inserted: MD 2B Subpart MK MK 1 MK 2 MK 3 MK 4 MK 5 MK 6 MK 1 MK 2 MK 3 MK 4 MK 5 MK 6 175 Part 4 s 269 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 MK 7 MK 8 MK 9 MK 7 MK 8 MK 9 (k) (l) in the 3rd column, in the entry that corresponds to sec­ tion MZ 7, “MZ 7” is replaced by “omitted”:
 after the entry that corresponds to section NB 1, the following entries are inserted: Subpart NBB NBB 1 NBB 2 NBB 3 NBB 4 NBB 5 NBB 6 NBB 7 NBB 8 NBB 9 NBA 1 NBA 2 NBA 3 NBA 4 NBA 5 NBA 6 NBA 7 NBA 8 NBA 9 (m) after the entry that corresponds to section NF 8, the following entry is inserted: NF 8B NF 8A (n) after the entry that corresponds to section OB 3, the following entry is inserted: OB 3B OB 3A (o) in the 3rd column, in the entry that corresponds to sec­ tion OB 7, “EW 40” is replaced by “EW 34”.
In schedule 23, part B— (a) after the entry that corresponds to section HI 5, the fol­ lowing entries are inserted: (4) 176 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Part 4 s 269 HI 6 HI 7 HI 8 HI 9 HI 6 HI 7 HI 8 HI 9 (b) after the entry that corresponds to section MB 12, the following entries are inserted: Subpart MBA MBA 1 MBA 2 MBA 3 MBA 4 MBA 5 MBA 6 MBA 7 MBA 8 MBA 9 MBB 1 MBB 2 MBB 3 MBB 4 MBB 5 MBB 6 MBB 7 MBB 8 MBB 9 (c) after the entry that corresponds to section MJ 8, the following entries are inserted: Subpart MK MK 1 MK 2 MK 3 MK 4 MK 5 MK 6 MK 1 MK 2 MK 3 MK 4 MK 5 MK 6 177 Part 4 s 269 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 MK 7 MK 8 MK 9 MK 7 MK 8 MK 9 (d) (e) the entry that corresponds to section MZ 7 is omitted: after the entry that corresponds to section NB 1, the following entries are inserted: Subpart NBA NBA 1 NBA 2 NBA 3 NBA 4 NBA 5 NBA 6 NBA 7 NBA 8 NBB 1 NBB 2 NBB 3 NBB 4 NBB 5 NBB 6 NBB 7 NBB 8 (f) after the entry that corresponds to section NF 8, the following entry is inserted: NF 8A NF 8B (g) after the entry that corresponds to section OB 3, the following entry is inserted: OB 3A OB 3B In schedule 23, part C, column 1— “14A” is replaced by “14B”: (a) “14B” is replaced by “14C”: (b) “91(1A)” is replaced by “91(1B)”: (c) “91AAA” is replaced by “91AAC”: (d) “91AB” is replaced by “91AAD”: (e) “91AC” is replaced by “91AAE”: (f) “91AD” is replaced by “91AAF”: (g) (5) 178 2004 No 111 Taxation (Venture Capital and
 Miscellaneous Provisions) Act 2004 Schedule (h) (i) (j) (k) (l) (m) (n) (o) (p) (q) “91AE” is replaced by “91AAG”: “91AF” is replaced by “91AAH”: “91AG” is replaced by “91AAI”: “91AH” is replaced by “91AAJ”: “91AI” is replaced by “91AAK”: “91AJ” is replaced by “91 AAL”: “91AK” is replaced by “91AAM”: “108(3A)” is replaced by “108(3B)”: “113A” is replaced by “113B”: “113B” is replaced by “113C”.
270 Amendments contained in schedule The provisions of the Income Tax Act 2004 speciﬁed in the schedule are amended in the manner indicated in the schedule.
Schedule Other amendments to Income Tax Act 2004 s 270 Provision in Income Tax Act 2004 Amendment to provision Item Item omitted substituted AA 1 BA 1 BD 1 BF 1 BH l CB 5 CB 8 (a) and (b) (a) to (c) (5)(a) and (b) (a) to (d) (4)(a) and (b) (1)(a) (2)(a) CB 12 (2)(a) to (k) ; and ; and ; or ; and ; or ; or ; or ; or : : : : : : : : 179 Schedule Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 Provision in Income Tax Act 2004 Amendment to provision Item Item omitted substituted : : : : : : : : : : : 113B 113B : 113C : : : CB 19 (2)(a) to (d) ; and CB 24 (a) and (b) CC 1 CC 9 (2)(a) to (e) (2)(a) to (h) (3)(a) to (c) CC 10 (2)(a) to (e) (3)(a)(i) to (iv) CD 9 (1)(a) CD 14 (3)(a) to (d) CD 16 (2)(a)(i) and (ii) CD 28 (11)(a) CD 29 CD 30 (2) (3) CD 37 (1)(a) to (c) CD 39 (12)(a) CE 1 CE 5 CF 1 (a) to (f) (3)(a) to (h) (1)(a) to (g) ; or ; or ; or ; or ; or ; and ; and ; or ; and ; or 113A 113A ; and 113B ; and ; or ; and 180 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Schedule Provision in Income Tax Act 2004 Amendment to provision Item Item omitted substituted CF 1(2) accident compensation payment (a), (b), (d), (e) CG 2 CG 6 CH 1 CH 5 CQ 5 CS 1 CS 2 CT 4 CT 6 CT 7 CU 2 CU 3 (4)(a) to (c) (1)(a) (1)(a) and (b) (2)(a) and (b) (1)(c)(i) to (v) (7)(a) (9)(a) (a) (3)(a) to (d) (3)(a) to (c) (3)(a) (3)(a) (6)(c)(i) CU 11 (3)(a) CU 19 (6)(a) to (c) ; or ; or ; or ; or ; or ; or ; or ; and ; and ; or ; or ; and ; or ; or ; and ; and (1)(a) and (b)(ii) ; and : :
 : : : : : : : : : : : : : : : 181 Schedule Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 Provision in Income Tax Act 2004 Amendment to provision Item Item omitted substituted CU 23 (2)(a) to (c), (d)(i) to (iv), (e), (f) and (g)(ii) CU 24 (2)(a) to (e) (3)(a) CU 28 (1)(a) (2)(a) and (b) CW 1 (2)(a) CW 12 (a) CW 14 (3)(a) to (e) (4)(a) and (b) CW 18 (1)(b)(i) to (iii) (2)(a)(i) to (iii) CW 23 (1)(a) to (d) (2)(a)(ii) CW 25 (a)(i) and (b)(i) CW 26 (a) CW 27 (1)(a), (b)(v), and
 (c) to (e) (1)(b)(i) to (iv) CW 28 (1)(a) to (f) 182 ; or ; or ; or ; and ; or ; and ; and ; or ; and ; or ; or ; and ; and ; or ; and ; and ; or ; or : : : : : : : : : : : : : : : : : : 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Schedule Provision in Income Tax Act 2004 Amendment to provision Item Item omitted substituted CW 28(2) payment relating to incapacity for work (a) to (c) CW 31 (5)(a) to (c) CW 33 (1)(a)(i) (2)(a) CW 34 (1)(a) CW 35 (8)(a),(b)(ix), and (c) (8)(b)(i) to (viii) CW 38 (a)(i) and (ii) CW 40 (1)(a) to (c) CX 1 CX 5 CX 9 (a) (2)(a) (2)(a) and (b) CX 10 (3)(a) CX 16 (4)(a) CX 29 (1)(a)(i) (2)(a) and (b) CX 33 (1)(a) CZ 2 (2)(a) and (b) ; or ; or ; or ; or ; and ; and ; or ; and ; or ; and ; or ; or ; and ; and ; or ; or ; and ; and : : : : : : : : : : : : : : : : : : 183 Schedule Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 Provision in Income Tax Act 2004 Amendment to provision Item Item omitted substituted CZ 3(5) loan (a)(iii), (b)(ii) and (c)(ii) CZ 11 (1)(a) and (b) CZ 14 (3)(a) (2)(b)(i) to (iii) DB 1 (1)(a) and (b) (2)(a)(i) to (v) (2)(b)(i) (5)(a) (1)(a) to (c) (2)(a) to (d) DB 2 DB 3 DB 4 (4)(a) DB 32 (1)(a) DB 40 (1)(a) and (b) DC 1 DC 9 (2)(a) (4)(a) DC 14(1) employee (a) ; and ; or ; and ; or ; and ; and ; or ; and ; and ; or ; and ; and ; or ; or ; and ; or DC 14(1) normal retiring age : (a) and (b); and DD 2 (2)(a)(i) (6)(a) ; or ; or 184 : : : : : : : : : : : : : :
 : : : : 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Schedule Provision in Income Tax Act 2004 Amendment to provision Item Item omitted substituted DD 4 DD 5 DD 9 DD 10 DD 11 DE 1 DE 3 DE 8 (3)(a) (1)(b)(i) and (ii) (2)(a) (a) (a) business contacts (a)(i) and (ii) business premises (a) (2)(a) and (b) (a) and (b) (2)(a) to (c) (3)(a) to (c) DN 6 (1)(c)(i) to (v) (1)(a), (b), (c)(vi), (d), and (e) (1)(a) to (e) (1)(a) to (e), (f)(ii), (g) and (h)(ii) (3)(a) (2)(a) DO 1 DP 1 DP
 4 DP 8 ; or ; or ; or ; or ; and ; and ; and ; or ; or ; or ; or ; or ; and ; or ; or ; or ; and : : : : : : : : : : : : : : : : : 185 Schedule Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 Provision in Income Tax Act 2004 Amendment to provision Item Item omitted substituted ; or ; or ; and ; and ; or ; and ; and ; and ; and ; and ; and ; and ; and ; and ; and ; and ; or ; or : : : : : : : : : : : : : : : : : : DS 2 DS 4 (1)(b)(i) and (ii) (2)(a) and (b)(i) DT 19 (a) DU 2 DU 8 (2)(a) to (c) (1)(a)(i) DU 11 (2)(a)(ii) DV 2 DV 4 DV 5 DV 9 (10)(a)(i) to (iii) (2)(a), (b), and (c)(ii) (8)(a) (10)(a) (3)(a) DV 10 (1)(a) and (b) DV 11 (1)(a) DX 1 (3)(a) (a) (1)(a) and (b) (1)(a) to (f) (2)(a) to (g) DZ 6 EA 1 EA 2 EA 3 186 (8) 91AAA 91AAC 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Schedule Provision in Income Tax Act 2004 Amendment to provision Item Item omitted substituted EB 2 (2)(a)(i) and (ii), (b) and (c) (3)(a) to (f) EB 4 (1)(a) to (c) EB 11 (3)(a) to (c) EB 17 (2)(a) to (f) EC 1 EC 7 (2)(a) to (c) (1)(a) to (c) EC 24 (2)(a) and (b) ; and ; or ; and ; and ; and ; and ; and ; and : : : : : : : : (3) 91AB 91AAD EC 30 (a) to (c) EC 31 (2)(a) and (b) EC 34 (3)(a) EE 7 (a) to (i) ; or ; and ; and ; or EE 12 (2)(a)(ii) and (b)(ii) ; and EE 16 (4)(a) EE 17 (4)(a) EE 25 (2)(b) ; and ; and 91AD : : : : : : : 91AAF EE 26 (2)(a) and (b)(iv) ; or : EE 28 91 AE to 91AH 91AAG to 91AAJ 187 Schedule Taxation (Venture
 Capital and Miscellaneous Provisions) Act 2004 2004 No 111 Provision in Income Tax Act 2004 Amendment to provision Item Item omitted substituted EE 30 (3)(a) (5)(a) EE 34 (2)(a) to (i) (4)(a)(ii) and (b) (5)(a) EE 38 (1)(a) (2)(a) and (b) (3)(a) (6)(a) (7)(a) EE 46 (a) EE 48 (3)(a) to (c) and (d)(i) EE 50 (5)(a) to (c) EE 51 (2)(a) and (b) EE 56 (1)(b) EF 3 (5)(a)(ii), (b)(ii), (c)(ii), (d)(ii), (e)(ii), (f), (g) and (h) EH 1 (2)(a) and (b) (3)(a) and (b) 188 ; and ; or ; or ; or ; or ; and ; and ; and ; and
 ; and ; or ; and ; and ; or 91AJ ; or ; and ; and : : : : : : : : : : : : : : 91AAL : : : 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Schedule Provision in Income Tax Act 2004 Amendment to provision Item Item omitted substituted EH 4 (1)(a) and (b) EH 12 (1)(a) to (c) EH 15 (1)(a) (3)(a) and (b) EH 18 (4)(a) EH 21 (3)(a) EH 22 (5)(b)(i) EH 34 (2)(a) EH 36 (2)(a) EH 37 date the deposit ends (a) to (f) ﬁshing business (a) and (b) EH 45 (1)(a) to (c) EH 49 (4)(a) EH 52 (3)(a) EH 53 (5)(b)(i) EH 61 (2)(a) EH 63 (2)(a) EH 64 date the deposit ends (a) to (f) ; and ; and ; or ; or ; or ; or ; or ; or ; or ; and ; and ; and ; or ; or ; or ; and ; or ; and : : : : : : : : : : : : : : : : : : 189 Schedule Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 Provision in Income Tax Act 2004 Amendment to provision Item Item omitted substituted EH 72 (1)(a) EH 75 (3)(a) EH 80 (3)(a) EH 81 date the deposit ends (a) and (b) (3)(a) and (b) (3)(a) and (b) (4)(a) to (c) (5)(a) (5)(a) to (c) (2)(a) (1)(a) and (b) (a) (2)(a) to (c) (2)(a) to (c) (2)(a) to (h) (3)(a) to (c) (4)(a) (1)(a) (2)(a) EI 2 EI 6 EI 7 EJ 3 EJ 6 EJ 14 EJ 15 EJ 17 EJ 18 EW 2 EW 3 EW 5 190 ; and ; or ; or ; and ; or ; and ; and ; and ; and ; or ; or ; and ; or ; or ; or ; and ; and ; and ; and : : : : : : : : : : : : : : : : : : : 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Schedule Provision in Income Tax Act 2004
 Amendment to provision Item Item omitted substituted (3)(a) and (b) ; and EW 11 (a) to (c) EW 17 (2)(b)(i) and (ii) EW 26 (4)(a) EW 32 (3)(a) EW 46 (2)(b)(i) EW 54 (1)(a) EW 57 (2)(a) and (b) EW 62 (9)(a) ; or ; or ; and ; and ; or ; and ; or ; and (1)(a) and (b)(iii) ; or EX 1 EX 2 EX 3 EX 5 EX 8 EX 9 (2)(a) to (c) (a) to (c) (1)(a) to (c) (a) (1)(a) to (c) EX 11 (3)(a) (4)(a) and (b) EX 17 (4)(a) EX 21 (13)(a) to (j) (14)(a) to (c) ; and ; and ; or ; and ; or ; or ; or ; and ; or ; and : : : : : : : : : : : : :
 : : : : : : : 191 Schedule Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 2004 No 111 Provision in Income Tax Act 2004 Amendment to provision Item Item omitted substituted EX 24 (1)(a) to (c) EX 26 (3)(a) to (c) EX 29 (a) to (c) EX 31 (1)(a) to (c) EX 40 (4)(b)(i) EX 42 (4)(a) and (b) EX 43 (4)(a) and (b) EX 45 (11)(b)(i) (14)(b)(i) EX 50 (2)(a) to (d) (6)(a)(ii) EX 60 (1)(a) and (b) EY 2 EY 7 (3)(a) to (e) (a) to (f) (1)(a) and (b) (2)(a) to (e) EY 15 (2)(a) and (b) EY 16 (2)(a) and (b) EY 25 (2)(a) to (c) EY 26 (2)(a) to (c) 192 ; or ; and ; or ; or ; or ; and ; and ; or ; or ; or ; or ; or ; or ; and ; and ; and ; and ; and ; and ; and : : : : : : : : : : : : : : : : : : : : 2004 No 111 Taxation (Venture Capital and Miscellaneous Provisions) Act 2004 Provision in Income Tax Act 2004 Amendment to provision Item Item omitted substituted EY 35 (2)(a) EZ 10 (a) and (b) EZ 15 (1)(b)(i) (2)(a) to (e) (5)(a) EZ 19 (1)(a) and (b) ; and ; or ; or ; or ; and ; and : : : : : : 14 December 2004 Legislative history Divided from Taxation (Annual Rates, Venture Capital and Miscellaneous Provisions) Bill (Bill 110­2), third reading 193