Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698753978379.pdf (New Zealand)
Contents LH 1 Who this subpart applies to [Repealed] LH 2 Tax credits relating to expenditure on research and development [Repealed] LH 3 Requirements [Repealed] LH 4 Calculation of amount of credit [Repealed] LH 5 Adjustments to eligible expenditure [Repealed] LH 6 Research and development activities outside New Zealand [Repealed] LH 7 Research and development activities and related terms LH 8 Orders in Council [Repealed] LH 9 LH 10 Internal software development: no associated internal Internal software development: general [Repealed] software developer [Repealed] LH 11 Internal software development: associated internal software developer with same income year [Repealed] LH 12 Internal software development: associated internal software developer with different income year [Repealed] LH 13 Internal software development: limit [Repealed] LH 14 Treatment of depreciation loss for certain depreciable property [Repealed] 2162 Page 2163 2163 2163 2163 2163 2163 2164 2165 2165 2165 2165 2165 2166 2166 Reprinted as at 2 September 2013 Income Tax Act 2007 Part L s LH 6 LH 14B Recovery of overpaid tax credit LH 15 Listed research providers [Repealed] LH 16 Industry research co-operatives [Repealed] LH 17 Some deﬁnitions 2166 2166 2166 2166 LH 1 Who this subpart applies to [Repealed] Section LH 1: repealed, on 1 April 2009, by section 19(1)(c) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).
LH 2 Tax credits relating to expenditure on research and development [Repealed] Section LH 2: repealed, on 1 April 2009, by section 19(1)(c) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).

LH 3 Requirements [Repealed] Section LH 3: repealed, on 1 April 2009, by section 19(1)(c) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).
LH 4 Calculation of amount of credit [Repealed] Section LH 4: repealed, on 1 April 2009, by section 19(1)(c) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).

LH 5 Adjustments to eligible expenditure [Repealed] Section LH 5: repealed, on 1 April 2009, by section 19(1)(c) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).
LH 6 Research and development activities outside New Zealand [Repealed] Section LH 6: repealed, on 1 April 2009, by section 19(1)(c) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).
2163 Part L s LH 7 Income Tax Act 2007 Reprinted as at 2 September 2013 LH 7 Research and development activities and related terms Research and development activities In this subpart, research and development activities of a per- son are— (a) systematic, investigative, and experimental activities that are performed for the purposes of acquiring new knowledge or creating new or improved materials, products, devices, processes, or services and that— (i) are intended to achieve an advance in science or technology by resolving scientiﬁc or technologi- cal uncertainty: involve an appreciable element of novelty: (ii) other activities that are wholly or mainly for the purpose of, required for, and integral to, the performing of the activities referred to in paragraph (a).
(b) Systematic, investigative, and experimental activities In this subpart, systematic, investigative, and experimental activities of a person are activities that— (a) are planned activities directed towards a particular pur- pose and following a logical progression of work in- volving hypothesis, experiment, observation, and evalu- ation; and are not excluded under schedule 21, part C (Expenditure and activities related to research and development).
(b) Scientiﬁc or technological uncertainty In this subpart, scientiﬁc or technological uncertainty means uncertainty concerning the scientiﬁc or technological possibil- ity of a thing, or the achievement of the thing in practice, cre- ated by an absence of relevant knowledge from the knowledge that is publicly available or deducible by a competent profes- sional working in the ﬁeld.
Novelty In this subpart, novelty means a development of technology or a new use of existing technology, by comparison with the knowledge of the technology that is publicly available on a reasonably accessible worldwide basis.

(1) (2) (3) (4) 2164 Reprinted as at 2 September 2013 Income Tax Act 2007 Part L s LH 12 (5) Technology In this subpart, technology means the practical application of scientiﬁc principles and knowledge.
Deﬁned in this Act: novelty, research and development activities, scientiﬁc or technological uncertainty, systematic, investigative, and experimental activities, technology Section LH 7: inserted, on 1 April 2008, by section 448 of the Taxation (Busi- ness Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section LH 7 compare note: repealed (with effect on 1 April 2008), on 6 October 2009, by section 329 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

LH 8 Orders in Council [Repealed] Section LH 8: repealed, on 1 April 2009, by section 19(1)(c) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).
LH 9 Internal software development: general [Repealed] Section LH 9: repealed, on 1 April 2009, by section 19(1)(c) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).

LH 10 Internal software development: no associated internal software developer [Repealed] Section LH 10: repealed, on 1 April 2009, by section 19(1)(c) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).
LH 11 Internal software development: associated internal software developer with same income year [Repealed] Section LH 11: repealed, on 1 April 2009, by section 19(1)(c) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).

LH 12 Internal software development: associated internal software developer with different income year [Repealed] Section LH 12: repealed, on 1 April 2009, by section 19(1)(c) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).
2165 Part L s LH 13 Income Tax Act 2007 Reprinted as at 2 September 2013 LH 13 Internal software development: limit [Repealed] Section LH 13: repealed, on 1 April 2009, by section 19(1)(c) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).

LH 14 Treatment of depreciation loss for certain depreciable property [Repealed] Section LH 14: repealed, on 1 April 2009, by section 19(1)(c) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).
LH 14B Recovery of overpaid tax credit (1) (2) When this section applies This section applies when the Commissioner considers the amount of a tax credit under this subpart that is used under sec- tions LA 2, LA 6(2), or LH 2(6) (which relate to tax credits) for a tax year is more than the proper amount.

Recovery of overpayment The Commissioner may recover the excess as if it were income tax payable by the person.
Deﬁned in this Act: amount, Commissioner, income tax, pay, tax credit, tax year Section LH 14B: inserted (with effect on 1 April 2008), on 6 October 2009, by section 334(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

LH 15 Listed research providers [Repealed] Section LH 15: repealed, on 1 October 2009, by section 19(1)(d) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).
LH 16 Industry research co-operatives [Repealed] Section LH 16: repealed, on 1 April 2009, by section 19(1)(c) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).
LH 17 Some deﬁnitions In this subpart,— 2166 Reprinted as at 2 September 2013 Income Tax Act 2007 Part L s LH 17 associated internal software developer, for a person (per- son A) who is performing, or having another person perform, internal software development at a time, means another per- son— (a) who is performing, or having another person perform, internal software development at the time; and for whom the internal software development controller is the same as the internal software development con- troller of person A (b) internal software development, for a person, means a research and development activity of developing software with— (a) (b) (ii) a purpose of having the software used in— (i) the internal administration of business activities of the person or of another person associated with them: providing services to customers of the person or another person associated with them whose main reason for using the services is to obtain a service other than the use of the person’s computer tech- nology or software: the main purpose that is neither— (i) selling, renting, licensing, hiring, or leasing the software by the person to customers of which 2 or more are not associated with the person nor with each other: including the software as an integral part of an electrical or mechanical device for which the software is developed and that has for the person the main purpose of being sold, rented, licensed, hired, or leased to customers as part of the per- son’s business (ii) internal software development controller, for a person (per- son A) who is performing, or having another person perform, internal software development, means a group of 1 or more persons— (a) having the power to govern, directly or indirectly, the ﬁnancial and operating policies of person A to obtain beneﬁts from person A’s activities; and 2167 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) having no other person or persons with the power to govern, directly or indirectly, the ﬁnancial and operating policies of the group to obtain
 beneﬁts from the group’s activities internal software development group, for an internal soft- ware development controller (the controller) and a tax year, means a group of entities of which each entity is a member at a time, in the entity’s income year corresponding to the tax year, when— (a) the controller is the internal software development con- troller of the entity; and the entity is performing, or having another person per- form, internal software development; and the entity has an associated internal software developer.
(c) Deﬁned in this Act: associated person, associated internal software developer, deduction, income year, internal software development, internal software devel- opment controller, internal software development group, research and develop- ment activities, tax year (b) Section LH 17: inserted, on 1 April 2008, by section 448 of the Taxation (Busi- ness Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section LH 17 list of deﬁned terms associated internal software developer: inserted (with effect on 1 April 2008), on 17 July 2013, by section 69 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Section LH 17 compare note: repealed (with effect on 1 April 2008), on 6 Octo- ber 2009, by section 329 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Subpart LJ—Tax credits for foreign income tax Contents Tax credits for foreign income tax LJ 1 What this subpart does LJ 2 LJ 3 Meaning of foreign income tax LJ 4 Meaning of segment of foreign-sourced income LJ 5 LJ 6 LJ 7 Calculation of New Zealand tax Taxable distributions and NRWT rules Repaid foreign tax: effect on income tax liability Page 2169 2170 2173 2173 2173 2176 2177 2168 Reprinted as at 2 September 2013 Income Tax Act 2007 Part L s LJ 1 LJ 8 Repaid foreign tax: effect on FDP liability 2178 LJ 1 What this subpart does (1) (2) (3) (4) (5) When tax credits allowed This subpart provides the rules for dividing assessable income from foreign-sourced amounts into segments and allows a tax credit for foreign income tax paid in relation to a segment of that income.
(b) Limited application of rules The rules in this subpart apply only when— (a) a person resident in New Zealand derives assessable in- come that is sourced from outside New Zealand; and foreign income tax is not paid in a country or territory listed in schedule 27 (Countries and types of income with unrecognised tax) to the extent to which the foreign income tax is paid on the types of income listed in the schedule.
When treated as assessable income [Repealed] [Repealed] Source of dividends If a company is not resident in New Zealand, and for the pur- poses of a law of another territory in relation to which a double tax agreement has been made is resident in that territory, and the law imposes foreign tax, a dividend paid by the company is treated as being derived from a source in that other territory for the purposes of the double tax agreement.
Double tax agreements This subpart and sections BH 1 (Double tax agreements) and CD 19(1) (Foreign tax credits and refunds linked to dividends) and section 88 of the Tax Administration Act 1994 as far as they are applicable, and modiﬁed as necessary, apply for the purposes of section LJ 2, as if that section were a double tax agreement.
2169 Part L s LJ 2 Income Tax Act 2007 Reprinted as at 2 September 2013 (6) Relationship with section YD 5 Section YD 5 (Apportionment of income derived partly in New Zealand) applies to determine how an amount is apportioned to sources outside New Zealand.
Deﬁned in this Act: amount, assessable income, attributing interest, company, dividend, double tax agreement, FIF, foreign income tax, foreign investment fund, foreign-sourced amount, foreign tax, income, pay, resident in New Zealand, tax credit Compare: 2004 No 35 ss LC 1(1)–(5), LC 14(1), LC 14A Section LJ 1(2)(a): amended (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 100 of the Taxa- tion (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section LJ 1(2)(a): amended, on 21 December 2010, by section 109(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section LJ 1(3) heading: repealed (with effect on 1 April 2008), on 6 October 2009, pursuant to section 335(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section LJ 1(3): repealed (with effect on 1 April 2008), on 6 October 2009, by section 335(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section LJ 1(6) heading: added (with effect on 1 April 2008), on 6 October 2009, by section 335(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section LJ 1(6): added (with effect on 1 April 2008), on 6 October 2009, by section 335(2) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).

Section LJ 1 list of deﬁned terms derived from New Zealand: repealed, on 21 December 2010, by section 109(2)(a) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section LJ 1 list of deﬁned terms source in New Zealand: inserted, on 21 De- cember 2010, by section 109(2)(b) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

LJ 2 Tax credits for foreign income tax Amount of credit (1) A person described in section LJ 1(2)(a) has a tax credit for a tax year for an amount of foreign income tax paid on a segment of foreign-sourced income, determined as if the segment were the net income of the person for the tax year.
The amount of the New Zealand tax payable is calculated under section LJ 5.

Limitation on amount of credit The amount of the person’s credit in subsection (1) must not be more than the amount of New Zealand tax payable by the per- (2) 2170 Reprinted as at 2 September 2013 Income Tax Act 2007 Part L s LJ 2 son in relation to the segment calculated under section LJ 5(2), modiﬁed as necessary under section LJ 5(4).
(3) Amount adjusted The amount of the person’s credit in subsection (1) may be reduced or increased if either section LJ 6 or LJ 7 applies.

When person both resident in New Zealand and another country (4) A person described in section LJ 1(2)(a) who has, because they are a citizen or resident of, or are domiciled in, a foreign country, paid foreign income tax on their assessable income, has a credit under subsection (1).
However, the amount of the credit is limited to the amount of foreign income tax that would have been paid in the foreign country if the person were treated as not a citizen or resident of, or domiciled in, that foreign country.

(5) (6) (7) Multi-rate PIEs and their investors For a multi-rate PIE and an investor in a multi-rate PIE, the amount of a tax credit is limited to the extent allowed under subpart HM (Portfolio investment entities).
When subsection (7) applies Subsection (7) applies to a person who derives an amount from an attributing interest in a FIF when the amount is treated as not being income under section EX 59(2) (Codes: comparative value method, deemed rate of return method, fair dividend rate method, and cost method).

Tax credit The person has a tax credit under this subpart for foreign in- come tax paid on or withheld in relation to the amount.
The calculation of the maximum amount of the tax credit is made under section LJ 5(2), modiﬁed so that the item segment in the formula is the amount of FIF income from the attributing interest that the person derives in the period referred to in sec- tion EX 59(2).
Deﬁned in this Act: amount, assessable income, attributing interest, FIF, FIF in- come, foreign income tax, income, income tax liability, investor, multi-rate PIE, net income, New Zealand, New Zealand tax, pay, segment of foreign-sourced income, tax credit, tax year Compare: 2004 No 35 ss LC 1(1), (1B), (1C), LC 2 2171 Part L s LJ 2 Income Tax Act 2007 Reprinted as at 2 September 2013 Section LJ 2(2): substituted (with effect on 1 April 2008), on 6 October 2009, by section 336(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section LJ 2(5) heading: substituted, on 1 April 2010 (applying for the 2010–11 and later income years), by section 336(2) of the Taxation (International Taxa- tion, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section LJ 2(5): substituted, on 1 April 2010 (applying for the 2010–11 and later income years), by section 336(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section LJ 2(6) heading: added (with effect on 1 April 2008), on 6 October 2009, by section 336(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section LJ 2(6): added (with effect on 1 April 2008), on 6 October 2009, by section 336(3) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
Section LJ 2(7) heading: added (with effect on 1 April 2008), on 6 October 2009, by section 336(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section LJ 2(7): added (with effect on 1 April 2008), on 6 October 2009, by section 336(3) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
Section LJ 2 list of deﬁned terms attributing interest: inserted (with effect on 1 April 2008), on 6 October 2009, by section 336(5) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section LJ 2 list of deﬁned terms FIF: inserted (with effect on 1 April 2008), on 6 October 2009, by section 336(5) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section LJ 2 list of deﬁned terms FIF income: inserted (with effect on 1 April 2008), on 6 October 2009, by section 336(5) of the Taxation (International Tax- ation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section LJ 2 list of deﬁned terms income: inserted (with effect on 1 April 2008), on 6 October 2009, by section 336(5) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section LJ 2 list of deﬁned terms multi-rate PIE: inserted, on 1 April 2010, by section 336(4)(b) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section LJ 2 list of deﬁned terms portfolio tax rate entity: repealed, on 1 April 2010, by section 336(4)(a) of the Taxation (International Taxation, Life Insur- ance, and Remedial Matters) Act 2009 (2009 No 34).
Section LJ 2 list of deﬁned terms tax credit: inserted (with effect on 1 April 2008), on 6 October 2009, by section 336(5) of the Taxation (International Tax- ation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

2172 Reprinted as at 2 September 2013 Income Tax Act 2007 Part L s LJ 5 LJ 3 Meaning of foreign income tax For the purposes of this Part, foreign income tax means an amount of income tax of a foreign country.
Deﬁned in this Act: amount, income tax Compare: 2004 No 35 s LC 1(1) Section LJ 3: substituted (with effect on 1 April 2008), on 6 October 2009, by section 337 of the Taxation (International Taxation, Life Insurance, and Remed- ial Matters) Act 2009 (2009 No 34).

LJ 4 Meaning of segment of foreign-sourced income For the purposes of this Part, a person has a segment of for- eign-sourced income equal to an amount of assessable income derived from 1 foreign country that comes from 1 source or is of 1 nature.
Deﬁned in this Act: amount, assessable income Compare: 2004 No 35 s LC 14(1) LJ 5 Calculation of New Zealand tax (1) (2) (3) What this section does This section provides the rules that a person must use to cal- culate the amount of New Zealand tax for an income year in relation to each segment of foreign-sourced income of the per- son that is allocated to the income year.
Calculation for single segment If the person has a notional income tax liability of more than zero, the amount of New Zealand tax for the income year relat- ing to the allocated segment is calculated using the following formula, the result of which can not be less than zero: (segment person’s deductions) person’s net income × notional liability.
Deﬁnition of items in formula In the formula in subsection (2),— (a) (b) the segment of is the amount of segment eign-sourced income for the income year: person’s deductions is the amount of the person’s deduction for the tax year corresponding to the in- come year that is attributable to the segment of for- eign-sourced income: for- 2173 Part L s LJ 5 Income Tax Act 2007 Reprinted as at 2 September 2013 (c) (d) person’s net income is the person’s net income for the tax year corresponding to the income year under section BD 4(1) to (3) (Net income and net loss): notional liability is the person’s notional income tax liability for the income year under subsection (5).
When subsection (4B) applies Subsection (4B) applies for the income year when the total amount of New Zealand tax for all segments of for- eign-sourced income of the person calculated under subsection (2) is more than the notional income tax liability.
(4) Modiﬁcation to results of formula for single segment (4B) Each amount of New Zealand tax calculated under subsection (2) in relation to each segment of foreign-sourced income is adjusted by multiplying the amount by the following ratio: person’s notional income tax liability NZ tax.
(4C) Deﬁnition of item in formula In the formula in subsection (4B), NZ tax is the amount given by adding together the result of the calculation under sub- section (2), for each segment of assessable income from all sources, including assessable income sourced in New Zealand.

Person’s notional income tax liability For the purposes of this section, a person’s notional income tax liability for a tax year is calculated using the formula— (person’s net income losses) × tax rate.
Deﬁnition of items in formula In the formula in subsection (5),— (a) (b) person’s net income is the person’s net income for the tax year: losses— (i) is the amount of the loss balance carried forward to the tax year that the person must subtract from their net income under section IA 4(1)(a) (Using loss balances carried forward to tax year): (ii) must be no more than the amount of the person’s net income: (5) (6) 2174 Reprinted as at 2 September 2013 Income Tax Act 2007 Part L s LJ 5 (c) tax rate is the basic rate of income tax set out in sched- ule 1, part A (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe beneﬁts).
Deﬁned in this Act: amount, deduction, income tax, income tax liability, loss balance, net income, New Zealand, New Zealand tax, segment of for- eign-sourced income, tax loss component, tax year Compare: 2004 No 35 s LC 14 Section LJ 5(1) heading: substituted (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 101(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section LJ 5(1): substituted (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 101(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section LJ 5(2) heading: substituted (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 101(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section LJ 5(2): substituted (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 101(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section LJ 5(3) heading: substituted (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 101(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section LJ 5(3): substituted (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 101(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section LJ 5(4) heading: substituted (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 101(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section LJ 5(4): substituted (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 101(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section LJ 5(4B) heading: substituted (with effect on 1 April 2008), on 29 Au- gust 2011 (applying for the 2008–09 and later income years), by section 101(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section LJ 5(4B): substituted (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 101(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section LJ 5(4C) heading: inserted (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 101(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section LJ 5(4C): inserted (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 101(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

2175 Part L s LJ 6 Income Tax Act 2007 Reprinted as at 2 September 2013 Section LJ 5(6)(b): substituted (with effect on 1 April 2008), on 6 October 2009, by section 338(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section LJ 5(6)(c): amended, on 1 April 2008, by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section LJ 5 list of deﬁned terms New Zealand: inserted (with effect on 1 April 2008), on 6 October 2009, by section 338(4) of the Taxation (International Tax- ation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
LJ 6 Taxable distributions and NRWT rules When this section applies This section applies when a person who is a beneﬁciary of a trust and resident in New Zealand derives a taxable distribution in their capacity as beneﬁciary of the trust.

When credit not allowed The person is not allowed a tax credit in relation to any foreign income tax paid on the taxable distribution unless the tax has substantially the same nature as non-resident withholding tax (NRWT).
Amount of credit The person’s tax credit is equal to an amount calculated using the formula— person’s taxable distribution total distribution × foreign tax paid.
Deﬁnition of items in formula In the formula,— (a) person’s taxable distribution is the amount of the tax- able distribution derived by the person in their capacity as beneﬁciary of the trust, including a payment of tax that meets the requirements of subsection (2): total distribution is the total amount of the distribution derived by the person in their capacity as beneﬁciary of the trust, including a payment of tax that meets the requirements of subsection (2): (b) (1) (2) (3) (4) 2176 Reprinted as at 2 September 2013 Income Tax Act 2007 Part L s LJ 7 (c) foreign tax paid is the payment of tax that meets the requirements of subsection (2).
Deﬁned in this Act: amount, distribution, foreign income tax, non-resident withholding tax, NRWT, NRWT rules, pay, resident in New Zealand, tax credit, taxable distribution Compare: 2004 No 35 s LC 1(2) LJ 7 Repaid foreign tax: effect on income tax liability (1) (2) (3) Who this section applies to This section applies to a person who has— (a) paid an amount of foreign income tax, or in relation to whom an amount of foreign income tax has been paid, on a segment of foreign-sourced income in relation to which they are entitled to a tax credit under section LJ 2; and received a refund, amount, or beneﬁt (the refund) de- termined directly or indirectly by reference to some or all of the payment of foreign income tax.
(b) When refund received before assessment If the person receives the refund before they assess their in- come tax liability for a tax year, the amount of the tax credit for the foreign income tax paid is reduced by the lesser of— (a) (b) the amount of the refund: the amount of New Zealand tax payable on the foreign- sourced income calculated under section LJ 5.
When refund received after assessment If the person receives the refund after they have assessed their income tax liability for a tax year, have used an amount of foreign tax credit in satisfying that liability, and have not taken the refund into account in that assessment, the person is liable to pay the Commissioner the lesser of— the amount of the refund: (a) the amount of New Zealand tax payable on the foreign- (b) sourced income calculated under section LJ 5.
(4) Date for payment In subsection (3), the date for payment is 30 days after the later of— (a) the date on which the person receives the refund: 2177 Part L s LJ 8 Income Tax Act 2007 Reprinted as at 2 September 2013 (5) (b) the date of the notice of assessment in relation to which the person has used the credit.
Associated persons For the purposes of this section, the refund is treated as re- ceived by the person, whether it is received by the person, a person who paid the foreign income tax, or a person associ- ated with either of them.
Deﬁned in this Act: amount, associated person, Commissioner, foreign income tax, income tax liability, New Zealand, New Zealand tax, pay, return of income, segment of foreign-sourced income, tax credit, tax year, tax year Compare: 2004 No 35 ss LC 1(3A), (3B), LC 3 Section LJ 7: substituted (with effect on 1 April 2008), on 6 October 2009, by section 339(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section LJ 7(3)(b): amended (with effect on 1 April 2008), on 2 November 2012 (applying for the 2008–09 and later income years), by section 117(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section LJ 7(4): substituted (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 102(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
LJ 8 Repaid foreign tax: effect on FDP liability Who this section applies to This section applies to a person who receives a foreign divi- dend from a foreign dividend company, and the person or the company has— (a) paid an amount of foreign income tax, or in relation to whom an amount of foreign income tax has been paid or withheld; and received a refund, amount, or beneﬁt (the refund) de- termined directly or indirectly by reference to some or all of the payment of foreign income tax.
(b) When refund received before calculation of FDP If the person or company receives the refund before the per- son calculates the amount of FDP payable under section RG 4 (Calculating amount of FDP) for a tax year, the formula is modiﬁed as follows: (a) if the refund relates to foreign withholding tax on the dividend, the item foreign tax is the amount by (1) (2) 2178 Reprinted as at 2 September 2013 Income Tax Act 2007 Part L s LJ 8 (b) which the foreign withholding tax paid is more than the amount of the refund: if the refund relates to foreign income tax taken into account in the item total tax paid in section LL 2(5) (Tax credits for underlying foreign tax) or the item tax withheld in section LL 6(3) (Foreign dividend company lower tier UFTCs), the foreign dividend company’s cal- culation of UFTC is modiﬁed as follows: (i) the item foreign tax paid is the amount by which the total income tax or foreign income tax paid by the foreign dividend company is more than the amount of the refund: the item tax withheld is the amount by which the tax withheld and paid in relation to the standard dividend is more than the amount of the refund.
(ii) (3) (4) (5) When subsection (4) applies Subsection (4) applies if— (a) the person or company receives the refund after the per- son has calculated the amount of FDP payable for a tax year under section RG 4; and the person has taken the amount of foreign income tax paid or withheld into account in that calculation in the items foreign tax or underlying credit in section RG 4(1); and the person has not taken the refund into account in that calculation.
(b) (c) When refund received after calculation of FDP The person must recalculate the FDP liability for the tax year and pay the difference to the Commissioner as FDP.

Date for payment In subsection (4), the date for payment is 30 days after the later of— (a) the date on which the person or the company receives the refund: the date for payment of FDP to the Commissioner in relation to the foreign dividend received for which the recalculation is required.
(b) 2179 Income Tax Act 2007 Reprinted as at 2 September 2013 (6) Associated persons For the purposes of this section, the refund is treated as re- ceived by the person or company, whether it is received by the person or company, a person who paid or withheld the foreign income tax, or a person associated with any of them.
Deﬁned in this Act: amount, associated person, Commissioner, FDP, foreign dividend, foreign dividend company, foreign income tax, income tax, pay, tax year Compare: 2004 No 35 ss LC 1(3A), (3B), LC 3 Section LJ 8: added (with effect on 1 April 2008), on 6 October 2009, by section 339(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section LJ 8(5): substituted (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 103(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Subpart LK—Tax credits relating to attributed controlled foreign company income Contents Amounts of credits LK 1 Tax credits relating to attributed CFC income LK 2 Calculation of amount of credit LK 3 Currency conversion Use of credits in later tax years LK 4 Use of remaining credits LK 5 Companies’ credits carried forward LK 5B Credits from tax year before ﬁrst affected year LK 6 Use of credits by group companies Treatment of taxable distributions LK 7 Taxable distributions and NRWT rules Consolidated companies LK 8 Tax credits of consolidated companies LK 9 Use of company’s credits carried forward LK 10 When group membership lacking in tax year in which credit arises Page 2181 2185 2185 2186 2186 2187 2190 2191 2193 2193 2194 LK 11 When group membership lacking in tax year in which 2194 credit used 2180 Reprinted as at 2 September 2013 Income Tax Act 2007 Part L s LK 1 Amalgamations of companies LK 12 Treatment of credits when companies amalgamate LK 13 Use of credits by amalgamated company LK 14 Use by amalgamated company of credits carried forward LK 15 Use of amalgamating company’s credits 2196 2196 2197 2197 Amounts of credits LK 1 Tax credits relating to attributed CFC income Amount of credit (1) A person who has an amount of attributed CFC income for an income year has a tax credit for the tax year correspond- ing to the income year equal to the following amounts paid or payable in relation to the attributed CFC income: (a) (b) (c) (d) (e) an amount of income tax paid by the CFC from which the income is derived: an amount of tax withheld and paid on behalf of the CFC from which the income is derived: the amount of foreign income tax paid by the CFC from which the income is derived: the amount of foreign income tax paid by the person in relation to the CFC from which the income is derived: the amount of foreign tax paid, under legislation of an- other country or territory that is equivalent of the inter- national tax rules, by a foreign company in relation to income derived by the CFC.
(2) (3) Amount adjusted The amount of the person’s credit in subsection (1) may be reduced or increased if section LK 7 applies.
Limitation to quarantined amount The person’s use under section LA 2 (Satisfaction of income tax liability) of a credit referred to in subsection (1) is limited to the amount (the quarantined amount) that would be their income tax liability for the tax year if their only assessable income were attributed CFC income derived from a CFC resi- dent in the foreign country or territory referred to in subsection (1) in the accounting period in which the amount of tax giving rise to the credit was paid or payable.
2181 Part L s LK 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Tax withheld In subsection (1), a payment of income tax or foreign income tax by the CFC includes a payment of an amount of tax with- held from income.
When subsection (7) applies Subsection (7) applies when— (a) (b) (c) a person has a credit under subsection (1) in relation to an amount of income tax or foreign income tax; and the credit has been used under section LA 2 (Satisfac- tion of income tax liability) or is carried forward under section LK 4; and the person has received a refund, amount, or beneﬁt (the refund) determined directly or indirectly by reference to some or all of the tax paid.
When refund received before assessment If the person receives the refund before they assess their in- come tax liability for a tax year, the amount of tax credit for the tax paid is reduced by the lesser of— the amount of the refund: (a) the amount of New Zealand tax payable on the foreign- (b) sourced income calculated under section LJ 5 (Calcula- tion of New Zealand tax).
Credit repayable or extinguished The amount of the credit— (a) must be paid to the Commissioner if it has been used (b) under section LA 2: is extinguished, if it is carried forward under section LK 4.

Date for payment In subsection (7)(a), the date for payment is 30 days after the later of— (a) the date on which the person who paid the tax receives the refund: the date of the notice of assessment in relation to which the person has used the credit.
(b) Associated persons For the purposes of subsections (5) to (8), the refund is treated as received by the person, whether it is received by the person, (4) (5) (6) (7) (8) (9) 2182 Reprinted as at 2 September 2013 Income Tax Act 2007 Part L s LK 1 a person who paid the foreign income tax, or a person associ- ated with either of them.
Deﬁned in this Act: accounting period, amount, amount of tax, assessable in- come, assessment, associated person, attributed CFC income, CFC, Commis- sioner, controlled foreign company, corresponding income year, foreign in- come tax, income tax, income tax liability, income year, international tax rules, New Zealand tax, notice, NRWT, pay, quarantined amount, segment of for- eign-sourced income, tax credit, tax withheld, tax year Compare: 2004 No 35 s LC 4(1), (4) Section LK 1(1): substituted (with effect on 1 April 2008), on 6 October 2009, by section 340(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section LK 1(1)(d): replaced (with effect on 1 April 2008 and applying for the 2008–09 and later income years), on 17 July 2013, by section 70(1) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Section LK 1(1)(e): inserted (with effect on 1 April 2008 and applying for the 2008–09 and later income years), on 17 July 2013, by section 70(1) of the Taxa- tion (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Section LK 1(3): amended (with effect on 30 June 2009), on 6 October 2009, by section 340(2)(a) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section LK 1(3): amended (with effect on 30 June 2009), on 6 October 2009, by section 340(2)(b) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section LK 1(5) heading: added (with effect on 1 April 2008), on 6 October 2009, by section 340(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section LK 1(5): added (with effect on 1 April 2008), on 6 October 2009, by section 340(3) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
Section LK 1(6) heading: added (with effect on 1 April 2008), on 6 October 2009, by section 340(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section LK 1(6): added (with effect on 1 April 2008), on 6 October 2009, by section 340(3) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
Section LK 1(7) heading: added (with effect on 1 April 2008), on 6 October 2009, by section 340(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section LK 1(7): added (with effect on 1 April 2008), on 6 October 2009, by section 340(3) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
Section LK 1(8) heading: substituted (with effect on 1 April 2008), on 29 Au- gust 2011 (applying for the 2008–09 and later income years), by section 104(1) 2183 Part L s LK 1 Income Tax Act 2007 Reprinted as at 2 September 2013 of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section LK 1(8): substituted (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 104(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section LK 1(9) heading: added (with effect on 1 April 2008), on 6 October 2009, by section 340(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section LK 1(9): added (with effect on 1 April 2008), on 6 October 2009, by section 340(3) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).

Section LK 1 list of deﬁned terms assessment: inserted (with effect on 1 April 2008), on 6 October 2009, by section 340(4) of the Taxation (International Tax- ation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section LK 1 list of deﬁned terms associated person: inserted (with effect on 1 April 2008), on 6 October 2009, by section 340(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

inserted (with effect Section LK 1 list of deﬁned terms Commissioner: on 1 April 2008), on 6 October 2009, by section 340(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section LK 1 list of deﬁned terms conduit tax relief: repealed (with effect on 30 June 2009), on 6 October 2009, by section 340(5) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section LK 1 list of deﬁned terms CTR company: repealed (with effect on 30 June 2009), on 6 October 2009, by section 340(5) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section LK 1 list of deﬁned terms international tax rules: inserted (with ef- fect on 1 April 2008), on 6 October 2009, by section 340(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section LK 1 list of deﬁned terms New Zealand tax: inserted (with effect on 1 April 2008), on 6 October 2009, by section 340(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section LK 1 list of deﬁned terms notice: inserted (with effect on 1 April 2008), on 6 October 2009, by section 340(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section LK 1 list of deﬁned terms NRWT: inserted (with effect on 1 April 2008), on 6 October 2009, by section 340(4) of the Taxation (International Tax- ation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section LK 1 list of deﬁned terms segment of foreign-sourced income: in- serted (with effect on 1 April 2008), on 6 October 2009, by section 340(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2184 (1) (2) Reprinted as at 2 September 2013 Income Tax Act 2007 Part L s LK 3 LK 2 Calculation of amount of credit Amount of credit For the purposes of section LK 1(1), the amount of a tax credit for a tax year for a person is equal to an amount calculated using the formula— section EX 18 income interest × (tax paid excluded foreign tax).
Deﬁnition of items in formula In the formula,— (a) section EX 18 income interest is the income interest of the person used to calculate attributed CFC income under section EX 18 (Formula for calculating attributed CFC income or loss) for the accounting period corres- ponding to the tax year: tax paid is the amount of income tax or foreign in- come tax paid or payable by the CFC for the account- ing period corresponding to the tax year, including an amount withheld by another person and paid or payable on behalf of the CFC: excluded foreign tax is an amount of foreign income tax paid in a country or territory listed in schedule 27 (Countries and types of income with unrecognised tax) to the extent to which the foreign income tax is paid on the types of income listed in the schedule.
(b) (c) Deﬁned in this Act: accounting period, amount, attributed CFC income, CFC, foreign income tax, income interest, income tax, pay, tax credit, tax year Compare: 2004 No 35 s LC 4(1)–(3) Section LK 2(2)(b): substituted (with effect on 1 April 2008), on 6 October 2009, by section 341(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
LK 3 Currency conversion If foreign income tax is paid or payable by a CFC in a cur- rency other than New Zealand currency, the amount must be converted into New Zealand currency by applying— (a) the close of trading spot exchange rate on the date when the income tax is paid or becomes payable; or 2185 Part L s LK 4 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) the average of the close of trading spot exchange rates for the 15th day of each complete month that falls in the period to which the attributed CFC income relates.
Deﬁned in this Act: amount, attributed CFC income, CFC, close of trading spot exchange rate, foreign income tax, New Zealand, pay Compare: 2004 No 35 s LC 4(1) Use of credits in later tax years LK 4 Use of remaining credits (1) (2) When this section applies This section applies for the purposes of section LA 5(2) (Treat- ment of remaining credits) when a person has a tax credit re- maining for a tax year after applying section LA 4(1) (When total tax credit more than income tax liability).
Amount carried forward The amount is carried forward to the next tax year as a credit carried forward.
Deﬁned in this Act: amount, tax credit, tax year Compare: 2004 No 35 s LC 4(4) LK 5 Companies’ credits carried forward Company carrying credit forward (1) A tax credit carried forward under section LK 4 may be carried forward to a later tax year only if, by treating the credit as a tax loss component to which sections IA 2 to IA 10 (which re- late to the treatment of tax losses) apply, those sections would allow the amount to be carried forward.
(2) Timing For the purposes of this section, the credit is treated as a tax loss component arising on the last day of the income year cor- responding to the tax year for which the person has the credit.
Deﬁned in this Act: amount, company, corresponding income year, tax credit, tax loss component, tax year Compare: 2004 No 35 s LC 4(4)–(6) 2186 Reprinted as at 2 September 2013 Income Tax Act 2007 Part L s LK 5B LK 5B Credits from tax year before ﬁrst affected year (1) (2) When this section applies This section applies for a person and a country (the jurisdic- tion) when the person has a credit (the available BE credit) that— (a) relates to a tax year (the credit year) before the ﬁrst tax year for which this section applies to the person; and relates to a CFC or FIF that is resident in the jurisdiction in the credit year; and is carried forward to a tax year (the conversion year) in which this section applies to the person.
(b) (c) What this section does In this section, subsection (3) gives the person an option that an available BE credit for a jurisdiction not be carried forward and subsections (4) to (7) give, for whichever of the 4 possible alternative situations is relevant for the person,— (a) the amount of the available BE credit (the converted BE credit) for the jurisdiction that is— (i) treated as being converted into an amount re- ferred to in paragraph (b) in the conversion year; and not available to the person to be carried forward as available BE credit for the jurisdiction and a later tax year: (ii) (b) the amount (the equivalent tax credit) of a tax credit for the jurisdiction that, for the purposes of the rest of this subpart, is treated as arising on the last day of the conversion year.
Option: tax credit not carried forward (3) A person may choose by giving a notice in a form and at a time acceptable to the Commissioner that the available BE credit for a jurisdiction not be carried forward under this section.
(4) Person not resident group member: more jurisdictional BE income For a person who is not a resident group member and has juris- dictional BE income for the conversion year that is greater than zero and greater than the person’s jurisdictional attributed in- come for the conversion year,— 2187 Part L s LK 5B Income Tax Act 2007 Reprinted as at 2 September 2013 (a) (b) the person’s converted BE credit in the conversion year is the lesser of— (i) the amount that would be the person’s income tax liability if the person’s only assessable income were the person’s jurisdictional BE income for the conversion year: the person’s available BE credit for the conver- sion year: (ii) the person’s equivalent tax credit in the conversion year is the lesser of— (i) the amount that would be the person’s income tax liability if the person’s only assessable in- come were the person’s jurisdictional attributed income for the conversion year: the amount calculated by dividing the person’s available BE credit for the conversion year by the person’s jurisdictional income ratio for the conversion year.
(ii) Person not resident group member: more jurisdictional attributed income For a person who is not a resident group member and has jur- isdictional attributed income for the conversion year that is greater than or equal to zero and greater than or equal to the person’s jurisdictional BE income for the conversion year,— the person’s converted BE credit for the conversion year (a) is the lesser of— (i) the person’s available BE credit for the conver- sion year: the amount that would be the person’s income tax liability if the person’s only assessable in- come were the person’s jurisdictional attributed income for the conversion year: (ii) (b) the person’s equivalent tax credit is equal to the person’s converted BE credit for the conversion year.
Resident group member: more jurisdictional BE income For a person who is a resident group member for a wholly- owned group of companies and has jurisdictional BE income for the conversion year that is greater than zero and greater (5) (6) 2188 Reprinted as at 2 September 2013 Income Tax Act 2007 Part L s LK 5B than the person’s jurisdictional attributed income for the con- version year,— (a) the person’s converted BE credit for the conversion year is the lesser of— (i) (ii) the person’s available BE credit for the conver- sion year: the amount that would be the person’s income tax liability if the person’s only assessable income were the greater of the person’s jurisdictional BE income for the conversion year and the amount calculated by multiplying the group’s jurisdic- tional income ratio for the conversion year by the person’s jurisdictional attributed income for the conversion year: (7) (b) the person’s equivalent tax credit is the amount calcu- lated by dividing the person’s converted BE credit for the conversion year by the group’s jurisdictional income ratio for the conversion year.
Resident group member: more jurisdictional attributed income For a person who is a resident group member and has jurisdic- tional attributed income for the conversion year that is greater than or equal to zero and greater than or equal to the person’s jurisdictional BE income for the conversion year,— (a) the person’s converted BE credit for the conversion year is the lesser of— (i) (ii) the person’s available BE credit for the conver- sion year: the amount that would be the person’s income tax liability if the person’s only assessable in- come were the person’s jurisdictional attributed income for the conversion year multiplied by the group’s jurisdictional income ratio for the con- version year: (b) the person’s equivalent tax credit is equal to the amount calculated by dividing the person’s converted tax credit for the conversion year by the group’s jurisdictional in- come ratio for the conversion year.
Option to determine jurisdictional BE income from accounts 2189 Part L s LK 6 Income Tax Act 2007 Reprinted as at 2 September 2013 (8) [Repealed] [Repealed] Deﬁned in this Act: attributed CFC income, attributed CFC loss, CFC, group of companies, income interest, jurisdictional attributed income, jurisdictional BE income, jurisdictional income ratio, New Zealand resident, resident group member, tax year, wholly-owned group, wholly-owned group of companies Section LK 5B: inserted (with effect on 30 June 2009), on 6 October 2009, by section 342(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section LK 5B(1): replaced (with effect on 1 July 2009 and applying for in- come years beginning on or after that date), on 7 May 2012, by section 79(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section LK 5B(2): replaced (with effect on 1 July 2009 and applying for in- come years beginning on or after that date), on 7 May 2012, by section 79(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section LK 5B(8) heading: repealed (with effect on 1 July 2009 and applying for income years beginning on or after that date), on 7 May 2012, pursuant to section 79(3) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section LK 5B(8): repealed (with effect on 1 July 2009 and applying for in- come years beginning on or after that date), on 7 May 2012, by section 79(3) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section LK 5B list of deﬁned terms branch equivalent income: repealed (with effect on 1 July 2009), on 7 May 2012, by section 79(4) of the Taxation (Inter- national Investment and Remedial Matters) Act 2012 (2012 No 34).

Section LK 5B list of deﬁned terms branch equivalent loss: repealed (with effect on 1 July 2009), on 7 May 2012, by section 79(4) of the Taxation (Inter- national Investment and Remedial Matters) Act 2012 (2012 No 34).
LK 6 Use of credits by group companies When this section applies This section applies when a company (company A) in a group of companies has a tax credit under section LK 1 in relation to an income interest in a CFC (company B) of an amount other than a quarantined amount.
Making credit available Company A may choose to make the amount of the tax credit available to another company (company C) that is part of the group of companies for the tax year in which the credit is avail- able to the company if the requirements of subsections (3) and (4) are met.
(1) (2) 2190 Reprinted as at 2 September 2013 Income Tax Act 2007 Part L s LK 7 (3) (4) Amount limited The amount of the credit must not be more than the amount that would be company C’s income tax liability if that company’s only assessable income were the attributed CFC income de- rived in the corresponding income year from a CFC resident in the same country in which company B was resident in the accounting period in which the income tax giving rise to the credit was paid or payable.
Use limited Company A may make an amount of a tax credit available to company C to use only if the amount would be able to be used under subpart IC (Grouping tax losses), reading the subpart by substituting— (a) a wholly-owned group of companies for a group of com- panies: a credit of company A for a tax loss component of the loss company: the use of the credit to satisfy an income tax liability for the use of a tax loss component to reduce net income, in both subpart IC and section GB 4 (Arrangements for grouping tax losses: companies): company C for the company B: the income tax liability of company C for the net income of company B: sections LK 1 to LK 5 for sections IA 3 to IA 5 (which relate to the use of tax losses generally).
(b) (c) (d) (e) (f) Deﬁned in this Act: accounting period, amount, assessable income, attributed CFC income, CFC, company, corresponding income year, group of companies, income interest, income tax, income tax liability, net income, pay, quarantined amount, tax credit, tax loss component, tax year, wholly-owned group of com- panies Compare: 2004 No 35 s LC 5 Treatment of taxable distributions LK 7 Taxable distributions and NRWT rules (1) When this section applies This section applies when a CFC receives a taxable distribu- tion in an accounting period and, for a person with an income interest of 10% or more in the CFC under the rules in sections 2191 Part L s LK 7 Income Tax Act 2007 Reprinted as at 2 September 2013 EX 14 to EX 17 (which relate to the 10% threshold and vari- ations in income interest level), the taxable distribution gives rise to attributed CFC income to which section EX 19 (Taxable distribution from non-complying trust) applies.
When credit not allowed The person does not have a tax credit in relation to tax paid on the taxable distribution unless the tax is substantially the same as non-resident withholding tax (NRWT).

Amount of tax on distribution The amount of tax that gives rise to the credit must not be more than an amount calculated using the formula— person’s taxable distribution total distribution × foreign tax paid.
Deﬁnition of items in formula In the formula in subsection (3),— (a) person’s taxable distribution is the amount of the tax- able distribution derived by the CFC, including a pay- ment of tax that meets the requirements of subsection (2): total distribution is the total amount of the distribution derived by the CFC, including a payment of tax that meets the requirements of subsection (2): foreign tax paid is the payment of tax that meets the requirements of subsection (2).
(b) (c) Amount of person’s credit The amount of a credit of a person under this section is equal to an amount calculated using the formula— section EX 18 income interest × amount of tax.
Deﬁnition of items in formula In the formula in subsection (5),— (a) section EX 18 income interest is the income interest of the person used to calculate attributed CFC income under section EX 18 (Formula for calculating attributed CFC income or loss) for the accounting period corres- ponding to the tax year: (2) (3) (4) (5) (6) 2192 Reprinted as at 2 September 2013 Income Tax Act 2007 Part L s LK 9 (b) amount of tax is the amount of tax determined under subsection (3).
Deﬁned in this Act: accounting period, amount, amount of tax, attributed CFC income, CFC, distribution, income interest, non-resident withholding tax, NRWT, NRWT rules, pay, tax year, taxable distribution Compare: 2004 No 35 s LC 4(7) Consolidated companies LK 8 Tax credits of consolidated companies If a consolidated group has a tax credit under section LK 1, the credit is treated as the consolidated group’s credit and not the credit of a group company.
Deﬁned in this Act: company, consolidated group, tax credit Compare: 2004 No 35 s LC 16(1) LK 9 Use of company’s credits carried forward (1) (2) (3) (4) When this section applies This section applies when a company that is part of a consoli- dated group of companies in an income year has a credit car- ried forward for the tax year corresponding to the income year.
First use by consolidated group The amount must ﬁrst be used to satisfy the income tax liabil- ity of the consolidated group for the income year.

However, the amount must not be more than the consolidated group’s quarantined amount.

Second use by group company or another consolidated group If, after applying subsection (2), an amount remains, the amount may be used to satisfy the income tax liability of the company or the income tax liability of another consolidated group in the income year.
Sections LK 10 and LK 11 override this subsection.

Third use: amount carried forward If, after applying subsections (2) and (3), a balance remains, the amount must be carried forward to the next income year under section LK 4(2).
Deﬁned in this Act: amount, company, consolidated group, corresponding in- come year, income tax liability, income year, quarantined amount, tax year Compare: 2004 No 35 s LC 16(2), (3) 2193 Part L s LK 10 Income Tax Act 2007 Reprinted as at 2 September 2013 LK 10 When group membership lacking in tax year in which credit arises (1) (2) When this section applies This section applies when a company that is part of a consoli- dated group of companies has a credit carried forward for a tax year, but the company was not part of the same consolidated group as 1 or more companies in the consolidated group in an earlier tax year in which the credit arises.
Limitation on amount used The amount of the credit carried forward and made available for the consolidated group to use under section LK 9(2) is limited to the sum of— (a) the amount of the credit carried forward that the com- pany could use under section LA 2 or LA 4 (which relate to the company’s income tax liability), if the company were not part of the consolidated group for the tax year; and the amount that each company in the consolidated group would have under section LK 6 in relation to the amount of credit carried forward if— (i) the consolidation of the companies is ignored; and all required steps are presumed taken for section LK 6 to apply.
(ii) (b) (3) Relationship with section FM 3 In subsection (2), section FM 3 (Liability of consolidated groups and group companies) applies to the calculation of the income tax liability.
Deﬁned in this Act: amount, company, consolidated group, income tax liability, tax year Compare: 2004 No 35 s LC 16(4) LK 11 When group membership lacking in tax year in which credit used When this section applies This section applies when a company that is part of a consoli- dated group of companies has a credit carried forward for a tax (1) 2194 Reprinted as at 2 September 2013 Income Tax Act 2007 Part L s LK 11 year, but the company is not part of the consolidated group for the whole tax year in which the credit carried forward is used.
(2) (3) (4) Limitation on amount The amount of the credit carried forward and made available for the consolidated group to use under section LK 9(2) is limited to the least of— (a) the amount of the credit carried forward shown in ﬁnan- cial statements provided with the consolidated group’s return of income for the income year corresponding to the tax year that— (i) relate to the part of the income year when the company was part of the consolidated group; and disclose the amount that would be the net income attributable to the part of the income year when the company is part of the consolidated group, determined on a fair and reasonable basis of at- tribution: (ii) (b) (c) the amount of the credit calculated using the formula in subsection (3): the amount referred to in section LK 10(2).
Formula The amount referred to in subsection (2)(b) is calculated using the formula— amount carried forward (part-year credits + pre-consolidation credits).
Deﬁnition of items in formula In the formula,— (a) amount carried forward is the amount of the credit carried forward under section LK 9(2) before applying section LK 10 and this section: part-year credits is the amount of the credit carried for- ward that the company may use under section LA 2 or LA 4 (which relate to the company’s income tax liabil- ity) for the part of the tax year before the company be- comes part of the consolidated group: pre-consolidation credits is the amount of the credits carried forward that the company must make available (b) (c) 2195 Part L s LK 12 Income Tax Act 2007 Reprinted as at 2 September 2013 for another consolidated group of which it was part be- fore becoming part of the consolidated group.
Deﬁned in this Act: amount, company, consolidated group, corresponding in- come year, income year, net income, return of income, tax year Compare: 2004 No 35 s LC 16(5) Amalgamations of companies LK 12 Treatment of credits when companies amalgamate On an amalgamation, for the purposes of determining whether a credit carried forward is available under section LK 5 or whether the requirements of section LK 6 are met, the amalga- mated company is treated as if it were the amalgamating com- pany with the same holders of shares and options over shares.
Deﬁned in this Act: amalgamated company, amalgamating company, amalgam- ation, share Compare: 2004 No 35 ss LC 8, LC 11, LC 12 LK 13 Use of credits by amalgamated company When this section applies This section applies when an amalgamating company ends its existence on a resident’s restricted amalgamation and the com- pany has a tax credit under this subpart that— (a) has not otherwise been used by the amalgamating com- pany before the date of amalgamation: if treated as a credit remaining for a tax year under sec- tion LA 4(1) (When total tax credit more than income tax liability), could be made available to each of the amalgamated company, unless it is a company incorpor- ated only on amalgamation, and a company that is amal- gamated with the amalgamated company.
(b) Amalgamated company’s credit The tax credit is treated as a credit of the amalgamated com- pany for the tax year in which the amalgamation occurs.
Deﬁned in this Act: amalgamated company, amalgamating company, company, resident’s restricted amalgamation, tax credit, tax year Compare: 2004 No 35 s LC 8 (1) (2) 2196 Reprinted as at 2 September 2013 Income Tax Act 2007 Part L s LK 15 LK 14 Use by amalgamated company of credits carried forward (1) (2) (3) When this section applies This section applies when an amalgamated company has a tax credit under this subpart for a tax year before that in which the amalgamation takes place, and the credit has not been used before the date of amalgamation.
Restrictions on carrying credit forward: year of amalgamation The credit may be carried forward to the tax year of amalgam- ation or a later tax year only if— (a) (b) the requirements of sections LK 1 to LK 5 are met; and the credit could be made available under section LK 6 for the part of the tax year ending with the date of the amalgamation to each amalgamating company.
Restrictions on carrying credit forward: order If the tax credits of 2 or more amalgamating companies are credited under section LK 13 against the amalgamated com- pany’s income tax liability for a tax year, those tax credits must— (a) if resulting from tax payable in 2 or more tax years, be credited in the same order as arising; and if resulting from tax payable in the same tax year, be credited, so far as the tax extends,— (i) in the order chosen by the amalgamated company by notice to the Commissioner; or otherwise, on a pro rata basis.
(ii) (b) Deﬁned in this Act: amalgamated company, amalgamating company, amalgam- ation, Commissioner, income tax liability, pay, tax credit, tax year Compare: 2004 No 35 ss LC 9, LC 10 LK 15 Use of amalgamating company’s credits (1) When this section applies This section applies when a company has a tax credit under this subpart arising in whole or in part before an amalgamation.
2197 Income Tax Act 2007 Reprinted as at 2 September 2013 (2) Restrictions on use The amalgamated company may use the credit only if the com- pany and each amalgamating company meet the requirements of section LK 6.
Deﬁned in this Act: amalgamated company, amalgamating company, amalgam- ation, company, tax credit Compare: 2004 No 35 s LC 12 Subpart LL—Underlying foreign tax credits (UFTC) [Repealed] Subpart LL: repealed (with effect on 30 June 2009), on 6 October 2009, by section 343(1) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
Contents Tax credits for underlying foreign tax [Repealed] LL 1 What this subpart does [Repealed] LL 2 LL 3 Meaning of grey list dividend [Repealed] LL 4 LL 5 Meaning of foreign dividend company net Tracking accounts [Repealed] earnings [Repealed] Foreign dividend company lower tier UFTCs [Repealed] LL 6 LL 7 Conduit ﬁnancing arrangements [Repealed] LL 8 Currency conversion [Repealed] LL 9 Some deﬁnitions [Repealed] Page 2198 2198 2199 2199 2199 2199 2199 2199 2199 LL 1 What this subpart does [Repealed] Section LL 1: repealed (with effect on 30 June 2009), on 6 October 2009, by section 343(1) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
LL 2 Tax credits for underlying foreign tax [Repealed] Section LL 2: repealed (with effect on 30 June 2009), on 6 October 2009, by section 343(1) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
2198 Reprinted as at 2 September 2013 Income Tax Act 2007 Part L s LL 9 LL 3 Meaning of grey list dividend [Repealed] Section LL 3: repealed (with effect on 30 June 2009), on 6 October 2009, by section 343(1) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
LL 4 Tracking accounts [Repealed] Section LL 4: repealed (with effect on 30 June 2009), on 6 October 2009, by section 343(1) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).

LL 5 Meaning of foreign dividend company net earnings [Repealed] Section LL 5: repealed (with effect on 30 June 2009), on 6 October 2009, by section 343(1) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
LL 6 Foreign dividend company lower tier UFTCs [Repealed] Section LL 6: repealed (with effect on 30 June 2009), on 6 October 2009, by section 343(1) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).

LL 7 Conduit ﬁnancing arrangements [Repealed] Section LL 7: repealed (with effect on 30 June 2009), on 6 October 2009, by section 343(1) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
LL 8 Currency conversion [Repealed] Section LL 8: repealed (with effect on 30 June 2009), on 6 October 2009, by section 343(1) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).

LL 9 Some deﬁnitions [Repealed] Section LL 9: repealed (with effect on 30 June 2009), on 6 October 2009, by section 343(1) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
2199 Income Tax Act 2007 Reprinted as at 2 September 2013 Subpart LO—Tax credits for Maori authority credits Contents LO 1 Tax credits for Maori authority credits LO 2 Beneﬁciaries of trusts LO 2B Credit of RSCT for Maori authority credit LO 3 Application of Maori authority distribution ratio LO 4 When income tax unpaid LO 5 Evidential requirements Page 2200 2200 2201 2202 2202 2203 LO 1 Tax credits for Maori authority credits Amount of credit (1) A person who derives a taxable Maori authority distribution in a tax year has a tax credit for the tax year equal to the amount of the Maori authority credit attached to the distribution.
(2) Amount altered The amount of the person’s credit in subsection (1) may be reduced or increased if any of sections LO 2 to LO 4 apply.

Arrangements for tax advantage (3) A person’s credit under this section is extinguished if sections GB 42 and GB 43 (which relate to Maori authority arrange- ments to obtain tax advantage) apply.
Deﬁned in this Act: amount, Maori authority credit, tax credit, tax year, taxable Maori authority distribution Compare: 2004 No 35 ss LB 1(1)(m), LD 3A(1) LO 2 Beneﬁciaries of trusts When this section applies This section applies when a person who has a tax credit under section LO 1 is a beneﬁciary of a trust and, in that capacity, derives a taxable Maori authority distribution.
Limitation on amount of credit The person’s credit is limited to an amount calculated using the formula— (1) (2) 2200 Reprinted as at 2 September 2013 Income Tax Act 2007 Part L s LO 2B person’s distributions trust distributions × total beneﬁciary credits person’s supplementary dividend.
(3) Deﬁnition of items in formula In the formula,— (a) person’s distributions is the total taxable Maori au- thority distributions for the tax year made to the person in their capacity as beneﬁciary of the trust: trust distributions is the total distributions for the tax year made to all beneﬁciaries of the trust in their cap- acity as beneﬁciaries, and includes all supplementary dividends paid to them: total beneﬁciary credits is the total Maori authority credits attached to taxable Maori authority distributions and total supplementary dividends for the tax year made to all beneﬁciaries of the trust in their capacity as bene- ﬁciaries: person’s supplementary dividend is the total supple- mentary dividends for the tax year paid to the person in their capacity as beneﬁciary of the trust.
(b) (c) (d) Deﬁned in this Act: amount, distribution, Maori authority credit, pay, supple- mentary dividend, tax credit, tax year, taxable Maori authority distribution Compare: 2004 No 35 s LB 1(3), (3A) LO 2B Credit of RSCT for Maori authority credit Retirement scheme contributions (1) A retirement scheme contributor who attaches a Maori author- ity credit to a retirement scheme contribution for a person in an income year has a credit of RSCT equal to the lesser of— (a) (b) the amount of the Maori authority credit: the liability of the contributor for RSCT on the contri- bution.
(2) When credit more than liability If the amount of the Maori authority credit is more than the liability of the contributor for RSCT on the contribution,— (a) the amount of the excess is treated as a Maori authority credit attached to a taxable Maori authority distribution from the contributor to the person; and 2201 Part L s LO 3 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) the person responsible for withholding the RSCT must, within 30 days of the contribution, notify the person of the amount of the excess credit.
Deﬁned in this Act: amount, income year, Maori authority credit, notify, retire- ment scheme contribution, retirement scheme contributor, RSCT Compare: 2004 No 35 s LD 4 Section LO 2B: inserted, on 1 April 2008, by section 449 of the Taxation (Busi- ness Taxation and Remedial Matters) Act 2007 (2007 No 109).
LO 3 Application of Maori authority distribution ratio (1) (2) When this section applies This section applies when a person who has a tax credit under section LO 1 derives a taxable Maori authority distribution that has a Maori authority credit ratio greater than the maximum permitted ratio calculated under section OA 18 (Calculation of maximum permitted ratios).
Amount of reduction The person’s credit is reduced by an amount equal to the amount by which the credit is greater than the maximum permitted ratio.
Deﬁned in this Act: amount, Maori authority credit ratio, maximum permitted ratio, tax credit, taxable Maori authority distribution Compare: 2004 No 35 s LB 1(1)(ea) LO 4 When income tax unpaid When this section applies This section applies when— (a) (b) (c) a person has a tax credit under section LO 1 and a Maori authority credit is attached to a dividend; and the dividend is paid by a Maori authority that has a debit balance in their Maori authority credit account at the end of the tax year; and the authority has not paid further income tax by the due date referred to in section OK 21 (Further income tax for closing debit balance).
Amount of reduction The Commissioner may reduce the person’s credit by an amount equal to their proportion of the unpaid amount under subsection (1)(c).

(1) (2) 2202 Reprinted as at 2 September 2013 Income Tax Act 2007 Part L s LO 5 (3) When failure to pay remedied To the extent to which a Maori authority remedies the failure after the due date, this section does not apply.
Deﬁned in this Act: amount, Commissioner, dividend, further income tax, Maori authority, Maori authority credit, Maori authority credit account, pay, tax credit, tax year Compare: 2004 No 35 s LD 3A(6) LO 5 Evidential requirements If a person who has a tax credit under section LO 1 does not meet the evidential requirements of section 78D of the Tax Administration Act 1994, the person’s credit may be reduced.
Deﬁned in this Act: tax credit Compare: 2004 No 35 s LD 3A(5) Subpart LP—Tax credits for supplementary dividends Contents Introductory provision LP 1 What this subpart does Use of credits Tax credits for supplementary dividends LP 2 LP 3 Use of remaining credits LP 4 LP 5 Application of benchmark dividend rules and imputation Continuity rules for carrying credits forward Page 2204 2204 2207 2209 2210 credit ratio LP 6 Deriving supplementary dividend and breach of terms of 2210 trust LP 7 Supplementary dividend holding companies Requirements for supplementary dividend holding companies [Repealed] Relationship with exempt income rules [Repealed] Relationship with RWT rules [Repealed] LP 8 LP 9 LP 10 Limitation on deductions [Repealed] 2211 2211 2211 2211 2203 Part L s LP 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Introductory provision LP 1 What this subpart does (1) (2) Supplementary dividends This subpart provides the rules for the treatment of a tax credit for a supplementary dividend.
The amount of the credit is de- termined by reference to an imputation credit attached to a dividend paid by a company to a non-resident.

For a credit to arise under this subpart, the company must pay a supple- mentary dividend, and the amount of the credit is equal to the amount of the supplementary dividend.
Supplementary dividend holding companies [Repealed] [Repealed] Deﬁned in this Act: amount, company, dividend, imputation credit, non-resi- dent, pay, supplementary dividend, supplementary dividend holding company, tax credit Compare: 2004 No 35 s LE 1 Section LP 1(2) heading: repealed, on 1 April 2011, pursuant to section 77 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section LP 1(2): repealed, on 1 April 2011, by section 77 of the Taxation (Con- sequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
LP 2 Tax credits for supplementary dividends Use of credits When this section applies This section applies when a company resident in New Zealand pays a dividend and a related supplementary dividend to— (a) a non-resident, if— (i) the non-resident has less than a 10% direct voting interest in the company; and the post-treaty tax rate for the dividend and the related supplementary dividend is 15% or more; or (ii) (b) (c) [Repealed] a foreign investment PIE if— (i) a notiﬁed foreign investor (a qualifying in- vestor) in the PIE meets the requirements of paragraph (a); and (1) 2204 Reprinted as at 2 September 2013 Income Tax Act 2007 Part L s LP 2 (ii) (iii) an amount representing the dividend and the related supplementary dividend is attributed to the qualifying investor, or would be attributed to them in the absence of section HM 44B(2) (NRWT calculation option); and the PIE notiﬁes the company under section HM 55FB (Notiﬁed foreign investors and tax credits for supplementary dividends), providing the relevant information on those qualifying in- vestors who have an entitlement to the dividend and related supplementary dividend.
(2) (3) Amount of credit For the tax year corresponding to the income year in which the company pays the dividend, the company has a tax credit equal to an amount calculated using the formula— attached imputation credit × 54 119.

Deﬁnition of item in formula In the formula, attached imputation credit is the imputation credit that would, in the absence of this subpart, be attached to the dividend.
When dividends derived by foreign investment PIEs (3B) For the purposes of subsection (1)(c) and the calculation of the amount of the credit, the following apply in relation to a qualifying investor in a foreign investment PIE: (a) the item attached imputation credit in the formula is the imputation credit that would, in the absence of this subpart, be attached to the portion of the dividend at- tributed to the investor: the relevant amount of the dividend and related supple- mentary dividend is treated as if it were paid by the com- pany directly to the investor: the investor’s voting interest in the company is treated as if it were a direct voting interest.
(b) (c) Limitation on use of credit 2205 Part L s LP 2 Income Tax Act 2007 Reprinted as at 2 September 2013 [Repealed] [Repealed] Meaning of year of payment [Repealed] [Repealed] Associated persons test [Repealed] [Repealed] Relationship with section OZ 12 Section OZ 12 (Tax credits for non-resident investors) may apply to modify subsection (2).
Deﬁned in this Act: amount, associated person, company, consolidated group, corresponding income year, direct voting interest, dividend, imputation credit, non-resident, pay, post-treaty tax rate, resident in New Zealand, supplementary dividend, tax credit, tax year Compare: 2004 No 35 ss LE 2(1), (2), (2A), LE 3(5) Section LP 2(1)(a): substituted, on 1 February 2010, by section 78(1) of the Tax- ation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section LP 2(1)(b): repealed, on 1 April 2011, by section 78(2) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section LP 2(1)(c): inserted, on 1 April 2013 (applying for the 2013–14 and later income years), by section 118(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section LP 2(2): amended, on 1 April 2011, by section 78(3) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section LP 2(2) formula: amended, on 1 April 2011 (applying for the 2011–12 and later income years), by section 88(1) of the Taxation (Annual Rates, Trans- Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Section LP 2(2) formula: amended, on 1 April 2011 (applying for the 2011–12 and later income years), by section 91(1) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section LP 2(2) formula: amended (with effect from 1 April 2008), on 29 May 2008, by section 32(1) of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).
Section LP 2(2) formula: amended, on 1 April 2008, by section 450(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section LP 2(3B) heading: inserted, on 1 April 2013 (applying for the 2013–14 and later income years), by section 118(2) of the Taxation (Annual Rates, Re- turns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section LP 2(3B): inserted, on 1 April 2013 (applying for the 2013–14 and later income years), by section 118(2) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
(4) (5) (6) (7) 2206 Reprinted as at 2 September 2013 Income Tax Act 2007 Part L s LP 3 Section LP 2(4) heading: repealed, on 1 April 2013 (applying for the 2013–14 and later income years), pursuant to section 78(4) of the Taxation (Consequen- tial Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section LP 2(4): repealed, on 1 April 2013 (applying for the 2013–14 and later income years), by section 78(4) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section LP 2(5) heading: repealed, on 1 April 2011, pursuant to section 78(5) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section LP 2(5): repealed, on 1 April 2011, by section 78(5) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section LP 2(6) heading: repealed, on 1 April 2011, by section 78(5) of the Tax- ation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section LP 2(6): repealed, on 1 April 2011, by section 78(5) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section LP 2(7) heading: inserted (with effect on 1 April 2008), on 17 July 2013, by section 71 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Section LP 2(7): added, on 1 April 2008, by section 450(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section LP 2 list of deﬁned terms direct voting interest: inserted (with effect on 1 April 2008), on 7 December 2009, by section 126 of the Taxation (Conse- quential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section LP 2 list of deﬁned terms post-treaty tax rate: inserted (with effect on 1 April 2008), on 7 December 2009, by section 126 of the Taxation (Conse- quential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section LP 2 list of deﬁned terms supplementary dividend holding company: repealed (with effect on 1 April 2008), on 7 December 2009, by section 126 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section LP 2 list of deﬁned terms year of payment: repealed (with effect on 1 April 2008), on 7 December 2009, by section 126 of the Taxation (Conse- quential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
LP 3 Use of remaining credits (1) (2) When this section applies This section applies when a company has a tax credit remain- ing for a tax year under section LA 5(3) (Treatment of remain- ing credits).

Grouping amount The company may make the amount available to another company (company B) that is part of the same wholly-owned 2207 Part L s LP 3 Income Tax Act 2007 Reprinted as at 2 September 2013 group of companies as the company for the corresponding income year in which the remaining credit arises.
Carrying back and using or grouping amount If the amount of the remaining credit has never been carried forward from an earlier tax year, the company may either— (a) use the amount for any 1 of the 4 tax years that are immediately before the tax year in which the remaining credit arises; or (b) make the amount available to company B, if both com- panies are part of the same wholly-owned group of com- panies for the relevant tax year in the 4-year period.
Carrying amount forward If, after applying subsections (2) and (3), the company has an amount of tax credit remaining for the tax year, the amount must be carried forward to the next tax year as a credit carried forward.

Notifying Commissioner The company makes a choice under subsection (2) or (3) by notifying the Commissioner in their return of income for the income year that corresponds to the tax year.
When companies in same group For the purposes of subsections (2) and (3), the company and company B must be part of the same wholly-owned group of companies for the whole of the relevant income year or, if 1 of the companies exists for only part of the year, for the whole of the period of the income year when both companies are in existence.
Deﬁned in this Act: amount, Commissioner, company, corresponding income year, income year, notify, return of income, tax credit, tax year, wholly-owned group of companies Compare: 2004 No 35 s LE 2(3), (4), (6), (7) Section LP 3(5): amended (with effect on 1 April 2008), on 6 October 2009, by section 344(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
(3) (4) (5) (6) 2208 Reprinted as at 2 September 2013 Income Tax Act 2007 Part L s LP 4 LP 4 Continuity rules for carrying credits forward (1) (2) (3) When this section applies This section applies for the purposes of section LA 5(3) (Treat- ment of remaining credits) when a company has an amount of a tax credit that must be carried forward under section LP 3(4).
Minimum interests required The amount is available for use under section LP 3(4) if a group of persons exists that has, for the continuity period,— (a) minimum voting interests in the company that add up to 49% or more; and (b) when a market value circumstance exists for the com- pany in the continuity period, minimum market value interests in the company that add up to 49% or more.
Some deﬁnitions In this section,— continuity period means the period that starts on the ﬁrst day of the income year that corresponds to the tax year in which the tax credit ﬁrst arises and ends on the last day of the income year that corresponds to the tax year to which the amount of the credit has been carried forward minimum market value interest means the lowest market value interest that a person has in the company for the con- tinuity period minimum voting interest means the lowest voting interest that a person has in the company for the continuity period.
Deﬁned in this Act: amount, company, continuity period, corresponding in- come year, group of persons, income year, market value circumstance, market value interest, minimum market value interest, minimum voting interest, tax credit, tax year, voting interest Compare: 2004 No 35 s LE 2(5) Section LP 4(2): substituted (with effect on 1 April 2008), on 6 October 2009, by section 345(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section LP 4 list of deﬁned terms market value circumstance: inserted (with effect on 1 April 2008), on 6 October 2009, by section 345(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2209 Part L s LP 5 Income Tax Act 2007 Reprinted as at 2 September 2013 LP 5 Application of benchmark dividend rules and imputation credit ratio (1) (2) (3) Applying benchmark dividend rules The benchmark dividend rules in sections OB 61 and OC 28 (which relate to the allocation of imputation and FDP credits) and sections GB 35 and GB 36 (which relate to imputation ar- rangements to obtain a tax advantage) apply as if the company had never paid the supplementary dividend.
Increase in imputation credit The maximum permitted ratio referred to in section OB 60(5) (Imputation credits attached to dividends) and sections GB 35 and GB 36 apply to a dividend as if the imputation credit at- tached to the dividend were increased by an amount equal to the related supplementary dividend.

Relationship with section OZ 12 Section OZ 12 (Tax credits for non-resident investors) may apply to modify this section.
Deﬁned in this Act: amount, benchmark dividend, company, imputation credit, maximum permitted ratio, supplementary dividend Compare: 2004 No 35 s LE 2(9), (10) Section LP 5(3) heading: inserted (with effect on 1 April 2008), on 17 July 2013, by section 72 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Section LP 5(3): added, on 1 April 2008, by section 451 of the Taxation (Busi- ness Taxation and Remedial Matters) Act 2007 (2007 No 109).
LP 6 Deriving supplementary dividend and breach of terms of trust Class of shares The payment of a supplementary dividend on only some shares in a class of shares does not constitute a breach of— (a) (b) section 53 of the Companies Act 1993; or the company’s constitution or its articles of association, unless the provision expressly refers to this subsection; or any other provision.
(c) Trusts If a trustee derives a dividend and is required under the terms of a trust to distribute it as beneﬁciary income to a beneﬁciary, (1) (2) 2210 Reprinted as at 2 September 2013 Income Tax Act 2007 Part L s LP 10 the trustee’s distribution of a supplementary dividend does not breach the terms of the trust.
Deﬁned in this Act: beneﬁciary income, company, distribution, dividend, pay, share, supplementary dividend, trustee Compare: 2004 No 35 s LE 2(11), (12) Supplementary dividend holding companies LP 7 Requirements for supplementary dividend holding companies [Repealed] Section LP 7: repealed, on 1 April 2013 (applying for the 2013–14 and later income years), by section 79(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
LP 8 Relationship with exempt income rules [Repealed] Section LP 8: repealed, on 1 April 2013 (applying for the 2013–14 and later income years), by section 80(2) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

LP 9 Relationship with RWT rules [Repealed] Section LP 9: repealed, on 1 April 2013 (applying for the 2013–14 and later income years), by section 81(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
LP 10 Limitation on deductions [Repealed] Section LP 10: repealed, on 1 April 2013 (applying for the 2013–14 and later income years), by section 82(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Subpart LQ—Tax credits of conduit tax relief companies Contents LQ 1 Tax credits of CTR companies [Repealed] LQ 2 Limitation on amount of credit [Repealed] Page 2212 2212 2211 Part L s LQ 1 Income Tax Act 2007 Reprinted as at 2 September 2013 LQ 3 Determining percentage of non-resident shareholders [Repealed] LQ 4 Date for determining percentage of non-resident shareholders [Repealed] LQ 5 CTR additional dividends [Repealed] 2212 2212 2212 LQ 1 Tax credits of CTR companies [Repealed] Section LQ 1: repealed (with effect on 30 June 2009), on 6 October 2009, by section 346(1) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
LQ 2 Limitation on amount of credit [Repealed] Section LQ 2: repealed (with effect on 30 June 2009), on 6 October 2009, by section 346(1) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).

LQ 3 Determining percentage of non-resident shareholders [Repealed] Section LQ 3: repealed (with effect on 30 June 2009), on 6 October 2009, by section 346(1) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
LQ 4 Date for determining percentage of non-resident shareholders [Repealed] Section LQ 4: repealed (with effect on 30 June 2009), on 6 October 2009, by section 346(1) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
LQ 5 CTR additional dividends [Repealed] Section LQ 5: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 80(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
2212 Reprinted as at 2 September 2013 Income Tax Act 2007 Part L s LR 1 Subpart LR—Tax credits for policyholder income Contents LR 1 Tax credits for policyholder income Page 2213 LR 1 Tax credits for policyholder income Amount of credit (1) A person who has a credit in their policyholder credit account for a tax year has a tax credit equal to the amount, as limited under subsection (2), of the balance of the account determined under sections OJ 8, OJ 9, OJ 16, OP 115, and OP 116 (which relate to the use of credit balances against policyholder base income tax liability).
(2) Limitation The person’s use, under section LA 2 (Satisfaction of income tax liability), of a credit referred to in subsection (1) is limited to the amount that would be their income tax liability for the tax year if their only assessable income were policyholder in- come in the accounting period in which the amount of tax giv- ing rise to the credit was paid or payable.
Deﬁned in this Act: accounting period, amount, assessable income, income tax liability, pay, policyholder base income tax liability, policyholder credit ac- count, policyholder income, tax credit, tax year Compare: 2004 No 35 ss ME 19, ME 24, ME 28 Subpart LS—Tax credits for multi-rate PIEs and investors Subpart LS: substituted, on 1 April 2010 (applying for the 2010–11 and later income years), by section 348(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Contents LS 1 LS 2 LS 3 Tax credits for multi-rate PIEs Tax credits for investors in multi-rate PIEs Tax credits for zero-rated investors Page 2214 2215 2216 2213 Part L s LS 1 Income Tax Act 2007 Reprinted as at 2 September 2013 LS 4 Tax credits for certain exiting investors 2217 LS 1 Tax credits for multi-rate PIEs Tax credit (1) A multi-rate PIE has a tax credit for a tax year for the amount determined— (a) under sections HM 51 and HM 53 (which relate to cer- tain tax credits) for an imputation credit or a credit for tax paid or withheld: under section HM 55 (Tax credits for losses) arising from a tax loss attributed to an investor.
(b) When this section does not apply This section does not apply— in relation to— (a) (i) (ii) a zero-rated investor: an exiting investor who is treated under section HM 61 (Certain exiting investors zero-rated) as zero-rated: a notiﬁed foreign investor in a foreign investment PIE in relation to an imputation credit attached to a dividend derived by the PIE: (iii) (b) if the PIE pays tax using the provisional tax calculation option under section HM 44 (Provisional tax calculation option).
Amount of credit The amount of the tax credit equals the amount determined under the relevant section.

Timing The PIE has the tax credit for the tax year in which the relevant calculation period falls.

Exception: timing under exit calculation option If the PIE calculates its income tax liability using the exit cal- culation option under section HM 42 (Exit calculation option), the amount of a credit attributable to an investor is able to be used to satisfy a tax obligation relating to the investor.
Deﬁned in this Act: amount, calculation period, foreign investment PIE, im- putation credit, income tax liability, investor, multi-rate PIE, notiﬁed foreign (2) (3) (4) (5) 2214 Reprinted as at 2 September 2013 Income Tax Act 2007 Part L s LS 2 investor, pay, PIE, provisional tax, tax credit, tax loss, tax year, zero-rated in- vestor Compare: 2007 No 97 s LS 1 Section LS 1: substituted, on 1 April 2010 (applying for the 2010–11 and later income years), by section 348(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section LS 1(2)(a)(iii): added, on 29 August 2011 (applying for the 2012–13 and later income years for a foreign investment variable-rate PIE and a notiﬁed foreign investor in the PIE), by section 105(1) of the Taxation (Tax Administra- tion and Remedial Matters) Act 2011 (2011 No 63).

Section LS 1 list of deﬁned terms foreign investment PIE: inserted, on 29 Au- gust 2011, by section 105(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section LS 1 list of deﬁned terms notiﬁed foreign investor: inserted, on 29 Au- gust 2011, by section 105(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
LS 2 Tax credits for investors in multi-rate PIEs (1) When this section applies This section applies when— (a) (b) (c) an investor has attributed PIE income from a multi-rate PIE for a tax year; and the investor’s prescribed investor rate is— (i) (ii) more than zero: for an investor who is a trustee, the rate set out in schedule 6, table 1, row 5 or 7 (Prescribed rates: PIE investments and retirement scheme contribu- tions), as applicable; and the income is not excluded income of the investor be- cause— (i) the test in section CX 56(1)(b) (Attributed in- come of certain investors in multi-rate PIEs) is not met; or section CX 56(2)(b) or (c) applies.
(ii) (2) Amount of credit The investor has a tax credit for the income year in which the PIE’s tax year ends.

The amount of the credit is equal to the amount of income tax liability satisﬁed by the PIE in relation 2215 Part L s LS 3 Income Tax Act 2007 Reprinted as at 2 September 2013 to the attributed PIE income, and may be used to satisfy the investor’s income tax liability for the tax year.
Deﬁned in this Act: amount, attributed PIE income, excluded income, income, income year, investor, multi-rate PIE, PIE, prescribed investor rate, tax credit, tax year Compare: 2007 No 97 s LS 2 Section LS 2(1)(c): substituted (with effect on 1 April 2010), on 29 August 2011 (applying for the 2010–11 and later income years), by section 106(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section LS 2(1)(c)(ii): amended, on 1 April 2012 (applying for the 2012–13 and later income years), by section 106(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section LS 2: substituted, on 1 April 2010 (applying for the 2010–11 and later income years), by section 348(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section LS 2(1): substituted (with effect on 1 April 2009), on 6 October 2009, by section 347(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section LS 2(1)(a): amended, on 1 April 2010, by section 347(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section LS 2(1)(b)(ii): amended, on 1 April 2010 (applying for income years beginning on or after 1 April 2010), by section 83(1) of the Taxation (Conse- quential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section LS 2(2): amended (with effect on 1 April 2010), on 7 September 2010 (applying for the 2010–11 and later income years), by section 91(1) of the Taxa- tion (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remed- ial Matters) Act 2010 (2010 No 109).
Section LS 2 list of deﬁned terms pay: repealed (with effect on 1 April 2010), on 7 September 2010, by section 91(2) of the Taxation (Annual Rates, Trans- Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).

LS 3 Tax credits for zero-rated investors When this section applies This section applies when a zero-rated investor has attributed PIE income from a multi-rate PIE for a tax year.
Amount of credit The investor has a tax credit that may be used to satisfy their income tax liability for the tax year equal to the amount of in- come tax liability satisﬁed by the PIE for the attributed income for the tax year.
(1) (2) 2216 Reprinted as at 2 September 2013 Income Tax Act 2007 Part L s LS 4 Credit for PIE’s foreign tax (3) A zero-rated investor also has a tax credit for the tax year for the amount determined under section HM 52 (Use of foreign tax credits by zero-rated and certain exiting investors) for for- eign income tax paid by the PIE.
Credit for PIE’s other tax credits (4) A zero-rated investor also has a tax credit for the tax year for the amount determined under section HM 54 (Use of tax credits other than foreign tax credits by investors) for tax paid or withheld.

(5) Timing The investor has the tax credit for the tax year corresponding to the income year in which the PIE’s tax year ends.
Deﬁned in this Act: amount, attributed PIE income, income tax, income tax liability, income year, multi-rate PIE, pay, PIE, tax credit, tax year, zero-rated investor Compare: 2007 No 97 s LS 3 Section LS 3: substituted, on 1 April 2010 (applying for the 2010–11 and later income years), by section 348(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section LS 3(2): amended (with effect on 1 April 2010), on 7 September 2010 (applying for the 2010–11 and later income years), by section 93(1) of the Taxa- tion (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remed- ial Matters) Act 2010 (2010 No 109).
LS 4 Tax credits for certain exiting investors (1) (2) When this section applies This section applies when an exiting investor in a multi-rate PIE who is treated under section HM 61 (Certain exiting in- vestors zero-rated) as zero-rated has attributed PIE income from the PIE for a tax year in which the exit period falls.
Amount of credit The investor has a tax credit that may be used to satisfy their income tax liability for the tax year equal to any amount paid by the PIE under section HM 43(4) (Quarterly calculation op- tion) to the Commissioner after the investor exits from the PIE for the residual value of the investor interest of the investor.
2217 Income Tax Act 2007 Reprinted as at 2 September 2013 Credit for PIE’s foreign tax (3) An exiting investor also has a tax credit for the tax year for the amount determined under section HM 52 (Use of foreign tax credits by zero-rated and certain exiting investors) for foreign income tax paid by the PIE.
Credit for PIE’s other tax credits (4) An exiting investor also has a tax credit for the tax year for the amount determined under section HM 54 (Use of tax credits other than foreign tax credits by investors) for tax paid or with- held.

(5) Timing The investor has the tax credit for the tax year corresponding to the income year in which the PIE’s tax year ends.
Deﬁned in this Act: attributed PIE income, exit period, foreign income tax, income tax liability, income year, investor, investor interest, multi-rate PIE, pay, PIE, tax credit, tax year Compare: 2007 No 97 s LS 4 Section LS 4: substituted, on 1 April 2010 (applying for the 2010–11 and later income years), by section 348(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section LS 4(2): amended (with effect on 1 April 2010), on 21 December 2010, by section 110 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Subpart LZ—Terminating provisions Contents Underlying foreign tax credits [Repealed] LZ 1 Low tax jurisdiction companies [Repealed] Credits for certain non-resident investment companies LZ 2 Certain development projects [Repealed] LZ 3 LZ 4 Dividends derived from development Interest derived from development investments [Repealed] investments [Repealed] Some deﬁnitions [Repealed] LZ 5 Credits for interest on home vendor mortgages Interest on home vendor mortgages LZ 6 LZ 7 Maximum amount of credit under section LZ 6 Page 2219 2219 2219 2219 2220 2220 2221 2218 Reprinted as at 2 September 2013 Income Tax Act 2007 Part L s LZ 4 LZ 8 Meaning of home vendor mortgage Credits for savings in special home ownership accounts Savings in special home ownership accounts LZ 9 LZ 10 Maximum amount for 1 special home ownership account for 1 tax year LZ 11 Maximum amount for all special home ownership accounts for all tax years LZ 12 Meaning of increase in savings 2221 2222 2222 2222 2223 Underlying foreign tax credits [Repealed] LZ 1 Low tax jurisdiction companies [Repealed] Section LZ 1: repealed, on 2 November 2012, by section 119 of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Credits for certain non-resident investment companies LZ 2 Certain development projects [Repealed] repealed (with effect on 1 April 2013 and applying for the Section LZ 2: 2013–14 and later income years), on 17 July 2013, by section 74(1) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
LZ 3 Interest derived from development investments [Repealed] Section LZ 3: repealed (with effect on 1 April 2013 and applying for the 2013–14 and later income years), on 17 July 2013, by section 74(1) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
LZ 4 Dividends derived from development investments [Repealed] Section LZ 4: repealed (with effect on 1 April 2013 and applying for the 2013–14 and later income years), on 17 July 2013, by section 74(1) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
2219 Part L s LZ 5 Income Tax Act 2007 Reprinted as at 2 September 2013 LZ 5 Some deﬁnitions [Repealed] Section LZ 5: repealed (with effect on 1 April 2013 and applying for the 2013–14 and later income years), on 17 July 2013, by section 74(1) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Credits for interest on home vendor mortgages LZ 6 Interest on home vendor mortgages When this section applies This section applies when, in a tax year, a person derives in- terest in relation to a home vendor mortgage.

Exclusions This section does not apply to— (a) (b) (c) (d) (e) (f) an absentee; or a company; or a public authority; or a Maori authority; or an unincorporated body; or a trustee liable for income tax under subpart HC (Trusts) and section HZ 2 (Trusts that may become complying trusts).
Tax credit The person is entitled to a tax credit equal to an amount calcu- lated using the formula— interest × 0.020.

Deﬁnition of item in formula In the formula, interest means the amount of interest in com- plete dollars that the person derives in the tax year in relation to a home vendor mortgage.

Relationship to section LZ 7 This section is overridden by section LZ 7.
Deﬁned in this Act: absentee, amount, company, distribution, home vendor mortgage, income tax, interest, Maori authority, public authority, tax credit, tax year, trustee Compare: 2004 No 35 s KE 1(1) (1) (2) (3) (4) (5) 2220 Reprinted as at 2 September 2013 Income Tax Act 2007 Part L s LZ 8 LZ 7 Maximum amount of credit under section LZ 6 (1) Maximum amount: 1 person If only 1 person has provided the loan secured by a home ven- dor mortgage, the maximum amount of tax credit that the per- son is entitled to under section LZ 6 in a tax year is $500.
Maximum amount: 2 or more persons (2) When 2 or more persons have provided the loan secured by a home vendor mortgage, for each person who has provided the loan, the maximum amount of tax credit under section LZ 6 in a tax year is calculated using the formula— loan provided loan secured × 500.

(3) Deﬁnition of items in formula In the formula,— (a) loan provided is the amount of the loan provided by the persons: loan secured is the total amount of the loan secured by the home vendor mortgage.
(b) Deﬁned in this Act: amount, home vendor mortgage, loan, tax credit, tax year Compare: 2004 No 35 s KE 1(1) LZ 8 Meaning of home vendor mortgage (b) In sections LZ 6 and LZ 7, home vendor mortgage means a mortgage— (a) that secures a loan provided by the vendor or vendors of a house; and that is guaranteed by the Housing New Zealand Cor- poration under its housing mortgage guarantee scheme; and that has been approved by the Housing New Zealand Corporation, on or before 5 August 1982, for the pur- pose of the credit under this section; and for which notice of such guarantee and approval and of any variation has been delivered by the Housing New Zealand Corporation to the Commissioner.
Deﬁned in this Act: Commissioner, home vendor mortgage, loan, notice Compare: 2004 No 35 s KE 1(3) (d) (c) 2221 Part L s LZ 9 Income Tax Act 2007 Reprinted as at 2 September 2013 Credits for savings in special home ownership accounts LZ 9 Savings in special home ownership accounts (1) (2) (3) (4) When this section applies This section applies when a person operates a special home ownership account in a tax year.
Tax credit The person is entitled to a tax credit equal to an amount calcu- lated using the formula— increase in savings × 0.045.

Deﬁnition of item in formula In the formula, increase in savings is the total amount in com- plete dollars of the person’s increase in savings for all special accounts in the tax year.

Relationship with sections LZ 10 and LZ 11 Sections LZ 10 and LZ 11 override this section.
Deﬁned in this Act: amount, increase in savings, special home ownership ac- count, tax credit, tax year Compare: 2004 No 35 s KG 1(1) LZ 10 Maximum amount for 1 special home ownership account for 1 tax year For the purpose of calculating the amount of a credit under section LZ 9, the maximum amount of a single increase in savings for a special home ownership account for a tax year is $3,000.
Deﬁned in this Act: amount, increase in savings, special home ownership ac- count, tax year Compare: 2004 No 35 s KG 1(1) proviso LZ 11 Maximum amount for all special home ownership accounts for all tax years For the purpose of calculating the amount of a credit under section LZ 9, the maximum amount of increase in savings for 2222 Reprinted as at 2 September 2013 Income Tax Act 2007 Part L s LZ 12 all special home ownership accounts of the person for all tax years is $10,250 for a special home ownership account.
Deﬁned in this Act: amount, increase in savings, special home ownership ac- count, tax year Compare: 2004 No 35 s KG 1(2) LZ 12 Meaning of increase in savings (1) (2) Meaning In sections LZ 9 to LZ 11, increase in savings, in relation to a special home ownership account of a person and a tax year, means the total of— (a) the amount by which the amount standing to the credit of that special home ownership account at the end of that tax year or the date of the closure of that account, whichever is the earlier, is more than the amount stand- ing to the credit of that account, if any, at the end of the tax year immediately before that tax year; and the amount of resident withholding tax (RWT) withheld during that tax year from interest paid for the account.
(b) Withdrawals For the purposes of the deﬁnition of increase in savings,— (a) an amount withdrawn from a special home ownership account in accordance with a withdrawal certiﬁcate is treated as not having been withdrawn: an amount withdrawn from a special home ownership account in accordance with a withdrawal certiﬁcate, and subsequently redeposited in the account, is treated as not having been redeposited.
(b) Deﬁned in this Act: amount, increase in savings, interest, pay, RWT, special home ownership account, tax year, withdrawal certiﬁcate Compare: 2004 No 35 s KG 1(3), (4) 2223 Income Tax Act 2007 Reprinted as at 2 September 2013 Part M Tax credits paid in cash Subpart MA—General provisions Contents MA 1 What this Part does MA 2 Relationship with core provisions MA 3 Excluded income MA 4 Calculation of amounts of credit producing negative amounts MA 5 Advice from outside agencies MA 6 Avoidance arrangements MA 7 Meaning of full-time earner for family scheme MA 8 Some deﬁnitions for family scheme Page 2224 2224 2225 2225 2225 2225 2225 2227 MA 1 What this Part does (b) This Part identiﬁes the tax credits to which a person is en- titled— (a) under the family scheme for a tax year, see subparts MA to MF and MZ (which relate to working for families tax credits): under the superannuation savings scheme for a year be- ginning on 1 July and ending on 30 June, see subpart MK (Tax credits for KiwiSaver schemes and comply- ing superannuation funds).
[Repealed] (c) Section MA 1: substituted, on 1 April 2008, by section 453 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MA 1(c): repealed, on 1 April 2013, by section 6 of the Taxation (Can- terbury Earthquake Measures) Act 2011 (2011 No 24).

MA 2 Relationship with core provisions Section BC 8 (Satisfaction of income tax liability) deals with how a tax credit arising under this Part is applied.
Deﬁned in this Act: tax credit 2224 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MA 7 MA 3 Excluded income A tax credit that a person has under this Part is excluded in- come of the person.
Deﬁned in this Act: excluded income, tax credit Compare: 2004 No 35 s KD 8 MA 4 Calculation of amounts of credit producing negative amounts If a calculation under this Part produces a result that is negative for the amount of a tax credit or the amount of a component of a credit, the amount of the credit or component is zero.
Deﬁned in this Act: amount, tax credit Compare: 2004 No 35 s KB 3 MA 5 Advice from outside agencies In determining a person’s entitlement to a tax credit under sub- parts MB to MF and MZ, the Commissioner may obtain the advice of the chief executive or, as applicable, the person ap- pointed under section 61A of the Defence Act 1990 for the purposes of the War Pensions Act 1954.
Deﬁned in this Act: chief executive, Commissioner, tax credit Compare: 2004 No 35 s KD 9 MA 6 Avoidance arrangements Section GB 44 (Arrangements involving tax credits for fam- ilies) may apply to reduce a tax credit under subparts MB to MF and MZ.

Deﬁned in this Act: tax credit Section MA 6: amended, on 1 April 2008, by section 454 of the Taxation (Busi- ness Taxation and Remedial Matters) Act 2007 (2007 No 109).
MA 7 Meaning of full-time earner for family scheme (1) Weekly employment In subparts MB to MF and MZ, a full-time earner means a person who, for a week,— (a) is employed for 20 hours or more and does not have a spouse, civil union partner, or de facto partner during the week; or 2225 Part M s MA 7 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) has a spouse, civil union partner, or de facto partner (the partner) during the week, and either the person or the partner or both of them in total are employed for 30 hours or more.
Modiﬁcations to weekly employment For the purposes of subsection (1),— (a) (b) (c) (d) a person who is employed in a pay period that is longer than 1 week is treated as undertaking the employment activities to a uniform daily extent for the period: a person who is employed becomes incapacitated as de- scribed in subsection (3) and is unable to undertake em- ployment in a week in which but for the incapacity they would be employed for the number of hours set out in subsection (1)(a) and (b) is treated as having been em- ployed for the hours referred to: a person who is taking parental leave under the Parental Leave and Employment Protection Act 1987 for which a parental leave payment under Part 7A of that Act is payable, is treated as employed in the week for the num- ber of hours for which they would have worked but for the period of parental leave: a person who receives or will receive weekly compen- sation from the Accident Compensation Corporation as a surviving spouse or partner of a deceased claimant is treated as being employed, during the week to which that compensation relates, for the number of hours that the deceased claimant would have been employed for in a week before dying, but for their incapacity.
The num- ber of hours under this paragraph are in addition to the person’s own hours.

Incapacity The incapacity referred to in subsection (2)(b) and (d) is an incapacity due to personal injury by accident for which an ac- cident compensation earnings-related payment has been, is be- ing, or will be paid.
Deﬁned in this Act: accident compensation earnings-related payment, civil union partner, de facto partner, employment, pay, pay period, spouse Compare: 2004 No 35 s OB 1 “full-time earner” (2) (3) 2226 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MA 8 Section MA 7(2): amended (with effect on 1 April 2008), on 6 October 2009, by section 349(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section MA 7(2)(b): amended (with effect on 1 April 2008), on 6 October 2009, by section 349(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section MA 7(2)(c): amended (with effect on 1 April 2008), on 2 November 2012, by section 120(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section MA 7(2)(d): inserted (with effect on 1 April 2008), on 2 November 2012, by section 120(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section MA 7(3): amended (with effect on 1 April 2008), on 2 November 2012, by section 120(2) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section MA 7 list of deﬁned terms employment: inserted (with effect on 1 April 2008), on 6 October 2009, by section 349(3) of the Taxation (International Tax- ation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
MA 8 Some deﬁnitions for family scheme In subparts MB to MF and MZ,— abating WFF tax credit means a tax credit under section MD 1 (Abating WFF tax credit) chief executive means the chief executive of the department currently responsible for administering the Social Security Act 1964 child tax credit means the component of the WFF tax credit that is calculated using the formula in section MZ 2 (Calcula- tion of child tax credit) family assistance credit [Repealed] [Repealed] family credit abatement means the component of the abating WFF tax credit that is calculated using the formula in section MD 13 (Calculation of family credit abatement) family plus [Repealed] [Repealed] family scheme means all the entitlements and tax credits aris- ing under subparts MB to MF and MZ family scheme income means an amount calculated under subpart MB (Adjustment of net income for family scheme) on 2227 Part M s MA 8 Income Tax Act 2007 Reprinted as at 2 September 2013 which an entitlement and a tax credit under the family scheme is based family support [Repealed] [Repealed] family tax credit means the component of the abating WFF tax credit calculated using the formula in section MD 3 (Cal- culation of family tax credit) in-work payment [Repealed] [Repealed] in-work tax credit means the component of the abating WFF tax credit calculated using the formula in section MD 10 (Cal- culation of in-work tax credit) minimum family tax credit means a tax credit under section ME 1 (Minimum family tax credit) net family scheme income [Repealed] [Repealed] New Zealand resident— (a) means ordinarily resident; and (b) does not include being unlawfully resident in New Zealand; and does not include being lawfully resident in New Zealand only because of holding a temporary entry class visa (c) parental tax credit means the component of the abating WFF tax credit calculated using the formula in section MD 12 social assistance payment means— (a) (b) (c) (d) an income-tested beneﬁt; or a veteran’s pension; or New Zealand superannuation; or a basic
 grant or an independent circumstances grant, made under regulations made under section 193 of the Education Act 1964, section 303 of the Education Act 1989, or a substituted provision; or an accident compensation earnings-related payment, when the compensation relates to a day forming part of a continuous period of eligibility for the compensation and the day falls after the earlier of— (i) the day with the same date as the ﬁrst day of the continuous period of eligibility for compensation (e) 2228 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MA 8 (ii) and occurring in the third calendar month after that ﬁrst day; and the last day of the third calendar month after the ﬁrst day of the continuous period of eligibility for compensation WFF tax credit means a tax credit under either section MD 1 (Abating WFF tax credit) or ME 1 (Minimum family tax credit).
Deﬁned in this Act: abating WFF tax credit, accident compensation earnings-re- lated payment, amount, child tax credit, Commissioner, entitlement period, family tax credit, income-tested beneﬁt, in-work payment, minimum family tax credit, net income, New Zealand, New Zealand superannuation, parental tax credit, relationship period, resident in New Zealand, tax credit, tax year, vet- eran’s pension, WFF tax credit Section MA 8 abating WFF tax credit: inserted, on 1 April 2008, by section 455(1)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MA 8 child tax credit: amended, on 1 April 2008, by section 455(1)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MA 8 family assistance credit: repealed, on 1 April 2008, by section 455(1)(c) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MA 8 family credit abatement: amended, on 1 April 2008, by section 455(1)(d) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MA 8 family plus: repealed, on 1 April 2008, by section 455(1)(e) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MA 8 family support: repealed, on 1 April 2008, by section 455(1)(f) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MA 8 family tax credit: substituted, on 1 April 2008, by section 455(1)(g) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MA 8 in-work payment: repealed, on 1 April 2008, by section 455(1)(h) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MA 8 in-work tax credit: inserted, on 1 April 2008, by section 455(1)(h) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MA 8 minimum family tax credit: inserted, on 1 April 2008, by sec- tion 455(1)(i) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
2229 Income Tax Act 2007 Reprinted as at 2 September 2013 Section MA 8 net family scheme income: repealed, on 1 April 2008, by section 455(1)(j) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MA 8 New Zealand resident: substituted, on 29 November 2010, by section 406(1) of the Immigration Act 2009 (2009 No 51).
Section MA 8 parental tax credit: amended, on 1 April 2008, by section 455(1)(k) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MA 8 WFF tax credit: added, on 1 April 2008, by section 455(1)(l) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MA 8 list of deﬁned terms abating WFF tax credit: inserted, on 1 April 2008, by section 455(2)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MA 8 list of deﬁned terms full-time earner: repealed (with effect on 1 April 2008), on 6 October 2009, by section 350 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section MA 8 list of deﬁned terms minimum family tax credit: inserted, on 1 April 2008, by section 455(2)(a) of the Taxation (Business Taxation and Re- medial Matters) Act 2007 (2007 No 109).
Section MA 8 list of deﬁned terms WFF tax credit: inserted, on 1 April 2008, by section 455(2)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MA 8 list of deﬁned terms family assistance credit: repealed, on 1 April 2008, by section 455(2)(b) of the Taxation (Business Taxation and Re- medial Matters) Act 2007 (2007 No 109).
Subpart MB—Adjustment of net income for family scheme Contents MB 1 Adjustments for calculation of family scheme income MB 2 Adjustment for period that is less or more than 1 year MB 3 When person carries on 1 or more businesses or investment activities Page 2231 2235 2236 MB 4 Family scheme income of major shareholders in close 2237 companies MB 5 Treatment of distributions from superannuation schemes MB 6 Treatment of distributions from retirement savings schemes MB 7 Family scheme income of settlor of trust MB 8 Family scheme income from fringe beneﬁts 2238 2239 2239 2241 2230 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MB 1 MB 9 Family scheme income from deposits in main income equalisation accounts MB 10 Family scheme income from certain pensions and annuities MB 11 Family scheme income from amounts derived by dependent children MB 12 Family scheme income from non-residents’ foreign-sourced income MB 13 Family scheme income from other payments 2242 2242 2243 2244 2244 MB 1 Adjustments for calculation of family scheme income (1) Assessable income derived at uniform daily rate To determine the net income (the family scheme income) on which the calculation of an entitlement and tax credit under the family scheme is based, the following paragraphs apply in relation to the assessable income derived by the person in a relationship period in an income year: (a) (b) (c) to the extent to which the income is derived from em- ployment during all or part of the income year, it is treated as derived at a uniform daily rate during the period of the employment; and to the extent to which the income is derived as an in- come-tested beneﬁt, it is treated as derived at a uniform daily rate during the period in the income year for which the beneﬁt is paid to the person; and despite section 38(1) of the Tax Administration Act 1994,— (i) to the extent to which the income is derived other- wise than under paragraph (a) or (b), it is treated as derived at a uniform daily rate during the in- come year; and any
 expenditure incurred in deriving the income referred to in subparagraph (i) that is allowed as a deduction is treated as incurred at a uniform daily rate during the income year.
(ii) 2231 Part M s MB 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Exempt income included For the purposes of subsection (1), an amount derived by the person in the income year is not treated as exempt income if it is— (a) an amount referred to in section CW 28(2)(a) or CW 32 (which relate to overseas pensions and maintenance payments): an amount of salary or wages that is exempt from in- come tax under an Act, or under a regulation or Order in Council made under an Act, that is listed in schedule 38 (Acts exempting income from tax: income included in family scheme income).
(b) Deduction For the purposes of subsection (1), the person is allowed a deduction for— (a) the amount of any payment, made by the person during the income year, of the kind referred to in section CW 32 (Maintenance payments); and the amount of any payment made by the person during the income year under section 27K of the Social Secur- ity Act 1964, as saved by section 256 of the Child Sup- port Act 1991.
(b) Tax loss of qualifying company [Repealed] [Repealed] Income from portfolio investment entities For the purposes of subsection (1),— (a) an amount of income attributed by a portfolio invest- ment entity to the person for an income year— (i) is not included in family scheme income of the person for the income year if the portfolio in- vestment entity is a superannuation fund or re- tirement savings scheme: is included in family scheme income of the per- son for the income year if subparagraph (i) does not apply: (ii) (2) (3) (4) (5) 2232 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MB 1 (b) a distribution from a listed PIE that is derived by the person in an income year is included in family scheme income of the person for the income year.
Retirement scheme contributions (5B) For the purposes of subsection (1), an amount of retirement scheme contribution that is not excluded income of the person and would be their excluded income in the absence of section CX 50B(2) (Contributions to retirement savings schemes) is not included in family scheme income.
Amounts of depreciation loss on sale of building (5C) For the purposes of subsection (1), in relation to a building from the sale of which the person derives assessable income, an amount of depreciation loss allowed in the 2002–03 or ear- lier income year is not included in family scheme income.

However, this subsection does not apply to an amount of de- preciation loss of a business that under section MB 4 is treated as having no net income for the purposes of calculating family scheme income.
Refunds from main income equalisation accounts (5D) For the purposes of subsection (1), a refund under sections EH 8 to EH 26 (which relate to refunds from main income equalisation accounts) of a deposit made on or after 1 April 2011 is not included in family scheme income of a person, ex- cept to the extent that the refund is interest payable to the per- son under section EH 6 (Interest on deposits in main income equalisation account).
(6) (7) All known income sources [Repealed] [Repealed] Transitional adjustments The amounts described in section MZ 2 (Calculation of child tax credit) are not included in the person’s family scheme in- come.
Deﬁned in this Act: amount, assessable income, business, Commissioner, de- duction, depreciation loss, excluded income, exempt income, family scheme, family scheme income, income, income from employment, income tax, in- come-tested beneﬁt, income year, listed PIE, main income equalisation account, net income, pay, portfolio investment entity, qualifying company, relationship 2233 Part M s MB 1 Income Tax Act 2007 Reprinted as at 2 September 2013 period, retirement savings scheme, retirement scheme contribution, salary or wages, shareholder, superannuation fund, tax credit, tax loss, tax year Compare: 2004 No 35 s KD 1(1)(a), (b), (e)(vii), (i), (3) Section MB 1(2): substituted, on 1 April 2011, by section 111(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section MB 1(2)(a): amended, on 17 July 2013, by section 75 of the Taxa- tion (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Section MB 1(4) heading: repealed, on 17 July 2013, pursuant to section 172 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Section MB 1(4): repealed, on 17 July 2013, by section 172 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Section MB 1(5) heading: substituted, on 1 April 2011, by section 111(2) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section MB 1(5): substituted, on 1 April 2011, by section 111(2) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section MB 1(5B) heading: inserted, on 1 April 2008, by section 456(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MB 1(5B): inserted, on 1 April 2008, by section 456(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MB 1(5C) heading: inserted (with effect on 1 April 2008), on 7 De- cember 2009, by section 84(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section MB 1(5C): inserted (with effect on 1 April 2008), on 7 December 2009, by section 84(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section MB 1(5D) heading: inserted, on 1 April 2011, by section 111(3) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section MB 1(5D): inserted, on 1 April 2011, by section 111(3) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section MB 1(6) heading: repealed, on 1 April 2011, pursuant to section 111(4) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section MB 1(6): repealed, on 1 April 2011, by section 111(4) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section MB 1 list of deﬁned terms business: inserted (with effect on 1 April 2008), on 7 December 2009, by section 126 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section MB 1 list of deﬁned terms depreciation loss: inserted (with effect on 1 April 2008), on 7 December 2009, by section 126 of the Taxation (Conse- quential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section MB 1 list of deﬁned terms income tax: inserted, on 1 April 2011, by section 111(5) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
2234 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MB 2 Section MB 1 list of deﬁned terms income statement: repealed, on 2 Novem- ber 2012, by section 121 of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section MB 1 list of deﬁned terms LAQC: repealed, on 17 July 2013, by section 172 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Section MB 1 list of deﬁned terms listed PIE: inserted, on 1 April 2011, by section 111(5) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section MB 1 list of deﬁned terms main income equalisation account: in- serted, on 1 April 2011, by section 111(5) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section MB 1 list of deﬁned terms portfolio investment entity: inserted, on 1 April 2010, by section 351(2)(b) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section MB 1 list of deﬁned terms portfolio investor allocated income: re- pealed, on 1 April 2010, by section 351(2)(a) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section MB 1 list of deﬁned terms retirement savings scheme: inserted, on 1 April 2011, by section 111(5) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section MB 1 list of deﬁned terms retirement scheme contribution: inserted, on 1 April 2008, by section 456(3) of the Taxation (Business Taxation and Re- medial Matters) Act 2007 (2007 No 109).
Section MB 1 list of deﬁned terms salary or wages: inserted, on 1 April 2011, by section 111(5) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section MB 1 list of deﬁned terms superannuation fund: inserted, on 1 April 2011, by section 111(5) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
MB 2 Adjustment for period that is less or more than 1 year (1) (2) Calculation of adjustment If a person’s income is calculated for a period that is less or more than a year, their family scheme income must be adjusted by an amount calculated using the formula— person’s family scheme income × 365 days.
Deﬁnition of items in formula In the formula,— (a) person’s family scheme income is the person’s income calculated under subparts MB to MF and MZ: 2235 Part M s MB 3 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) days is the total number of days in the period for which the income has been derived.
Deﬁned in this Act: amount, family scheme income, income, year Compare: 2004 No 35 s KD 1(4)–(6) MB 3 When person carries on 1 or more businesses or investment activities When this section applies This section applies when a person carries on 1 or more busi- nesses in the income year, or has or carries on 1 or more in- vestment activities in the income year (each separate business or investment activity, a single family scheme activity).
Ignore income and deductions for net loss activity The income and deductions for a person’s family scheme ac- tivity for an income year are ignored when calculating the per- son’s family scheme income for the year if, treating the person as having only the income and deductions of that activity, the person would have a net loss for that year.
Modiﬁcation of what counts as 1 family scheme activity For the purposes of applying subsection (2), and despite sub- section (1), 2 or more family scheme activities may be treated as a single family scheme activity, if the Commissioner con- siders that the 2 or more activities are of the kind that are nor- mally carried on in association with each other.
Apportionment of deductions between family scheme activities For the purposes of applying subsection (2) as modiﬁed by subsection (3), deductions that relate to an asset used in carry- ing on 2 or more family scheme activities must be appropri- ately apportioned between the activities on the basis of the use of that asset in those 2 or more activities.

Deﬁnition In this section, investment activity includes passive holding of an investment asset, other than a variable principal debt in- strument.
Deﬁned in this Act: business, deduction, family scheme income, income, in- come year, investment activity, net loss, variable principal debt instrument (1) (2) (3) (4) (5) 2236 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MB 4 Section MB 3: substituted, on 1 April 2011 (applying for the 2011–12 and later income years), by section 93(1) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
MB 4 Family scheme income of major shareholders in close companies (1) (2) (3) When this section applies This section applies for the purposes of determining the amount that represents the family scheme income of a person for an income year when the person is a major shareholder in a close company on the last day of the company’s balance If the company has paid the date for ﬁnancial purposes.
major shareholder a dividend in the income year, the amount of family scheme income calculated under subsection (2) is reduced by the total dividends paid for the income year.

What is included in family scheme income The person’s family scheme income includes an amount cal- culated using the formula— person’s shares company’s shares × company’s income.
Deﬁnition of items in formula In the formula,— (a) person’s shares is the number of shares issued by the company and held by the person, excluding ﬁxed-rate shares, on the last day of the company’s accounting year: company’s shares is the number of shares issued by the company, excluding ﬁxed-rate shares, on the last day of the company’s accounting year: company’s income is the net income of the company for the company’s accounting year.
(b) (c) Deﬁned in this Act: accounting year, amount, close company, dividend, family scheme income, income year, major shareholder, net income, share Compare: 2004 No 35 s KD 1(1)(g) Section MB 4(1): substituted (with effect on 1 April 2008), on 6 October 2009, by section 352(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2237 Part M s MB 5 Income Tax Act 2007 Reprinted as at 2 September 2013 MB 5 Treatment of distributions from superannuation schemes When this section applies This section applies when— (a) (b) a person receives a distribution from a superannuation scheme in an income year; and an employer of the person has made contributions to the superannuation scheme in— (i) the income year in which the distribution was received; or the 2 income years immediately before that in- come year; and (ii) (c) the person continues to work for the employer for 1 month or more after the date of the distribution.
When this section does not apply This section does not apply to a person who receives a distri- bution from a superannuation scheme— (a) as a result of and on or after the person’s retirement from employment with an employer who was a contributor to the scheme: if the superannuation scheme is a KiwiSaver scheme or a complying superannuation fund.
(b) Assessable income For the purposes of calculating family scheme income, the dis- tribution referred to in subsection (1) is assessable income of the person derived in the tax year or years that corresponds to the income year or years in which the contributions were made.

The amount does not include an amount attributable to a contribution by the person as a member of the superannu- ation scheme.
Deﬁned in this Act: assessable income, complying superannuation fund, corres- ponding income year, employer, employment, family scheme income, income year, KiwiSaver scheme, superannuation scheme, tax year Compare: 2004 No 35 s KD 1(1)(h) Section MB 5(2): replaced (with effect on 1 April 2008), on 2 November 2012, by section 122(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section MB 5 list of deﬁned terms complying superannuation fund: inserted (with effect on 1 April 2008), on 2 November 2012, by section 122(2) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
(1) (2) (3) 2238 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MB 7 Section MB 5 list of deﬁned terms KiwiSaver scheme: inserted (with effect on 1 April 2008), on 2 November 2012, by section 122(2) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
MB 6 Treatment of distributions from retirement savings schemes (1) (2) When this section applies This section applies when— (a) (b) (c) a person receives a distribution of a retirement scheme contribution from a retirement savings scheme in an in- come year; and RSCT has been withheld from the contribution; and at the time of the distribution, the person is— (i) not eligible for New Zealand superannuation; and eligible for a distribution of a retirement scheme contribution from a retirement scheme contribu- tor.
(ii) Assessable income For the purposes of calculating family scheme income, the dis- tribution is assessable income of the person derived in the in- come year in which the distribution is made.
Deﬁned in this Act: assessable income, family scheme income, income year, New Zealand superannuation, retirement savings scheme, retirement scheme contribution, retirement scheme contributor, RSCT Compare: 2004 No 35 s KD 1(1)(hb) Section MB 6: added, on 1 April 2008, by section 457 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
MB 7 Family scheme income of settlor of trust (1) When this section applies This section applies for the purpose of determining the amount that represents the family scheme income of a person for an in- come year when the person is the settlor of a trust (the person’s trust) at a time in the income year, other than solely as a re- sult of providing personal services for less than market value in the administration of the trust or the maintenance of trust property.
2239 Part M s MB 7 Income Tax Act 2007 Reprinted as at 2 September 2013 Exception for some trusts This section does not apply if— (a) the trustee of the person’s trust is registered as a charit- able entity under the Charities Act 2005: the person’s trust is solely for the beneﬁt of a local au- thority: interest and dividends derived by the trustee of the per- son’s trust would be exempt income of the trustee under section CW 45 (Funeral trusts): the person’s trust is a superannuation fund: the person and the members of the person’s family are not permitted to beneﬁt from the person’s trust except under an order of a court.
What is included in family scheme income The person’s family scheme income for the income year in- cludes an amount calculated using the formula— trustee + company – dividends settlor number.
Deﬁnition of items in formula In the formula— (a) trustee is the net income of the trustee of the person’s trust for the income year reduced, to not less than zero, by the amount of the trustee’s income that vests or is paid by the trustee as beneﬁciary income for the income year: company is the total of amounts calculated for compan- ies in which, at the end of the company’s income year, the trustee of the person’s trust and associated persons hold voting interests of 50% or more, or market value interests of 50% or more if there is a market value cir- cumstance, with the amount for each company being calculated by multiplying the company’s net income for the income year by the trustee’s voting interest or mar- ket value interest in the company at the end of the in- come year: dividends is the total amount, not exceeding the item company, of dividends that are derived by the trustee of (b) (c) (d) (e) (b) (c) (2) (3) (4) 2240 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MB 8 (d) the person’s trust in the income year from companies referred to in paragraph (b): settlor number is the number of settlors of the person’s trust, including the person, for which this section ap- plies.
Deﬁned in this Act: amount, beneﬁciary income, company, dividend, exempt income, family scheme income, income, income year, interest, local authority, market value, market value circumstance, market value interest, net income, settlor, superannuation fund, trustee, trustee income, voting interest Section MB 7: added, on 1 April 2011, by section 112 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
MB 8 Family scheme income from fringe beneﬁts (1) (2) When this section applies This section applies for the purpose of determining the amount that represents the family scheme income of a person for an income year when— (a) the person is an employee of a company in which the person and associated persons hold— (i) (ii) market value interests of 50% or more, if a market voting interests of 50% or more: value circumstance exists; and (b) the company provides a fringe beneﬁt that must be at- tributed to the person under section RD 47 (Attribution of certain fringe beneﬁts).
What is included in family scheme income The person’s family scheme income for the income year in- cludes an amount equal to the total of the following amounts: the taxable value of the fringe beneﬁts that the company (a) must attribute to the person under sections RD 47 to RD 49 for the income year; and the company’s FBT liability in relation to the person under section RD 50 (Employer’s liability for attributed beneﬁts) for the income year.
(b) Deﬁned in this Act: associated person, company, employee, family scheme income, FBT, fringe beneﬁt, income year, market value circumstance, market value interest, voting interest Section MB 8: added, on 1 April 2011, by section 112 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
2241 Part M s MB 9 Income Tax Act 2007 Reprinted as at 2 September 2013 MB 9 Family scheme income from deposits in main income equalisation accounts The family scheme income of a person for an income year includes the amount of a deduction under section DQ 1 (Main income equalisation scheme) allowed for a payment made to the Commissioner under section EH 4 (Main deposit) for an accounting year, corresponding to the same tax year as does the income year, and for a business of— (a) (b) the person: a company that meets the requirements of section MB 4 for the person’s family scheme income to be affected by net income of the company for the accounting year: a trustee of a trust that meets the requirements of sec- tion MB 7 for the person’s family scheme income to be affected by net income of the trustee for the accounting year: a company in which a trustee referred to in paragraph (c) and associated persons hold a voting interest of 50% or more, or a market value interest of 50% or more if a market value circumstance exists.
(c) (d) Deﬁned in this Act: accounting year, business, close company, Commissioner, company, family scheme income, income year, market value circumstance, market value interest, net income, pay, voting interest Section MB 9: added, on 1 April 2011, by section 112 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
MB 10 Family scheme income from certain pensions and annuities When this section applies This section applies for the purpose of determining the amount that represents the family scheme income of a person for an income year when the person derives in the income year a pension or annuity that is exempt income of the person under section CW 4 (Annuities under life insurance policies) or is a pension from a superannuation fund.
Half of pension or annuity included in family scheme income The family scheme income of the person for the income year— includes half of the amount of pension or annuity de- (a) rived in the income year; and (1) (2) 2242 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MB 11 (b) does not include the other half of the amount of pension or annuity derived in the income year.
Deﬁned in this Act: amount, excluded income, exempt income, family scheme income, income year Section MB 10: added, on 1 April 2011, by section 112 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
MB 11 Family scheme income from amounts derived by dependent children (1) (2) (3) When this section applies This section applies for the purpose of determining the amount that represents the family scheme income of a person for an income year when the person is a principal caregiver of a de- pendent child and the dependent child derives in the income year an amount that is— (a) (b) (c) (d) resident passive income: a royalty: rent: beneﬁciary income that is not an amount referred to in section HC 35(4)(b)(i), (ii), or (v) (Beneﬁciary income of minors): attributed income from a portfolio investment entity that is not a superannuation fund or retirement savings scheme: a distribution from a listed PIE.
(e) (f) Amount included in family scheme income If the total of amounts derived by the dependent child in the in- come year and referred to in subsection (1) is more than $500, the family scheme income of the person for the income year includes an amount calculated using the formula— child’s amounts $500 principal caregivers.
Deﬁnitions of items in formula In the formula,— (a) child’s amounts is the total of amounts— (i) derived by the dependent child in the income year; and referred to in subsection (1): (ii) 2243 Part M s MB 12 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) principal caregivers is the number of people who are each a principal caregiver of the child.
Deﬁned in this Act: beneﬁciary income, dependent child, excluded income, family scheme income, income year, listed PIE, portfolio investment entity, principal caregiver, resident passive income, retirement savings scheme, roy- alty, superannuation fund Section MB 11: added, on 1 April 2011, by section 112 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section MB 11(1): amended (with effect on 1 April 2011), on 29 August 2011, by section 107(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section MB 11(2) heading: substituted (with effect on 1 April 2011), on 29 Au- gust 2011, pursuant to section 107(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section MB 11(2): substituted (with effect on 1 April 2011), on 29 August 2011, by section 107(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section MB 11(3) heading: added (with effect on 1 April 2011), on 29 August 2011, by section 107(2) of the Taxation (Tax Administration and Remedial Mat- ters) Act 2011 (2011 No 63).
Section MB 11(3): added (with effect on 1 April 2011), on 29 August 2011, by section 107(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section MB 11 list of deﬁned terms principal caregiver: inserted (with effect on 1 April 2011), on 29 August 2011, by section 107(3) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
MB 12 Family scheme income from non-residents’ foreign-sourced income The family scheme income of a person for an income year in- cludes the non-residents’ foreign-sourced income for the in- come year of the person’s spouse, civil union partner, or de facto partner.
Deﬁned in this Act: civil union partner, de facto partner, family scheme income, income year, non-residents’ foreign-sourced income, spouse Section MB 12: added, on 1 April 2011, by section 112 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
MB 13 Family scheme income from other payments (1) The family scheme income of a person for an income year includes the value of payments— (a) (b) paid or provided to the person from any source; and used by the person to— 2244 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MB 13 (i) replace lost or diminished income of the person or the person’s family: (ii) meet usual living expenses of the person or the person’s family; and (c) not excluded from family scheme income under subsec- tion (2).
Payments and beneﬁts excluded from family scheme income (2) A payment to a person is not included under subsection (1) in the family scheme income of the person if it is— (a) (b) a loan under ordinary commercial terms and conditions: from an amount that is— (i) (ii) proceeds of the disposal of property; and not assessable income of the person disposing of the property: (c) (d) (e) (f) (g) (h) (i) (j) (k) (kb) (l) (m) (n) a payment on behalf of the person by a local authority or public authority: a forgiveness of debt by a public authority: a charitable distribution from a charitable entity regis- tered under the Charities Act 2005: an educational scholarship: a student loan under the Student Loan Scheme Act 2011: a grant for the payment of expenses relating to medical treatment or a funeral: a payment under an insurance contract, other than a pay- ment for a loss of income: compensation for a loss other than a loss of income: lump sum compensation under the Accident Compen- sation Act 2001: a payment of a foster care allowance under section 363 of the Children, Young Persons, and Their Families Act 1989: a monetary beneﬁt under the Social Security Act 1964 that is exempt income: a pension or allowance under the War Pensions Act 1954 that is exempt income: a payment is exempt that CW 33(1)(c), (e), or (f) (Allowances and beneﬁts): income under section 2245 Part M s MB 13 Income Tax Act 2007 Reprinted as at 2 September 2013 (o) (p) (q) (r) an amount that is declared not to be income for the pur- poses of the Social Security Act 1964 by a regulation under section 132 of that Act: included in the family scheme income of the person under another section: expressly excluded from the family scheme income of the person under another section: a payment— (i) to relieve the adverse effects of an event declared to be an emergency event by the Commissioner in a determination under section 91AAS of the Tax Administration Act 1994; and in the period set by the Commissioner in the de- termination as relating to the event.
(ii) Exception for total value of payments less than threshold If, in the absence of this subsection, the total value of pay- ments that would be included under subsection (1) in the fam- ily scheme income for the year of the person and the person’s spouse, civil union partner, or de facto partner is less than or equal to $5,000, then the payments paid or provided to the per- son are not included in the person’s family scheme income for the income year.
Deﬁned in this Act: assessable income, dispose, exempt income, family scheme income, income, income year, insurance contract, land, loan, local authority, pay, public authority Section MB 13: added, on 1 April 2011, by section 112 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section MB 13(2)(g): amended, on 1 April 2012, by section 223 of the Student Loan Scheme Act 2011 (2011 No 62).
Section MB 13(2)(kb): inserted (with effect on 1 April 2011), on 2 November 2012, by section 123 of the Taxation (Annual Rates, Returns Filing, and Re- medial Matters) Act 2012 (2012 No 88).

Section MB 13(2)(q): amended (with effect on 1 April 2011), on 24 May 2011, by section 7 of the Taxation (Canterbury Earthquake Measures) Act 2011 (2011 No 24).

Section MB 13(2)(r): added (with effect on 1 April 2011), on 24 May 2011, by section 7 of the Taxation (Canterbury Earthquake Measures) Act 2011 (2011 No 24).
(3) 2246 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MC 1 Subpart MC—Entitlements under family scheme Contents MC 1 What this subpart does MC 2 Who qualiﬁes for entitlements under family scheme?
MC 3 First requirement: person’s age MC 4 Second requirement: principal care MC 5 Third requirement: residence MC 6 When person does not qualify MC 7 When spouse or partner entitled under family scheme MC 8 Continuing requirements MC 9 Credits for person aged 18 MC 10 Principal caregiver MC 11 Relationship periods and entitlement periods Page 2247 2249 2249 2249 2249 2251 2252 2252 2254 2255 2257 MC 1 What this subpart does (1) (2) Rules about entitlements under family scheme This subpart provides the rules for determining whether a per- son and their spouse, civil union partner, or de facto partner are entitled to WFF tax credits as entitlements and tax credits under the family scheme.
WFF tax credits The WFF tax credit is the amount of a person’s entitlement and tax credit made up of— (a) the family tax credit calculated under section MD 3 (Calculation of family tax credit): the in-work tax credit, see sections MD 4 to MD 10 (which relate to the entitlement to and calculation of the in-work tax credit), or the child tax credit continued under section MZ 1 (Entitlement to child tax credit): the parental tax credit, see sections MD 11 and MD 12 (which relate to the entitlement to and calculation of the parental tax credit): the minimum family tax credit, see section ME 1 (Min- imum family tax credit).
(b) (c) (d) 2247 Part M s MC 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Classiﬁcation of credits For the purposes of the calculation of an amount of a WFF tax credit, entitlements and tax credits under the family scheme are divided into— (a) abating WFF tax credits, made up of the family tax credit, in-work tax credit or child tax credit, and the parental tax credit: the minimum family tax credit.
(b) Classiﬁcation of credits [Repealed] [Repealed] Deﬁned in this Act: abating WFF tax credit, amount, child tax credit, civil union partner, Commissioner, de facto partner, family scheme, family tax credit, in-work tax credit, minimum family tax credit, parental tax credit, spouse, tax credit, WFF tax credit Compare: 2004 No 35 s KD 1A Section MC 1(1): amended, on 1 April 2008, by section 458(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MC 1(2) heading: substituted, on 1 April 2008, by section 458(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MC 1(2): substituted, on 1 April 2008, by section 458(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MC 1(3) heading: substituted, on 1 April 2008, by section 458(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MC 1(3): substituted, on 1 April 2008, by section 458(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MC 1(4) heading: repealed, on 1 April 2008, by section 458(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MC 1(4): repealed, on 1 April 2008, by section 458(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MC 1 list of deﬁned terms abating WFF tax credit: inserted, on 1 April 2008, by section 458(3)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MC 1 list of deﬁned terms family assistance credit: repealed, on 1 April 2008, by section 458(3)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MC 1 list of deﬁned terms family plus: repealed, on 1 April 2008, by section 458(3)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MC 1 list of deﬁned terms family support: repealed, on 1 April 2008, by section 458(3)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
(3) (4) 2248 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MC 5 Section MC 1 list of deﬁned terms in-work payment,: repealed, on 1 April 2008, by section 458(3)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MC 1 list of deﬁned terms in-work tax credit: inserted, on 1 April 2008, by section 458(3)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MC 1 list of deﬁned terms minimum family tax credit: inserted, on 1 April 2008, by section 458(3)(a) of the Taxation (Business Taxation and Re- medial Matters) Act 2007 (2007 No 109).

Section MC 1 list of deﬁned terms WFF tax credit: inserted, on 1 April 2008, by section 458(3)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MC 1 compare note: amended (with effect on 1 April 2008), on 6 Octo- ber 2009, by section 353 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

MC 2 Who qualiﬁes for entitlements under family scheme?

A person qualiﬁes for an entitlement under the family scheme if, for an entitlement period, they meet— (a) the qualifying criteria set out in sections MC 3 to MC 7; and the continuing requirements set out in section MC 8.
(b) Deﬁned in this Act: entitlement period, family scheme MC 3 First requirement: person’s age The ﬁrst requirement is that the person referred to in section MC 2 is 16 or older.

Compare: 2004 No 35 ss KD 2AA(4), KD 3(1), OB 1 “qualifying person” (a)(i) MC 4 Second requirement: principal care The second requirement is that the person referred to in sec- tion MC 2 is the principal caregiver for 1 or more dependent children.
Deﬁned in this Act: dependent child, principal caregiver Compare: 2004 No 35 ss KD 2AA(4), KD 3(1), OB 1 “qualifying person” (a)(ii) MC 5 Third requirement: residence (1) Third requirement The third requirement is that either the person referred to in section MC 2 or the child referred to in section MC 4 meets 2249 Part M s MC 5 Income Tax Act 2007 Reprinted as at 2 September 2013 the residence requirements of subsections (2) and (3), as ap- plicable.
When person meets residence requirements The person meets the residence requirements of subsection (1) if the person— (a) has been— (i) (ii) both a New Zealand resident and present in New Zealand for a continuous period of 12 months at any time; and resident in New Zealand under section YD 1 (Residence of natural persons) on the days for which a tax credit arises under section MD 1 (Abating WFF tax credit) or ME 1 (Minimum family tax credit); and (b) is not a transitional resident, and has not made an elec- tion under section HR 8(4) (Transitional residents), and is not the spouse, civil union partner, or de facto partner of a transitional resident.
When child meets residence requirements The child meets the residence requirements of subsection (1) if the child is both a New Zealand resident and present in New Zealand for the entitlement period.
Deﬁned in this Act: child, civil union partner, de facto partner, entitlement period, New Zealand, New Zealand resident, spouse, tax credit, transitional resi- dent Compare: 2004 No 35 ss KD 3(1), OB 1 “qualifying person” (a)(iii) Section MC 5(1): substituted (with effect on 1 April 2008), on 6 October 2009, by section 354(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section MC 5(2)(a): replaced (with effect on 1 April 2008), on 2 November 2012, by section 124 of the Taxation (Annual Rates, Returns Filing, and Re- medial Matters) Act 2012 (2012 No 88).

Section MC 5(3): amended (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 108(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section MC 5 list of deﬁned terms resident: repealed (with effect on 1 April 2008), on 29 August 2011, by section 108(3) of the Taxation (Tax Administra- tion and Remedial Matters) Act 2011 (2011 No 63).
(2) (3) 2250 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MC 6 MC 6 When person does not qualify (b) Despite sections MC 3 to MC 5, a person does not qualify for— (a) an abating WFF tax credit if, during the relationship period, they receive a parent’s allowance under section 32(2) of the War Pensions Act 1954: an in-work tax credit, parental tax credit, or minimum family tax credit if, during the relationship period, they receive— (i) (ii) (iii) an income-tested beneﬁt; or [Repealed] a parent’s allowance.
Deﬁned in this Act: abating WFF tax credit, income-tested beneﬁt, in-work tax credit, minimum family tax credit, parental tax credit, relationship period, veteran’s pension Compare: 2004 No 35 s KD 3(1), “qualifying person” Section MC 6(a): amended, on 1 April 2008, by section 460(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MC 6(b): amended, on 1 April 2008, by section 460(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MC 6(b)(ii): repealed (with effect on 1 April 2008), on 6 October 2009, by section 355(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section MC 6 list of deﬁned terms abating WFF tax credit: inserted, on 1 April 2008, by section 460(3)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MC 6 list of deﬁned terms family assistance credit: repealed, on 1 April 2008, by section 460(3)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MC 6 list of deﬁned terms family tax credit: repealed, on 1 April 2008, by section 460(3)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MC 6 list of deﬁned terms in-work tax credit: inserted, on 1 April 2008, by section 460(3)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MC 6 list of deﬁned terms minimum family tax credit: inserted, on 1 April 2008, by section 460(3)(a) of the Taxation (Business Taxation and Re- medial Matters) Act 2007 (2007 No 109).
Section MC 6 list of deﬁned terms parental tax credit: inserted, on 1 April 2008, by section 460(3)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MC 6 compare note: amended (with effect on 1 April 2008), on 6 Oc- tober 2009, by section 355(2) of the Taxation (International Taxation, Life In- surance, and Remedial Matters) Act 2009 (2009 No 34).
2251 Part M s MC 7 Income Tax Act 2007 Reprinted as at 2 September 2013 MC 7 When spouse or partner entitled under family scheme (1) (2) When this section applies This section applies when a person has a spouse, civil union partner, or de facto partner throughout an entitlement period, and during the period— (a) the person meets the criteria in sections MC 3 to MC 5 in relation to 1 or more dependent children; and the spouse or partner meets the criteria in sections MC 3 to MC 5 in relation to 1 or more dependent children; and the dependent child, or at least 1 of the dependent chil- dren, referred to in paragraph (b) is not a dependent child referred to in paragraph (a).
(b) (c) Single person In the circumstances described in subsection (1),— (a) this section applies as if— (i) (ii) the person or their spouse or partner meets the qualifying criteria in relation to all those chil- dren; and the other person does not meet the qualifying cri- teria in relation to any of the children; and for all WFF tax credits other than the in-work tax credit, the Commissioner must determine which of the persons referred to in paragraph (a) meets the qualifying criteria.
Deﬁned in this Act: civil union partner, Commissioner, de facto partner, de- pendent child, entitlement period, spouse Compare: 2004 No 35 s KD 3A(2)–(4) (b) Section MC 7(2)(b): amended, on 1 April 2008, by section 461 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
MC 8 Continuing requirements Requirements for entitlement period To receive entitlements and tax credits under the family scheme, a person who meets the qualifying criteria set out in sections MC 3 to MC 7 must also meet the following requirements throughout the entitlement period: (a) the person meets the qualifying criteria on each day of the period; and (1) 2252 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MC 8 (2) (b) (c) (d) (e) (f) another person does not on any day start or stop being a spouse, civil union partner, or de facto partner of the person; and the person does not start or stop being the principal care- giver of a dependent child other than on the ﬁrst or, as applicable, the last day; and a child for whom the person is the principal caregiver does not stop being a dependent child other than on the ﬁrst or, as applicable, the last day; and the composition of a WFF tax credit does not change, other than on the ﬁrst, or as applicable, the last day; and the person does not start or stop being a person receiving protected family tax credit, other than on the ﬁrst, or as applicable, the last day.
Relationship with section MD 6(2) Section MD 6(2) (Second requirement: principal care) over- rides this section in relation to the in-work tax credit.
Deﬁned in this Act: child, civil union partner, de facto partner, dependent child, entitlement period, family scheme, in-work tax credit, principal caregiver, pro- tected family tax credit, spouse, tax credit, WFF tax credit Compare: 2004 No 35 s OB 1 “eligible period” Section MC 8(1) heading: inserted (with effect on 1 April 2008), on 6 October 2009, by section 356(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section MC 8(e): amended, on 1 April 2008, by section 462(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MC 8(f): amended, on 1 April 2008, by section 462(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MC 8(2) heading: added (with effect on 1 April 2008), on 6 October 2009, by section 356(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section MC 8(2): added (with effect on 1 April 2008), on 6 October 2009, by section 356(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section MC 8 list of deﬁned terms family assistance credit: repealed, on 1 April 2008, by section 462(3)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MC 8 list of deﬁned terms in-work tax credit: inserted (with effect on 1 April 2008), on 6 October 2009, by section 356(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

2253 Part M s MC 9 Income Tax Act 2007 Reprinted as at 2 September 2013 Section MC 8 list of deﬁned terms protected family support: repealed, on 1 April 2008, by section 462(3)(b) of the Taxation (Business Taxation and Re- medial Matters) Act 2007 (2007 No 109).
Section MC 8 list of deﬁned terms protected family tax credit: inserted, on 1 April 2008, by section 462(3)(a) of the Taxation (Business Taxation and Re- medial Matters) Act 2007 (2007 No 109).

Section MC 8 list of deﬁned terms WFF tax credit: inserted, on 1 April 2008, by section 462(3)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
MC 9 Credits for person aged 18 For person aged 18 (1) A person is entitled to a tax credit under sections MD 1 (Abat- ing WFF tax credit) and ME 1 (Minimum family tax credit) for a person aged 18 who— (a) (b) is not ﬁnancially independent; and is attending school or a tertiary educational establish- ment.

Determining period The Commissioner must determine the period for which a per- son is entitled to an abating WFF tax credit or a minimum fam- ily tax credit for a person who is 18 years of age.
When period expires The period determined by the Commissioner ends on or be- fore the ﬁrst day ﬁxed by the Commissioner for payments of instalments of tax credits under section 80KI of the Tax Ad- ministration Act 1994 in the calendar year following that in which the person turns 18 years of age.
Deﬁned in this Act: abating WFF tax credit, Commissioner, family tax credit, ﬁnancially independent, minimum family tax credit, pay, tax credit, year Compare: 2004 No 35 ss KD 2AA(7)–(10), KD 3A(5)–(9) Section MC 9(1): amended, on 1 April 2008, by section 463(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MC 9(2): amended, on 1 April 2008, by section 463(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MC 9 list of deﬁned terms abating WFF tax credit: inserted, on 1 April 2008, by section 463(3)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MC 9 list of deﬁned terms family assistance credit: repealed, on 1 April 2008, by section 463(3)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
(2) (3) 2254 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MC 10 Section MC 9 list of deﬁned terms minimum family tax credit: inserted, on 1 April 2008, by section 463(3)(a) of the Taxation (Business Taxation and Re- medial Matters) Act 2007 (2007 No 109).
MC 10 Principal caregiver General meaning (1) A principal caregiver, for a dependent child,— (a) means the person, whether or not a parent of the child, who the Commissioner considers has the primary re- sponsibility for the day-to-day care for the child, other than on a temporary basis: does not include— (i) (ii) (b) a body of persons, incorporated or otherwise: the spouse, civil union partner, or de facto part- ner of a person eligible to be a transitional resi- dent who has not made an election under section HR 8(4) (Transitional residents): a person who is the proprietor of, or employed in, a residence established under the Children, Young Persons, and Their Families Act 1989, or a residential disability care institution as deﬁned in section 58(4) of the Health and Disability Ser- vices (Safety) Act 2001, or another institution in which a child is cared for.
(iii) (2) Meaning for abating WFF tax credit, family tax credit, child tax credit For the purposes of sections MD 3 and MZ 1 (which relate to family tax credit and the child tax credit), a person is a prin- cipal caregiver of a dependent child if the person— (a) lives apart from another person who qualiﬁes under sec- tion MC 2 in relation to the dependent child; and has the dependent child in their exclusive care for periods totalling at least one-third of— (i) (ii) (iii) a 4-month period: the tax year: the entitlement period, in the case of the parental tax credit.
(b) 2255 Part M s MC 10 Income Tax Act 2007 Reprinted as at 2 September 2013 (3) (4) (5) Meaning for in-work tax credit For the purposes of section MD 6 (Second requirement: prin- cipal care), a person is a principal caregiver of a dependent child for an entitlement period if the person— (a) lives apart from another person who qualiﬁes under sec- tion MC 2 in relation to the dependent child; and has the dependent child in their exclusive care for periods, whether or not they coincide with the entitle- ment period, totalling at least one-third of a 4-month period or the tax year.
(b) Entitlement to in-work tax credit If subsection (3) applies, section MD 10(3) (Calculation of in-work tax credit) is to be read as applying to the periods during which the principal caregiver has exclusive care of the dependent child.
Meaning for parental tax credit For the purposes of section MD 11 (Entitlement to parental tax credit), a person is a principal caregiver of a dependent child if the person— (a) lives apart from another person who qualiﬁes under sec- tion MC 2 in relation to the dependent child; and has the dependent child in their exclusive care for periods totalling at least one-third of the parental en- titlement period.
(b) Principal caregiver to notify Commissioner of change (6) A person who is a principal caregiver under this section must notify the Commissioner immediately of a change in the ar- rangements for the care of the child that has, or will have, the effect of ending the person’s status as a principal caregiver.
Deﬁned in this Act: abating WFF tax credit, child tax credit, civil union partner, Commissioner, de facto partner, dependent child, entitlement period, family tax credit, in-work tax credit, notify, parental entitlement period, parental tax credit, principal caregiver, spouse, tax year, transitional resident Compare: 2004 No 35 ss KD 2AA(2)–(3), OB 1 “principal caregiver” Section MC 10(2) heading: amended, on 1 April 2008, by section 464(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MC 10(2): amended, on 1 April 2008, by section 464(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MC 10(3) heading: amended, on 1 April 2008, by section 464(3) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
2256 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MC 11 Section MC 10(4) heading: amended, on 1 April 2008, by section 464(4) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MC 10(4): amended (with effect on 1 April 2008), on 6 October 2009, by section 357(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section MC 10(4): amended, on 1 April 2008, by section 464(5) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MC 10 list of deﬁned terms abating WFF tax credit: inserted, on 1 April 2008, by section 464(6)(a) of the Taxation (Business Taxation and Re- medial Matters) Act 2007 (2007 No 109).
Section MC 10 list of deﬁned terms family assistance credit: repealed, on 1 April 2008, by section 464(6)(b) of the Taxation (Business Taxation and Re- medial Matters) Act 2007 (2007 No 109).

Section MC 10 list of deﬁned terms family support: repealed, on 1 April 2008, by section 464(6)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MC 10 list of deﬁned terms family tax credit: inserted, on 1 April 2008, by section 464(6)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MC 10 list of deﬁned terms in-work payment: repealed, on 1 April 2008, by section 464(6)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MC 10 list of deﬁned terms in-work tax credit: inserted, on 1 April 2008, by section 464(6)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
MC 11 Relationship periods and entitlement periods (1) Meaning In subparts MB to MF and MZ,— (a) (b) a relationship period means an unbroken period in a tax year, whether the period consists of some or all of the days in the tax year: an entitlement period, for a person, means a period that forms all or part of a relationship period during which the person meets the continuing requirements set out in section MC 8.
(2) When day included in more than 1 period If a day is part of more than 1 entitlement period or 1 rela- tionship period, the day is treated as part only of the particular 2257 Income Tax Act 2007 Reprinted as at 2 September 2013 period that the Commissioner determines is fair in the circum- stances.
Deﬁned in this Act: Commissioner, entitlement period, relationship period, tax year Compare: 2004 No 35 ss KD 2AA(1), (11), OB 1 “eligible period”, “speciﬁed period” Subpart MD—Abating WFF tax credits Subpart MD heading: substituted, on 1 April 2008, by section 465 of the Taxa- tion (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Contents Calculating amount of credit MD 1 Abating WFF tax credit MD 2 Calculating net contributions to credits MD 3 Calculation of family tax credit Family tax credit In-work tax credit MD 4 Entitlement to in-work tax credit MD 5 First requirement: person’s age MD 6 Second requirement: principal care MD 7 Third requirement: residence MD 8 Fourth requirement: person not receiving beneﬁt MD 9 Fifth requirement: full-time earner MD 10 Calculation of in-work tax credit Parental tax credit MD 11 Entitlement to parental tax credit MD 12 Calculation of parental tax credit Credit abatement MD 13 Calculation of family credit abatement MD 14 Person receiving protected family tax credit MD 15 Family scheme income for purposes of section MD 14 MD 16 Calculation of parental tax credit abatement Page 2259 2261 2262 2266 2266 2267 2267 2268 2269 2272 2274 2276 2277 2279 2279 2280 2258 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MD 1 Calculating amount of credit MD 1 Abating WFF tax credit Tax credit (1) A person who qualiﬁes under section MC 2 (Who qualiﬁes for entitlements under family scheme?)
is entitled to a tax credit (the abating WFF tax credit) equal to an amount calculated using the formula in subsection (2).

Formula The formula is— (2) family tax credit + (in-work tax credit or child tax credit) + parental tax credit – credit abatement.
(3) Deﬁnition of items in formula In the formula,— (a) (b) (c) (d) family tax credit is the family tax credit for the en- titlement period calculated using the formula in section MD 3: in-work tax credit or child tax credit is 1 of the fol- lowing, as applicable: (i) the in-work tax credit for the entitlement period calculated using the formula in section MD 10, if the person is entitled to the in-work tax credit for the entitlement period: the amount of child tax credit for the entitlement period calculated using the formula in section MZ 2 (Calculation of child tax credit), if the per- son is not entitled to the in-work tax credit for the entitlement period, and is entitled to the child tax credit for the entitlement period under section MZ 1 (Entitlement to child tax credit): (ii) parental tax credit is the amount of parental tax credit for the entitlement period calculated using the formula in section MD 12: credit abatement is the total amount, for the entitle- ment period, of— (i) a calculated us- abatement ing the formula in section MD 13(2) other than an amount used as described in section MD 16(3)(b); and family credit 2259 Part M s MD 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (ii) a parental tax credit abatement calculated using the formula in section MD 16(2).
Extra instalment This section is overridden by section 80KW of the Tax Admin- istration Act 1994.

Deﬁned in this Act: abating WFF tax credit, amount, child tax credit, entitle- ment period, family credit abatement, family tax credit, in-work tax credit, parental tax credit, tax credit Compare: 2004 No 35 s KD 2(1), (2) Section MD 1 heading: substituted, on 1 April 2008, by section 466(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MD 1(1): amended, on 1 April 2008, by section 466(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MD 1(2) formula: amended, on 1 April 2008, by section 466(3)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MD 1(2) formula: amended, on 1 April 2008, by section 466(3)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MD 1(2) formula: amended, on 1 April 2008, by section 466(3)(c) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MD 1(3)(a): amended, on 1 April 2008, by section 466(4) of the Taxa- tion (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MD 1(3)(b): amended, on 1 April 2008, by section 466(5) of the Taxa- tion (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MD 1(3)(b)(i): amended, on 1 April 2008, by section 466(5) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MD 1(3)(b)(ii): amended, on 1 April 2008, by section 466(5) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MD 1(3)(d): substituted, on 1 April 2008, by section 466(6) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MD 1 list of deﬁned terms abating WFF tax credit: inserted, on 1 April 2008, by section 466(7)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MD 1 list of deﬁned terms family support: repealed, on 1 April 2008, by section 466(7)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MD 1 list of deﬁned terms family tax credit: inserted, on 1 April 2008, by section 466(7)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MD 1 list of deﬁned terms in-work payment: repealed, on 1 April 2008, by section 466(7)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
(4) 2260 (1) (2) (3) Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MD 2 Section MD 1 list of deﬁned terms in-work tax credit: inserted, on 1 April 2008, by section 466(7)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
MD 2 Calculating net contributions to credits When this section applies This section applies when the Commissioner calculates the amounts making up the family tax credit, the in-work tax credit, the child tax credit, and the parental tax credit that relate to a period under this subpart.
Calculating net contributions The Commissioner must— (a) (b) (c) treat the family tax credit, the in-work tax credit, the child tax credit, and the parental tax credit as tax credits corresponding to the period; and treat as a debit the amount of family credit abatement corresponding to the period; and apply the amount of the family credit abatement corres- ponding to the period,— (i) ﬁrst, to reduce the amount of the family tax credit corresponding to the period; and second, to reduce the amount of the in-work tax credit or, as applicable, the child tax credit cor- responding to the period; and third, to reduce the amount of the parental tax credit corresponding to the period.
(ii) (iii) Credit abatements Section MD 16 overrides this section in relation to the amount of the family credit abatement and the parental tax credit abate- ment.

Deﬁned in this Act: amount, child tax credit, Commissioner, family credit abatement, family tax credit, in-work tax credit, parental tax credit, tax credit Compare: 2004 No 35 s KD 2A Section MD 2(1): amended, on 1 April 2008, by section 467(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MD 2(2)(a): amended, on 1 April 2008, by section 467(2) of the Taxa- tion (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MD 2(2)(c)(i): amended, on 1 April 2008, by section 467(3) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
2261 Part M s MD 3 Income Tax Act 2007 Reprinted as at 2 September 2013 Section MD 2(2)(c)(ii): amended, on 1 April 2008, by section 467(4) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MD 2(3) heading: added, on 1 April 2008, by section 467(5) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MD 2(3): added, on 1 April 2008, by section 467(5) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MD 2 list of deﬁned terms family support: repealed, on 1 April 2008, by section 467(6)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MD 2 list of deﬁned terms family tax credit: inserted, on 1 April 2008, by section 467(6)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MD 2 list of deﬁned terms in-work payment: repealed, on 1 April 2008, by section 467(6)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MD 2 list of deﬁned terms in-work tax credit: inserted, on 1 April 2008, by section 467(6)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Family tax credit Heading: substituted, on 1 April 2008, by section 468(1) of the Taxation (Busi- ness Taxation and Remedial Matters) Act 2007 (2007 No 109).

MD 3 Calculation of family tax credit Entitlement (1) A person who qualiﬁes under section MC 2 (Who qualiﬁes for entitlements under family scheme?)

is entitled to an amount of family tax credit calculated using the formula in subsection (2).

Formula The formula is— (2) prescribed amount × days 365.
Deﬁnition of items in formula The items in the formula are deﬁned in subsections (4) and (5).
Prescribed amount Prescribed amount is the sum of the following amounts: (a) for the eldest dependent child for whom the person is a principal caregiver during the entitlement period, 1 of the following, as applicable: (3) (4) 2262 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MD 3 (i) (ii) (iii) $4,822, if the child is younger than 16: $5,303, if the child is 16 or older: a weighted average of the amounts in subpara- graphs (i) and (ii) that reﬂects the proportion of the period for which those subparagraphs apply to the child, if the child turns 16 during the en- titlement period; and (b) for each dependent child for whom the person is a prin- cipal caregiver during the entitlement period, other than the eldest dependent child, 1 of the following, as applic- able: (i) (ii) (iii) (iv) $3,351, if the child is younger than 13: $3,822, if the child is 13, 14, or 15: $4,745, if the child is 16 or older: a weighted average of the amounts in subpara- graphs (i) and (ii) that reﬂects the proportion of the period for which those subparagraphs apply to the child, if the child turns 13 during the en- titlement period: a weighted average of the amounts in subpara- graphs (ii) and (iii) that reﬂects the proportion of the entitlement period for which those subpara- graphs apply to the child, if the child turns 16 during the entitlement period.
(v) Days (5) Days is the number of days in the entitlement period.

(6) Order in Council increasing amount In subsection (4)(a)(i) and (ii), and (b)(i) to (iii), the amount referred to may be increased as prescribed by the Governor- General by Order in Council under section MF 7 (Orders in Council).
When another person cares for dependent child (7) A family tax credit must be reduced in proportion to the time in the entitlement period that a dependent child spends in the exclusive care of another person who qualiﬁes under section MC 2.
Deﬁned in this Act: amount, child, dependent child, entitlement period, family tax credit, principal caregiver Compare: 2004 No 35 ss KD 2(3), KD 2AA(3) 2263 Part M s MD 3 Income Tax Act 2007 Reprinted as at 2 September 2013 Section MD 3 heading: amended, on 1 April 2008, by section 468(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MD 3(1): amended, on 1 April 2008, by section 468(3) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MD 3(4)(a)(i): amended, on 1 April 2012 (applying in respect of the 2012–13 tax year and later tax years), by clause 3(1) of the Income Tax (Family Tax Credit) Order 2011 (SR 2011/403).
Section MD 3(4)(a)(i): amended, in 1 April 2011 (applying for the 2011–12 income year and later income years), by section 61(2)(a) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section MD 3(4)(a)(i): amended (with effect on 1 April 2010), on 28 May 2010 (applying for the 2010–11 income year and later income years), by section 61(1)(a) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Section MD 3(4)(a)(i): amended, on 1 April 2009, by section 5(2)(a) of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).

Section MD 3(4)(a)(i): amended (with effect from 1 April 2008), on 29 May 2008, by section 5(1)(a) of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).
Section MD 3(4)(a)(ii): amended, on 1 April 2011 (applying for the 2011–12 in- come year and later income years), by section 61(2)(b) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section MD 3(4)(a)(ii): amended (with effect on 1 April 2010), on 28 May 2010 (applying for the 2010–11 income year and later income years), by section 61(1)(b) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Section MD 3(4)(a)(ii): amended, on 1 April 2009, by section 5(2)(b) of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).

Section MD 3(4)(a)(ii): amended (with effect from 1 April 2008), on 29 May 2008, by section 5(1)(b) of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).
Section MD 3(4)(b)(i): amended, on 1 April 2012 (applying in respect of the 2012–13 tax year and later tax years), by clause 3(2) of the Income Tax (Family Tax Credit) Order 2011 (SR 2011/403).

Section MD 3(4)(b)(i): amended, in 1 April 2011 (applying for the 2011–12 income year and later income years), by section 61(2)(c) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Section MD 3(4)(b)(i): amended (with effect on 1 April 2010), on 28 May 2010 (applying for the 2010–11 income year and later income years), by section 61(1)(c) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section MD 3(4)(b)(i): amended, on 1 April 2009, by section 5(2)(c) of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).
Section MD 3(4)(b)(i): amended (with effect from 1 April 2008), on 29 May 2008, by section 5(1)(c) of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).

2264 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MD 3 Section MD 3(4)(b)(ii): amended, on 1 April 2012 (applying in respect of the 2012–13 tax year and later tax years), by clause 3(3) of the Income Tax (Family Tax Credit) Order 2011 (SR 2011/403).
Section MD 3(4)(b)(ii): amended, in 1 April 2011 (applying for the 2011–12 in- come year and later income years), by section 61(2)(d) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section MD 3(4)(b)(ii): amended (with effect on 1 April 2010), on 28 May 2010 (applying for the 2010–11 income year and later income years), by section 61(1)(d) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Section MD 3(4)(b)(ii): amended, on 1 April 2009, by section 5(2)(d) of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).

Section MD 3(4)(b)(ii): amended (with effect from 1 April 2008), on 29 May 2008, by section 5(1)(d) of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).
Section MD 3(4)(b)(iii): amended, on 1 April 2011 (applying for the 2011–12 income year and later income years), by section 61(2)(e) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section MD 3(4)(b)(iii): amended (with effect on 1 April 2010), on 28 May 2010 (applying for the 2010–11 income year and later income years), by section 61(1)(e) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Section MD 3(4)(b)(iii): amended, on 1 April 2009, by section 5(2)(e) of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).

Section MD 3(4)(b)(iii): amended (with effect from 1 April 2008), on 29 May 2008, by section 5(1)(e) of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).

Section MD 3(7): amended, on 1 April 2008, by section 468(4) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MC 3 list of deﬁned terms family support: repealed, on 1 April 2008, by section 468(5)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MC 3 list of deﬁned terms family tax credit: inserted, on 1 April 2008, by section 468(5)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
In-work tax credit Heading: substituted, on 1 April 2008, by section 469(1) of the Taxation (Busi- ness Taxation and Remedial Matters) Act 2007 (2007 No 109).

2265 Part M s MD 4 Income Tax Act 2007 Reprinted as at 2 September 2013 MD 4 Entitlement to in-work tax credit Requirements (1) A person is entitled to an in-work tax credit for a child if, for an entitlement period, the person meets the 5 requirements of sections MD 5 to MD 9.
(2) When another person entitled to in-work tax credit or child tax credit If 2 persons are entitled to an in-work tax credit or a child tax credit for a child for an entitlement period, the entitlement of each is not affected by the entitlement of the other person.
Deﬁned in this Act: child, entitlement period, in-work tax credit Compare: 2004 No 35 s KD 2AAA(1), (3A) Section MD 4 heading: amended, on 1 April 2008, by section 469(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MD 4(1): amended, on 1 April 2008, by section 469(3) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MD 4(2) heading: amended, on 1 April 2008, by section 469(4) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MD 4(2): amended, on 1 April 2008, by section 469(5) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MD 4 list of deﬁned terms in-work payment: repealed, on 1 April 2008, by section 469(6)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MD 4 list of deﬁned terms in-work tax credit: inserted, on 1 April 2008, by section 469(6)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

MD 5 First requirement: person’s age The ﬁrst requirement for an entitlement to an in-work tax credit is that the person referred to in section MD 4 is 16 or older.
Deﬁned in this Act: in-work tax credit Compare: 2004 No 35 s KD 2AAA(1)(a) Section MD 5: amended, on 1 April 2008, by section 470(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MD 5 list of deﬁned terms in-work payment: repealed, on 1 April 2008, by section 470(2)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MD 5 list of deﬁned terms in-work tax credit: inserted, on 1 April 2008, by section 470(2)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
2266 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MD 7 MD 6 Second requirement: principal care (1) When child ﬁnancially dependent The second requirement for an entitlement to an in-work tax credit is that the person referred to in section MD 4 is the principal caregiver for a child who is ﬁnancially dependent on them.
Inclusions (2) A child for whom payments are made under section 363 of the Children, Young Persons, and Their Families Act 1989, or a child for whom a beneﬁt is paid under section 28 or 29 of the Social Security Act 1964, is treated as ﬁnancially dependent on the person.

(3) Relationship with section MC 8 Subsection (2) overrides section MC 8 (Continuing require- ments).
Deﬁned in this Act: child, in-work tax credit, principal caregiver Compare: 2004 No 35 s KD 2AAA(1)(b) Section MD 6(1): amended, on 1 April 2008, by section 471(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MD 6(3) heading: added (with effect on 1 April 2008), on 6 October 2009, by section 358(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section MD 6(3): added (with effect on 1 April 2008), on 6 October 2009, by section 358(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section MD 6 list of deﬁned terms in-work payment: repealed, on 1 April 2008, by section 471(2)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MD 6 list of deﬁned terms in-work tax credit: inserted, on 1 April 2008, by section 471(2)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

MD 7 Third requirement: residence (1) Third requirement The third requirement for an entitlement to an in-work tax credit is that the person or child referred to in section MD 4 meet the residence requirements of subsections (2) and (3), as applicable.
2267 Part M s MD 8 Income Tax Act 2007 Reprinted as at 2 September 2013 (2) (3) When person meets residence requirements The person meets the residence requirements of subsection (1) if the person— (a) has been— (i) (ii) both a New Zealand resident and present in New Zealand for a continuous period of 12 months at any time; and resident in New Zealand under section YD 1 (Residence of natural persons) on the days for which a tax credit arises under section MD 1; and is neither a transitional resident, nor the spouse, civil union partner, or de facto partner of a transitional resi- dent.
(b) When child meets residence requirements The child meets the residence requirements of subsection (1) if the child is both resident and present in New Zealand for the entitlement period.
Deﬁned in this Act: child, civil union partner, de facto partner, entitlement period, in-work tax credit, New Zealand, New Zealand resident, spouse, tax credit, transitional resident Compare: 2004 No 35 s KD 2AAA(1)(c), (3), (4) Section MD 7(1): substituted (with effect on 1 April 2008), on 6 October 2009, by section 359(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section MD 7(1): amended, on 1 April 2008, by section 472(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MD 7(2)(a): replaced (with effect on 1 April 2008), on 2 November 2012, by section 125(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section MD 7 list of deﬁned terms in-work payment: repealed, on 1 April 2008, by section 472(2)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MD 7 list of deﬁned terms in-work tax credit: inserted, on 1 April 2008, by section 472(2)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MD 7 list of deﬁned terms resident: repealed (with effect on 1 April 2008), on 2 November 2012, by section 125(2) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
MD 8 Fourth requirement: person not receiving beneﬁt The fourth requirement for an entitlement to an in-work tax credit is that the person referred to in section MD 4 and their 2268 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MD 9 spouse, civil union partner, or de facto partner, do not re- ceive— (a) (b) an income-tested beneﬁt; or a basic grant and an independent circumstances grant made under regulations made under section 193 of the Education Act 1964, section 303 of the Education Act 1989, or an enactment substituted for those sections; or a parent’s allowance under section 32(2) of the War Pen- sions Act 1954.
(c) Deﬁned in this Act: civil union partner, de facto partner, income-tested beneﬁt, in-work tax credit, spouse Compare: 2004 No 35 s KD 2AAA(1)(e) Section MD 8: amended, on 1 April 2008, by section 473(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MD 8 list of deﬁned terms in-work payment: repealed, on 1 April 2008, by section 473(2)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MD 8 list of deﬁned terms in-work tax credit: inserted, on 1 April 2008, by section 473(2)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

MD 9 Fifth requirement: full-time earner (1) Normally full-time earner The ﬁfth requirement for an entitlement to an in-work tax credit is that either or both the person referred to in section MD 4 and their spouse, civil union partner, or de facto partner, is normally a full-time earner (the earner).
Also, the earner must— (a) derive income as set out in subsections (2) and (3) as a full-time earner or derive an amount of compensation described in subsection (4); or if they are a full-time earner in relation to a close com- pany, be a major shareholder in the close company, and the company must derive gross income in the income year.
(b) (2) Income The income referred to in subsection (1)(a) is— a PAYE income payment that is— (a) 2269 Part M s MD 9 Income Tax Act 2007 Reprinted as at 2 September 2013 (i) (ii) not excluded under subsection (3), although it does not matter if the person also derives income of the type described in subsection (3); and not a beneﬁt or allowance described in section MD 8; or (b) (c) (d) income to which section RD 3(2) to (4) (PAYE income payments) applies; or income from a business carried on for proﬁt; or an amount paid or beneﬁt provided— (i) by a person (the claimant), who receives a per- sonal service rehabilitation payment from which an amount of tax has been withheld at the rate speciﬁed in schedule 4, part I (Rates of tax for schedular payments) or under section RD 18 (Schedular payments without notiﬁcation); and to another person for providing to the claimant a key aspect of social rehabilitation referred to in paragraph (c) of the deﬁnition of personal service rehabilitation payment in section YA 1 (Deﬁnitions).
(ii) Exclusions from income The following PAYE income payments are excluded from in- come under subsection (2): (a) a payment referred to in paragraphs (a) to (c) of the deﬁnition of accident compensation earnings-related payment: referred to in section a PAYE income payment RD 5(6)(a) (Salary or wages), other than a parental leave payment referred to in section CF 1 (Beneﬁts, pensions, compensation, and government grants): a PAYE income payment RD 5(6)(bb), (bc), or (bd): a schedular payment that is a contract payment for a contract activity or service of a non-resident contractor: an amount paid as a result of incapacity, suffered be- fore 1 January 2006, due to personal injury by accident within the meaning of section 26 of the Accident Com- pensation Act 2001. referred to in section (b) (c) (d) (e) (3) 2270 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MD 9 Compensation payments for personal injury (4) A person meets the ﬁfth requirement if— (a) (b) (c) (d) they receive a child tax credit for an entitlement period ending on 31 March 2006; and on or after 1 January 2006, they or their spouse, civil union partner, or de facto partner suffers an incapacity due to personal injury by accident within the meaning of section 26 of the Accident Compensation Act 2001; and weekly compensation within the meaning of section 6 of the Accident Compensation Act 2001, is or will be paid for the incapacity; and the person or their spouse, civil union partner, or de facto partner would have met the ﬁfth requirement in deriving income as a full-time earner under subsection (1)(a) and been eligible for the tax credit calculated us- ing the formula in section MD 10 at the time of the in- capacity had this section come into force before the date of the incapacity.
Absence from work due to birth of child (5) Despite subsection (1), a person also meets the ﬁfth require- ment if they are normally a full-time earner as described in subsection (1)(a) but, in a 1-week period, they do not work, or work less than, the number of hours required to be a full-time earner because of the birth of a child.

However, this subsection applies only if the person is entitled to receive the parental tax credit for the child.
Deﬁned in this Act: amount, business, child, child tax credit, civil union partner, close company, contract activity or service, contract payment, de facto partner, entitlement period, full-time earner, income, income from employment, income year, in-work tax credit, major shareholder, non-resident contractor, parental tax credit, pay, PAYE income payment, schedular payment, spouse, tax credit Compare: 2004 No 35 s KD 2AAA(1)(d), (5)–(8) Section MD 9(1) heading: replaced (with effect on 1 April 2011), on 2 Novem- ber 2012, by section 126(2) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section MD 9(1): replaced (with effect on 1 April 2011), on 2 November 2012, by section 126(2) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section MD 9(1): amended (with effect on 1 April 2008), on 2 November 2012, by section 126(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
2271 Part M s MD 10 Income Tax Act 2007 Reprinted as at 2 September 2013 Section MD 9(2): substituted (with effect on 1 April 2008), on 6 October 2009, by section 360(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section MD 9(2)(c): amended (with effect on 1 July 2008), on 6 October 2009, by section 360(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section MD 9(2)(d): added (with effect on 1 July 2008), on 6 October 2009, by section 360(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section MD 9(3): substituted (with effect on 1 April 2008), on 6 October 2009, by section 360(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section MD 9(3)(c): amended (with effect on 5 January 2010), on 29 August 2011, by section 109 of the Taxation (Tax Administration and Remedial Mat- ters) Act 2011 (2011 No 63).

Section MD 9(3)(e): amended, on 21 December 2010, by section 189 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section MD 9(4)(b): amended, on 21 December 2010, by section 189 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section MD 9(4)(c): amended, on 21 December 2010, by section 189 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section MD 9 list of deﬁned terms close company: inserted (with effect on 1 April 2011), on 2 November 2012, by section 126(3) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section MD 9 list of deﬁned terms income year: inserted (with effect on 1 April 2011), on 2 November 2012, by section 126(3) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section MD 9 list of deﬁned terms in-work payment: repealed, on 1 April 2008, by section 474(2)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MD 9 list of deﬁned terms in-work tax credit: inserted, on 1 April 2008, by section 474(2)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MD 9 list of deﬁned terms major shareholder: inserted (with effect on 1 April 2011), on 2 November 2012, by section 126(3) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
MD 10 Calculation of in-work tax credit Entitlement (1) A person who meets the requirements of section MD 4 is en- titled to an in-work tax credit calculated using the formula in subsection (2).

Formula The formula is— (2) 2272 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MD 10 (amount A + (amount B × (children 3))) × weekly periods 52.
(3) (4) Deﬁnition of items in formula In the formula,— (a) (b) (c) amount A is $3,120: amount B is $780: children is the greater of— (i) (ii) 3; and the number of children for whom the person is allowed the in-work tax credit: (d) weekly periods— (i) (ii) for 2 or more entitlement periods forming 1 con- tinuous period, is the number of whole periods of 1 week in the continuous period for which the person or their spouse, civil union partner, or de facto partner has, from the work activity, income to which section MD 9(2) refers or is a full-time earner described in section MD 9(1)(b): for an entitlement period to which subparagraph (i) does not apply, is the number of whole periods of 1 week in the entitlement period for which the person or their spouse, civil union partner, or de facto partner has, from the work activity, income to which section MD 9(2) refers or is a full-time earner described in section MD 9(1)(b).
Order in Council increasing amount In subsection (3)(a) and (b), the amount referred to may be increased as prescribed by the Governor-General by Order in Council under section MF 7 (Orders in Council).

Deﬁned in this Act: amount, child, civil union partner, de facto partner, entitle- ment period, in-work tax credit, spouse Compare: 2004 No 35 s KD 2AAA(2) Section MD 10 heading: amended, on 1 April 2008, by section 475(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MD 10(1): amended, on 1 April 2008, by section 475(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MD 10(3)(c)(ii): amended, on 1 April 2008, by section 475(3) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
2273 Part M s MD 11 Income Tax Act 2007 Reprinted as at 2 September 2013 Section MD 10(3)(d)(i): amended (with effect on 1 April 2011), on 2 November 2012, by section 127(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section MD 10(3)(d)(ii): amended (with effect on 1 April 2008), on 2 Novem- ber 2012, by section 127(2) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section MD 10(3)(d)(ii): amended (with effect on 1 April 2011), on 2 Novem- ber 2012, by section 127(3) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section MD 10(3)(d)(ii): amended (with effect on 1 April 2008), on 6 October 2009, by section 361(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section MD 10 list of deﬁned terms in-work payment: repealed, on 1 April 2008, by section 475(4)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MD 10 list of deﬁned terms in-work tax credit: inserted, on 1 April 2008, by section 475(4)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Parental tax credit MD 11 Entitlement to parental tax credit (1) When this section applies This section applies when— (a) (b) a person qualiﬁes under section MC 2 (Who qualiﬁes for entitlements under family scheme?)
in relation to a dependent child; and neither the person nor their spouse, civil union partner, or de facto partner receives— (i) a social assistance payment or has a suspended entitlement to an income-tested beneﬁt at any time during the ﬁrst 56 days after the date of the dependent child’s birth (the parental entitle- ment period); or a parental leave payment under Part 7A of the Parental Leave and Employment Protection Act 1987 at any time for the child.
(ii) (2) Entitlement The person is entitled to a parental tax credit for the parental entitlement period.
2274 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MD 11 (3) (4) (5) (6) If dependent child dies during parental entitlement period The person continues to be entitled to the parental tax credit if— (a) the dependent child dies during the parental entitlement period; and the person and their spouse, civil union partner, or de facto partner otherwise meet the requirements of sub- section (1).
(b) When another person cares for dependent child The parental tax credit must be reduced in proportion to the time in the parental entitlement period that a dependent child spends in the exclusive care of another person who qualiﬁes under section MC 2.
Relationship with section 2B of Parental Leave and Employment Protection Act 1987 Section 2B of the Parental Leave and Employment Protection Act 1987 applies for the purposes of subsection (1)(b) if a per- son— (a) gives birth to 2 or more children as a result of 1 preg- nancy; or assumes the care of 2 or more children with a view to adoption.
(b) Payment of parental tax credit The parental tax credit is paid to the person either— as a tax credit in an end-of-year assessment; or (a) in the 56 days after the date on which an application is (b) made if— (i) the person applies to receive the parental tax credit by instalment under section MF 1 (Appli- cation for payment of tax credit by instalment); and at any time during the period of 56 days, the per- son and their spouse, civil union partner, or de facto partner do not receive a social assistance (ii) 2275 Part M s MD 12 Income Tax Act 2007 Reprinted as at 2 September 2013 payment and do not have a suspended entitlement to an income-tested beneﬁt.
Deﬁned in this Act: assessment, civil union partner, de facto partner, depend- ent child, income-tested beneﬁt, parental entitlement period, parental tax credit, social assistance payment, spouse, tax credit Compare: 2004 No 35 ss KD 2AA(3), KD 2AB MD 12 Calculation of parental tax credit Entitlement (1) A person who meets the requirements of section MD 11 is entitled to a parental tax credit calculated using the formula in subsection (2).

Formula The formula is— (2) prescribed amount × days 56.
Deﬁnition of items in formula In the formula,— (a) (b) prescribed amount is $1,200 for each dependent child born on or after 1 October 1999: days is the number of days in the parental entitlement period, up to a maximum of 56 days, for which the per- son and their spouse, civil union partner, or de facto partner do not receive a social assistance payment and do not have a suspended entitlement to an income-tested beneﬁt.
Order in Council increasing amount In subsection (3)(a), the amount referred to may be increased as prescribed by the Governor-General by Order in Council under section MF 7 (Orders in Council).
Deﬁned in this Act: amount, civil union partner, de facto partner, dependent child, income-tested beneﬁt, parental entitlement period, parental tax credit, so- cial assistance payment, spouse Compare: 2004 No 35 s KD 2(5) Credit abatement Heading: substituted, on 1 April 2008, by section 476(1) of the Taxation (Busi- ness Taxation and Remedial Matters) Act 2007 (2007 No 109).
(3) (4) 2276 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MD 13 MD 13 Calculation of family credit abatement (1) When this section applies This section applies for the purposes of section MD 1 to deter- mine the amount of a person’s family credit abatement for an entitlement period.

Formula The formula is— (2) full-year abatement × days 365.
(3) Deﬁnition of items in formula In the formula,— (a) full-year abatement is,— (i) (ii) if the person has no spouse, civil union part- ner, or de facto partner during the entitlement period, and the person’s family scheme income for the relationship period containing the entitle- ment period is more than $36,350, 21.25 cents for each complete dollar of the excess; or if the person has a spouse, civil union partner, or de facto partner during the entitlement period, and the person’s family scheme income, the fam- ily scheme income of their spouse, civil union partner, or de facto partner, or the sum of those in- comes for the relationship period containing the entitlement period is more than $36,350, 21.25 cents for each complete dollar of the excess: days is the number of days in the entitlement period excluding the days of any calendar months in which the person receives protected family tax credit as described in section MD 14.
(b) (4) When 56-day period includes 31 March If a person who qualiﬁes under section MC 2 (Who qualiﬁes for entitlements under family scheme?)
receives fortnightly instalments of the parental tax credit in a 56-day period that includes 31 March, the formula is applied so that— (a) instalments of the parental tax credit received in the ﬁrst tax year are abated against the person’s family scheme 2277 Part M s MD 13 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) income, the family scheme income of their spouse, civil union partner, or de facto partner, or the sum of those incomes for that tax year; and instalments of the parental tax credit received in the second tax year are abated against the person’s fam- ily scheme income, the family scheme income of their spouse, civil union partner, or de facto partner, or the sum of those incomes for that tax year.
Order in Council increasing amount In subsection (3)(a), the amounts referred to may be increased as prescribed by the Governor-General by Order in Council under section MF 7 (Orders in Council).
Deﬁned in this Act: amount, civil union partner, de facto partner, entitlement period, family credit abatement, family scheme income, parental tax credit, pro- tected family tax credit, relationship period, spouse, tax year Compare: 2004 No 35 s KD 2(6), (7) Section MD 13(3)(a)(i): amended, on 1 April 2012, by section 5(1)(a) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).
Section MD 13(3)(a)(i): amended, on 1 April 2009, by section 6(2) of the Taxa- tion (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).

Section MD 13(3)(a)(i): amended (with effect from 1 April 2008), on 29 May 2008, by section 6(1) of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).

Section MD 13(3)(a)(ii): amended, on 1 April 2012, by section 5(1)(b) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).
Section MD 13(3)(a)(ii): amended, on 1 April 2009, by section 6(2) of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).

Section MD 13(3)(a)(ii): amended (with effect from 1 April 2008), on 29 May 2008, by section 6(1) of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).

Section MD 13(3)(b): amended, on 1 April 2008, by section 476(2) of the Tax- ation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MD 13 list of deﬁned terms protected family support: repealed, on 1 April 2008, by section 476(3)(b) of the Taxation (Business Taxation and Re- medial Matters) Act 2007 (2007 No 109).

inserted, Section MD 13 list of deﬁned terms protected family tax credit: on 1 April 2008, by section 476(3)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
(5) 2278 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MD 15 MD 14 Person receiving protected family tax credit (1) (2) Requirements For the purposes of section MD 13(3)(b), a person who re- ceives protected family tax credit for a calendar month in an entitlement period, is a person who, in the calendar month,— has no spouse, civil union partner, or de facto partner, (a) receives an income-tested beneﬁt, and derives family scheme income that is less than the amount set out in section MD 13(3)(a)(i): has a spouse, civil union partner, or de facto partner, receives an income-tested beneﬁt, and derives family scheme income that together with the family scheme income of their spouse is less in total than the amount set out in section MD 13(3)(a)(ii).
(b) Annualised equivalent Section MB 2 (Adjustment for period that is less or more than 1 year) applies to adjust the amount of family scheme income to provide an annualised equivalent.
Deﬁned in this Act: amount, civil union partner, de facto partner, entitlement period, family scheme income, income-tested beneﬁt, protected family tax credit, spouse Compare: 2004 No 35 s KD 2(6B) Section MD 14 heading: amended, on 1 April 2008, by section 477(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MD 14(1): amended, on 1 April 2008, by section 477(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MD 14 list of deﬁned terms protected family support: repealed, on 1 April 2008, by section 477(3)(b) of the Taxation (Business Taxation and Re- medial Matters) Act 2007 (2007 No 109).

Section MD 14 list of deﬁned terms protected family tax credit: inserted, on 1 April 2008, by section 477(3)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
MD 15 Family scheme income for purposes of section MD 14 For the purposes of section MD 14, in the calculation of family scheme income,— (a) section MB 1(1)(a) and (b) (Adjustments for calculation of family scheme income) does not apply; and any income from employment that is derived in the cal- endar month as a result of an extra pay period that occurs in that month is disregarded; and (b) 2279 Part M s MD 16 Income Tax Act 2007 Reprinted as at 2 September 2013 (c) for a person who derives, for part of an income year, income to which section RD 3(2) to (4) (PAYE income payments) applies, or income from a business, the as- sessable income and any expenditure incurred in deriv- ing that income that is allowed as a deduction are treated as derived and incurred, respectively, at a uniform daily rate throughout that part of the income year.
Deﬁned in this Act: assessable income, business, deduction, family scheme income, income, income from employment, income year, pay period Compare: 2004 No 35 s KD 2(6C) MD 16 Calculation of parental tax credit abatement (1) When this section applies This section applies when— (a) a person is entitled under section MD 11 to a parental tax credit for a parental entitlement period; and they choose to have the credit paid in a lump sum; and the birth occurs within 56 days of the end of the tax year.
(b) (c) Amount of abatement (2) Despite section MD 2, the amount of the person’s parental tax credit abatement for the parental entitlement period is calcu- lated using the formula— full-year abatement × 56 365 amount used.
Deﬁnition of items in formula In the formula,— (a) (b) full-year abatement has the same meaning as the item full-year abatement in section MD 13(3)(a): amount used means an amount of family credit abate- ment under section MD 13 for an entitlement period that ends on the last day of the tax year to the extent to which the abatement would be applied under section MD 2(2)(c)(i) and (ii) in calculating a net contribution.
Deﬁned in this Act: amount, entitlement period, family credit abatement, parental entitlement period, parental tax credit, pay, tax year Section MD 16: added, on 1 April 2008, by section 478 of the Taxation (Busi- ness Taxation and Remedial Matters) Act 2007 (2007 No 109).
(3) 2280 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s ME 1 Section MD 16 compare note: repealed (with effect on 1 April 2008), on 17 July 2013, by section 78 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Subpart ME—Minimum family tax credit Subpart ME heading: substituted, on 1 April 2008, by section 479 of the Taxa- tion (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Contents ME 1 Minimum family tax credit ME 2 Meaning of employment for this subpart ME 3 Meaning of net family scheme income Page 2281 2282 2284 ME 1 Minimum family tax credit Tax credit (1) A person who qualiﬁes under sections MC 3 to MC 6 (which relate to the qualifying criteria) is entitled to a tax credit (the minimum family tax credit) for an entitlement period equal to an amount calculated using the formula in subsection (2).
Formula The formula is— (2) (prescribed amount net family scheme income) × weekly periods 52.
(3) Deﬁnition of items in formula In the formula,— (a) (b) prescribed amount is $22,724: net family scheme income is the net family scheme in- come, calculated using the formula in section ME 3, for a relationship period containing the entitlement period, of— (i) (ii) the person; or their spouse, civil union partner, or de facto part- ner; or the person and their spouse, civil union partner, or de facto partner: (iii) 2281 Part M s ME 2 Income Tax Act 2007 Reprinted as at 2 September 2013 (4) (5) (c) weekly periods is the number of periods of 1 week in the entitlement period for which the person is a full-time earner.
Order in Council increasing amount In subsection (3)(a), the amount referred to may be increased as prescribed by the Governor-General by Order in Council under section MF 7 (Orders in Council).

Relationship with section 80KW of the Tax Administration Act 1994 This section is overridden by section 80KW of the Tax Admin- istration Act 1994.
Deﬁned in this Act: amount, civil union partner, de facto partner, entitlement period, full-time earner, minimum family tax credit, net family scheme income, relationship period, spouse, tax credit Compare: 2004 No 35 s KD 3(2)–(5) Section ME 1 heading: substituted, on 1 April 2008, by section 480(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section ME 1(1): amended, on 1 April 2008, by section 480(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section ME 1(2) formula: substituted (with effect on 1 April 2008), on 21 De- cember 2010 (applying for the 2008–09 and later income years), by section 113(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section ME 1(3)(a): amended, on 1 April 2013 (applying in respect of the 2013–14 tax year and later tax years), by clause 3(1) of the Income Tax (Min- imum Family Tax Credit) Order 2012 (SR 2012/325).

Section ME 1(3)(b): amended, on 1 April 2008, by section 480(3) of the Taxa- tion (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section ME 1 list of deﬁned terms family tax credit: repealed, on 1 April 2008, by section 480(4)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section ME 1 list of deﬁned terms minimum family tax credit: inserted, on 1 April 2008, by section 480(4)(a) of the Taxation (Business Taxation and Re- medial Matters) Act 2007 (2007 No 109).
ME 2 Meaning of employment for this subpart Meaning For the purposes of the calculation of a minimum family tax credit, employment in the deﬁnition of full-time earner, means the activity of a person that gives rise, or will give rise, to an entitlement to a PAYE income payment other than— (1) 2282 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s ME 2 (a) (b) (c) (d) (e) a payment of any of the kinds referred to in section RD 5(3) and (6)(b), (bb), (bc), (bd), and (c) (Salary or wages): a schedular payment that is a contract payment for a contract activity or service of a non-resident contractor: a payment made by a close company to a person who is a major shareholder of the close company: a payment made by a person to their spouse, civil union partner, or de facto partner: a payment made by a business carried on by 2 or more persons jointly, whether in partnership or otherwise, to a spouse, civil union partner, or de facto partner of 1 of the persons in business.
(2) (3) (4) When subsections (3) and (4) apply Subsections (3) and (4) apply when a person— (a) (b) receives a PAYE income payment; and on the date of receipt— (i) (ii) does not undertake any employment; or performs an activity to an extent less than would give rise to an entitlement to the PAYE income payment.

Commissioner’s determination The Commissioner may treat the person as having undertaken the employment or performed the activity that would have given rise to the PAYE income payment.
Considerations The Commissioner must have regard to— (a) (b) the date of receipt of the PAYE income payment; and the pay period in which the PAYE income payment oc- curs; and the circumstances giving rise to the PAYE income pay- ment; and any other matters that the Commissioner considers rele- vant.
(c) (d) Deﬁned in this Act: business, civil union partner, close company, Commis- sioner, contract activity or service, contract payment, de facto partner, employ- ment, full-time earner, minimum family tax credit, major shareholder, non-resi- dent contractor, pay, pay period, PAYE income payment, schedular payment, spouse Compare: 2004 No 35 ss KD 3(1) “employment”, KD 3A(10) 2283 Part M s ME 3 Income Tax Act 2007 Reprinted as at 2 September 2013 Section ME 2(1): amended, on 1 April 2008, by section 481(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section ME 2(1)(a): amended (with effect on 5 January 2010), on 29 August 2011, by section 110 of the Taxation (Tax Administration and Remedial Mat- ters) Act 2011 (2011 No 63).

Section ME 2 list of deﬁned terms family tax credit: repealed, on 1 April 2008, by section 481(2)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section ME 2 list of deﬁned terms full-time earner: inserted (with effect on 1 April 2008), on 6 October 2009, by section 362 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section ME 2 list of deﬁned terms minimum family tax credit: inserted, on 1 April 2008, by section 481(2)(a) of the Taxation (Business Taxation and Re- medial Matters) Act 2007 (2007 No 109).
ME 3 Meaning of net family scheme income When this section applies This section applies for the purposes of this subpart.

(1) Formula (2) Net family scheme income, for a person and a relationship period, means the amount calculated using the formula— adjusted income – adjusted liability + amount received – amount paid.
Deﬁnition of items in formula In the formula,— (a) adjusted income is— (i) the amount of the person’s family scheme income for the tax year in which the relationship period falls that is attributable to the number of weeks in which the person is a full-time earner, adjusted to an annualised amount that is found by multiply- ing the amount by the fraction that is 52 divided by the number of weeks in the relationship period for which the person is a full-time earner; and calculated without reference to the amounts re- ferred to in section MB 1(2) and (3): (ii) (b) (c) [Repealed] adjusted liability is the amount that would be the per- son’s income tax liability— (3) 2284 Reprinted as at 2 September 2013 (i) Income Tax Act 2007 Part M s ME 3 treating the amount of adjusted income under paragraph (a) as if it were the person’s net in- come: [Repealed] (ii) amount received is the amount referred to in section MB 1(2) for the tax year: amount paid is the amount of the deduction referred to in section MB 1(3) for the tax year.
(d) (e) Deﬁned in this Act: amount, deduction, family scheme income, full-time earner, income tax liability, net income, pay, relationship period, tax credit, tax year Compare: 2004 No 35 s OB 1 “net speciﬁed income” Section ME 3: added, on 1 April 2008, by section 482 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section ME 3(2) formula: substituted (with effect on 1 April 2008), on 6 Octo- ber 2009, by section 363(1) of the Taxation (International Taxation, Life Insur- ance, and Remedial Matters) Act 2009 (2009 No 34).

Section ME 3(3)(a)(i): substituted (with effect on 1 April 2008), on 6 October 2009, by section 363(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section ME 3(3)(a)(i): amended (with effect on 1 April 2013 and applying for the 2013–14 and later tax years), on 17 July 2013, by section 79(1) of the Taxa- tion (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Section ME 3(3)(b): repealed (with effect on 1 April 2008), on 6 October 2009, by section 363(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section ME 3(3)(c)(i): amended (with effect from 1 April 2008), on 29 May 2008, by section 34(1) of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).

Section ME 3(3)(c)(ii): repealed (with effect from 1 April 2008), on 29 May 2008, by section 34(1) of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).
Section ME 3 list of deﬁned terms family scheme income: inserted (with effect on 1 April 2013 and applying for the 2013–14 and later tax years), on 17 July 2013, by section 79(2) of the Taxation (Livestock Valuation, Assets Expend- iture, and Remedial Matters) Act 2013 (2013 No 52).
Subpart MF—Payment of credits Contents MF 1 Application for payment of tax credit by instalment MF 2 When person not entitled to payment by instalment Page 2286 2287 2285 Part M s MF 1 Income Tax Act 2007 Reprinted as at 2 September 2013 MF 3 Calculating amount of interim WFF tax credit MF 4 Requirements for calculating instalment of tax credit MF 4B Calculation of instalments: 1 April 2008 to 30 September 2287 2289 2290 2008 [Repealed] MF 4C Calculation of instalments: 1 October 2008 to 31 March 2290 2009 [Repealed] MF 4D Calculation of instalments: 1 April 2010 to 30 September 2290 2010 MF 4E Calculation of instalments: 1 October 2010 to 31 March 2293 2011 MF 5 Recovery of overpaid tax credit MF 6 Overpayment or underpayment of tax credit MF 7 Orders in Council 2297 2298 2299 MF 1 Application for payment of tax credit by instalment When this section applies This section applies when— (a) a person who is a principal caregiver expects to be en- titled, throughout a selected period, to a tax credit under section MD 1 (Abating WFF tax credit) or, as applic- able, sections MD 1 and ME 1 (Minimum family tax credit); and section MF 2 does not apply to the person; and the person wants the tax credit to be paid by instalment before the end of the tax year that contains the selected period.
(b) (c) Application The person may ask the Commissioner to pay the tax credit by instalment to them.

Meaning of selected period Selected period is a relationship period chosen by the person for the purposes of this section and sections 80KA to 80KG of the Tax Administration Act 1994.
Deﬁned in this Act: Commissioner, pay, principal caregiver, relationship period, selected period, tax credit, tax year Compare: 2004 No 35 s KD 5(1), (1A) Section MF 1(1)(a): amended, on 1 April 2008, by section 483 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
(1) (2) (3) 2286 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MF 3 MF 2 When person not entitled to payment by instalment (1) (2) When this section applies This section applies when— (a) a person— (i) (ii) (ii) expects that in a relationship period they will be entitled to receive an income-tested beneﬁt; or applies under section 80KP of the Tax Adminis- tration Act 1994 to the chief executive for pay- ment of a tax credit for a period after an in- come-tested beneﬁt has ended; and is authorised by section 80KN of that Act to pay an abating WFF tax credit to the person; and does not ask the Commissioner under section 80KQ of that Act to accept from the person an application for a notice of entitlement.
(b) the chief executive— (i) No entitlement The person is not entitled to apply under section MF 1 for the payment of the tax credit by instalment for the relationship period, and section 80KN applies.
Deﬁned in this Act: abating WFF tax credit, chief executive, Commissioner, income-tested beneﬁt, notice of entitlement, pay, relationship period, tax credit Compare: 2004 No 35 s KD 5(8) Section MF 2(1)(b)(i): amended, on 1 April 2008, by section 484(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MF 2 list of deﬁned terms abating WFF tax credit: inserted, on 1 April 2008, by section 484(2)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MF 2 list of deﬁned terms family assistance credit: repealed, on 1 April 2008, by section 484(2)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
MF 3 Calculating amount of interim WFF tax credit (1) When this section applies This section applies when the Commissioner receives an ap- plication under section MF 1 and is required under section 80KD(2) of the Tax Administration Act 1994 to determine the amount of the tax credit to which the person applying would be entitled.
2287 Part M s MF 3 Income Tax Act 2007 Reprinted as at 2 September 2013 (2) Method for determining family assistance credit The Commissioner must— (a) (b) (c) calculate an amount (the annual amount) using the for- mula in subsection (3); and ascertain the amount (amount A) that, in schedule 31, column 2 (Annualised equivalent amount for Part M) is the equivalent of the annual amount represented in schedule 31, column 1; and calculate the WFF tax credit that the person would be entitled to for the tax year in which the calculation period falls if the family scheme income of the person for the calculation period were equal to amount A.
Formula The formula is— (3) attributed net income × 365 days.

Deﬁnition of items in formula In the formula,— (a) attributed net income is equal to such amount of the family scheme income expected to be attributable to the part of the tax year that is the part (the calculation period) for which the Commissioner determines that a tax credit is allowable to the person: days is the number of days in the calculation period.
(b) Deﬁned in this Act: amount, Commissioner, family scheme income, tax credit, tax year, WFF tax credit Compare: 2004 No 35 s KD 5(6) Section MF 3 heading: amended, on 1 April 2008, by section 485(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MF 3(2)(c): amended, on 1 April 2008, by section 485(2) of the Taxa- tion (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MF 3 list of deﬁned terms family assistance credit: repealed, on 1 April 2008, by section 485(2)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MF 3 list of deﬁned terms WFF tax credit: inserted, on 1 April 2008, by section 485(2)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
(4) 2288 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MF 4 MF 4 Requirements for calculating instalment of tax credit (1) How to calculate instalment The Commissioner must calculate the amount of an instalment by way of tax credit under section MD 1 (Abating WFF tax credit) or, as applicable, sections MD 1 and ME 1 (Minimum family tax credit)— (a) as if the calculation period referred to in section MF 3 were a relationship period; and using— (i) (b) a value for family scheme income as directed by section MF 3(2)(c); and the amounts of family tax credit, in-work tax credit, child tax credit, parental tax credit, family credit abatement, and minimum family tax credit set out in sections MD 3, MD 4, MD 11, MD 12, and ME 1 (which relate to credits).
(ii) Instalment shown in complete dollars (2) An instalment of a tax credit under section MD 1 or, as applic- able, sections MD 1 and ME 1, is to be shown in a notice of entitlement in complete dollars.
Deﬁned in this Act: amount, child tax credit, Commissioner, family credit abatement, family scheme income, family tax credit, in-work tax credit, min- imum family tax credit, notice of entitlement, parental tax credit, relationship period, tax credit Compare: 2004 No 35 s KD 5(6A), (7) Section MF 4(1): amended, on 1 April 2008, by section 486(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MF 4(1)(b)(ii): amended, on 1 April 2008, by section 486(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MF 4 list of deﬁned terms family support: repealed, on 1 April 2008, by section 486(3)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MF 4 list of deﬁned terms in-work payment: repealed, on 1 April 2008, by section 486(3)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MF 4 list of deﬁned terms in-work tax credit: inserted, on 1 April 2008, by section 486(3)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MF 4 list of deﬁned terms minimum family tax credit: inserted, on 1 April 2008, by section 486(3)(a) of the Taxation (Business Taxation and Re- medial Matters) Act 2007 (2007 No 109).
2289 Part M s MF 4B Income Tax Act 2007 Reprinted as at 2 September 2013 MF 4B Calculation of instalments: 1 April 2008 to 30 September 2008 [Repealed] Section MF 4B: repealed, on 1 April 2011 (applying for the 2011–12 income year and later income years), by section 63(2) of the Taxation (Budget Meas- ures) Act 2010 (2010 No 27).
MF 4C Calculation of instalments: 1 October 2008 to 31 March 2009 [Repealed] Section MF 4C: repealed, on 1 April 2011 (applying for the 2011–12 income year and later income years), by section 63(2) of the Taxation (Budget Meas- ures) Act 2010 (2010 No 27).
MF 4D Calculation of instalments: 1 April 2010 to 30 September 2010 When this section applies This section applies for calculating the amount of an instal- ment by way of tax credit under section MD 1 (Abating WFF tax credit), or as applicable, sections MD 1 and ME 1 (Min- imum family tax credit) for the period starting on 1 April 2010 and ﬁnishing on 30 September 2010.
Family tax credit formula: section MD 3 The instalments for the relevant tax credit are calculated us- ing, for the calculation of the family tax credit, the following formula: prescribed amount × days 365.

Deﬁnition of items in formula in subsection (2) The items in the formula are deﬁned in subsections (4) and (5).
Prescribed amount Prescribed amount is the sum of the following amounts: (a) for the eldest dependent child for whom the person is a principal caregiver during the entitlement period, 1 of the following, as applicable: (i) (ii) $4,487, if the child is younger than 16: $5,198, if the child is 16 or older: (1) (2) (3) (4) 2290 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MF 4D (iii) a weighted average of the amounts in subpara- graphs (i) and (ii) that reﬂects the proportion of the period for which those subparagraphs apply to the child, if the child turns 16 during the en- titlement period; and (b) for each dependent child for whom the person is a prin- cipal caregiver during the entitlement period, other than the eldest dependent child, 1 of the following, as applic- able: (i) (ii) (iii) (iv) $3,119, if the child is younger than 13: $3,557, if the child is 13, 14, or 15: $4,651, if the child is 16 or older: a weighted average of the amounts in subpara- graphs (i) and (ii) that reﬂects the proportion of the period for which those subparagraphs apply to the child, if the child turns 13 during the en- titlement period: a weighted average of the amounts in subpara- graphs (ii) and (iii) that reﬂects the proportion of the entitlement period for which those subpara- graphs apply to the child, if the child turns 16 during the entitlement period.
(v) Days (5) Days is the number of days in the entitlement period.

When another person cares for dependent child (6) A family tax credit must be reduced in proportion to the time in the entitlement period that a dependent child spends in the exclusive care of another person who qualiﬁes under section MC 2 (Who qualiﬁes for entitlements under family scheme?).
(7) Family credit abatement formula: section MD 13 The instalments for the relevant tax credit are calculated us- ing, for the calculation of the family credit abatement, the following formula: full-year abatement × days 365.
Deﬁnition of items in formula in subsection (7) In the formula,— (8) 2291 Part M s MF 4D Income Tax Act 2007 Reprinted as at 2 September 2013 (a) full-year abatement is,— (i) (ii) if the person has no spouse, civil union part- ner, or de facto partner during the entitlement period, and the person’s family scheme income for the relationship period containing the entitle- ment period is more than $36,827, 20 cents for each complete dollar of the excess; or if the person has a spouse, civil union partner, or de facto partner during the entitlement period, and the person’s family scheme income, the fam- ily scheme income of their spouse, civil union partner, or de facto partner, or the sum of those in- comes for the relationship period containing the entitlement period is more than $36,827, 20 cents for each complete dollar of the excess: (9) (b) days is the number of days in the entitlement period excluding the days of any calendar months in which the person receives protected family tax credit as described in section MD 14 (Person receiving protected family tax credit).
When 56-day period includes 31 March If a person who qualiﬁes under section MC 2 receives instal- ments of the parental tax credit in a 56-day period that includes 31 March, the formula is applied so that— (a) instalments of the parental tax credit received in the ﬁrst tax year are abated against the person’s family scheme income, the family scheme income of their spouse, civil union partner, or de facto partner, or the sum of those incomes for that tax year; and instalments of the parental tax credit received in the second tax year are abated against the person’s fam- ily scheme income, the family scheme income of their spouse, civil union partner, or de facto partner, or the sum of those incomes for that tax year.
(b) Relationship with subject matter (10) Sections MD 14 to MD 16 (which relate to family credit abate- ment), with necessary modiﬁcations, apply to the calculation of the family credit abatement in subsection (7).
2292 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MF 4E Minimum family tax credit formula: section ME 1 (11) The instalments for the relevant tax credit are calculated using, for the calculation of the minimum family tax credit, the fol- lowing formula: prescribed amount net family scheme income × weekly periods 52.
(12) Deﬁnition of items in formula in subsection (11) In the formula,— (a) (b) prescribed amount is $20,800: net family scheme income is the net family scheme income, calculated using the formula in section ME 3 (Meaning of net family scheme income), for a relation- ship period containing the entitlement period, of— (i) (ii) (iii) the person; or their spouse, civil union, or de facto partner; or the person and their spouse, civil union, or de facto partner: (c) weekly periods is the number of periods of 1 week in the entitlement period for which the person is a full-time earner.
Relationship with subject matter (13) Sections ME 2 (Meaning of employment for this subpart) and ME 3, with necessary modiﬁcations, apply to the calculation of the minimum family tax credit in subsection (11).
Deﬁned in this Act: amount, child, civil union partner, de facto partner, de- pendent child, entitlement period, family credit abatement, family scheme in- come, family tax credit, full-time earner, minimum family tax credit, net family scheme income, parental tax credit, principal caregiver, protected family tax credit, relationship period, spouse, tax credit, tax year Section MF 4D: inserted (with effect on 1 April 2010), on 28 May 2010 (apply- ing for the 2010–11 income year and later income years), by section 63(1) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
MF 4E Calculation of instalments: 1 October 2010 to 31 March 2011 (1) When this section applies This section applies for calculating the amount of an instal- ment by way of tax credit under section MD 1 (Abating WFF tax credit), or as applicable, sections MD 1 and ME 1 (Min- 2293 Part M s MF 4E Income Tax Act 2007 Reprinted as at 2 September 2013 (2) (3) (4) imum family tax credit) for the period starting on 1 October 2010 and ﬁnishing on 31 March 2011.
Family tax credit formula: section MD 3 The instalments for the relevant tax credit are calculated us- ing, for the calculation of the family tax credit, the following formula: prescribed amount × days 365.

Deﬁnition of items in formula in subsection (2) The items in the formula are deﬁned in subsections (4) and (5).
Prescribed amount Prescribed amount is the sum of the following amounts: (a) for the eldest dependent child for whom the person is a principal caregiver during the entitlement period, 1 of the following, as applicable: (i) (ii) (iii) $4,578, if the child is younger than 16: $5,303, if the child is 16 or older: a weighted average of the amounts in subpara- graphs (i) and (ii) that reﬂects the proportion of the period for which those subparagraphs apply to the child, if the child turns 16 during the en- titlement period; and (b) for each dependent child for whom the person is a prin- cipal caregiver during the entitlement period, other than the eldest dependent child, 1 of the following, as applic- able: (i) (ii) (iii) (iv) $3,182, if the child is younger than 13: $3,629, if the child is 13, 14, or 15: $4,745, if the child is 16 or older: a weighted average of the amounts in subpara- graphs (i) and (ii) that reﬂects the proportion of the period for which those subparagraphs apply to the child, if the child turns 13 during the en- titlement period: a weighted average of the amounts in subpara- graphs (ii) and (iii) that reﬂects the proportion of the entitlement period for which those subpara- (v) 2294 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MF 4E graphs apply to the child, if the child turns 16 during the entitlement period.
Days (5) Days is the number of days in the entitlement period.

When another person cares for dependent child (6) A family tax credit must be reduced in proportion to the time in the entitlement period that a dependent child spends in the exclusive care of another person who qualiﬁes under section MC 2 (Who qualiﬁes for entitlements under family scheme?).
Family credit abatement formula: section MD 13 The instalments for the relevant tax credit are calculated us- ing, for the calculation of the family credit abatement, the following formula: full-year abatement × days 365.
(7) (8) Deﬁnition of items in formula in subsection (7) In the formula,— (a) full-year abatement is,— (i) (ii) if the person has no spouse, civil union part- ner, or de facto partner during the entitlement period, and the person’s family scheme income for the relationship period containing the entitle- ment period is more than $36,827, 20 cents for each complete dollar of the excess; or if the person has a spouse, civil union partner, or de facto partner during the entitlement period, and the person’s family scheme income, the fam- ily scheme income of their spouse, civil union partner, or de facto partner, or the sum of those in- comes for the relationship period containing the entitlement period is more than $36,827, 20 cents for each complete dollar of the excess: (b) days is the number of days in the entitlement period excluding the days of any calendar months in which the person receives protected family tax credit as described in section MD 14 (Person receiving protected family tax credit).
2295 Part M s MF 4E Income Tax Act 2007 Reprinted as at 2 September 2013 (9) When 56-day period includes 31 March If a person who qualiﬁes under section MC 2receives instal- ments of the parental tax credit in a 56-day period that includes 31 March, the formula is applied so that— (a) instalments of the parental tax credit received in the ﬁrst tax year are abated against the person’s family scheme income, the family scheme income of their spouse, civil union partner, or de facto partner, or the sum of those incomes for that tax year; and instalments of the parental tax credit received in the second tax year are abated against the person’s fam- ily scheme income, the family scheme income of their spouse, civil union partner, or de facto partner, or the sum of those incomes for that tax year.
(b) Relationship with subject matter (10) Sections MD 14 to MD 16 (which relate to family credit abate- ment), with necessary modiﬁcations, apply to the calculation of the family credit abatement in subsection (7).

Minimum family tax credit formula: section ME 1 (11) The instalments for the relevant tax credit are calculated using, for the calculation of the minimum family tax credit, the fol- lowing formula: prescribed amount net family scheme income × weekly periods 52.
Deﬁnition of items in formula in subsection (11) In the formula,— (a) (b) prescribed amount is $21,216: net family scheme income is the net family scheme income, calculated using the formula in section ME 3 (Meaning of net family scheme income), for a relation- ship period containing the entitlement period, of— (i) (ii) (iii) the person; or their spouse, civil union, or de facto partner; or the person and their spouse, civil union, or de facto partner: (c) weekly periods is the number of periods of 1 week in the entitlement period for which the person is a full-time earner.
(12) 2296 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MF 5 Relationship with subject matter (13) Sections ME 2 (Meaning of employment for this subpart) and ME 3, with necessary modiﬁcations, apply to the calculation of the minimum family tax credit in subsection (11).
Deﬁned in this Act: amount, child, civil union partner, de facto partner, de- pendent child, entitlement period, family credit abatement, family scheme in- come, family tax credit, full-time earner, minimum family tax credit, net family scheme income, parental tax credit, principal caregiver, protected family tax credit, relationship period, spouse, tax credit, tax year Section MF 4E: inserted (with effect on 1 April 2010), on 28 May 2010 (apply- ing for the 2010–11 income year and later income years), by section 63(1) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
MF 5 Recovery of overpaid tax credit (1) (2) (3) When this section applies This section applies when the Commissioner considers that the amount of a tax credit under section MD 1 (Abating WFF tax credit) or ME 1 (Minimum family tax credit) set off or refunded to a person for a tax year is more than the proper amount.

Recovery of overpayment The Commissioner may recover the excess as if it were in- come tax payable by the person.
However, if, throughout the tax year, the person is in a relationship with a spouse, civil union partner, or de facto partner, the person and that spouse or partner are jointly and severally liable for the payment of the excess.
Shortfall penalties The person is not liable for a shortfall penalty under Part 9 of the Tax Administration Act 1994 in relation to an amount that the Commissioner may recover under this section if the amount set off or refunded is more than the proper amount because the person— (a) applied for a tax credit under section 41 of that Act before 1 April 2007; and (b) was eligible to be a transitional resident at the time of (c) the application; and notiﬁed the Commissioner before 1 June 2007 that they did not wish the application to be treated under section 2297 Part M s MF 6 Income Tax Act 2007 Reprinted as at 2 September 2013 HR 8(5) (Transitional residents) as an election under section HR 8(4).
Deﬁned in this Act: amount, civil union partner, Commissioner, de facto part- ner, income tax, notify, pay, shortfall penalty, spouse, tax credit, tax year, tran- sitional resident Compare: 2004 No 35 s KD 4(4) Section MF 5(1): amended, on 1 April 2008, by section 487 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MF 5(2): substituted (with effect on 1 April 2008), on 6 October 2009, by section 364(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
MF 6 Overpayment or underpayment of tax credit When this section applies This section applies for the purposes of sections LA 3 and LA 4 (which relate to the treatment of a person’s total tax credits) when— (a) (b) (c) (d) a person has an entitlement to a tax credit under section MD 1 (Abating WFF tax credit) or ME 1 (Minimum family tax credit); and the person applies under section MF 1 to have the tax credit paid by instalment; and the instalments of the estimated tax credit, or the total of those instalments, differs from the tax credit, or total tax credit, to which the person is entitled under the family scheme because the instalment has, or the total instal- ments have, either been overpaid resulting in an excess or underpaid resulting in a shortfall; and the Commissioner— (i) gives the person a notice of entitlement for the tax year because an instalment of the estimated tax credit has been paid to the person during the tax year; or ﬁnds out, otherwise than by way of a notice of entitlement, that an instalment of the estimated tax credit has been paid to the person for the tax year.
(ii) Overpayment For an overpayment of the person’s entitlement, an amount equal to the excess is— (1) (2) 2298 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MF 7 (3) (a) (b) added to the tax payable by the person for the tax year; and recoverable by the Commissioner under section 80KLB of the Tax Administration Act 1994 as if it were tax payable by the person for the tax year.
Underpayment For an underpayment of the entitlement, an amount equal to the shortfall is used to satisfy the person’s income tax liability, and any balance remaining is treated as tax paid in excess and available for use under section LA 7(2) (Remaining refundable credits: tax credits under social policy schemes).
Deﬁned in this Act: amount, Commissioner, family scheme, income tax liabil- ity, notice of entitlement, pay, tax, tax credit, tax year Section MF 6: substituted (with effect on 1 April 2008), on 6 October 2009, by section 365(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section MF 6(1)(a): amended, on 1 April 2008, by section 488 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
MF 7 Orders in Council (1) What may be done by Order in Council The Governor-General may, by Order in Council,— (a) increase the amounts in section MD 3(4)(a)(i) and (b)(i) and (ii) (Calculation of family tax credit) by amounts that— (i) correspond to the movement in the New Zealand Consumer Price Index that has not yet been taken into account by an increase: are rounded up to the nearest whole dollar, with- out affecting the calculation of later increases made under this paragraph: (ii) (ab) increase the amount in— (i) section MD 3(4)(a)(ii) to equal the corresponding amount in section MD 3(4)(a)(i), if the amount in section MD 3(4)(a)(i) would otherwise be the greater: section MD 3(4)(b)(iii) to equal the correspond- if the ing amount in section MD 3(4)(b)(ii), amount in section MD 3(4)(b)(ii) would other- wise be the greater: (ii) 2299 Part M s MF 7 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) (c) (cb) (d) (e) increase the amounts appearing as items in the formula for the in-work tax credit set out in section MD 10(3) (Calculation of in-work tax credit): increase the amount appearing as an item in the formula for the parental tax credit set out in section MD 12(3) (Calculation of parental tax credit): increase the amounts appearing as the amount of the threshold set out in section MD 13(3): increase the amount appearing as an item in the formula for the minimum family tax credit in section ME 1(3) (Minimum family tax credit): replace schedule 31 (Annualised equivalent amount for Part M).
Order in Council under subsection (1)(a): requirements (2) An Order in Council under subsection (1)(a),— (a) (b) in the case of the ﬁrst Order in Council made under subsection (1)(a), must be made when the total per- centage increase in the movement in the New Zealand Consumers Price Index measured from that applying on 1 October 2008 is 5% or more: in the case of a subsequent Order in Council under sub- section (1)(a), must be made when the total percent- age increase in the movement in the New Zealand Con- sumers Price Index measured from that applying on the date when the requirement to make the immediately pre- ceding adjustment arose is 5% or more.
How movement in CPI determined (2B) For the purposes of subsections (1)(a)(i) and (2)(a) and (b), a movement in the New Zealand Consumers Price Index over a period is determined by comparing the following numbers: the number that, when the period started, was the most (a) recent quarterly index number of— (i) the New Zealand Consumers Price Index all groups, if the period starts before 29 April 2010; and the New Zealand Consumers Price Index all groups excluding cigarettes and other tobacco products, if the period starts after 28 April 2010: (ii) 2300 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MF 7 (b) the number that, when the period ended, was the most recent quarterly index number of— (i) the New Zealand Consumers Price Index all groups, if the period ends before 29 April 2010; and the New Zealand Consumers Price Index all groups excluding cigarettes and other tobacco products, if the period ends after 28 April 2010.
(ii) Order in Council under subsection (1)(ab) (2C) An Order in Council must be made under subsection (1)(ab) if an Order in Council under subsection (1)(a) would otherwise result in— (a) the amount in section MD 3(4)(a)(i) exceeding the amount in section MD 3(4)(a)(ii): the amount in section MD 3(4)(b)(ii) exceeding the amount in section MD 3(4)(b)(iii).
(b) Timing of Order in Council (3) An Order in Council made under this section must be made no later than 1 December in each year and must apply from 1 April following that date.
(4) Review of in-work tax credit and parental tax credit The Minister responsible for the Inland Revenue Depart- ment, in consultation with the Minister responsible for the department currently responsible for administering the Social Security Act 1964, must cause a review to be undertaken of the amounts of the in-work tax credit and the parental tax credit allowable under subparts MB to MF and MZ.
Timing of review (5) A review undertaken under subsection (4) must occur,— (a) (b) in the case of the ﬁrst review, not later than 30 June 2008; and in the case of subsequent reviews, not later than 30 June in the third year after each preceding review.
Deﬁned in this Act: amount, family tax credit, in-work tax credit, minimum family tax credit, parental tax credit Compare: 2004 No 35 s KD 5C Section MF 7(1)(a): amended, on 24 May 2011, by section 6(1) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).
2301 Part M s MF 7 Income Tax Act 2007 Reprinted as at 2 September 2013 Section MF 7(1)(a): amended, on 24 October 2012 (applying for Working for Families entitlements for the 2014–15, 2015–16, 2016–17, and 2017–2018 tax years), by section 3(1) of the Income Tax (Working for Families Index- ation—Budget Measures) Amendment Act 2012 (2012 No 80).

Section MF 7(1)(a): amended (with effect on 20 May 2010), on 28 May 2010, by section 94(1) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Section MF 7(1)(a): amended, on 1 April 2008, by section 489(1) of the Taxa- tion (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MF 7(1)(a)(i): amended (with effect on 1 October 2008), on 21 Decem- ber 2010, by section 114 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section MF 7(1)(ab): inserted, on 24 May 2011, by section 6(2) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).
Section MF 7(1)(b): amended, on 1 April 2008, by section 489(2) of the Taxa- tion (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MF 7(1)(cb): inserted (with effect on 20 May 2010), on 28 May 2010, by section 94(3) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section MF 7(1)(d): amended, on 1 April 2008, by section 489(3) of the Taxa- tion (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MF 7(2): amended, on 24 October 2012 (applying for Working for Families entitlements for the 2014–15, 2015–16, 2016–17, and 2017–2018 tax years), by section 3(1) of the Income Tax (Working for Families Index- ation—Budget Measures) Amendment Act 2012 (2012 No 80).

Section MF 7(2)(a): amended (with effect from 1 April 2008), on 29 May 2008, by section 35 of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).
Section MF 7(2B) heading: inserted (with effect on 29 April 2010), on 28 May 2010, by section 94(5) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section MF 7(2B): inserted (with effect on 29 April 2010), on 28 May 2010, by section 94(5) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Section MF 7(2B): amended, on 24 October 2012 (applying for Working for Families entitlements for the 2014–15, 2015–16, 2016–17, and 2017–2018 tax years), by section 3(1) of the Income Tax (Working for Families Index- ation—Budget Measures) Amendment Act 2012 (2012 No 80).

Section MF 7(2C) heading: inserted, on 24 May 2011, by section 6(3) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).
Section MF 7(2C): inserted, on 24 May 2011, by section 6(3) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).

Section MF 7(4) heading: amended, on 1 April 2008, by section 489(4) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MF 7(4): amended, on 1 April 2008, by section 489(5) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MF 7 list of deﬁned terms family support: repealed, on 1 April 2008, by section 489(6)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

2302 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MF 7 Section MF 7 list of deﬁned terms in-work payment: repealed, on 1 April 2008, by section 489(6)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MF 7 list of deﬁned terms in-work tax credit: inserted, on 1 April 2008, by section 489(6)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MF 7 list of deﬁned terms minimum family tax credit: inserted, on 1 April 2008, by section 489(6)(a) of the Taxation (Business Taxation and Re- medial Matters) Act 2007 (2007 No 109).
Subpart MK—Tax credits for KiwiSaver schemes and complying superannuation funds Contents MK 1 Tax credits for superannuation contributions Tax credits for fund providers MK 2 Eligibility requirements MK 3 Payment of tax credits MK 4 Amount of tax credit MK 5 Crown contributions for members MK 6 Credit given by fund providers MK 7 Amounts paid in excess MK 8 Treatment of tax credits on permanent emigration Tax credits for employers [Repealed] MK 9 Eligibility requirements [Repealed] MK 10 Amount of credit [Repealed] MK 11 When tax credits arise [Repealed] MK 12 Using tax credits [Repealed] MK 13 When short payment and unpaid compulsory employer contributions found after tax credit used [Repealed] MK 14 Employees opting out [Repealed] MK 15 Groups of persons MK 16 Private domestic workers Page 2304 2305 2306 2307 2309 2309 2309 2310 2311 2311 2311 2311 2311 2311 2312 2312 2303 Part M s MK 1 Income Tax Act 2007 Reprinted as at 2 September 2013 MK 1 Tax credits for superannuation contributions Tax credits for members paid to fund providers (1) A fund provider of a person’s KiwiSaver scheme or a comply- ing superannuation fund has a tax credit equal to an amount calculated under section MK 4 for a member credit contribu- tion to the scheme or fund.
Section MK 2 imposes some eligi- bility requirements for the year described in subsection (3) in relation to the person.

Tax credits for employers [Repealed] [Repealed] (2) Calculations: fund providers (3) A tax credit referred to in subsection (1) is calculated for a year that begins on 1 July and ends on 30 June.
Calculations: employers [Repealed] [Repealed] Deﬁned in this Act: amount, complying superannuation fund, employee, employer, employer contribution, fund provider, KiwiSaver scheme, member credit contribution, pay, tax credit, tax year Compare: 2004 No 35 ss KJ 1, KJ 6, OB 1 “member credit year” Section MK 1: substituted, on 1 April 2008, by section 125 of the Taxation (KiwiSaver) Act 2007 (2007 No 110).
Section MK 1(1): amended (with effect on 1 April 2008), on 6 October 2009, by section 366 of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).

Section MK 1(2) heading: repealed, on 1 April 2009, pursuant to section 53 of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).

Section MK 1(2): repealed, on 1 April 2009, by section 53 of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).
Section MK 1(4) heading: repealed, on 1 April 2009, pursuant to section 53 of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).

Section MK 1(4): repealed, on 1 April 2009, by section 53 of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).

Tax credits for fund providers Heading: inserted, on 1 April 2008, by section 126 of the Taxation (KiwiSaver) Act 2007 (2007 No 110).
(4) 2304 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MK 2 MK 2 Eligibility requirements (1) (2) Requirements for person For the purposes of section MK 1(1), the requirements for the person for the year described in section MK 1(3) are the fol- lowing: (a) (b) they must be 18 years or older; and they must have a creditable membership of a complying superannuation fund or a KiwiSaver scheme; and they must not be entitled under schedule 1, clause 4(3) of the KiwiSaver Act 2006 or an equivalent provision to withdraw an amount from the scheme or fund; and they must reside mainly in New Zealand, or otherwise they must— (i) be an employee of the State services under the State Sector Act 1988 serving outside New Zealand; or (c) (d) (ii) work overseas as a volunteer or for token pay- ment for a charitable organisation named in regu- lations made under the Student Loan Scheme Act 2011 and the work meets 1 or more of the require- ments in clause 2(1) of Schedule 1 of that Act.
Evidence For the purposes of subsection (1)(d)(i) and (ii), the person must give the fund provider written evidence that they meet the requirements, and of the period in which they meet the requirements.
Deﬁned in this Act: amount, complying superannuation fund, creditable mem- bership, employee, KiwiSaver scheme, New Zealand, resident in New Zealand, tax credit Compare: 2004 No 35 s KJ 2 Section MK 2(1) heading: substituted, on 1 April 2008, by section 127(1) of the Taxation (KiwiSaver) Act 2007 (2007 No 110).

Section MK 2(1): amended (with effect on 1 April 2008), on 6 October 2009, by section 367 of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
Section MK 2(1): amended, on 1 April 2008, by section 127(1) of the Taxation (KiwiSaver) Act 2007 (2007 No 110).

Section MK 2(1)(b): substituted, on 1 April 2008, by section 127(2) of the Taxation (KiwiSaver) Act 2007 (2007 No 110).

Section MK 2(1)(d)(ii): replaced, on 1 April 2012, by section 223 of the Student Loan Scheme Act 2011 (2011 No 62).
2305 Part M s MK 3 Income Tax Act 2007 Reprinted as at 2 September 2013 Section MK 2 list of deﬁned terms creditable membership: inserted, on 1 April 2008, by section 127(3) of the Taxation (KiwiSaver) Act 2007 (2007 No 110).

MK 3 Payment of tax credits (1) (2) (3) (4) When this section applies This section applies when a member credit contribution is made to a KiwiSaver scheme or a complying superannuation fund.
Payment The Commissioner must pay a tax credit to the trustees of the scheme or fund (the fund provider) to which the person has contributed.

The amount of the tax credit is calculated under section MK 4.

Subsection (5) overrides this subsection.

Full amount paid The Commissioner must pay the full amount of the tax credit by direct credit to the fund provider without subtracting any amount that the person or fund provider may be obliged to pay to the Commissioner.
Subsection (5) overrides this subsection.

Payment The Commissioner must pay the amount of the tax credit to the fund provider within 30 working days of the provider ﬁling a claim form under section 68C(3) or (4) of the Tax Administra- tion Act 1994.
Exception: payment to person or another provider (5) Despite subsections (2) and (3), the Commissioner may pay the amount of the tax credit as follows: (a) to the person, if it would be impossible or impractical to pay it to the person’s fund provider because either the person has no fund provider, or because the person has died or has suffered a serious illness as deﬁned in schedule 1, clause 12(3) of the KiwiSaver Act 2006; or to a fund provider (provider B) other than the fund provider referred to in subsections (2) and (3), if the per- son is transferring or has transferred to provider B. Deﬁned in this Act: amount, Commissioner, complying superannuation fund, employer contribution, employer’s superannuation contribution, fund provider, KiwiSaver scheme, member credit contribution, pay, tax credit, trustee Compare: 2004 No 35 ss KJ 1, KJ 4, OB 1 “member credit contributions” (b) 2306 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MK 4 Section MK 3(1) heading: substituted, on 1 April 2008, by section 128(1) of the Taxation (KiwiSaver) Act 2007 (2007 No 110).
Section MK 3(1): substituted, on 1 April 2008, by section 128(1) of the Taxation (KiwiSaver) Act 2007 (2007 No 110).

Section MK 3(2): amended, on 1 April 2008, by section 128(2) of the Taxation (KiwiSaver) Act 2007 (2007 No 110).

Section MK 3(3): amended, on 1 April 2008, by section 128(3) of the Taxation (KiwiSaver) Act 2007 (2007 No 110).

Section MK 3(4) heading: substituted, on 1 April 2008, by section 128(4) of the Taxation (KiwiSaver) Act 2007 (2007 No 110).
Section MK 3(4): substituted, on 1 April 2008, by section 128(4) of the Taxation (KiwiSaver) Act 2007 (2007 No 110).

Section MK 3(5) heading: added, on 1 April 2008, by section 128(4) of the Taxation (KiwiSaver) Act 2007 (2007 No 110).

Section MK 3(5): added, on 1 April 2008, by section 128(4) of the Taxation (KiwiSaver) Act 2007 (2007 No 110).

Section MK 3(5)(b): amended, on 29 August 2011, by section 111 of the Tax- ation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section MK 3 list of deﬁned terms employer contribution: inserted, on 1 April 2008, by section 128(5)(a) of the Taxation (KiwiSaver) Act 2007 (2007 No 110).

Section MK 3 list of deﬁned terms member credit contribution: inserted, on 1 April 2008, by section 128(5)(a) of the Taxation (KiwiSaver) Act 2007 (2007 No 110).

Section MK 3 list of deﬁned terms superannuation contribution: repealed, on 1 April 2008, by section 128(5)(b) of the Taxation (KiwiSaver) Act 2007 (2007 No 110).
MK 4 Amount of tax credit (1) (2) What this section does This section sets out how to calculate the amount of a tax credit paid to a fund provider under section MK 3(2) for a year de- scribed in section MK 1(3).

Amount of credit for year The amount of the tax credit is an amount equal to half of a person’s total member credit contributions for the year for all of their complying superannuation funds and KiwiSaver schemes up to a maximum amount of $521.43.
Part-year equivalents: amount of tax credit (3) Despite subsection (2), if the person meets the requirements of section MK 2 for only part of the year, the amount of the tax credit is,— 2307 Part M s MK 4 Income Tax Act 2007 Reprinted as at 2 September 2013 (a) (b) equal to half of their total member credit contributions for the year, if that amount is equal to or less than the part-year maximum amount calculated under subsec- tion (4); or equal to the part-year maximum amount calculated under subsection (4), if half of their total member credit contributions for the year is greater than the part-year maximum amount calculated under subsection (4).
Part-year equivalents: maximum amount The part-year maximum amount referred to in subsection (3) is calculated using the formula— $521.43 × days 365.

Deﬁnition of item in formula In the formula, days is the number of days in the year in which the person meets the requirements of section MK 2.
Parts of years In subsection (3), a part of the year may include 1 or more periods of the year in which the person meets the relevant re- quirements and, if there are several periods, for the purposes of the item days in the formula, the days in those periods are added together.
Deﬁned in this Act: amount, employee, employer contribution, ﬁrst payment period, fund provider, member credit contribution, salary or wages, second pay- ment period, tax credit Compare: 2004 No 35 ss KJ 3, OB 1 “member credit year” Section MK 4: substituted, on 1 April 2008, by section 129 of the Taxation (KiwiSaver) Act 2007 (2007 No 110).
Section MK 4(2): amended, on 1 July 2011 (applying for calculating a tax credit for the year starting on 1 July 2011 and later years), by section 7(1)(a) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).

Section MK 4(2): amended, on 1 July 2011 (applying for calculating a tax credit for the year starting on 1 July 2011 and later years), by section 7(1)(b) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).
Section MK 4(3)(a): substituted, on 1 July 2011 (applying for calculating a tax credit for the year starting on 1 July 2011 and later years), by section 7(2) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).

Section MK 4(3)(b): substituted, on 1 July 2011 (applying for calculating a tax credit for the year starting on 1 July 2011 and later years), by section 7(2) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).
(4) (5) (6) 2308 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MK 7 Section MK 4(4) formula: amended, on 1 July 2011 (applying for calculating a tax credit for the year starting on 1 July 2011 and later years), by section 7(3) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).
MK 5 Crown contributions for members A tax credit paid to a person’s fund provider under section MK 3 is treated as a Crown contribution for the person, and the KiwiSaver scheme rules and complying fund rules, as ap- plicable, apply to the amount.
Deﬁned in this Act: amount, complying fund rules, fund provider, KiwiSaver scheme, pay, tax credit Compare: 2004 No 35 s KJ 5(2) MK 6 Credit given by fund providers A fund provider who receives a tax credit under section MK 3 must credit the relevant person with the amount which must vest in the person immediately after it is paid to the fund provider.
The provider must use the contribution allocation for a member to credit the amount of the tax credit on a pro rata basis across the investment products to which the person has subscribed or been allocated as a member of a KiwiSaver scheme or complying superannuation fund.
Deﬁned in this Act: amount, complying superannuation fund, fund provider, KiwiSaver scheme, pay, tax credit Compare: 2004 No 35 s KJ 5(3), (4) Section MK 6: amended, on 1 April 2008, by section 130 of the Taxation (Kiwi- Saver) Act 2007 (2007 No 110).

MK 7 Amounts paid in excess Despite section MK 6, a fund provider is treated as having the amount of a tax credit paid under section MK 3 for the pur- poses of recovering any amount paid in excess of that properly payable.
For the purposes of this section, the fund provider may subtract an amount from a person’s account to pay the Commissioner the excess amount.
Deﬁned in this Act: amount, Commissioner, fund provider, pay, tax credit Compare: 2004 No 35 s KJ 5(1), (5) 2309 Part M s MK 8 Income Tax Act 2007 Reprinted as at 2 September 2013 MK 8 Treatment of tax credits on permanent emigration When this section applies This section applies in the case of a permanent emigration from New Zealand when a person for whom a tax credit has been paid asks their fund provider after their emigration to withdraw or transfer from their KiwiSaver scheme or comply- ing superannuation fund under schedule 1, clause 14 of the KiwiSaver Act 2006 for a KiwiSaver scheme or under a pro- vision equivalent to that one for a complying superannuation fund.
Payment to Commissioner The fund provider must pay to the Commissioner as soon as practicable the lesser of— (a) the amount of the tax credit paid for the person and held by the provider: the amount of member’s accumulation, as deﬁned in the KiwiSaver Act 2006 for the person for a KiwiSaver scheme: the amount of employee’s superannuation accumulation for the person for a complying superannuation fund.
(b) (c) Recovery If the fund provider does not pay the amount under subsection (2) as soon as practicable, they are treated as having an amount of tax credit paid in excess of that properly payable.
Deﬁned in this Act: amount, Commissioner, complying superannuation fund, employee’s superannuation accumulation, fund provider, KiwiSaver scheme, New Zealand, pay, tax credit Compare: 2004 No 35 ss KJ 3, OB 1 “member credit year” Section MK 8 heading: amended, on 1 July 2013, by section 115(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section MK 8 heading: amended, on 1 July 2013, by section 94(1) of the Taxa- tion (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remed- ial Matters) Act 2010 (2010 No 109).

Section MK 8(1): amended, on 1 July 2013, by section 115(2) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section MK 8(1): amended, on 1 July 2013, by section 94(2) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Section MK 8(1): amended, on 1 July 2013, by section 94(3) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).

(1) (2) (3) 2310 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MK 14 Section MK 8(2)(a): amended, on 1 April 2008, by section 131 of the Taxation (KiwiSaver) Act 2007 (2007 No 110).
Tax credits for employers [Repealed] Heading: repealed, on 1 April 2009, by section 54 of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).

MK 9 Eligibility requirements [Repealed] Section MK 9: repealed, on 1 April 2009, by section 54 of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).

MK 10 Amount of credit [Repealed] Section MK 10: repealed, on 1 April 2009, by section 54 of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).
MK 11 When tax credits arise [Repealed] Section MK 11: repealed, on 1 April 2009, by section 54 of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).

MK 12 Using tax credits [Repealed] Section MK 12: repealed, on 1 April 2009, by section 54 of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).
MK 13 When short payment and unpaid compulsory employer contributions found after tax credit used [Repealed] Section MK 13: repealed, on 1 April 2009, by section 54 of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).

MK 14 Employees opting out [Repealed] Section MK 14: repealed, on 1 April 2009, by section 54 of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).
2311 Part M s MK 15 Income Tax Act 2007 Reprinted as at 2 September 2013 MK 15 Groups of persons (b) (c) For the purposes of this subpart, a group of persons described in 1 of the following paragraphs is treated as 1 employer: (a) 2 or more companies, if the companies are a group of companies; and all partners in a partnership; and all persons in whom property has become vested, or to whom the control of property has passed in the case of an estate of a deceased person, or a trust, or a com- pany in liquidation, or an assigned estate, or other case in which property is vested or controlled in a ﬁduciary capacity.
Deﬁned in this Act: company, employer, group of companies, group of persons Compare: 2004 No 35 s KJ 12 Section MK 15: added, on 1 April 2008, by section 132 of the Taxation (Kiwi- Saver) Act 2007 (2007 No 110).

MK 16 Private domestic workers For the purposes of this subpart, a private domestic worker who is an employer under paragraph (c) of the deﬁnition of employer in section 4 of the KiwiSaver Act 2006 is treated as paying salary or wages to themselves in the capacity of em- ployee.
Deﬁned in this Act: employee, private domestic worker, salary or wages Compare: 2004 No 35 s KJ 6(4) Section MK 16: added, on 1 April 2008, by section 132 of the Taxation (Kiwi- Saver) Act 2007 (2007 No 110).

Subpart ML—Tax credits for redundancy payments [Repealed] Subpart ML: repealed, on 1 April 2013, by section 10 of the Taxation (Canter- bury Earthquake Measures) Act 2011 (2011 No 24).
Contents ML 1 What this subpart does [Repealed] ML 2 Tax credit for redundancy payments [Repealed] Page 2313 2313 2312 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MZ 1 ML 3 Payment by Commissioner [Repealed] 2313 ML 1 What this subpart does [Repealed] Section ML 1: repealed, on 1 April 2013, by section 10 of the Taxation (Can- terbury Earthquake Measures) Act 2011 (2011 No 24).
ML 2 Tax credit for redundancy payments [Repealed] Section ML 2: repealed, on 1 April 2013, by section 10 of the Taxation (Can- terbury Earthquake Measures) Act 2011 (2011 No 24).

ML 3 Payment by Commissioner [Repealed] Section ML 3: repealed, on 1 April 2013, by section 10 of the Taxation (Can- terbury Earthquake Measures) Act 2011 (2011 No 24).
Subpart MZ—Terminating provisions Contents MZ 1 Entitlement to child tax credit MZ 2 Calculation of child tax credit MZ 3 Exclusions from determination of family scheme income Page 2313 2314 2315 MZ 1 Entitlement to child tax credit (1) When this section applies This section applies when— (a) a person is claiming or receiving a child tax credit for a child for an entitlement period ending on 31 March 2006; and the person is not entitled to an in-work tax credit under section MD 4 (Entitlement to in-work tax credit).
(b) 2313 Part M s MZ 2 Income Tax Act 2007 Reprinted as at 2 September 2013 (2) (3) Entitlement If the person maintains continuously their entitlement after 31 March 2006, they remain entitled to receive the child tax credit for entitlement periods after that date.

When another person entitled to credit If 2 persons are entitled to an in-work tax credit or a child tax credit for a child for an entitlement period, the amount to which each is entitled is not affected by the entitlement of the other person.
Deﬁned in this Act: amount, child, child tax credit, entitlement period, in-work tax credit Compare: 2004 No 35 ss KD 2AA(3A), KD 2AAAB Section MZ 1(1)(b): amended, on 1 April 2008, by section 491(1) of the Taxa- tion (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MZ 1(3): amended, on 1 April 2008, by section 491(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section MZ 1 list of deﬁned terms in-work payment: repealed, on 1 April 2008, by section 491(3)(b) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section MZ 1 list of deﬁned terms in-work tax credit: inserted, on 1 April 2008, by section 491(3)(a) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
MZ 2 Calculation of child tax credit Entitlement (1) A person who meets the requirements of section MZ 1 is en- titled to a child tax credit calculated using the formula in sub- section (2).

Formula The formula is— (2) $780 × dependent children × days in entitlement period 365.
Deﬁnition of items in formula In the formula,— (a) dependent children is the number of dependent chil- dren for whom the person is a principal caregiver during the entitlement period: days in entitlement period is the number of days in the entitlement period for which the person and their (b) (3) 2314 Reprinted as at 2 September 2013 Income Tax Act 2007 Part M s MZ 3 spouse, civil union partner, or de facto partner do not receive a social assistance payment and do not have a suspended entitlement to an income-tested beneﬁt.
Deﬁned in this Act: amount, child tax credit, civil union partner, de facto part- ner, dependent child, entitlement period, income-tested beneﬁt, principal care- giver, social assistance payment, spouse Compare: 2004 No 35 s KD 2(4) MZ 3 Exclusions from determination of family scheme income (1) When this section applies This section applies for the purposes of determining under sec- tion MB 1 (Adjustments for calculation of family scheme in- come) the entitlement and tax credit of a person under the fam- ily scheme.
Refunds of main deposit (2) An amount of main deposit made in relation to the 2002–03 or earlier income year that is refunded to the person in the 2003–04 or later income year under any of sections EH 10, EH 13, EH 15, EH 17, and EH 23 (which relate to income equalisation accounts) is not included in family scheme in- come.
Refunds of adverse event deposit (3) An amount of adverse event deposit made under section EH 39 (Adverse event income equalisation account) in relation to the 2002–03 or earlier income year that is refunded to the person in the 2003–04 or later income year under any of sections EH 45, EH 47, and EH 53 (which relate to refunds on application) is not included in family scheme income.
(4) Treatment of interest The amount of a refund under subsections (2) and (3) does not include an amount of interest payable under section EH 6 or EH 40 (which relate to interest on deposits), as applicable.
Deﬁned in this Act: adverse event deposit, amount, family scheme, family scheme income, income year, interest, main deposit, tax credit Compare: 2004 No 35 s KD 1(1)(e)(i), (vi) Section MZ 3: added (with effect on 1 April 2008), on 6 October 2009, by section 371(1) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
2315 Income Tax Act 2007 Reprinted as at 2 September 2013 Part O Memorandum accounts Subpart OA—General provisions Contents Introductory provisions OA 1 What this Part does OA 2 Memorandum accounts OA 3 General rules for maintaining memorandum accounts OA 4 Certain credits and debits arising only in group accounts Credits and debits OA 5 Credits OA 6 Debits OA 7 Opening balances of memorandum accounts Opening balances Page 2317 2317 2318 2319 2319 2321 2323 Shareholder continuity requirements OA 8 Shareholder continuity requirements for memorandum 2325 accounts Treatment of credits and debits on resident’s restricted amalgamation General provision OA 9 General treatment of credits and debits on resident’s 2328 restricted amalgamation OA 10 When credits or debits due to amalgamating company but 2329 When companies amalgamate not recorded OA 11 FDP account on resident’s restricted amalgamation OA 12 CTR account on resident’s restricted amalgamation [Repealed] OA 13 Policyholder credit account on resident’s restricted 2330 2331 2331 amalgamation Amalgamation of companies in consolidated groups OA 14 Continuity of shareholding when group companies 2332 amalgamate OA 15 When credits or debits due to consolidated group but not 2333 recorded 2316 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OA 2 OA 16 When FDP account ends on resident’s restricted amalgamation OA 17 When policyholder credit account ends on resident’s restricted amalgamation OA 18 Calculation of maximum permitted ratios Maximum permitted ratios 2334 2335 2336 Introductory provisions OA 1 What this Part does This Part provides some rules of general application for recording amounts as credits and debits to a memorandum account.
Deﬁned in this Act: memorandum account OA 2 Memorandum accounts (1) Types of account in this Part The following accounts are dealt with in this Part: (a) (b) an imputation credit account, see subparts OB and OP: a foreign dividend payment (FDP) account, see subparts OC and OP: [Repealed] a branch equivalent tax account, see subpart OE: an available subscribed capital (ASC) account, see sub- part OF: [Repealed] a Maori authority credit account, see subpart OK. (c) (d) (e) (f) (g) Role of accounts (2) A memorandum account is an account listed in subsection (1) that provides a record of the credits and debits arising in the account.
Tax year (3) A memorandum account is maintained for a tax year unless a provision in this Part expressly states otherwise.

(4) Tables The credits and debits that arise in a memorandum account are listed in tables in each of the subparts.
The tables— 2317 Part O s OA 3 Income Tax Act 2007 Reprinted as at 2 September 2013 (5) (a) (b) (c) state the credits and the debits; and provide the credit dates and the debit dates; and refer to the section that fully deﬁnes the credits and debits, and their credit dates and debit dates.
Determination The Commissioner may issue a determination under section 104B of the Tax Administration Act 1994 adjusting the amount of a credit or debit, or a credit date or debit date recorded in a memorandum account if the Commissioner considers the amount or date is not correct.

The determination may be re- viewed in challenge proceedings under Part 8A of that Act.
Deﬁned in this Act: ASC account, branch equivalent tax account, Commis- sioner, CTR account, FDP account, imputation credit account, Maori authority credit account, memorandum account, policyholder credit account, tax year Compare: 2004 No 35 ss ME 1(1), ME 3(1), ME 10(1), (1A)–(1C), ME 15, ME 17(1), ME 20, ME 21(1), ME 22(1), ME 25, ME 26(2), ME 40, MF 1(1), MF 3(1), MF 6, MF 7(1), MF 11(1), MF 12(1), MG 2(1), MG 3(1), MG 12, MG 13(1), MG 14(1), MG 15(1), MI 2(1), (4), MI 3(1), MI 14, MI 17(1), MI 18(1), MJ 1(1), MJ 3(1), MJ 8, MK 1(1), MK 3(1), MK 9 Section OA 2(1)(c): repealed (with effect on 1 July 2011 and applying for in- come years beginning on or after that date), on 7 May 2012, by section 81(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section OA 2(1)(d): amended, on 1 July 2012 (applying for income years be- ginning on or after that date), by section 81(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section OA 2(1)(f): repealed, on 1 July 2010, by section 372(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OA 3 General rules for maintaining memorandum accounts (1) What this section does This section sets out the rules that apply in relation to a memo- randum account to a person who— (a) (b) may choose to maintain an account.

is required to maintain a memorandum account; or Record (2) A person who maintains a memorandum account must record all credits and all debits that arise in the account as at their credit date or debit date.
The credits and debits are listed in provisions in the relevant subpart for each type of memoran- dum account.

2318 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OA 5 (3) (4) Credit balances The credit balance recorded in a memorandum account during a tax year or income year, as applicable, is the excess of credits over debits.

Debit balances The debit balance recorded in a memorandum account during a tax year or income year, as applicable, is the excess of debits over credits.
Deﬁned in this Act: amount, income year, memorandum account, tax year Compare: 2004 No 35 ss ME 2, ME 3(1), ME 16, ME 17(1), ME 22(1), ME 26, MF 2, MF 3(1), MF 8, MF 12(1), MG 1, MG 3(1), MG 14(1), MG 15(1), MI 1, MI 3(1), MI 17(1), MI 18(1), MJ 2, MJ 3(1), MK 2, MK 3(1) OA 4 Certain credits and debits arising only in group accounts Certain credits or debits of a consolidated group may arise only in the memorandum account of the consolidated group and not in the memorandum account of a group company.
Memoran- dum accounts of consolidated groups are dealt with in subpart OP (Memorandum accounts of consolidated groups).

Deﬁned in this Act: company, consolidated group, memorandum account Compare: 2004 No 35 ss ME 13, ME 28(4), MF 9, MF 11(3), MG 16, MI 19 Credits and debits OA 5 Credits (1) What this section does This section deﬁnes the credits that arise under this Part in a memorandum account.
Imputation credits (2) A credit is an imputation credit if it is an amount— (a) (b) (c) set out in any of sections OA 7, OB 4 to OB 29, and OP 7 to OP 27: described in a row of table O1: imputation credits or imputation credits of consolidated imput- table O19: ation groups: credited under section OZ 18 (Credit-back of PCA bal- ance).
FDP credits (3) A credit is an FDP credit if it is an amount— 2319 Part O s OA 5 Income Tax Act 2007 Reprinted as at 2 September 2013 (a) (b) set out in any of sections OA 7, OC 6 to OC 12, and OP 56 to OP 63: described in a row of table O3: FDP credits or table O21: FDP credits of consolidated FDP groups.
CTR credits [Repealed] [Repealed] (4) Branch equivalent tax credits (5) A credit is a branch equivalent tax credit if it is an amount, for a BETA person,— (a) (b) set out in section OA 7 or OE 19: described in a row of table O9: person’s branch equiva- lent tax credits.

ASC credits (6) A credit is an ASC credit if it is an amount— (a) (b) set out in section OA 7 or OF 4: described in a row of table O11: ASC credits.
Policyholder credits [Repealed] [Repealed] (7) Maori authority credits (8) A credit is a Maori authority credit if it is an amount— set out in any of sections OA 7 and OK 2 to OK 9: (a) (b) described in a row of table O17: Maori authority credits.
Deﬁned in this Act: amount, ASC credit, BETA person, branch equivalent tax credit, consolidated FDP group, consolidated group, consolidated imputation group, FDP credit, imputation credit, Maori authority credit, memorandum ac- count, PCA company, PCA person Section OA 5(2)(b): amended, on 1 July 2010, by section 373(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OA 5(2)(c): added, on 1 July 2010, by section 373(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OA 5(4) heading: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, pursuant to section 82(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section OA 5(4): repealed (with effect on 1 July 2011 and applying for in- come years beginning on or after that date), on 7 May 2012, by section 82(1) of 2320 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OA 6 the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section OA 5(5): replaced, on 1 July 2012 (applying for income years beginning on or after that date), by section 82(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section OA 5(7) heading: repealed, on 1 July 2010, pursuant to section 373(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OA 5(7): repealed, on 1 July 2010, by section 373(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OA 5 list of deﬁned terms BETA company: repealed, on 1 July 2012, by section 82(4) of the Taxation (International Investment and Remedial Mat- ters) Act 2012 (2012 No 34).
Section OA 5 list of deﬁned terms consolidated BETA group: repealed, on 1 July 2012, by section 82(4) of the Taxation (International Investment and Re- medial Matters) Act 2012 (2012 No 34).

Section OA 5 list of deﬁned terms CTR credit: repealed (with effect on 1 July 2011), on 7 May 2012, by section 82(3) of the Taxation (International Invest- ment and Remedial Matters) Act 2012 (2012 No 34).
Section OA 5 list of deﬁned terms policyholder credit: repealed, on 1 July 2010, by section 373(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

OA 6 Debits What this section does (1) An ICA company has an imputation credit for an amount rep- resenting an entitlement to funds held in a tax pooling account if the intermediary transfers the entitlement from another per- son to the company.
Imputation debits (2) A debit is an imputation debit if it is an amount— (a) (b) set out in any of sections OA 7, OB 30 to OB 59, OP 28 to OP 50, and OZ 3: described in a row of table O2: table O20: ation groups.
imputation debits or imputation debits of consolidated imput- FDP debits (3) A debit is an FDP debit if it is an amount— (a) set out in any of sections OA 7, OC 13 to OC 26, and OP 64 to OP 77: 2321 Part O s OA 6 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) described in a row of table O4: FDP debits or table O22: FDP debits of consolidated FDP groups.
CTR debits [Repealed] [Repealed] (4) Branch equivalent tax debits (5) A debit is a branch equivalent tax debit if it is an amount, for a BETA person,— (a) (b) set out in any of sections OA 7 and OE 20 to OE 22: described in a row of table O10: person’s branch equivalent tax debits.

ASC debits (6) A debit is an ASC debit if it is an amount— (a) (b) set out in section OA 7 or OF 5: described in a row of table O12: ASC debits.
Policyholder debits [Repealed] [Repealed] (7) Maori authority debits (8) A debit is a Maori authority debit if it is an amount— (a) set out in any of sections OA 7 and OK 10 to OK 18: described in a row of table O18: Maori authority debits.
(b) Deﬁned in this Act: amount, ASC debit, BETA person, branch equivalent tax debit, consolidated FDP group, consolidated group, consolidated imputation group, FDP debit, imputation debit, Maori authority debit, memorandum ac- count, PCA company, PCA person Section OA 6(4) heading: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, pursuant to section 83(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section OA 6(4): repealed (with effect on 1 July 2011 and applying for in- come years beginning on or after that date), on 7 May 2012, by section 83(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section OA 6(5): replaced, on 1 July 2012 (applying for income years beginning on or after that date), by section 83(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section OA 6(7) heading: repealed, on 1 July 2010, pursuant to section 374(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

2322 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OA 7 Section OA 6(7): repealed, on 1 July 2010, by section 374(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OA 6 list of deﬁned terms BETA company: repealed, on 1 July 2012, by section 83(4) of the Taxation (International Investment and Remedial Mat- ters) Act 2012 (2012 No 34).

Section OA 6 list of deﬁned terms consolidated BETA group: repealed, on 1 July 2012, by section 83(4) of the Taxation (International Investment and Re- medial Matters) Act 2012 (2012 No 34).
Section OA 6 list of deﬁned terms CTR debit: repealed (with effect on 1 July 2011), on 7 May 2012, by section 83(3) of the Taxation (International Invest- ment and Remedial Matters) Act 2012 (2012 No 34).

Section OA 6 list of deﬁned terms policyholder debit: repealed, on 1 July 2010, by section 374(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Opening balances OA 7 Opening balances of memorandum accounts (1) (2) Balances carried forward The opening balance of a memorandum account at the start of a tax year or income year, as applicable, is the closing balance of the account in the previous tax year or income year, as ap- plicable.
Credit date The credit date or debit date for an opening balance is,— (a) for an imputation credit account, the ﬁrst day of the tax year: for an FDP account, the ﬁrst day of the tax year: [Repealed] for a branch equivalent tax account of a BETA person, the ﬁrst day of the income year: for an ASC account, the ﬁrst day of the tax year: [Repealed] for a Maori authority credit account, the ﬁrst day of the tax year.
(b) (c) (d) (e) (f) (g) (3) First year If a consolidated group, company, or person starts a memo- randum account during a tax year, no credit for an opening balance arises in the account.
But this subsection does not apply— 2323 Part O s OA 7 Income Tax Act 2007 Reprinted as at 2 September 2013 (a) when the companies of 2 or more consolidated imput- ation groups choose to combine to form, or to join, an imputation group, for which see section OP 3(2) (Changes in consolidated imputation groups): (b) when the companies that are part of an imputation group choose to convert their status to that of a consolidated group that is a consolidated imputation group, for which see section OP 3(3): to a resident imputation subgroup associated with a trans-Tasman imputation group, for which see section OP 4 (Resident imputation subgroups).
(c) Deﬁned in this Act: ASC account, BETA person, branch equivalent tax ac- count, company, consolidated group, consolidated imputation group, FDP ac- count, imputation credit account, imputation group, income year, Maori author- ity credit account, memorandum account, PCA company, PCA person, resident imputation subgroup, tax year, trans-Tasman imputation group Compare: 2004 No 35 ss ME 3(2), ME 10(1A)–(1C), (2), ME 17(2), ME 22(2), ME 26(1), MF 3(2), MF 8(1), MF 12(2), MG 3(2), MG 13(3), MI 3(2), MI 15, MJ 3(2), MK 3(2) Section OA 7(2)(c): repealed (with effect on 1 July 2011 and applying for in- come years beginning on or after that date), on 7 May 2012, by section 84(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section OA 7(2)(d): replaced, on 1 July 2012 (applying for income years be- ginning on or after that date), by section 84(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section OA 7(2)(f): repealed, on 1 July 2010, by section 375(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OA 7 list of deﬁned terms BETA company: repealed, on 1 July 2012, by section 84(4) of the Taxation (International Investment and Remedial Mat- ters) Act 2012 (2012 No 34).

Section OA 7 list of deﬁned terms consolidated BETA account: repealed, on 1 July 2012, by section 84(4) of the Taxation (International Investment and Re- medial Matters) Act 2012 (2012 No 34).
Section OA 7 list of deﬁned terms CTR account: repealed (with effect on 1 July 2011), on 7 May 2012, by section 84(3) of the Taxation (International Invest- ment and Remedial Matters) Act 2012 (2012 No 34).

Section OA 7 list of deﬁned terms policyholder credit account: repealed, on 1 July 2010, by section 375(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2324 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OA 8 Shareholder continuity requirements OA 8 Shareholder continuity requirements for memorandum accounts (1) When this section applies This section applies when a company or a consolidated group maintains a memorandum account.
Shareholder continuity requirement (2) An amount that is a credit in the account may be carried for- ward from a credit date to a later time only if the company or consolidated group that has the credit maintains a 66% con- tinuity of shareholding under subsection (7) from the credit date to the later time.

Subsections (3B) to (5) override this subsection.

Continuity (3) A credit is treated as continuing to exist to the extent to which it is not reduced by an earlier or later debit arising in the account.
Exclusions: qualifying companies (3B) Subsection (2) does not apply to a qualifying company.

But, if section HA 11(1) (When requirements no longer met) applies to the company,— (a) an adjustment must be made under section HA 18 (Treatment of dividends when qualifying company status ends) to the company’s imputation credit account and FDP account, as applicable; and the shareholder continuity requirements apply to the company from the day on which the status as a quali- fying company ends.
(b) (4) (5) (6) Exclusion: ASC accounts Subsection (2) does not apply to a person who maintains an ASC account.
Modiﬁcation: CTR accounts [Repealed] [Repealed] When continuity lost For a memorandum account and for a company or consolidated group that maintains the account when the continuity of share- holding required by subsection (7) is lost, a debit arises under 2325 Part O s OA 8 Income Tax Act 2007 Reprinted as at 2 September 2013 the relevant section in each subpart only to the extent to which an unused amount of credit remains in the memorandum ac- count.
The relevant sections are— (a) section OB 41 (ICA debit for loss of shareholder con- tinuity): section OC 24 (FDPA debit for loss of shareholder con- tinuity): [Repealed] section OK 15 (MACA debit for loss of shareholder continuity): section OP 42 (Consolidated ICA debit for loss of share- holder continuity): section OP 73 (Consolidated FDPA debit for loss of shareholder continuity).
[Repealed] (b) (c) (d) (e) (f) (g) Shareholder continuity requirement The shareholder continuity requirement is that, while some or all of the credit still exists, a group of persons must continue to hold— (a) aggregate minimum voting interests in a company or consolidated group of at least 66%; and if a market value circumstance exists for a company or, in the case of a consolidated group, a group company, aggregate minimum market value interests in the com- pany or group of at least 66%.
(b) Modiﬁcations The following rules apply for the purposes of subsection (7): the minimum interest referred to in subsection (7)(a) or (a) (b) of a person must be counted if their interests change after the credit arises; and a credit retains its separate character and is not treated as part of a credit referred to in section OA 7 in a later tax year; and the amount by which a credit is reduced by an earlier or later debit is found by— (i) (b) (c) treating debits as reducing credits in the order in which credits arise; and counting an amount of a debit only once in the reduction of some or all of a credit; and (7) (8) (ii) 2326 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OA 8 (iii) applying any relevant terminating modiﬁcations set out in section OZ 4 (Terminating modiﬁca- tions to debits for loss of shareholder continuity) for a credit arising before 1 April 1992.
Deﬁned in this Act: amount, ASC account, branch equivalent tax account, com- pany, consolidated group, FDP account, group of persons, imputation credit ac- count, Maori authority credit account, market value circumstance, market value interest, memorandum account, minimum market value interest, minimum vot- ing interest, shareholder, tax year, voting interest Compare: 2004 No 35 ss ME 5(3), ME 12(1)(h), ME 13(2), (4), MF 4(5), MF 8(4), MG 15(1), MI 5(3)–(7), MI 18(1)(e), (3), (4), MK 5(3), (4) Section OA 8(2): amended (with effect on 1 April 2008), on 6 October 2009, by section 376(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OA 8(3B) heading: inserted (with effect on 1 April 2008), on 6 October 2009, by section 376(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OA 8(3B): inserted (with effect on 1 April 2008), on 6 October 2009, by section 376(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OA 8(4) heading: substituted (with effect on 1 April 2008), on 6 Octo- ber 2009, by section 376(3) of the Taxation (International Taxation, Life Insur- ance, and Remedial Matters) Act 2009 (2009 No 34).

Section OA 8(4): substituted (with effect on 1 April 2008), on 6 October 2009, by section 376(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OA 8(5) heading: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, pursuant to section 85(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section OA 8(5): repealed (with effect on 1 July 2011 and applying for in- come years beginning on or after that date), on 7 May 2012, by section 85(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section OA 8(6)(c): repealed, on 1 July 2012 (applying for income years be- ginning on or after that date), by section 85(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section OA 8(6)(g): repealed, on 1 July 2012 (applying for income years be- ginning on or after that date), by section 85(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section OA 8 list of deﬁned terms CTR account: repealed (with effect on 1 July 2011), on 7 May 2012, by section 85(3) of the Taxation (International Invest- ment and Remedial Matters) Act 2012 (2012 No 34).

Section OA 8 list of deﬁned terms policyholder credit account: repealed (with effect on 1 April 2008), on 6 October 2009, by section 376(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2327 Part O s OA 9 Income Tax Act 2007 Reprinted as at 2 September 2013 Treatment of credits and debits on resident’s restricted amalgamation General provision OA 9 General treatment of credits and debits on resident’s restricted amalgamation (1) When this section applies This section applies— (a) on a resident’s restricted amalgamation, in relation to an amalgamated company and a memorandum account, if an amalgamating company ends its existence on the amalgamation and, at the time of the amalgamation, the amalgamating company maintains 1 or more memo- randum accounts of the type referred to in sections OA 2(1)(a) to (d), and (f); and for the purposes of determining whether a credit or debit arises in the same type of account of the amalgamated company.
(b) Treatment of pre-amalgamation credits and debits (2) A credit or debit recorded in the memorandum account of the amalgamating company before the date of the amalgamation is treated as if it were recorded in the same type of account of the amalgamated company on the date it was recorded in the amalgamating company’s account with effect from the time of the amalgamation.
(3) Treatment of pre-amalgamation period For the purposes of section OA 8(7)(b) and (8), in determining at a time after the amalgamation whether continuity of share- holding exists for the credit or debit in the memorandum ac- count, the amalgamated company is treated for all times before the amalgamation as if— (a) (b) it did not separately exist; and it were instead the amalgamating company, with the same shareholders and option holders.
(4) Avoidance provisions For the purposes of determining the credits and debits in the memorandum account of an amalgamating company, sections 2328 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OA 10 GB 34 and GB 41 (which relate to arrangements to defeat the application of certain provisions) apply, modiﬁed as necessary.
Deﬁned in this Act: amalgamated company, amalgamating company, consoli- dated group, memorandum account, resident’s restricted amalgamation, share- holder Compare: 2004 No 35 ss ME 29(1)(a), MF 16(1)(a), MG 17(1)(a), MI 13 Section OA 9(4): amended, on 1 July 2012 (applying for income years begin- ning on or after that date), by section 86(1) of the Taxation (International In- vestment and Remedial Matters) Act 2012 (2012 No 34).
When companies amalgamate OA 10 When credits or debits due to amalgamating company but not recorded (1) When this section applies This section applies on a resident’s restricted amalgamation if, at the time of the amalgamation, an amalgamating company maintains— (a) (b) (c) (d) (e) an imputation credit account: an FDP account: [Repealed] [Repealed] a policyholder credit account.
Credits and debits due (2) A credit or a debit due to the amalgamating company but not recorded in its memorandum account before the date of amal- gamation is recorded in the same type of memorandum ac- count of the amalgamated company.

Subsections (3) and (4) override this subsection.


(3) (4) Exclusion: shareholder continuity rules Subsection (2) does not apply to a debit for loss of shareholder continuity in an imputation credit account arising under sec- tion OB 41 (ICA debit for loss of shareholder continuity) and described in table O2: imputation debits, row 14 (debit for loss of shareholder continuity).
Recording in imputation credit account If the amalgamated company does not maintain a memoran- dum account referred to in subsection (1)(b) and (e), the credit 2329 Part O s OA 11 Income Tax Act 2007 Reprinted as at 2 September 2013 or debit is recorded in the imputation credit account of the amalgamated company.

See sections OA 11 to OA 13.
Deﬁned in this Act: amalgamated company, amalgamating company, FDP ac- count, imputation credit, imputation credit account, imputation debit, memoran- dum account, policyholder credit account, resident’s restricted amalgamation Compare: 2004 No 35 ss ME 29(1), MF 16(1), MG 17(1), MI 13 Section OA 10(1)(c): repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 87(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section OA 10(1)(d): repealed, on 1 July 2012 (applying for income years be- ginning on or after that date), by section 87(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section OA 10(3): replaced, on 1 July 2012 (applying for income years be- ginning on or after that date), by section 87(4) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section OA 10(4): amended (with effect on 1 July 2011 and applying for in- come years beginning on or after that date), on 7 May 2012, by section 87(5) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section OA 10 list of deﬁned terms branch equivalent tax account: repealed, on 1 July 2012, by section 87(7) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section OA 10 list of deﬁned terms CTR account: repealed (with effect on 1 July 2011), on 7 May 2012, by section 87(6) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OA 11 FDP account on resident’s restricted amalgamation (1) When this section applies This section applies on a resident’s restricted amalgamation if— (a) an amalgamating company ends its existence on amal- gamation; and at the time of amalgamation, the company maintains an FDP account; and the amalgamated company does not maintain an FDP account.
(b) (c) Credits and debits due (2) A credit or a debit due to the amalgamating company for the purposes of the FDP account but not recorded before the date of amalgamation is recorded in the imputation credit account of the amalgamated company, as appropriate,— 2330 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OA 13 (a) (b) under section OB 24 (ICA credit on resident’s restricted amalgamation) as described in table O1: imputation credits, row 22 (credit on resident’s restricted amalgam- ation); or under section OB 53 (ICA debit on resident’s restricted amalgamation) as described in table O2: imputation debits, row 26 (debit on resident’s restricted amalgam- ation).
Deﬁned in this Act: amalgamated company, amalgamating company, FDP ac- count, imputation credit account, resident’s restricted amalgamation Compare: 2004 No 35 s MG 17(1) OA 12 CTR account on resident’s restricted amalgamation [Repealed] Section OA 12: repealed (with effect on 30 June 2009), on 6 October 2009, by section 377(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OA 13 Policyholder credit account on resident’s restricted amalgamation (1) When this section applies This section applies on a resident’s restricted amalgamation if— (a) an amalgamating company ends its existence on amal- gamation; and at the time of amalgamation, the company maintains a policyholder credit account; and the amalgamated company does not maintain a policy- holder credit account.
(b) (c) Credits and debits due (2) A credit or a debit due to the amalgamating company for the purposes of the policyholder credit account but not recorded in the account before the date of amalgamation, is recorded in the imputation credit account of the amalgamated company, as appropriate,— (a) under section OB 24 (ICA credit on resident’s restricted amalgamation) as described in table O1: imputation credits, row 22 (credit on resident’s restricted amalgam- ation); or 2331 Part O s OA 14 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) under section OB 53 (ICA debit on resident’s restricted amalgamation) as described in table O2: imputation debits, row 26 (debit on resident’s restricted amalgam- ation).
Deﬁned in this Act: amalgamated company, amalgamating company, imput- ation credit account, policyholder credit account, resident’s restricted amalgam- ation Compare: 2004 No 35 s ME 29(1) Amalgamation of companies in consolidated groups OA 14 Continuity of shareholding when group companies amalgamate (1) (2) (3) What this section does This section and sections OA 15 to OA 17 apply when all the companies in a consolidated group or consolidated imput- ation group amalgamate on a resident’s restricted amalgam- ation, and the amalgamation results in— (a) (b) the end of the group’s existence; and the formation of an amalgamated company.
Other company The amalgamation may include a company that is not part of the consolidated group or consolidated imputation group.

Continuity of shareholding: credits and debits Subsections (4) and (5) apply for the purposes of determining whether a credit or debit arises in the memorandum account of the amalgamated company that is of the type referred to in section OA 2(1)(a), (b), (d), and (f).
Treatment of pre-amalgamation credits and debits (4) A credit or debit recorded in the memorandum account of the consolidated group before the date of the amalgamation is treated as if it were recorded in the same type of account of the amalgamated company on the date it was recorded in the consolidated group’s account with effect from the date of amalgamation.
Treatment of pre-amalgamation period For the purposes of section OA 8(7)(b) and (8), in determining at a time after the amalgamation whether continuity of share- (5) 2332 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OA 15 (6) holding exists for the credit or debit in the memorandum ac- count, the amalgamated company is treated for all times before the amalgamation as if— (a) (b) it did not separately exist; and it were instead the consolidated group, with the same shareholders and option holders.
Avoidance provisions For the purposes of determining the credits and debits in the memorandum account of a consolidated group, sections GB 34 and GB 41 (which relate to arrangements to defeat the appli- cation of certain provisions) apply, modiﬁed as necessary.
Deﬁned in this Act: amalgamated company, company, consolidated group, con- solidated imputation group, memorandum account, resident’s restricted amal- gamation, shareholder, voting interest Compare: 2004 No 35 ss ME 29(2)(a), MF 16(2)(a), MG 17(2)(a) Section OA 14(6): amended, on 1 July 2012 (applying for income years be- ginning on or after that date), by section 88(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OA 15 When credits or debits due to consolidated group but not recorded (1) When this section applies This section applies on a resident’s restricted amalgamation referred to in section OA 14 when, at the time of the amal- gamation, a consolidated group maintains— an imputation credit account: (a) an FDP account: (b) [Repealed] (c) a policyholder credit account.
(d) Credits and debits due (2) A credit or a debit due to the consolidated group but not recorded in its account before the date of amalgamation is recorded in the same type of memorandum account of the amalgamated company.

Subsections (3) and (4) override this subsection.


(3) Exclusion: shareholder continuity rules Subsection (2) does not apply to a debit for loss of shareholder continuity in an imputation credit account arising under sec- tion OP 42 (Consolidated ICA debit for loss of shareholder 2333 Part O s OA 16 Income Tax Act 2007 Reprinted as at 2 September 2013 (4) imputation debits continuity) and described in table O20: of consolidated imputation groups, row 16 (debit for loss of shareholder continuity).
Recording in imputation credit account If the amalgamated company does not maintain a memoran- dum account referred to in subsection (1)(b) or (d), the credit or debit is recorded in the imputation credit account of the amal- gamated company.

See sections OA 16 and OA 17.


Deﬁned in this Act: amalgamated company, consolidated group, FDP account, imputation credit account, policyholder credit account, resident’s restricted amalgamation, shareholder, voting interest Compare: 2004 No 35 ss ME 29(2)(b), MF 16(2)(b), MG 17(2)(b) Section OA 15(1)(c): repealed, on 1 July 2012 (applying for income years be- ginning on or after that date), by section 89(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section OA 15(3): replaced, on 1 July 2012 (applying for income years be- ginning on or after that date), by section 89(3) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section OA 15 list of deﬁned terms branch equivalent tax account: repealed, on 1 July 2012, by section 89(5) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section OA 15 list of deﬁned terms CTR account: repealed (with effect on 1 July 2011), on 7 May 2012, by section 89(4) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OA 16 When FDP account ends on resident’s restricted amalgamation (1) When this section applies This section applies on a resident’s restricted amalgamation referred to in section OA 14 if— (a) a consolidated group ends its existence on amalgam- ation; and at the time of amalgamation, the consolidated group maintains an FDP account; and the amalgamated company does not maintain an FDP account.
(b) (c) Credits and debits due (2) A credit or a debit due to the group but not recorded before the date of amalgamation is recorded in the imputation credit account of the amalgamated company, as appropriate,— 2334 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OA 17 (a) (b) under section OB 24 (ICA credit on resident’s restricted amalgamation) as described in table O1: imputation credits, row 22 (credit on resident’s restricted amalgam- ation); or under section OB 53 (ICA debit on resident’s restricted amalgamation) as described in table O2: imputation debits, row 26 (debit on resident’s restricted amalgam- ation).
Deﬁned in this Act: amalgamated company, consolidated group, FDP account, imputation credit account OA 17 When policyholder credit account ends on resident’s restricted amalgamation (1) When this section applies This section applies on a resident’s restricted amalgamation referred to in section OA 14 if,— (a) a consolidated group ends its existence on amalgam- ation; and at the time of amalgamation, the consolidated group maintains a policyholder credit account; and the amalgamated company does not maintain a policy- holder credit account.
(b) (c) No policyholder credit account (2) A credit or a debit due to the group but not recorded before the date of amalgamation is recorded in the imputation credit account of the amalgamated company, as appropriate,— (a) under section OB 24 (ICA credit on resident’s restricted amalgamation) as described in table O1: imputation credits, row 22 (credit on resident’s restricted amalgam- ation); or under section OB 53 (ICA debit on resident’s restricted amalgamation) as described in table O2: imputation debits, row 26 (debit on resident’s restricted amalgam- ation).
(b) Deﬁned in this Act: amalgamated company, amalgamating company, consoli- dated group, imputation credit account, policyholder credit account, resident’s restricted amalgamation Compare: 2004 No 35 s ME 29(2) 2335 Part O s OA 18 Income Tax Act 2007 Reprinted as at 2 September 2013 Maximum permitted ratios OA 18 Calculation of maximum permitted ratios (1) When this section applies This section applies in relation to an imputation credit, an FDP credit, and a Maori authority credit, for the purposes of the calculation of— (a) (b) (c) (d) (e) (f) an imputation ratio; and an FDP ratio; and a combined imputation and FDP ratio; and [Repealed] [Repealed] a Maori authority credit ratio.
Maximum permitted ratio (2) A dividend or distribution with a credit attached must not have a ratio for the amount of the credit to the amount of the divi- dend or distribution that is more than the maximum permitted ratio calculated using the formula— tax rate 1 tax rate.
Deﬁnition of item in formula In the formula, tax rate is— (a) for subsection (1)(a) to (e), the basic rate of income tax set out in schedule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RSCT, RWT and attributed fringe beneﬁts) for the income year in which the dividend is paid: for subsection (1)(f), the basic rate of income tax set out in schedule 1, part A, clause 7 for the income year in which the distribution is paid.
(b) Relationship with sections OZ 8 and OZ 9 Sections OZ 8 and OZ 9 (which relate to the calculation of maximum permitted ratios in certain income years) may apply to modify this section.
Deﬁned in this Act: amount, basic rate, combined imputation and CTR ratio, combined imputation and FDP ratio, dividend, FDP credit, imputation credit, income tax, income year, Maori authority credit ratio, maximum permitted ratio, pay, tax year Compare: 2004 No 35 ss ME 8(1), MG 8(1), MG 10(1), MI 8(1), MK 7(1) (3) (4) 2336 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OA 18 Section OA 18(1): amended (with effect on 1 July 2011 and applying for in- come years beginning on or after that date), on 7 May 2012, by section 90(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section OA 18(1)(d): repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 90(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section OA 18(1)(e): repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 90(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section OA 18(3): substituted (with effect on 1 April 2008), on 7 December 2009, by section 85(1) of the Taxation (Consequential Rate Alignment and Re- medial Matters) Act 2009 (2009 No 63).

Section OA 18(4) heading: added, on 1 April 2008, by section 492 of the Tax- ation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section OA 18(4): added, on 1 April 2008, by section 492 of the Taxation (Busi- ness Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section OA 18 list of deﬁned terms CTR credit: repealed (with effect on 1 July 2011), on 7 May 2012, by section 90(3) of the Taxation (International Invest- ment and Remedial Matters) Act 2012 (2012 No 34).

Section OA 18 list of deﬁned terms pay: inserted (with effect on 1 April 2008), on 7 December 2009, by section 126 of the Taxation (Consequential Rate Align- ment and Remedial Matters) Act 2009 (2009 No 63).
Subpart OB—Imputation credit accounts (ICA) Contents Introductory provisions OB 1 General rules for companies with imputation credit accounts OB 2 Australian companies with imputation credit accounts OB 3 OB 3B General rule for life insurer’s policyholder base Imputation credit accounts Imputation credits ICA payment of tax ICA deposit in tax pooling account ICA transfer from tax pooling account ICA payment of further income tax OB 4 OB 5 OB 6 OB 7 OB 7B ICA payment of qualifying company election tax OB 7C ICA expenditure on research and development Page 2340 2342 2345 2345 2345 2348 2348 2349 2349 2350 2337 Income Tax Act 2007 Reprinted as at 2 September 2013 ICA resident withholding tax withheld ICA dividend derived with imputation credit OB 8 OB 9 OB 9B ICA attributed PIE income with imputation credit OB 10 ICA dividend derived with FDP credit OB 11 ICA payment of FDP [Repealed] OB 12 ICA transfer from FDP account OB 13 ICA transfer of debit balance on leaving wholly-owned group OB 14 ICA payment of tax on leaving wholly-owned group OB 15 ICA payment of tax on joining wholly-owned group OB 16 ICA attribution for personal services OB 17 ICA transfer from policyholder credit account [Repealed] OB 18 ICA transfer from ASC account OB 19 ICA transfer to master fund OB 20 ICA distribution with Maori authority credit OB 21 ICA balance of Maori authority credit account OB 22 ICA replacement payment to company under share-lending arrangement OB 23 ICA credit transfer to company OB 24 ICA credit on resident’s restricted amalgamation OB 25 ICA reversal of tax advantage arrangement OB 26 ICA elimination of double debit OB 27 ICA non-resident withholding tax withheld OB 28 ICA payment of amount of tax for schedular payment OB 29 ICA payment of schedular income tax Imputation debits OB 30 ICA payment of dividend OB 31 ICA allocation of provisional tax OB 32 ICA refund of income tax OB 33 ICA amount applied to pay other taxes OB 34 ICA refund from tax pooling account OB 35 ICA transfer within tax pooling account OB 35B ICA
 debit for transfer from tax pooling account for policyholder base liability OB 36 ICA refund of FDP OB 37 ICA refund of tax credit OB 38 ICA overpayment of FDP OB 39 ICA transfer for net foreign attributed income [Repealed] OB 40 ICA attribution for personal services OB 41 ICA debit for loss of shareholder continuity OB 42 ICA on-market cancellation OB 43 ICA breach of imputation ratio Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OA 18 OB 44 ICA debit on leaving wholly-owned group OB 45 ICA redemption debit OB 46 ICA transfer from member fund OB 47 Debit for policyholder base imputation credits OB 48 ICA credit balance when Maori authority credit account starts OB 49 ICA replacement payment by company under share-lending arrangement OB 50 ICA returning share transfer OB 51 ICA credit transfer by company OB 52 ICA imputation credit of consolidated imputation group OB 53 ICA debit on resident’s restricted amalgamation OB 54 ICA tax advantage arrangement OB 55 ICA retrospective imputation credit OB 56 ICA ﬁnal balance OB 57 ICA refund of NRWT OB 58 ICA refund of amount of tax for schedular payment OB 59 ICA refund of schedular income tax Imputation credits attached to dividends OB 60 Imputation credits attached to dividends OB 61 ICA benchmark dividend rules OB 62 Retrospective attachment of imputation credits OB 63 Australian dividends OB 64 Replacement payments Further income tax OB 65 Further income tax for ICA closing debit balance OB 66 Further income tax when company stops being ICA company OB 67 Reduction of further income tax OB 68 Income tax paid satisfying liability for further income tax OB 69 Further income tax paid satisfying liability for income tax OB 70 Application of other provisions Imputation additional tax OB 71 Imputation additional tax on
 leaving wholly-owned group OB 72 Imputation additional tax on joining wholly-owned group OB 72B Limit on using entitlement to refund after joining wholly-owned group Part O s OB 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Distributions of statutory producer boards and co-operative companies OB 73 Statutory producer boards attaching imputation credits 2409 to cash distributions OB 74 Statutory producer boards attaching imputation credits to 2412 notional distributions OB 75 Statutory producer boards’ notional distributions that are 2413 dividends OB 76 Statutory producer boards attaching FDP credits OB 77 When and how statutory producer board makes election OB 78 Co-operative companies attaching imputation credits to 2415 2415 2416 cash distributions OB 79 Co-operative companies attaching imputation credits to 2418 notional distributions OB 80 Co-operative companies’ notional distributions that are 2419 dividends OB 81 Co-operative companies attaching FDP credits OB 82 When and how co-operative company makes election 2420 2420 Tables of credits and debits in memorandum accounts Table O1: imputation credits Table O2: imputation debits Introductory provisions OB 1 General rules for companies with imputation credit accounts New Zealand resident (1) A company that is resident in New Zealand (the imputation credit account (ICA) company) must establish and maintain an imputation credit account for a tax year.
Subsection (2) overrides this subsection.
Exclusions (2) A company that is resident in New Zealand is excluded from being an ICA company if it is— a company that— (a) [Repealed] (i) is acting in the capacity of trustee, not being a (ii) company that is a trustee, of a group investment 2340 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 1 (3) fund to which paragraph (c) of the deﬁnition of company in section YA 1 (Deﬁnitions) applies; or has a constitution that prohibits a distribution to a shareholder; or derives only exempt income other than income exempt under sections CW 9 and CW 10 (which relate to income from equity); or under a double tax agreement, is treated as not being resident in New Zealand; or (iii) (iv) (v) (b) (c) (d) (e) (f) a Maori authority; or a local authority; or a Crown Research Institute; or a subsidiary of the Accident Compensation Corporation affected by section 266 of the Accident Compensation Act 2001, or section 334(1) of the Accident Insurance Act 1998; or a multi-rate PIE.
Exception to subsection (2): Australian resident [Repealed] [Repealed] Deﬁned in this Act: company, Crown Research Institute, double tax agreement, exempt income, group investment fund, ICA company, imputation credit ac- count, income, local authority, Maori authority, multi-rate PIE, New Zealand, resident in New Zealand, shareholder, tax, tax year, trustee Compare: 2004 No 35 s ME 1 Section OB 1(1): amended (with effect on 1 April 2008), on 6 October 2009, by section 378(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OB 1(2)(a)(i): repealed (with effect on 1 April 2008), on 6 October 2009, by section 378(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OB 1(2)(a)(iv): amended (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 2 November 2012, by section 128(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section OB 1(2)(a)(iv): amended (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 91(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section OB 1(2)(e): amended, on 21 December 2010, by section 189 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
2341 Part O s OB 2 Income Tax Act 2007 Reprinted as at 2 September 2013 Section OB 1(2)(f): substituted, on 1 April 2010 (applying for the 2010–11 and later income years), by section 378(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OB 1(3) heading: repealed (with effect on 1 April 2008), on 6 October 2009, pursuant to section 378(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OB 1(3): repealed (with effect on 1 April 2008), on 6 October 2009, by section 378(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OB 1 list of deﬁned terms Australian ICA company: repealed (with effect on 1 April 2008), on 6 October 2009, by section 378(5) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OB 1 list of deﬁned terms multi-rate PIE: inserted, on 1 April 2010, by section 378(6)(b) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OB 1 list of deﬁned terms portfolio tax rate entity: repealed, on 1 April 2010, by section 378(6)(a) of the Taxation (International Taxation, Life Insur- ance, and Remedial Matters) Act 2009 (2009 No 34).
Section OB 1 list of deﬁned terms resident in Australia: repealed (with effect on 1 April 2008), on 6 October 2009, by section 378(5) of the Taxation (Inter- national Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

OB 2 Australian companies with imputation credit accounts Company resident in Australia (1) A company that is resident in Australia may choose to establish and maintain an imputation credit account.
Ineligibility (2) Despite meeting the residency requirements, a company is not eligible to make an election referred to in subsection (1) if— (a) the company— (i) (ii) is a company referred to in section OB 1(2)(a)(ii) to (iv), and (b) to (f); or is treated as resident in a country other than Aus- tralia under an agreement between Australia and the other country that would be a double tax agreement if negotiated between New Zealand and that other country; or (b) an earlier election has been revoked by the Commis- sioner under subsection (7)(b), and the company has not shown the Commissioner that it has taken adequate 2342 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 2 steps to prevent the grounds of revocation occurring again.
(3) Election, and when status starts The election is made by notifying the Commissioner, and the company must maintain an imputation credit account from the following date, as applicable: (a) the ﬁrst day of the tax year in which the Commissioner is notiﬁed: for the purposes of section OB 60,— (i) (b) for a company that is formed or becomes eligible in the tax year, the ﬁrst day of the tax year in which the Commissioner receives the notice and the Commissioner notiﬁes the company of that date; or if subparagraph (i) does not apply, 30 days after the date on which the Commissioner receives the notice.
(ii) Joint and several liability (4) A company that is part of the same wholly-owned group of companies as an Australian ICA company may have joint and several liability with the Australian ICA company for further income tax, civil penalties, and interest under Part 7 of the Tax Administration Act 1994 imposed on the Australian ICA company for a breach by the Australian ICA company of the imputation rules.
Exclusion (5) Despite subsection (4), no joint and several liability arises if the Australian ICA company is prohibited by an independent regulatory body from being subject to the liability.

Dividend in Australian currency (6) An Australian ICA company that pays a dividend in Aus- tralian currency must make a currency conversion under section OB 60(6).
How status ends (7) A company ends its status as an Australian ICA company if— the company becomes ineligible to maintain an imput- ation credit account; or (a) 2343 Part O s OB 2 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) (c) the company revokes the election by notifying the Com- missioner; or the Commissioner gives the company notice revoking the election.
(8) When status ends For the purposes of subsection (7), the company ends its status as an Australian ICA company— (a) from the day on which the relevant circumstance of in- eligibility in subsection (2) applies; or unless paragraph (c) applies, from the last day of the tax year in which the company or the Commissioner revokes the election; or for the purposes of section OB 60,— (i) when the company notiﬁes the Commissioner, on the date on which the Commissioner receives the notice; or on the date set out in the Commissioner’s notice.
(ii) (b) (c) Outstanding obligations (9) A company that stops being an Australian ICA company for a tax year must nevertheless satisfy all obligations that the com- pany had as an Australian ICA company.
Deﬁned in this Act: Australian ICA company, Commissioner, company, divi- dend, double tax agreement, imputation credit account, imputation rules, in- come, New Zealand, notice, notify, pay, resident in Australia, tax year, wholly- owned group of companies Compare: 2004 No 35 s ME 1A Section OB 2(1) heading: substituted (with effect on 1 April 2008), on 6 October 2009, by section 379(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OB 2(1): substituted (with effect on 1 April 2008), on 6 October 2009, by section 379(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OB 2(2)(a)(i): amended, on 1 April 2008, by section 493(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section OB 2(2)(a)(ii): substituted, on 1 April 2008, by section 493(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section OB 2 list of deﬁned terms resident in New Zealand: repealed (with effect on 1 April 2008), on 6 October 2009, by section 379(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2344 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 4 OB 3 Imputation credit accounts (1) General rules The general rules on memorandum accounts set out in sec- tions OA 2 and OA 3 (which relate to the treatment of memo- randum accounts) apply to an imputation credit account of an ICA company.
Consolidated imputation groups (2) Under section OP 2 (When credits and debits arise only in group accounts), certain credits and debits do not arise in an ICA company’s memorandum account if the company is part of a consolidated imputation group.
Deﬁned in this Act: consolidated imputation group, ICA company, imputation credit account, memorandum account Compare: 2004 No 35 s ME 13(1) OB 3B General rule for life insurer’s policyholder base An imputation credit does not arise in relation to a life in- surer’s policyholder base.

Similarly, an imputation debit does not arise in relation to a life insurer’s policyholder base.
Deﬁned in this Act: imputation credit, imputation debit, life insurer, policy- holder base Section OB 3B: inserted, on 1 July 2010, by section 380(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Imputation credits OB 4 ICA payment of tax Credit (1) An ICA company has an imputation credit for an amount of income tax or provisional tax paid or an amount treated under section RC 32(5)(b) (Wholly-owned groups of companies) as a payment of provisional tax.

Subsection (3) overrides this subsection.

(2) Table reference The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 2 (payment of tax).
2345 Part O s OB 4 Income Tax Act 2007 Reprinted as at 2 September 2013 No credit (3) An ICA company does not have an imputation credit for an amount of— (a) a transfer from a tax pooling account to a tax account with the Commissioner; or income tax paid on income derived when the company is not an ICA company; or income tax paid by a life insurer to satisfy its schedular income tax liability for schedular policyholder base in- come; or income tax paid under sections LA 2 and LE 1 (which relate to tax credits for imputation credits and their use) by crediting an imputation credit; or income tax paid under subpart LA and section LF 1 (which relate to tax credits for FDP credits and their use) by crediting a foreign dividend payment (FDP) credit; or income tax paid by a tax credit under subpart LA and section LH 2 (which relate to tax credits for research development and their use); or income tax paid by a tax credit under subpart LP (Tax credits for supplementary dividends); or further income tax applied under section OB 69 to pay income tax or provisional tax; or further income tax applied under section OC 34 (Further income tax paid satisfying liability for income tax) to pay income tax; or [Repealed] income tax paid as a trustee, unless paid on category A income of the type described in paragraph (c) of the deﬁnition of company in section YA 1 (Deﬁnitions).
Credit date The credit date is— (a) for an amount of income tax or provisional tax paid other than an amount referred to in paragraph (b), the day the tax is paid: for an amount treated under section RC 32(5)(b) as a payment of provisional tax, the day on which notice of the allocation of the tax is given to the Commissioner.
(4) 2346 (b) (c) (d) (e) (eb) (f) (g) (gb) (h) (i) (b) Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 4 Limitation on credits (5) No amount may give rise to more than 1 imputation credit.
Deﬁned in this Act: amount, category A income, Commissioner, company, FDP credit, further income tax, ICA company, imputation credit, imputation credit account, income, income tax, life insurer, pay, provisional tax, schedular in- come tax liability, schedular policyholder base income, tax account with the Commissioner, tax credit, tax pooling account, tax year, trustee Compare: 2004 No 35 s ME 4(1)(a), (1C), (2)(a) Section OB 4(1): amended (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 112(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section OB 4(3)(c): substituted, on 1 July 2010, by section 381(1) of the Tax- ation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OB 4(3)(e): substituted (with effect on 1 April 2008), on 6 October 2009, by section 381(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OB 4(3)(eb): substituted (with effect on 1 April 2008), on 6 October 2009, by section 381(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OB 4(3)(gb): inserted (with effect on 30 June 2009), on 2 November 2012 (applying for income years beginning on or after 1 July 2009), by section 129(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section OB 4(3)(h): repealed, on 1 July 2012 (applying for income years be- ginning on or after that date), by section 92(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section OB 4(4): substituted (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 112(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section OB 4 list of deﬁned terms branch equivalent tax account: repealed, on 1 July 2012, by section 92(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section OB 4 list of deﬁned terms policyholder base income tax liability: re- pealed, on 1 July 2010, by section 381(3)(a) of the Taxation (International Tax- ation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OB 4 list of deﬁned terms schedular income tax liability: inserted, on 1 July 2010, by section 381(3)(b) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OB 4 list of deﬁned terms schedular policyholder base income: in- serted, on 1 July 2010, by section 381(3)(b) of the Taxation (International Tax- ation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2347 Part O s OB 5 Income Tax Act 2007 Reprinted as at 2 September 2013 OB 5 ICA deposit in tax pooling account Credit (1) An ICA company has an imputation credit for an amount pro- vided by it and paid by an intermediary into a tax pooling ac- count.

(2) (3) Table reference The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 3 (deposit in tax pooling account).

Credit date The credit date is the day the amount is deposited.
Deﬁned in this Act: amount, ICA company, imputation credit, imputation credit account, intermediary, pay, tax pooling account Compare: 2004 No 35 s ME 4(1)(ac), (2)(ac) OB 6 ICA transfer from tax pooling account Credit (1) An ICA company has an imputation credit for an amount rep- resenting an entitlement to funds held in a tax pooling account if the intermediary transfers the entitlement from another per- son to the company.
Table reference The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 4 (transfer from tax pooling ac- count).
Credit date The credit date is,— (a) for an entitlement to funds that are transferred by the intermediary from the tax pooling account to the com- pany’s tax account with the Commissioner, the credit date under section RP 19 (Transfers from tax pooling accounts) for the amount transferred; or for an entitlement to funds that are refunded by the inter- mediary from the tax pooling account to the company, the date of the refund; or (b) (2) (3) 2348 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 7B (c) for an entitlement that is transferred by the intermediary from the company to another person, the date of the transfer.
Deﬁned in this Act: amount, Commissioner, ICA company, imputation credit, intermediary, tax account with the Commissioner, tax pooling account Compare: 2004 No 35 s ME 4(1)(ad), (2)(ad) Section OB 6(1): substituted (with effect on 1 April 2008), on 7 September 2010 (applying for the 2008–09 and later income years), by section 95(1) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Section OB 6(3): substituted (with effect on 1 April 2008), on 7 September 2010 (applying for the 2008–09 and later income years), by section 95(2) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).

OB 7 ICA payment of further income tax Credit (1) An ICA company has an imputation credit for an amount of further income tax paid under section OB 65 or OB 66.
(2) (3) Table reference The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 5 (payment of further income tax).

Credit date The credit date is the day the further income tax is paid.
Deﬁned in this Act: amount, further income tax, ICA company, imputation credit, pay Compare: 2004 No 35 s ME 4(1)(c), (2)(a) OB 7B ICA payment of qualifying company election tax Credit (1) An ICA company has an imputation credit for an amount of qualifying company election tax paid under section HA 40 (Li- ability for qualifying company election tax).
(2) Table reference The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 5B (payment of qualifying com- pany election tax).

2349 Part O s OB 7C Income Tax Act 2007 Reprinted as at 2 September 2013 (3) Credit date The credit date is the day the qualifying company election tax is paid.
Deﬁned in this Act: amount, ICA company, imputation credit, pay, qualifying company election tax Compare: 2004 No 35 s ME 4(1)(ae), (2)(ae) Section OB 7B: inserted, on 1 April 2008, by section 495 of the Taxation (Busi- ness Taxation and Remedial Matters) Act 2007 (2007 No 109).
OB 7C ICA expenditure on research and development Credit (1) An ICA company has an imputation credit for an amount of a tax credit that the company has under section LH 2 (Tax credits relating to expenditure on research and development).

(2) (3) Table reference The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 5C (tax credit for research and development expenditure).
Credit date The credit date is the day the Commissioner is notiﬁed in the company’s return of income of the entitlement to the credit.

Deﬁned in this Act: amount, Commissioner, ICA company, imputation credit, return of income, tax credit Compare: 2004 No 35 s ME 4(1)(ib), (2)(g) Section OB 7C: inserted, on 1 April 2008, by section 495 of the Taxation (Busi- ness Taxation and Remedial Matters) Act 2007 (2007 No 109).
OB 8 ICA resident withholding tax withheld Credit (1) An ICA company has an imputation credit for resident with- holding tax (RWT) that is treated under section RA 9(1)(b) (Treatment of amounts withheld as received) as derived by the company other than as policyholder base income.

Table reference The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 6 (amount of tax withheld for resident passive income).
(2) 2350 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 9B (3) Credit date The credit date is the day the amount of tax is withheld.

Deﬁned in this Act: amount, amount of tax, ICA company, imputation credit, policyholder base income, resident passive income, resident withholding tax, RWT Compare: 2004 No 35 s ME 4(1)(i), (2)(g) Section OB 8(1): amended, on 1 July 2010, by section 382(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OB 8 list of deﬁned terms policyholder base income: inserted, on 1 July 2010, by section 382(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

OB 9 ICA dividend derived with imputation credit Credit (1) An ICA company has an imputation credit for the amount of an imputation credit attached to a dividend derived by the com- pany.
(2) (3) Table reference The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 7 (dividend derived with imput- ation credit).

Credit date The credit date is the day the dividend is paid to the company.
Deﬁned in this Act: amount, dividend, ICA company, imputation credit, pay Compare: 2004 No 35 s ME 4(1)(d), (2)(c) OB 9B ICA attributed PIE income with imputation credit Credit (1) An ICA company that is an investor in a multi-rate PIE has an imputation credit for the amount of an imputation credit attributed to it under section HM 54 (Use of tax credits other than foreign tax credits by investors).
(2) Table reference The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 7B (attributed PIE income with imputation credit).

2351 Part O s OB 10 Income Tax Act 2007 Reprinted as at 2 September 2013 (3) Credit date The credit date is the day the amount is attributed.
Deﬁned in this Act: amount, attributed PIE income, ICA company, imputation credit, multi-rate PIE Section OB 9B: substituted, on 1 April 2010 (applying for the 2010–11 and later income years), by section 384(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OB 10 ICA dividend derived with FDP credit Credit (1) An ICA company has an imputation credit for the amount of an FDP credit attached to a dividend derived by the company when it is not a foreign dividend payment account (FDPA) company.

(2) (3) Table reference The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 8 (dividend derived with FDP credit).

Credit date The credit date is the day the dividend is paid.
Deﬁned in this Act: amount, dividend, FDP credit, FDPA company, ICA com- pany, imputation credit, pay Compare: 2004 No 35 s ME 4(1)(e), (2)(c) OB 11 ICA payment of FDP [Repealed] Section OB 11: repealed (with effect on 30 June 2009), on 6 October 2009, by section 385(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OB 12 ICA transfer from FDP account Credit (1) An ICA company has an imputation credit for an amount equal to the amount of an FDP debit transferred from its FDP ac- count under section OC 18 (FDPA transfer to imputation credit account).

Table references The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 10 (transfer from FDP account).
(2) 2352 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 13 The FDP debit in subsection (1) is referred to in table O4: FDP debits, row 7 (transfer to imputation credit account).

(3) Credit date The credit date is the day the amount is transferred.
Deﬁned in this Act: amount, FDP account, FDP debit, ICA company, imput- ation credit Compare: 2004 No 35 s ME 4(1)(g), (2)(e) OB 13 ICA transfer of debit balance on leaving wholly-owned group (1) (2) (3) Election If the requirements of subsections (2) and (3) are met, an ICA company may choose to transfer a debit balance in its imput- ation credit account when the company stops being part of a wholly-owned group of companies.
Eligibility The company may make an election under subsection (1) if, at a particular time,— (a) the company is or has recently been part of a wholly- owned group of companies; and the company is no longer part of the group, or will shortly no longer be part of the group; and the company has a debit balance in its imputation credit account; and the group has a loss balance carried forward from earlier tax years of more than $1,000,000 for the income year before the particular time.
(b) (c) (d) Credit and debit The company may choose that an amount of no more than the debit balance is— (a) an imputation credit in its imputation credit account; and an imputation debit in the imputation credit account of another company in the group after the date on which the company stops being part of the wholly-owned group.
(b) 2353 Part O s OB 14 Income Tax Act 2007 Reprinted as at 2 September 2013 (4) (5) (6) (7) Table references The imputation credit in subsection (3)(a) is referred to in table O1: imputation credits, row 11 (debit balance on leav- ing wholly-owned group).

The imputation debit in subsection imputation debits, row 17 (3)(b) is referred to in table O2: (debit balance on leaving wholly-owned group).
Form and timing of election The company must make the election— (a) in a form that the Commissioner may require; and (b) with a notice of agreement from the group company in whose account the imputation debit arises under sub- section (3)(b); and before the company stops being part of the wholly- owned group.
(c) Further time For the purposes of subsection (5)(b), the Commissioner may allow further time in which to provide the notice if the com- pany did not have sufﬁcient information at the time it stops being part of the wholly-owned group.

Credit date The credit date is the day the company stops being part of the wholly-owned group.
Deﬁned in this Act: amount, Commissioner, company, ICA company, imput- ation credit, imputation credit account, imputation debit, income year, notice, tax loss, wholly-owned group of companies Compare: 2004 No 35 ss ME 4(1)(cb), (2)(bb), ME 9B(1), (2) OB 14 ICA payment of tax on leaving wholly-owned group Credit (1) An ICA company has an imputation credit for a payment of imputation additional tax that it chooses to pay under section OB 71, excluding an excess tax payment applied under section OB 71(8).
Table reference The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 12 (payment of tax on leaving wholly-owned group).

(2) 2354 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 16 (3) Credit date The credit date is the day the imputation additional tax is paid to the Commissioner.
Deﬁned in this Act: amount, Commissioner, excess tax payment, ICA company, imputation additional tax, imputation credit, pay Compare: 2004 No 35 s ME 4(1)(cc), (2)(bc) OB 15 ICA payment of tax on joining wholly-owned group Credit (1) An ICA company has an imputation credit for a payment of imputation additional tax for which it is liable under section OB 72, excluding an excess tax payment applied under section OB 72(9).
(2) (3) Table reference The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 13 (payment of tax on joining wholly-owned group).

Credit date The credit date is the day the imputation additional tax is paid to the Commissioner.
Deﬁned in this Act: amount, Commissioner, excess tax payment, ICA company, imputation additional tax, imputation credit, pay Compare: 2004 No 35 s ME 4(1)(cd), (2)(bd) OB 16 ICA attribution for personal services Credit (1) An ICA company that is not a qualifying company has an im- putation credit for an amount equal to 38.89% of the personal services attribution under section GB 29 (Attribution rule: cal- culation).
(2) Table reference The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 14 (attribution for personal ser- vices).

2355 Part O s OB 17 Income Tax Act 2007 Reprinted as at 2 September 2013 (3) Credit date The credit date is the last day of the tax year for which the attribution is made.
Deﬁned in this Act: amount, ICA company, imputation credit, imputation credit account, qualifying company, tax year Compare: 2004 No 35 s ME 4(1)(ab), (2)(ab) Section OB 16(1): amended, on 1 April 2011, by section 96 of the Taxation (An- nual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Mat- ters) Act 2010 (2010 No 109).

Section OB 16(1): amended, on 1 April 2008, by section 496 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
OB 17 ICA transfer from policyholder credit account [Repealed] Section OB 17: repealed, on 1 July 2010, by section 386(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

OB 18 ICA transfer from ASC account Credit (1) An ICA company has an imputation credit for the transfer of an amount from its available subscribed capital (ASC) account.

The amount is calculated under section OF 5(4) (ASCA trans- fer to imputation credit account).
(2) (3) Table reference The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 16 (transfer from ASC account).

Credit date The credit date is the day the amount is transferred.
Deﬁned in this Act: amount, ASC account, ICA company, imputation credit, imputation credit account Compare: 2004 No 35 s ME 4(1)(da), (2)(ca) OB 19 ICA transfer to master fund Credit (1) An ICA company that is a master fund has an imputation credit for the transfer of an amount of expenditure under sections DV 5 to DV 7 (which relate to the transfer of expenditure to master funds).
The amount is calculated using the formula— 2356 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 20 expenditure transferred × tax rate.
(2) (3) (4) Deﬁnition of items in formula In the formula,— (a) expenditure transferred is the amount of expenditure transferred under sections DV 5 to DV 7 (which relate to the expenditure of investment funds) to the company as a master fund: tax rate is the basic rate of income tax set out in sched- ule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe beneﬁts).
(b) Table reference The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 17 (transfer to master fund).

Credit date The credit date is the last day of the tax year corresponding to the income year in which the expenditure is deducted.
Deﬁned in this Act: amount, basic rate, ICA company, imputation credit, im- putation credit account, income tax, master fund Compare: 2004 No 35 s ME 4(1)(aab), (2)(aab) Section OB 19(1): amended (with effect on 1 April 2008), on 6 October 2009, by section 387(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OB 19(2)(b): amended, on 1 April 2008, by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
OB 20 ICA distribution with Maori authority credit Credit (1) An ICA company has an imputation credit for the amount of a Maori authority credit attached to a distribution received by the company.

(2) (3) Table reference The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 18 (distribution with Maori au- thority credit).

Credit date The credit date is the day the distribution is paid.
Deﬁned in this Act: amount, ICA company, imputation credit, Maori authority credit, pay Compare: 2004 No 35 s ME 4(1)(ea), (2)(cb) 2357 Part O s OB 21 Income Tax Act 2007 Reprinted as at 2 September 2013 OB 21 ICA balance of Maori authority credit account Credit (1) An ICA company has an imputation credit for an amount equal to the amount of a Maori authority debit under section OK 18 (MACA ﬁnal balance) when the Maori authority stops being a Maori authority.
(2) (3) Table references The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 19 (balance of Maori authority credit account).

The Maori authority debit in subsection (1) is referred to in table O18: Maori authority debits, row 10 (ﬁnal balance).

Credit date The credit date is the same as the debit date recorded for the debit under section OK 18.
Deﬁned in this Act: amount, ICA company, imputation credit, Maori authority, Maori authority debit Compare: 2004 No 35 s ME 4(1)(k), (2)(k) OB 22 ICA replacement payment to company under share-lending arrangement Credit (1) An ICA company has an imputation credit for the amount of an imputation credit attached under section OB 64, or treated as attached under section RE 25 (When amount of tax treated as imputation credit) to a replacement payment paid under a share-lending arrangement to the company.
Table reference The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 20 (replacement payment under share-lending arrangement).

Credit date The credit date is the day the replacement payment is paid.
Deﬁned in this Act: amount, ICA company, imputation credit, pay, replacement payment, share-lending arrangement Compare: 2004 No 35 s ME 4(1)(eb), (ec), (2)(cc) (2) (3) 2358 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 24 OB 23 ICA credit transfer to company Credit (1) An ICA company has an imputation credit for the amount of an imputation credit shown in a credit transfer notice given to the company.
(2) (3) Table reference The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 21 (credit in credit transfer no- tice).

Credit date The credit date is the day the notice is given.
Deﬁned in this Act: amount, credit transfer notice, ICA company, imputation credit Compare: 2004 No 35 s ME 4(1)(ed), (2)(cd) OB 24 ICA credit on resident’s restricted amalgamation Credit (1) An ICA company has an imputation credit for the amount of a credit that arises on or after a resident’s restricted amal- gamation in the imputation credit account of the amalgamated company under 1 of the sections listed in subsection (3).
(2) (3) Table reference The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 22 (credit on resident’s restricted amalgamation).
Sections The sections are— (a) section OA 10 (When credits or debits due to amalgam- ating company but not recorded) for imputation credits in the imputation credit account of an amalgamating company: section OA 11 (FDP account on resident’s restricted amalgamation) for an FDP credit in the FDP account of an amalgamating company because the amalgamated company does not maintain an FDP account: [Repealed] section OA 13 (Policyholder credit account on resi- dent’s restricted amalgamation) for a policyholder (b) (c) (d) 2359 Part O s OB 25 Income Tax Act 2007 Reprinted as at 2 September 2013 (e) (f) (g) credit in the policyholder credit account of an amal- gamating company because the amalgamated company does not maintain a policyholder credit account: section OA 14 (Continuity of shareholding when group companies amalgamate) for imputation credits in the imputation credit account of a consolidated imputation group that ends its existence on the amalgamation: section OA 16 (When FDP account ends on resident’s restricted amalgamation) for an FDP credit in the FDP account of a consolidated FDP group because the amal- gamated company does not maintain an FDP account: section OA 17 (When policyholder credit account ends on resident’s restricted amalgamation) for the policyholder credits in the policyholder credit account of a consolidated group because the company does not maintain a policyholder credit account.
Deﬁned in this Act: amalgamated company, amalgamating company, amount, consolidated FDP group, consolidated group, consolidated imputation group, FDP account, FDP credit, ICA company, imputation credit, imputation credit account, policyholder credit, policyholder credit account, resident’s restricted amalgamation Compare: 2004 No 35 ss ME 29, MG 17, MI 13 Section OB 24(3)(c): repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 93(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section OB 24 list of deﬁned terms CTR account: repealed (with effect on 1 July 2011), on 7 May 2012, by section 93(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section OB 24 list of deﬁned terms CTR credit: repealed (with effect on 1 July 2011), on 7 May 2012, by section 93(2) of the Taxation (International Invest- ment and Remedial Matters) Act 2012 (2012 No 34).
OB 25 ICA reversal of tax advantage arrangement When this section applies This section applies when it is established that an imputation credit in an ICA company’s imputation credit account was in- correctly determined to be the subject of an arrangement to obtain a tax advantage.
(1) 2360 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 26 (2) (3) (4) Credit The company has an imputation credit for an amount equal to the amount of a debit in the company’s imputation credit account under section OB 54.

Table references The imputation credit in subsection (2) is referred to in table O1: imputation credits, row 23 (reversal of tax advantage ar- rangement).
The imputation debit in subsection (2) is referred to in table O2: imputation debits, row 27 (tax advantage ar- rangement).

Credit date The credit date is the same as the debit date of the debit under section OB 54.
Deﬁned in this Act: amount, arrangement, ICA company, imputation credit, imputation credit account, imputation debit, tax advantage Compare: 2004 No 35 s ME 4(1)(h), (2)(f) OB 26 ICA elimination of double debit (1) (2) When this section applies This section applies when an imputation debit in an ICA com- pany’s imputation credit account under section OB 41 has the effect of cancelling an imputation credit under section OB 5. Credit The company has an imputation credit for an amount equal to the amount of the debit referred to in subsection (1), and either— (a) another debit arises under section OB 34 for a refund of the amount of the deposit on a debit date after the debit date for the debit for loss of shareholder continuity; or the deposit is taken into account under section RP 19 (Transfers from tax pooling accounts) in determining the balance of the company’s tax account with the Com- missioner after the debit date for the debit for loss of shareholder continuity.
(b) Table references The table references are as follows: (3) 2361 Part O s OB 27 Income Tax Act 2007 Reprinted as at 2 September 2013 (a) (b) (c) (d) the imputation debit in subsection (1) is referred to in table O2: imputation debits, row 14 (debit for loss of shareholder continuity): the imputation credit in subsection (1) is referred to in table O1: imputation credits, row 3 (deposit in tax pool- ing account): the imputation credit in subsection (2) is referred to in imputation credits, row 24 (elimination of table O1: double debit): the imputation debit in subsection (2)(a) is referred to in table O2: imputation debits, row 6 (refund from tax pooling account).
Credit date The credit date is the day— (a) (b) the deposit is refunded; or the credit arises in the company’s tax account with the Commissioner.
Deﬁned in this Act: amount, Commissioner, ICA company, imputation credit, imputation credit account, imputation debit, shareholder, tax account with the Commissioner Compare: 2004 No 35 s ME 4(1A), (2A) (4) OB 27 ICA non-resident withholding tax withheld Credit (1) An Australian ICA company has an imputation credit for an amount of tax withheld by the payer of non-resident passive income.
Table reference The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 25 (NRWT withheld).

Credit date The credit date is the day the amount of tax is withheld.
Deﬁned in this Act: amount, amount of tax, Australian ICA company, imput- ation credit, non-resident passive income, non-resident withholding tax, NRWT Compare: 2004 No 35 s ME 4(1B)(a), (2B)(a) (2) (3) 2362 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 29 OB 28 ICA payment of amount of tax for schedular payment Credit (1) An Australian ICA company has an imputation credit for an amount equal to the amount of tax for a schedular payment paid to the company as a non-resident contractor.
(2) (3) Table reference The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 26 (amount of tax for schedular payment).

Credit date The credit date is the day the amount of tax is withheld.
Deﬁned in this Act: amount, amount of tax, Australian ICA company, imput- ation credit, non-resident contractor, pay, schedular payment Compare: 2004 No 35 s ME 4(1B)(b), (2B)(b) OB 29 ICA payment of schedular income tax Credit (1) An Australian ICA company has an imputation credit for a payment of income tax relating to the company’s schedular income tax liability for income derived under section CR 3 (Income of non-resident general insurer) or CV 16 (Non-resi- dent shippers).
(2) (3) Table reference The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 27 (payment of schedular income tax).

Credit date The credit date is the day the schedular income tax is paid.
Deﬁned in this Act: Australian ICA company, company, imputation credit, in- come, pay, schedular income Compare: 2004 No 35 s ME 4(1B)(c), (2B)(c) Section OB 29(1): amended, on 2 November 2012, by section 130 of the Tax- ation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
2363 Part O s OB 30 Income Tax Act 2007 Reprinted as at 2 September 2013 Imputation debits OB 30 ICA payment of dividend Debit (1) An ICA company has an imputation debit for the amount of an imputation credit attached to a dividend paid by the company.

(2) (3) (4) Table reference The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 2 (payment of dividend).

Debit date The debit date is the day the dividend is paid.
Arrangement for dividend from another company Section GB 37 (Arrangements for payment of dividend by other companies) may apply to treat an amount as a debit under this section.
Deﬁned in this Act: amount, dividend, ICA company, imputation credit, imput- ation debit, pay Compare: 2004 No 35 s ME 5(1)(a), (2)(a) OB 31 ICA allocation of provisional tax Debit (1) An ICA company has an imputation debit for an amount of provisional tax allocated by the company under section RC 32 (Wholly-owned groups of companies) to an underpaid com- pany.

Table reference The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 3 (allocation of provisional tax).
Debit date The debit date is the day the Commissioner is notiﬁed of the allocation.

Deﬁned in this Act: amount, Commissioner, company, ICA company, imput- ation debit, notify, provisional tax Compare: 2004 No 35 s ME 5(1)(d), (2)(d) (2) (3) 2364 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 32 OB 32 ICA refund of income tax Debit (1) An ICA company has an imputation debit for the amount of a refund of income tax paid to the company.

Subsection (2) overrides this subsection.
No debit (2) A debit under subsection (1) does not include— (a) (ab) (b) (c) a refund of income tax paid for a period when the com- pany was not an ICA company; or a refund of income tax paid by a life insurer to satisfy its schedular income tax liability for schedular policy- holder base income; or a refund of income tax paid before a debit arises under section OB 41, but only to the extent to which the amount of the refund is less than or equal to the amount of the debit; or a refund under subpart LP (Tax credits for supplemen- tary dividends) because the supplementary dividend generating the refund was paid before a debit arises under section OB 41, but only to the extent to which the amount of the refund is less than the amount of the debit.
(3) Table references The table references are as follows: (a) the imputation debit in subsection (1) is referred to in table O2: imputation debits, row 4 (refund of income tax): the imputation debit in subsection (2)(b) is referred to in table O2: imputation debits, row 14 (debit for loss of shareholder continuity): the imputation debit in subsection (2)(c) is referred to in table O2: imputation debits, row 14 (debit for loss of shareholder continuity).
(b) (c) (4) Part-year ICA company The amount of the debit that arises if the company is an ICA company for only part of a tax year is an amount calculated using the formula— 2365 Part O s OB 33 Income Tax Act 2007 Reprinted as at 2 September 2013 ICA days 365 × refund.

(5) (6) (7) Deﬁnition of items in formula In the formula,— (a) ICA days is the number of days in which the company is an ICA company: refund is the amount of the refund.

(b) Debit date The debit date is the day the refund is made.
Relationship with section OB 37 This section does not apply to an amount that gives rise to a debit under section OB 37.
Deﬁned in this Act: amount, company, ICA company, imputation debit, income tax, life insurer, pay, schedular income tax liability, schedular policyholder base income, shareholder, supplementary dividend, tax year Compare: 2004 No 35 s ME 5(1)(e), (2)(e) Section OB 32(2)(ab): inserted, on 1 July 2010, by section 388(1) of the Tax- ation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OB 32(2)(b): amended (with effect on 1 April 2008), on 7 September 2010 (applying for the 2008–09 and later income years), by section 97(1) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).

Section OB 32(7) heading: added (with effect on 1 April 2008), on 6 October 2009, by section 388(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OB 32(7): added (with effect on 1 April 2008), on 6 October 2009, by section 388(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OB 32 list of deﬁned terms life insurer: inserted, on 1 July 2010, by section 388(3) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
Section OB 32 list of deﬁned terms schedular income tax liability: inserted, on 1 July 2010, by section 388(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OB 32 list of deﬁned terms schedular policyholder base income: in- serted, on 1 July 2010, by section 388(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OB 33 ICA amount applied to pay other taxes Debit (1) An ICA company has an imputation debit for— 2366 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 33 (a) (b) an amount of overpaid income tax applied to pay an amount due under the Inland Revenue Acts: an increased amount of tax as described in section RP 17B(3) (Tax pooling accounts and their use) applied to pay an amount due under the Inland Revenue Acts other than income tax.
(2) Table reference The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 5 (amount applied to pay other taxes).
No debit (3) A debit under subsection (1) does not include an amount of overpaid income tax— (a) (b) applied to satisfy a liability for income tax or provi- sional tax; or relating to income tax paid before an imputation debit arises under section OB 41 (table O2: imputation debits, row 14 (debit for loss of shareholder continuity)), but only to the extent to which the amount of overpaid in- come tax is no more than the amount of the debit for loss of shareholder continuity.
(4) (5) Debit date The debit date is the day the amount is applied.

Relationship with section OB 37 This section does not apply to an amount that gives rise to a debit under section OB 37.
Deﬁned in this Act: amount, ICA company, imputation debit, income tax, In- land Revenue Acts, pay, provisional tax, shareholder Compare: 2004 No 35 s ME 5(1)(l), (2)(k) Section OB 33(1): substituted, on 6 October 2009, by section 389(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OB 33(5) heading: added (with effect on 1 April 2008), on 6 October 2009, by section 389(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OB 33(5): added (with effect on 1 April 2008), on 6 October 2009, by section 389(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2367 Part O s OB 34 Income Tax Act 2007 Reprinted as at 2 September 2013 OB 34 ICA refund from tax pooling account When this section applies This section applies for an ICA company when— (a) the company has an entitlement to an amount in a tax pooling account and has an imputation credit for the entitlement under— (i) section OB 5 (table O1: imputation credits, row 3 (deposit in tax pooling account)); or section OB 6 (table O1: imputation credits, row 4 (transfer from tax pooling account)); and the intermediary refunds the amount from the tax pool- ing account to the company.
(ii) (b) Debit The company has an imputation debit for the amount of the refund.

Table reference The imputation debit in subsection (2) is referred to in table O2: imputation debits, row 6 (refund from tax pooling ac- count).
Debit date for companies other than qualifying companies The debit date for a company that is not a qualifying com- pany is the date found by applying the following paragraphs in order: (a) the last day of the previous tax year to the extent of the amount of the debit that is no more than the credit balance in the imputation credit account on that date: the day the refund is made to the extent of the remain- ing amount of the debit that is no more than the credit balance in the imputation credit account on the day of refund: the last day of the previous tax year for the remainder of the debit.
(b) (c) (1) (2) (3) (4) 2368 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 34 (5) Debit date for qualifying companies The debit date for a qualifying company is the day the refund is made.
Deﬁned in this Act: amount, company, ICA company, imputation credit, imput- ation credit account, imputation debit, intermediary, pay, qualifying company, tax pooling account, tax year Compare: 2004 No 35 s ME 5(1)(ea), (2)(ea), (eb) Section OB 34(1): substituted (with effect on 1 April 2008), on 7 September 2010 (applying for the 2008–09 and later income years), by section 98(1) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Section OB 34(4) heading: substituted (with effect on 1 April 2008), on 6 Oc- tober 2009, by section 390(1) of the Taxation (International Taxation, Life In- surance, and Remedial Matters) Act 2009 (2009 No 34).

Section OB 34(4): substituted (with effect on 1 April 2008), on 6 October 2009, by section 390(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OB 34(4)(b): amended (with effect on 1 April 2008), on 7 September 2010 (applying for the 2008–09 and later income years), by section 98(2) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).

Section OB 34(5) heading: added (with effect on 1 April 2008), on 6 October 2009, by section 390(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OB 34(5): added (with effect on 1 April 2008), on 6 October 2009, by section 390(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OB 34(5): amended (with effect on 1 April 2008), on 7 September 2010 (applying for the 2008–09 and later income years), by section 98(3) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Section OB 34 list of deﬁned terms company: inserted (with effect on 1 April 2008), on 6 October 2009, by section 390(2) of the Taxation (International Tax- ation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OB 34 list of deﬁned terms imputation credit account: inserted (with effect on 1 April 2008), on 6 October 2009, by section 390(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OB 34 list of deﬁned terms qualifying company: added (with effect on 1 April 2008), on 6 October 2009, by section 390(2) of the Taxation (Inter- national Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OB 34 list of deﬁned terms tax pooling account: inserted (with effect on 1 April 2008), on 7 September 2010, by section 98(4) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
2369 Part O s OB 35 Income Tax Act 2007 Reprinted as at 2 September 2013 Section OB 34 list of deﬁned terms tax year: added (with effect on 1 April 2008), on 6 October 2009, by section 390(2) of the Taxation (International Tax- ation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OB 35 ICA transfer within tax pooling account When this section applies This section applies for an ICA company when— (a) the company has an entitlement to an amount in a tax pooling account and has an imputation credit for the entitlement under— (i) section OB 5 (table O1: imputation credits, row 3 (deposit in tax pooling account)); or section OB 6 (table O1: imputation credits, row 4 (transfer from tax pooling account)); and the intermediary transfers the entitlement from the com- pany to another person.
(ii) (b) Debit The company has an imputation debit for a tax year for the amount of the transfer of the entitlement to funds in the tax pooling account.

Table reference The imputation debit in subsection (2) is referred to in table O2: imputation debits, row 7 (transfer within tax pooling ac- count).
Debit date for companies other than qualifying companies The debit date for a company that is not a qualifying company is— (a) the last day of the previous tax year to the extent of the amount of the debit that is no more than the credit balance in the account on that date; or the day the transfer is made to the extent of the remain- ing amount of the debit that is no more than the credit balance in the imputation credit account on the day of the transfer; or the last day of the previous tax year for the remainder of the debit.
(b) (c) (1) (2) (3) (4) 2370 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 35B (5) Debit date for qualifying companies The debit date for a qualifying company is the day the transfer is made.
Deﬁned in this Act: amount, ICA company, imputation credit, imputation credit account, imputation debit, intermediary, pay, qualifying company, tax pooling account, tax year Compare: 2004 No 35 s ME 5(1)(eb), (2)(ea), (eb) Section OB 35(1): substituted (with effect on 1 April 2008), on 7 September 2010 (applying for the 2008–09 and later income years), by section 99(1) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Section OB 35(4)(b): substituted (with effect on 1 April 2008), on 6 October 2009, by section 391 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OB 35(5): amended (with effect on 1 April 2008), on 7 September 2010 (applying for the 2008–09 and later income years), by section 99(2) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
OB 35B ICA debit for transfer from tax pooling account for policyholder base liability Debit (1) An ICA company has an imputation debit for the amount trans- ferred from a tax pooling account to their tax account with the Commissioner, to the extent to which the company is a life insurer, and the amount satisﬁes its schedular income tax li- ability for schedular policyholder base income or its income tax liability for a life fund PIE that is a multi-rate PIE.
(2) (3) Table reference The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 7B (debit for transfer from tax pooling account for policyholder base liability).

Debit date The debit date is the last day of the tax year.
Deﬁned in this Act: ICA company, imputation credit, imputation debit, life insurer, schedular income tax liability, schedular policyholder base income, tax year Section OB 35B: inserted, on 1 July 2010, by section 392(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2371 Part O s OB 36 Income Tax Act 2007 Reprinted as at 2 September 2013 OB 36 ICA refund of FDP Debit (1) An ICA company has an imputation debit for the amount of a refund of FDP paid to the company when it is not an FDPA company.

(2) (3) Table reference The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 8 (refund of FDP).

Debit date The debit date is the day the refund is made.
Deﬁned in this Act: amount, FDP, FDPA company, ICA company, imputation debit, pay Compare: 2004 No 35 s ME 5(1)(g), (2)(g) OB 37 ICA refund of tax credit Debit (1) An ICA company has an imputation debit for— (a) (b) (c) the amount of a transfer under section LA 6(2)(d) (Re- maining refundable credits: PAYE, RWT, and certain other items) to the extent to which the transfer does not lead to a refund of income tax: the amount of a refund to the company under section LA 6(2)(e): an amount used by the company under section LH 2(6) (Tax credits relating to expenditure on research and de- velopment) to pay an amount payable under an Inland Revenue Act to the extent to which the use does not lead to a refund of income tax.
Exclusion: FDPA companies (1B) Despite subsection (1), an FDPA company does not have an imputation debit to the extent to which the amount transferred, refunded, or used is a tax credit under subpart LF (Tax credits for FDP credits).

(2) Table reference The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 9 (refund of tax credit).
2372 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 38 (3) Debit date The debit date is— (a) for a debit referred to in subsection (1)(a), the day the amount is transferred: for a debit referred to in subsection (1)(b), the day the amount is refunded: for a debit referred to in subsection (1)(c), the day the amount is applied.
(b) (c) Deﬁned in this Act: amount, FDPA company, ICA company, imputation debit, pay Compare: 2004 No 35 s ME 5(1)(h), (2)(e) Section OB 37(1) heading: substituted (with effect on 1 April 2008), on 6 Oc- tober 2009, by section 393(1) of the Taxation (International Taxation, Life In- surance, and Remedial Matters) Act 2009 (2009 No 34).
Section OB 37(1): substituted (with effect on 1 April 2008), on 6 October 2009, by section 393(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OB 37(1B) heading: inserted (with effect on 1 April 2008), on 6 October 2009, by section 393(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OB 37(1B): inserted (with effect on 1 April 2008), on 6 October 2009, by section 393(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OB 37(3): substituted (with effect on 1 April 2008), on 6 October 2009, by section 393(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OB 38 ICA overpayment of FDP Debit (1) An ICA company has an imputation debit for an amount of overpaid FDP applied to pay an amount due under the Inland Revenue Acts.

This subsection applies only to a company at a time when it is not an FDPA company.

subsection (3) overrides this subsection.

(2) (3) Table reference The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 10 (overpayment of FDP).
No debit The debit does not include an overpayment of FDP applied to satisfy a liability for income tax or provisional tax, or relating to a foreign dividend.

2373 Part O s OB 39 Income Tax Act 2007 Reprinted as at 2 September 2013 (4) Debit date The debit date is the day the amount is applied.
Deﬁned in this Act: amount, FDP, foreign dividend, ICA company, imputation debit, income tax, Inland Revenue Acts, pay, provisional tax Compare: 2004 No 35 s ME 5(1)(m), (2)(k) OB 39 ICA transfer for net foreign attributed income [Repealed] Section OB 39: repealed (with effect on 30 June 2009), on 6 October 2009, by section 395(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OB 40 ICA attribution for personal services Debit (1) An ICA company has an imputation debit for an amount of an attribution for personal services equal to the amount of an imputation credit under section OB 16.

(2) Table references The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 13 (attribution for personal ser- vices).

The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 14 (attribution for personal services).
Accounts adjusted (3) A debit under subsection (1) is recorded in the imputation credit account only if the company has accounted for an attri- bution of income under section GB 29 (Attribution rule: cal- culation).

Debit date The debit date is the last day of the tax year that falls in the income year for which the company accounts in its ﬁnancial statements for the attribution of income referred to in subsec- tion (3).
Deﬁned in this Act: amount, ﬁnancial statements, ICA company, imputation credit, imputation credit account, imputation debit, income, income year, tax year Compare: 2004 No 35 s ME 5(1)(ia), (2)(ha) (4) 2374 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 41 OB 41 ICA debit for loss of shareholder continuity Debit (1) An ICA company has an imputation debit for the amount equal to the amount of an imputation credit retained in the imput- ation credit account and unused at the time at which share- holder continuity is lost.
(2) Table reference The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 14 (debit for loss of shareholder continuity).

When debit arises The debit arises at the time shareholder continuity is lost.

(3) Qualifying companies (3B) This section does not apply to a qualifying company in circum- stances other than those set out in section HA 18 (Treatment of dividends when qualifying company status ends), and that section overrides subsections (1) to (3).
(4) Avoidance arrangements Section GB 34 (ICA arrangements for carrying amounts for- ward) may exclude a company from the application of this sec- tion.
Deﬁned in this Act: amount, ICA company, imputation credit, imputation credit account, imputation debit, qualifying company, shareholder Compare: 2004 No 35 ss HG 13(6), ME 5(1)(i), (2)(h) Section OB 41(1): amended (with effect on 1 April 2008), on 7 December 2009, by section 87(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section OB 41(3) heading: substituted (with effect on 1 April 2008), on 7 De- cember 2009, by section 87(2) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section OB 41(3): substituted (with effect on 1 April 2008), on 7 December 2009, by section 87(2) of the Taxation (Consequential Rate Alignment and Re- medial Matters) Act 2009 (2009 No 63).
Section OB 41(3B) heading: inserted (with effect on 1 April 2008), on 21 De- cember 2010 (applying for the 2008–09 and later income years), by section 117(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section OB 41(3B): inserted (with effect on 1 April 2008), on 21 December 2010 (applying for the 2008–09 and later income years), by section 117(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section OB 41 list of deﬁned terms qualifying company: inserted (with effect on 1 April 2008), on 21 December 2010 (applying for the 2008–09 and later 2375 Part O s OB 42 Income Tax Act 2007 Reprinted as at 2 September 2013 income years), by section 117(2) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section OB 41 compare note: amended (with effect on 1 April 2008), on 21 De- cember 2010 (applying for the 2008–09 and later income years), by section 117(3) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

OB 42 ICA on-market cancellation Debit (1) When an ICA company acquires its shares in an on-market cancellation, it has an imputation debit for an amount calcu- lated using the formula— ASC per share excess × tax rate tax rate.
1 Deﬁnitions of items in formula In the formula,— (a) ASC per share excess is the amount distributed on the on-market cancellation that is more than the amount of the available subscribed capital per share calculated under the ordering rule: tax rate is the basic rate of income tax set out in sched- ule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe beneﬁts) for the tax year in which the acquisition occurs.
(b) Table reference The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 15 (on-market cancellation).

Negative result If the formula produces a negative result, the debit is treated as zero.

Debit date The debit date is the day the shares are acquired by the com- pany in the on-market cancellation.
Deﬁned in this Act: amount, available subscribed capital, ICA company, im- putation debit, on-market cancellation, ordering rule, RWT, share Compare: 2004 No 35 s ME 5(1)(c), (2)(c) Section OB 42(1) formula: amended, on 1 April 2008, by section 498(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
(2) (3) (4) (5) 2376 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 43 Section OB 42(2)(b): substituted, on 1 April 2008, by section 498(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

OB 43 ICA breach of imputation ratio Debit (1) An ICA company has an imputation debit for a breach of the benchmark dividend rules in section OB 61(5) for an amount calculated using the formula— (net dividends × imputation ratio) – attached credits.
(2) Deﬁnition of items in formula In the formula,— (a) net dividends is the total amount of all dividends paid by the company during the tax year, excluding the amount of imputation credits and FDP credits attached to the dividends: imputation ratio is the maximum permitted ratio cal- culated under section OA 18(2) (Calculation of maxi- mum permitted ratios) for an imputation credit or, if less, the greatest imputation ratio of dividends paid by the company for the tax year: attached credits is the total amount of all imputation credits attached to dividends paid by the company for the tax year.
(b) (c) (3) Table reference The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 16 (breach of imputation ratio).

Ratio change declaration (4) A debit under subsection (1) does not arise if the company provides a ratio change declaration under section OB 61(6).

(5) Debit date The debit date is the last day of the tax year.
Deﬁned in this Act: amount, benchmark dividend, dividend, FDP credit, ICA company, imputation credit, imputation debit, imputation ratio, maximum per- mitted ratio, tax year Compare: 2004 No 35 s ME 5(1)(f), (2)(f) 2377 Part O s OB 44 Income Tax Act 2007 Reprinted as at 2 September 2013 OB 44 ICA debit on leaving wholly-owned group Debit (1) An ICA company (company A) has an imputation debit for an amount equal to the amount of an imputation debit that another company (company B) chooses under section OB 13 as a debit to company A’s imputation credit account when company B leaves a wholly-owned group of companies.
(2) (3) Table reference The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 17 (debit balance on leaving wholly-owned group).

Debit date The debit date is the date when the company B stops being part of the wholly-owned group.
Deﬁned in this Act: amount, company, ICA company, imputation credit ac- count, imputation debit, wholly-owned group of companies Compare: 2004 No 35 ss ME 5(1)(fb), (2)(fb), ME 9B(2)(a)(i) OB 45 ICA redemption debit Debit (1) An ICA company has an imputation debit for the amount of a redemption debit.
When redemption debit arises (2) A redemption debit arises when— (a) (b) (c) a company that is not an Australian ICA company is— (i) (ii) the manager of a unit trust; or the trustee or manager of a group investment fund; and the company derives a dividend on the redemption or cancellation of— (i) (ii) a unit issued by the unit trust; or an interest of an investor in the group investment fund; and the company has acquired the unit or interest in the or- dinary course of its management activities for the unit trust or group investment fund; and 2378 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 45 (3) (4) (5) (d) the unit or interest had been acquired by the company on the same terms as those offered to the investors in the unit trust or group investment fund.
Calculating amount The debit is for the greater of the amounts described in subsec- tions (4) and (6) calculated for the income year in which the company derived the dividend referred to in subsection (2)(b).

First amount The ﬁrst amount is calculated using the formula— credits attached – imputation debits.
Deﬁnition of items in formula In the formula in subsection (4),— (a) (b) credits attached is the total amount of all imputation credits and FDP credits attached to dividends derived in the circumstances set out in subsection (2) by the company for the income year: imputation debits is the total amount of all imputation debits arising for the income year under— (i) section OB 41 in the company’s imputation credit account; or section OP 42 (Consolidated ICA debit for loss of shareholder continuity) in the imputation credit account of the consolidated imputation group of which the company is part.
(ii) Second amount The second amount is calculated using the formula— (6) total dividends taxable income × (tax liability debits).
(7) Deﬁnition of items in formula In the formula in subsection (6),— (a) total dividends is the total amount of all dividends de- rived in the circumstances set out in subsection (2), in- cluding imputation credits and FDP credits attached to the dividends: taxable income is the taxable income of the company for the income year in which the dividends are derived: (b) 2379 Part O s OB 45 Income Tax Act 2007 Reprinted as at 2 September 2013 (c) (d) tax liability is the company’s income tax liability for the income year: debits is the imputation credits attached to the dividends that have been cancelled by an imputation debit arising during the income year under — (i) section OB 41 in the company’s imputation credit account; or section OP 42 in the imputation credit account of the consolidated imputation group of which the company is part.
(ii) Table references The table references are as follows: (a) (b) (c) (d) (e) the imputation debit in subsection (1) is referred to in table O2: imputation debits, row 18 (redemption debit): the imputation debit in subsection (5)(b)(i) is referred to in table O2: imputation debits, row 14 (debit for loss of shareholder continuity): the imputation debit in subsection (5)(b)(ii) is referred to in table O20: imputation debits of consolidated im- putation groups, row 16 (debit for loss of shareholder continuity): the imputation debit in subsection (7)(d)(i) is referred to in table O2: imputation debits, row 14 (debit for loss of shareholder continuity): the imputation debit in subsection (7)(d)(ii) is referred to in table O20: imputation debits of consolidated im- putation groups, row 16 (debit for loss of shareholder continuity).
Debit date The debit date is the date on which the company or the group’s nominated company ﬁles the return of income for the income year in which the dividend is derived.
Deﬁned in this Act: amount, Australian ICA company, company, consolidated imputation group, dividend, FDP credit, group investment fund, ICA company, imputation credit, imputation credit account, imputation debit, income, income tax, income tax liability, income year, investor, nominated company, return of income, shareholder, tax, taxable income, trustee, unit trust Compare: 2004 No 35 s ME 41 (8) (9) 2380 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 47 OB 46 ICA transfer from member fund Debit (1) An ICA company has an imputation debit for an amount cal- culated using the formula— expenditure transferred × tax rate.
(2) (3) (4) Deﬁnition of items in formula In the formula,— (a) expenditure transferred is the amount of expenditure transferred under sections DV 5 to DV 7 (which relate to expenditure related to investment funds) by the com- pany, as a member fund, to a master fund: tax rate is the basic rate of income tax set out in sched- ule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe beneﬁts).
(b) Table reference The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 19 (transfer from member fund).

Debit date The debit date is the last day of the tax year corresponding to the income year in which the expenditure is deducted.
Deﬁned in this Act: amount, basic rate, ICA company, imputation debit, master fund, tax year Compare: 2004 No 35 s ME 5(1)(ja), (2)(ia) Section OB 46(2)(b): amended, on 1 April 2008, by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
OB 47 Debit for policyholder base imputation credits Debit (1) An ICA company has an imputation debit for the amount of an imputation credit attached to a dividend derived by the com- pany, to the extent to which it is derived by it as a life insurer and apportioned to their policyholder base.

(2) Table reference The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 20 (debit for policyholder base imputation credits).
2381 Part O s OB 48 Income Tax Act 2007 Reprinted as at 2 September 2013 (3) Debit date The debit date is the last day of the tax year.

Deﬁned in this Act: ICA company, imputation credit, imputation debit, life insurer, policyholder base, tax year Section OB 47: substituted, on 1 July 2010, by section 396(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OB 48 ICA credit balance when Maori authority credit account starts Debit (1) An ICA company has an imputation debit for a credit balance in the company’s imputation credit account immediately be- fore the company becomes a Maori authority.

(2) (3) Table reference The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 21 (credit balance when Maori authority credit account starts).

Debit date The debit date is the day before the company becomes a Maori authority.
Deﬁned in this Act: ICA company, imputation credit account, imputation debit, Maori authority Compare: 2004 No 35 s ME 5(1)(ka), (2)(ja) OB 49 ICA replacement payment by company under share-lending arrangement Debit (1) An ICA company has an imputation debit for the amount of an imputation credit attached under section OB 64 to a replace- ment payment paid by the company under a share-lending ar- rangement.
(2) Table reference The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 22 (replacement payment under share-lending arrangement).

2382 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 51 (3) Debit date The debit date is the day the replacement payment is paid.
Deﬁned in this Act: amount, ICA company, imputation credit, imputation debit, pay, replacement payment, share-lending arrangement Compare: 2004 No 35 s ME 5(1)(ab), (2)(ab) OB 50 ICA returning share transfer Debit (1) An ICA company has an imputation debit for the amount of an imputation credit attached to a dividend paid to the company as a share user in a returning share transfer that is not a share- lending arrangement.
(2) (3) Table reference The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 23 (returning share transfer).

Debit date The debit date is the day the dividend is paid.
Deﬁned in this Act: amount, dividend, ICA company, imputation credit, imput- ation debit, pay, returning share transfer, share-lending arrangement, share user Compare: 2004 No 35 s ME 5(1)(ac), (2)(ac) OB 51 ICA credit transfer by company Debit (1) An ICA company has an imputation debit for the amount of an imputation credit attached to a dividend that is paid to the company and shown in a credit transfer notice given by the company.
(2) (3) Table reference The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 24 (credit transfer notice).

Debit date The debit date is the day the dividend is paid.
Deﬁned in this Act: amount, credit transfer notice, dividend, ICA company, imputation credit, imputation debit, pay Compare: 2004 No 35 s ME 5(1)(ad), (2)(ac) 2383 Part O s OB 52 Income Tax Act 2007 Reprinted as at 2 September 2013 OB 52 ICA imputation credit of consolidated imputation group (1) (2) (3) (4) When this section applies This section applies when— (a) (b) an ICA company that is part of a consolidated imput- ation group has a credit in its imputation credit account; and a debit arises in the imputation credit account of the consolidated imputation group that is not cancelled by a credit in the imputation credit account arising before or on the same date as the company’s credit.
Debit The ICA company has an imputation debit for the amount of the imputation credit that is transferred to the imputation credit account of the consolidated imputation group.

Table reference The imputation debit in subsection (2) is referred to in table O2: imputation debits, row 25 (credit of consolidated imput- ation group).

Debit date The debit date is the day on which the imputation credit is recorded in the imputation credit account of the consolidated imputation group.
Deﬁned in this Act: amount, consolidated imputation group, ICA company, imputation credit, imputation credit account, imputation debit Compare: 2004 No 35 s ME 13(3) OB 53 ICA debit on resident’s restricted amalgamation Debit (1) An ICA company has an imputation debit for the amount of a debit described in subsection (3) that arises on or after a resi- dent’s restricted amalgamation in the account of the amalga- mated company under 1 of the sections listed in subsection (3).
Table reference The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 26 (debit on resident’s restricted amalgamation).
(2) 2384 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 53 (3) Sections The sections are— (a) (e) (b) (c) (d) section OA 10 (When credits or debits due to amalgam- ating company but not recorded) for imputation debits in the imputation credit account of an amalgamating company: section OA 11 (FDP account on resident’s restricted amalgamation) for FDP debits in the FDP account of an amalgamating company because the amalgamated com- pany does not maintain an FDP account: [Repealed] section OA 13 (Policyholder credit account on resi- dent’s restricted amalgamation) for the policyholder debits in the policyholder credit account of an amal- gamating company because the amalgamated company does not maintain a policyholder credit account: section OA 14 (Continuity of shareholding when group companies amalgamate) for imputation debits in the imputation credit account of a consolidated imputation group that ends its existence on the amalgamation: section OA 16 (When FDP account ends on resident’s restricted amalgamation) for FDP debits in the FDP ac- count of a consolidated group because the amalgamated company does not maintain an FDP account: section OA 17 (When policyholder credit account ends on resident’s restricted amalgamation) for the policy- holder debits on the policyholder credit account of a consolidated group because the amalgamated company does not maintain a policyholder credit account.
Deﬁned in this Act: amalgamated company, amalgamating company, amount, consolidated group, consolidated imputation group, FDP account, FDP debit, ICA company, imputation credit account, imputation debit, policyholder credit account, policyholder debit, resident’s restricted amalgamation Compare: 2004 No 35 ss ME 29, MG 17, MI 13 (g) (f) Section OB 53(3)(c): repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 94(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section OB 53 list of deﬁned terms CTR account: repealed (with effect on 1 July 2011), on 7 May 2012, by section 94(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

2385 Part O s OB 54 Income Tax Act 2007 Reprinted as at 2 September 2013 Section OB 53 list of deﬁned terms CTR debit: repealed (with effect on 1 July 2011), on 7 May 2012, by section 94(2) of the Taxation (International Invest- ment and Remedial Matters) Act 2012 (2012 No 34).
OB 54 ICA tax advantage arrangement Debit (1) An ICA company has an imputation debit for the amount of a debit for a tax advantage arrangement determined under sec- tion GB 36 (Reconstruction of imputation arrangements to ob- tain tax advantage).

(2) (3) Table reference The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 27 (tax advantage arrangement).
Debit date The debit date is the last day of the tax year in which the debit for the tax advantage arrangement is determined.

Deﬁned in this Act: amount, arrangement, ICA company, imputation debit, tax advantage, tax year Compare: 2004 No 35 s ME 5(1)(j), (2)(i) OB 55 ICA retrospective imputation credit Debit (1) An ICA company has an imputation debit for an imputation credit that is retrospectively attached to a non-cash dividend under section OB 62.
Table reference The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 28 (retrospective imputation credit).

Debit date The debit date is the day the dividend is paid.
Deﬁned in this Act: ICA company, imputation credit, imputation debit, non- cash dividend, pay Compare: 2004 No 35 s ME 6(4)(a) (2) (3) 2386 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 58 OB 56 ICA ﬁnal balance Debit (1) An ICA company has an imputation debit for a credit balance in the imputation credit account when the company stops being an ICA company.

(2) (3) Table reference The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 29 (ﬁnal balance).
Debit date The debit date is the day the company stops being an ICA company.

Deﬁned in this Act: ICA company, imputation credit account, imputation debit Compare: 2004 No 35 s ME 5(1)(k), (2)(j) OB 57 ICA refund of NRWT Debit (1) An Australian ICA company has an imputation debit for an amount of a refund of NRWT that gave rise to an imputation credit under section OB 27.

(2) (3) Table references The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 30 (refund of NRWT).
The imput- ation credit in subsection (1) is referred to in table O1: imput- ation credits, row 25 (NRWT withheld).

Debit date The debit date is the day the refund is made.
Deﬁned in this Act: amount, amount of tax, Australian ICA company, imput- ation credit, imputation debit, NRWT Compare: 2004 No 35 s ME 5(1A)(a), (2A) OB 58 ICA refund of amount of tax for schedular payment Debit (1) An Australian ICA company has an imputation debit for the amount of a refund of an amount of tax for a schedular payment that gave rise to an imputation credit under section OB 28.
2387 Part O s OB 59 Income Tax Act 2007 Reprinted as at 2 September 2013 (2) (3) Table references The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 31 (refund of amount of tax for schedular payment).

The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 26 (amount of tax for schedular payment).

Debit date The debit date is the day the refund is made.
Deﬁned in this Act: amount, amount of tax, Australian ICA company, imput- ation credit, imputation debit, pay, schedular payment Compare: 2004 No 35 s ME 5(1A)(b), (2A) OB 59 ICA refund of schedular income tax Debit (1) An Australian ICA company has an imputation debit for the amount of a refund of schedular income tax that gave rise to an imputation credit under section OB 29.
(2) (3) Table references The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 32 (refund of schedular income tax).

The imputation credit in subsection (1) is referred to in table O1: imputation credits, row 27 (payment of schedular income tax).

Debit date The debit date is the day the refund is made.
Deﬁned in this Act: amount, Australian ICA company, imputation credit, im- putation debit, pay Compare: 2004 No 35 s ME 5(1A)(c), (2A) Imputation credits attached to dividends OB 60 Imputation credits attached to dividends Attaching imputation credits (1) When an ICA company pays a dividend, it may attach an im- putation credit to the dividend.

Section OB 63 overrides this section.


2388 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 60 (2) Retrospective attachment The ICA company may determine that an imputation credit is retrospectively attached to a dividend in the circumstances described in section OB 62.

Imputation ratio for dividend (3) A dividend with an imputation credit attached has an imput- ation ratio calculated using the formula— credit attached net dividend paid.
(4) Deﬁnition of items in formula In the formula in subsection (3),— (a) (b) credit attached is the amount of the imputation credit attached to the dividend: net dividend paid is the amount of the dividend paid, excluding the amount of the imputation credit and FDP credit attached.
Maximum permitted ratio (5) A dividend with an imputation credit attached must not have an imputation ratio that is more than the maximum permitted ratio calculated under section OA 18(2) (Calculation of maximum permitted ratios).

Conversion of AUD dividend (6) A dividend paid in Australian currency by an Australian ICA company must be converted into New Zealand currency, cal- culated using the formula— Australian dollar value × exchange rate.
(7) Deﬁnition of items in formula In the formula in subsection (6),— (a) (b) Australian dollar value is the amount of the dividend in Australian dollars: exchange rate is the close of trading spot exchange rate for the Australian dollar on— (i) the day the dividend is declared if that day is no more than 3 months before the dividend is paid; or 2389 Part O s OB 61 Income Tax Act 2007 Reprinted as at 2 September 2013 (ii) the day the dividend is paid if that day is more than 3 months after the dividend is declared.
Deﬁned in this Act: amount, Australian ICA company, close of trading spot ex- change rate, dividend, FDP credit, ICA company, imputation credit, imputation ratio, income year, maximum permitted ratio, pay, tax year Compare: 2004 No 35 ss ME 1B, ME 6, ME 8(1), (2) OB 61 ICA benchmark dividend rules (1) (2) (3) (4) When this section applies This section applies when an ICA company pays a dividend on more than 1 occasion during a tax year.

Subsection (2) overrides this subsection.


Exclusions This section does not apply to the following dividends: (a) a dividend that is the subject of an election by a statutory producer board under sections OB 73 to OB 75: a dividend that is the subject of an election by a co-op- erative company under sections OB 78 to OB 80: a dividend paid when the company is not an ICA com- pany.

(b) (c) Benchmark dividend The ﬁrst dividend of the tax year is the benchmark dividend.
Same imputation ratio The imputation ratio of a dividend paid after the benchmark dividend must be the same as the imputation ratio of the bench- mark dividend.

This subsection is modiﬁed by section OZ 9 (Benchmark dividends: ratio change).

Breach of imputation ratio (5) A breach of subsection (4) gives rise to an amount of an imput- ation debit under section OB 43 (table O2: imputation debits, row 16 (breach of imputation ratio)) calculated using the for- mula in section OB 43(1).
Ratio change declaration (6) An ICA company may notify the Commissioner that the divi- dend is not part of an arrangement to obtain a tax advantage by providing a ratio change declaration stating that the dividend is not part of an arrangement to which sections GB 35 and GB 36 (which relate to imputation arrangements to obtain tax advan- 2390 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 62 tage) apply.
The company must provide the declaration before the dividend is paid, or by a later date if the Commissioner al- lows.

For the purposes of this subsection, the dividend must not be part of an arrangement to obtain a tax advantage.

This subsection overrides subsection (5).


Consolidated imputation group [Repealed] [Repealed] (7) Group debit (8) Under section OP 2(2) (When credits and debits arise only in group accounts), a breach of an imputation ratio alternatively gives rise to an imputation debit under section OP 43 (Consoli- dated ICA breach of imputation ratio) (table O20: imputation debits of consolidated imputation groups, row 17 (breach of imputation ratio)) if the company is part of a consolidated im- putation group.
(9) Treatment of group dividends In the application of this section to a consolidated imputation group, a dividend paid between group companies is disre- garded.
Deﬁned in this Act: arrangement, benchmark dividend, Commissioner, com- pany, consolidated imputation group, co-operative company, dividend, ICA company, imputation debit, imputation ratio, notify, pay, statutory producer board, tax advantage, tax year Compare: 2004 No 35 ss ME 8(2), (3), ME 14(2) Section OB 61(4): amended, on 1 October 2010, by section 12 of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Section OB 61(7) heading: repealed (with effect on 1 April 2008), on 6 October 2009, pursuant to section 397(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OB 61(7): repealed (with effect on 1 April 2008), on 6 October 2009, by section 397(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OB 62 Retrospective attachment of imputation credits (1) When this section applies This section applies in relation to a dividend arising from a transfer pricing arrangement or under subpart FL (Emigration of resident companies) when— 2391 Part O s OB 62 Income Tax Act 2007 Reprinted as at 2 September 2013 (a) (b) an ICA company pays a non-cash dividend whose amount is later adjusted under section GC 7 or GC 8 (which relate to transfer pricing arrangements): an emigrating company that was an ICA company im- mediately before the time of emigration and is treated under section FL 2 (Treatment of emigrating companies and their shareholders) as paying a distribution to share- holders.
Imputation credits attached retrospectively The company may attach retrospectively an imputation credit to the dividend or distribution, as applicable.
Limit for ICA company The amount of all imputation credits attached retrospectively by a company referred to in subsection (1)(a) during a tax year must not be more than the lesser of— (a) the credit balance of the company’s imputation credit account at the end of the tax year in which the dividend is paid; or the credit balance of the company’s imputation credit account at the end of each of the tax years in the period that runs from the tax year of payment of the dividend to the tax year in which the credit is attached retrospect- ively under subsection (1).
(b) Limit for emigrating company The amount of all imputation credits attached retrospectively by a company referred to in subsection (1)(b) must be no more than the credit balance of the company’s imputation credit ac- count immediately before the time of emigration.
When subsection (6) applies Subsection (6) applies if— (a) a company provides a company dividend statement and issues a shareholder dividend statement for a non-cash dividend at the time it retrospectively attaches an imput- ation credit; and the adjustment under section GC 7 or GC 8 results in a payment of income tax; and the attachment of the imputation credit would otherwise result in a liability for imputation penalty tax.
(2) (3) (4) (5) (b) (c) 2392 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 63 (6) New credit date The credit date for the imputation credit arising for the pay- ment of the income tax referred to in subsection (5)(b) is the day on which the non-cash dividend is paid, and the company is excused a breach of section 69 of the Tax Administration Act 1994 for not ﬁling a correct annual ICA return through the retrospective attachment of an imputation credit.
Statements still required (7) A company that does not meet the requirement of subsection (8) (9) (5)(a) remains liable to— (a) (b) provide a company dividend statement; and issue a shareholder dividend statement for the non-cash dividend and the retrospective attachment of an imput- ation credit.

When subsection (9) applies Subsection (9) applies when an amount of tax paid by an emi- grating company is attributable to income derived before the time of emigration or to the application of subpart FL.
Amount of tax paid by emigrating company The amount of tax referred to in subsection (8) is treated for the purposes of this subpart as paid immediately before the time of emigration if— (a) the company determines to attach an imputation credit to a dividend; and the imputation credit is not less than the amount of tax; and the company notiﬁes the Commissioner when providing the company dividend statement.
(b) (c) Deﬁned in this Act: amount, amount of tax, annual ICA return, arrangement, Commissioner, company dividend statement, dividend, emigrating company, ICA company, imputation credit, imputation credit account, imputation penalty tax, income, income tax, non-cash dividend, notify, pay, shareholder, share- holder dividend statement, tax year, time of emigration Compare: 2004 No 35 s ME 6 OB 63 Australian dividends No credits attached (1) Despite section OB 60(1), an ICA company must not attach an imputation credit to a dividend if— 2393 Part O s OB 63 Income Tax Act 2007 Reprinted as at 2 September 2013 (a) (b) (c) the Income Tax Assessment Act 1997 (Aust) applies to the payment of the dividend by the company; and the dividend is paid in relation to a share that is, or forms part of, a debt interest under that Act; and the payment of the dividend is included in the com- pany’s return of income to the Australian Federal Com- missioner of Taxation.
Exclusion: groups of companies Subsection (1) does not apply in relation to a share issued be- fore 21 July 2005 if, when the dividend is paid, the shareholder and the ICA company— (a) (b) are not part of the same group of companies: are part of the same wholly-owned group of companies and not resident in New Zealand.
Exclusion: reasons for acquisition of shares Subsection (1) does not apply in relation to a share issued be- fore 21 July 2005 if— (a) the shareholder and the ICA company are part of the same group of companies; and the shareholder acquired the share— (i) (ii) as part of a sharebroking business: as an investment held by the shareholder as part of an insurance business: as security for a loan given as part of a business of lending money: as a trustee for a beneﬁciary who is not a com- pany that is part of the same group of companies as the shareholder: for a reason that does not include the fact that the shareholder and the ICA company were part of the same group of companies.
(iii) (iv) (v) (b) Deﬁned in this Act: business, company, dividend, group of companies, ICA company, imputation credit, pay, resident in New Zealand, share, shareholder, trustee, wholly-owned group of companies Compare: 2004 No 35 s ME 6(1B)–(1D) (2) (3) 2394 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 65 OB 64 Replacement payments Attaching credits (1) On making a replacement payment, a share user under a share- lending arrangement may attach an imputation credit to the payment.
(2) Amount of credit The amount of the imputation credit must be equal to or less than the amount of any imputation credit attached to a dividend relating to the replacement payment that is received by the share user before the replacement payment is made.
Deﬁned in this Act: amount, dividend, imputation credit, pay, replacement pay- ment, share-lending arrangement, share user Compare: 2004 No 35 s ME 6B Further income tax OB 65 Further income tax for ICA closing debit balance Liability (1) An ICA company is liable to pay further income tax for a debit balance in the company’s imputation credit account at the end of a tax year.
Exclusion (2) An imputation debit arising under section OB 46 (table O2: imputation debits, row 19 (transfer from member fund)) is dis- regarded when determining under subsection (1) if the com- pany has a debit balance at the end of a tax year.

(3) Due date The company must pay the further income tax to the Commis- sioner no later than 20 June following the end of the tax year.
Deﬁned in this Act: Commissioner, company, further income tax, ICA com- pany, imputation credit account, imputation debit, pay, tax year Compare: 2004 No 35 s ME 9(1), (1A), (2) 2395 Part O s OB 66 Income Tax Act 2007 Reprinted as at 2 September 2013 OB 66 Further income tax when company stops being ICA company Liability (1) An ICA company is liable to pay further income tax for a debit balance in the company’s imputation credit account when the company stops being an ICA company.
(2) Due date The company must pay the further income tax to the Commis- sioner— (a) by the day the company stops being an ICA company; or for a company that is no longer an ICA company be- cause it becomes a portfolio investment entity, by the end of the tax year in which it stops being an ICA com- pany.

(b) Paramount section (3) A company that stops being an ICA company on the last day of a tax year is liable to pay further income tax under this section and not under section OB 65.
Deﬁned in this Act: Commissioner, company, further income tax, ICA com- pany, imputation credit account, pay, portfolio investment entity, tax year Compare: 2004 No 35 s ME 9(3) Section OB 66(2): substituted, on 1 April 2008, by section 499(1) of the Taxa- tion (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section OB 66 list of deﬁned terms portfolio investment entity: inserted, on 1 April 2008, by section 499(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
OB 67 Reduction of further income tax Debit at previous year-end (1) An ICA company’s liability for further income tax under sec- tions OB 65 and OB 66 may be reduced under subsection (2) if— (a) a debit balance existed in the company’s imputation credit account at the end of a tax year; and the credits that arise in the account in the following tax year totals less than the debit balance; and the company notiﬁes the Commissioner.
(b) (c) 2396 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 67 (2) (2B) (3) (4) (5) Reduction applying for consecutive tax years In relation to 2 tax years that are consecutive, the liability for further income tax at the end of the second tax year is reduced by the amount calculated using the formula— debit balance at end of second year ﬁrst year adjustment.
Deﬁnition of items in formula In the formula in subsection (2),— (a) (b) debit balance at end of second year is the amount of the debit balance in the company’s imputation credit account at the end of the second tax year: ﬁrst year adjustment is the amount— (i) of the ﬁrst year’s debit balance in the company’s imputation credit account less the credits made to the account during the second tax year; and that cannot be less than zero.
(ii) Qualifying companies The liability of an ICA company that is a qualifying company for further income tax under sections OB 65 and OB 66 may be reduced under subsection (4) if an imputation debit arises under section OB 32 (table O2: imputation debits, row 4 (re- fund of income tax)) in the company’s imputation credit ac- count before the end of the tax year for which the liability arises.
Amount of reduction The liability of the qualifying company for further income tax at the end of the tax year referred to in subsection (3) is reduced by an amount calculated using the formula— refunds – credits.
Deﬁnition of items in formula In the formula in subsection (4),— (a) refunds is the total amount of all refunds of income tax paid to the company before the debit balance creating the liability for further income tax referred to in subsec- tion (3) arises: credits is the total amount of all credits to the com- pany’s imputation credit account for the period that runs (b) 2397 Part O s OB 68 Income Tax Act 2007 Reprinted as at 2 September 2013 from the tax year in which the ﬁrst refund was received to the time the calculation is made.
Deﬁned in this Act: amount, Commissioner, further income tax, ICA company, imputation credit account, imputation debit, imputation rules, income tax, no- tify, pay, qualifying company, tax year Compare: 2004 No 35 s ME 9(7)–(9) Section OB 67(2) heading: substituted (with effect on 1 April 2008), on 29 Au- gust 2011 (applying for the 2008–09 and later income years), pursuant to section 113(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section OB 67(2): substituted (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 113(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section OB 67(2B) heading: inserted (with effect on 1 April 2008), on 29 Au- gust 2011 (applying for the 2008–09 and later income years), by section 113(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section OB 67(2B): inserted (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 113(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section OB 67(5): amended (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 113(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
OB 68 Income tax paid satisfying liability for further income tax Election (1) On meeting the requirements of subsection (2), an ICA com- pany that is liable for further income tax may choose to satisfy the liability through a payment of income tax.

Requirements The company must pay the income tax— (a) after the end of the tax year in which the relevant debit balance arises; and for an income year corresponding to the tax year in which the company is an ICA company.
(b) Payment credited The payment of income tax satisﬁes the company’s liability to pay further income tax.

(2) (3) 2398 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 69 (4) When treated as paid The further income tax is treated as paid on the date on which the Commissioner receives the payment of income tax.
Deﬁned in this Act: Commissioner, further income tax, ICA company, income tax, income year, pay, tax year Compare: 2004 No 35 s ME 9(5A), (8), (9) OB 69 Further income tax paid satisfying liability for income tax Election (1) An ICA company that pays further income tax may choose to treat the payment as satisfying a liability of the company to pay income tax or provisional tax.
(2) ICA company status The liability for income tax or provisional tax referred to in subsection (1) must be for an income year corresponding to a tax year in which the company is an ICA company.

Alternative for consolidated imputation group (3) A company that is part of a consolidated imputation group may choose that the payment under subsection (1) satisﬁes a group liability for income tax or provisional tax that arises at or after the time of payment.
(4) When treated as paid The liability for income tax or provisional tax is treated as paid on the day on which the further income tax is paid.

Australian ICA company (5) An Australian ICA company may choose to convert a payment of further income tax into a tax loss of an amount calculated under subsection (7).

Subsection (6) overrides this subsection.


(6) (7) Requirement The election under subsection (5) may be made only if no possibility exists that the further income tax can be credited against a future income tax liability of the company.

Tax loss For the purposes of subsection (5), the amount of the tax loss for the payment of further income tax is calculated using the formula— 2399 Part O s OB 70 Income Tax Act 2007 Reprinted as at 2 September 2013 further income tax paid tax rate.
(8) Deﬁnition of items in formula In the formula,— (a) (b) further income tax paid is the amount of further in- come tax paid that is not credited against an income tax liability: tax rate is the basic rate of income tax set out in sched- ule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe beneﬁts) at the time the further income tax is paid.
(9) Beneﬁt of the loss For the purposes of subsection (5), the company may choose that the tax loss is attributed to itself or to another company that is part of the same wholly-owned group of companies.

When loss is attributed (10) The tax loss referred to in subsection (5) is a loss for the in- come year corresponding to the tax year in which the company paid the further income tax.
Deﬁned in this Act: amount, Australian ICA company, basic rate, consolidated imputation group, further income tax, ICA company, income tax, income tax liability, income year, pay, provisional tax, tax loss, tax year, wholly-owned group of companies Compare: 2004 No 35 ss ME 9(5), (5B), ME 13(6) Section OB 69(8)(b): amended, on 1 April 2008, by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
OB 70 Application of other provisions When it is appropriate for the purposes of this section, the other sections of this Act and the Tax Administration Act 1994— (a) apply to further income tax as if they addressed further income tax and not income tax; and apply, modiﬁed as necessary, to ensure their application to further income tax rather than income tax; and do not override the imputation rules or section 101 of the Tax Administration Act 1994.
(b) (c) Deﬁned in this Act: further income tax, imputation rules, income tax Compare: 2004 No 35 s ME 9(6) 2400 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 71 Imputation additional tax OB 71 Imputation additional tax on leaving wholly-owned group (1) When this section applies This section applies in a tax year when— (a) a company (company A) stops being part of a wholly- owned group of companies because of a change in the ultimate owner of the company; and [Repealed] the loss balance carried forward from the previous tax year for companies in the group is more than $1,000,000.
(b) (c) Sources of liability (1B) Company A is liable for imputation additional tax under— (a) (b) subsection (2), if the company has a debit balance in the imputation credit account when the ultimate owner of the company changes: subsection (4), if the company has an amount of ex- cess entitlement under subsection (5) when the ultimate owner of the company changes.
Liability arising from debit balance (2) At the time company A stops being part of the wholly-owned group, it may choose to reduce or eliminate the debit balance by paying imputation additional tax of an amount no greater than the debit balance but, in dealing with the liability, it may transfer some or all of the debit balance under subsection (3) or choose to use its excess entitlement under subsection (4), or a combination of both.
(3) (4) Debit balance Company A may choose to transfer under section OB 44 some or all of a debit balance in the company’s imputation credit account to another company (company B) in the same wholly- owned group.

An imputation additional tax liability remains for the amount of the debit balance that is not transferred.
Liability arising from excess entitlement Company A is liable for an amount of imputation additional tax equal to the amount of the excess entitlement described in 2401 Part O s OB 71 Income Tax Act 2007 Reprinted as at 2 September 2013 subsection (5) reduced, to no less than zero, by the amount of any payment that company A— (a) made as provisional tax or income tax; and (b) chooses to treat as having been paid by company B.
Amount of excess entitlement Company A’s excess entitlement at the time it stops being part of the wholly-owned group is 1 of the following amounts: (a) zero, if the credit balance of its imputation credit ac- count at the time is equal to or more than— (i) (ii) the amount in the tax pooling account provided by or for the beneﬁt of company A that is more than its liability to pay income tax or provisional tax at the time; or the entitlement company A would have to a re- fund under sections RM 2, RM 4, and RM 5 (which relate to refunds of excess tax) as if sec- tions RM 13 to RM 17 (which relate to limits on refunds) did not apply; or (b) (c) the total of the amounts referred to in paragraph (a)(i) and (ii) if no credit balance exists at the time; or the excess of the total of the amounts referred to in para- graph (a)(i) and (ii) over the credit balance, if paragraph (b) does not apply.
Due date If company A chooses to pay imputation additional tax under subsections (2) and (4), it must pay the amount to the Com- missioner no later than the 20th day of the month following the month in which company A stops being part of the group.

Joint liability Company A and all companies in the group are jointly liable for a payment of imputation additional tax under subsection (6).

A payment of imputation additional tax does not satisfy any other liability of company A or the group.
Payment by excess tax Company A, or another company in the wholly-owned group, may choose to apply an excess tax payment to satisfy company A’s liability.

(5) (6) (7) (8) 2402 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 71 Form of election (9) An election under this section must follow the form of an elec- tion under section OB 13(5).
However, if subsection (3) or (4) apply to transfer a debit or treat an amount of tax as having been paid, company A must also provide a notice of agree- ment from company B in relation to the amount of excess tax payment.
Deﬁned in this Act: amount, Commissioner, company, excess tax payment, imputation additional tax, imputation credit account, income tax, income tax liability, pay, provisional tax, tax loss, tax pooling account, tax year, ultimate owner, wholly-owned group of companies Compare: 2004 No 35 s ME 9B Section OB 71(1)(b): repealed (with effect on 1 April 2008), on 6 October 2009, by section 398(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OB 71(1B) heading: inserted (with effect on 1 April 2008), on 7 Sep- tember 2010, by section 100(1) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).

Section OB 71(1B): inserted (with effect on 1 April 2008), on 7 September 2010, by section 100(1) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Section OB 71(2) heading: substituted (with effect on 1 April 2008), on 7 Sep- tember 2010, by section 100(2) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).

Section OB 71(4) heading: substituted (with effect on 1 April 2008), on 7 Sep- tember 2010, by section 100(3) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Section OB 71(4): substituted (with effect on 1 April 2008), on 7 September 2010, by section 100(3) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).

Section OB 71(4)(a): amended (with effect on 1 April 2008), on 6 October 2009, by section 398(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OB 72(5)(a)(ii): amended (with effect on 1 April 2013), on 17 July 2013, by section 80 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Section OB 71(5)(c): substituted (with effect on 1 April 2008), on 6 October 2009, by section 398(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OB 71(6): amended (with effect on 1 April 2008), on 7 September 2010, by section 100(4) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).

2403 Part O s OB 72 Income Tax Act 2007 Reprinted as at 2 September 2013 Section OB 71(9): amended (with effect on 1 April 2008), on 6 October 2009, by section 398(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OB 72 Imputation additional tax on joining wholly-owned group Liability (1) An ICA company to which subsection (2) applies may be liable (b) (b) (c) for imputation additional tax under— (a) subsection (3) as the company’s ﬁrst liability under this section: subsection (5) as the company’s second liability under this section.
Liable company The company is 1 to which all of the following apply: (a) the company is or was recently part of a wholly-owned group of companies (the former group); and the company has or will soon join a different wholly- owned group of companies (the new group); and the former group has a loss balance carried forward from an earlier tax year of more than $1,000,000 for the tax year before the income year corresponding to the tax year in which the company changes groups.
First liability The company is liable for imputation additional tax if, at a particular time,— (a) a debit balance exists in the company’s imputation credit account; and an imputation debit arose when the company was part of the former group; and the imputation additional tax liability of the company has not been paid under section OB 71 by the company or another company in the former group.
(b) (c) Amount of liability The amount of the imputation additional tax liability under subsection (3) is equal to the amount of the imputation debit at the time the company becomes part of the new group.
(2) (3) (4) 2404 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 72 (5) Second liability The company is liable for an amount of imputation additional tax, equal to the excess entitlement determined under subsec- tion (6), if a group of people hold common voting interests in the new group that exceed by 67% or more the common voting interests in the former group that are held by the same people immediately before the company joins the new group.
Possible liability under section OB 72B (5B) The company is liable for an amount of imputation additional tax given by section OB 72B(8) if the requirements of that provision are met.
(6) (7) Excess entitlement The company’s excess entitlement at a particular time is 1 of the following amounts: (a) zero, if the credit balance of the company’s imputation credit account at the time is equal to or more than the amount (the total refundable amount) that is the total of the following: (i) (ii) the amount in the tax pooling account provided by or for the beneﬁt of the company that is more than the company’s liability to pay income tax or provisional tax at the time: the amount of the refund to which the company is entitled under sections RM 2, RM 4, and RM 5 (which relate to refunds of excess tax), other than an amount affected by a restriction under section OB 72B(5); or (b) (c) the total refundable amount, if there is no credit balance in the company’s imputation credit account at the time; or the excess of the total refundable amount over the credit balance in the company’s imputation credit account at the time, if paragraph (b) does not apply.
Due date The imputation additional tax must be paid to the Commis- sioner no later than the 20th day of the month following the month in which the company stops being part of the former group.

2405 Part O s OB 72 Income Tax Act 2007 Reprinted as at 2 September 2013 Joint liability The company and all companies in the new group are jointly liable for the imputation additional tax.

A payment of imput- ation additional tax does not satisfy any other liability of the company or the new group.
Payment by excess tax For a liability under subsections (3) and (5), the company or another company in the new group may choose to satisfy the liability by applying an excess tax payment in discharging it.
Deﬁned in this Act: amount, Commissioner, company, excess tax payment, ICA company, imputation additional tax, imputation credit account, imputation debit, income tax liability, income year, pay, provisional tax, tax loss, tax pool- ing account, tax year, wholly-owned group of companies Compare: 2004 No 35 s ME 9C Section OB 72(1)(a): amended (with effect on 1 March 2010), on 7 September 2010, by section 101(1) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Section OB 72(5): substituted (with effect on 1 March 2010), on 7 September 2010, by section 101(2) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).

Section OB 72(5B) heading: inserted (with effect on 1 March 2010), on 7 Sep- tember 2010, by section 101(2) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Section OB 72(5B): inserted (with effect on 1 March 2010), on 7 September 2010, by section 101(2) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).

Section OB 72(6)(a): substituted (with effect on 1 March 2010), on 7 September 2010, by section 101(3) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Section OB 72(6)(a)(ii): amended (with effect on 1 April 2013), on 17 July 2013, by section 81 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Section OB 72(6)(b): substituted (with effect on 1 March 2010), on 7 September 2010, by section 101(3) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Section OB 72(6)(c): substituted (with effect on 1 March 2010), on 7 September 2010, by section 101(3) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
(8) (9) 2406 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 72B OB 72B Limit on using entitlement to refund after joining wholly-owned group (1) (2) (3) (4) When this section applies This section applies when— (a) an ICA company joins a wholly-owned group of com- panies (the new group) from another wholly-owned group of companies (the former group); and the ICA company is not liable for imputation additional tax under section OB 72(5).
(b) Restricted refund amount for company and new group Subsections (3) to (8) apply to an amount (the restricted re- fund amount) for the ICA company and the new group that is greater than zero and calculated using the formula— refund amount – ICA credit balance.
Deﬁnition of items in formula In the formula,— (a) refund amount is the total of the following amounts, determined immediately before the ICA company joins the new group: (i) the amount in the tax pooling account provided by or for the beneﬁt of the ICA company that is more than the company’s liability to pay income tax or provisional tax at the time: the amount of the refund to which the ICA com- pany is entitled under sections RM 2, RM 4, and RM 5 (which relate to refunds of excess tax) other than an amount affected by a restriction under subsection (5) for the company and another group: (ii) (b) ICA credit balance is the credit balance of the ICA company’s imputation credit account immediately be- fore the company joins the new group.
Payment to Commissioner If the restricted refund amount is greater than the amount re- ferred to in subsection (3)(a)(ii), the ICA company must pay to the Commissioner an amount equal to the excess and the Com- missioner must hold the amount with the balance of the re- stricted refund amount as if the excess were a refund to which 2407 Part O s OB 72B Income Tax Act 2007 Reprinted as at 2 September 2013 (5) the company were entitled under section RM 2 (Refunds for overpaid tax).
Use of restricted refund amount The Commissioner must hold the restricted refund amount for the ICA company and the new group subject to the restriction that the amount— (a) may be refunded for an imputation credit only if the ICA company satisﬁes the Commissioner that the credit— (i) arises from taxation paid by the ICA company or by a company that is in the same wholly-owned group as the ICA company and was in the for- mer group immediately before the ICA company joined the new group: is attached to a dividend received in relation to a shareholding by the ICA company or by a com- pany that is in the same wholly-owned group as the ICA company and was in the former group immediately before the ICA company joined the new group and had the shareholding then; and (ii) (b) may be used to satisfy a tax liability of— (i) (ii) the ICA company: a company that is in the same wholly-owned group as the ICA company (the member), if the ICA company satisﬁes the Commissioner that the member was in the former group immedi- ately before the ICA company joined the new group.
Restriction additional to other requirements The restriction imposed by subsection (5) on the use of a re- stricted refund amount is in addition to the requirements under other provisions of the Act for a refund or the satisfaction of a tax liability from an amount to which the ICA company is entitled under sections RM 2, RM 4, and RM 5.
Reducing restricted refund amount The restricted refund amount for the ICA company and a group is reduced by the amount of— (a) a refund permitted under subsection (5)(a) relating to the restricted refund amount: (6) (7) 2408 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 73 (b) (c) (d) a satisfaction of a tax liability permitted by subsection (5)(b) relating to the restricted refund amount: a payment of imputation additional tax under subsection (8) relating to the restricted refund amount: a payment of imputation additional tax under section OB 71(4) relating to the restricted refund amount.
(8) Liability for imputation additional tax The ICA company is liable for an amount of imputation ad- ditional tax equal to the restricted refund amount for the com- pany and a wholly-owned group of companies (the old group) determined immediately after a change in the holding of voting interests in the ICA company if, immediately after the change, a group of people hold common voting interests in the ICA company that exceed, by 67% or more, the common voting interests— (a) in the wholly-owned group of companies to which the company belonged immediately before the company joined the old group; and that were held by the same people immediately before the company joined the old group.
(b) Deﬁned in this Act: Commissioner, common voting interest, company, divi- dend, ICA company, imputation additional tax, imputation credit, income tax, provisional tax, tax pooling account, wholly-owned group of companies Section OB 72B: inserted (with effect on 1 March 2010), on 7 September 2010, by section 102 of the Taxation (Annual Rates, Trans-Tasman Savings Portabil- ity, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Section OB 72B(3)(a)(ii): amended (with effect on 1 April 2013), on 17 July 2013, by section 82(1) of the Taxation (Livestock Valuation, Assets Expend- iture, and Remedial Matters) Act 2013 (2013 No 52).

Section OB 72B(6): amended (with effect on 1 April 2013), on 17 July 2013, by section 82(2) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Distributions of statutory producer boards and co-operative companies OB 73 Statutory producer boards attaching imputation credits to cash distributions Election (1) On meeting the requirements of subsection (2), a statutory pro- ducer board that is an ICA company may choose, for an in- 2409 Part O s OB 73 Income Tax Act 2007 Reprinted as at 2 September 2013 come year, to attach an imputation credit to a cash distribution paid to a member of the producer board.
Requirements The producer board may make an election under subsection (1) if— (a) the distribution is made to all persons who were mem- bers of the board at a time in the income year; and the board proposes to pay the distribution based on 1 of the factors set out in subsection (3); and the board would, in the absence of this section, have a deduction for some or all of the distribution, whether as an association rebate under subpart HE (Mutual associ- ations) or under some other provision of this Act.
(b) (c) Methods The amount of the distribution must be based on 1 of the fol- lowing methods of determination, as applicable, for an income year: (a) all payments for a member’s produce transactions dur- ing the income year as a proportion of total payments for all members’ produce transactions during the income year; or all levies payable by a member for the income year as a proportion of total levies payable by members for the income year; or another method of determination approved by the Com- missioner.
(b) (c) Total credits attached The total amount of imputation credit attached to the distribu- tion is calculated using the formula— total net dividend × tax rate tax rate.
1 Deﬁnition of items in formula In the formula in subsection (4),— (a) total net dividend is the total amount of the distribution excluding the amount of imputation credit: tax rate is the basic rate of income tax set out in sched- income tax, ule 1, part A, clause 2 (Basic tax rates: (b) (2) (3) (4) (5) 2410 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 73 (6) (7) (8) (9) ESCT, RSCT, RWT, and attributed fringe beneﬁts) for the income year.
Member’s credits The amount of a member’s share of an imputation credit at- tached under subsection (4) is calculated using the formula— member’s distribution total distribution × total imputation credit attached.
Deﬁnition of items in formula In the formula in subsection (6),— (a) member’s distribution is the amount of the member’s share of the distribution excluding the amount of imput- ation credit: total distribution is the amount of the total distribution paid excluding the amount of imputation credit: total imputation credit attached is total amount of im- putation credit attached to the distribution calculated under subsection (4).
(b) (c) When producer board chooses not to have deduction If a producer board chooses to treat a distribution as a dividend, it is denied a deduction for the amount of the distribution under section DV 18 (Statutory producer boards and co-operative companies).

Relationship with section OZ 15 Section OZ 15 (Attaching imputation credits and notional dis- tributions: modifying amounts) may apply to modify subsec- tion (4).
Deﬁned in this Act: amount, association rebate, basic rate, Commissioner, de- duction, dividend, ICA company, imputation credit, income tax, income year, levy, member, pay, produce transactions, statutory producer board Compare: 2004 No 35 ss ME 30, ME 31 Section OB 73(5)(b): amended, on 1 April 2008, by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section OB 73(9) heading: added, on 1 April 2008, by section 500 of the Tax- ation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section OB 73(9): added, on 1 April 2008, by section 500 of the Taxation (Busi- ness Taxation and Remedial Matters) Act 2007 (2007 No 109).
2411 Part O s OB 74 Income Tax Act 2007 Reprinted as at 2 September 2013 OB 74 Statutory producer boards attaching imputation credits to notional distributions Election (1) A statutory producer board that is an ICA company may choose, for an income year, to attach an imputation credit to a notional distribution, as a result of which a member derives a dividend of an amount calculated under section OB 75(2).

Subsections (2) and (8) override this subsection.


All members (2) A statutory producer board may make an election under sub- section (1) only if the distribution is made to all persons who were members of the producer board at a time in the income year.
Methods The producer board may determine that the amount of an im- putation credit attached to a notional distribution is based on— produce transactions, and calculated under subsection (a) (5) for each member; or (b) members’ levies, and calculated under subsection (7) (c) (d) for each member; or a combination of paragraphs (a) and (b); or some other method of determination approved by the Commissioner.
Produce transactions The amount of an imputation credit attached to a member’s distribution that is based on produce transactions is calculated using the formula— member’s payment total payments × credit attached.
Deﬁnition of items in formula In the formula in subsection (4),— (a) member’s payments is the total amount of all pay- ments to or by a member for the member’s produce transactions during the income year: total payments is all payments to or by all members for produce transactions during the income year: (b) (3) (4) (5) 2412 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 75 (c) credit attached is the amount of imputation credit at- tached to the distribution.
Members’ levies (6) An imputation credit attached to a member’s distribution that is based on members’ levies is calculated using the formula— member’s levies total levies × credit attached.
(7) (8) Deﬁnition of items in formula In the formula in subsection (6),— (a) member’s levies is the total amount of all levies payable by a member to the producer board for the income year: total levies is total amount of all levies payable by all members to the producer board for the income year: credit attached is the amount of imputation credit at- tached to the distribution.
(b) (c) Commissioner’s determination The Commissioner may apply subsections (4) to (7) to deter- mine the amount of the imputation credit to be treated as at- tached to a member’s distribution if the Commissioner con- siders that the producer board’s application of subsections (3) to (7) does not result in a fair and reasonable allocation of an amount of imputation credit to a member having regard to— (a) (b) (c) Deﬁned in this Act: amount, Commissioner, dividend, ICA company, imput- ation credit, income year, levy, member, pay, produce transactions, statutory producer board Compare: 2004 No 35 s ME 32 the produce transactions of the producer board; and the levies payable to the producer board; and any other relevant factor.
OB 75 Statutory producer boards’ notional distributions that are dividends Dividend derived (1) A notional distribution to which section OB 74 applies that has an imputation credit attached is a dividend under section CD 13 (Notional distributions of producer boards and co-op- erative companies) derived by a member.
2413 Part O s OB 75 Income Tax Act 2007 Reprinted as at 2 September 2013 Calculation of amount The amount of the dividend is calculated using the formula— (2) credit attached tax rate credit attached.
Deﬁnitions of items in formula In the formula,— (a) (b) credit attached is the amount of imputation credit at- tached to the member’s distribution: tax rate is the basic rate of income tax for companies set out in schedule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe beneﬁts) for the income year.

When derived The member derives the dividend on the date the statutory pro- ducer board chooses under section OB 74 to make a notional distribution.
Returns and information For the purposes of this section, the producer board must— (a) include the details of the dividend with the return of in- come ﬁled for the tax year corresponding to the income year in relation to which the distribution was made; and retain relevant information to enable the Commissioner to determine whether a later distribution is not a divi- dend under section CD 26(3) or CD 33(1) (which relate to capital distributions on liquidation or emigration and payments that correspond to notional distributions).
(b) Relationship with section OZ 15 Section OZ 15 (Attaching imputation credits and notional dis- tributions: modifying amounts) may apply to modify subsec- tion (2).
Deﬁned in this Act: amount, basic rate, Commissioner, company, dividend, imputation credit, income tax, income year, member, pay, return of income, statutory producer board, tax year Compare: 2004 No 35 s ME 33 Section OB 75(3)(b): amended, on 1 April 2008, by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section OB 75(6) heading: added, on 1 April 2008, by section 501 of the Tax- ation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
(3) (4) (5) (6) 2414 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 77 Section OB 75(6): added, on 1 April 2008, by section 501 of the Taxation (Busi- ness Taxation and Remedial Matters) Act 2007 (2007 No 109).

OB 76 Statutory producer boards attaching FDP credits FDP credits attached (1) A statutory producer board that is an FDPA company may choose, for an income year, to attach an FDP credit to a cash distribution or a notional distribution.
An FDP credit may be attached in conjunction with an imputation credit.

(2) Application of provisions Sections OB 73 to OB 75and OB 77 apply, modiﬁed as ne- cessary, to the producer board, the distribution, and the FDP credit.

Both credits at once (3) A producer board may choose to attach both an imputation credit and an FDP credit as part of 1 distribution.
Deﬁned in this Act: FDP credit, FDPA company, imputation credit, income year, statutory producer board Compare: 2004 No 35 s ME 34 OB 77 When and how statutory producer board makes election Timing of election (1) A statutory producer board may make an election under sec- tion OB 73, OB 74, or OB 76 in relation to a distribution either— (a) after the income year in relation to which the distribu- tion is made; but no later than 6 months after the end of the income year in relation to which the distribution is made.
(b) Notice (2) A producer board must notify the Commissioner of an election referred to in subsection (1) no later than the time allowed for the statutory producer board to ﬁle a return of income for the tax year corresponding to the income year in relation to which the distribution is made.
Deﬁned in this Act: Commissioner, dividend, income year, return of income, statutory producer board, tax year Compare: 2004 No 35 s ME 30(3), (4) 2415 Part O s OB 78 Income Tax Act 2007 Reprinted as at 2 September 2013 OB 78 Co-operative companies attaching imputation credits to cash distributions Election (1) On meeting the requirements of subsection (2), a co-operative company that is an ICA company may choose, for an income year, to attach an imputation credit to a cash distribution paid to the company’s shareholders.
Requirements (2) A co-operative company may make an election under subsec- tion (1) if— (a) (b) (c) (d) (b) the distribution is made to all persons who were share- holders of the company at a time during the income year; and the distribution is based on the proportion for the in- come year in which the payments to or by a shareholder for their produce transactions are of total payments to or by all shareholders for all produce transactions; and the company would, in the absence of this section, have a deduction for some or all of the distribution, whether as an association rebate under subpart HE (Mutual as- sociations) or some other provision of this Act; and no other election for a cash distribution is made for the income year.
Total credit attached The total amount of imputation credit attached to the distribu- tion is calculated using the formula— total net dividend × tax rate tax rate.
1 Deﬁnition of items in formula In the formula in subsection (3),— (a) total net dividend is the total amount of the distribution excluding the amount of imputation credit: tax rate is the basic rate of income tax set out in sched- ule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe beneﬁts) for the income year.
(3) (4) 2416 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 78 (5) (6) (7) (8) Shareholder’s credit The amount of a shareholder’s share of the imputation credit attached as described in subsection (3) is calculated using the formula— shareholder’s distribution total distribution × total imputation credit attached.
Deﬁnition of items in formula In the formula in subsection (5),— (a) shareholder’s distribution is the amount that is the shareholder’s share of the distribution, excluding the amount of imputation credit: total distribution is the amount of the total distribution paid, excluding the amount of imputation credit: total imputation credit attached is the total amount of imputation credit attached to the distribution calculated under subsection (3).
(b) (c) When co-operative company chooses not to have deduction If a co-operative company chooses to treat a distribution as a dividend, it is denied a deduction under section DV 18 (Statu- tory producer boards and co-operative companies).

The com- pany must notify the Commissioner of an election under this subsection under section OB 82(3) for the election to be ef- fective.
Relationship with section OZ 15 Section OZ 15 (Attaching imputation credits and notional dis- tributions: modifying amounts) may apply to modify subsec- tion (3).
Deﬁned in this Act: amount, association rebate, basic rate, Commissioner, co-operative company, deduction, dividend, ICA company, imputation credit, income tax, income year, notify, pay, produce transactions, shareholder Compare: 2004 No 35 ss ME 35, ME 36 Section OB 78(4)(b): amended, on 1 April 2008, by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section OB 78(8) heading: added, on 1 April 2008, by section 502 of the Tax- ation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section OB 78(8): added, on 1 April 2008, by section 502 of the Taxation (Busi- ness Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section OB 78 list of deﬁned terms Maori Authority: repealed (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income 2417 Part O s OB 79 Income Tax Act 2007 Reprinted as at 2 September 2013 years), by section 140(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
OB 79 Co-operative companies attaching imputation credits to notional distributions Election (1) On meeting the requirements of subsection (2), a co-operative company that is an ICA company may choose, for an income year, to attach an imputation credit to a notional distribution, as a result of which a member derives a dividend of an amount calculated under section OB 80.
Requirements (2) A co-operative company may make an election under subsec- tion (1) if— (a) the distribution is made to all persons who were share- holders of the company at a time during the income year; and no other election to pay a notional distribution is made for the income year.

(b) Shareholder’s credits The amount of a shareholder’s share of an imputation credit attached to a notional distribution is calculated using the for- mula— produce payments total payments × credit attached.
Deﬁnition of items in formula In the formula,— (a) produce payments is the amount of all payments to or by the shareholder for the shareholder’s produce trans- actions during the income year: total payments is the amount of all payments to or by shareholders for produce transactions during the in- come year: credit attached is the amount of imputation credit at- tached to the distribution.
(b) (c) Deﬁned in this Act: amount, co-operative company, dividend, ICA company, imputation credit, income year, member, pay, produce transactions, shareholder Compare: 2004 No 35 s ME 37 (3) (4) 2418 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 80 OB 80 Co-operative companies’ notional distributions that are dividends Dividends (1) A notional distribution referred to in section OB 79 that has an imputation credit attached is a dividend under section CD 13 (Notional distributions of producer boards and co-operative companies) derived by a shareholder of the co-operative com- pany.
(2) (3) (4) (5) Amount The amount of a shareholder’s dividend is calculated using the formula— credit attached tax rate credit attached.

Deﬁnition of items in formula In the formula,— (a) (b) credit attached is the amount of imputation credit at- tached to the shareholder’s distribution: tax rate is the basic rate of income tax set out in sched- ule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe beneﬁts) for the income year.
When derived The shareholder derives the dividend on the date the co-opera- tive company chooses under section OB 79 to make a notional distribution.

Relationship with section OZ 15 Section OZ 15 (Attaching imputation credits and notional dis- tributions: modifying amounts) may apply to modify subsec- tion (2).
Deﬁned in this Act: amount, basic rate, co-operative company, dividend, im- putation credit, income tax, income year, shareholder Compare: 2004 No 35 s ME 38 Section OB 80(2) formula: substituted (with effect on 1 April 2008), on 29 Au- gust 2011 (applying for the 2008–09 and later income years), by section 114(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section OB 80(3)(b): amended, on 1 April 2008, by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

2419 Part O s OB 81 Income Tax Act 2007 Reprinted as at 2 September 2013 Section OB 80(5) heading: added, on 1 April 2008, by section 503 of the Tax- ation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section OB 80(5): added, on 1 April 2008, by section 503 of the Taxation (Busi- ness Taxation and Remedial Matters) Act 2007 (2007 No 109).
OB 81 Co-operative companies attaching FDP credits Election (1) A co-operative company that is an FDPA company may choose, for an income year, to attach an FDP credit to a cash distribution.

The FDP credit may be attached in conjunction with an imputation credit.

(2) Application of provisions Sections OB 78 to OB 80 and section 64 of the Tax Admin- istration Act 1994 apply, modiﬁed as necessary, to the co-op- erative company, the distribution, and the FDP credit.
Both credits at once (3) A co-operative company may choose to attach both an imput- ation credit and an FDP credit as part of 1 distribution.
Deﬁned in this Act: co-operative company, FDP credit, FDPA company, im- putation credit, income year Compare: 2004 No 35 s ME 39 OB 82 When and how co-operative company makes election One a year (1) A co-operative company may make an election under section OB 78, OB 79, or OB 81 in relation to a distribution for— (a) (b) only 1 cash distribution during the income year: only 1 notional distribution during the income year.
Timing (2) A co-operative company may make an election referred to in subsection (1)— (a) after the income year in relation to which the distribu- tion is made; but no later than 6 months after the end of the income year in relation to which the distribution is made.
(b) Notice (3) A co-operative company must notify the Commissioner of an election referred to in subsection (1)(a) no later than the time 2420 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 82 allowed for the company to ﬁle a return of income for the tax year corresponding to the income year in relation to which the distribution is made.
Deﬁned in this Act: Commissioner, co-operative company, income year, notify, return of income, tax year Compare: 2004 No 35 s ME 35 2421 Part O s OB 82 Income Tax Act 2007 Reprinted as at 2 September 2013 Tables of credits and debits in memorandum accounts How to use these tables Each row of a table describes— (a) the credits or debits that may arise in a memorandum account during a tax year; and the credit date or debit date when the credit or debit arises.
(b) A more detailed description of the credits or debits is contained in the section noted in the last column.
Table O1: imputation credits Row Imputation credit Credit date Further deﬁned 5B 5C 6 7 7B 8 9 10 11 Opening credit balance 1 April section OA 7 Provisional tax and income tax paid day of payment section OB 4 Deposit into tax pooling account day of payment section OB 5 Transfer from tax pooling account day of credit section OB 6 Payment of further income tax day of payment section OB 7 Payment of qualifying company election tax Tax credit for research and development expenditure Amount of tax withheld for resident passive income day of payment section OB 7B day return ﬁled section OB 7C day on which amount is withheld section OB 8 Imputation credit attached to dividend derived day on which dividend is paid section OB 9 Attributed PIE income with imputation credit day of attribution section OB 9B FDP credit attached to dividend derived when not FDPA company day on which dividend is paid section OB 10 [Repealed] Transfer from FDP account day of payment section OB 12 Transfer of debt balance when company leaves wholly-owned group day on which company leaves group section OB 13 2422 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 82 Row Imputation credit Credit date Further deﬁned 26 27 Additional income tax payable when company leaves wholly-owned group Additional income tax when company joins wholly-owned group Attribution for personal services if company is not qualifying company [Repealed] day of payment section OB 14 day of payment section OB 15 31 March section OB 16 Transfer from ASC account day of transfer section OB 18 Transfer to master fund by company day of transfer section OB 19 Maori authority credit attached to distribution day of distribution section OB 20 Transfer of balance of Maori authority credit account Replacement payment paid under share-lending arrangement day of transfer section OB 21 day of payment section OB 22 Imputation credit shown in credit transfer notice day on which notice is given section OB 23 Imputation credit,
 FDP credit, or policyholder credit on resident’s restricted amalgamation credit date in account of amalgamating company section OB 24 Reversal of debt for tax advantage arrangement Eliminating debit for loss of shareholder continuity cancelling tax pooling account deposit that is refunded or credited Amount of tax withheld by Australian ICA company for non-resident passive income Amount of tax withheld from schedular payment to Australian ICA company Schedular income tax paid by Australian ICA company debit date of debit section OB 25 day of refund or credit section OB 26 day on which amount is withheld day on which amount is withheld section OB 27 section OB 28 day of payment section OB 29 Table O1 row 5B: inserted, on 1 April 2008, by section 497 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
2423 Part O s OB 82 Income Tax Act 2007 Reprinted as at 2 September 2013 Table O1 row 5C: inserted, on 1 April 2008, by section 497 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Table O1 row 7B: substituted (with effect on 1 April 2009), on 6 October 2009, by section 399(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Table O1 row 9: repealed (with effect on 30 June 2009), on 6 October 2009, by section 399(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Table O1 row 14: amended (with effect on 1 April 2008), on 6 October 2009, by section 399(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Table O1 row 15: repealed, on 1 July 2010, by section 399(5) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Table O2: imputation debits Row Imputation debit Debit date Further deﬁned 7B 8 9 10 11 Opening debt balance 1 April section OA 7 Imputation credit attached to dividend paid Allocation of provisional tax day of payment section OB 30 day of notice of allocation section OB 31 Refund of income tax day of refund section OB 32 Overpaid income tax applied to meet another tax liability day of application section OB 33 Refund from tax pooling account day of refund section OB 34 Transfer of entitlement to another person in tax pooling account set out in section OB 35 section OB 35 Debit for transfer from tax pooling account for policyholder base liability Refund of FDP when not FDPA company 31 March section OB 35B day of refund section OB 36 Transfer, refund, or use of tax credit day of transfer, refund, or use section OB 37 Overpaid FDP applied to satisfy liability when not FDPA company Overpaid income tax or FDP applied to satisfy pre-imputation income tax when not FDPA company day of application section OB 38 day of application section OZ 3 2424 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 82 Row Imputation debit Debit date Further deﬁned 26 27 [Repealed] Attribution for personal services 31 March section OB 40 Debit for loss of shareholder continuity time of loss of continuity section OB 41 Debit for on-market cancellation day of acquisition section OB 42 Debit for breach of imputation ratio 31 March section OB 43 Transfer for debit balance when company leaves wholly-owned group day on which company leaves group Redemption debit for unit trust or group investment fund for income year day on which return of income for income year is ﬁled section OB 44 section OB 45 Transfer from member fund to master fund Debit for policyholder base imputation credits 31 March section OB 46 31 March section OB 47 Credit balance when Maori authority credit account starts day of becoming Maori authority section OB 48 Credit attached to replacement payment paid by
 company under share-lending arrangement Credit attached to dividend paid to company shown in returning share transfer Credit attached to dividend paid to company shown in credit transfer notice Credit that is also credit to imputation credit account of consolidated imputation group Imputation debit, FDP debit, or policyholder debit in account of amalgamating company Debit for tax advantage arrangement day of payment section OB 49 day of payment section OB 50 day of payment section OB 51 credit date for imputation credit section OB 52 section OB 53 section OB 54 debit date in account of amalgamating company last day of tax year in which arrangement began 2425 Part O s OB 82 Income Tax Act 2007 Row Imputation debit Debit date Reprinted as at 2 September 2013 Further deﬁned section OB 55 28 29 30 31 32 Retrospective attachment of imputation credit to non-cash dividend day of payment of dividend Final balance when ICA company status ends day of cessation section OB 56 Refund of amount of tax for non-resident passive income to Australian ICA company Refund of amount of tax for schedular payment to Australian ICA company Refund of schedular income tax to Australian ICA company day of refund section OB 57 day of refund section OB 58 day of refund section OB 59 Table O2 row 7B: inserted, on 1 July 2010, by section 400(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Table O2 row 9: substituted (with effect on 1 April 2008), on 6 October 2009, by section 400(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Table O2 row 12: repealed (with effect on 30 June 2009), on 6 October 2009, by section 400(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Table O2 row 14: amended (with effect on 1 April 2008), on 7 December 2009, by section 88 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Table O2 row 20: substituted, on 1 July 2010, by section 400(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2426 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OB 82 Subpart OC—Foreign dividend payment accounts (FDPA) Contents Introductory provisions FDP accounts OC 1 General rules for companies with FDP accounts OC 2 OC 2B General rule for life insurer’s policyholder base OC 3 Choosing to become FDPA company OC 4 When company chooses to stop being FDPA company OC 5 When company emigrates OC 6 OC 7 OC 8 FDP credits FDPA payment of FDP [Repealed] FDPA dividend derived with FDP credit FDPA payment of FDP for transfer from CTR account [Repealed] FDPA transfer for net foreign attributed income [Repealed] OC 9 OC 10 FDPA payment of FDP for conduit debit balance [Repealed] OC 11 FDPA credit transfer to company OC 12 FDPA reversal of tax advantage arrangement FDP debits OC 13 FDPA payment of dividend OC 14 FDPA refund of FDP OC 15 FDPA overpayment of FDP OC 16 FDPA refund of tax credit OC 17 FDPA credit transfer by company OC 18 FDPA transfer to imputation credit account OC 19 FDPA transfer to CTR account [Repealed] OC 20 Debit for policyholder base FDP credits OC 21 FDPA transfer to group account OC 22 FDPA breach of FDP ratio OC 23 FDPA breach of FDP ratio by PCA company [Repealed] OC 24 FDPA debit for loss of shareholder continuity OC 25 FDPA tax advantage arrangement OC 26 FDPA ﬁnal balance FDP credits attached to dividends OC 27 FDP credits attached to dividends OC 28 FDPA benchmark dividend rules Page Part O s OC 1 Income Tax Act 2007 Reprinted as at 2 September 2013 OC 29 FDP credits and imputation credits attached to dividends 2445 Further income tax OC 30 Payment of further income tax for closing debit balance OC 31 Payment of further income tax when company no longer New Zealand resident OC 32 Reduction of further income tax OC 33 Income tax paid satisfying liability for further income tax OC 34 Further income tax paid satisfying liability for income tax
 Some deﬁnitions [Repealed] OC 35 Meaning of FDP reference period [Repealed] OC 36 Meaning of maximum deﬁcit debit [Repealed] OC 37 Meaning of policyholder FDP ratio [Repealed] OC 38 Meaning of reduced deﬁcit debit [Repealed] OC 39 Meaning of shareholder FDP ratio [Repealed] Table O3: FDP credits Table O4: FDP debits 2446 2448 2449 2450 2451 2452 2452 2452 2452 2452 Introductory provisions OC 1 General rules for companies with FDP accounts FDPA company (1) A company resident in New Zealand may choose to become a foreign dividend payment account (FDPA) company.
This subsection does not apply to a multi-rate PIE.

FDP accounts (2) An FDPA company must maintain a foreign dividend payment (FDP) account for a tax year.

The account is a record of FDP credits and FDP debits that arise in the account during the tax year.

(3) Main credit [Repealed] [Repealed] Main debit (4) An FDPA company has an FDP debit for the amount of an FDP credit attached to a dividend paid to the company’s sharehold- ers.
2428 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OC 1 (5) Treatment of FDP credit by shareholder The amount of an FDP credit attached to a dividend derived by a shareholder is included in the amount of the dividend under section CD 15 (Tax credits linked to dividends).
Refunds (6) When a dividend with an FDP credit attached is derived by a non-resident or by a person who is resident and the dividend is exempt income of the person, they are entitled to a refund under section LF 8 (Credits for persons who are non-resident or who receive exempt income).
(7) (8) Shareholder continuity requirements The carrying forward of a credit in a company’s FDP account is subject to the shareholder continuity requirements of section OA 8 (Shareholder continuity requirements for memorandum accounts).

Imputation credits If a company does not choose to become an FDPA company, a payment of FDP on a dividend derived from a non-resident company is accounted for under the imputation rules under section OB 11 (ICA payment of FDP).
Deﬁned in this Act: amount, assessable income, company, dividend, exempt in- come, FDP account, FDP credit, FDP debit, FDPA company, imputation rules, income, multi-rate PIE, non-resident company, pay, resident in New Zealand, shareholder, tax year Compare: 2004 No 35 ss CD 9, LD 9, ME 4(1)(e), (f), MG 2(1), (3), MG 4(1)(a), (b), MG 5(3) Section OC 1(1): amended, on 1 April 2010 (applying for the 2010–11 and later income years), by section 401(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OC 1(3) heading: repealed (with effect on 30 June 2009), on 6 October 2009, pursuant to section 401(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OC 1(3): repealed (with effect on 30 June 2009), on 6 October 2009, by section 401(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OC 1 list of deﬁned terms multi-rate PIE: inserted, on 1 April 2010, by section 401(3)(b) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OC 1 list of deﬁned terms portfolio tax rate entity: repealed, on 1 April 2010, by section 401(3)(a) of the Taxation (International Taxation, Life Insur- ance, and Remedial Matters) Act 2009 (2009 No 34).
2429 Part O s OC 2 Income Tax Act 2007 Reprinted as at 2 September 2013 OC 2 FDP accounts (1) General rules apply The general rules on memorandum accounts set out in sections OA 2 and OA 3 (which relate to the treatment of memorandum accounts) apply to the FDP account of an FDPA company.

Consolidated groups (2) Under section OP 54 (When credits and debits arise only in consolidated FDP group accounts), certain credits and debits do not arise in the account if the company is part of a consoli- dated group.
Deﬁned in this Act: consolidated group, FDP account, FDPA company, memo- randum account Compare: 2004 No 35 s MG 16(1), (4) OC 2B General rule for life insurer’s policyholder base An FDP credit does not arise in relation to a life insurer’s pol- icyholder base.

Similarly, an FDP debit does not arise in rela- tion to a life insurer’s policyholder base.
Deﬁned in this Act: FDP credit, FDP debit, life insurer, policyholder base Section OC 2B: inserted, on 1 July 2010, by section 402(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

OC 3 Choosing to become FDPA company Election (1) A company that chooses to become an FDPA company must notify the Commissioner of the election no later than 21 days after the date of the election or by a later date if the Commis- sioner allows.
Effect of election (2) An FDPA company must maintain the FDP account referred to in section OC 1(2) from the date of election.

Deﬁned in this Act: Commissioner, company, FDP account, FDPA company, notify Compare: 2004 No 35 s MG 2(2), (3) 2430 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OC 5 OC 4 When company chooses to stop being FDPA company Election (1) An FDPA company may choose to stop being an FDPA com- pany.
When election made (2) An FDPA company may make an election under subsection (1) only in a tax year that is later than the tax year in which the company chooses under section OC 3 to become an FDPA company.
(3) When company’s status ends The company ends its status as an FDPA company from the ﬁrst day of the tax year after the tax year in which the election referred to in subsection (2) is made but only if the company— ﬁles an annual FDPA return for the year of election in (a) the time allowed by section 71 of the Tax Administra- tion Act 1994; and pays any further income tax payable under section OC 30 or OC 31 for the year of election.
(b) Deﬁned in this Act: amount, annual FDPA return, FDP, FDPA company, further FDP, pay, tax year Compare: 2004 No 35 s MG 2(4), (5) Section OC 4(3)(b): substituted (with effect on 30 June 2009), on 6 October 2009, by section 403(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OC 5 When company emigrates (1) (2) Status ends If an emigrating company is an FDPA company immediately before the time of emigration, its status as an FDPA company ends at the time of emigration.

Further payments and returns The company referred to in subsection (1) must— (a) ﬁle an annual FDPA return for the tax year in which the company becomes non-resident; and pays any further income tax payable under sections OC 30 to OC 34 for the tax year.
(b) Deﬁned in this Act: annual FDPA return, emigrating company, FDPA company, further FDP, non-resident, pay, tax year, time of emigration Compare: 2004 No 35 s MG 2(6), (7) 2431 Part O s OC 6 Income Tax Act 2007 Reprinted as at 2 September 2013 Section OC 5(2)(b): substituted (with effect on 30 June 2009), on 6 October 2009, by section 404(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OC 6 FDPA payment of FDP FDP credits [Repealed] Section OC 6: repealed (with effect on 30 June 2009), on 6 October 2009, by section 405(1) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).

OC 7 FDPA dividend derived with FDP credit Credit (1) An FDPA company has an FDP credit for the amount of an FDP credit attached to a dividend derived by the company.
(2) (3) Table reference The FDP credit in subsection (1) is referred to in table O3: FDP credits, row 4 (dividend derived with FDP credit).

Credit date The credit date is the day the dividend is paid.
Deﬁned in this Act: amount, dividend, FDP credit, FDPA company, pay Compare: 2004 No 35 s MG 4(1)(b), (2)(b) OC 8 FDPA payment of FDP for transfer from CTR account [Repealed] Section OC 8: repealed (with effect on 30 June 2009), on 6 October 2009, by section 406(1) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
OC 9 FDPA transfer for net foreign attributed income [Repealed] Section OC 9: repealed (with effect on 30 June 2009), on 6 October 2009, by section 407(1) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
OC 10 FDPA payment of FDP for conduit debit balance [Repealed] Section OC 10: repealed (with effect on 30 June 2009), on 6 October 2009, by section 408(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

2432 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OC 12 OC 11 FDPA credit transfer to company Credit (1) An FDPA company has an FDP credit for the amount of a credit shown in a credit transfer notice given to the company.
(2) (3) Table reference The FDP credit in subsection (1) is referred to in table O3: FDP credits, row 8 (credit transfer).

Credit date The credit date is the day the notice is given.
Deﬁned in this Act: amount, credit transfer notice, FDP credit, FDPA company Compare: 2004 No 35 s MG 4(1)(bd), (2)(bd) OC 12 FDPA reversal of tax advantage arrangement (1) (2) (3) (4) When this section applies This section applies when it is established that an FDP credit in an FDPA company’s FDP account was incorrectly determined to be the subject of an arrangement to obtain a tax advantage.
Credit The company has an FDP credit for an amount equal to the amount of a debit in the company’s FDP account under section OC 25.

Table references The FDP credit in subsection (2) is referred to in table O3: FDP credits, row 9 (reversal of tax advantage arrangement).

The FDP debit in subsection (2) is referred to in table O4: FDP debits, row 14 (tax advantage arrangement).

Credit date The credit date is the same as the debit date recorded for the debit.
Deﬁned in this Act: amount, FDP account, FDP credit, FDPA company, tax advantage Compare: 2004 No 35 s MG 4(1)(d), (2)(d) 2433 Part O s OC 13 Income Tax Act 2007 Reprinted as at 2 September 2013 FDP debits OC 13 FDPA payment of dividend Debit (1) An FDPA company has an FDP debit for the amount of an FDP credit attached to a dividend paid by the company.

(2) (3) Table reference The FDP debit in subsection (1) is referred to in table O4: FDP debits, row 2 (payment of dividend).
Debit date The debit date is the day the dividend is paid.

Deﬁned in this Act: amount, dividend, FDP credit, FDP debit, FDPA company, pay Compare: 2004 No 35 s MG 5(1)(a), (2)(a) OC 14 FDPA refund of FDP Debit (1) An FDPA company has an FDP debit for the amount of a re- fund of FDP paid to the company.

Subsection (3) overrides this subsection.

Table reference The FDP debit in subsection (1) is referred to in table O4: FDP debits, row 3 (refund of FDP).
No debit The company does not have a debit for the amount of a refund to the extent to which it refunds FDP paid before a debit arises under section OC 24 (table O4: FDP debits, row 13 (debit for loss of shareholder continuity)).

Debit date The debit date is the day the refund is made.
Deﬁned in this Act: amount, FDP, FDP account, FDP debit, FDPA company, pay Compare: 2004 No 35 s MG 5(1)(d), (2)(d) Section OC 14(3): replaced (with effect on 1 July 2011 and applying for in- come years beginning on or after that date), on 7 May 2012, by section 95(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
(2) (3) (4) 2434 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OC 16 OC 15 FDPA overpayment of FDP Debit (1) An FDPA company has an FDP debit for the amount of an overpayment of FDP that is applied to pay an amount due under the Inland Revenue Acts.

Subsection (3) overrides this subsection.

(2) (3) Table reference The FDP debit in subsection (1) is referred to in table O4: FDP debits, row 4 (overpayment of FDP).
No debit The company does not have a debit for the amount of an over- payment of FDP— (a) (b) that is applied to satisfy a liability for FDP; or that— (i) relates to a payment of FDP before an FDP debit arises under section OC 24 (table O4: FDP debits, row 13 (debit for loss of shareholder continuity)); and is no more than the debit for loss of shareholder continuity.

(ii) (4) Debit date The debit date is the day the amount is applied.
Deﬁned in this Act: amount, FDP, FDP debit, FDPA company, Inland Revenue Acts, pay, shareholder Compare: 2004 No 35 s MG 5(1)(k), (2)(i) OC 16 FDPA refund of tax credit Debit (1) An FDPA company has an FDP debit for the amount of a trans- fer or refund to the company under section LA 6(2)(d) or (e) (Remaining refundable credits: PAYE, RWT, and certain other items) to the extent to which the amount transferred or re- funded is a tax credit under subpart LF (Tax credits for FDP credits).
(2) Table reference The FDP debit in subsection (1) is referred to in table O4: FDP debits, row 5 (refund of tax credit).

2435 Part O s OC 17 Income Tax Act 2007 Reprinted as at 2 September 2013 (3) Debit date The debit date is the day the transfer or refund is made.
Deﬁned in this Act: amount, FDP debit, FDPA company Compare: 2004 No 35 s MG 5(1)(e), (2)(d) Section OC 16(1): substituted (with effect on 1 April 2008), on 6 October 2009, by section 409(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OC 16(3): substituted (with effect on 1 April 2008), on 6 October 2009, by section 409(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OC 17 FDPA credit transfer by company Debit (1) An FDPA company has an FDP debit for the amount of an FDP credit attached to a dividend paid by the company and shown in a credit transfer notice given by the company.

(2) (3) Table reference The FDP debit in subsection (1) is referred to in table O4: FDP debits, row 6 (credit transfer).

Debit date The debit date is the day the dividend is paid.
Deﬁned in this Act: amount, credit transfer notice, dividend, FDP credit, FDP debit, FDPA company, pay Compare: 2004 No 35 s MG 5(1)(ab), (2)(ab) OC 18 FDPA transfer to imputation credit account Election (1) An FDPA company may choose for a tax year to transfer some or all of a closing credit balance in the company’s FDP account to the imputation credit account of— (a) (b) the company; or an imputation group of which the company is part.
Debit and credit The amount transferred is— (a) (b) an FDP debit in the company’s FDP account; and an imputation credit under, as applicable,— (i) section OB 12 (ICA transfer from FDP account) in the company’s imputation credit account; or (2) 2436 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OC 18 (ii) section OP 18 (Consolidated ICA transfer from group company’s FDP account) in the imput- ation credit account of the consolidated imput- ation group.
(3) (4) (5) (6) Table references The table references are as follows: (a) (b) (c) the FDP debit in subsection (2)(a) is referred to in table O4: FDP debits, row 7 (transfer to imputation credit account): the imputation credit in subsection (2)(b)(i) is referred to in table O1: imputation credits, row 10 (transfer from FDP account): the imputation credit in subsection (2)(b)(ii) is referred to in table O19: imputation credits of consolidated imputation groups, row 13 (transfer from group com- pany’s FDP account).
Method of election The company makes the election by recording the credit bal- ance transferred as— (a) (b) a debit in the company’s FDP account; and a credit in the imputation credit account of— (i) (ii) the company; or the imputation group.

CTR companies [Repealed] [Repealed] Debit date The debit date is the last day of the tax year.
Deﬁned in this Act: amount, consolidated imputation group, FDP, FDP account, FDP debit, FDPA company, imputation credit, imputation credit account, im- putation group, tax year Compare: 2004 No 35 ss MG 5(1)(c), (2)(c), MG 11 Section OC 18(5) heading: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, pursuant to section 96(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section OC 18(5): repealed (with effect on 1 July 2011 and applying for in- come years beginning on or after that date), on 7 May 2012, by section 96(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
2437 Part O s OC 19 Income Tax Act 2007 Reprinted as at 2 September 2013 Section OC 18 list of deﬁned terms CTR company: repealed (with effect on 1 July 2011), on 7 May 2012, by section 96(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OC 19 FDPA transfer to CTR account [Repealed] Section OC 19: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 97(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OC 20 Debit for policyholder base FDP credits Debit (1) An FDP company has an FDP debit for the amount of an FDP credit attached to a dividend derived by the company, to the extent to which it is derived by it as a life insurer and appor- tioned to their policyholder base.

(2) (3) Table reference The FDP debit in section (1) is referred to in table O4: FDP debits, row 9 (debit for policyholder base FDP credits).

Debit date The debit date is the last day of the tax year.
Deﬁned in this Act: FDP company FDP credit, FDP debit, life insurer, policy- holder base, tax year Section OC 20: substituted, on 1 July 2010, by section 410(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OC 21 FDPA transfer to group account Debit (1) An FDPA company has an FDP debit for an amount equal to the amount of an FDP credit under section OP 59 (Con- solidated FDPA group company’s credit) for the transfer of a credit to the FDP account of the consolidated group of which the company is part.

Table references The FDP debit in subsection (1) is referred to in table O4: FDP debits, row 10 (transfer to group account).
The FDP credit (2) 2438 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OC 22 (3) in subsection (1) is referred to in table O21: FDP credits of consolidated FDP groups, row 5 (group company’s credit).

Debit date The debit date is the same as the credit date recorded in the consolidated group’s FDP account.
Deﬁned in this Act: amount, consolidated group, FDP account, FDP credit, FDP debit, FDPA company Compare: 2004 No 35 s MG 16(3) OC 22 FDPA breach of FDP ratio Debit (1) An FDPA company has an FDP debit for a breach of the bench- mark dividend rules in section OC 28(4) for an amount calcu- lated using the formula— net dividends × FDP ratio – credits attached.
(2) Deﬁnition of items in formula In the formula,— (a) net dividends is the total amount of all dividends paid by the company during the tax year, excluding imput- ation credits and FDP credits attached to the dividends: FDP ratio is the maximum permitted ratio calculated under section OA 18(2) (Calculation of maximum per- mitted ratios) or, if it is less, the greatest FDP ratio of dividends paid by the company during the tax year: credits attached is the total amount of all FDP credits attached to dividends paid by the company during the tax year.
(b) (c) (3) Table reference The FDP debit in subsection (1) is referred to in table O4: FDP debits, row 11 (breach of FDP ratio).

Ratio change declaration (4) A debit under subsection (1) does not arise if the FDPA company provides a ratio change declaration under section OC 28(6).

2439 Part O s OC 23 Income Tax Act 2007 Reprinted as at 2 September 2013 (5) Debit date The debit date is the last day of the tax year.
Deﬁned in this Act: amount, benchmark dividend, dividend, FDP account, FDP credit, FDP debit, FDP ratio, FDPA company, imputation credit, pay, tax year Compare: 2004 No 35 ss MG 5(1)(f), (2)(e), MG 8(4) OC 23 FDPA breach of FDP ratio by PCA company [Repealed] Section OC 23: repealed, on 1 July 2010, by section 411(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OC 24 FDPA debit for loss of shareholder continuity Debit (1) An FDPA company has an FDP debit for the amount equal to the amount of an FDP credit retained in the FDP account and unused at the time at which shareholder continuity is lost.

Table reference The FDP debit in subsection (1) is referred to in table O4: FDP debits, row 13 (debit for loss of shareholder continuity).

When debit arises The debit arises at the time shareholder continuity is lost.
(2) (3) Qualifying companies (3B) This section does not apply to a qualifying company in circum- stances other than those set out in section HA 18 (Treatment of dividends when qualifying company status ends), and that section overrides subsections (1) to (3).

Avoidance arrangements Section GB 41 (FDPA arrangements for carrying amounts for- ward) may apply to treat a company as not meeting the require- ments of this section.
Deﬁned in this Act: amount, FDP account, FDP credit, FDP debit, FDPA com- pany, qualifying company, shareholder Compare: 2004 No 35 ss HG 13(6), MG 5(1)(i), (2)(g), (3), (4) Section OC 24(1): amended (with effect on 1 April 2008), on 7 December 2009, by section 89(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
(4) 2440 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OC 26 Section OC 24(3) heading: substituted (with effect on 1 April 2008), on 7 De- cember 2009, by section 89(2) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section OC 24(3): substituted (with effect on 1 April 2008), on 7 December 2009, by section 89(2) of the Taxation (Consequential Rate Alignment and Re- medial Matters) Act 2009 (2009 No 63).
Section OC 24(3B) heading: inserted (with effect on 1 April 2008), on 21 De- cember 2010 (applying for the 2008–09 and later income years), by section 118(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section OC 24(3B): inserted (with effect on 1 April 2008), on 21 December 2010 (applying for the 2008–09 and later income years), by section 118(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section OC 24 list of deﬁned terms qualifying company: inserted (with effect on 1 April 2008), on 21 December 2010 (applying for the 2008–09 and later income years), by section 118(2) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section OC 24 compare note: amended (with effect on 1 April 2008), on 21 De- cember 2010 (applying for the 2008–09 and later income years), by section 118(3) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
OC 25 FDPA tax advantage arrangement Debit (1) An FDPA company has an FDP debit for the amount of a debit for a tax advantage arrangement determined under sections GB 35 and GB 36 (which relate to imputation arrangements to obtain tax advantage).

(2) (3) Table reference The FDP debit in subsection (1) is referred to in table O4: FDP debits, row 14 (tax advantage arrangement).

Debit date The debit date is the last day of the tax year in which the tax advantage arrangement began.
Deﬁned in this Act: amount, arrangement, FDP debit, FDPA company, tax ad- vantage, tax year Compare: 2004 No 35 s MG 5(1)(h), (2)(f) OC 26 FDPA ﬁnal balance Debit (1) An FDPA company has an FDP debit for a credit balance in the FDP account when the company stops being an FDPA com- pany.

2441 Part O s OC 27 Income Tax Act 2007 Reprinted as at 2 September 2013 (2) (3) Table reference The FDP debit in subsection (1) is referred to in table O4: FDP debits, row 15 (ﬁnal balance).
Debit date The debit date is the day the company stops being an FDPA company.

Deﬁned in this Act: FDP account, FDP debit, FDPA company Compare: 2004 No 35 s MG 5(1)(j), (2)(h) FDP credits attached to dividends OC 27 FDP credits attached to dividends Attaching FDP credits (1) When an FDPA company pays a dividend, it may attach an FDP credit to the dividend.

Subsection (2) overrides this sub- section.


Exclusion [Repealed] [Repealed] (2) FDP ratio for dividend (3) A dividend with an FDP credit attached has an FDP ratio cal- culated using the formula— credit attached net dividends.

(4) Deﬁnition of items in formula In the formula,— (a) credit attached is the amount of FDP credit attached to the dividend: net dividends is the amount of dividends paid, exclud- ing imputation credits and FDP credits.
(b) Maximum permitted ratio (5) A dividend with an FDP credit attached must not have an FDP ratio that is more than the maximum permitted ratio calculated 2442 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OC 28 under section OA 18(2) (Calculation of maximum permitted ratios).
Deﬁned in this Act: amount, company, dividend, FDP, FDP account, FDP credit, FDP ratio, FDPA company, imputation credit, maximum permitted ratio, pay Compare: 2004 No 35 ss MG 6, MG 8(1), (2) Section OC 27(2) heading: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, pursuant to section 98(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section OC 27(2): repealed (with effect on 1 July 2011 and applying for in- come years beginning on or after that date), on 7 May 2012, by section 98(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section OC 27 list of deﬁned terms CTR company: repealed (with effect on 1 July 2011), on 7 May 2012, by section 98(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OC 28 FDPA benchmark dividend rules (1) (2) (3) (4) When this section applies This section applies when an FDPA company pays a dividend on more than 1 occasion during a tax year.

Subsection (2) overrides this subsection.


Exclusions This section does not apply to a dividend that is the subject of an election by— (a) a statutory producer board under sections OB 73 to OB 75 (which relate to statutory boards’ notional dis- tributions); and a co-operative company under sections OB 78 to OB 80 (which relate to co-operative companies’ notional dis- tributions).

(b) Benchmark dividend The ﬁrst dividend of the tax year is the benchmark dividend.
Same FDP ratio The FDP ratio of a dividend paid after the benchmark dividend must be the same as the FDP ratio of the benchmark dividend.

This subsection is modiﬁed by section OZ 9 (Benchmark divi- dends: ratio change).

2443 Part O s OC 28 Income Tax Act 2007 Reprinted as at 2 September 2013 Breach of FDP ratio (5) A breach of subsection (4) gives rise to an FDP debit under section OC 22 (table O4: FDP debits, row 11 (breach of FDP ratio)) for an amount calculated using the formula in section OC 22(1).
Ratio change declaration (6) An FDPA company may notify the Commissioner that the divi- dend is not part of an arrangement to obtain a tax advantage by providing a ratio change declaration stating that the dividend is not part of an arrangement to which sections GB 35 and GB 36 (which relate to imputation arrangements to obtain tax advan- tage) apply.

The company must provide the declaration before the dividend is paid, or by a later date if the Commissioner al- lows.
For the purposes of this subsection, the dividend must not be part of an arrangement to obtain a tax advantage.

This subsection overrides subsection (5).

(7) Consolidated group This section applies, modiﬁed as necessary, to a consolidated group as if it were a single company.
Group debit (8) Under section OP 54 (When credits and debits arise only in consolidated FDP group accounts), a breach of an FDP ratio alternatively gives rise to an FDP debit under section OP 72 (Consolidated FDPA breach of FDP ratio) (table O22: FDP debits of consolidated group, row 10 (breach of FDP ratio)) if the company is part of a consolidated group.

Treatment of group dividends In the application of this section to a consolidated group, a dividend paid between group companies is disregarded.
Deﬁned in this Act: amount, arrangement, benchmark dividend, Commis- sioner, company, consolidated group, co-operative company, dividend, FDP, FDP debit, FDP ratio, FDPA company, pay, statutory producer board, tax advantage, tax year Compare: 2004 No 35 ss MG 8(2), (3), MG 16A(1) Section OC 28(4): amended, on 1 October 2010, by section 13 of the Taxation (Budget Measures) Act 2010 (2010 No 27).
(9) 2444 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OC 29 OC 29 FDP credits and imputation credits attached to dividends Attaching combined credits (1) When an FDPA company pays a dividend, it may attach both an FDP credit and an imputation credit to the dividend.

Combined ratio (2) A dividend with combined credits attached has a combined imputation and FDP ratio calculated using the formula— combined credits attached net dividends.
(3) Deﬁnition of items in formula In the formula in subsection (2),— (a) combined credits attached is the total amount of FDP credits and the imputation credits attached to the divi- dend: net dividends is the amount of dividends paid, ex- cluding the amount of FDP credits and the imputation credits.
(b) Maximum permitted ratio (4) A dividend with combined credits attached must not have a combined imputation and FDP ratio that is more than the maxi- mum permitted ratio calculated under section OA 18(2) (Cal- culation of maximum permitted ratios).

Breach of combined ratio breach (5) A breach of the maximum ratio referred to in subsection (4) gives rise to an excess credit amount that is calculated using the formula— net dividends × (combined ratio – maximum ratio).
(6) Deﬁnition of items in formula In the formula in subsection (5),— (a) net dividends is the amount of dividends paid, exclud- ing FDP credits and the imputation credits: combined ratio is the combined imputation and FDP ratio of the dividend: (b) (c) maximum ratio is the maximum combined imputation and FDP ratio permitted under subsection (4).
2445 Part O s OC 30 Income Tax Act 2007 Reprinted as at 2 September 2013 (7) Relationship with section OZ 8 Section OZ 8 (Attaching imputation credits and FDP credits: maximum permitted ratio) may apply to modify this section.
Deﬁned in this Act: amount, basic rate, combined imputation and FDP ratio, company, dividend, excess credit amount, FDP credit, FDP ratio, FDPA com- pany, imputation credit, income tax, income year, maximum permitted ratio, pay, tax year Compare: 2004 No 35 s MG 10 Section OC 29(7) heading: added, on 1 April 2008, by section 504 of the Tax- ation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section OC 29(7): added, on 1 April 2008, by section 504 of the Taxation (Busi- ness Taxation and Remedial Matters) Act 2007 (2007 No 109).

Further income tax Heading: substituted (with effect on 30 June 2009), on 6 October 2009, by sec- tion 412 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OC 30 Payment of further income tax for closing debit balance Liability (1) An FDPA company or consolidated FDP group is liable to pay further income tax for a closing debit balance in the FDP ac- count of the company or the group.

Due date The company or group must pay the further income tax to the Commissioner no later than the 20 June following the end of the tax year.
Application of other provisions [Repealed] [Repealed] (2) (3) FDP credit for payment under subsection (1) (4) An FDPA company has an FDP credit for an amount of further income tax paid under subsection (1).
Deﬁned in this Act: amount, Commissioner, company, consolidated FDP group, FDP account, FDPA company, FDP credit, further income tax, pay, tax year Compare: 2004 No 35 s MG 9(1), (2), (6) Section OC 30 heading: amended (with effect on 30 June 2009), on 6 October 2009, by section 413(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2446 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OC 30 Section OC 30(1) heading: substituted (with effect on 30 June 2009), on 6 Oc- tober 2009, by section 413(2) of the Taxation (International Taxation, Life In- surance, and Remedial Matters) Act 2009 (2009 No 34).

Section OC 30(1): substituted (with effect on 30 June 2009), on 6 October 2009, by section 413(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OC 30(2) heading: substituted (with effect on 30 June 2009), on 6 Oc- tober 2009, by section 413(2) of the Taxation (International Taxation, Life In- surance, and Remedial Matters) Act 2009 (2009 No 34).

Section OC 30(2): substituted (with effect on 30 June 2009), on 6 October 2009, by section 413(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OC 30(3) heading: repealed (with effect on 30 June 2009), on 6 October 2009, pursuant to section 413(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OC 30(3): repealed (with effect on 30 June 2009), on 6 October 2009, by section 413(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OC 30(4) heading: inserted (with effect on 30 June 2009), on 2 Novem- ber 2012 (applying for income years beginning on or after 1 July 2009), by section 131(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section OC 30(4): inserted (with effect on 30 June 2009), on 2 November 2012 (applying for income years beginning on or after 1 July 2009), by section 131(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section OC 30 list of deﬁned terms FDP credit: inserted (with effect on 30 June 2009), on 2 November 2012, by section 131(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section OC 30 list of deﬁned terms FDP rules: repealed (with effect on 30 June 2009), on 6 October 2009, by section 413(4)(a) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OC 30 list of deﬁned terms further FDP: repealed (with effect on 30 June 2009), on 6 October 2009, by section 413(4)(a) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OC 30 list of deﬁned terms income tax: repealed (with effect on 30 June 2009), on 6 October 2009, by section 413(4)(a) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OC 30 list of deﬁned terms further income tax: inserted (with effect on 30 June 2009), on 6 October 2009, by section 413(4)(b) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2447 Part O s OC 31 Income Tax Act 2007 Reprinted as at 2 September 2013 OC 31 Payment of further income tax when company no longer New Zealand resident Liability (1) An FDPA company is liable to pay further income tax for a debit balance in the company’s FDP account when the com- pany stops being resident in New Zealand.

(2) Due date The company must pay the further income tax to the Commis- sioner by the day the company stops being resident in New Zealand.
Paramount section (3) A company to which this section applies that stops being an FDPA company on the last day of a tax year is liable for further income tax under this section and not under section OC 30.

Application of other provisions [Repealed] [Repealed] (4) FDP credit for payment under subsection (1) (5) A company that stops being an FDPA company has an FDP credit for an amount of further income tax paid under this sec- tion.
Deﬁned in this Act: Commissioner, FDP account, FDP credit, FDPA company, further income tax, pay, resident in New Zealand, tax year Compare: 2004 No 35 s MG 9(3) Section OC 31 heading: amended (with effect on 30 June 2009), on 6 October 2009, by section 414(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OC 31(1) heading: substituted (with effect on 30 June 2009), on 6 Oc- tober 2009, by section 414(2) of the Taxation (International Taxation, Life In- surance, and Remedial Matters) Act 2009 (2009 No 34).

Section OC 31(1): substituted (with effect on 30 June 2009), on 6 October 2009, by section 414(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OC 31(2) heading: substituted (with effect on 30 June 2009), on 6 Oc- tober 2009, by section 414(2) of the Taxation (International Taxation, Life In- surance, and Remedial Matters) Act 2009 (2009 No 34).

Section OC 31(2): substituted (with effect on 30 June 2009), on 6 October 2009, by section 414(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2448 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OC 32 Section OC 31(3) heading: substituted (with effect on 30 June 2009), on 6 Oc- tober 2009, by section 414(2) of the Taxation (International Taxation, Life In- surance, and Remedial Matters) Act 2009 (2009 No 34).

Section OC 31(3): substituted (with effect on 30 June 2009), on 6 October 2009, by section 414(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OC 31(4) heading: repealed (with effect on 30 June 2009), on 6 October 2009, pursuant to section 414(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OC 31(4): repealed (with effect on 30 June 2009), on 6 October 2009, by section 414(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OC 31(5) heading: inserted (with effect on 30 June 2009), on 2 Novem- ber 2012 (applying for income years beginning on or after 1 July 2009), by section 132(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section OC 31(5): inserted (with effect on 30 June 2009), on 2 November 2012 (applying for income years beginning on or after 1 July 2009), by section 132(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section OC 31 list of deﬁned terms FDP credit: inserted (with effect on 30 June 2009), on 2 November 2012, by section 132(2) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section OC 31 list of deﬁned terms FDP rules: repealed (with effect on 30 June 2009), on 6 October 2009, by section 414(4)(a) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OC 31 list of deﬁned terms further FDP: repealed (with effect on 30 June 2009), on 6 October 2009, by section 414(4)(a) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OC 31 list of deﬁned terms further income tax: inserted (with effect on 30 June 2009), on 6 October 2009, by section 414(4)(b) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OC 32 Reduction of further income tax Debit at previous year-end (1) An FDPA company’s liability for further income tax under section OC 30 or OC 31 may be reduced under subsection (2) if— (a) a debit balance existed in the company’s FDP account at the end of a tax year; and a credit that arises in the account in the following tax year is less than the debit balance; and the company notiﬁes the Commissioner.
(b) (c) 2449 Part O s OC 33 Income Tax Act 2007 Reprinted as at 2 September 2013 (2) Amount of reduction The liability is reduced by the amount that is the debit balance for the tax year less the total amount of credits for the following tax year.
Deﬁned in this Act: amount, Commissioner, FDP account, FDP credit, FDPA company, further income tax, notify, tax year Compare: 2004 No 35 s MG 9(7), (8) Section OC 32 heading: amended (with effect on 30 June 2009), on 6 October 2009, by section 415(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OC 32(1): amended (with effect on 30 June 2009), on 6 October 2009, by section 415(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OC 32 list of deﬁned terms further FDP: repealed (with effect on 30 June 2009), on 6 October 2009, by section 415(3)(a) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OC 32 list of deﬁned terms further income tax: inserted (with effect on 30 June 2009), on 6 October 2009, by section 415(3)(b) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

OC 33 Income tax paid satisfying liability for further income tax Election (1) On meeting the requirements of subsection (2), an FDPA com- pany that is liable for further income tax may choose to satisfy the liability through a payment of income tax.
Requirements The company must pay the income tax— (a) after the end of the tax year in which the relevant debit balance arises; and for an income year corresponding to a tax year in which the company is an FDPA company.

(b) Payment credited The payment of income tax satisﬁes the company’s liability to pay further income tax.
(2) (3) 2450 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OC 34 (4) When treated as paid The further income tax is treated as paid on the day the Com- missioner receives the payment of income tax.
Deﬁned in this Act: Commissioner, company, FDPA company, further income tax, income tax, income year, pay, tax year Section OC 33: substituted (with effect on 30 June 2009), on 6 October 2009, by section 416(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OC 34 Further income tax paid satisfying liability for income tax Election (1) A company that pays further income tax may choose to treat the payment as satisfying a liability of the company to pay income tax.

(2) FDPA company status The liability referred to in subsection (1) must be for an income year that corresponds with a tax year in which the company is an FDPA company.
Alternative for consolidated group (3) A company that is part of a consolidated FDP group may choose that the payment under subsection (1) satisﬁes a group liability for income tax owed by another group company when or after the payment is made.
Deﬁned in this Act: company, consolidated FDP group, FDPA company, further income tax, income tax, income year, pay, tax year Section OC 34: substituted (with effect on 30 June 2009), on 6 October 2009, by section 417(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Some deﬁnitions [Repealed] Heading: repealed, on 1 July 2010, by section 418(1) of the Taxation (Inter- national Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2451 Part O s OC 35 Income Tax Act 2007 Reprinted as at 2 September 2013 OC 35 Meaning of FDP reference period [Repealed] Section OC 35: repealed, on 1 July 2010, by section 418(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

OC 36 Meaning of maximum deﬁcit debit [Repealed] Section OC 36: repealed, on 1 July 2010, by section 418(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OC 37 Meaning of policyholder FDP ratio [Repealed] Section OC 37: repealed, on 1 July 2010, by section 418(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

OC 38 Meaning of reduced deﬁcit debit [Repealed] Section OC 38: repealed, on 1 July 2010, by section 418(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OC 39 Meaning of shareholder FDP ratio [Repealed] Section OC 39: repealed, on 1 July 2010, by section 418(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2452 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OC 39 Table O3: FDP credits Row FDP credit Credit date Further deﬁned Opening credit balance 1 April section OA 7 [Repealed] [Repealed] FDP credit attached to dividend derived day on which dividend is paid section OC 7 [Repealed] [Repealed] [Repealed] FDP credit attached to dividend and shown in credit transfer notice day on which notice is given section OC 11 Reversal of debt for tax advantage arrangement debit date of debit section OC 12 Table O3 row 2: repealed (with effect on 30 June 2009), on 6 October 2009, by section 419(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Table O3 row 3: repealed (with effect on 30 June 2009), on 6 October 2009, by section 419(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Table O3 row 5: repealed (with effect on 30 June 2009), on 6 October 2009, by section 419(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Table O3 row 6: repealed (with effect on 30 June 2009), on 6 October 2009, by section 419(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Table O3 row 7: repealed (with effect on 30 June 2009), on 6 October 2009, by section 419(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2453 Part O s OC 39 Income Tax Act 2007 Reprinted as at 2 September 2013 Table O4: FDP debits Row FDP debit Debit date Further deﬁned Opening debit balance 1 April section OA 7 FDP credit attached to dividend paid day of payment section OC 13 Refund of FDP day of refund section OC 14 Overpaid FDP applied to satisfy tax liability day of application section OC 15 Transfer or refund of tax credit FDP credit attached to dividend and shown in credit transfer notice Transfer of closing credit balance to company’s imputation credit account [Repealed] day of transfer or refund section OC 16 day of payment section OC 17 31 March section OC 18 Debit for policyholder base FDP credits 31 March section OC 20 Transfer of credit to group FDP account credit date in group account section OC 21 Debit for breach of FDP ratio 31 March section OC 22 Breach of FDP ratio by FDPA company that is also PCA company Debit for loss of shareholder continuity Debit for tax advantage arrangement 31 March section OC 23 section OC 24 section OC 25 time of loss of continuity last day of tax year in which arrangement began Final balance when FDPA company status ends day of cessation section OC 26 Table O4 row 5: substituted (with effect on 1 April 2008), on 6 October 2009, by section 420(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Table O4 row 8: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 2 November 2012, by section 133(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

2454 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OC 39 Table O4 row 9: substituted, on 1 July 2010, by section 420(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Table O4 row 10: amended (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 140(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Table O4 row 13: amended (with effect on 1 April 2008), on 7 December 2009, by section 90 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
2455 Income Tax Act 2007 Reprinted as at 2 September 2013 Subpart OD—Conduit tax relief accounts (CTRA) [Repealed] Subpart OD: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 99(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Contents Introductory provisions [Repealed] OD 1 General rules for companies with CTR accounts [Repealed] OD 2 CTR accounts [Repealed] OD 3 Choosing to become CTR company [Repealed] OD 4 When company stops being CTR company [Repealed] CTR credits [Repealed] OD 5 CTRA tax credit for conduit tax relief [Repealed] OD 6 CTRA transfer from FDP account [Repealed] OD 7 CTRA dividend derived with CTR credit [Repealed] OD 8 CTRA reduction of FDP [Repealed] OD 9 CTRA reversal of tax advantage arrangement [Repealed] CTR debits [Repealed] OD 10 CTRA payment of dividend [Repealed] OD 11 CTRA transfer to FDP account [Repealed] OD 12 CTRA transfer to group account [Repealed] OD 13 CTRA adjustment for conduit tax relief [Repealed] OD 14 CTRA break in shareholding chain for group company [Repealed] OD 15 CTRA break in shareholding chain for company [Repealed] OD 16 CTRA increase in resident shareholding [Repealed] OD 17 CTRA breach of CTR ratio [Repealed] OD 18 CTRA tax advantage arrangement [Repealed] OD 19 CTRA ﬁnal balance [Repealed] CTR credits attached to dividends [Repealed] Page 2457 2457 2457 2458 2458 2458 2458 2458 2459 2459 2459 2459 2459 2460 2460 2460 2460 2460 2460 OD 20 CTR credits attached to dividends [Repealed] 2461 2456 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OD 3 OD 21 CTRA benchmark dividend rules [Repealed] OD 22 CTR credits and imputation credits attached to dividends [Repealed] Payment of FDP and refunds [Repealed] OD 23 FDP payable for CTR debits [Repealed] OD 24 FDP payable on resident’s restricted amalgamation [Repealed] OD 25 Refunds on transfers to CTR account [Repealed] 2461 2461 2461 2462 2462 Table O5: conduit tax relief credits [Repealed] Table O6: conduit tax relief debits [Repealed] Introductory provisions [Repealed] Heading: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 99(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OD 1 General rules for companies with CTR accounts [Repealed] Section OD 1: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 99(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OD 2 CTR accounts [Repealed] Section OD 2: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 99(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OD 3 Choosing to become CTR company [Repealed] Section OD 3: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 99(1) of 2457 Part O s OD 4 Income Tax Act 2007 Reprinted as at 2 September 2013 the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OD 4 When company stops being CTR company [Repealed] Section OD 4: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 99(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
CTR credits [Repealed] Heading: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 99(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

OD 5 CTRA tax credit for conduit tax relief [Repealed] Section OD 5: repealed (with effect on 30 June 2009), on 6 October 2009, by section 424(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OD 6 CTRA transfer from FDP account [Repealed] Section OD 6: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 99(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OD 7 CTRA dividend derived with CTR credit [Repealed] Section OD 7: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 99(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OD 8 CTRA reduction of FDP [Repealed] Section OD 8: repealed (with effect on 30 June 2009), on 6 October 2009, by section 425(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2458 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OD 13 OD 9 CTRA reversal of tax advantage arrangement [Repealed] Section OD 9: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 99(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
CTR debits [Repealed] Heading: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 99(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OD 10 CTRA payment of dividend [Repealed] Section OD 10: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 99(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OD 11 CTRA transfer to FDP account [Repealed] Section OD 11: repealed (with effect on 30 June 2009), on 6 October 2009, by section 426(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OD 12 CTRA transfer to group account [Repealed] Section OD 12: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 99(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OD 13 CTRA adjustment for conduit tax relief [Repealed] Section OD 13: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 99(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
2459 Part O s OD 14 Income Tax Act 2007 Reprinted as at 2 September 2013 OD 14 CTRA break in shareholding chain for group company [Repealed] Section OD 14: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 99(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OD 15 CTRA break in shareholding chain for company [Repealed] Section OD 15: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 99(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OD 16 CTRA increase in resident shareholding [Repealed] Section OD 16: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 99(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OD 17 CTRA breach of CTR ratio [Repealed] Section OD 17: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 99(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OD 18 CTRA tax advantage arrangement [Repealed] Section OD 18: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 99(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OD 19 CTRA ﬁnal balance [Repealed] Section OD 19: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 99(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
CTR credits attached to dividends 2460 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OD 23 [Repealed] Heading: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 99(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OD 20 CTR credits attached to dividends [Repealed] Section OD 20: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 99(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OD 21 CTRA benchmark dividend rules [Repealed] Section OD 21: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 99(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OD 22 CTR credits and imputation credits attached to dividends [Repealed] Section OD 22: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 99(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Payment of FDP and refunds [Repealed] Heading: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 99(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

OD 23 FDP payable for CTR debits [Repealed] Section OD 23: repealed (with effect on 30 June 2009), on 6 October 2009, by section 428(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2461 Part O s OD 24 Income Tax Act 2007 Reprinted as at 2 September 2013 OD 24 FDP payable on resident’s restricted amalgamation [Repealed] Section OD 24: repealed (with effect on 30 June 2009), on 6 October 2009, by section 429(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OD 25 Refunds on transfers to CTR account [Repealed] Section OD 25: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 99(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Table O5: conduit tax relief credits [Repealed] Table O5: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 99(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Table O6: conduit tax relief debits [Repealed] Table O6: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 99(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Subpart OE—Branch equivalent tax accounts (BETA) Contents Introductory provision Page OE 1 General rules for persons with branch equivalent tax 2464 accounts Companies with branch equivalent tax accounts [Repealed] Introductory provisions [Repealed] OE 2 Branch equivalent tax accounts of companies [Repealed] OE 3 Choosing to become BETA company [Repealed] OE 4 When company stops being BETA company [Repealed] 2465 2465 2465 2462 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OD 25 OE 5 Treatment of attributed CFC income and FIF income in 2465 this subpart Branch equivalent tax credits [Repealed] OE 6 BETA payment of income tax on foreign income [Repealed] OE 7 BETA payment of income tax [Repealed] OE 8 BETA unused amount of debit balance [Repealed] OE 9 BETA refund of FDP [Repealed] OE 10 BETA credit for loss of shareholder continuity [Repealed] OE 11 BETA ﬁnal balance [Repealed] 2466 2466 2467 2467 2467 2467 Treatment of debits from conduit relief [Repealed] OE 11B Company with debit balance, including debits from 2467 conduit relief, in some income years [Repealed] Branch equivalent tax debits [Repealed] OE 12 BETA payment of FDP [Repealed] OE 13 BETA reduction in FDP [Repealed] OE 14 BETA refund of income tax [Repealed] OE 15 BETA debit for loss of shareholder continuity [Repealed] OE 16 BETA ﬁnal balance [Repealed] 2468 2468 2468 2468 2468 Debit if credit balance at beginning of ﬁrst affected income year [Repealed] OE 16B Company with credit balance at beginning of ﬁrst 2469 affected income year [Repealed] Persons with branch equivalent tax accounts Introductory provisions OE 17 Person choosing to become BETA person OE 18 When person stops being BETA person 2469 2469 OE 19 BETA person’s payment of income tax on foreign income 2470 Branch equivalent tax credits Branch equivalent tax debits OE 20 BETA person’s payment of income tax OE 21 BETA person’s refund of income tax OE 22 BETA person’s ﬁnal balance 2471 2472 2472 2463 Part O s OE 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Table
 O7: branch equivalent tax credits [Repealed] Table O8: branch equivalent tax debits [Repealed] Table O9: person’s branch equivalent tax credits Table O10: person’s branch equivalent tax debits Introductory provision OE 1 General rules for persons with branch equivalent tax accounts BETA company [Repealed] BETA person (1) (2) A person resident in New Zealand who is not a company may choose to be a BETA person with a branch equivalent tax ac- count.
General rules: BETA company [Repealed] General rules: BETA person Sections OA 2 and OA 3 (which relate to the treatment of memorandum accounts) apply to a BETA person and their branch equivalent tax account as if references in those sections to a tax year were references to an income year.
Deﬁned in this Act: BETA person, branch equivalent tax account, company, income year, memorandum account, resident in New Zealand, tax year Compare: 2004 No 35 ss MF 1(1), MF 11(1) Section OE 1 heading: amended, on 1 July 2012 (applying for income years beginning on or after that date), by section 100(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section OE 1(1): repealed, on 1 July 2012 (applying for income years beginning on or after that date), by section 100(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section OE 1(3): repealed, on 1 July 2012 (applying for income years beginning on or after that date), by section 100(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section OE 1(4): amended, on 1 July 2012 (applying for income years begin- ning on or after that date), by section 100(3) of the Taxation (International In- vestment and Remedial Matters) Act 2012 (2012 No 34).

(3) (4) 2464 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OE 5 Section OE 1 list of deﬁned terms BETA company: repealed, on 1 July 2012, by section 100(4) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Companies with branch equivalent tax accounts [Repealed] Heading: repealed, on 1 July 2012, by section 101(1) of the Taxation (Inter- national Investment and Remedial Matters) Act 2012 (2012 No 34).

Introductory provisions [Repealed] Heading: repealed, on 1 July 2012, by section 101(1) of the Taxation (Inter- national Investment and Remedial Matters) Act 2012 (2012 No 34).
OE 2 Branch equivalent tax accounts of companies [Repealed] Section OE 2: repealed, on 1 July 2012 (applying for income years beginning on or after that date), by section 101(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OE 3 Choosing to become BETA company [Repealed] Section OE 3: repealed, on 1 July 2012 (applying for income years beginning on or after that date), by section 101(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

OE 4 When company stops being BETA company [Repealed] Section OE 4: repealed, on 1 July 2012 (applying for income years beginning on or after that date), by section 101(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OE 5 Treatment of attributed CFC income and FIF income in this subpart For the purposes of applying this subpart to a person, other than a company, with an attributing interest in a foreign in- vestment fund (FIF),— (a) FIF income derived from the person’s interest is treated as attributed CFC income if the FIF income is calcu- lated— 2465 Part O s OE 6 Income Tax Act 2007 Reprinted as at 2 September 2013 (i) (ii) under the attributable FIF income method: under a method to which section EX 50(6) or EX 58 (which relate to the calculation of FIF income) applies; and the FIF is treated as a CFC; and the interest in the FIF is treated as an income interest.
(b) (c) Deﬁned in this Act: attributable FIF income method, attributing interest, CFC, company, FIF, FIF income, foreign investment fund, income interest Section OE 5: replaced, on 1 July 2012 (applying for income years beginning on or after that date), by section 103(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Branch equivalent tax credits [Repealed] Heading: repealed, on 1 July 2012, by section 105(1) of the Taxation (Inter- national Investment and Remedial Matters) Act 2012 (2012 No 34).

OE 6 BETA payment of income tax on foreign income [Repealed] Section OE 6: repealed, on 1 July 2012 (applying for income years beginning on or after that date), by section 105(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OE 7 BETA payment of income tax [Repealed] Section OE 7: repealed, on 1 July 2012 (applying for income years beginning on or after that date), by section 107(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section OE 7(6): amended (with effect on 1 April 2008), on 2 November 2012, by section 134(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section OE 7(7)(b): amended (with effect on 1 April 2008), on 2 November 2012, by section 134(2) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section OE 7(8): amended (with effect on 1 April 2008), on 2 November 2012, by section 134(3) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
2466 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OE 11B OE 8 BETA unused amount of debit balance [Repealed] Section OE 8: repealed (with effect on 1 April 2008), on 29 August 2011 (apply- ing for the 2008–09 and later income years), by section 116(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
OE 9 BETA refund of FDP [Repealed] Section OE 9: repealed, on 1 July 2012 (applying for income years beginning on or after that date), by section 109(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

OE 10 BETA credit for loss of shareholder continuity [Repealed] Section OE 10: repealed, on 1 July 2012 (applying for income years beginning on or after that date), by section 109(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OE 11 BETA ﬁnal balance [Repealed] Section OE 11: repealed, on 1 July 2012 (applying for income years beginning on or after that date), by section 109(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Treatment of debits from conduit relief [Repealed] Heading: repealed, on 1 July 2012 (applying for income years beginning on or after that date), by section 109(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OE 11B Company with debit balance, including debits from conduit relief, in some income years [Repealed] Section OE 11B: repealed, on 1 July 2012 (applying for income years beginning on or after that date), by section 109(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Branch equivalent tax debits [Repealed] Heading: repealed (with effect on 30 June 2009), on 6 October 2009, by sec- tion 433(1) the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2467 Part O s OE 12 Income Tax Act 2007 Reprinted as at 2 September 2013 OE 12 BETA payment of FDP [Repealed] Section OE 12: repealed (with effect on 30 June 2009), on 6 October 2009, by section 433(1) the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
OE 13 BETA reduction in FDP [Repealed] Section OE 13: repealed (with effect on 30 June 2009), on 6 October 2009, by section 433(1) the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).

OE 14 BETA refund of income tax [Repealed] Section OE 14: repealed (with effect on 30 June 2009), on 6 October 2009, by section 434(1) the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
OE 15 BETA debit for loss of shareholder continuity [Repealed] Section OE 15: repealed (with effect on 30 June 2009), on 6 October 2009, by section 434(1) the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).

OE 16 BETA ﬁnal balance [Repealed] Section OE 16: repealed (with effect on 30 June 2009), on 6 October 2009, by section 434(1) the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
Debit if credit balance at beginning of ﬁrst affected income year [Repealed] Heading: repealed (with effect on 30 June 2009), on 7 September 2010, by section 104 of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
2468 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OE 18 OE 16B Company with credit balance at beginning of ﬁrst affected income year [Repealed] Section OE 16B: repealed (with effect on 30 June 2009), on 7 September 2010, by section 104 of the Taxation (Annual Rates, Trans-Tasman Savings Portabil- ity, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Persons with branch equivalent tax accounts Introductory provisions OE 17 Person choosing to become BETA person Election (1) A person who is eligible under section OE 1(2) and who chooses to become a BETA person may make the election for an income year— (a) (b) at any time during the income year; or no later than the day on which the person is required to ﬁle a return of income for the income year; or by a later date if the Commissioner allows.
(c) (2) Notice The person must notify the Commissioner of the election under subsection (1)— (a) (b) no later than 21 days after the election; or by a later date if the Commissioner allows.

Effect of election (3) A BETA person must maintain a branch equivalent tax account from the ﬁrst day of the income year in which they make the election.
Deﬁned in this Act: BETA person, branch equivalent tax account, Commis- sioner, income year, notify, return of income Compare: 2004 No 35 s MF 11(1), (2) OE 18 When person stops being BETA person Election (1) A BETA person may choose to stop the branch equivalent tax account.
2469 Part O s OE 19 Income Tax Act 2007 Reprinted as at 2 September 2013 When election made (2) A person may make an election under subsection (1) only in an income year that is later than the income year in which the person chose under section OE 1(2) to become a BETA person.
(3) When person’s status ends The person ends their status as a BETA person from the ﬁrst day of the income year after the income year in which the election referred to in subsection (1) is made but only if they ﬁle an annual branch equivalent tax account return for the year of election in the time allowed by section 78(3) of the Tax Administration Act 1994.
Deﬁned in this Act: annual branch equivalent tax account return, BETA person, branch equivalent tax account, income year Compare: 2004 No 35 s MF 13(1), (2) Branch equivalent tax credits OE 19 BETA person’s payment of income tax on foreign income Credit (1) A BETA person has a branch equivalent tax credit for an in- come year for an amount calculated using the formula— tax liability × (CFC or taxable income) (taxable income) foreign tax credits.
(2) Deﬁnition of items in formula In the formula,— (a) tax liability is the person’s income tax liability for the income year: (i) (b) CFC or taxable income is the lesser of the person’s— attributed CFC income derived during the income year; or taxable income for the income year: (ii) taxable income is the person’s taxable income for the income year: foreign tax credits is the foreign tax credits allowed for the income year under sections LK 1 to LK 7 (which relate to tax credits relating to attributed CFC income).
(c) (d) 2470 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OE 20 (3) (4) Table reference The branch equivalent tax credit in subsection (1) is referred to in table O9: person’s branch equivalent tax credits, row 2 (payment of income tax on foreign income).

Credit date The credit date is the day the person ﬁles the return of income for the tax year corresponding to the income year.
Deﬁned in this Act: amount, attributed CFC income, BETA person, branch equivalent tax account, branch equivalent tax credit, foreign tax, income tax, income tax liability, income year, return of income, tax year, taxable income Compare: 2004 No 35 ss MF 13(1), (2), MF 14 Branch equivalent tax debits OE 20 BETA person’s payment of income tax Election (1) On meeting the requirements of subsection (4), a BETA per- son may choose to use some or all of a credit balance in their branch equivalent tax account to satisfy an income tax liability of the person for an income year.
(2) (3) (4) Debit The amount used to satisfy the income tax liability is a branch equivalent tax debit in the person’s branch equivalent tax ac- count.

Table reference The branch equivalent tax debit in subsection (2) is referred to in table O10: person’s branch equivalent tax debits, row 2 (payment of income tax).
Requirements The person may make an election under subsection (1) if— (a) they derive a dividend from an income interest in a CFC during the income year; and a credit balance exists in their branch equivalent tax ac- count; and they have paid the income tax giving rise to a credit included in the credit balance.

(b) (c) (5) Manner of election The person makes the election by recording the amount as a debit in the branch equivalent tax account.
2471 Part O s OE 21 Income Tax Act 2007 Reprinted as at 2 September 2013 Income tax paid (6) Once the election is made, the income tax liability is satisﬁed to the extent to which the liability is no more than the income tax payable on the amount of the dividend derived.

(7) Debit date The debit date is the day of election.
Deﬁned in this Act: amount, BETA person, branch equivalent tax account, branch equivalent tax debit, CFC, dividend, income interest, income tax, in- come tax liability, income year, pay Compare: 2004 No 35 ss MF 13(3)(a), MF 14 OE 21 BETA person’s refund of income tax Debit (1) A BETA person has a branch equivalent tax debit for an in- come year for the amount of a refund of income tax attributable to income tax paid for the income year on attributed CFC in- come derived during the income year.
(2) (3) Table reference The branch equivalent tax debit in subsection (1) is referred to in table O10: person’s branch equivalent tax debits, row 3 (refund of income tax).

Debit date The debit date is the day the refund is made.
Deﬁned in this Act: amount, attributed CFC income, BETA person, branch equivalent tax debit, income tax, income year, pay Compare: 2004 No 35 s MF 13(3)(b) OE 22 BETA person’s ﬁnal balance Debit (1) A BETA person has a branch equivalent tax debit for a credit balance in the branch equivalent tax account when the person stops being resident in New Zealand.
Table reference The branch equivalent tax debit in subsection (1) is referred to in table O10: person’s branch equivalent tax debits, row 4 (ﬁnal balance).

(2) 2472 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OE 22 (3) Debit date The debit date is the day the person stops being resident in New Zealand.
Deﬁned in this Act: BETA person, branch equivalent tax account, branch equivalent tax debit, resident in New Zealand Compare: 2004 No 35 s MF 13(3)(c) Table O7: branch equivalent tax credits [Repealed] Table O7: repealed, on 1 July 2012 (applying for income years beginning on or after that date), by section 110(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Table O8: branch equivalent tax debits [Repealed] Table O8: repealed (with effect on 30 June 2009), on 6 October 2009, by section 437(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2473 Part O s OE 22 Income Tax Act 2007 Reprinted as at 2 September 2013 Table O9: person’s branch equivalent tax credits Row Branch equivalent tax credit Credit date Further deﬁned 1 2 Opening credit balance 1 April section OA 7 Income tax paid on foreign income derived in income year section OE 19 day on which return of income for income year is ﬁled Table O10: person’s branch equivalent tax debits Row Branch equivalent tax debit Debit date Further deﬁned 1 2 3 4 Opening debit balance 1 April section OA 7 Credit balance applied to satisfy income tax liability Refund of income tax for attributed CFC income Credit balance when New Zealand residence ends day of election section OE 20 day of refund section OE 21 day of cessation section OE 22 2474 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OF 1 Subpart OF—Available subscribed capital accounts (ASCA) Contents Introductory provisions OF 1 General rules for companies with ASC accounts OF 2 ASC accounts OF 3 Choosing to become ASC account company OF 4 ASCA redemption credit ASC credits OF 5 ASCA transfer to imputation credit account ASC debits Table O11: ASC credits Table O12: ASC debits Page 2475 2476 2476 2477 2478 Introductory provisions OF 1 General rules for companies with ASC accounts ASC account company (1) A public unit trust or a group investment fund that derives cat- egory A income may choose to become an available subscribed capital (ASC) account company.
This section does not apply to a multi-rate PIE.

ASC account (2) An ASC account company must maintain an ASC account for a tax year.

The account is a record of ASC credits and ASC debits that arise in the account during the tax year.

(3) Credits Credits to the account include redemption proceeds that are less than the ASC company’s available subscribed capital cal- culated under the slice rule.
2475 Part O s OF 2 Income Tax Act 2007 Reprinted as at 2 September 2013 Debits (4) Debits to the account include a transfer of a credit balance to the company’s imputation credit account.
Deﬁned in this Act: ASC account, ASC account company, ASC credit, ASC debit, available subscribed capital, category A income, group investment fund, imputation credit account, multi-rate PIE, public unit trust, slice rule, tax year Compare: 2004 No 35 ss MJ 1(1), MJ 5(1), MJ 6(1) Section OF 1(1): amended, on 1 April 2010 (applying for the 2010–11 and later income years), by section 438(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OF 1 list of deﬁned terms multi-rate PIE: inserted, on 1 April 2010, by section 438(2)(b) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OF 1 list of deﬁned terms portfolio tax rate entity: repealed, on 1 April 2010, by section 438(2)(a) of the Taxation (International Taxation, Life Insur- ance, and Remedial Matters) Act 2009 (2009 No 34).
OF 2 ASC accounts The general rules on memorandum accounts set out in sections OA 2 and OA 3 (which relate to the treatment of memorandum accounts) apply to the ASC account of an ASC account com- pany.
Deﬁned in this Act: ASC account, ASC account company, memorandum ac- count Compare: 2004 No 35 s MJ 3(1) OF 3 Choosing to become ASC account company Election (1) A company may choose to become an ASC account company if— (a) (b) it is a public unit trust or a group investment fund that derives category A income; and it has issued shares on terms that their redemption will be subject to section CD 22(4) (Returns of capital: off- market share cancellations).
Notifying Commissioner (2) A company that makes an election under subsection (1) must notify the Commissioner of the election no later than the day on which the company is required to ﬁle a return of income for the tax year that corresponds to the income year in which the election is made.
2476 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OF 4 Effect of election (3) An ASC account company must maintain the ASC account re- ferred to in section OF 1(2) from the day the company chooses to become an ASC account company.
Deﬁned in this Act: ASC account company, category A income, Commissioner, company, group investment fund, income year, notify, public unit trust, return of income, share, tax year Compare: 2004 No 35 s MJ 1(1) ASC credits OF 4 ASCA redemption credit Credit (1) An ASC account company has an ASC credit when the com- pany redeems a share in the company for an amount calculated using the formula— ASC amount – redemption proceeds.
(2) (3) (4) (5) Deﬁnition of items in formula In the formula,— (a) ASC amount is the amount of the available subscribed capital for the redemption calculated under section CD 22(4) (Returns of capital: off-market share cancel- lations): redemption proceeds is the amount of the proceeds from the redemption calculated under sections CD 4 to CD 6 (which relate to the nature of a dividend).

(b) Positive result If the result of the formula in subsection (1) is negative, the amount is treated as zero.
Table reference The ASC credit in subsection (1) is referred to in table O11: ASC credits, row 2 (redemption credit).

Credit date The credit date is the day the company redeems the share.
Deﬁned in this Act: amount, ASC account, ASC account company, ASC credit, available subscribed capital, share Compare: 2004 No 35 s MJ 5 2477 Part O s OF 5 Income Tax Act 2007 Reprinted as at 2 September 2013 ASC debits OF 5 ASCA transfer to imputation credit account Election (1) An ASC account company may choose that some or all of the credit balance in the company’s ASC account is transferred to the company’s imputation credit account.
(2) (3) (4) (5) Debit and credit The amount of the credit balance transferred is— (a) an ASC debit for the full amount of the credit balance transferred; and an imputation credit under section OB 18 (ICA trans- fer from ASC account) for the amount calculated under subsection (4).

(b) Table references The ASC debit in subsection (2)(a) is referred to in table O12: ASC debits, row 2 (transfer to imputation credit account).
The imputation credit in subsection (2)(b) is referred to in table O1: imputation credits, row 16 (transfer from ASC account).

Amount The amount of the credit to the imputation credit account is calculated using the formula— credit balance × maximum imputation ratio.
Deﬁnition of items in formula In the formula,— (a) credit balance is some or all of the credit balance in the company’s ASC account that the ASC account com- pany chooses to use: (b) maximum imputation ratio is the maximum permitted ratio calculated under section OA 18(2) (Calculation of maximum permitted ratios).

Timing of election (6) An election under subsection (1) may be made at any time when the company is an imputation credit account (ICA) com- pany.
Manner of election (7) A company makes an election under subsection (1) by record- ing the credit balance transferred as— 2478 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OF 5 (8) (a) (b) a debit in the company’s ASC account; and a credit in the company’s imputation credit account.

Debit date The debit date is— (a) (b) the day of election; or the day before the company stops being an ICA com- pany if the election is made on the occasion of cessa- tion.
Deﬁned in this Act: amount, ASC account, ASC account company, ASC debit, ICA company, imputation credit, imputation credit account, imputation ratio Compare: 2004 No 35 ss ME 4(1)(da), MJ 6 2479 Part O s OF 5 Income Tax Act 2007 Reprinted as at 2 September 2013 Further deﬁned section OA 7 section OF 4 Further deﬁned section OA 7 section OF 5 Table O11: ASC credits Row ASC credit Credit date 1 2 Opening credit balance 1 April Amount by which ASC is more than proceeds on redemption of shares day on which shares are redeemed Table O12: ASC debits Row ASC debit Opening debit balance Debit date 1 April Transfer of credit balance to imputation credit account set out in section OF 5 1 2 2480 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OF 5 Subpart OJ—Policyholder credit accounts (PCA) [Repealed] Subpart OJ: repealed, on 1 July 2010, by section 439(1) of the Taxation (Inter- national Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Contents Introductory provision [Repealed] Page OJ 1 General rules for companies and other persons with 2482 policyholder credit accounts [Repealed] Companies with policyholder credit accounts [Repealed] Introductory provision [Repealed] OJ 2 Policyholder credit accounts of companies [Repealed] 2483 Policyholder credits of PCA company [Repealed] PCA transfer from imputation credit account [Repealed] PCA transfer from FDP account [Repealed] PCA transfer of life insurance business [Repealed] PCA credit for maximum deﬁcit in FDP account [Repealed] PCA credit for reduced deﬁcit in FDP account [Repealed] Policyholder debits of PCA company [Repealed] OJ 3 OJ 4 OJ 5 OJ 6 OJ 7 OJ 8 PCA payment of tax relating to policyholder base [Repealed] PCA transfer to imputation credit account [Repealed] OJ 9 OJ 10 PCA transfer to group account [Repealed] OJ 11 PCA company’s transfer of life insurance business [Repealed] Persons with policyholder credit accounts [Repealed] Introductory provisions [Repealed] OJ 12 Choosing to become PCA person [Repealed] 2483 2483 2483 2484 2484 2484 2484 2484 2484 2485 2481 Part O s OJ 1 Income Tax Act 2007 Reprinted as at 2 September 2013 OJ 13 Choosing to stop being PCA person [Repealed] 2485 Policyholder credits of PCA person [Repealed] OJ 14 PCA person’s equivalent credit [Repealed] OJ 15 PCA person’s credit for transfer of life insurance business [Repealed] Policyholder debits of PCA person [Repealed] OJ 16 PCA person’s payment of tax relating to policyholder base [Repealed] OJ 17 PCA person’s equivalent debit [Repealed] OJ 18 PCA person’s debit for transfer of life insurance business [Repealed] 2485 2485 2486 2486 2486 Table O13: policyholder credits [Repealed] Table O14: policyholder debits [Repealed] Table O15: person’s policyholder credits [Repealed] Table O16: person’s policyholder debits [Repealed] Introductory provision [Repealed] Heading: repealed, on 1 July 2010, by section 439(1) of the Taxation (Inter- national Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OJ 1 General rules for companies and other persons with policyholder credit accounts [Repealed] Section OJ 1: repealed, on 1 July 2010, by section 439(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Companies with policyholder credit accounts 2482 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OJ 5 [Repealed] Heading: repealed, on 1 July 2010, by section 439(1) of the Taxation (Inter- national Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Introductory provision [Repealed] Heading: repealed, on 1 July 2010, by section 439(1) of the Taxation (Inter- national Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OJ 2 Policyholder credit accounts of companies [Repealed] Section OJ 2: repealed, on 1 July 2010, by section 439(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Policyholder credits of PCA company [Repealed] Heading: repealed, on 1 July 2010, by section 439(1) of the Taxation (Inter- national Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OJ 3 PCA transfer from imputation credit account [Repealed] Section OJ 3: repealed, on 1 July 2010, by section 439(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

OJ 4 PCA transfer from FDP account [Repealed] Section OJ 4: repealed, on 1 July 2010, by section 439(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OJ 5 PCA transfer of life insurance business [Repealed] Section OJ 5: repealed, on 1 July 2010, by section 439(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

2483 Part O s OJ 6 Income Tax Act 2007 Reprinted as at 2 September 2013 OJ 6 PCA credit for maximum deﬁcit in FDP account [Repealed] Section OJ 6: repealed, on 1 July 2010, by section 439(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OJ 7 PCA credit for reduced deﬁcit in FDP account [Repealed] Section OJ 7: repealed, on 1 July 2010, by section 439(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Policyholder debits of PCA company [Repealed] Heading: repealed, on 1 July 2010, by section 439(1) of the Taxation (Inter- national Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OJ 8 PCA payment of tax relating to policyholder base [Repealed] Section OJ 8: repealed, on 1 July 2010, by section 439(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

OJ 9 PCA transfer to imputation credit account [Repealed] Section OJ 9: repealed, on 1 July 2010, by section 439(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OJ 10 PCA transfer to group account [Repealed] Section OJ 10: repealed, on 1 July 2010, by section 439(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

OJ 11 PCA company’s transfer of life insurance business [Repealed] Section OJ 11: repealed, on 1 July 2010, by section 439(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2484 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OJ 15 Persons with policyholder credit accounts [Repealed] Heading: repealed, on 1 July 2010, by section 439(1) of the Taxation (Inter- national Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Introductory provisions [Repealed] Heading: repealed, on 1 July 2010, by section 439(1) of the Taxation (Inter- national Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OJ 12 Choosing to become PCA person [Repealed] Section OJ 12: repealed, on 1 July 2010, by section 439(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

OJ 13 Choosing to stop being PCA person [Repealed] Section OJ 13: repealed, on 1 July 2010, by section 439(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Policyholder credits of PCA person [Repealed] Heading: repealed, on 1 July 2010, by section 439(1) of the Taxation (Inter- national Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

OJ 14 PCA person’s equivalent credit [Repealed] Section OJ 14: repealed, on 1 July 2010, by section 439(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OJ 15 PCA person’s credit for transfer of life insurance business [Repealed] Section OJ 15: repealed, on 1 July 2010, by section 439(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2485 Part O s OJ 16 Income Tax Act 2007 Reprinted as at 2 September 2013 Policyholder debits of PCA person [Repealed] Heading: repealed, on 1 July 2010, by section 439(1) of the Taxation (Inter- national Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

OJ 16 PCA person’s payment of tax relating to policyholder base [Repealed] Section OJ 16: repealed, on 1 July 2010, by section 439(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OJ 17 PCA person’s equivalent debit [Repealed] Section OJ 17: repealed, on 1 July 2010, by section 439(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

OJ 18 PCA person’s debit for transfer of life insurance business [Repealed] Section OJ 18: repealed, on 1 July 2010, by section 439(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Table O13: policyholder credits [Repealed] repealed, on 1 July 2010, by section 439(1) of the Taxation Table O13: (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Table O14: policyholder debits [Repealed] Table O14: repealed, on 1 July 2010, by section 439(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Table O15: person’s policyholder credits [Repealed] repealed, on 1 July 2010, by section 439(1) of the Taxation Table O15: (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

2486 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OJ 18 Table O16: person’s policyholder debits [Repealed] Table O16: repealed, on 1 July 2010, by section 439(1) of the Taxation (Inter- national Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Subpart OK—Maori authority credit accounts (MACA) Contents Introductory provision Page OK 1 General rules for Maori authorities with Maori authority 2488 credit accounts Maori authority credits OK 2 MACA payment of tax OK 3 MACA payment of tax to other Maori authorities OK 4 MACA payment of further income tax OK 4B MACA expenditure on research and development OK 5 MACA distribution with Maori authority credit OK 6 MACA dividend derived with imputation credit OK 6B MACA attributed PIE income with imputation credit OK 7 MACA dividend derived with FDP credit OK 8 MACA resident withholding tax withheld OK 9 MACA reversal of tax advantage arrangement Maori authority debits OK 10 MACA distribution OK 11 MACA allocation of provisional tax OK 12 MACA refund of income tax OK 13 MACA payment of other taxes OK 14 MACA refund of FDP OK 14B MACA refund of tax credit OK 15 MACA debit for loss of shareholder continuity OK 16 MACA breach of Maori authority credit ratio OK 17 MACA tax advantage arrangement OK 18 MACA ﬁnal balance Maori authority credits attached to distributions OK 19 Maori authority credits attached to distributions OK 20 MACA benchmark distribution rules 2489 2490 2490 2490 2491 2491 2492 2492 2493 2493 2494 2494 2494 2496 2497 2497 2498 2499 2500 2500 2501 2502 2487 Part O s OK 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Further income tax OK 21 Further income tax for closing debit balance OK 22 Further income tax paid when Maori authority no longer Maori authority OK 23 Further income tax paid satisfying liability for income tax OK 24 Income tax paid satisfying liability for further income tax 2503 2503 2504 2505 Table O17: Maori authority credits Table O18: Maori authority debits Introductory provision OK 1 General rules for Maori authorities with Maori authority credit accounts Accounts (1) A Maori authority must maintain a Maori authority credit ac- count for a tax year.
The account is a record of Maori authority credits and Maori authority debits that arise in the account dur- ing the tax year.

Subsection (2) overrides this subsection.

(2) (3) Exclusion Subsection (1) does not apply for a period in which— (a) the constitution or rules of the Maori authority prohibit a distribution of any kind to a member; or the Maori authority derives only exempt income, disre- garding exempt income under section CW 10 (Dividend within New Zealand wholly-owned group).
(b) Credits Credits include an amount of income tax paid during a tax year, an imputation credit attached to a dividend derived by the Maori authority and, if the Maori authority is not also a foreign dividend payment account (FDPA) company, a foreign dividend payment (FDP) credit attached to a dividend derived.

Debits (4) Debits may include a refund of income tax and a Maori au- thority credit attached to a taxable Maori authority distribution paid by the Maori authority.
2488 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OK 2 (5) General rules The general rules on memorandum accounts set out in sections OA 2 and OA 3 (which relate to the treatment of memorandum accounts) apply to Maori authority credit accounts.
Deﬁned in this Act: amount, dividend, exempt income, FDP credit, FDPA com- pany, imputation credit, income tax, Maori authority, Maori authority credit, Maori authority credit account, Maori authority debit, member, memorandum account, pay, tax year, taxable Maori authority distribution Compare: 2004 No 35 ss MK 1, MK 3 Maori authority credits OK 2 MACA payment of tax Credit (1) A Maori authority has a Maori authority credit for a payment of income tax or provisional tax.
Subsection (3) overrides this subsection.

(2) Table reference The Maori authority credit in subsection (1) is referred to in table O17: Maori authority credits, row 2 (payment of tax).
No credit (3) No credit under subsection (1) arises for— (a) (b) (c) (cb) (d) income tax paid for a tax year before the 2004–05 tax year; or income tax paid for income derived when the Maori authority was not a Maori authority; or income tax paid by a credit under section LE 1 (Tax credits for imputation credits); or income tax paid by a tax credit under subpart LA (Tax credits and other credits) and section LH 2 (Tax credits relating to expenditure on research and development); or further income tax applied under section OK 23 to pay income tax or provisional tax.
(4) Credit date The credit date is the day the tax is paid.

Deﬁned in this Act: further income tax, income, income tax, Maori authority, Maori authority credit, pay, provisional tax, tax year Compare: 2004 No 35 s MK 4(1)(a), (2)(a) 2489 Part O s OK 3 Income Tax Act 2007 Reprinted as at 2 September 2013 Section OK 2(3)(cb): substituted (with effect on 1 April 2008), on 6 October 2009, by section 440(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OK 3 MACA payment of tax to other Maori authorities Credit (1) A Maori authority has a Maori authority credit for a payment of tax to another Maori authority that is treated as a payment transferred from company A to company B under section RC 32 (Wholly-owned groups of companies).

(2) (3) Table reference The Maori authority credit in subsection (1) is referred to in table O17: Maori authority credits, row 3 (payment of tax to another Maori authority).
Credit date The credit date is the day the tax is paid.

Deﬁned in this Act: Maori authority, Maori authority credit, pay Compare: 2004 No 35 s MK 4(1)(b), (2)(a) OK 4 MACA payment of further income tax Credit (1) A Maori authority has a Maori authority credit for a payment of further income tax under section OK 21 or OK 22.

(2) (3) Table reference The Maori authority credit in subsection (1) is referred to in table O17: Maori authority credits, row 4 (payment of further income tax).
Credit date The credit date is the day the further income tax is paid.

Deﬁned in this Act: further income tax, Maori authority, Maori authority credit, pay Compare: 2004 No 35 s MK 4(1)(c), (2)(a) OK 4B MACA expenditure on research and development Credit (1) A Maori authority has a Maori authority credit for an amount of a tax credit that the authority has under section LH 2 (Tax credits relating to expenditure on research and development).
2490 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OK 6 (2) (3) Table reference The Maori authority credit in subsection (1) is referred to in table O17: Maori authority credits, row 4B (tax credit for re- search and development expenditure).

Credit date The credit date is the day the authority’s return of income is ﬁled.
Deﬁned in this Act: amount, Commissioner, Maori authority credit, return of income, tax credit Compare: 2004 No 35 s MK 4(1)(gb), (2)(db) Section OK 4B: inserted, on 1 April 2008, by section 511 of the Taxation (Busi- ness Taxation and Remedial Matters) Act 2007 (2007 No 109).

OK 5 MACA distribution with Maori authority credit Credit (1) A Maori authority has a Maori authority credit for the amount of a Maori authority credit attached to a distribution derived by the Maori authority.
(2) (3) Table reference The Maori authority credit in subsection (1) is referred to in table O17: Maori authority credits, row 5 (distribution with Maori authority credit).

Credit date The credit date is the day the distribution is made.
Deﬁned in this Act: amount, distribution, Maori authority, Maori authority credit Compare: 2004 No 35 s MK 4(1)(d), (2)(b) OK 6 MACA dividend derived with imputation credit Credit (1) A Maori authority has a Maori authority credit for the amount of an imputation credit attached to a dividend derived by the Maori authority.

(2) Table reference The Maori authority credit in subsection (1) is referred to in table O17: Maori authority credits, row 6 (dividend derived with imputation credit).
2491 Part O s OK 6B Income Tax Act 2007 Reprinted as at 2 September 2013 (3) Credit date The credit date is the day the dividend is paid.
Deﬁned in this Act: amount, dividend, imputation credit, Maori authority, Maori authority credit, pay Compare: 2004 No 35 s MK 4(1)(e), (2)(c) OK 6B MACA attributed PIE income with imputation credit Credit (1) A Maori authority that is an investor in a multi-rate PIE has a Maori authority credit for the amount of an imputation credit attributed to it under section HM 54 (Use of tax credits other than foreign tax credits by investors).
(2) (3) Table reference The Maori authority credit in subsection (1) is referred to in table O17: Maori authority credits, row 6B (attributed PIE income with imputation credit).

Credit date The credit date is the day the amount is attributed.
Deﬁned in this Act: amount, attributed PIE income, imputation credit, multi- rate PIE Section OK 6B: inserted (with effect on 1 April 2008), on 29 August 2011 (ap- plying for the 2008–09 and later income years), by section 117(1) of the Taxa- tion (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
OK 7 MACA dividend derived with FDP credit Credit (1) A Maori authority has a Maori authority credit for the amount of an FDP credit attached to a dividend derived by the Maori authority when it is not an FDPA company.

Table reference The Maori authority credit in subsection (1) is referred to in table O17: Maori authority credits, row 7 (dividend derived with FDP credit).

Credit date The credit date is the day the dividend is paid.
Deﬁned in this Act: amount, dividend, FDP credit, FDPA company, Maori au- thority, Maori authority credit, pay Compare: 2004 No 35 s MK 4(1)(f), (2)(c) (2) (3) 2492 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OK 9 OK 8 MACA resident withholding tax withheld Credit (1) A Maori authority has a Maori authority credit for the amount of tax for resident passive income treated under section RA 9(1)(b) (Treatment of amounts withheld as received) as derived by the Maori authority.
(2) (3) Table reference The Maori authority credit in subsection (1) is referred to in table O17: Maori authority credits, row 8 (RWT).

Credit date The credit date is the day the amount of tax is withheld.
Deﬁned in this Act: amount of tax, Maori authority, Maori authority credit, resident passive income, RWT Compare: 2004 No 35 s MK 4(1)(h), (2)(e) OK 9 MACA reversal of tax advantage arrangement (1) (2) (3) (4) When this section applies This section applies when it is established that a Maori author- ity credit in a Maori authority’s credit account was incorrectly determined to be the subject of an arrangement to obtain a tax advantage.
Credit The Maori authority has a Maori authority credit for an amount that equals the amount of a debit in the Maori authority credit account under section OK 17.

Table references The Maori authority credit in subsection (2) is referred to in table O17: Maori authority credits, row 9 (reversal of tax ad- vantage arrangement).

The Maori authority debit in subsection (2) is referred to in table O18: Maori authority debits, row 9 (tax advantage arrangement).
Credit date The credit date is the same as the debit date for the debit under section OK 17.
Deﬁned in this Act: amount, Maori authority, Maori authority credit, Maori authority credit account, Maori authority debit, tax advantage Compare: 2004 No 35 s MK 4(1)(g), (2)(d) 2493 Part O s OK 10 Income Tax Act 2007 Reprinted as at 2 September 2013 Maori authority debits OK 10 MACA distribution Debit (1) A Maori authority has a Maori authority debit for the amount of a Maori authority credit attached to a distribution made by the Maori authority.
(2) (3) Table reference The Maori authority debit in subsection (1) is referred to in table O18: Maori authority debits, row 2 (distribution).

Debit date The debit date is the day the distribution is made.
Deﬁned in this Act: amount, distribution, Maori authority, Maori authority credit, Maori authority debit Compare: 2004 No 35 s MK 5(1)(a), (2)(a) OK 11 MACA allocation of provisional tax Debit (1) A Maori authority has a Maori authority debit for an amount of provisional tax treated under section RC 32 (Wholly-owned groups of companies) as allocated by the Maori authority to another Maori authority as an underpaid company.
(2) (3) Table reference The Maori authority debit in subsection (1) is referred to in table O18: Maori authority debits, row 3 (allocation of provi- sional tax).

Debit date The debit date is the day the Commissioner is notiﬁed of the allocation.
Deﬁned in this Act: amount, Commissioner, company, Maori authority, Maori authority debit, notify, provisional tax Compare: 2004 No 35 s MK 5(1)(b), (2)(b) OK 12 MACA refund of income tax Debit (1) A Maori authority has a Maori authority debit for the amount of a refund of income tax paid to the Maori authority.

Subsec- tions (2) and (4) override this subsection.
2494 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OK 12 (2) (3) (4) (5) (6) (7) No debit The amount of a debit under subsection (1) does not include— a refund of income tax paid for a tax year before the (a) 2004–05 tax year; or a refund of income tax paid to the Maori authority that is no more than the debit under section OK 15; or a refund of income tax paid for a period when the Maori authority credit account was not maintained.
(b) (c) Table references The Maori authority debit in subsection (1) is referred to in table O18: Maori authority debits, row 4 (refund of income tax).

The Maori authority debit in subsection (2)(b) is referred to in table O18: Maori authority debits, row 7 (debit for loss of shareholder continuity).

Part-year Maori authorities If a Maori authority maintains a Maori authority credit account for only part of a tax year, the amount of the debit is calculated using the formula— account days 365 × refund.
Deﬁnition of items in formula In the formula,— (a) account days is the number of days in the tax year for which the Maori authority maintains the Maori author- ity credit account: refund is the amount of the refund.

(b) Debit date The debit date is the day the refund is made.

Relationship with section OK 14B This section does not apply to an amount that gives rise to a debit under section OK 14B.
Deﬁned in this Act: amount, income tax, Maori authority, Maori authority credit account, Maori authority debit, pay, tax year Compare: 2004 No 35 s MK 5(1)(c), (g), (2)(c) Section OK 12(7) heading: added (with effect on 1 April 2008), on 6 October 2009, by section 441(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2495 Part O s OK 13 Income Tax Act 2007 Reprinted as at 2 September 2013 Section OK 12(7): added (with effect on 1 April 2008), on 6 October 2009, by section 441(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

OK 13 MACA payment of other taxes Debit (1) A Maori authority has a Maori authority debit for an amount of overpaid income tax applied to pay an amount due under the Inland Revenue Acts.

Subsection (2) overrides this subsection.


No debit The amount of a debit under subsection (1) does not include an amount of overpaid income tax— (a) applied to satisfy a liability for income tax or provi- sional tax; or paid for a tax year before the 2004–05 tax year; or that relates to income tax paid before a Maori authority debit arises under section OK 15 when the amount is no more than the amount of the debit for loss of shareholder continuity.
(b) (c) Table references The Maori authority debit in subsection (1) is referred to in table O18: Maori authority debits, row 5 (payment of other taxes).

The Maori authority debit in subsection (2)(c) is re- ferred to in table O18: Maori authority debits, row 7 (debit for loss of shareholder continuity).

Debit date The debit date is the day the amount is applied.

Relationship with section OK 14B This section does not apply to an amount that gives rise to a debit under section OK 14B.
Deﬁned in this Act: amount, income tax, income tax liability, income year, Inland Revenue Acts, Maori authority, Maori authority debit, pay, provisional tax, shareholder, tax year Compare: 2004 No 35 s MK 5(1)(j), (2)(i) Section OK 13(5) heading: added (with effect on 1 April 2008), on 6 October 2009, by section 442(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OK 13(5): added (with effect on 1 April 2008), on 6 October 2009, by section 442(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

(2) (3) (4) (5) 2496 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OK 14B OK 14 MACA refund of FDP Debit (1) A Maori authority has a Maori authority debit for the amount of a refund of FDP paid to the Maori authority when it is not an FDPA company.
(2) (3) Table reference The Maori authority debit in subsection (1) is referred to in table O18: Maori authority debits, row 6 (refund of FDP).

Debit date The debit date is the day the refund is made.
Deﬁned in this Act: amount, FDP, FDPA company, Maori authority, Maori authority debit, pay Compare: 2004 No 35 s MK 5(1)(e), (2)(c) OK 14B MACA refund of tax credit Debit (1) A Maori authority has a Maori authority debit for— (a) (b) (c) the amount of a transfer under section LA 6(2)(d) (Re- maining refundable credits: PAYE, RWT, and certain other items) to the extent to which the transfer does not lead to a refund of income tax: the amount of a refund to the authority under section LA 6(2)(e): an amount used under section LH 2(6) (Tax credits re- lating to expenditure on research and development) to pay an amount payable under an Inland Revenue Act to the extent to which the use does not lead to a refund of income tax.
Exclusion (2) Despite subsection (1), a Maori authority that is an FDPA com- pany does not have a Maori authority debit to the extent to which the amount transferred, refunded, or used is a tax credit under subpart LF (Tax credits for FDP credits).

(3) Table reference The Maori authority debit in subsection (1) is referred to in table O18: Maori authority debits, row 6B (refund of tax credit).
2497 Part O s OK 15 Income Tax Act 2007 Reprinted as at 2 September 2013 (4) Debit date The debit date is— (a) for a debit referred to in subsection (1)(a), the day the amount is transferred: for a debit referred to in subsection (1)(b), the day the amount is refunded: for a debit referred to in subsection (1)(c), the day the amount is applied.
(b) (c) Deﬁned in this Act: amount, FDPA company, Inland Revenue Acts, Maori au- thority, Maori authority debit, pay Section OK 14B: inserted (with effect on 1 April 2008), on 6 October 2009, by section 443(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OK 15 MACA debit for loss of shareholder continuity Debit (1) A Maori authority has a Maori authority debit for the amount of a Maori authority credit retained in the Maori authority credit account and unused at the time at which shareholder continuity is lost.

Table reference The Maori authority debit in subsection (1) is referred to in table O18: Maori authority debits, row 7 (debit for loss of shareholder continuity).

When debit arises The debit arises at the time shareholder continuity is lost.
Deﬁned in this Act: amount, company, Maori authority, Maori authority credit, Maori authority credit account, Maori authority debit, shareholder Compare: 2004 No 35 s MK 5(1)(f), (2)(f) Section OK 15(1): amended (with effect on 1 April 2008), on 7 December 2009, by section 93(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section OK 15(3) heading: amended (with effect on 1 April 2008), on 7 De- cember 2009, by section 93(2) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section OK 15(3): amended (with effect on 1 April 2008), on 7 December 2009, by section 93(2) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
(2) (3) 2498 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OK 16 OK 16 MACA breach of Maori authority credit ratio Debit (1) A Maori authority has a Maori authority debit for a breach in a tax year of the Maori authority credit ratio under section OK 20(3) for an amount calculated using the formula— (net distributions × Maori authority credit ratio) – credits attached.
(2) Deﬁnition of items in formula In the formula,— (a) net distributions is the total amount of all taxable Maori authority distributions made by the Maori au- thority during the tax year, excluding the amount of Maori authority credits attached to the distributions: (b) Maori authority credit ratio is the maximum permit- ted ratio calculated under section OA 18(2) (Calculation of maximum permitted ratios) or, if less, the greatest Maori authority credit ratio of all taxable Maori author- ity distributions made by the Maori authority during the tax year: credits attached is the total amount of all Maori author- ity credits attached to distributions paid by the Maori authority during the tax year.
(c) Ratio change declaration (3) A debit under subsection (1) does not arise if the Maori author- ity provides a ratio change declaration under section OK 20(5).

(4) (5) Table reference The Maori authority debit in subsection (1) is referred to in table O18: Maori authority debits, row 8 (breach of Maori authority credit ratio).

Debit date The debit date is the last day of the tax year.
Deﬁned in this Act: amount, distribution, Maori authority, Maori authority credit, Maori authority credit account, Maori authority credit ratio, Maori au- thority debit, tax year, taxable Maori authority distribution Compare: 2004 No 35 ss MK 5(1)(d), (2)(d), MK 7(5) 2499 Part O s OK 17 Income Tax Act 2007 Reprinted as at 2 September 2013 OK 17 MACA tax advantage arrangement Debit (1) A Maori authority has a Maori authority debit for the amount of a further debit for a tax advantage arrangement referred to in section GB 43(2) and (3) (Reconstruction of Maori authority credit arrangements to obtain tax advantage).
(2) (3) Table reference The Maori authority debit in subsection (1) is referred to in table O18: Maori authority debits, row 9 (tax advantage ar- rangement).

Debit date The debit date is the last day of the tax year in which the tax advantage arrangement began.
Deﬁned in this Act: amount, arrangement, Maori authority, Maori authority credit account, Maori authority debit, tax advantage, tax year Compare: 2004 No 35 s MK 5(1)(h), (2)(g) OK 18 MACA ﬁnal balance Debit (1) A Maori authority has a Maori authority debit for a credit bal- ance in the Maori authority credit account when the Maori au- thority stops being a Maori authority.
(2) (3) Table reference The Maori authority debit in subsection (1) is referred to in table O18: Maori authority debits, row 10 (ﬁnal balance).

Debit date The debit date is day the Maori authority stops being a Maori authority.
Deﬁned in this Act: Maori authority, Maori authority credit account, Maori authority debit Compare: 2004 No 35 s MK 5(1)(i), (2)(h) 2500 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OK 19 Maori authority credits attached to distributions OK 19 Maori authority credits attached to distributions Attaching Maori authority credits (1) When a Maori authority makes a taxable Maori authority dis- tribution, it may attach a Maori authority credit to the distri- bution.
Maori authority credit ratio (2) A distribution referred to in subsection (1) must have a Maori authority credit ratio calculated using the formula— credit attached net distribution.

(3) Deﬁnition of items in formula In the formula,— (a) credit attached is the amount of Maori authority credit attached to the distribution: net distribution is the amount of distribution made, ex- cluding the amount of Maori authority credit.
(b) Maximum permitted ratio (4) A Maori authority credit attached to a distribution must not be more than the maximum permitted ratio calculated under section OA 18(2) (Calculation of maximum permitted ratios).

Co-operative companies (5) A Maori authority that is also a co-operative company may at- tach a Maori authority credit to a notional distribution.
The provisions of section OB 79 (Co-operative companies attach- ing imputation credits to notional distributions) apply to the notional distribution as if references in that section to— (a) an imputation credit were a reference to a Maori author- ity credit; and an imputation credit account were a reference to a Maori authority credit account.

(b) Retrospective attachment (6) A Maori authority may retrospectively attach a Maori author- ity credit to a taxable Maori authority distribution.
2501 Part O s OK 20 Income Tax Act 2007 Reprinted as at 2 September 2013 (7) Application of other provisions The provisions of section OB 62 (Retrospective attachment of imputation credits) apply to a distribution under this section as if a reference in that section to— (a) an imputation credit were a reference to a Maori author- ity credit; and an imputation credit account were a reference to a Maori authority credit account.
(b) Deﬁned in this Act: amount, co-operative company, imputation credit, imput- ation credit account, Maori authority, Maori authority credit, Maori authority credit account, Maori authority credit ratio, maximum permitted ratio, taxable Maori authority distribution Compare: 2004 No 35 ss MK 6, MK 7(1) OK 20 MACA benchmark distribution rules (1) (2) (3) When this section applies This section applies when a Maori authority pays a taxable Maori authority distribution on more than 1 occasion during a tax year.
Benchmark distribution The ﬁrst distribution of the tax year is the benchmark distribu- tion.

Same Maori authority credit ratio The Maori authority credit ratio of a distribution made after the benchmark distribution must be the same as the Maori au- thority credit ratio of the benchmark distribution.
Debit for breach of Maori authority credit ratio (4) A breach of subsection (3) gives rise to a Maori authority debit under section OK 16 (table O18: Maori authority debits, row 8 (breach of Maori authority credit ratio)) for an amount cal- culated using the formula in section OK 16(1).
Ratio change declaration (5) A Maori authority may notify the Commissioner that the dis- tribution is not part of an arrangement to obtain a tax advantage by providing a ratio change declaration stating that the distri- bution is not part of an arrangement to which sections GB 35 and GB 36 (which relate to imputation arrangements to obtain a tax advantage) apply.
The Maori authority must provide the 2502 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OK 22 declaration before the distribution is made, or by a later date if the Commissioner allows.

For the purposes of this subsection, the distribution must not be part of an arrangement to obtain a tax advantage.

This subsection overrides subsection (4).
Deﬁned in this Act: amount, arrangement, benchmark distribution, Commis- sioner, Maori authority, Maori authority credit ratio, Maori authority debit, no- tify, pay, tax advantage, tax year, taxable Maori authority distribution Compare: 2004 No 35 s MK 7(2)–(4) Further income tax OK 21 Further income tax for closing debit balance Liability (1) A Maori authority is liable to pay further income tax for the amount of a debit balance in its Maori authority credit account at the end of a tax year.
(2) Due date The Maori authority must pay the further income tax to the Commissioner no later than 20 June following the end of the tax year.
Application of other provisions (3) When it is appropriate for the purposes of this section, the other sections of this Act and the Tax Administration Act 1994— (a) apply to further income tax as if they addressed further income tax and not income tax; and apply, modiﬁed as necessary, to ensure their application to the further income tax rather than income tax; and do not override the imputation rules and section 101 of the Tax Administration Act 1994.
(b) (c) Deﬁned in this Act: amount, Commissioner, further income tax, imputation rules, income tax, Maori authority, Maori authority credit account, pay, tax year Compare: 2004 No 35 s MK 8(1), (2), (6) OK 22 Further income tax paid when Maori authority no longer Maori authority Liability (1) A Maori authority is liable to pay further income tax for a debit balance in its Maori authority credit account immediately before the Maori authority stops being a Maori authority.
2503 Part O s OK 23 Income Tax Act 2007 Reprinted as at 2 September 2013 (2) Due date The Maori authority must pay the further income tax to the Commissioner by the day on which the Maori authority stops being a Maori authority.

Paramount section (3) A Maori authority that stops being a Maori authority on the last day of a tax year is liable for further income tax under this section and not under section OK 21.
Application of other provisions (4) When it is appropriate for the purposes of this section, the other sections of this Act and the Tax Administration Act 1994— (a) apply to further income tax as if they addressed further income tax and not income tax; and apply, modiﬁed as necessary, to ensure their application to the further income tax rather than income tax; and do not override the imputation rules and section 101 of the Tax Administration Act 1994.
(b) (c) Deﬁned in this Act: Commissioner, further income tax, imputation rules, in- come tax, Maori authority, Maori authority credit account, pay, tax year Compare: 2004 No 35 s MK 8(3), (4), (6) OK 23 Further income tax paid satisfying liability for income tax Election (1) A Maori authority that is liable for income tax or provisional tax may choose to satisfy the liability through a payment of further income tax.
Requirements The liability referred to in subsection (1) must be for an income year corresponding to a tax year in which the Maori authority maintains a Maori authority credit account.

When treated as paid The income tax or provisional tax is treated as paid on the day the further income tax is paid to the Commissioner.
Deﬁned in this Act: Commissioner, further income tax, income tax, income year, Maori authority, Maori authority credit account, pay, provisional tax, tax year Compare: 2004 No 35 s MK 8(5) (2) (3) 2504 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OK 24 OK 24 Income tax paid satisfying liability for further income tax Election (1) A Maori authority that is liable for further income tax may choose to satisfy the liability through a payment of income tax.
(2) (3) Requirements The liability referred to in subsection (1) must be for an income year corresponding to a tax year in which the Maori authority maintains a Maori authority credit account.

When treated as paid The further income tax is treated as paid on the day the income tax is paid to the Commissioner.
Deﬁned in this Act: Commissioner, further income tax, income tax, income year, Maori authority, Maori authority credit account, pay, tax year Compare: 2004 No 35 s MK 8(5B) 2505 Part O s OK 24 Income Tax Act 2007 Reprinted as at 2 September 2013 Table O17: Maori authority credits Row Maori authority credit Credit date Further deﬁned 1 2 3 4 Opening credit balance 1 April section OA 7 Provisional tax and income tax paid Tax paid to another Maori authority day of payment section OK 2 day of payment section OK 3 Further income tax paid day of payment section OK 4 4B Tax credit for research and development expenditure day return ﬁled section OK 4B.
5 6 Maori authority credit attached to distribution derived day on which distribution is paid section OK 5 Imputation credit attached to dividend derived day on which dividend is paid section OK 6 6B Attributed PIE income with imputation credit day of attribution section OK 6B 7 8 9 FDP credit attached to dividend derived when not FDP company day on which dividend is paid section OK 7 RWT withheld day on which amount withheld section OK 8 Reversal of debit for tax advantage arrangement debit date for debit section OK 9 Table O17 row 4B: inserted, on 1 April 2008, by section 512 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Table O17 row 6B: inserted (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 118(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
2506 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OK 24 Table O18: Maori authority debits Row Maori authority debit Debit date Further deﬁned Opening debit balance 1 April section OA 7 Maori authority credit attached to distribution paid day of distribution section OK 10 Allocation of provisional tax day of notice of allocation section OK 11 Refund of income tax day of refund section OK 12 Overpaid income tax applied to satisfy another taxation liability day of application section OK 13 Refund of FDP when not FDPA company day of refund section OK 14 6B Transfer, refund, or use of tax credit day of transfer, refund, or use section OK 14B 7 8 9 Debit for loss of shareholder continuity for Maori authority that is company time of loss of continuity section OK 15 Debit for breach of Maori authority credit ratio Debit for tax advantage arrangement 31 March section OK 16 section OK 17 last day of tax year in which arrangement began 10 Credit balance when Maori authority credit account stops day of cessation section OK 18 Table O18 row 6B: inserted (with effect on 1 April 2008), on 6 October 2009, by section 444(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Table O18 row 7: amended (with effect on 1 April 2008), on 7 December 2009, by section 94 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
2507 Income Tax Act 2007 Reprinted as at 2 September 2013 Subpart OP—Memorandum accounts of consolidated groups Contents Introductory provisions OP 1 Memorandum accounts of consolidated groups OP 2 When credits and debits arise only in group accounts Consolidated groups and imputation credit accounts Introductory provisions OP 3 Changes in consolidated imputation groups OP 4 Resident imputation subgroups OP 5 When credits and debits arise only in consolidated imputation group accounts Provisions applying to consolidated imputation groups OP 6 Imputation credits of consolidated imputation groups OP 7 Consolidated ICA payment of tax OP 8 Consolidated ICA deposit in tax pooling account OP 9 Consolidated ICA transfer from tax pooling account OP 10 Consolidated ICA allocation from company with overpaid provisional tax OP 11 Consolidated ICA payment of further income tax OP 11B Consolidated ICA expenditure on research and development OP 12 Consolidated ICA dividend derived with imputation credit OP 13 Consolidated ICA dividend derived with FDP credit OP 14 Consolidated ICA payment of FDP [Repealed] OP 15 Consolidated ICA replacement payment to company under share-lending arrangement OP 16 Consolidated ICA credit transfer to company OP 17 Consolidated ICA resident withholding tax withheld OP 18 Consolidated ICA transfer from group company’s FDP account OP 19 Consolidated ICA transfer from group’s FDP account OP 20 Consolidated ICA transfer from group company’s policyholder credit account [Repealed] OP 21 Consolidated ICA transfer from group’s policyholder credit account [Repealed] OP 22 Consolidated ICA group company’s credit OP 23 Consolidated ICA elimination of double debit OP 24 Consolidated ICA reversal of tax advantage arrangement 2508 Page 2514 2515 2515 2516 2517 2518 2522 2523 2524 2525 2525 2526 2526 2527 2527 2527 2528 2528 2529 2529 2530 2530 2530 2531 2532 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OK 24 OP 25 Consolidated ICA non-resident withholding tax withheld OP 26 Consolidated ICA
 payment of amount of tax for schedular 2533 2534 payment OP 27 Consolidated ICA payment of schedular income tax 2534 Imputation debits of consolidated imputation groups OP 28 Consolidated ICA payment of dividend OP 29 Consolidated ICA allocation of provisional tax OP 30 Consolidated ICA refund of income tax OP 31 Consolidated ICA amount applied to pay other taxes OP 32 Consolidated ICA refund from tax pooling account OP 33 Consolidated ICA transfer within tax pooling account OP 33B Consolidated ICA debit for transfer from tax pooling account for policyholder base liability OP 34 Consolidated ICA refund of FDP OP 35 Consolidated ICA refund of tax credit OP 36 Consolidated ICA overpayment of FDP OP 37 Consolidated ICA group company’s debit OP 38 Consolidated ICA transfer for net foreign attributed income [Repealed] OP 39 Consolidated ICA replacement payment by company under share-lending arrangement OP 40 Consolidated ICA returning share transfer OP 41 Consolidated ICA credit transfer by company OP 42 Consolidated ICA debit for loss of shareholder continuity OP 43 Consolidated ICA breach of imputation ratio OP 44 Consolidated ICA debit for policyholder base imputation credits OP 45 Consolidated ICA redemption debit OP 46 Consolidated ICA tax advantage arrangement OP 47 Consolidated ICA ﬁnal balance OP 48 Consolidated ICA refund of NRWT OP 49 Consolidated ICA refund of amount of tax for schedular payment OP 50 Consolidated ICA refund of schedular income tax 2535 2535 2536 2537 2538 2539 2540 2541 2541 2543 2543 2544 2544 2545 2545 2546 2546 2547 2548 2550 2550 2551 2551 2552 2509 Income Tax Act 2007 Reprinted as at 2 September 2013 Table O19: imputation credits of consolidated imputation groups Table O20: imputation debits of consolidated imputation groups Consolidated groups and FDP accounts Introductory provisions OP 51 FDP accounts of consolidated FDP groups OP 52 Choosing to stop being consolidated FDP group OP 53 When group company emigrates OP 54 When credits
 and debits arise only in consolidated FDP group accounts OP 55 Provisions applying to consolidated FDP groups FDP credits of consolidated FDP groups OP 56 Consolidated FDPA payment of FDP [Repealed] OP 57 Consolidated FDPA payment of further FDP [Repealed] OP 58 Consolidated FDPA dividend derived with FDP credit OP 59 Consolidated FDPA group company’s credit OP 60 Consolidated FDPA credit transfer to company OP 61 Consolidated FDPA transfer from group’s CTR account [Repealed] OP 62 Consolidated FDPA transfer for net foreign attributed income [Repealed] 2557 2557 2558 2559 2560 2560 2560 2561 2561 2562 2562 2563 OP 63 Consolidated FDPA reversal of tax advantage arrangement 2563 FDP debits of consolidated FDP groups OP 64 Consolidated FDPA payment of dividend OP 65 Consolidated FDPA credit transfer by company OP 66 Consolidated FDPA refund of FDP OP 67 Consolidated FDPA overpayment of FDP OP 68 Consolidated FDPA refund of tax credit OP 69 Consolidated FDPA transfer to imputation credit account OP 70 Consolidated FDPA transfer to group’s CTR account [Repealed] OP 71 Consolidated FDPA group company’s debit OP 72 Consolidated FDPA breach of FDP ratio OP 73 Consolidated FDPA debit for loss of shareholder continuity OP 74 Consolidated FDPA debit for policyholder base FDP credits OP 75 Consolidated FDPA breach of FDP ratio by PCA company OP 76 Consolidated FDPA tax advantage arrangement 2563 2564 2564 2565 2566 2566 2567 2567 2568 2568 2569 2569 2570 2510 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OK 24 OP 77 Consolidated FDPA ﬁnal balance 2570 Table O21: FDP credits of consolidated FDP groups Table O22: FDP debits of consolidated FDP groups Consolidated groups and CTR credits [Repealed] Introductory provisions [Repealed] OP 78 CTR accounts of consolidated groups [Repealed] OP 79 When credits and debits arise only in CTR group accounts [Repealed] OP 80 Provisions applying to consolidated groups with CTR accounts [Repealed] CTR credits of consolidated
 groups [Repealed] OP 81 Consolidated CTRA tax credit for conduit tax relief [Repealed] OP 82 Consolidated CTRA reduction of FDP [Repealed] OP 83 Consolidated CTRA dividend derived with CTR credit [Repealed] OP 84 Consolidated CTRA group company’s credit [Repealed] OP 85 Consolidated CTRA transfer from group’s FDP account [Repealed] OP 86 Consolidated CTRA reversal of tax advantage arrangement [Repealed] CTR debits of consolidated groups OP 87 Consolidated CTRA payment of dividend [Repealed] OP 88 Consolidated CTRA transfer to group’s FDP account [Repealed] OP 89 Consolidated CTRA adjustment for conduit tax relief [Repealed] OP 90 Consolidated CTRA group company’s debit [Repealed] OP 91 Consolidated CTRA increase in resident shareholding [Repealed] OP 92 Consolidated CTRA breach of CTR ratio [Repealed] OP 93 Consolidated CTRA tax advantage arrangement [Repealed] OP 94 Consolidated CTRA ﬁnal balance [Repealed] Consolidated groups’ FDP payments and refunds [Repealed] 2575 2575 2575 2576 2576 2576 2576 2576 2576 2577 2577 2577 2577 2577 2577 2578 2578 2511 Income Tax Act 2007 Reprinted as at 2 September 2013 OP 95 FDP payable for credits and debits in group’s CTR 2578 account [Repealed] OP 96 Refund on transfer from group’s FDP account [Repealed] 2578 Table O23: conduit tax relief credits of consolidated groups [Repealed] Table O24: conduit tax relief debits of consolidated groups [Repealed] Consolidated groups and branch equivalent tax accounts [Repealed] Introductory provisions [Repealed] OP 97 Branch equivalent tax accounts of consolidated BETA 2579 groups [Repealed] OP 98 Choosing to stop being consolidated BETA 2579 group [Repealed] OP 99 When credits and debits arise only in branch equivalent 2579 tax group accounts [Repealed] Branch equivalent tax credits of consolidated BETA groups [Repealed] OP 100 Consolidated BETA payment of income tax on foreign 2580 income [Repealed] OP 101 Consolidated BETA payment of income tax [Repealed] OP 102 Consolidated BETA
 remaining debit balances [Repealed] OP 103 Consolidated BETA refund of FDP [Repealed] OP 104 Consolidated BETA credit for loss of shareholder 2580 2580 2580 2581 continuity [Repealed] Treatment by consolidated BETA groups of BETA debits from conduit relief [Repealed] OP 104B Consolidated BETA group with debit balance, 2581 including debits from conduit relief, in certain income years [Repealed] Branch equivalent tax debits of consolidated BETA groups [Repealed] OP 105 Consolidated BETA payment of FDP [Repealed] OP 106 Consolidated BETA reduction of FDP [Repealed] OP 107 Consolidated BETA refund of income tax [Repealed] 2581 2581 2582 2512 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OK 24 OP 108 Consolidated BETA debit for loss of shareholder 2582 continuity [Repealed] Debit if credit balance at beginning of ﬁrst affected income year [Repealed] OP 108B Consolidated BETA group with credit balance at 2582 beginning of ﬁrst affected income year [Repealed] Table O25: branch equivalent tax credits of consolidated BETA groups [Repealed] Table O26: branch equivalent tax debits of consolidated BETA groups [Repealed] Consolidated groups and policyholder credit accounts [Repealed] Introductory provision [Repealed] OP 109 Policyholder credit accounts of consolidated 2583 groups [Repealed] Policyholder credits of consolidated groups [Repealed] OP 110 Consolidated PCA transfer from imputation credit account [Repealed] OP 111 Consolidated PCA transfer from FDP account [Repealed] OP 112 Consolidated PCA group company’s credit [Repealed] OP 113 Consolidated PCA maximum deﬁcit debit in FDP account [Repealed] OP 114 Consolidated PCA reduced deﬁcit debit in FDP 2583 2583 2584 2584 2584 account [Repealed] Policyholder debits of consolidated groups [Repealed] OP 115 Consolidated PCA payment of tax relating to policyholder 2584 base [Repealed] OP 116 Consolidated PCA transfer to imputation credit 2584 account [Repealed] Table O27: policyholder credits of consolidated
 groups [Repealed] 2513 Part O s OP 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Table O28: policyholder debits of consolidated groups [Repealed] Introductory provisions OP 1 Memorandum accounts of consolidated groups (1) Single company For the purposes of this Part, a consolidated group is treated as if it were a single company, and subpart FM (Consolidated groups of companies) applies to the consolidated group.
Consolidated group accounts (2) A consolidated group may be— (a) (b) required to maintain a memorandum account for a tax year; or entitled to maintain a memorandum account for a tax year.

Separate accounts (3) A consolidated group’s memorandum account is separate from the memorandum account of each company in the consolidated group.
General rules The general rules on memorandum accounts set out in sections OA 2 and OA 3 (which relate to the treatment of memorandum accounts) apply to a memorandum account of a consolidated group.

Tables The credits and debits that arise in a memorandum account are listed in tables set out at the end of this subpart.
The tables— (a) (b) state the credits and the debits; and state the credit dates and debit dates when the credits and debits arise; and refer to the section that fully deﬁnes them, and provides the credit dates and debit dates for each credit and debit.
Deﬁned in this Act: company, consolidated group, memorandum account, tax year Compare: 2004 No 35 ss ME 10, ME 25, MF 7(2), MG 13, MI 14 (c) (4) (5) 2514 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OP 3 OP 2 When credits and debits arise only in group accounts Credits only in group account (1) A credit may arise only in the memorandum account of a consolidated group and not in the memorandum account of a group company, unless another provision expressly states otherwise.
Debits only in group account (2) A debit may arise only in the memorandum account of a consolidated group and not in the memorandum account of a group company, unless another provision expressly states otherwise.

(3) (4) Particular credits and debits The credit referred to in subsection (1) and the debit referred to in subsection (2) are listed in provisions in this subpart.
Company’s obligation overridden This section applies despite— (a) (b) the obligation that a group company may have under this Part to record a credit or debit; and the fact that the credit and debit referred to in this section may otherwise be eligible to give rise to a credit or debit in the group company’s account.
Deﬁned in this Act: company, consolidated group, memorandum account Compare: 2004 No 35 ss ME 13, ME 27, MF 9, MG 16, MI 19 Consolidated groups and imputation credit accounts Introductory provisions OP 3 Changes in consolidated imputation groups New group company (1) A consolidated group that is a consolidated imputation group continues to have the same imputation credit account if the group starts an imputation group with a company that is not part of another consolidated group.
(2) Combining consolidated imputation groups The companies that are part of 2 or more consolidated im- putation groups that choose to combine to form 1 imputation 2515 Part O s OP 4 Income Tax Act 2007 Reprinted as at 2 September 2013 group must record in the imputation credit account of the new group— (a) all credits and debits in the imputation credit accounts of the 2 groups immediately before the election takes effect; and all credits and debits that arise for a group company that is part of the new group on and after the election takes effect.
(b) Imputation group becoming consolidated group (3) An imputation group continues to use its imputation credit ac- count if the companies that are part of the imputation group choose to convert their status to that of a consolidated group that is a consolidated imputation group.

(4) Opening balances The opening balances for the imputation credit account of the consolidated imputation group referred to in subsection (3) are set out in section OA 7 (Opening balances of memorandum accounts).
Deﬁned in this Act: company, consolidated group, consolidated imputation group, imputation credit account, imputation group Compare: 2004 No 35 s ME 10(1A), (1B), (1D) OP 4 Resident imputation subgroups Subgroup of trans-Tasman imputation group The resident imputation subgroup of a trans-Tasman imput- ation group must record in its imputation credit account the credits and debits described in subsection (2).
Eligible credits and debits The credits and debits referred to in subsection (1) are those that arise in the imputation credit account of the subgroup’s trans-Tasman imputation group in relation to a company that— will be part of the subgroup if the credit or debit arises (a) before the subgroup is formed; or is part of the subgroup if the credit or debit arises when or after the subgroup is formed.
(b) Deﬁned in this Act: company, imputation credit account, imputation group, resident imputation subgroup, trans-Tasman imputation group Compare: 2004 No 35 s ME 10(1C) (1) (2) 2516 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OP 5 OP 5 When credits and debits arise only in consolidated imputation group accounts Credits only in group account (1) A credit listed in subsection (2) arises only in the imputation credit account of a consolidated imputation group and not in the imputation credit account of a group company.
(2) Particular credits The credit referred to in subsection (1) is a credit under the following sections and described in the following rows of table O19: imputation credits of consolidated imputation groups: (a) (b) (bb) section OP 7, row 2 (payment of tax): section OP 8, row 3 (deposit in tax pooling account): section OP 11B, row 6B (tax credit for research and development expenditure): section OP 12, row 7 (dividend derived with imputation credit): section OP 13, row 8 (dividend derived with FDP credit).
[Repealed] (c) (d) (e) Debits only in the group account (3) A debit listed in subsection (4) arises only in the imputation credit account of a consolidated imputation group and not in the imputation credit account of a group company.
(4) Particular debits The debit referred to in subsection (3) is a debit under the fol- lowing sections and described in the following rows of table O20: imputation debits of consolidated imputation groups: section OP 28, row 2 (payment of dividend): (a) section OP 30, row 4 (refund of income tax): (b) section OP 32, row 6 (refund from tax pooling account): (c) section OP 33, row 7 (transfer within tax pooling ac- (d) count): section OP 33B, row 7B (debit for transfer from tax pooling account for policyholder base liability): section OP 34, row 8 (refund of FDP): section OP 35, row 9 (refund of tax credit): section OP 37, row 11 (group company’s debit): (e) (f) (g) (db) 2517 Part O s OP 6 Income Tax Act 2007 Reprinted as at 2 September 2013 (h) (i) (j) (k) (l) section OP 39, row 13 (replacement payment under share-lending arrangement): section OP 40, row 14 (returning share transfer): section OP 41, row 15 (credit transfer): section OP 43, row 17 (breach of imputation ratio): section OP 44, row 18 (debit for policyholder base im- putation credits).
Deﬁned in this Act: company, consolidated imputation group, imputation credit, imputation credit account, imputation debit Compare: 2004 No 35 s ME 12(1) Section OP 5(2)(bb): inserted, on 1 April 2008, by section 513 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section OP 5(2)(d): amended (with effect on 1 April 2009), on 6 October 2009, by section 445(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OP 5(2)(e): repealed (with effect on 1 April 2009), on 6 October 2009, by section 445(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OP 5(4)(d): amended (with effect on 1 April 2008), on 7 September 2010, by section 105 of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Section OP 5(4)(db): inserted, on 1 July 2010, by section 445(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OP 5(4)(k): amended, on 1 July 2010, by section 445(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OP 5(4)(l): added, on 1 July 2010, by section 445(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OP 6 Provisions applying to consolidated imputation groups Single company, tax liabilities The provisions listed in subsection (2) apply, modiﬁed as ne- cessary, to a consolidated imputation group and to the imput- ation credit account of the group as if— (a) (b) the group were a single company; and a reference to a company’s liability for further income tax, late payment penalty, or imputation penalty tax were a reference to a joint and several liability owed by group companies when the tax or penalty becomes payable.
(1) 2518 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OP 6 (2) (3) (4) (5) Other provisions The provisions are— (a) (ab) section OB 61 (ICA benchmark dividend rules); and sections OB 65 and OB 66 (which relate to further in- come tax); and sections OB 71 and OB 72 (which relate to imputation additional tax); and sections 97, 101, 139B, 140B, 140D, and 180 of the Tax Administration Act 1994.
(ac) (b) Consolidation provisions Sections FM 4 and FM 5 (which relate to the liabilities of group companies) override subsection (1)(b).
Tax advantage arrangements and determinations Sections GB 35 and GB 36 (which relate to tax advantage arrangements), LE 1(5) (Tax credits for imputation credits), OA 2(5) (Memorandum accounts), and sections 90AF and 104B of the Tax Administration Act 1994 apply, modiﬁed as necessary, in a case that involves accounts of a consolidated imputation group as if— (a) (b) the group were a single company; and references to the provisions of this Act or the Tax Administration Act 1994 were references to the equiva- lent provisions applicable to the equivalent accounts.
Refunds for overpaid amounts Sections RM 13 to RM 17, RM 32, and RZ 6 (which relate to limits on refunds) apply, modiﬁed as necessary, in relation to income tax paid by a consolidated imputation group as if— (a) (b) the group were a single company; and a reference to that company when it stops being an ICA company were a reference to the consolidated group when it stops being a consolidated imputation group; and references to the provisions of this Act or the Tax Administration Act 1994 were references to the equiva- lent provisions applicable to the equivalent accounts.
(c) Limits on refunds (6) Despite subsection (5), sections RM 13 to RM 17, RM 32, and RZ 6 do not apply to limit a refund payable to a company 2519 Part O s OP 6 Income Tax Act 2007 Reprinted as at 2 September 2013 that is part of a consolidated imputation group in relation to income tax paid individually by the company to the extent to which those sections would not have limited the refund if it had been a refund payable to the group in relation to income tax paid by the group.
However, if an amount is refunded and would not have been payable but for this subsection, section RM 15(1) (Changes in credit balances) applies as if the refund were made in relation to income tax paid by the group.

Applying for refunds If a company that is part of an imputation group is entitled to a refund under section RM 2, RM 4, or RM 5 (which relate to refunds for overpaid income tax), the company must apply for a refund by notifying the Commissioner.
Sections RM 13 to RM 17, RM 32, and RZ 6 apply to the entitlement as if— (a) the imputation credit account of the group were the im- putation credit account of the company: a credit in the imputation credit account for the purposes of those sections were reduced by the amount of a re- fund to a company that is part of the group.
(b) Deﬁned in this Act: Commissioner, company, consolidated group, consolidated imputation group, further income tax, ICA company, imputation additional tax, imputation credit account, imputation group, imputation penalty tax, income tax, notify, pay, tax Compare: 2004 No 35 s ME 14(3) Section OP 6(2)(a): substituted (with effect on 1 April 2008), on 6 October 2009, by section 446(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OP 6(2)(ab): inserted (with effect on 1 April 2008), on 6 October 2009, by section 446(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OP 6(2)(ac): inserted (with effect on 1 April 2008), on 6 October 2009, by section 446(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OP 6(4) heading: added (with effect on 1 April 2008), on 6 October 2009, by section 446(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OP 6(4): added (with effect on 1 April 2008), on 6 October 2009, by section 446(2) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
Section OP 6(5) heading: added (with effect on 1 April 2008), on 6 October 2009, by section 446(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

(7) 2520 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OP 6 Section OP 6(5): added (with effect on 1 April 2008), on 6 October 2009, by section 446(2) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
Section OP 6(6) heading: added (with effect on 1 April 2008), on 6 October 2009, by section 446(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OP 6(6): added (with effect on 1 April 2008), on 6 October 2009, by section 446(2) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
Section OP 6(7) heading: added (with effect on 1 April 2008), on 6 October 2009, by section 446(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OP 6(7): added (with effect on 1 April 2008), on 6 October 2009, by section 446(2) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
Section OP 6(7): amended (with effect on 1 April 2013), on 17 July 2013, by section 83 of the Taxation (Livestock Valuation, Assets Expenditure, and Re- medial Matters) Act 2013 (2013 No 52).

inserted (with effect on Section OP 6 list of deﬁned terms Commissioner: 1 April 2008), on 6 October 2009, by section 446(3) of the Taxation (Inter- national Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OP 6 list of deﬁned terms consolidated group: inserted (with effect on 1 April 2008), on 6 October 2009, by section 446(3) of the Taxation (Inter- national Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OP 6 list of deﬁned terms ICA company: inserted (with effect on 1 April 2008), on 6 October 2009, by section 446(3) of the Taxation (Inter- national Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OP 6 list of deﬁned terms imputation additional tax: inserted (with effect on 1 April 2008), on 6 October 2009, by section 446(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OP 6 list of deﬁned terms imputation group: inserted (with effect on 1 April 2008), on 6 October 2009, by section 446(3) of the Taxation (Inter- national Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OP 6 list of deﬁned terms income tax: inserted (with effect on 1 April 2008), on 6 October 2009, by section 446(3) of the Taxation (International Tax- ation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OP 6 list of deﬁned terms notify: inserted (with effect on 1 April 2008), on 6 October 2009, by section 446(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OP 6 list of deﬁned terms tax: added (with effect on 1 April 2008), on 6 October 2009, by section 446(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

2521 Part O s OP 7 Income Tax Act 2007 Reprinted as at 2 September 2013 Imputation credits of consolidated imputation groups OP 7 Consolidated ICA payment of tax Credit (1) A consolidated imputation group has an imputation credit for a payment of income tax.
Subsection (3) overrides this sub- section.

(2) Table reference The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 2 (payment of tax).
No credit (3) A consolidated imputation group does not have an imputation credit for an amount of— (a) income tax paid as a trustee, unless paid on category A income; or a transfer from a tax pooling account to a tax account with the Commissioner; or income tax paid on income derived by a company that is not an imputation credit account (ICA) company; or income tax paid by a life insurer to satisfy its schedular income tax liability for schedular policyholder base in- come; or income tax paid under section LE 1 (Tax credits for imputation credits) by crediting an imputation credit; or income tax paid under section LF 1 (Tax credits for FDP credits) by crediting a foreign dividend payment (FDP) credit; or income tax paid by a tax credit under subpart LA (Tax credits and other credits) and section LH 2 (Tax credits relating to expenditure on research and development); or income tax paid by crediting an amount under subpart LP (Tax credits for supplementary dividends); or further income tax applied under section OB 65 or OB 66 (which relate to further income tax) to pay income tax or provisional tax; or (b) (c) (d) (e) (f) (fb) (g) (h) 2522 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OP 8 (4) (i) income tax paid by crediting further income tax under section OB 69(3) (Further income tax paid satisfying liability for income tax).
Credit date The credit date is the day the tax is paid.
Deﬁned in this Act: amount, category A income, Commissioner, company, con- solidated imputation group, FDP credit, further income tax, ICA company, im- putation credit, imputation credit account, income, income tax, life insurer, pay, provisional tax, schedular income tax liability, schedular policyholder base in- come, tax account with the Commissioner, tax pooling account, tax year, trustee Compare: 2004 No 35 s ME 11(1)(a), (2)(a) Section OP 7(3)(d): substituted, on 1 July 2010, by section 447(1) of the Tax- ation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OP 7(3)(fb): substituted (with effect on 1 April 2008), on 6 October 2009, by section 447(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OP 7 list of deﬁned terms policyholder base income tax liability: re- pealed, on 1 July 2010, by section 447(3)(a) of the Taxation (International Tax- ation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OP 7 list of deﬁned terms schedular income tax liability: inserted, on 1 July 2010, by section 447(3)(b) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OP 7 list of deﬁned terms schedular policyholder base income: in- serted, on 1 July 2010, by section 447(3)(b) of the Taxation (International Tax- ation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OP 8 Consolidated ICA deposit in tax pooling account Credit (1) A consolidated imputation group has an imputation credit for an amount provided by it and paid by an intermediary into a tax pooling account.

(2) (3) Table reference The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 3 (deposit in tax pooling account).

Credit date The credit date is the day the amount is deposited.
Deﬁned in this Act: amount, consolidated imputation group, imputation credit, intermediary, pay, tax pooling account Compare: 2004 No 35 s ME 11(1)(aa), (2)(aa) 2523 Part O s OP 9 Income Tax Act 2007 Reprinted as at 2 September 2013 OP 9 Consolidated ICA transfer from tax pooling account Credit (1) A consolidated imputation group has an imputation credit for an amount representing an entitlement to funds held in a tax pooling account if the intermediary transfers the entitlement from another person to the group.
Table reference The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 4 (transfer from tax pooling account).
Credit date The credit date is,— (a) for an entitlement to funds that are transferred by the intermediary from the tax pooling account to the group’s tax account with the Commissioner, the credit date under section RP 19 (Transfers from tax pooling accounts) for the amount transferred; or for an entitlement to funds that are refunded by the inter- mediary from the tax pooling account to the group, the date of the refund; or for an entitlement that is transferred by the intermediary from the group to another person, the date of the trans- fer.
(b) (c) Deﬁned in this Act: amount, Commissioner, consolidated imputation group, imputation credit, intermediary, tax account with the Commissioner, tax pool- ing account Compare: 2004 No 35 s ME 11(1)(ab), (2)(ab) Section OP 9(1): substituted (with effect on 1 April 2008), on 7 September 2010 (applying for the 2008–09 and later income years), by section 106(1) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Section OP 9(3): substituted (with effect on 1 April 2008), on 7 September 2010 (applying for the 2008–09 and later income years), by section 106(2) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
(2) (3) 2524 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OP 11 OP 10 Consolidated ICA allocation from company with overpaid provisional tax Credit (1) A consolidated imputation group has an imputation credit for an amount allocated under section RC 32 (Wholly-owned groups of companies) by a company that has overpaid its provisional tax.
(2) (3) Table reference The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 5 (allocation from excess company).

Credit date The credit date is the day the Commissioner is notiﬁed of the allocation.
Deﬁned in this Act: amount, Commissioner, company, consolidated imputation group, imputation credit, notify Compare: 2004 No 35 s ME 11(1)(b), (2)(b) OP 11 Consolidated ICA payment of further income tax Credit (1) A consolidated imputation group has an imputation credit for an amount of further income tax paid under section OB 65 or OB 66 (which relate to further income tax).
(2) (3) Table reference The imputation credit in subsection (1) is referred to in table imputation credits of consolidated imputation groups, O19: row 6 (payment of further income tax).

Credit date The credit date is the day the further income tax is paid.
Deﬁned in this Act: amount, consolidated imputation group, further income tax, imputation credit, pay Compare: 2004 No 35 s ME 11(1)(c), (2)(a) 2525 Part O s OP 11B Income Tax Act 2007 Reprinted as at 2 September 2013 OP 11B Consolidated ICA expenditure on research and development Credit (1) A consolidated imputation group has an imputation credit for an amount of a tax credit that a group company has under sec- tion LH 2 (Tax credits relating to expenditure on research and development).
(2) (3) Table reference The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated groups, row 6B (tax credit for research and development expenditure).

Credit date The credit date is the day the return of income relating to the amount, is ﬁled.
Deﬁned in this Act: amount, Commissioner, company, consolidated imputation group, imputation credit, return of income, tax credit Compare: 2004 No 35 s ME 11(1)(ib), (2)(db) Section OP 11B: inserted, on 1 April 2008, by section 515 of the Taxation (Busi- ness Taxation and Remedial Matters) Act 2007 (2007 No 109).
OP 12 Consolidated ICA dividend derived with imputation credit Credit (1) A consolidated imputation group has an imputation credit for the amount of an imputation credit attached to a dividend de- rived by a group company.

Table reference The imputation credit in subsection (1) is referred to in table imputation credits of consolidated imputation groups, O19: row 7 (dividend derived with imputation credit).

Credit date The credit date is the day the dividend is paid.
Deﬁned in this Act: amount, company, consolidated imputation group, divi- dend, imputation credit, pay Compare: 2004 No 35 s ME 11(1)(d), (2)(c) (2) (3) 2526 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OP 15 OP 13 Consolidated ICA dividend derived with FDP credit Credit (1) A consolidated imputation group has an imputation credit for the amount of an FDP credit attached to a dividend derived by a group company that— (a) is part of a consolidated group without an FDP account; or does not have an FDP account and is not part of a con- solidated group.
(b) (2) (3) Table reference The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 8 (dividend derived with FDP credit).

Credit date The credit date is the day the dividend is paid.
Deﬁned in this Act: amount, company, consolidated group, consolidated im- putation group, dividend, FDP account, FDP credit, imputation credit, pay Compare: 2004 No 35 s ME 11(1)(e), (2)(c) OP 14 Consolidated ICA payment of FDP [Repealed] Section OP 14: repealed (with effect on 30 June 2009), on 6 October 2009, by section 448(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OP 15 Consolidated ICA replacement payment to company under share-lending arrangement Credit (1) A consolidated imputation group has an imputation credit for the amount of an imputation credit attached under section OB 64 (Replacement payments) or treated as attached under section RE 25 (When amount of tax treated as imputation credit) to a replacement payment paid under a share-lending arrangement to a company that is part of the consolidated imputation group at the date of payment.
(2) Table reference The imputation credit in subsection (1) is referred to in table imputation credits of consolidated imputation groups, O19: 2527 Part O s OP 16 Income Tax Act 2007 Reprinted as at 2 September 2013 row 10 (replacement payment under share-lending arrange- ment).

(3) Credit date The credit date is the day the replacement payment is paid.
Deﬁned in this Act: amount, company, consolidated imputation group, imput- ation credit, pay, replacement payment, share-lending arrangement Compare: 2004 No 35 s ME 11(1)(eb), (ec), (2)(cb) OP 16 Consolidated ICA credit transfer to company Credit (1) A consolidated imputation group has an imputation credit for the amount of an imputation credit shown in a credit transfer notice given to a company that is part of the consolidated im- putation group when the notice is given.
(2) (3) Table reference The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 11 (credit transfer).

Credit date The credit date is the day the notice is given.
Deﬁned in this Act: amount, company, consolidated imputation group, credit transfer notice, imputation credit Compare: 2004 No 35 s ME 11(1)(ed), (2)(cc) OP 17 Consolidated ICA resident withholding tax withheld Credit (1) A consolidated imputation group has an imputation credit for resident withholding tax (RWT) that is treated under section RA 9(1)(b) (Treatment of amounts withheld as received) as derived by a group company other than as policyholder base income.
(2) Table reference The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 12 (RWT withheld).

2528 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OP 19 (3) Credit date The credit date is the day the interest or dividend relating to the resident passive income is paid.
Deﬁned in this Act: company, consolidated imputation group, dividend, imput- ation credit, interest, pay, policyholder base income, resident passive income, RWT Compare: 2004 No 35 s ME 11(1)(j), (2)(c) Section OP 17(1): amended, on 1 July 2010, by section 449(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OP 17 list of deﬁned terms policyholder base income: inserted, on 1 July 2010, by section 449(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

OP 18 Consolidated ICA transfer from group company’s FDP account Credit (1) A consolidated imputation group has an imputation credit for an amount equal to the amount of an FDP debit under sec- tion OC 18 (FDPA transfer to imputation credit account) trans- ferred from the FDP account of a group company.
(2) (3) Table references The imputation credit in subsection (1) is referred to in table imputation credits of consolidated imputation groups, O19: row 13 (transfer from group company’s FDP account).

The FDP debit in subsection (1) is referred to in table O4: FDP debits, row 7 (transfer to imputation credit account).

Credit date The credit date is the same as the debit date for the transfer.
Deﬁned in this Act: amount, company, consolidated imputation group, FDP account, FDP debit, imputation credit Compare: 2004 No 35 s ME 11(1)(fb), (2)(fb) OP 19 Consolidated ICA transfer from group’s FDP account Credit (1) A consolidated imputation group has an imputation credit for an amount equal to the amount transferred under section FM 30(3) and (4) (Application of certain provisions to con- solidated groups) from the FDP account of a consolidated group.
2529 Part O s OP 20 Income Tax Act 2007 Reprinted as at 2 September 2013 (2) (3) Table reference The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 14 (transfer from consolidated group’s FDP account).

Credit date The credit date is the same as the debit date for the transfer.
Deﬁned in this Act: amount, consolidated group, consolidated imputation group, FDP account, imputation credit Compare: 2004 No 35 s ME 11(1)(g), (2)(d) OP 20 Consolidated ICA transfer from group company’s policyholder credit account [Repealed] Section OP 20: repealed, on 1 July 2010, by section 450(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OP 21 Consolidated ICA transfer from group’s policyholder credit account [Repealed] Section OP 21: repealed, on 1 July 2010, by section 451(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OP 22 Consolidated ICA group company’s credit Credit (1) A consolidated imputation group has an imputation credit for the amount of a credit that arises when— (a) an imputation credit described in a row of table O1: im- putation credits, arises in the imputation credit account of a group company; and an imputation debit described in a row of table O20: imputation debits of consolidated imputation groups, arises in the imputation credit account of the group; and the debit is not offset by a credit arising in the group account before or on the same date on which the credit arose in the group company’s account.
(b) (c) 2530 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OP 23 (2) (3) (4) Table reference The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 17 (group company’s credit).
(b) (c) Offsetting debits For the purposes of subsection (1)(c), to determine whether a debit has been offset by a credit in the group account,— (a) credits are treated as reducing debits in the order in which the credits arise; and a credit, whether some or all, is counted only once in determining whether a debit has been offset; and credits in the accounts of more than 1 group company become a credit to the group account— (i) (ii) in the order of their credit date; and as chosen by the group, if credits arise on the same credit date; and on a pro rata basis, if no election is made under subparagraph (ii).
(iii) Credit date The credit date is the same as the debit date for the debit to the group account.

Deﬁned in this Act: amount, company, consolidated imputation group, imput- ation credit, imputation credit account, imputation debit Compare: 2004 No 35 s ME 13(2), (3) Section OP 22(2): amended (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 140(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
OP 23 Consolidated ICA elimination of double debit (1) (2) When this section applies This section applies when an imputation debit in a consoli- dated imputation group’s imputation credit account under sec- tion OP 42 has the effect of cancelling an imputation credit under section OP 8. Credit The consolidated imputation group has an imputation credit for an amount that equals the amount of the debit referred to in subsection (1), and either— 2531 Part O s OP 24 Income Tax Act 2007 Reprinted as at 2 September 2013 (a) (b) another debit arises under section OP 32 for a refund or transfer of the deposit on a debit date that is after the debit date for the debit for loss of shareholder continu- ity; or the deposit is taken into account under sections RP 19 and RP 20 (which relate to transfers from tax pooling accounts) in determining the balance of the company’s tax account with the Commissioner after the debit date for the debit for loss of shareholder continuity.
(3) (4) Table references The table references are as follows: (a) the imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imput- ation groups, row 16 (debit for loss of shareholder con- tinuity): the imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imput- ation groups, row 3 (deposit in tax pooling account): the imputation credit in subsection (2) is referred to in table O19: imputation credits of consolidated imput- ation groups, row 18 (elimination of double debit): the imputation debit in subsection (2)(a) is referred to in table O20: imputation debits of consolidated imput- ation groups, row 6 (refund from tax pooling account).
(b) (c) (d) Credit date The credit date is the day— (a) (b) the deposit is refunded; or a credit arises in the company’s tax account with the Commissioner.
Deﬁned in this Act: amount, Commissioner, company, consolidated imputation group, deposit, imputation credit, imputation credit account, imputation debit, shareholder, tax account with the Commissioner Compare: 2004 No 35 s ME 11(1A), (2A) OP 24 Consolidated ICA reversal of tax advantage arrangement When this section applies This section applies when it is established that an imputation credit in a consolidated imputation group’s imputation credit (1) 2532 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OP 25 (2) (3) (4) account was incorrectly determined to be the subject of an ar- rangement to obtain a tax advantage.
Credit The consolidated imputation group has an imputation credit for an amount equal to the amount of a debit in the group’s account under section OP 46.

Table references The imputation credit in subsection (2) is referred to in table O19: imputation credits of consolidated imputation groups, row 19 (reversal of tax advantage arrangement).

The imput- ation debit in subsection (2) is referred to in table O20: imput- ation debits of consolidated imputation groups, row 20 (tax advantage arrangement).
Credit date The credit date is the same as the debit date for the debit.
Deﬁned in this Act: amount, consolidated imputation group, imputation credit, imputation debit, tax advantage Compare: 2004 No 35 s ME 11(1)(i), (2)(e) OP 25 Consolidated ICA non-resident withholding tax withheld Credit (1) A consolidated imputation group that includes an Australian ICA company has an imputation credit for an amount of non- resident passive income derived by the company from which non-resident withholding tax (NRWT) is withheld.
(2) (3) Table reference The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 20 (NRWT paid).

Credit date The credit date is the day the amount of tax is withheld.
Deﬁned in this Act: amount, Australian ICA company, consolidated imputation group, imputation credit, non-resident passive income, NRWT, pay Compare: 2004 No 35 s ME 11(1B)(a), (2B)(a) 2533 Part O s OP 26 Income Tax Act 2007 Reprinted as at 2 September 2013 OP 26 Consolidated ICA payment of amount of tax for schedular payment Credit (1) A consolidated imputation group that includes an Australian ICA company has an imputation credit for the amount of tax for a schedular payment paid to the company as a non-resident contractor.
(2) (3) Table reference The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 21 (amount of tax for schedular payment).

Credit date The credit date is the day the amount of tax is withheld.
Deﬁned in this Act: amount of tax, Australian ICA company, consolidated im- putation group, imputation credit, non-resident contractor, schedular payment Compare: 2004 No 35 s ME 11(1B)(b), (2B)(b) OP 27 Consolidated ICA payment of schedular income tax Credit (1) A consolidated imputation group that includes an Australian ICA company has an imputation credit for the amount of a payment by the company of schedular income tax for income derived under section CR 3 (Income of non-resident general insurer) or CV 16 (Non-resident shippers).
Table reference The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 22 (payment of schedular income tax).

Credit date The credit date is the day the schedular income tax is paid.
Deﬁned in this Act: amount, Australian ICA company, consolidated imputation group, imputation credit, imputation credit account, income, pay, schedular in- come tax Compare: 2004 No 35 s ME 11(1B)(c), (2B)(c) Section OP 27(1): amended, on 2 November 2012, by section 135 of the Tax- ation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
(2) (3) 2534 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OP 29 Imputation debits of consolidated imputation groups OP 28 Consolidated ICA payment of dividend Debit (1) A consolidated imputation group has an imputation debit for an amount that equals the amount of an imputation credit at- tached to a dividend paid by a group company.
(2) (3) (4) Table reference The imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 2 (payment of dividend).

Debit date The debit date is the day the dividend is paid.

Arrangement for dividend from another country Section GB 38 (When sections GB 35 to GB 37 apply to con- solidated groups) may apply to treat an amount as a debit under this section.
Deﬁned in this Act: amount, company, consolidated imputation group, divi- dend, imputation credit, imputation debit, pay Compare: 2004 No 35 s ME 12(1)(a), (2)(a) OP 29 Consolidated ICA allocation of provisional tax Debit (1) A consolidated imputation group has an imputation debit for an amount of provisional tax allocated by the group under sec- tion RC 32 (Wholly-owned groups of companies) to an under- paid company.
(2) (3) Table reference The imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 3 (allocation of provisional tax).

Debit date The debit date is the day the Commissioner is notiﬁed of the allocation.
Deﬁned in this Act: amount, Commissioner, company, consolidated imputation group, imputation debit, notify, provisional tax Compare: 2004 No 35 s ME 12(1)(c), (2)(c) 2535 Part O s OP 30 Income Tax Act 2007 Reprinted as at 2 September 2013 OP 30 Consolidated ICA refund of income tax Debit (1) A consolidated imputation group has an imputation debit for the amount of a refund of income tax or provisional tax paid to the group.

Subsection (2) overrides this subsection.


No debit The debit in subsection (1) does not include— (a) a refund of income tax paid by a life insurer to satisfy its schedular income tax liability for schedular policy- holder base income; or a refund of income tax paid before a debit arises under section OP 42 to the extent to which the amount of the refund is less than the amount of the debit.
(b) Table references The imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 4 (refund of income tax).

The imputation debit in sub- section (2)(b) is referred to in table O20: imputation debits of consolidated imputation groups, row 16 (debit for loss of shareholder continuity).

Debit date The debit date is the day the refund is made.
Relationship with section OP 35 This section does not apply to an amount that gives rise to a debit under section OP 35.
Deﬁned in this Act: amount, consolidated imputation group, imputation debit, income tax, life insurer, pay, provisional tax, schedular income tax liability, schedular policyholder base income Compare: 2004 No 35 s ME 12(1)(d), (2)(d) Section OP 30(2) heading: substituted, on 1 July 2010, by section 452(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OP 30(2): substituted, on 1 July 2010, by section 452(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OP 30(3): amended, on 1 July 2010, by section 452(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
(2) (3) (4) (5) 2536 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OP 31 Section OP 30(5) heading: added (with effect on 1 April 2008), on 6 October 2009, by section 452(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OP 30(5): added (with effect on 1 April 2008), on 6 October 2009, by section 452(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OP 30 list of deﬁned terms life insurer: inserted, on 1 July 2010, by section 452(4) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).

Section OP 30 list of deﬁned terms schedular income tax liability: added, on 1 July 2010, by section 452(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OP 30 list of deﬁned terms schedular policyholder base income: added, on 1 July 2010, by section 452(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

OP 31 Consolidated ICA amount applied to pay other taxes Debit (1) A consolidated imputation group has an imputation debit for an amount of overpaid income tax that is applied to pay an amount due under the Inland Revenue Acts.

Subsection (2) overrides this subsection.


(2) (3) No debit The debit referred to in subsection (1) does not include over- paid income tax to the extent to which it is— (a) (b) applied to satisfy an income tax liability; or for an amount paid before an imputation debit arises under section OP 42, no more than the debit for loss of shareholder continuity.
Table references The imputation debit in subsection (1) is referred to in table imputation debits of consolidated imputation groups, O20: row 5 (amount applied to pay other taxes).

The imputation debit in subsection (2) is referred to in table O20: imputation debits of consolidated imputation groups, row 16 (debit for loss of shareholder continuity).

Debit date The debit date is the day the amount is applied.
(4) 2537 Part O s OP 32 Income Tax Act 2007 Reprinted as at 2 September 2013 (5) Relationship with section OP 35 This section does not apply to an amount that gives rise to a debit under section OP 35.
Deﬁned in this Act: amount, company, consolidated imputation group, imput- ation debit, income tax, income tax liability, Inland Revenue Acts, pay, share- holder Compare: 2004 No 35 s ME 12(1)(l), (2)(k) Section OP 31(5) heading: added (with effect on 1 April 2008), on 6 October 2009, by section 453(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OP 31(5): added (with effect on 1 April 2008), on 6 October 2009, by section 453(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OP 32 Consolidated ICA refund from tax pooling account When this section applies This section applies for a consolidated imputation group when— (a) the group has an entitlement to an amount in a tax pool- ing account and has an imputation credit for the entitle- ment under sections OP 8 and OP 9; and the intermediary refunds the amount from the tax pool- ing account to the group.

(b) Debit The consolidated imputation group has an imputation debit for the tax year for the amount of the refund.
Table references The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 3 (deposit in tax pooling account) or row 4 (transfer from tax pooling account).

The imputation debit in subsection (2) is referred to in table O20: imputation debits of consolidated imputation groups, row 6 (refund from tax pooling account).
Debit date The debit date for the debit is— (a) the last day of the previous tax year to the extent of the amount of the debit that is no more than the credit balance in the imputation credit account on that date: (1) (2) (3) (4) 2538 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OP 33 (b) (c) the day the refund is made to the extent of the remain- ing amount of the debit that is no more than the credit balance in the imputation credit account on the day of refund: the last day of the previous tax year for the remainder of the imputation debit.
Deﬁned in this Act: amount, consolidated imputation group, deposit, imput- ation credit, imputation credit account, imputation debit, intermediary, pay, tax pooling account, tax year Compare: 2004 No 35 s ME 12(1)(da), (2)(da) Section OP 32(1): substituted (with effect on 1 April 2008), on 7 September 2010 (applying for the 2008–09 and later income years), by section 107(1) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
OP 33 Consolidated ICA transfer within tax pooling account (1) (2) (3) (4) When this section applies This section applies for a consolidated imputation group when— (a) the group has an entitlement to an amount in a tax pool- ing account and has an imputation credit for the entitle- ment under sections OP 8 and OP 9; and the intermediary transfers the entitlement from the group to another person.

(b) Debit The consolidated imputation group has an imputation debit for the amount of the transfer.
Table reference The imputation debit in subsection (2) is referred to in table O20: imputation debits of consolidated imputation groups, row 7 (transfer to tax pooling account).
Debit date The debit date for the debit is— (a) the last day of the previous tax year to the extent of the amount of the debit that is no more than the credit balance in the imputation credit account on that date: the day the transfer is made to the extent of the remain- ing amount of the debit that is no more than the credit (b) 2539 Part O s OP 33B Income Tax Act 2007 Reprinted as at 2 September 2013 balance in the imputation credit account on the day of transfer: the last day of the previous tax year for the remainder of the imputation debit.
(c) Deﬁned in this Act: amount, consolidated imputation group, imputation credit, imputation credit account, imputation debit, tax pooling account, tax year Compare: 2004 No 35 s ME 12(1)(db), (2)(da) Section OP 33 heading: substituted (with effect on 1 April 2008), on 7 Septem- ber 2010, by section 108(1) of the Taxation (Annual Rates, Trans-Tasman Sav- ings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Section OP 33(1): substituted (with effect on 1 April 2008), on 7 September 2010 (applying for the 2008–09 and later income years), by section 108(2) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Section OP 33(4)(b): amended (with effect on 1 April 2008), on 7 September 2010 (applying for the 2008–09 and later income years), by section 108(3) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
OP 33B Consolidated ICA debit for transfer from tax pooling account for policyholder base liability Debit (1) A consolidated imputation group has an imputation debit for the amount transferred from a tax pooling account to their tax account with the Commissioner, to the extent to which the amount satisﬁes its schedular income tax liability for schedu- lar policyholder base income or its income tax liability for a life fund PIE that is a multi-rate PIE.
Table reference The imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 7B (debit for transfer from tax pooling account for pol- icyholder base liability).

Debit date The debit date is the last day of the tax year.
Deﬁned in this Act: ICA company, imputation credit, imputation debit, life insurer, schedular income tax liability, schedular policyholder base income, tax year Section OP 33B: inserted, on 1 July 2010, by section 454(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
(2) (3) 2540 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OP 35 OP 34 Consolidated ICA refund of FDP Debit (1) A consolidated imputation group has an imputation debit for the amount of a refund of FDP that relates to a dividend derived by a group company at a time when— (a) the group company is part of a consolidated group with- out an FDP account; or the group company does not have an FDP account and is not part of a consolidated group.
(b) (2) (3) Table reference The imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 8 (refund of FDP).

Debit date The debit date is the day the refund is made.
Deﬁned in this Act: amount, company, consolidated group, consolidated im- putation group, dividend, FDP, FDP account, imputation debit Compare: 2004 No 35 s ME 12(1)(f), (2)(d) OP 35 Consolidated ICA refund of tax credit Debit (a) (1) A consolidated imputation group has an imputation debit for— the amount of a transfer under section LA 6(2)(d) (Re- maining refundable credits: PAYE, RWT, and certain other items) to the extent to which the transfer does not lead to a refund of income tax: the amount of a refund under section LA 6(2)(e): an amount used under section LH 2(6) (Tax credits re- lating to expenditure on research and development) to pay an amount payable under an Inland Revenue Act to the extent to which the use does not lead to a refund of income tax.
(b) (c) Exclusion (1B) Despite subsection (1), a consolidated imputation group does not have an imputation debit to the extent to which— (a) the amount transferred, refunded, or used is a tax credit for a payment of FDP relating to a dividend derived by a group company; and 2541 Part O s OP 35 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) the dividend was derived when the company— (i) had an FDP account and was not part of a con- solidated group; or (ii) was part of a consolidated group with an FDP account.
Table reference The imputation debit in subsection (1) is referred to in table imputation debits of consolidated imputation groups, O20: row 9 (refund of tax credit).

Debit date The debit date is— (a) for a debit referred to in subsection (1)(a), the day the amount is transferred: for a debit referred to in subsection (1)(b), the day the amount is refunded: for a debit referred to in subsection (1)(c), the day the amount is applied.
(b) (c) Deﬁned in this Act: amount, company, consolidated group, consolidated im- putation group, dividend, FDP, FDP account, imputation debit, pay, tax credit Compare: 2004 No 35 s ME 12(1)(f), (2)(d) Section OP 35(1): substituted (with effect on 1 April 2008), on 6 October 2009, by section 455(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OP 35(1B) heading: inserted (with effect on 1 April 2008), on 6 October 2009, by section 455(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OP 35(1B): inserted (with effect on 1 April 2008), on 6 October 2009, by section 455(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OP 35(3): substituted (with effect on 1 April 2008), on 6 October 2009, by section 455(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OP 35 list of deﬁned terms FDP: inserted (with effect on 1 April 2008), on 6 October 2009, by section 455(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OP 35 list of deﬁned terms pay: added (with effect on 1 April 2008), on 6 October 2009, by section 455(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OP 35 list of deﬁned terms tax credit: added (with effect on 1 April 2008), on 6 October 2009, by section 455(3) of the Taxation (International Tax- ation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
(2) (3) 2542 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OP 37 OP 36 Consolidated ICA overpayment of FDP Debit (1) A consolidated imputation group has an imputation debit for the amount of an overpayment of FDP relating to a dividend derived by a group company in the following circumstances: the dividend is derived by the company at a time when— (a) the company is part of a consolidated group with- (i) out an FDP account; or the company does not have an FDP account and is not part of a consolidated group; and (ii) (b) (c) the overpayment is applied to pay an amount due under the Inland Revenue Acts other than a liability for in- come tax or FDP; and the group does not have an FDP account when the amount is applied.
Table reference The imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 10 (overpayment of FDP).

Debit date The debit date is the day the amount is applied.
Deﬁned in this Act: amount, company, consolidated group, consolidated imput- ation group, dividend, FDP, FDP account, imputation debit, income tax, Inland Revenue Acts, pay Compare: 2004 No 35 s ME 12(1)(m), (2)(k) (2) (3) OP 37 Consolidated ICA group company’s debit Debit (1) A consolidated imputation group has an imputation debit for an amount to the extent to which the amount would, in the absence of subsection (3), give rise to— (a) an imputation debit described in a row of table O2: im- putation debits, in the imputation credit account of a group company; and an imputation debit that would create or increase a debit balance in the group company’s imputation credit ac- count.
(b) 2543 Part O s OP 38 Income Tax Act 2007 Reprinted as at 2 September 2013 (2) (3) (4) Table reference The imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 11 (group company’s debit).

No debit for group company The amount referred to in subsection (1) does not give rise to an imputation debit in the group company’s account although otherwise eligible to be one.
Debit date The debit date is the day that the amount would have been debited to the imputation credit account of the group company in the absence of subsection (3).
Deﬁned in this Act: amount, company, consolidated imputation group, imput- ation credit account, imputation debit Compare: 2004 No 35 s ME 12(1)(k), (2)(j) OP 38 Consolidated ICA transfer for net foreign attributed income [Repealed] Section OP 38: repealed (with effect on 30 June 2009), on 6 October 2009, by section 456(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OP 39 Consolidated ICA replacement payment by company under share-lending arrangement Debit (1) A consolidated imputation group has an imputation debit for the amount of an imputation credit attached under section OB 64 (Replacement payments) to a replacement payment paid under a share-lending arrangement by a company that is part of the consolidated imputation group at the time of payment.
Table reference The imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 13 (replacement payment under share-lending arrange- ment).

(2) 2544 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OP 41 (3) Debit date The debit date is the day the replacement payment is paid.
Deﬁned in this Act: amount, company, consolidated imputation group, im- putation credit, imputation debit, pay, replacement payment, share-lending ar- rangement Compare: 2004 No 35 s ME 12(1)(ab), (2)(ab) OP 40 Consolidated ICA returning share transfer Debit (1) A consolidated imputation group has an imputation debit for the amount of an imputation credit attached to a dividend paid to a company if— (a) at the time of payment, the company is part of the con- solidated imputation group; and the dividend is paid to the company as a share user, or a person associated with a share user, in a returning share transfer that is not a share-lending arrangement.
(b) (2) (3) Table reference The imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 14 (returning share transfer).

Debit date The debit date is the day the dividend is paid.
Deﬁned in this Act: amount, associated person, company, consolidated imput- ation group, dividend, imputation credit, imputation debit, pay, returning share transfer, share-lending arrangement, share user Compare: 2004 No 35 s ME 12(1)(ac), (2)(ac) OP 41 Consolidated ICA credit transfer by company Debit (1) A consolidated imputation group has an imputation debit for the amount of an imputation credit attached to a dividend paid to a company if— (a) at the time of payment, the company is a part of the consolidated imputation group; and the amount is shown in a credit transfer notice given by the company.
(b) 2545 Part O s OP 42 Income Tax Act 2007 Reprinted as at 2 September 2013 (2) (3) Table reference The imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 15 (credit transfer).

Debit date The debit date is the day the dividend is paid.
Deﬁned in this Act: amount, company, consolidated imputation group, credit transfer notice, dividend, imputation credit, imputation debit, pay Compare: 2004 No 35 s ME 12(1)(ad), (2)(ac) OP 42 Consolidated ICA debit for loss of shareholder continuity Debit (1) A consolidated imputation group has an imputation debit for the amount of an imputation credit retained in the group’s im- putation credit account and unused at the time at which share- holder continuity is lost.
(2) (3) Table reference The imputation debit in subsection (1) is referred to in table imputation debits of consolidated imputation groups, O20: row 16 (debit for loss of shareholder continuity).

When debit arises The debit arises at the time shareholder continuity is lost.
Deﬁned in this Act: amount, consolidated imputation group, imputation credit, imputation credit account, imputation debit, shareholder Compare: 2004 No 35 ss ME 12(1)(h), (2)(g), ME 13(2) Section OP 42(1): amended (with effect on 1 April 2008), on 7 December 2009, by section 95(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section OP 42(3) heading: substituted (with effect on 1 April 2008), on 7 De- cember 2009, by section 95(2) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section OP 42(3): substituted (with effect on 1 April 2008), on 7 December 2009, by section 95(2) of the Taxation (Consequential Rate Alignment and Re- medial Matters) Act 2009 (2009 No 63).
OP 43 Consolidated ICA breach of imputation ratio Debit (1) A consolidated imputation group has an imputation debit for a tax year for the amount of a debit under section OB 43 (ICA 2546 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OP 44 breach of imputation ratio) that would arise in the imputation credit account of a group company in the absence of section OP 5(3).
Table references The group’s imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 17 (breach of imputation ratio).

The group com- pany’s imputation debit in subsection (1) is referred to in table O2: imputation debits, row 16 (breach of imputation ratio).

Debit date The debit date is the last day of the tax year.
Deﬁned in this Act: amount, company, consolidated imputation group, imput- ation credit account, imputation debit, tax year Compare: 2004 No 35 s ME 12(1)(e), (2)(e) (2) (3) OP 44 Consolidated ICA debit for policyholder base imputation credits Debit (1) A consolidated imputation group has an imputation debit for the amount of an imputation credit attached to a dividend de- rived by a group company, to the extent to which it is derived by a group company that is a life insurer and apportioned to that life insurer’s policyholder base.
(2) (3) Table reference The imputation debit in subsection (1) is referred to in table imputation debits of consolidated imputation groups, O20: row 18 (debit for policyholder base imputation credits).

Debit date The debit date is the last day of the tax year.
Deﬁned in this Act: consolidated imputation group, imputation credit, imput- ation debit, life insurer, policyholder base, tax year Section OP 44: substituted, on 1 July 2010, by section 458(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2547 Part O s OP 45 Income Tax Act 2007 Reprinted as at 2 September 2013 OP 45 Consolidated ICA redemption debit Debit (1) A consolidated imputation group has an imputation debit for the amount of a redemption debit.
When redemption debit arises (2) A redemption debit arises when— (a) (b) (c) (d) a group company that is not an Australian ICA company is— (i) (ii) the manager of a unit trust; or the trustee or manager of a group investment fund; and the group company derives a dividend from the redemp- tion or cancellation of— (i) (ii) a unit issued by the unit trust; or an interest of an investor in the group investment fund; and the company has acquired the unit or interest in the or- dinary course of its management activities for the unit trust or group investment fund; and the unit or interest had been acquired by the company on the same terms as those offered to the investors in the unit trust or group investment fund.
Calculating amount The debit is for the greater of the amounts described in sub- sections (4) and (6) calculated for the income year referred to in subsection (8) in which the group company derives the divi- dend referred to in subsection (2)(b).

First amount The ﬁrst amount is calculated using the formula— credits attached – imputation debits.
Deﬁnition of items in formula In the formula in subsection (4),— (a) credits attached is the total amount of all imputation credits and FDP credits attached to dividends derived by the group company in the income year in the circum- stances set out in subsection (2): (3) (4) (5) 2548 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OP 45 (b) imputation debits is the amount of imputation debits in the income year under section OP 42 in the group’s imputation credit account.
Second amount The second amount is calculated using the formula— (6) total dividends taxable income × (tax liability continuity debits).
(7) (8) Deﬁnition of items in formula In the formula in subsection (6),— (a) total dividends is the total amount of all dividends de- rived in the circumstances set out in subsection (2), in- cluding imputation credits and FDP credits attached to the dividends: taxable income is the taxable income of the group com- pany for the tax year corresponding to the income year in which the dividends are derived: tax liability is the group company’s income tax liability for the tax year corresponding to the income year in which the dividends are derived: continuity debits is the amount of imputation credits attached to the dividends that have been cancelled by an imputation debit under section OP 42.
Table references The table references are as follows: (a) the imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imput- ation groups, row 19 (redemption debit): the imputation debit in subsection (5)(b) is referred to in table O20: imputation debits of consolidated imput- ation groups, row 16 (debit for loss of shareholder con- tinuity): the imputation debit in subsection (7)(d) is referred to in table O20: imputation debits of consolidated imput- ation groups, row 16 (debit for loss of shareholder con- tinuity).
(b) (c) (d) (b) (c) 2549 Part O s OP 46 Income Tax Act 2007 Reprinted as at 2 September 2013 (9) Debit date The debit date is the day the company or the group’s nomin- ated company ﬁles the return of income for the tax year corres- ponding to the income year in which the dividend is derived.
Deﬁned in this Act: amount, Australian ICA company, company, consolidated imputation group, dividend, FDP credit, group investment fund, imputation credit, imputation credit account, imputation debit, income tax liability, income year, investor, nominated company, return of income, tax year, taxable income, trustee, unit trust Compare: 2004 No 35 s ME 41 OP 46 Consolidated ICA tax advantage arrangement Debit (1) A consolidated imputation group has an imputation debit for the amount of a debit for a tax advantage arrangement deter- mined under sections GB 35 and GB 36 (which relate to im- putation arrangements to obtain a tax advantage).
(2) (3) Table reference The imputation debit in subsection (1) is referred to in table imputation debits of consolidated imputation groups, O20: row 20 (tax advantage arrangement).

Debit date The debit date is the last day of the tax year in which the ar- rangement began.
Deﬁned in this Act: amount, arrangement, consolidated imputation group, im- putation debit, tax advantage, tax year Compare: 2004 No 35 s ME 12(1)(i), (2)(h) OP 47 Consolidated ICA ﬁnal balance Debit (1) A consolidated imputation group has an imputation debit for a credit balance in the imputation credit account when the group stops being a consolidated imputation group.
Table reference The imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 21 (ﬁnal balance).

(2) 2550 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OP 49 (3) Debit date The debit date is the day before the group stops being a con- solidated imputation group.
Deﬁned in this Act: consolidated imputation group, imputation credit account, imputation debit Compare: 2004 No 35 s ME 12(1)(j), (2)(h) OP 48 Consolidated ICA refund of NRWT Debit (1) A consolidated imputation group that includes an Australian ICA company has an imputation debit for the amount of a re- fund of NRWT that gave rise to an imputation credit under section OP 25.
(2) (3) Table references The imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 22 (refund of NRWT).

The imputation credit in subsec- tion (1) is referred to in table O19: imputation credits of con- solidated imputation groups, row 20 (NRWT withheld).

Debit date The debit date is the day the refund is made.
Deﬁned in this Act: amount, Australian ICA company, consolidated imputation group, imputation credit, imputation debit, NRWT Compare: 2004 No 35 s ME 12(1A)(a), (2A) OP 49 Consolidated ICA refund of amount of tax for schedular payment Debit (1) A consolidated imputation group that includes an Australian ICA company has an imputation debit for the amount of a re- fund of an amount of tax for a schedular payment that gave rise to an imputation credit under section OP 26.
(2) Table references The imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 23 (refund of amount of tax for schedular payment).

The imputation credit in subsection (1) is referred to in table O19: 2551 Part O s OP 50 Income Tax Act 2007 Reprinted as at 2 September 2013 imputation credits of consolidated imputation groups, row 21 (amount of tax for schedular payment).

(3) Debit date The debit date is the day the refund is made.
Deﬁned in this Act: amount, amount of tax, Australian ICA company, consoli- dated imputation group, imputation credit, imputation debit, schedular payment Compare: 2004 No 35 s ME 12(1A)(b), (2A) OP 50 Consolidated ICA refund of schedular income tax Debit (1) A consolidated imputation group that includes an Australian ICA company has an imputation debit for the amount of a re- fund of a payment of schedular income tax that gave rise to an imputation credit under section OP 27.
(2) (3) Table references The imputation debit in subsection (1) is referred to in table O20: imputation debits of consolidated imputation groups, row 24 (refund of schedular income tax).

The imputation credit in subsection (1) is referred to in table O19: imputation credits of consolidated imputation groups, row 22 (payment of schedular income tax).

Debit date The debit date is the day the refund is made.
Deﬁned in this Act: amount, Australian ICA company, consolidated imputation group, imputation credit, imputation debit, income tax, pay, schedular income tax Compare: 2004 No 35 s ME 12(1A)(c), (2A) 2552 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OP 50 Table O19: imputation credits of consolidated imputation groups Row Imputation credit Credit date Opening credit balance 1 April or when group starts Further deﬁned section OA 7 Income tax paid for group tax liability Group funds paid into tax pooling account Transfer from tax pooling account Allocation from excess company day of payment section OP 7 day of payment section OP 8 day of credit or refund day of notice of allocation section OP 9 section OP 10 Further income tax paid day of payment section OP 11 6B Tax credit for research and development expenditure day return ﬁled section OP 11B.
Imputation credit attached to dividend derived day on which dividend is paid section OP 12 FDP credit attached to dividend derived day on which dividend is paid section OP 13 [Repealed] Replacement payment paid under share-lending arrangement day of payment section OP 15 Imputation credit attached to dividend and shown in credit transfer notice RWT withheld day on which notice is given section OP 16 day on which interest is paid section OP 17 Transfer from group company’s FDP account debit day for transfer Transfer from consolidated group’s FDP account debit date for transfer section OP 18 section OP 19 [Repealed] [Repealed] Group company’s credit set out in section OP 22 section OP 22 2553 Part O s OP 50 Income Tax Act 2007 Row Imputation credit Credit date Reprinted as at 2 September 2013 Further deﬁned Debit for loss of shareholder continuity that cancels credit for tax pooling account deposit that is refunded day of refund section OP 23 Reversal of debit for tax advantage arrangement debit date for debit NRWT on non-resident withholding income derived by group company that is Australian ICA company day on which amount is withheld Amount of tax for schedular payment to group company that is also Australian ICA company day on which amount is withheld section OP 24 section OP 25 section OP 26 Schedular income tax paid by group company that is Australian ICA company day of payment section OP 27 Table O19 row 6B: inserted, on 1 April 2008, by section 516 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Table O19 row 9: repealed (with effect on 30 June 2009), on 6 October 2009, by section 459(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Table O19 row 15: repealed, on 1 July 2010, by section 459(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Table O19 row 16: repealed, on 1 July 2010, by section 459(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2554 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OP 50 Table O20: imputation debits of consolidated imputation groups Row Imputation debit Debit date Opening debit balance 1 April or when group starts Further deﬁned section OA 7 7B Imputation credit attached to dividend paid by group company day of payment section OP 28 Provisional tax allocated by group to underpaid company day of notice of allocation section OP 29 Refund of income tax or provisional tax to group Income tax overpaid that is applied to satisfy amount of tax, other than income tax, due by group company Refund from tax pooling account day of refund section OP 30 day of application section OP 31 set out in section OP 32 section OP 32 Transfer to another taxpayer of funds in tax pooling account set out in section OP 33 section OP 33 Debit for transfer from tax pooling account for policyholder base liability Refund of FDP when no FDP account 31 March section OP 33B day of refund section OP 34 Transfer, refund, or use of tax credit day of transfer, refund, or use section OP 35 Overpaid FDP applied, when group does not have FDP account, to satisfy amount due that is not income tax or FDP day of application section OP 36 Debit that would increase debit balance for group company set out in section OP 37 section OP 37 [Repealed] Credit attached to replacement payment under share-lending arrangement Credit attached to dividend shown in returning share transfer Credit attached to dividend and shown in credit transfer notice day of payment section OP 39 day of payment section OP 40 day of payment section OP 41 2555 Part O s OP 50 Income Tax Act 2007 Row Imputation debit Debit date Reprinted as at 2 September 2013 Further deﬁned section OP 42 Debit for loss of shareholder continuity time of loss of continuity Debit for breach of imputation ratio Debit for policyholder base imputation credits Redemption debit for unit trust or group investment fund for income year Debit for tax
 advantage arrangement Credit balance of group’s imputation credit account when group stops being consolidated imputation group Refund of NRWT to group company that is Australian ICA company Refund of amount of tax for schedular payment to group company that is Australian ICA company Refund of schedular income tax to group company that is Australian ICA company 31 March section OP 43 31 March section OP 44 section OP 45 section OP 46 day on which return of income for income year is ﬁled last day of tax year in which arrangement began day of cessation section OP 47 day of refund section OP 48 day of refund section OP 49 day of refund section OP 50 Table O20 row 7B: inserted, on 1 July 2010, by section 460(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Table O20 row 9: substituted (with effect on 1 April 2008), on 6 October 2009, by section 460(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Table O20 row 12: repealed (with effect on 30 June 2009), on 6 October 2009, by section 460(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Table O20 row 16: amended (with effect on 1 April 2008), on 7 December 2009, by section 96 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Table O20 row 18: substituted, on 1 July 2010, by section 460(5) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2556 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OP 52 Consolidated groups and FDP accounts Introductory provisions OP 51 FDP accounts of consolidated FDP groups Consolidated group account (1) A consolidated group is a consolidated FDP group for a tax year if— (a) (b) a group company is a foreign dividend payment account (FDPA) company at a time during the tax year; or the group chooses to maintain an FDP account.
(2) (3) Effect of election If a consolidated FDP group makes an election under subsec- tion (1)(b), it must maintain the FDP account referred to in section OC 2 (FDP accounts) from the date of election.
Notifying Commissioner The nominated company of a consolidated FDP group must notify the Commissioner of an election under subsection (1)(b)— (a) (b) Deﬁned in this Act: Commissioner, company, consolidated FDP group, con- solidated group, FDP account, FDPA company, nominated company, notify, tax year Compare: 2004 No 35 s MG 13(1) no later than 21 days after the day of election; or by a later date if the Commissioner allows.
OP 52 Choosing to stop being consolidated FDP group (1) (2) Election The nominated company of a consolidated FDP group may choose that the group’s status as a consolidated FDP group is to end.

When election made The election referred to in subsection (1) may be made during a tax year that is later than the tax year in which the group chooses under section OP 51 to become a consolidated FDP group.
2557 Part O s OP 53 Income Tax Act 2007 Reprinted as at 2 September 2013 (3) When company’s status ends The election referred to in subsection (1) takes effect from the ﬁrst day of the tax year after the tax year in which the election referred to in subsection (2) is made, but only if,— (a) the group— (i) (ii) ﬁles an annual FDPA return for the year of elec- tion in the time allowed by section 71 of the Tax Administration Act 1994; and pays further FDP, if any, under section OC 30 (Payment of further FDP for closing debit bal- ance) for the year of election; and (b) no group company is an FDPA company in the tax year after the year of election.
Deﬁned in this Act: annual FDPA return, company, consolidated FDP group, FDPA company, further FDP, nominated company, pay, tax year Compare: 2004 No 35 s MG 2(4), (5) OP 53 When group company emigrates When this section applies This section applies when an FDPA company in a consolidated FDP group is an emigrating company.

Status ends The group’s status as a consolidated FDP group ends at the time of emigration of the company.
Further payments and returns The consolidated FDP group must— (a) (b) provide the annual FDPA return required for the group for the tax year in which the company becomes non- resident; and for a debit balance in the consolidated FDP group’s ac- count at the time of emigration, pay further FDP payable for the tax year of an amount equal to the debit balance.
Deﬁned in this Act: amount, annual FDPA return, consolidated FDP group, emigrating company, FDPA company, further FDP, non-resident, pay, tax year, time of emigration Compare: 2004 No 35 s MG 13(6), (7) (1) (2) (3) 2558 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OP 54 OP 54 When credits and debits arise only in consolidated FDP group accounts Credits to group accounts (1) A credit listed in subsection (2) arises only in the FDP account of a consolidated FDP group and not in the FDP account of a group company.
(2) Particular credits The credit referred to in subsection (1) is a credit under section OP 58, described in table O21, row 4.

Debits only in group accounts (3) A debit listed in subsection (4) arises only in the FDP account of a consolidated FDP group and not in the FDP account of a group company.
(4) Particular debits The debit referred to in subsection (3) is a debit under the fol- lowing sections and described in the following rows of table O22: FDP debits of consolidated FDP groups: (a) (b) (c) (d) (e) section OP 64, row 2 (payment of dividend): section OP 66, row 4 (refund of FDP): section OP 68, row 6 (refund of tax credit): section OP 72, row 10 (breach of FDP ratio): section OP 74, row 12 (debit for policyholder base FDP credits).
Deﬁned in this Act: company, consolidated FDP group, FDP account Compare: 2004 No 35 s MG 16(1) Section OP 54(2): substituted (with effect on 30 June 2009), on 6 October 2009, by section 461(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OP 54(4)(d): amended, on 1 July 2010, by section 461(2) of the Tax- ation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OP 54(4)(e): added, on 1 July 2010, by section 461(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2559 Part O s OP 55 Income Tax Act 2007 Reprinted as at 2 September 2013 OP 55 Provisions applying to consolidated FDP groups (1) (2) (3) Single company, tax liabilities The provisions set out in subsection (2) apply, modiﬁed as necessary, to a consolidated FDP group and to the FDP account of the group as if— (a) (b) the group were a single company; and a reference to a section of this Act were to an equivalent provision applicable to a consolidated group; and a reference to a company’s liability for further FDP, late payment penalty, or FDP penalty tax were a reference to a joint and several liability owed by group companies when the tax or penalty becomes payable.
(c) Other provisions The provisions are— (a) sections OC 30 and OC 31 (which relate to further FDP); and sections 103, 104, 139B, 140C, 140D, and 181 of the Tax Administration Act 1994.

(b) Consolidation provisions Sections FM 3 and FM 4 (which relate to the liabilities of con- solidated groups and group companies) overrides subsection (1)(c).
Deﬁned in this Act: company, consolidated FDP group, consolidated group, FDP account, FDP penalty tax, further FDP, pay Compare: 2004 No 35 s MG 16A(2) FDP credits of consolidated FDP groups OP 56 Consolidated FDPA payment of FDP [Repealed] Section OP 56: repealed (with effect on 1 April 2009), on 6 October 2009, by section 462(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OP 57 Consolidated FDPA payment of further FDP [Repealed] Section OP 57: repealed (with effect on 1 April 2009), on 6 October 2009, by section 463(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2560 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OP 59 OP 58 Consolidated FDPA dividend derived with FDP credit Credit (1) A consolidated FDP group has an FDP credit for the amount of an FDP credit attached to a dividend derived by a group company.

(2) (3) Table reference The FDP credit in subsection (1) is referred to in table O21: FDP credits of consolidated FDP groups, row 4 (dividend de- rived with FDP credit).

Credit date The credit date is the day the dividend is paid.
Deﬁned in this Act: amount, company, consolidated FDP group, dividend, FDP credit, pay Compare: 2004 No 35 s MG 14(1)(b), (2)(a) OP 59 Consolidated FDPA group company’s credit Credit (1) A consolidated FDP group has an FDP credit for the amount of a credit arising as follows: (a) an FDP credit described in a row of table O3: FDP credits, arises in the FDP account of a group company; and an FDP debit described in a row of table O22: FDP debits of consolidated FDP groups, arises in the group FDP account; and the debit is not offset by a credit arising in the group account before or on the same date on which the credit arose in the group company’s account.
(b) (c) (2) (3) Table reference The FDP credit in subsection (1) is referred to in table O21: FDP credits of consolidated FDP groups, row 5 (group com- pany’s credits).
Offsetting debits For the purposes of subsection (1)(c), to determine whether the debit has been offset by a credit in the group account,— (a) credits are treated as reducing debits in the order in which the credits arise; and 2561 Part O s OP 60 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) (c) a credit, whether some or all, is counted only once in determining whether a debit has been offset; and credits in the accounts of more than 1 group company become a credit to the group account— (i) (ii) in the order of their credit date; and as chosen by the group, if credits arise on the same credit date; and on a pro rata basis, if no election is made under subparagraph (ii).
(iii) (4) Credit date The credit date is immediately before the debit date for the debit to the group account.
Deﬁned in this Act: amount, company, consolidated FDP group, FDP account, FDP credit, FDP debit Compare: 2004 No 35 ss MG 14(1)(e), (2)(c), MG 16(2), (4) OP 60 Consolidated FDPA credit transfer to company Credit (1) A consolidated FDP group has an FDP credit for the amount of an FDP credit shown in a credit transfer notice given to a company that is part of the consolidated FDP group when the notice is given.
(2) (3) Table reference The FDP credit in subsection (1) is referred to in table O21: FDP credits of consolidated imputation groups, row 6 (credit transfer).

Credit date The credit date is the day the notice is given.
Deﬁned in this Act: amount, company, consolidated FDP group, credit transfer notice, FDP credit Compare: 2004 No 35 s MG 14(1)(bb), (2)(ab) OP 61 Consolidated FDPA transfer from group’s CTR account [Repealed] Section OP 61: repealed (with effect on 1 April 2009), on 6 October 2009, by section 464(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2562 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OP 64 OP 62 Consolidated FDPA transfer for net foreign attributed income [Repealed] Section OP 62: repealed (with effect on 1 April 2009), on 6 October 2009, by section 465(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OP 63 Consolidated FDPA reversal of tax advantage arrangement (1) (2) (3) (4) When this section applies This section applies when it is established that an FDP credit in a consolidated FDP group’s FDP account was incorrectly determined to be the subject of an arrangement to obtain a tax advantage.

Credit The consolidated FDP group has an FDP credit for an amount equal to a debit in the group’s FDP account under section OP 76.
Table references The FDP credit in subsection (2) is referred to in table O21: FDP credits of consolidated FDP groups, row 9 (reversal of tax advantage arrangement).

The FDP debit in subsection (2) is referred to in table O22: FDP debits of consolidated FDP groups, row 14 (tax advantage arrangement).

Credit date The credit date is the same as the debit date of the debit.
Deﬁned in this Act: amount, consolidated FDP group, FDP account, FDP credit, tax advantage Compare: 2004 No 35 s MG 14(1)(d), (2)(b) FDP debits of consolidated FDP groups OP 64 Consolidated FDPA payment of dividend Debit (1) A consolidated FDP group has an FDP debit for the amount of an FDP credit attached to a dividend paid by a group company that is part of the group when the dividend is paid.
2563 Part O s OP 65 Income Tax Act 2007 Reprinted as at 2 September 2013 (2) (3) Table reference The FDP debit in subsection (1) is referred to in table O22: FDP debits of consolidated FDP groups, row 2 (payment of dividend).

Debit date The debit date is the day the dividend is paid.
Deﬁned in this Act: amount, company, consolidated FDP group, dividend, FDP account, FDP credit, FDP debit, pay Compare: 2004 No 35 s MG 15(1)(a), (2)(a) OP 65 Consolidated FDPA credit transfer by company Debit (1) A consolidated FDP group has an FDP debit for the amount of an FDP credit attached to a dividend paid to a company if— (a) at the time of payment, the company is a part of the consolidated FDP group; and the amount is shown in a credit transfer notice given by the company.
(b) (2) (3) Table reference The FDP debit in subsection (1) is referred to in table O22: FDP debits of consolidated FDP groups, row 3 (credit transfer notice).

Debit date The debit date is the day the dividend is paid.
Deﬁned in this Act: amount, consolidated FDP group, credit transfer notice, dividend, FDP credit, FDP debit, pay Compare: 2004 No 35 s MG 15(1)(ab), (2)(ab) OP 66 Consolidated FDPA refund of FDP Debit (1) A consolidated FDP group has an FDP debit for a refund of FDP paid to a group company that is part of the group when it derived the dividend giving rise to the payment of FDP and the refund.

Subsection (2) overrides this subsection.


No debit (2) A debit under subsection (1) does not arise if— (a) the payment of FDP giving rise to the refund was made before an FDP debit arises under section OP 73; and 2564 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OP 67 (3) (4) (b) the debit for the refund is no more than the debit for loss of shareholder continuity.
Table references The FDP debit in subsection (1) is referred to in table O22: FDP debits of consolidated FDP groups, row 4 (refund of FDP).

The FDP debit in subsection (2)(a) is referred to in table O22: FDP debits of consolidated FDP groups, row 11 (debit for loss of shareholder continuity).

Debit date The debit date is the day the refund is made.
Deﬁned in this Act: company, consolidated FDP group, dividend, FDP, FDP debit, pay, shareholder Compare: 2004 No 35 s MG 15(1)(d), (2)(d) OP 67 Consolidated FDPA overpayment of FDP Debit (1) A consolidated FDP group has an FDP debit for an overpay- ment of FDP that is— (a) paid by a group company that is part of the group at the time it derived the dividend giving rise to the overpay- ment of FDP; and applied to pay an amount due under the Inland Revenue Acts.
(b) No debit (2) Despite subsection (1), the debit does not include an overpay- ment of FDP to the extent to which it is— (a) (b) applied to satisfy a liability for FDP; or for a payment of FDP before an FDP debit arises under section OP 73, no more than the debit for loss of share- holder continuity.

Table references The FDP debit in subsection (1) is referred to in table O22: FDP debits of consolidated FDP groups, row 5 (overpayment of FDP).
The FDP debit in subsection (2)(b) is referred to in table O22: FDP debits of consolidated FDP groups, row 11 (debit for loss of shareholder continuity).

(3) 2565 Part O s OP 68 Income Tax Act 2007 Reprinted as at 2 September 2013 (4) Debit date The debit date is the day the amount is applied.
Deﬁned in this Act: amount, company, consolidated FDP group, dividend, FDP, FDP debit, Inland Revenue Acts, pay, shareholder Compare: 2004 No 35 s MG 15(1)(1), (2)(j) OP 68 Consolidated FDPA refund of tax credit Debit (1) A consolidated FDP group has an FDP debit for the amount of a transfer or refund under section LA 6(2)(d) or (e) (Remaining refundable credits: PAYE, RWT, and certain other items) to the extent to which the amount transferred or refunded is a tax credit under subpart LF (Tax credits for FDP credits) relating to a dividend derived by a group company that is part of the group at the time it derives the dividend.
(2) (3) Table reference The FDP debit in subsection (1) is referred to in table O22: FDP debits of consolidated FDP groups, row 6 (refund of tax credit).

Debit date The debit date is the day the transfer or refund is made.
Deﬁned in this Act: company, consolidated FDP group, tax credit, dividend, FDP debit Compare: 2004 No 35 s MG 15(1)(e), (2)(d) Section OP 68(1): substituted (with effect on 1 April 2008), on 6 October 2009, by section 466(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section OP 68(3): substituted (with effect on 1 April 2008), on 6 October 2009, by section 466(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OP 69 Consolidated FDPA transfer to imputation credit account Debit (1) A consolidated FDP group has an FDP debit for a tax year for an amount equal to a closing credit balance transferred under section FM 29 (Treatment of credit balance in consoli- dated group’s FDP account) to the group’s imputation credit account.
2566 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OP 71 (2) (3) Table reference The FDP debit in subsection (1) is referred to in table O22: FDP debits of consolidated FDP groups, row 7 (transfer to imputation credit account).

Debit date The debit date is the last day of the tax year.
Deﬁned in this Act: amount, consolidated FDP group, FDP debit, imputation credit account, tax year Compare: 2004 No 35 s MG 15(1)(c), (2)(c) OP 70 Consolidated FDPA transfer to group’s CTR account [Repealed] Section OP 70: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 111(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OP 71 Consolidated FDPA group company’s debit Debit (1) A consolidated FDP group has an FDP debit for an amount to the extent to which it would, in the absence of subsection (2), give rise to— (a) an FDP debit described in a row of table O4: FDP debits, in the FDP account of a group company; and an FDP debit that would create or increase a debit bal- ance in the group company’s FDP account.
(b) (2) (3) Table reference The FDP debit in subsection (1) is referred to in table O22: FDP debits of consolidated FDP groups, row 9 (group com- pany’s debit).

No debit for group company The amount referred to in subsection (1) does not give rise to an FDP debit in the group company’s account although other- wise eligible to be one.
2567 Part O s OP 72 Income Tax Act 2007 Reprinted as at 2 September 2013 (4) Debit date The debit date is the day that would be the debit date for the amount in the absence of subsection (3).
Deﬁned in this Act: amount, company, consolidated FDP group, FDP account, FDP debit Compare: 2004 No 35 ss MG 15(1)(k), (2)(i), MG 16(5) OP 72 Consolidated FDPA breach of FDP ratio Debit (1) A consolidated FDP group has an FDP debit for a tax year for the amount of a debit that would arise under section OC 22 (FDPA breach of FDP ratio) in the FDP account of a group company in the absence of section OP 54(3).
(2) (3) Table references The group’s FDP debit in subsection (1) is referred to in table O22: FDP debits of consolidated FDP groups, row 10 (breach of FDP ratio).

The group company’s FDP debit in subsection (1) is referred to in table O4: FDP debits, row 11 (breach of FDP ratio).

Debit date The debit date is the last day of the tax year.
Deﬁned in this Act: amount, company, consolidated FDP group, FDP account, FDP debit, tax year Compare: 2004 No 35 s MG 15(1)(f), (2)(e) OP 73 Consolidated FDPA debit for loss of shareholder continuity Debit (1) A consolidated FDP group has an FDP debit for the amount of an FDP credit retained in the group’s FDP account and unused at the time at which shareholder continuity is lost.
(2) Table reference The FDP debit in subsection (1) is referred to in table O22: FDP debits of consolidated FDP groups, row 11 (debit for loss of shareholder continuity).

2568 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OP 75 (3) When debit arises The debit arises at the time shareholder continuity is lost.
Deﬁned in this Act: amount, consolidated FDP group, FDP account, FDP credit, FDP debit, shareholder Compare: 2004 No 35 s MG 15(1)(i), (2)(g) Section OP 73(1): amended (with effect on 1 April 2008), on 7 December 2009, by section 97(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section OP 73(3) heading: substituted (with effect on 1 April 2008), on 7 De- cember 2009, by section 97(2) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section OP 73(3): substituted (with effect on 1 April 2008), on 7 December 2009, by section 97(2) of the Taxation (Consequential Rate Alignment and Re- medial Matters) Act 2009 (2009 No 63).
OP 74 Consolidated FDPA debit for policyholder base FDP credits Debit (1) A consolidated FDP group has an FDP debit for the amount of an FDP credit attached to a dividend derived by a group com- pany, to the extent to which it is derived by a group company that is a life insurer and apportioned to that life insurer’s pol- icyholder base.
(2) (3) Table reference The FDP debit in subsection (1) is referred to in table O22: FDP debits of consolidated FDP groups, row 12 (debit for pol- icyholder base FDP credits).

Debit date The debit date is the last day of the tax year.

Deﬁned in this Act: consolidated FDP group, FDP credit, FDP debit, life in- surer, policyholder base, tax year Section OP 74: substituted, on 1 July 2010, by section 467(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OP 75 Consolidated FDPA breach of FDP ratio by PCA company Debit (1) A consolidated FDP group has an FDP debit for a tax year for the amount of a debit that would arise under section 2569 Part O s OP 76 Income Tax Act 2007 Reprinted as at 2 September 2013 OC 23 (FDPA breach of FDP ratio by PCA company) in the FDP account of a group company in the absence of section OP 54(4)(d).
Table references The group’s FDP debit in subsection (1) is referred to in table O22: FDP debits of consolidated FDP groups, row 13 (breach of FDP ratio by PCA company).

The group company’s FDP debit in subsection (1) is referred to in table O4: FDP debits, row 12 (breach of FDP ratio by PCA company).

Debit date The debit date is the last day of the tax year.
Deﬁned in this Act: amount, company, consolidated FDP group, FDP account, FDP debit, tax year Compare: 2004 No 35 s MG 15(1)(g), (2)(e) (2) (3) OP 76 Consolidated FDPA tax advantage arrangement Debit (1) A consolidated FDP group has an FDP debit for the amount of a debit for a tax advantage arrangement determined under sections GB 35 and GB 36 (which relate to imputation arrange- ments to obtain a tax advantage).
(2) (3) Table reference The FDP debit in subsection (1) is referred to in table O22: FDP debits of consolidated FDP groups, row 14 (tax advantage arrangement).

Debit date The debit date is the last day of the tax year in which the ar- rangement began.
Deﬁned in this Act: amount, arrangement, consolidated FDP group, FDP ac- count, FDP debit, tax advantage, tax year Compare: 2004 No 35 s MG 15(1)(h), (2)(f) OP 77 Consolidated FDPA ﬁnal balance Debit (1) A consolidated FDP group has an FDP debit for a credit bal- ance in the FDP account when the group stops being a con- solidated FDP group.
2570 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OP 77 (2) (3) Table reference The FDP debit in subsection (1) is referred to in table O22: FDP debits of consolidated FDP groups, row 15 (ﬁnal bal- ance).

Debit date The debit date is the day the group stops being a consolidated FDP group.
Deﬁned in this Act: consolidated FDP group, FDP account, FDP debit Compare: 2004 No 35 s MG 15(1)(j), (2)(h) 2571 Part O s OP 77 Income Tax Act 2007 Reprinted as at 2 September 2013 Table O21: FDP credits of consolidated FDP groups Row FDP credit Credit date Further deﬁned Opening credit balance 1 April section OA 7 [Repealed] [Repealed] FDP credit attached to dividend derived day on which dividend is paid section OP 58 Credit of group company set out in section OP 59 section OP 59 FDP credit attached to dividend and shown in credit transfer notice day on which notice is given section OP 60 [Repealed] [Repealed] Reversal of debit for tax advantage arrangement debit date for debit section OP 63 Table O21 row 2: repealed (with effect on 30 June 2009), on 6 October 2009, by section 468(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Table O21 row 3: repealed (with effect on 30 June 2009), on 6 October 2009, by section 468(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Table O21 row 7: repealed (with effect on 30 June 2009), on 6 October 2009, by section 468(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Table O21 row 8: repealed (with effect on 30 June 2009), on 6 October 2009, by section 468(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2572 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OP 77 Table O22: FDP debits of consolidated FDP groups Row FDP debit Debit date Further deﬁned Opening debit balance 1 April section OA 7 FDP credit attached to dividend paid by group company day on which dividend is paid section OP 64 FDP credit attached to dividend and shown in credit transfer notice day on which dividend is paid section OP 65 Refund of FDP day of refund section OP 66 Overpaid FDP applied to satisfy amount other than FDP due under Inland Revenue Acts day of application section OP 67 Refund of tax credit day of refund section OP 68 Transfer of year-end credit balance to imputation credit account 31 March section OP 69 [Repealed] Debit that would increase debit balance for group company set out in section OP 71 section OP 71 Debit for breach of FDP ratio 31 March section OP 72 Debit for loss of shareholder continuity time of loss of continuity section OP 73 Debit for policyholder base FDP credits Branch of FDP ratio by group company that is PCA company Debit for tax advantage arrangement Credit balance when group stops being consolidated FDP group 31 March section OP 74 31 March section OP 75 section OP 76 section OP 77 last day of tax year in which arrangement began days on which group stops being consolidated FDP group Table O22 row 8: repealed (with effect on 30 June 2009), on 6 October 2009, by section 469(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Table O22 row 11: amended (with effect on 1 April 2008), on 7 December 2009, by section 98 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

2573 Part O s OP 77 Income Tax Act 2007 Reprinted as at 2 September 2013 Table O22 row 12: substituted, on 1 July 2010, by section 469(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2574 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OP 80 Consolidated groups and CTR credits [Repealed] Heading: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 112(1) of the Taxa- tion (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Introductory provisions [Repealed] Heading: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 112(1) of the Taxa- tion (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OP 78 CTR accounts of consolidated groups [Repealed] Section OP 78: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 112(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OP 79 When credits and debits arise only in CTR group accounts [Repealed] Section OP 79: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 112(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OP 80 Provisions applying to consolidated groups with CTR accounts [Repealed] Section OP 80: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 112(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
CTR credits of consolidated groups [Repealed] Heading: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 113(1) of the Taxa- tion (International Investment and Remedial Matters) Act 2012 (2012 No 34).
2575 Part O s OP 81 Income Tax Act 2007 Reprinted as at 2 September 2013 OP 81 Consolidated CTRA tax credit for conduit tax relief [Repealed] Section OP 81: repealed (with effect on 30 June 2009), on 6 October 2009, by section 472(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OP 82 Consolidated CTRA reduction of FDP [Repealed] Section OP 82: repealed (with effect on 30 June 2009), on 6 October 2009, by section 473(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OP 83 Consolidated CTRA dividend derived with CTR credit [Repealed] Section OP 83: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 113(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OP 84 Consolidated CTRA group company’s credit [Repealed] Section OP 84: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 113(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OP 85 Consolidated CTRA transfer from group’s FDP account [Repealed] Section OP 85: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 113(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OP 86 Consolidated CTRA reversal of tax advantage arrangement [Repealed] Section OP 86: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 113(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
2576 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OP 92 CTR debits of consolidated groups OP 87 Consolidated CTRA payment of dividend [Repealed] Section OP 87: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 113(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OP 88 Consolidated CTRA transfer to group’s FDP account [Repealed] Section OP 88: repealed (with effect on 30 June 2009), on 6 October 2009, by section 474(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OP 89 Consolidated CTRA adjustment for conduit tax relief [Repealed] Section OP 89: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 114(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OP 90 Consolidated CTRA group company’s debit [Repealed] Section OP 90: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 114(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OP 91 Consolidated CTRA increase in resident shareholding [Repealed] Section OP 91: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 114(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OP 92 Consolidated CTRA breach of CTR ratio [Repealed] Section OP 92: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 114(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
2577 Part O s OP 93 Income Tax Act 2007 Reprinted as at 2 September 2013 OP 93 Consolidated CTRA tax advantage arrangement [Repealed] Section OP 93: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 114(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OP 94 Consolidated CTRA ﬁnal balance [Repealed] Section OP 94: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 114(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Consolidated groups’ FDP payments and refunds [Repealed] Heading: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 115(1) of the Taxa- tion (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OP 95 FDP payable for credits and debits in group’s CTR account [Repealed] Section OP 95: repealed (with effect on 30 June 2009), on 6 October 2009, by section 475(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OP 96 Refund on transfer from group’s FDP account [Repealed] Section OP 96: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 115(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Table O23: conduit tax relief credits of consolidated groups [Repealed] Table O23: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 115(2) of the Taxa- tion (International Investment and Remedial Matters) Act 2012 (2012 No 34).
2578 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OP 99 Table O24: conduit tax relief debits of consolidated groups [Repealed] Table O24: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 115(2) of the Taxa- tion (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Consolidated groups and branch equivalent tax accounts [Repealed] Heading: repealed, on 1 July 2012, by section 116(1) of the Taxation (Inter- national Investment and Remedial Matters) Act 2012 (2012 No 34).

Introductory provisions [Repealed] Heading: repealed, on 1 July 2012, by section 116(1) of the Taxation (Inter- national Investment and Remedial Matters) Act 2012 (2012 No 34).
OP 97 Branch equivalent tax accounts of consolidated BETA groups [Repealed] OP 97: repealed, on 1 July 2012 (applying for income years beginning on or after that date), by section 116(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OP 98 Choosing to stop being consolidated BETA group [Repealed] OP 98: repealed, on 1 July 2012 (applying for income years beginning on or after that date), by section 116(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OP 99 When credits and debits arise only in branch equivalent tax group accounts [Repealed] Section OP 99: repealed (with effect on 30 June 2009), on 6 October 2009, by section 478(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2579 Part O s OP 100 Income Tax Act 2007 Reprinted as at 2 September 2013 Branch equivalent tax credits of consolidated BETA groups [Repealed] Heading: repealed, on 1 July 2012, by section 118(1) of the Taxation (Inter- national Investment and Remedial Matters) Act 2012 (2012 No 34).
OP 100 Consolidated BETA payment of income tax on foreign income [Repealed] Section OP 100: repealed, on 1 July 2012 (applying for income years beginning on or after that date), by section 118(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OP 101 Consolidated BETA payment of income tax [Repealed] Section OP 101: repealed, on 1 July 2012 (applying for income years beginning on or after that date), by section 120(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section OP 101(4B): amended (with effect on 1 April 2008), on 2 November 2012, by section 136(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section OP 101(4C)(b): amended (with effect on 1 April 2008), on 2 November 2012, by section 136(2) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

OP 102 Consolidated BETA remaining debit balances [Repealed] Section OP 102: repealed (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 120(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
OP 103 Consolidated BETA refund of FDP [Repealed] Section OP 103: repealed, on 1 July 2012 (applying for income years beginning on or after that date), by section 122(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
2580 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OP 106 OP 104 Consolidated BETA credit for loss of shareholder continuity [Repealed] Section OP 104: repealed, on 1 July 2012 (applying for income years beginning on or after that date), by section 122(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Treatment by consolidated BETA groups of BETA debits from conduit relief [Repealed] Heading: repealed, on 1 July 2012 (applying for income years beginning on or after that date), by section 122(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OP 104B Consolidated BETA group with debit balance, including debits from conduit relief, in certain income years [Repealed] Section OP 104B: repealed, on 1 July 2012 (applying for income years begin- ning on or after that date), by section 122(1) of the Taxation (International In- vestment and Remedial Matters) Act 2012 (2012 No 34).
Branch equivalent tax debits of consolidated BETA groups [Repealed] Heading: repealed (with effect on 30 June 2009), on 6 October 2009, by section 479(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

OP 105 Consolidated BETA payment of FDP [Repealed] Section OP 105: repealed (with effect on 30 June 2009), on 6 October 2009, by section 479(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OP 106 Consolidated BETA reduction of FDP [Repealed] Section OP 106: repealed (with effect on 30 June 2009), on 6 October 2009, by section 479(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2581 Part O s OP 107 Income Tax Act 2007 Reprinted as at 2 September 2013 OP 107 Consolidated BETA refund of income tax [Repealed] Section OP 107: repealed (with effect on 30 June 2009), on 6 October 2009, by section 479(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OP 108 Consolidated BETA debit for loss of shareholder continuity [Repealed] Section OP 108: repealed (with effect on 30 June 2009), on 6 October 2009, by section 479(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Debit if credit balance at beginning of ﬁrst affected income year [Repealed] Heading: repealed (with effect on 30 June 2009), on 7 September 2010, by section 110 of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
OP 108B Consolidated BETA group with credit balance at beginning of ﬁrst affected income year [Repealed] OP 108B: repealed (with effect on 30 June 2009), on 7 September 2010, by section 110 of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Table O25: branch equivalent tax credits of consolidated BETA groups [Repealed] Table O25: repealed, on 1 July 2012 (applying for income years beginning on or after that date), by section 124(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Table O26: branch equivalent tax debits of consolidated BETA groups [Repealed] Table O26: repealed (with effect on 30 June 2009), on 6 October 2009, by section 482(1) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
2582 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OP 111 Consolidated groups and policyholder credit accounts [Repealed] Heading: repealed, on 1 July 2010, by section 483(1) of the Taxation (Inter- national Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Introductory provision [Repealed] Heading: repealed, on 1 July 2010, by section 483(1) of the Taxation (Inter- national Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OP 109 Policyholder credit accounts of consolidated groups [Repealed] Section OP 109: repealed, on 1 July 2010, by section 483(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Policyholder credits of consolidated groups [Repealed] Heading: repealed, on 1 July 2010, by section 483(1) of the Taxation (Inter- national Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OP 110 Consolidated PCA transfer from imputation credit account [Repealed] Section OP 110: repealed, on 1 July 2010, by section 483(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

OP 111 Consolidated PCA transfer from FDP account [Repealed] Section OP 111: repealed, on 1 July 2010, by section 483(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2583 Part O s OP 112 Income Tax Act 2007 Reprinted as at 2 September 2013 OP 112 Consolidated PCA group company’s credit [Repealed] Section OP 112: repealed, on 1 July 2010, by section 483(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OP 113 Consolidated PCA maximum deﬁcit debit in FDP account [Repealed] Section OP 113: repealed, on 1 July 2010, by section 483(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

OP 114 Consolidated PCA reduced deﬁcit debit in FDP account [Repealed] Section OP 114: repealed, on 1 July 2010, by section 483(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Policyholder debits of consolidated groups [Repealed] Heading: repealed, on 1 July 2010, by section 483(1) of the Taxation (Inter- national Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

OP 115 Consolidated PCA payment of tax relating to policyholder base [Repealed] Section OP 115: repealed, on 1 July 2010, by section 483(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
OP 116 Consolidated PCA transfer to imputation credit account [Repealed] Section OP 116: repealed, on 1 July 2010, by section 483(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2584 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OP 116 Table O27: policyholder credits of consolidated groups [Repealed] Table O27: repealed, on 1 July 2010, by section 484(1) of the Taxation (Inter- national Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Table O28: policyholder debits of consolidated groups [Repealed] Table O28: repealed, on 1 July 2010, by section 484(1) of the Taxation (Inter- national Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Subpart OZ—Terminating provisions Contents OZ 1 No imputation credit for pre-imputation tax paid OZ 2 No imputation debit for pre-imputation refund OZ 3 Overpaid income tax or foreign dividend payment for pre-imputation income year Page 2586 2586 2586 OZ 4 Terminating modiﬁcations to debits for loss of shareholder 2587 continuity OZ 5 ASCA lost excess available subscribed capital OZ 6 ASCA redemption of unused investments OZ 7 Memorandum accounts in transitional period OZ 7B Maori authority credit ratios for transitional period OZ 8 Attaching imputation credits and FDP credits: maximum permitted ratio OZ 9 Benchmark dividends: ratio change OZ 10 Modifying ratios for imputation credits and FDP credits OZ 11 Tax credits for imputation credits and FDP credits OZ 12 Tax credits for non-resident investors OZ 13 Fully credited dividends: modifying actual ratio OZ 14 Dividends from qualifying companies OZ 15 Attaching imputation credits and notional distributions: modifying amounts OZ 16 BETA reductions [Repealed] OZ 17 CTRA reductions [Repealed] OZ 18 Credit-back of PCA balance 2587 2590 2590 2590 2593 2593 2594 2595 2597 2599 2600 2601 2602 2602 2602 2585 Part O s OZ 1 Income Tax Act 2007 Reprinted as at 2 September 2013 OZ 1 No imputation credit for pre-imputation tax paid No imputation credit arises in the imputation credit account of an imputation credit account (ICA) company for a payment of income tax imposed for a pre-imputation income year.
Deﬁned in this Act: ICA company, imputation credit, imputation credit account, income tax, pay, pre-imputation income year Compare: 2004 No 35 s ME 4(1)(a)(viii) OZ 2 No imputation debit for pre-imputation refund No imputation debit arises in the imputation credit account of an ICA company for a refund of income tax for a pre-imput- ation income year.
Deﬁned in this Act: ICA company, imputation credit account, imputation debit, income tax, pre-imputation income year Compare: 2004 No 35 s ME 5(1)(e)(i) OZ 3 Overpaid income tax or foreign dividend payment for pre-imputation income year Debit (1) An ICA company has an imputation debit for an amount of overpaid income tax and foreign dividend payment (FDP) that is applied, when the company is not a foreign dividend pay- ment account (FDPA) company, to satisfy the company’s in- come tax liability under section BB 1 (Imposition of income tax) for a pre-imputation income year.
Subsection (2) over- rides this subsection.

No debit The debit does not include an amount of overpaid income tax and FDP that is— (a) paid before an imputation debit under section OB 41 (ICA debit for loss of shareholder continuity); and no more than the debit for loss of shareholder continuity.

(b) Table references The imputation debit in subsection (1) is referred to in table O2: imputation debits, row 11 (overpayment of income tax or FDP).
The imputation debit in subsection (2)(a) is referred imputation debits, row 14 (debit for loss of to in table O2: shareholder continuity).

(2) (3) 2586 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OZ 5 (4) Debit date The debit date is the day the amount is applied.
Deﬁned in this Act: amount, company, FDP, FDPA company, ICA company, imputation credit account, imputation debit, income tax, income tax liability, pay, pre-imputation income year, shareholder Compare: 2004 No 35 s ME 5(1)(n) OZ 4 Terminating modiﬁcations to debits for loss of shareholder continuity The terminating modiﬁcations that apply under section OA 8(8) (Shareholder continuity requirements for memoran- dum accounts) are— (a) the shareholder continuity requirement does not apply to a credit that arises on or before 16 December 1988; and credits arising after 16 December 1988 and before 1 April 1992 are treated as 1 credit arising on 1 April 1992 and, until such time as the credit can be treated as cancelled by later debits,— (i) (b) the shareholder continuity requirement applying to the credit is the earlier version of the require- ment incorporated in section 394E(2)(g) of the Income Tax Act 1976 (despite its repeal and re- placement by section 51 of the Income Tax Act Amendment Act (No 2) 1992); and the earlier version of the requirement of section 394E(2)(g) applies by reading the ﬁgure “66” in- stead of the ﬁgure “75”.
(ii) Deﬁned in this Act: shareholder Compare: 2004 No 35 ss ME 5(4), MG 5(4) OZ 5 ASCA lost excess available subscribed capital (1) When this section applies This section applies when a public unit trust or a group invest- ment fund that derives category A income— (a) is in existence between 17 October 2002 and 30 Sep- tember 2003 (both dates inclusive); and has redeemed a unit in the trust or fund; and (b) 2587 Part O s OZ 5 Income Tax Act 2007 Reprinted as at 2 September 2013 (c) (d) the slice rule was used to determine the tax treatment of the proceeds from the redemption; and the amount of the available subscribed capital, calcu- lated on a per unit basis, is greater than the proceeds from the redemption for the unit.
(2) Calculating opening balance The trust or fund may choose for the period to calculate an opening credit balance using 1 of the methods set out in sub- sections (3) and (4).

Method 1 (3) Method 1 requires the trust or fund to calculate the actual amount of available subscribed capital lost, that is the differ- ence, in total, between the amount paid on subscription for a unit and the amount paid on redemption of the unit.
Method 2 (4) Method 2 requires the trust or fund to make a calculation for the notional winding up of the trust or fund by taking the fol- lowing steps: (a) step 1: determine the total amount of income tax that would be payable on liquidation, treating the value of assets and liabilities as determined at their market value at the date of the notional liquidation according to pro- visions applying at that date: step 2: determine the amount of notional credits that are available after notional tax is paid in relation to them: step 3: determine the amount of notional credits re- quired to fully impute, for each unit holder, the payment of a redemption dividend, and aggregate the amounts, applying the maximum imputation ratio to the total amount: step 4: establish the imputation credit shortfall between the notional credits under step 2 and the credits required under step 3.
(b) (c) (d) Opening balance The amount of the opening balance is— (a) (b) the amount of the difference for method 1; and the shortfall referred to in subsection (4)(d) for method 2.
(5) 2588 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OZ 5 (6) (7) Certain causes of shortfalls For the purposes of subsection (4), the structural features of the taxation and imputation systems that would allow a company that does not issue shares on terms subject to section CD 22(4) (Returns of capital: off-market share cancellations) to fully impute a distribution made on the liquidation of the company, include the tax effects of— (a) non-taxable gains and losses, including exempt income; and imputation credits lost because shareholder continuity is lost; and foreign tax credits; and retained earnings generated before the trust or fund es- tablished an imputation credit account.
(b) (c) (d) Date of notional liquidation, orderly calculations For the purposes of this section,— (a) the date of notional liquidation is the date chosen by the trust or fund falling in the period referred to in subsec- tion (1)(a): a calculation under this section must be undertaken in a manner consistent with the preparation of ﬁnancial statements and unit pricing calculations, based on an orderly realisation of assets in the ordinary course of business and demonstrable market valuations.
(b) Deﬁned in this Act: amount, available subscribed capital, business, category A income, company, dividend, exempt income, ﬁnancial statements, foreign tax, group investment fund, imputation credit, imputation credit account, imputation ratio, liquidation, pay, public unit trust, share, shareholder, slice rule Compare: 2004 No 35 ss MJ 1(2), MJ 4, MJ 5(1) Section OZ 5(1)(d): substituted (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 121(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section OZ 5(6)(a): substituted (with effect on 30 June 2009), on 6 October 2009, by section 485(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OZ 5 compare note: amended (with effect on 1 April 2008), on 29 Au- gust 2011, by section 121(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
2589 Part O s OZ 6 Income Tax Act 2007 Reprinted as at 2 September 2013 OZ 6 ASCA redemption of unused investments (1) (2) When this section applies The section applies when a public unit trust or a group invest- ment fund that derives category A income— (a) redeems a share within the meaning in paragraphs (c) and (d) of the deﬁnition of share in section YA 1 (Def- initions); and has never established an ASC account.
(b) Election The company may choose to establish an ASC account, and the only ASC credit arising in the account is an ASC credit for an opening balance calculated under section OZ 5(5).

Closing balance (3) An opening balance under subsection (2) is treated as the clos- ing balance of the account.
Deﬁned in this Act: ASC account, ASC credit, category A income, complying trust, group investment fund, public unit trust, share Compare: 2004 No 35 s MJ 7 OZ 7 Memorandum accounts in transitional period Unless the context otherwise requires, sections OZ 8 to OZ 15 apply for a period (the transitional period)— (a) beginning the ﬁrst day of a person’s 2011–12 income year; and ending on 31 March 2013.
(b) Deﬁned in this Act: income year Section OZ 7: substituted, on 1 October 2010, by section 14 of the Taxation (Budget Measures) Act 2010 (2010 No 27).

OZ 7B Maori authority credit ratios for transitional period When this section applies This section applies when a Maori authority makes a taxable Maori authority distribution in the transitional period referred to in section OZ 7.
Application of modiﬁed sections OZ 8 to OZ 15 Sections OZ 8 to OZ 11 and OZ 13 apply for the transitional period to the Maori authority and the taxable Maori authority distribution as if,— (1) (2) 2590 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OZ 7B (a) (b) (c) (d) for each section,— (i) (ii) (iii) (iv) (v) (vi) a reference to a company had been replaced by a reference to a Maori authority: a reference to a dividend had been replaced by a reference to a taxable Maori authority distribu- tion: a reference to an imputation credit account had been replaced by a reference to a Maori authority credit account: a reference to an imputation credit had been re- placed by a reference to a Maori authority credit: a reference to a benchmark dividend had been re- placed by a reference to a benchmark distribu- tion: a reference to an imputation ratio had been re- placed by a reference to a Maori authority credit ratio: (vii) a reference to an FDP account or FDP credit or FDP ratio had been omitted: (ii) (iii) in section OZ 8(2), the reference to 30% had been re- placed by a reference to 19.5%: in section OZ 9,— (i) in subsection (1)(b), the reference to sections OB 61(4) and OC 28(4) had been replaced by a reference to section OK 20(3): in subsection (1)(c)(ii), the reference to a ratio of 30/70 had been replaced by a reference to a ratio of 19.5/80.5: in subsection (3)(b), the reference to a ratio of 28/72 had been replaced by a reference to a ratio of 17.5/82.5: in section OZ 10,— (i) in subsection (1)(b), a reference to a ratio of 28/72 had been replaced by a reference to a ratio of 17.5/82.5 and a reference to a ratio of 30/70 had been replaced by a reference to a ratio of 19.5/80.5: subsection (1)(b)(ii) and (iii) were omitted: (ii) 2591 Part O s OZ 7B Income Tax Act 2007 Reprinted as at 2 September 2013 (iii) (iv) in subsection (2), the reference to sections LE 8, LE 9, LF 6, and LF 7 had been replaced by a reference to section LO 3: in subsection (2), the reference to a ratio of 30/70 had been
 replaced by a reference to a ratio of 19.5/80.5: (e) (f) in section OZ 11,— (i) in subsection (1)(b)(i), the reference to a ratio of 28/72 had been replaced by a reference to a ratio of 17.5/82.5 and the reference to a ratio of 30/70 had been replaced by a reference to a ratio of 19.5/80.5: subsection (1)(b)(ii) and (iii) had been omitted: in subsection (1)(c), a reference to a new com- pany tax rate person had been replaced by a refer- ence to a Maori authority that uses a 17.5% basic tax rate for the 2011–12 income year or later in- come years: in subsection (2), in the formula, the ﬁgure 0.28 had been replaced by the ﬁgure 17.5: in subsection (3), the reference to section LE 1(1) or LF 1(1) had been replaced by a reference to section LO 1(1): subsections (4) and (5) had been omitted: in subsection (1), the reference to the ratio of 28/72 had been replaced by a reference to a ratio of 17.5/82.5 and the reference to a ratio of 30/70 had been replaced by a reference to a ratio of 19.5/80.5: in subsection (2), the reference to the ratio of 28/72 had been replaced by a reference to a ratio of 17.5/82.5.
(ii) (iii) (iv) (v) (ii) (vi) in section OZ 13,— (i) Deﬁned in this Act: benchmark distribution, income year, Maori authority, Maori authority credit, Maori authority credit account, Maori authority credit ratio, taxable Maori authority distribution Section OZ 7B: inserted (with effect on 1 October 2010), on 21 December 2010, by section 120 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
2592 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OZ 9 OZ 8 Attaching imputation credits and FDP credits: maximum permitted ratio (1) (2) When this section applies This section applies when— (a) (b) a company pays a dividend in the transitional period; and the company has a credit balance in its imputation credit account and FDP account from income, expenditure, memorandum account debits, credits, and balances, re- funds, tax, tax credits, transfers, amounts withheld, or other items dealt with, arising, or calculated using an old company tax rate.
Rate applying for transitional period If the amount of the imputation credit or FDP credit attached to the dividend is limited by the maximum permitted ratio set out in section OA 18 (Calculation of maximum permitted ra- tios), the company may choose to treat the item tax rate in the formula in section OA 18(2) as 30%.
Deﬁned in this Act: amount, company, dividend, FDP account, FDP credit, imputation credit, imputation credit account, income, maximum permitted ratio, tax credit, tax year, transitional period Section OZ 8: added, on 1 April 2008, by section 520 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section OZ 8(2): amended, on 1 October 2010, by section 15 of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Section OZ 8 compare note: repealed (with effect on 1 April 2008), on 21 De- cember 2010, by section 119 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
OZ 9 Benchmark dividends: ratio change (1) When this section applies This section applies when— (a) a company pays a dividend in the transitional period; and the dividend is a later dividend for the purposes of sec- tions OB 61(4) and OC 28(4) (which relate to the bench- mark dividend rules), as applicable; and the relevant benchmark dividend— (i) was 1 to which section OZ 8 applied; or (b) (c) 2593 Part O s OZ 10 Income Tax Act 2007 Reprinted as at 2 September 2013 (2) (3) (ii) has a ratio of 30/70, for a reason other than the application of section OZ 8.
When ratio treated as same as ratio for benchmark dividend If, in the cases set out in subsection (3), the imputation ratio or FDP ratio of the later dividend is less than that of the relevant benchmark dividend, the ratio is treated as the same as that of the relevant benchmark dividend.
Cases The cases referred to in subsection (2) are the following: (a) in the case of a benchmark dividend described in sub- section (1)(c)(i), section OZ 8 does not apply to the later dividend through the lack of a relevant credit balance described in section OZ 8(1)(b): in the case of a benchmark dividend described in sub- section (1)(c)(ii), the later dividend has a ratio of 28/72.
Deﬁned in this Act: benchmark dividend, company, dividend, FDP ratio, im- putation ratio, transitional period (b) Section OZ 9: added, on 1 April 2008, by section 520 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section OZ 9(1)(c)(ii): amended, on 1 October 2010, by section 16(1) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section OZ 9(3)(b): amended, on 1 October 2010, by section 16(2) of the Tax- ation (Budget Measures) Act 2010 (2010 No 27).
Section OZ 9 compare note: repealed (with effect on 1 April 2008), on 21 De- cember 2010, by section 119 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
OZ 10 Modifying ratios for imputation credits and FDP credits When this section applies This section applies when— (a) (b) a person derives a dividend in the period from 1 October 2010 to 31 March 2013; and the dividend and the imputation credits and FDP credits attached to the dividend, as applicable, have— (i) an imputation ratio greater than 28/72 and less than or equal to 30/70; or an FDP ratio greater than 28/72 and less than or equal to 30/70; or a combined imputation and FDP ratio greater than 28/72 and less than or equal to 30/70.
(ii) (iii) (1) 2594 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OZ 11 (2) Ratio applying For the purposes of sections LE 8, LE 9, LF 6, and LF 7 (which relate to tax credits for imputation credits and FDP credits), if the amount of the imputation credit or FDP credit, as ap- plicable, is limited by the maximum permitted ratio set out in section OA 18 (Calculation of maximum permitted ratios), the relevant ratio is treated as 30/70.
Deﬁned in this Act: combined imputation and FDP ratio, dividend, FDP credit, FDP ratio, imputation credit, imputation ratio, maximum permitted ratio, tran- sitional period Section OZ 10: added, on 1 April 2008, by section 520 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section OZ 10(1)(a): amended, on 1 October 2010, by section 17(1) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Section OZ 10(1)(b)(i): amended, on 1 October 2010, by section 17(2)(a) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section OZ 10(1)(b)(i): amended, on 1 October 2010, by section 17(2)(b) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section OZ 10(1)(b)(ii): amended, on 1 October 2010, by section 17(2)(a) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Section OZ 10(1)(b)(ii): amended, on 1 October 2010, by section 17(2)(b) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section OZ 10(1)(b)(iii): amended, on 1 October 2010, by section 17(2)(a) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section OZ 10(1)(b)(iii): amended, on 1 October 2010, by section 17(2)(b) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Section OZ 10(2): amended, on 1 October 2010, by section 17(3) of the Taxa- tion (Budget Measures) Act 2010 (2010 No 27).

Section OZ 10(2): amended (with effect on 1 April 2008), on 6 October 2009, by section 486(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section OZ 10 compare note: repealed (with effect on 1 April 2008), on 21 De- cember 2010, by section 119 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
OZ 11 Tax credits for imputation credits and FDP credits (1) When this section applies This section applies when— (a) a person— (i) derives a dividend in the transitional period, if the person is a new company tax rate person that is not a multi-rate PIE: 2595 Part O s OZ 11 Income Tax Act 2007 Reprinted as at 2 September 2013 (ii) derives a dividend in the period from 1 October 2010 to 31 March 2013, if the person is a new company tax rate person that is a multi-rate PIE; and (b) the dividend, and the imputation credits and FDP credits attached to the dividend, as applicable, have— (i) an imputation ratio greater than 28/72 and less than or equal to 30/70; or an FDP ratio greater than 28/72 and less than or equal to 30/70; or a combined imputation and FDP ratio greater than 28/72 and less than or equal to 30/70; and (ii) (iii) (c) the person is a new company tax rate person in the period for the dividend.
Imputation ratio and FDP ratio For a ratio described in subsection (1)(b)(i) or (ii), the amount of the tax credit that the person has is calculated using the formula— dividend and credits × 0.28.
Deﬁnition of item in formula In the formula in subsection (2), dividend and credits is the amount of the imputation credit or FDP credit, as applicable, included in the person’s assessable income for the purposes of section LE 1(1) or LF 1(1) (which relate to tax credits for imputation credits and FDP credits), together with the amount of dividend to which the relevant credit is attached.
Combined imputation and FDP ratio For a ratio described in subsection (1)(b)(iii), the total amount of tax credit that the person has is calculated using the for- mula— dividend and credits × 0.28.

Deﬁnition of item in formula In the formula in subsection (4), dividend and credits is the total amount of the imputation credit and FDP credit included in the person’s assessable income for the purposes of sections LE 1(1) and LF 1(1), together with the amount of the dividend to which the credits are attached.
For the purposes of the cal- (2) (3) (4) (5) 2596 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OZ 12 culation of the total tax credit, imputation credits are reduced before FDP credits.
Deﬁned in this Act: amount, assessable income, basic tax rate, combined im- putation and FDP ratio, dividend, FDP credit, FDP ratio, imputation credit, im- putation ratio, multi-rate PIE, new company tax rate person, tax credit, total tax credit, transitional period Section OZ 11: added, on 1 April 2008, by section 520 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section OZ 11(1)(a): substituted, on 1 October 2010, by section 18(1) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section OZ 11(1)(b)(i): amended, on 1 October 2010, by section 18(2)(a) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section OZ 11(1)(b)(i): amended, on 1 October 2010, by section 18(2)(b) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Section OZ 11(1)(b)(ii): amended, on 1 October 2010, by section 18(2)(a) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section OZ 11(1)(b)(ii): amended, on 1 October 2010, by section 18(2)(b) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section OZ 11(1)(b)(iii): amended, on 1 October 2010, by section 18(2)(a) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Section OZ 11(1)(b)(iii): amended, on 1 October 2010, by section 18(2)(b) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section OZ 11(1)(c): amended, on 1 October 2010, by section 18(3) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section OZ 11(2) formula: amended, on 1 October 2010, by section 18(4) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section OZ 11(4) formula: amended, on 1 October 2010, by section 18(5) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Section OZ 11 list of deﬁned terms multi-rate PIE: inserted, on 1 October 2010, by section 18(6) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section OZ 11 list of deﬁned terms new company tax rate person: inserted, on 1 October 2010, by section 18(6) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section OZ 11 compare note: repealed (with effect on 1 April 2008), on 21 De- cember 2010, by section 119 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
OZ 12 Tax credits for non-resident investors (1) When this section applies This section applies when— (a) a company pays or derives a dividend with an imput- ation credit attached in the transitional period; and 2597 Part O s OZ 12 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) the dividend and imputation credit, to the extent to which, in the absence of subpart LP (Tax credits for supplementary dividends),— (i) the combined imputation and FDP ratio is greater than 28/72 and less than or equal to 30/70; or the imputation ratio is greater than 28/72 and less than or equal to 30/70; and (ii) (c) section LP 2(1) (Tax credits for supplementary divi- dends) applies to the company, or the company is a sup- plementary dividend holding company.
When ratio equal to old rate For a ratio described in subsection (1)(b)(i) or (ii) that is equal to 30/70, then any tax credit that the company has is calculated using the formula in section LP 2(2), treating 54/119 as 7/17.
When ratio less than old rate For a ratio described in subsection (1)(b)(i) or (ii) that is less than 30/70, then, to the extent to which a part of the amount of the dividend and imputation credit has a ratio of 30/70 through the application of section OZ 8, any tax credit that the company has is calculated using the formula in section LP 2(2), treating 54/119 as 7/17.
Benchmark calculations In the application of sections GB 35, GB 36, OA 18, OB 60, OB 61, OC 28 (which relate to imputation and FDP credit ratios) under section LP 5 (Application of benchmark dividend rules and imputation credit ratio), the provisions apply using the ratio 30/70 and the old company tax rates.
Relationship with exempt income rules If the company derives a dividend to which this section applies, item tax rate in the formula in section LP 8(2) (Relationship with exempt income rules) is treated as 30%, to the extent to which a part of the supplementary dividend was calculated as described in subsection (2) or (3).
Deﬁned in this Act: amount, combined imputation and FDP ratio, company, dividend, imputation credit, imputation ratio, non-resident, pay, supplemen- tary dividend, supplementary dividend holding company, tax credit, transitional period Section OZ 12: added, on 1 April 2008, by section 520 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
(2) (3) (4) (5) 2598 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OZ 13 Section OZ 12(1)(b)(i): amended, on 1 October 2010, by section 19(1)(a) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section OZ 12(1)(b)(i): amended, on 1 October 2010, by section 19(1)(b) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section OZ 12(1)(b)(ii): amended, on 1 October 2010, by section 19(1)(a) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Section OZ 12(1)(b)(ii): amended, on 1 October 2010, by section 19(1)(b) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section OZ 12(2): amended, on 1 October 2010, by section 111(1) of the Taxa- tion (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remed- ial Matters) Act 2010 (2010 No 109).

Section OZ 12(2): amended, on 1 October 2010, by section 19(2)(a) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Section OZ 12(2): amended, on 1 October 2010, by section 19(2)(b) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section OZ 12(2): amended (with effect from 1 April 2008), on 29 May 2008, by section 37(1) of the Taxation (Personal Tax Cuts, Annual Rates, and Remed- ial Matters) Act 2008 (2008 No 36).

Section OZ 12(3): amended, on 1 October 2010, by section 111(2) of the Taxa- tion (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remed- ial Matters) Act 2010 (2010 No 109).
Section OZ 12(3): amended, on 1 October 2010, by section 19(3)(a) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section OZ 12(3): amended, on 1 October 2010, by section 19(3)(b) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section OZ 12(3): amended (with effect from 1 April 2008), on 29 May 2008, by section 37(2) of the Taxation (Personal Tax Cuts, Annual Rates, and Remed- ial Matters) Act 2008 (2008 No 36).
Section OZ 12(4): amended, on 1 October 2010, by section 19(4) of the Taxa- tion (Budget Measures) Act 2010 (2010 No 27).

Section OZ 12(5): amended, on 1 October 2010, by section 19(5) of the Taxa- tion (Budget Measures) Act 2010 (2010 No 27).

Section OZ 12 compare note: repealed (with effect on 1 April 2008), on 21 De- cember 2010, by section 119 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
OZ 13 Fully credited dividends: modifying actual ratio (1) What this section applies to This section applies in the transitional period to a dividend for which, in the absence of this section, the actual ratio under sec- tion CD 43(26) (Available subscribed capital (ASC) amount) is greater than 28/72 and less than or equal to 30/70.
2599 Part O s OZ 14 Income Tax Act 2007 Reprinted as at 2 September 2013 (2) Ratio for calculation In the calculation under section CD 43(26), the part of the dividend that is fully credited, the actual ratio is treated as 28/72.

Deﬁned in this Act: dividend, fully credited, transitional period Section OZ 13: added, on 1 April 2008, by section 520 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section OZ 13(1): amended, on 1 October 2010, by section 20(1)(a) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section OZ 13(1): amended, on 1 October 2010, by section 20(1)(b) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section OZ 13(2): amended, on 1 October 2010, by section 20(2) of the Taxa- tion (Budget Measures) Act 2010 (2010 No 27).
Section OZ 13 compare note: repealed (with effect on 1 April 2008), on 21 De- cember 2010, by section 119 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

OZ 14 Dividends from qualifying companies When this section applies This section applies when— (a) a qualifying company pays a dividend in the transitional period; and section OZ 8 applies to the dividend.
(b) Exempt income In the calculation under section HA 14 (Dividends paid by qualifying companies) the extent to which the dividend is ex- empt income of the person, item tax rate in the formula in section HA 15(2) (Fully imputed dividends) is treated as 0.30.

Deﬁned in this Act: dividend, exempt income, qualifying company, transitional period Section OZ 14: added, on 1 April 2008, by section 520 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section OZ 14(2): amended, on 1 October 2010, by section 21 of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section OZ 14 compare note: repealed (with effect on 1 April 2008), on 21 De- cember 2010, by section 119 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
(1) (2) 2600 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OZ 15 OZ 15 Attaching imputation credits and notional distributions: modifying amounts (1) (2) (3) (4) (5) When this section applies This section applies when— (a) (b) a statutory producer board or a co-operative company determines to pay a cash distribution or make a notional distribution in the transitional period; and the board or company has a credit balance in its imput- ation credit account from income, expenditure, memo- randum account debits, credits, and balances, refunds, tax, tax credits, transfers, amounts withheld, or other items dealt with, arising, or calculated using an old com- pany tax rate.
Statutory producer boards’ imputation credits In the calculation under section OB 73(4) (Statutory producer boards attaching imputation credits to cash distributions), the board may choose to treat item tax rate in the formula as 30%.

Statutory producer boards’ notional distributions In the calculation under section OB 75(2) (Statutory producer boards’ notional distributions that are dividends), the board may choose to treat item tax rate in the formula as 30%.
Co-operative companies’ imputation credits In the calculation under section OB 78(3) (Co-operative com- panies attaching imputation credits to cash distributions), the company may choose to treat item tax rate in the formula as 30%.

This subsection does not apply to a Maori authority.
Co-operative companies’ notional distributions In the calculation under section OB 80(2) (Co-operative com- panies’ notional distributions that are dividends), the company may choose to treat item tax rate in the formula as 30%.

This subsection does not apply to a Maori authority.
Deﬁned in this Act: amount, co-operative company, imputation credit account, income, Maori authority, statutory producer board, tax credit, transitional period Section OZ 15: added, on 1 April 2008, by section 520 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section OZ 15(2): amended, on 1 October 2010, by section 22(a) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
2601 Part O s OZ 16 Income Tax Act 2007 Reprinted as at 2 September 2013 Section OZ 15(3): amended, on 1 October 2010, by section 22(b) of the Taxa- tion (Budget Measures) Act 2010 (2010 No 27).

Section OZ 15(4): amended, on 1 October 2010, by section 22(c) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section OZ 15(5): amended, on 1 October 2010, by section 22(d) of the Taxa- tion (Budget Measures) Act 2010 (2010 No 27).
Section OZ 15 compare note: repealed (with effect on 1 April 2008), on 21 De- cember 2010, by section 119 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

OZ 16 BETA reductions [Repealed] Section OZ 16: repealed, on 1 July 2012 (applying for income years beginning on or after that date), by section 125(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OZ 17 CTRA reductions [Repealed] Section OZ 17: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 126(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
OZ 18 Credit-back of PCA balance When this section applies This section applies for a life insurer immediately before a day (the application day) that is— (a) 1 July 2010, if the life insurer does not have an early life regime application day, or their early life regime application day, if the life insurer does have an early life regime application day.
(b) Credit-back Immediately before the application day,— (a) the credit balance of a life insurer’s policyholder credit account is credited as an imputation credit to the life in- surer’s imputation credit account, and the policyholder credit account is debited accordingly: the credit balance of a consolidated group’s policy- holder credit account is credited as an imputation credit to the consolidated group’s imputation credit account, (b) (1) (2) 2602 Reprinted as at 2 September 2013 Income Tax Act 2007 Part O s OZ 18 and the consolidated group’s policyholder credit ac- count is debited accordingly.
Deﬁned in this Act: early life regime application day, consolidated group, im- putation credit, imputation credit amount, life insurer, policyholder credit ac- count Section OZ 18: added, on 30 June 2010, by section 487 of the Taxation (Inter- national Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2603 Income Tax Act 2007 Reprinted as at 2 September 2013 Part R General collection rules Subpart RA—General withholding and payment obligations Contents Introductory provisions RA 1 What this Part does RA 2 Amounts treated as income tax Payment and withholding obligations Provisional tax obligations RA 3 Terminal tax obligations RA 4 RA 5 Tax obligations for employment-related taxes RA 6 Withholding and payment obligations for passive income RA 6B Withholding and payment obligations for retirement scheme contributions Payment of tax by public authorities RA 7 RA 8 Liability of persons receiving payments or beneﬁts RA 9 Treatment of amounts withheld as received RA 10 When obligations not met RA 11 Adjustment to correct errors: certain underpayments RA 12 Adjustment to correct errors: certain excess amounts Payment dates RA 13 Payment dates for terminal tax RA 14 Payment dates for provisional tax RA 15 Payment dates for interim and other tax payments RA 16 Payment date when taxable activity ends RA 17 Payment date when RWT exemption certiﬁcate expires RA 18 Payment date for emigrating companies Page 2605 2606 2606 2606 2607 2608 2609 2609 2609 2609 2610 2611 2612 2614 2615 2615 2618 2619 2619 RA 19 Refunds of excess amounts or when amounts mistakenly 2620 Refunds paid RA 20 Amalgamation of companies Amalgamations Regulations RA 21 Regulations 2604 2620 2621 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RA 1 RA 22 Limits on application of other provisions for purposes of 2623 Application of other provisions PAYE rules RA 23 Application of other provisions for purposes of ESCT rules and NRWT rules RA 24 Application of other provisions for purposes of RSCT 2623 2624 rules Introductory provisions RA 1 What this Part does This Part provides the rules to require a person to pay to the Commissioner interim and terminal payments of tax and other amounts payable under the Inland Revenue Acts.
The Part provides for— (a) a person’s general withholding and payment obliga- tions; and the payment of terminal tax, see subpart RB; and the payment of provisional tax, see subpart RC; and the payment of the following employment-related taxes, see subpart RD: (i) (ii) (iii) pay-as-you-earn (PAYE): fringe beneﬁt tax (FBT): employer’s (ESCT); and superannuation contribution tax the payment of resident withholding tax (RWT), see subpart RE; and the payment of non-resident withholding tax (NRWT), see subpart RF; and [Repealed] the payment of retirement scheme contribution tax (RSCT), see subpart RH; and the treatment of refunds by the Commissioner, see sub- part RM; and the use of intermediaries in the tax system, see subpart RP.
(b) (c) (d) (e) (f) (g) (gb) (h) (i) Deﬁned in this Act: amount, Commissioner, employer’s superannuation con- tribution, ESCT, FBT, fringe beneﬁt tax, Inland Revenue Acts, intermediary, 2605 Part R s RA 2 Income Tax Act 2007 Reprinted as at 2 September 2013 NRWT, pay, PAYE, provisional tax, retirement scheme contribution, RSCT, RWT, tax, terminal tax Section RA 1(g): repealed (with effect on 30 June 2009), on 6 October 2009, by section 488(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RA 1(gb): inserted, on 1 April 2008, by section 521(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section RA 1 list of deﬁned terms FDP: repealed (with effect on 30 June 2009), on 6 October 2009, by section 488(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RA 1 list of deﬁned terms retirement scheme contribution: inserted, on 1 April 2008, by section 521(2) of the Taxation (Business Taxation and Re- medial Matters) Act 2007 (2007 No 109).

Section RA 1 list of deﬁned terms RSCT: inserted, on 1 April 2008, by sec- tion 521(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
RA 2 Amounts treated as income tax The provisions of this Act and the Tax Administration Act 1994 apply in relation to an amount that a person is liable to pay under this Part as if the amount were income tax imposed under section BB 1 (Imposition of income tax).
Deﬁned in this Act: amount, income tax, pay Compare: 2004 No 35 ss MB 12, NC 20(1), ND 1W(2), NE 7(2), NF 13, NG 17(2), NH 3(7) Section RA 2 compare note: amended (with effect on 1 April 2008), on 7 De- cember 2009, by section 101(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Payment and withholding obligations RA 3 Terminal tax obligations A person liable under section BC 8 (Satisfaction of income tax liability) to pay an amount of terminal tax for a tax year must pay the amount to the Commissioner under subpart RB (Terminal tax) by the due date.
Deﬁned in this Act: amount, Commissioner, pay, tax year, terminal tax Compare: 2004 No 35 ss BC 9, MC 1 RA 4 Provisional tax obligations A person liable to pay provisional tax must pay instalments on account of their income tax liability for a tax year to the 2606 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RA 5 Commissioner under subpart RC (Provisional tax) by the due dates.
Deﬁned in this Act: Commissioner, income tax liability, pay, provisional tax, tax year Compare: 2004 No 35 ss BB 2(3), MB 4 RA 5 Tax obligations for employment-related taxes Withholding and payment obligations (1) A person who makes a payment or provides a beneﬁt of 1 of the following kinds must either withhold and pay, or pay, the amount of tax for the payment or beneﬁt to the Commis- sioner under subpart RD (Employment-related taxes) by the due dates: (a) (b) (c) a PAYE income payment: a fringe beneﬁt: an employer’s superannuation cash contribution.
Timing for PAYE income payments (2) An amount of tax withheld from a PAYE income payment must be withheld at the time the person makes the payment.
Deﬁned in this Act: amount of tax, Commissioner, employer’s superannuation cash contribution, fringe beneﬁt, pay, PAYE income payment Compare: 2004 No 35 ss BE 1(1), (4), (5), NC 15, ND 1, NE 3 Section RA 5(1) heading: inserted (with effect on 1 April 2008), on 6 October 2009, by section 489(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RA 5(1)(c): substituted (with effect on 1 April 2008), on 6 October 2009, by section 489(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RA 5(2) heading: added (with effect on 1 April 2008), on 6 October 2009, by section 489(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RA 5(2): added (with effect on 1 April 2008), on 6 October 2009, by section 489(3) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).

Section RA 5 list of deﬁned terms employer’s superannuation cash contri- bution: inserted (with effect on 1 April 2008), on 6 October 2009, by section 489(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RA 5 list of deﬁned terms employer’s superannuation contribution: repealed (with effect on 1 April 2008), on 6 October 2009, by section 489(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2607 Part R s RA 6 Income Tax Act 2007 Reprinted as at 2 September 2013 RA 6 Withholding and payment obligations for passive income Resident passive income (1) A person who makes a payment of resident passive income must withhold and pay RWT for the payment to the Commis- sioner under subpart RE (Withholding tax on resident passive income (RWT)) by the due dates.
Non-resident passive income (2) A person who makes a payment of non-resident passive in- come must withhold and pay NRWT for the payment to the Commissioner under subpart RF (Withholding tax on non- resident passive income (NRWT)) by the due dates.

Foreign dividends [Repealed] [Repealed] (3) Timing for payments of passive income (4) An amount of tax withheld under subsections (1) and (2) must be withheld at the time the person makes the payment.
Deﬁned in this Act: Commissioner, company, non-resident passive income, NRWT, pay, resident passive income, RWT Compare: 2004 No 35 ss BE 1(4)–(6), NF 4, NG 11, NH 3 Section RA 6(3) heading: repealed (with effect on 30 June 2009), on 6 October 2009, pursuant to section 490(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RA 6(3): repealed (with effect on 30 June 2009), on 6 October 2009, by section 490(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RA 6(4) heading: inserted (with effect on 1 April 2008), on 6 October 2009, by section 490(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RA 6(4): inserted (with effect on 1 April 2008), on 6 October 2009, by section 490(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RA 6 list of deﬁned terms FDP: repealed (with effect on 1 April 2008), on 6 October 2009, by section 490(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RA 6 list of deﬁned terms foreign dividend: repealed (with effect on 1 April 2008), on 6 October 2009, by section 490(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2608 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RA 9 RA 6B Withholding and payment obligations for retirement scheme contributions A person who makes a contribution to a retirement savings scheme must withhold and pay RSCT for the contribution to the Commissioner under subpart RH (Withholding tax on re- tirement scheme contributions) by the due dates.
Deﬁned in this Act: Commissioner, pay, retirement savings scheme, RSCT Compare: 2004 No 35 s NEB 1 Section RA 6B: inserted, on 1 April 2008, by section 522 of the Taxation (Busi- ness Taxation and Remedial Matters) Act 2007 (2007 No 109).

RA 7 Payment of tax by public authorities A public authority that pays an amount under this Act acts within its capacity, whether further appropriation is made or not.
Deﬁned in this Act: amount, pay, public authority Compare: 2004 No 35 s MH 1 RA 8 Liability of persons receiving payments or beneﬁts Despite sections RA 5 and RA 6, a person receiving or deriving a payment or beneﬁt in relation to which an amount of tax must be withheld or paid may be liable under this Part for payment of the tax.
Deﬁned in this Act: amount of tax, pay, tax Compare: 2004 No 35 ss NC 16, NE 2A(1), (2), NF 3, NG 12 RA 9 Treatment of amounts withheld as received Payments treated as received or derived (1) An amount withheld from a payment under this Part, unless a provision in this Part states otherwise,— (a) by the person to whom the payment is made; and at the time the payment is made; and is treated as received— (i) (ii) is treated for the purposes of this Act as derived by the person at the same time and in the same way as they derive the payment from which the amount is withheld; and includes a combined tax and earner-related payment.
(b) (c) 2609 Part R s RA 10 Income Tax Act 2007 Reprinted as at 2 September 2013 (2) Exclusion Subsection (1) does not apply to a replacement payment under a share-lending arrangement.
Deﬁned in this Act: amount, combined tax and earner-related payment, pay, replacement payment, share-lending arrangement Compare: 2004 No 35 ss NC 19, NE 6, NF 12, NG 15 RA 10 When obligations not met When this section applies This section applies when— (a) a person liable to withhold an amount of tax for a PAYE income payment, an employer’s superannuation cash contribution, a retirement scheme contribution, a pay- ment of resident passive income, or a payment of non- resident passive income, does not withhold and pay the amount to the Commissioner; or a person liable to pay an amount of tax to the Commis- sioner for a fringe beneﬁt does not pay the amount.
[Repealed] (b) (c) Debt payable to Commissioner The amount is a debt payable to the Commissioner.

When payable The amount is due to be paid to the Commissioner on the rele- vant due date after the end date for the original liability set out in section RA 15.

Premiums and levies The amount includes a combined tax and earner-related pay- ment.
Deﬁned in this Act: amount, amount of tax, combined tax and earner-related payment, Commissioner, employer’s superannuation cash contribution, fringe beneﬁt, non-resident passive income, pay, PAYE income payment, resident pas- sive income Compare: 2004 No 35 ss NC 5(2), NC 16, NC 20(1), ND 1, ND 1W(2), NE 5, NEB 4(1), NF 3, NF 4, NF 13, NG 12, NG 13 Section RA 10(1)(a): amended (with effect on 1 April 2008), on 6 October 2009, by section 491(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RA 10(1)(a): amended, on 1 April 2008, by section 523(1) of the Tax- ation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

(1) (2) (3) (4) 2610 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RA 11 Section RA 10(1)(b): amended (with effect on 30 June 2009), on 6 October 2009, by section 491(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RA 10(1)(c): repealed (with effect on 30 June 2009), on 6 October 2009, by section 491(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RA 10 list of deﬁned terms employer’s superannuation cash contri- bution: inserted (with effect on 1 April 2008), on 6 October 2009, by section 491(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RA 10 list of deﬁned terms employer’s superannuation contribution: repealed (with effect on 1 April 2008), on 6 October 2009, by section 491(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RA 10 list of deﬁned terms FDP: repealed (with effect on 30 June 2009), on 6 October 2009, by section 491(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RA 10 compare note: amended, on 1 April 2008, by section 523(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
RA 11 Adjustment to correct errors: certain underpayments (1) (2) When this section applies This section applies when— (a) a person (the payer) is required to withhold and pay to the Commissioner— (i) RWT in relation to a payment to another person (the payee) of resident passive income that is in- terest or a dividend treated as interest; or (ii) NRWT in relation to a payment to the payee of non-resident passive income; and (b) the payer, through an error, does not withhold some or all of the amount.
Amount withheld from later payment or recovered The payer may— (a) subtract from a later payment to the payee an amount to correct the deﬁciency; or recover from the payee an amount to correct the deﬁ- ciency.
(b) Requirements when withholding from later payment For the purposes of subsection (2)(a),— (3) 2611 Part R s RA 12 Income Tax Act 2007 Reprinted as at 2 September 2013 (a) (b) the later payment must be a payment of interest, a divi- dend treated as interest, or a payment of non-resident passive income, as applicable; and the payment must be made in the same tax year in which the ﬁrst payment is made.
Deﬁned in this Act: amount, Commissioner, dividend treated as interest, inter- est, non-resident passive income, NRWT, pay, resident passive income, RWT, tax year Compare: 2004 No 35 ss NF 6(1), NG 16A(1) RA 12 Adjustment to correct errors: certain excess amounts When this section applies This section applies when— (a) (b) (b) (c) a person (the payer) is required to withhold and pay to the Commissioner an amount of RWT or NRWT for a payment to another person (the payee); and the payer, through an error, withholds an amount (the excess amount) that is more than the amount required under this Part.
Refunding excess amount of resident passive income For a payment of resident passive income, the payer may pay the excess amount to the payee at any time before the end of the tax year in which the amount of tax is withheld if,— (a) for a payment of interest or a dividend treated as in- terest, an RWT withholding certiﬁcate relating to the amount has either not been sent out or has been returned and cancelled: for a payment of a dividend other than a dividend treated as interest, a shareholder dividend statement relating to the amount has either not been sent out for the purposes of section 29 of the Tax Administration Act 1994 or has been returned and cancelled: for a taxable Maori authority distribution, a notice relat- ing to the amount has either not been given to a member of the Maori authority under section 31 of that Act or has been returned and cancelled.
(1) (2) 2612 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RA 12 (3) (4) (5) (6) Treatment of amount For the purposes of this section, when the payer pays the ex- cess amount under subsection (2), the amount is no longer treated as RWT.
Amendments to notices If the RWT withholding certiﬁcate, shareholder dividend state- ment, or notice referred to in subsection (2)(c) has been re- turned or cancelled, the payer must provide the payee with an amended certiﬁcate, statement, or notice, as applicable.
Commissioner refunding overpayment If the excess amount has been paid to the Commissioner, the Commissioner must refund the amount of the overpayment to— (a) (b) the payee; or the payer, if they have not subtracted the amount under subsection (6)(a) from a later payment made in relation to the payee.
Payer’s options For the purposes of subsection (5), if the excess amount has been refunded to the payee, the payer may— (a) subtract the amount from an amount paid later to the Commissioner under section RE 21 or RF 13 (which relate to resident passive income and non-resident pas- sive income), noting the action in the statement required under section 50 of the Tax Administration Act 1994; or apply for a refund of the amount under section RM 8 (Overpaid RWT or NRWT).
(b) Overpayment through payee’s act or omission (7) Despite subsections (2) and (5), if the excess amount arises from an act or omission by the payee, the payer must pay the full amount withheld to the Commissioner and is not liable to repay the excess amount to the payee or another person.
Deﬁned in this Act: amount, amount of tax, Commissioner, dividend, dividend treated as interest, interest, Maori authority, non-resident passive income, no- tice, NRWT, pay, resident passive income, RWT, RWT withholding certiﬁcate, shareholder dividend statement, tax year, taxable Maori authority distribution Compare: 2004 No 35 ss NF 6(2)–(4), NF 7(1), (2), NG 16A(2), (3) 2613 Part R s RA 13 Income Tax Act 2007 Reprinted as at 2 September 2013 Payment dates RA 13 Payment dates for terminal tax When payment due (1) A person must pay their terminal tax for a tax year by— (a) (b) the 7th day of the month in schedule 3, part A, column G or H (Payment of provisional tax and terminal tax) for the person’s corresponding income year, unless para- graph (b) applies; and the 15th day of January, if January is the month in sched- ule 3, part A, column G or H, for the person’s corres- ponding income year.
Columns G and H For the purposes of subsection (1), the month in schedule 3, part A, column G or H, for the person’s corresponding income year is— (a) the month in column H, if— (i) (ii) the person’s return of income for the income year was linked to a tax agent as described in subsec- tion (4); or the person has asked for an income statement under section 80C of the Tax Administration Act 1994 or has been sent an income statement under section 80D of that Act, and the Commissioner has been notiﬁed that a tax agent will respond to the income statement sent to the person; or (b) the month in column G in any other case.
First occurrence of month For the purposes of subsection (1),— (a) the month in column G is the ﬁrst occurrence of that month after the balance date: the month in column H is the ﬁrst occurrence of that month after the month in column G. (b) Linked to tax agent For the purposes of subsection (2)(a)(i), a return of income is linked to a tax agent if the Commissioner has been notiﬁed that (2) (3) (4) 2614 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RA 15 the return is to be ﬁled by the tax agent who has an extension of time under section 37(4) of the Tax Administration Act 1994.
Deﬁned in this Act: Commissioner, corresponding income year, income state- ment, notify, pay, return of income, tax agent, tax year, terminal tax Compare: 2004 No 35 s MC 1 Section RA 13(1)(b): amended (with effect from 1 April 2008), on 29 May 2008, by section 38(1) of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).
Section RA 13(2)(a)(i): amended (with effect on 1 April 2008), on 7 September 2010 (applying for the 2008–09 and later income years), by section 112(1) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
RA 14 Payment dates for provisional tax A person must pay their provisional tax for a tax year under section RC 9 (Provisional tax payable in instalments) accord- ing to the relevant cycle of instalments set out in schedule 3, part A, columns A to F (Payment of provisional tax and ter- minal tax).
Deﬁned in this Act: pay, provisional tax, tax year Compare: 2004 No 35 s MB 8(1), (2) RA 15 Payment dates for interim and other tax payments (1) (2) When this section applies This section applies when a person is required— (a) to withhold under section RA 5 an amount of tax for a payment and pay it to the Commissioner; or to withhold and pay, or pay, under section RA 6 an amount to the Commissioner for a payment received or beneﬁt provided by them; or to withhold and pay under section RA 6B an amount of tax to the Commissioner for a retirement scheme con- tribution.
(b) (c) When payment due The person must pay the amount to the Commissioner by the following dates: (a) when the period for which the payment is made is shorter than a month, by the 5th day after the relevant end date: 2615 Part R s RA 15 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) when the period for which the payment is made is a month or a period that is longer than a month but not a period referred to in paragraph (c) or (d), by the 20th day of the month after the relevant end date: when the period for which the payment is made is a tax year or income year or both, by 31 May: (c) (cb) despite subsection (3)(c), for FBT payable for the last (d) quarter of a tax year, by 31 May: for a close company that pays FBT on an income year basis, by terminal tax date.
(3) Relevant end dates In this section, an end date means 1 of the following, as ap- plicable: (a) for PAYE and ESCT payable for 2 payment periods in a month under section RD 4(1)(b) or RD 65(3) (which set out the basis for payment of PAYE and ESCT),— (i) for the ﬁrst payment period, the 15th day of the month; and for the second payment period, the last day of the month: (ii) (b) (c) (d) for PAYE, RWT, NRWT, and RSCT payable monthly under section RD 4(1)(a), RE 21(2) and (7), RF 13(3), or RH 2(2) (which set out the basis for payment of PAYE, RWT, NRWT, and RSCT), as applicable, the last day of a month: for FBT payable quarterly under sections RD 58, RD 59, and RD 62 (which set out the basis for payment of FBT), the last day of a quarter: for RWT and NRWT payable by instalment under sec- tion RE 21(3) or RF 13(2) (which set out the basis for payment of RWT and NRWT)— (i) for the ﬁrst instalment, the last day of September; and for the second instalment, the last day of March.
(ii) When payment due in December (4) Despite subsection (2), for the purposes of this section and the payment of PAYE and ESCT to the Commissioner, if the month referred to in subsection (3) is December, the payment is due by 15 January.
2616 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RA 15 (5) (6) (7) Discrepancies Subsection (6)— (a) applies when a discrepancy arises in the information that a person is required to provide under,— (i) for resident passive income, section 51(1), (4), or (5) of the Tax Administration Act 1994: for non-resident passive income, section 49(1) or (2) of that Act: (ii) (b) does not apply to an unpaid amount that the Commis- sioner assesses for a particular return period.
Payment dates If an amount of RWT or NRWT remains unpaid, the person required to withhold the amount must pay it to the Commis- sioner no later than— (a) 20 April after the end of the tax year in relation to in- formation provided under section 49(1) or 51(1) of the Tax Administration Act 1994: the last date for providing the information, in relation to information provided under section 49(2) or 51(4) or (5) of that Act.
(b) Non-resident passive income The Commissioner may extend the time for payment of NRWT.
Deﬁned in this Act: amount of tax, assessment, close company, Commissioner, end date, ESCT, FBT, ﬁrst payment period, income year, non-resident pas- sive income, NRWT, pay, PAYE, quarter, resident passive income, retirement scheme contribution, RSCT, RWT, second payment period, tax year, terminal tax Compare: 2004 No 35 ss NC 15, ND 9(2), (3), ND 10, ND 13, ND 14, NE 4, NEB 3(1), NF 4, NG 11, NH 3 Section RA 15(1)(b): amended, on 1 April 2008, by section 524(1) of the Tax- ation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section RA 15(1)(c): added, on 1 April 2008, by section 524(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section RA 15(2)(b): substituted (with effect on 1 April 2008), on 6 October 2009, by section 492(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RA 15(2)(c): substituted (with effect on 1 April 2009), on 6 October 2009, by section 492(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

2617 Part R s RA 16 Income Tax Act 2007 Reprinted as at 2 September 2013 Section RA 15(2)(cb): inserted (with effect on 1 April 2009), on 6 October 2009, by section 492(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RA 15(2)(d): substituted (with effect on 1 April 2008), on 6 October 2009, by section 492(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RA 15(3)(b): substituted, on 1 April 2008, by section 524(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section RA 15(3)(c): substituted (with effect on 30 June 2009), on 6 October 2009, by section 492(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RA 15 list of deﬁned terms FDP: repealed (with effect on 30 June 2009), on 6 October 2009, by section 492(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RA 15 list of deﬁned terms retirement scheme contribution: inserted, on 1 April 2008, by section 524(3) of the Taxation (Business Taxation and Re- medial Matters) Act 2007 (2007 No 109).

Section RA 15 list of deﬁned terms RSCT: inserted (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 140(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section RA 15 compare note: amended, on 1 April 2008, by section 524(4) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

RA 16 Payment date when taxable activity ends When this section applies This section applies for a month when a registered person is required under section RA 6 to withhold and pay RWT or NRWT, and the person— (a) (b) stops carrying on a taxable activity; or no longer carries on a taxable activity in New Zealand.
Payment to Commissioner The person must pay to the Commissioner by the 20th day of the next month the total amount of tax for all payments relating to the taxable activity to the extent to which an amount of tax remains unpaid.

(1) (2) 2618 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RA 18 (3) Exemption continuing This section does not apply for resident passive income if the person continues to hold an RWT exemption certiﬁcate.
Deﬁned in this Act: amount of tax, Commissioner, NRWT, pay, registered per- son, resident passive income, RWT, RWT exemption certiﬁcate, taxable activity Compare: 2004 No 35 ss NF 4(5), NG 11(4) RA 17 Payment date when RWT exemption certiﬁcate expires (1) (2) (3) When this section applies This section applies in relation to a month of a tax year when an RWT exemption certiﬁcate of a person expires.
Payment to Commissioner The person must pay to the Commissioner by the 20th day of the month following that in which the certiﬁcate expires the total amount of tax withheld by them to the extent to which the amount remains unpaid.

Exclusion This section does not apply if the person continues to be re- quired to withhold RWT through the carrying on of a taxable activity.
Deﬁned in this Act: amount of tax, Commissioner, pay, RWT, RWT exemption certiﬁcate, tax withheld, tax year, taxable activity Compare: 2004 No 35 s NF 4(6) RA 18 Payment date for emigrating companies (1) When this section applies This section applies to an emigrating company that is treated under section FL 2 (Treatment of emigrating companies and their shareholders) as paying a distribution to a shareholder.
Payment (2) On or before the date that is 3 months after the time of emigra- tion, the company must pay to the Commissioner all amounts of tax for resident passive income or non-resident passive in- come withheld in relation to the distribution.
Deﬁned in this Act: amount of tax, Commissioner, emigrating company, non- resident passive income, pay, resident passive income, shareholder, time of emi- gration Compare: 2004 No 35 ss NF 4(6B), NG 11(4B) 2619 Part R s RA 19 Income Tax Act 2007 Reprinted as at 2 September 2013 Refunds RA 19 Refunds of excess amounts or when amounts mistakenly paid (1) When this section applies This section applies for a person (the payer) and the withhold- ing of an amount of tax that is more than the amount required to be withheld and paid under this Part (the excess amount) or an amount mistakenly paid, when— (a) the payer withholds and pays to the Commissioner an excess amount of RWT or NRWT: the payer pays FDP of an excess amount: a PAYE intermediary pays an amount of tax for an em- ployer through an error, or when the payment is not funded by the employer, as described in section RM 7 (Refunds to PAYE intermediaries): the result of a calculation for FBT made by an employer under sections RD 50 to RD 53 (which relate to at- tributed beneﬁts and non-attributed beneﬁts) is negative.
(b) (c) (d) (2) Refunds The Commissioner must refund the excess amount to the payer.
Deﬁned in this Act: amount, amount of tax, Commissioner, employer, FBT, FDP, NRWT, pay, PAYE intermediary, RWT Compare: 2004 No 35 ss NBA 7, ND 10(4)(a), NF 7(1), NG 16, NH 4 RA 20 Amalgamation of companies Amalgamations Amalgamated company’s obligation If an amalgamating company ends its existence on a resident’s restricted amalgamation, an unsatisﬁed obligation that the amalgamating company has at the time of the amalgamation to withhold and pay an amount of tax to the Commissioner under this Part is treated as an obligation of the amalgamated company.
Thresholds for close companies For the purpose of determining whether the threshold under section RD 60 (Close company option) has been met, the amal- gamated company is treated as paying the gross amounts of tax (1) (2) 2620 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RA 21 withheld under section RA 5(1)(a) and (c) by the amalgamat- ing company in the income year before that in which the amal- gamation takes place.
Deﬁned in this Act: amalgamated company, amalgamating company, amalgam- ation, amount of tax, close company, Commissioner, gross, income year, pay, resident’s restricted amalgamation Compare: 2004 No 35 ss NC 15(7), ND 13(8), ND 14(8), NEB 3(2), NH 4(8) Section RA 20(1) heading: inserted (with effect on 1 April 2008), on 6 October 2009, by section 493(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RA 20(2) heading: added (with effect on 1 April 2008), on 6 October 2009, by section 493(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RA 20(2): added (with effect on 1 April 2008), on 6 October 2009, by section 493(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RA 20 list of deﬁned terms amalgamation: inserted (with effect on 1 April 2008), on 6 October 2009, by section 493(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RA 20 list of deﬁned terms close company: inserted (with effect on 1 April 2008), on 6 October 2009, by section 493(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RA 20 list of deﬁned terms gross: inserted (with effect on 1 April 2008), on 6 October 2009, by section 493(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RA 20 list of deﬁned terms income year: inserted (with effect on 1 April 2008), on 6 October 2009, by section 493(3) of the Taxation (International Tax- ation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RA 20 compare note: amended, on 1 April 2008, by section 525 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
RA 21 Regulations Regulations (1) PAYE income payments The Governor-General may make regulations by Order in Council to— (a) declare a particular payment, or particular class of pay- ments, to be included in, or excluded from, the deﬁn- ition of— (i) (ii) salary or wages; or extra pay; or 2621 Part R s RA 21 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) (c) schedular payment: (iii) provide further rules in relation to schedular payments as set out in subsection (2): provide that the regulations do not apply to a particu- lar person, or class or persons, on notiﬁcation from the Commissioner.
(2) Schedular payments For the purposes of subsection (1)(b), regulations may be made under this Act or the Tax Administration Act 1994 in relation to schedular payments for the following purposes: (a) to set the amount of tax for a particular schedular pay- ment or particular class of schedular payment: to provide that the Commissioner may, if a person asks, set the rate of tax for a schedular payment to the person: to provide that the amount of tax for a particular schedu- lar payment, class of schedular payment, or schedular payments under a particular threshold is the person’s income tax liability in relation to the relevant kind of income: to provide that an amount of tax must be withheld and paid despite any assignment or charge.
(b) (c) (d) (3) Employment-related loans The Governor-General may make regulations by Order in Council to declare the rate of interest applying to employ- ment-related loans.

Application to quarters (4) When regulations referred to in subsection (3) are made, they apply to quarters starting from a date at least 1 month following the date the regulations were made.
Regulations that reduce the rate of interest from the prescribed rate of interest at the time, if made at least 1 month before the quarter ends, may apply for that quarter.
Deﬁned in this Act: amount of tax, employment-related loan, extra pay, income, income tax liability, interest, notify, pay, prescribed rate of interest, quarter, salary or wages, schedular payment, tax Compare: 2004 No 35 ss NC 21, ND 1F Section RA 21(4): amended (with effect on 1 April 2008), on 6 October 2009, by section 494 of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
2622 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RA 23 Application of other provisions RA 22 Limits on application of other provisions for purposes of PAYE rules (1) (2) Amounts not separated For an amount of tax not withheld and paid to the Commis- sioner, the provisions listed in subsection (2) do not require— the separate identiﬁcation of the amounts of a combined (a) tax and earner-related payment that are attributable to— an amount of tax for a PAYE income payment (i) that an employer or PAYE intermediary is re- quired to make under the PAYE rules: an amount that an employer must subtract under the sections referred to in subsection (2)(b) to (d): the bringing of separate proceedings or separate treat- ment for the collection, recovery, or imposition of penalties in relation to an amount of a combined tax and earner-related payment.
(ii) (b) (b) Provisions The sections referred to in subsection (1) are— (a) sections 143, 143A, and 156 to 165 of the Tax Admin- istration Act 1994: section 115 of the Accident Rehabilitation and Com- pensation Insurance Act 1992: section 285 of the Accident Insurance Act 1998: section 221 of the Accident Compensation Act 2001.
(c) (d) Deﬁned in this Act: amount, amount of tax, combined tax and earner-related payment, Commissioner, employer, pay, PAYE income payment, PAYE inter- mediary, PAYE rules Compare: 2004 No 35 s NC 20 Section RA 22(2)(d): amended, on 21 December 2010, by section 189 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
RA 23 Application of other provisions for purposes of ESCT rules and NRWT rules (1) References For the purposes of the ESCT rules and the NRWT rules, sec- tions 167 and 169 of the Tax Administration Act 1994 apply, modiﬁed as necessary, as if— 2623 Part R s RA 24 Income Tax Act 2007 Reprinted as at 2 September 2013 (2) (a) (b) (c) a reference to an amount of tax withheld were a refer- ence to ESCT or NRWT, as applicable: a reference to an employer were a reference to a person required to withhold and pay ESCT or NRWT, as ap- plicable: a reference to the PAYE rules were a reference to the ESCT rules or the NRWT rules.
Exclusion [Repealed] [Repealed] Deﬁned in this Act: amount of tax, employer, ESCT, ESCT rules, NRWT, NRWT rules, pay, PAYE rules, tax withheld Compare: 2004 No 35 ss NE 7, NG 17(1) Section RA 23(2) heading: repealed (with effect on 1 April 2008), on 6 October 2009, pursuant to section 495(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RA 23(2): repealed (with effect on 1 April 2008), on 6 October 2009, by section 495(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RA 23 list of deﬁned terms employer’s superannuation contribution: repealed (with effect on 1 April 2008), on 6 October 2009, by section 495(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
RA 24 Application of other provisions for purposes of RSCT rules For the purposes of the RSCT rules, sections 170(2), 171, and 172 of the Tax Administration Act 1994, modiﬁed as neces- sary, apply as if— (a) a reference to an amount of tax withheld were a refer- ence to RSCT: a reference to the RWT rules were a reference to the RSCT rules.
(b) Deﬁned in this Act: amount of tax, RSCT rules, RWT rules Compare: 2004 No 35 s NEB 7(1) Section RA 24: added, on 1 April 2008, by section 526 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
2624 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RB 3 Subpart RB—Terminal tax Contents RB 1 RB 2 Payment of terminal tax Income tax liability for non-ﬁling taxpayers for non-resident passive income Schedular income tax liability for ﬁling taxpayers for non-resident passive income RB 4 Using refunds to satisfy tax liabilities RB 3 Page 2625 2625 2625 2626 RB 1 Payment of terminal tax A person must pay their terminal tax for a tax year on the due date set out in section RA 13 (Payment dates for terminal tax).
Deﬁned in this Act: pay, tax year, terminal tax Compare: 2004 No 35 s MC 1 Section RB 1: amended (with effect on 1 April 2008), on 6 October 2009, by section 496(1) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
RB 2 Income tax liability for non-ﬁling taxpayers for non-resident passive income For the purposes of calculating a person’s terminal tax under section BC 8 (Satisfaction of income tax liability), the income tax liability of a non-ﬁling taxpayer who derives non-resident passive income is determined under section BC 1 (Non-ﬁling and ﬁling taxpayers).
Deﬁned in this Act: income tax liability, non-ﬁling taxpayer, non-resident pas- sive income, terminal tax Compare: 2004 No 35 s BC 1 RB 3 Schedular income tax liability for ﬁling taxpayers for non-resident passive income (1) When this section applies This section applies for the purposes of calculating a ﬁling taxpayer’s terminal tax under section BC 8 (Satisfaction of income tax liability).
2625 Part R s RB 4 Income Tax Act 2007 Reprinted as at 2 September 2013 (2) (3) (4) Calculating amount of liability The schedular income tax liability of the ﬁling taxpayer under section BC 7 (Income tax liability of person with schedular income) for each class of non-resident passive income that is schedular income under paragraph (f) of the deﬁnition of schedular income is equal to an amount calculated using the formula— amount of income × tax rate.
Deﬁnition of item in formula In the formula, tax rate is the rate set out in sections RF 7 to RF 10, and RF 12 (which relate to the calculation of NRWT) that applies to the class of non-resident passive income.

No imputation credits If the taxpayer derives a dividend to which subsection (2) ap- plies, they do not have a credit under section LE 1 (Tax credits for imputation credits) for an imputation credit attached to the dividend.
Deﬁned in this Act: amount, dividend, ﬁling taxpayer, imputation credit, non-ﬁling taxpayer, non-resident passive income, NRWT, schedular income, schedular income tax liability, terminal tax Compare: 2004 No 35 ss BC 7, NG 3 Section RB 3(2): amended (with effect on 1 April 2008), on 6 October 2009, by section 497(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
RB 4 Using refunds to satisfy tax liabilities If a person is entitled to a refund of an amount of tax from the Commissioner, the amount may be applied under section RM 10 (Using refund to satisfy tax liability) to satisfy a liabil- ity that the person has under the Inland Revenue Acts.
Deﬁned in this Act: amount of tax, Commissioner, Inland Revenue Acts Compare: 2004 No 35 s MD 1(3), (3A) Subpart RC—Provisional tax Contents Introductory provisions RC 1 What this subpart does 2626 Page 2628 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RB 4 Provisional tax rules and their application RC 2 RC 3 Who is required to pay provisional tax?
RC 4 Choosing to pay provisional tax Calculating provisional tax liability RC 5 Methods for calculating provisional tax liability RC 6 RC 7 Estimation method RC 8 GST ratio method Standard method RC 9 Provisional tax payable in instalments Instalments of provisional tax Table R1: Summary of instalment dates and calculation methods for provisional tax RC 10 Calculating amount of instalment under standard and estimation methods RC 11 Calculating amount of instalment using GST ratio RC 12 Voluntary payments RC 13 Paying 2 instalments for tax year RC 14 Paying 1 instalment for tax year Requirements for using GST ratio RC 15 Choosing to use GST ratio RC 16 Who may use GST ratio?
RC 17 When GST ratio must not be used RC 18 Changing calculation method RC 19 Disposal of assets Transitional years RC 20 Calculating residual income tax in transitional years RC 21 Paying provisional tax in transitional years RC 22 Calculating instalments in transitional years: standard method 2629 2629 2630 2631 2633 2634 2635 2638 2643 2644 2645 2645 2646 2647 2648 2649 2650 2652 2653 2654 2656 RC 23 Calculating instalments in transitional years: estimation 2657 method RC 24 Calculating instalments in transitional years: GST ratio 2659 method RC 25 Consequences of change in balance date 2659 When persons start or stop paying GST, or change taxable periods RC 26 Registering for GST or cancelling registration RC 27 Payment of provisional tax instalments when GST cycle 2660 2662 changed 2627 Part R s RC 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Treatment of groups of companies and amalgamated companies RC 28 Provisional tax rules and consolidated groups RC 29 Residual income tax of consolidated groups RC 30 Consolidated groups using estimation method RC 31 Consolidated groups using GST ratio method RC 32 Wholly-owned groups of companies RC 33 Amalgamated companies: calculating residual income tax 2663 2664 2664 2665 2666 2667 Attribution rule for income from personal services RC 34 Attribution rule for income from personal services 2668 RC 35 Further income tax credited to provisional tax liability 2670 Credits Disaster relief RC 36 Persons affected by adverse events [Repealed] Early-payment discounts RC 37 Availability of early-payment discounts RC 38 Crediting income tax with early-payment discount RC 39 Credit treated as payment of income tax RC 40 Some deﬁnitions 2671 2671 2672 2673 2673 Introductory provisions RC 1 What this subpart does When this subpart applies Sections RC 3 to RC 39 apply, for the purposes of the provi- sional tax rules, to provide— (a) the circumstances in which a person has a provisional tax obligation: a person’s provisional tax liability for a tax year, and the methods
 for calculating the amount payable for the tax year: the number of instalments of provisional tax and the instalment dates for a corresponding income year: how the amount of an instalment of provisional tax is determined: the payment of provisional tax in a transitional year: (b) (c) (d) (e) (1) 2628 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RC 3 (2) (f) the application of the rules relating to use of money interest in Part 7 of the Tax Administration Act 1994, and late payment penalties and shortfall penalties in Part 9 of that Act.
Instalment dates In this subpart, a reference to an instalment classiﬁed by the letters A to F is a reference to a date in the table in schedule 3, part A (Payment of provisional tax and terminal tax) on which an instalment of provisional tax is payable for an income year corresponding to a tax year.
Deﬁned in this Act: amount, corresponding income year, income year, instal- ment date, pay, provisional tax, provisional tax rules, shortfall penalty, tax year, transitional year Compare: 2004 No 35 s MB 1 RC 2 Provisional tax rules and their application (1) (2) Meaning The provisional tax rules means— (a) (b) this subpart; and section LB 2 (Tax credits for provisional tax payments); and sections 15N to 15S, 119, 120KB to 120N, 120OE, 139B and 139C, 173P to 173R of the Tax Administra- tion Act 1994.
(c) Application The provisional tax rules apply to a person who is required or who chooses to pay provisional tax.

Deﬁned in this Act: provisional tax, provisional tax rules Compare: 2004 No 35 s OB 1 “provisional tax rules” RC 3 Who is required to pay provisional tax?

Threshold or election (a) (1) A person who is liable to pay provisional tax for a tax year is— a person whose residual income tax for the tax year is more than $2,500; or a person who chooses under section RC 4 to pay provi- sional tax.
(b) 2629 Part R s RC 4 Income Tax Act 2007 Reprinted as at 2 September 2013 Exclusions (2) Despite subsection (1), the following persons do not pay pro- visional tax: (a) (b) (c) (d) a company that does not have a ﬁxed establishment in New Zealand and is not treated as resident in New Zealand: a person referred to in section 33A(1) of the Tax Ad- ministration Act 1994: a non-resident contractor who has not been given an exemption certiﬁcate by the Commissioner for the tax year: a multi-rate PIE that does not choose to calculate and pay tax using the provisional tax calculation option under section HM 44 (Provisional tax calculation op- tion).
No obligation (3) A person has no obligation to pay provisional tax for a tax year if their residual income tax for the preceding tax year is $2,500 or less.
Deﬁned in this Act: Commissioner, company, exemption certiﬁcate, ﬁxed es- tablishment, multi-rate PIE, New Zealand, non-resident, non-resident contrac- tor, pay, provisional tax, resident in New Zealand, residual income tax, tax year Compare: 2004 No 35 ss MB 2, OB 1 “provisional taxpayer” Section RC 3(2)(d): substituted, on 1 April 2010 (applying for the 2010–11 and later income years), by section 498(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RC 3 list of deﬁned terms multi-rate PIE: inserted, on 1 April 2010, by section 498(2)(b) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RC 3 list of deﬁned terms portfolio tax rate entity: repealed, on 1 April 2010, by section 498(2)(a) of the Taxation (International Taxation, Life Insur- ance, and Remedial Matters) Act 2009 (2009 No 34).
RC 4 Choosing to pay provisional tax Election (1) A person, when ﬁrst providing a return of income for a tax year, may choose to pay provisional tax for the tax year if— (a) they have paid provisional tax of more than $2,500 on or before— (i) the date of instalment F for the corresponding income year; or 2630 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RC 5 (b) the ﬁnal instalment date in a transitional year; and (ii) they have, on the day on which the ﬁrst payment of provisional tax is made for the tax year, a reasonable expectation that they are liable to pay provisional tax for the tax year, other than by this election.
Exclusion This section does not apply to a person described in section RC 3(2).
Deﬁned in this Act: corresponding income year, ﬁnal instalment, instalment date, pay, provisional tax, return of income, tax year, transitional year Compare: 2004 No 35 s MB 3 (2) Calculating provisional tax liability RC 5 Methods for calculating provisional tax liability Choice of method (1) A person liable to pay provisional tax must calculate the amount payable for a tax year using 1 of the methods de- scribed in subsections (2) to (7).
Standard method: 5% uplift (2) Under the standard method, the amount of provisional tax payable for the tax year is 105% of the person’s residual in- come tax for the preceding tax year, determined under section RC 6.

Subsection (3) overrides this subsection.
Standard method: 10% uplift (3) Despite subsection (2), the amount of provisional tax payable for the tax year is 110% of the person’s residual income tax for the tax year before the preceding tax year if— (a) they are required to provide a return of income for the preceding tax year; and the return is not due on or before the date on which the ﬁrst payment of provisional tax for the tax year is required through the application of section 37 of the Tax Administration Act 1994, or an extension granted under that section; and they have not provided the return on or before that date; and the date is not the date of instalment F for the corres- ponding income year.
(b) (c) (d) 2631 Part R s RC 5 Income Tax Act 2007 Reprinted as at 2 September 2013 (4) (5) Relationships and modiﬁcation of standard method Subsections (5) to (7) override subsection (3).

Sections RZ 3 (Standard method: 2010–11 to 2012–13 income years) and RZ 5D (Standard method or GST method: transition for Maori authorities) modify subsections (2) and (3).

Estimation method The person may estimate their provisional tax liability for the tax year under section RC 7.
GST ratio method (6) A person who is eligible under section RC 16 and not excluded by section RC 17 may choose to use a goods and services tax (GST) ratio under section RC 8 to determine their provisional tax liability for the tax year.
(7) Commissioner’s determination If the Commissioner determines a person’s provisional tax li- ability under section 119 of the Tax Administration Act 1994, the amount or liability is that last determined by the Commis- sioner and notiﬁed to the person at least 30 days before the instalment date.

The 30-day requirement does not apply in a case to which section 119(1)(d) of that Act applies (which re- lates to an estimate of residual income tax that is not fair and reasonable).
Life insurance business (8) A person who carries on a business of providing life insurance and who is liable for income tax under the life insurance rules, must at the time they determine their provisional tax liability provide the Commissioner with details of the calculation of that liability.

In particular, they must detail the extent to which the amount of provisional tax relates to the policyholder base.
Deﬁned in this Act: amount, business, Commissioner, corresponding income year, GST ratio, income tax, instalment date, life insurance, life insurance rules, notify, pay, policyholder base, provisional tax, residual income tax, return of income, tax year Compare: 2004 No 35 s MB 4 Section RC 5(4): amended (with effect on 1 October 2010), on 21 December 2010, by section 121 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section RC 5(4): amended, on 1 October 2010, by section 25 of the Taxation (Budget Measures) Act 2010 (2010 No 27).

2632 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RC 6 Section RC 5(4): amended, on 1 October 2008, by section 39 of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).
RC 6 Standard method (1) (2) (3) (4) When this section applies This section applies to a person liable to pay provisional tax for the purposes of section RC 5(2) and (3) and the calculation of the amount of provisional tax payable for a tax year under the standard method.
Assessment for preceding tax year The person’s residual income tax for a tax year is based on their assessment for the preceding tax year unless the Com- missioner has sent out a notice of assessment for the tax year at least 30 days before the relevant instalment date, in which case the amount of residual income tax is based on the Com- missioner’s assessment for the preceding tax year.
Commissioner’s assessment for preceding tax year The person’s residual income tax is based on the Commis- sioner’s assessment for the preceding tax year, whenever the assessment is made, if— (a) they are required under sections 33 and 37 of the Tax Administration Act 1994 to provide a return of income for the preceding tax year but have failed to do so by the relevant instalment date; or they are not required under sections 33 and 37 of that Act to provide a return by the relevant instalment date, and subsections (2) and (4) do not apply.
(b) Residual income tax for preceding tax year The amount of provisional tax payable for a tax year is the amount of the person’s residual income tax for the preceding tax year if— (a) they are not required to provide a return of income for the preceding tax year; or their residual income tax for the tax year before the pre- ceding tax year was $2,500 or less, and they were not required to provide, and have not provided, a return of income for the tax year by the date of instalment F for the corresponding income year.
(b) 2633 Part R s RC 7 Income Tax Act 2007 Reprinted as at 2 September 2013 (5) Later increased assessment If the Commissioner’s assessment of a person’s income tax li- ability occurs after the payment date for an instalment of pro- visional tax and would result in an increase in the person’s residual income tax for the preceding tax year, the residual in- come tax is treated for the purposes of the provisional tax rules as if it had not been increased.
Transitional years and consolidated groups (6) A person’s residual income tax in a transitional year is calcu- lated under section RC 20.

For consolidated groups, the cal- culation is made under section RC 29.
Deﬁned in this Act: amount, assessment, Commissioner, consolidated group, corresponding income year, income tax liability, instalment date, notice, pay, provisional tax, provisional tax rules, residual income tax, return of income, tax year, transitional year Compare: 2004 No 35 s MB 5 RC 7 Estimation method (1) When this section applies This section applies to a person who is liable to pay provisional tax under section RC 5(5) and to the calculation of the amount of their provisional tax payable for a tax year under the esti- mation method.
Fair and reasonable estimate (2) On or before an instalment date, the person may make a fair and reasonable estimate of their residual income tax for the tax year by informing the Commissioner of the estimate.

The amount of provisional tax payable for a tax year is the amount of the estimated residual income tax.

(3) Revising estimates The person may choose to revise an estimate made under sub- section (2) before an instalment date.
The amount last esti- mated is the amount taken into account under section RC 5(5).

Reasonable care in making and maintaining assessment (4) A person who makes an estimate under subsection (2) must take reasonable care in making it, and must revise the estimate for the tax year if, at some time in the tax year, the amount estimated is no longer fair and reasonable.
2634 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RC 8 (5) (6) (7) Estimation higher than provisional tax payable If a person’s estimate is more than the provisional tax that is payable for the tax year, they are treated as having taken reasonable care in making the estimate.
Changing calculation method from GST ratio If, under section RC 18(5), a person changes the way they determine the amount of provisional tax after the date of an instalment, they must estimate their residual income tax for their corresponding income year, and must pay provisional tax on whichever of the following instalment dates for the income year occur after 30 days from their last ratio instalment date: C and F for changes to a 6-monthly GST taxable period: (a) B, D, and F for other changes.
(b) Disaster relief [Repealed] [Repealed] Deﬁned in this Act: amount, Commissioner, corresponding income year, GST ratio, instalment date, pay, provisional tax, ratio instalment date, residual in- come tax, tax year Compare: 2004 No 35 s MB 6 Section RC 7(6): substituted, on 1 April 2008, by section 527 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section RC 7(7) heading: repealed, on 6 October 2009, pursuant to section 499(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RC 7(7): repealed, on 6 October 2009, by section 499(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RC 7 list of deﬁned terms qualifying event: repealed, on 6 October 2009, by section 499(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RC 7 list of deﬁned terms self-assessed adverse event: repealed, on 6 October 2009, by section 499(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
RC 8 GST ratio method Using GST ratio (1) A person liable to pay provisional tax who meets the require- ments of section RC 16 and is not excluded by section RC 17 may choose to use a GST ratio to determine the amount of pro- visional tax payable for a tax year.
2635 Part R s RC 8 Income Tax Act 2007 Reprinted as at 2 September 2013 (2) (3) Meaning of GST ratio The person’s GST ratio is the percentage ﬁgure that is ob- tained by dividing their residual income tax for the preced- ing tax year by their total taxable supplies for the correspond- ing income year.

The amount of residual income tax and the amount of total taxable supplies are called base amounts for the purposes of this section.
When amounts based on tax year before preceding tax year If a base amount for the preceding tax year or corresponding income year is not known, the GST ratio is the percentage based on the assessment for the tax year and corresponding income year that are just before the preceding tax year and corresponding income year.
When no assessment for tax year before preceding tax year (3B) Subsection (3) does not apply and the GST ratio is the percent- age based on the assessments of the base amounts for the year that is 2 years before the preceding tax year if— (a) for the year before the preceding tax year— (i) (ii) an assessment of a base amount has not been made and the absence of an assessment arises be- cause of an extension of time for ﬁling a return for the year, or a period in the year: an assessment of a base amount is the subject of a dispute or challenge under the Tax Administra- tion Act 1994: the year is a transitional year; and (iii) for the year that is 2 years before the preceding tax year— (i) (ii) the base amounts have been assessed; and the circumstances in paragraph (a)(ii) and (iii) do not exist.
(b) Commissioner’s calculation The Commissioner must calculate a person’s GST ratio, in- forming them by— (a) including the percentage ﬁgure on the person’s preprinted GST return form; or advising them in writing or by telephone; or some other means.
(b) (c) (4) 2636 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RC 8 (5) Adjustment to GST ratio The Commissioner must adjust a person’s GST ratio if a base amount is revised through, among other reasons,— (a) an assessment or an amended assessment of the per- son’s income tax return for the preceding tax year; or a change in the value of the total taxable supplies for the corresponding income year; or the disposal of an asset to which section RC 19 applies.
(b) (c) New GST ratio (6) When subsection (5) applies, the Commissioner must inform the person of the new GST ratio.

The new ratio applies in relation to the relevant instalment dates that occur 30 days after the date on which the person is informed.
(7) Transitional years If a person has paid instalments of provisional tax in a transi- tional year, for the tax year that follows the transitional year, for the purposes of this section and section RC 11, they must— ignore the transitional year when determining their re- (a) sidual income tax or total taxable supplies; and base their determination of residual income tax and total taxable supplies on the tax year preceding the transi- tional year.
(b) When no assessment for tax year before preceding tax year (7B) Subsection (7) does not apply and the GST ratio is the percent- age based on the assessments of the base amounts for the year that is 2 years before the transitional year if— (a) for the year before the transitional year— (i) (ii) an assessment of a base amount has not been made and the absence of an assessment arises be- cause of an extension of time for ﬁling a return for the year, or a period in the year: an assessment of a base amount is the subject of a dispute or challenge under the Tax Administra- tion Act 1994: the year is a transitional year; and (iii) for the year that is 2 years before the transitional year— the base amounts have been assessed; and (i) (b) 2637 Part R s RC 9 Income Tax Act 2007 Reprinted as at 2 September 2013 (8) (9) (ii) the circumstances in paragraph (a)(ii) and (iii) do not exist.
Total taxable supplies In subsections (2), (5), and (7), and in sections RC 11, RC 19, and RC 31, total taxable supplies, for a person and a period, means the amount that is the total value of taxable supplies by the person for the period.

The amount includes the GST charged on the supplies.

Modiﬁcation Sections RZ 4 (GST ratio method: 2010–11 to 2013–14 in- come years) and RZ 5D (Standard method or GST method: transition for Maori authorities) modify this section.
Deﬁned in this Act: amount, assessment, base amount, Commissioner, corres- ponding income year, GST, GST ratio, income tax, instalment date, pay, pro- visional tax, residual income tax, return, tax year, taxable supply, total taxable supplies, transitional year Compare: 2004 No 35 s MB 7 Section RC 8(3B) heading: inserted, on 1 April 2008, by section 528(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section RC 8(3B): inserted, on 1 April 2008, by section 528(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section RC 8(7B) heading: inserted, on 1 April 2008, by section 528(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section RC 8(7B): inserted, on 1 April 2008, by section 528(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section RC 8(9): amended (with effect on 1 October 2010), on 21 December 2010, by section 122 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section RC 8(9): amended, on 1 October 2010, by section 26 of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section RC 8(9): amended, on 1 October 2008, by section 40 of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).
Instalments of provisional tax RC 9 Provisional tax payable in instalments (1) Who this section applies to This section applies to a person who is liable to pay provisional tax.
2638 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RC 9 (2) General principle For a person liable to pay provisional tax using the standard and estimation methods, the amount of the provisional tax li- ability must be spread evenly over the applicable number of instalments, so that equal amounts are paid on each instalment date.

If the full amount is not divisible into exactly equal in- stalments, the ﬁnal instalment carries the difference.
Provisional tax payable in 3 instalments (3) A person pays provisional tax in 3 instalments on the interest instalment dates for the tax year in the months set out in sched- ule 3, part A, columns B, D, and F (Payment of provisional tax and terminal tax) for the person’s corresponding income year.

The amount of each instalment is calculated under sec- tion RC 10.

Subsection (4) overrides this subsection.
(4) Exclusions Subsection (3) does not apply— (a) to a person liable to pay provisional tax who— pays GST on a 6-monthly basis; or (i) uses a GST ratio to determine the amount of pro- (ii) visional tax payable, or who changes their calcu- lation method under section RC 18(5); or changes the cycle of their taxable periods under section 15C of the Goods and Services Tax Act 1985: (iii) (b) (c) (d) to a person with an initial provisional tax liability who— (i) (ii) pays GST on a 6-monthly basis; or pays GST on a monthly or 2-monthly basis, and starts a taxable activity within 30 days before the date of instalment B in their corresponding in- come year: to a person liable to pay provisional tax who has not provided a return of income for the preceding tax year, and whose residual income tax for the tax year before the preceding tax year was $2,500 or less: in a transitional year.
Provisional tax when GST paid on 6-monthly basis (5) A person liable to pay provisional tax who pays GST on a 6-monthly basis must pay provisional tax on the 2 interest in- 2639 Part R s RC 9 Income Tax Act 2007 Reprinted as at 2 September 2013 stalment dates for the tax year in the months set out in sched- ule 3, part A, columns C and F for their corresponding income year.
This subsection applies to a person with an initial provi- sional tax liability other than 1 who pays GST on a 6-monthly basis and starts a taxable activity within 30 days before the date of instalment C. Provisional tax determined using GST ratio (6) A person liable to pay provisional tax who uses a GST ratio to determine the amount of provisional tax payable for a tax year, must pay provisional tax on the 6 ratio instalment dates in the months set out in schedule 3, part A, columns A to F for their corresponding income year.
The amount of each instalment is calculated under section RC 11.

Changing calculation method (7) A person who is unable or who decides not to use a GST ratio, changing their calculation method under section RC 18, must pay the provisional tax payable for the tax year on the relevant instalment dates under the replacement method.

The amount of each instalment is calculated under section RC 10.
Changing cycle of taxable periods (8) A person who changes the cycle of their taxable periods under section 15C of the Goods and Services Tax Act 1985 must pay provisional tax for the tax year on the instalment dates set out in section RC 27 after the change in taxable period takes effect.

The amount of each instalment is calculated under section RC 10.
Persons with initial provisional tax liability (9) A person with a new provisional tax liability who starts a tax- able activity in a tax year is liable to pay interest calculated under section 120KC of the Tax Administration Act 1994 as if they were liable to pay provisional tax for the tax year— (a) in 3 instalments under subsection (3) if they start a tax- able activity at some time in the period that starts at the beginning of the corresponding income year and ends 30 days before the date of instalment B: in 2 instalments— (i) in a case to which section RC 13 applies; or (b) 2640 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RC 9 (ii) if they pay GST on a 6-monthly basis and start a taxable activity at some time in the period that starts at the beginning of the corresponding in- come year and ends 30 days before the date of instalment C: (c) in 1 instalment in a case to which section RC 14 applies.
Extension of time for return (10) A person who has not provided a return of income for a pre- ceding tax year and whose residual income tax for the tax year before the preceding tax year was $2,500 or less must pay pro- visional tax for the tax year on the instalment dates set out in section RC 13 or RC 14, as applicable.

(11) Transitional years In a transitional year, provisional tax is payable as set out in section RC 21 and schedule 3, part B.
The amount of each instalment is calculated under sections RC 22 to RC 24.

Voluntary payments (12) A person liable to pay provisional tax may pay an instalment under section RC 12 at any time.
Deﬁned in this Act: amount, corresponding income year, ﬁnal instalment, GST, GST ratio, initial provisional tax liability, instalment date, interest instalment date, pay, provisional tax, ratio instalment date, residual income tax, return of income, tax year, taxable activity, taxable period, transitional year Compare: 2004 No 35 s MB 8 Section RC 9(7): amended, on 1 April 2008, by section 529(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section RC 9(9): amended, on 1 April 2008, by section 529(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section RC 9(9)(b)(ii): substituted, on 1 April 2008, by section 529(3) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
2641 Part R s RC 9 Income Tax Act 2007 Reprinted as at 2 September 2013 Table R1: Summary of instalment dates and calculation methods for provisional tax Variables Method Instal- ments Instal- ment dates Calcula- tion Interest, penalties RC 6 3: RC 9(3) B, D, F RC 10 120KE(1), (2) RC 7 3: RC 9(3) B, D, F RC 10 120KB 1 month RC 8 6: RC 9(6) A to F RC 11 2 month RC 8 6: RC 9(6) A to F RC 11 120KE(3), 139C 120KE(3), 139C standard RC 6 2: RC 9(5) C and F RC 11 120KE(1) estimation RC 7 2: RC 9(5) C and F RC 11 120KB RC 6 or RC 7 RC 9(9), RC 13(3), RC 14(2) D and F, or F as required RC 10 (RC 13(4)), RC 10 (RC 14(3)) RC 20 RC 22 (RC 9(11)) RC 27 (RC 9(8)) RC 27, 15C, 15E (GST Act) B, D, F, or C, F as required B, D, F, or C, F as required RC 22– RC 24 RC 26, RC 27 120KC 120KC 120KD RC 18 RC 7(6), RC 9(7) B, D, F, or C, F as required RC 18 120KE(5) –(7) RC 12 120E Categories: ordinary Standard RC 5(2), (3) Estimation RC 5(5) GST ratio RC 5(6) GST 6-month RC 9(4) Categories: exceptional Persons with initial provisional tax liability Transitional years Changing taxable period, or starting and stopping GST registration Changing calculation method Voluntary payments Note: references in the last column are to sections of the Tax Administration Act 1994.
2642 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RC 10 RC 10 Calculating amount of instalment under standard and estimation methods (1) When this section applies This section applies for the purposes of— (a) section RC 5(2), (3), and (5) (which relates to the cal- culation of a provisional tax liability); and section RC 9(3) and (5) (which relates to payment of instalments); and sections RC 13 and RC 14 (which relate to persons with an initial provisional tax liability and those with an ex- tension of time for providing a return); and sections RC 26 and RC 27 (which relate to changes in taxable periods).
(b) (c) (d) (2) Calculation The amount of an instalment of provisional tax is calculated using the formula— residual income tax × instalment number total instalments provisional tax.
(3) Deﬁnition of items in formula In the formula,— (a) residual income tax is a person’s residual income tax, as applicable— (i) for the preceding tax year, uplifted by 5% (modi- ﬁed as applicable by sections RZ 5 (Calculat- ing amounts under standard method: 2010–11 to 2012–13 income years) and RZ 5D (Standard method or GST method: transition for Maori au- thorities); or for the tax year before the preceding tax year, up- lifted by 10% (modiﬁed as applicable by sections RZ 5 and RZ 5D); or the amount estimated by them: (iii) instalment number is the number of the instalment for the tax year, whether ﬁrst, second, or third: total instalments is the total number of instalments for the tax year: (ii) (b) (c) 2643 Part R s RC 11 Income Tax Act 2007 Reprinted as at 2 September 2013 (4) (d) provisional tax is the amount of a person’s provisional tax liabilities for the tax year to date.
Instalment amounts after change in balance date or taxable period If a change occurs to the balance date or cycle of a person’s taxable periods, the calculation of the amount of an instalment is made under this section, applying the updated ﬁgures to the items in the formula.
Deﬁned in this Act: amount, balance date, initial provisional tax liability, pay, provisional tax, residual income tax, return of income, tax year, taxable period Compare: 2004 No 35 s MB 9 Section RC 10(1)(b): amended, on 1 April 2008, by section 530 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section RC 10(3)(a)(i): amended (with effect on 1 October 2010), on 21 De- cember 2010, by section 123(a) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section RC 10(3)(a)(i): amended, on 1 October 2010, by section 27(a) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section RC 10(3)(a)(i): amended, on 1 October 2008, by section 41(a) of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).

Section RC 10(3)(a)(ii): amended (with effect on 1 October 2010), on 21 De- cember 2010, by section 123(b) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section RC 10(3)(a)(ii): amended, on 1 October 2010, by section 27(b) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section RC 10(3)(a)(ii): amended, on 1 October 2008, by section 41(b) of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).
RC 11 Calculating amount of instalment using GST ratio Calculation For a person who uses a GST ratio, the amount of provisional tax payable on an instalment date for a tax year is calculated using the formula— GST ratio for tax year × total taxable supplies.

Deﬁnition of item in formula In the formula, total taxable supplies is the amount of the per- son’s total taxable supplies in the taxable period that matches the instalment period.
(1) (2) 2644 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RC 13 (3) (4) Taxable supplies when person pays on monthly basis For the purposes of subsection (1), a person who pays GST on a 1-month cycle under section 15 of the Goods and Services Tax Act 1985 must apply the GST ratio to the sum of their taxable supplies in the current taxable period and the preced- ing taxable period, that is, the taxable supplies in the 2-month period matching the instalment period.
Modiﬁcation Sections RZ 4 (GST ratio method: 2010–11 to 2013–14 in- come years) and RZ 5D (Standard method or GST method: transition for Maori authorities) modify this section.
Deﬁned in this Act: amount, GST, GST ratio, instalment date, pay, provisional tax, tax year, taxable period, taxable supply, total taxable supplies Compare: 2004 No 35 s MB 10 Section RC 11(4): amended (with effect on 1 October 2010), on 21 December 2010, by section 124 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section RC 11(4): amended, on 1 October 2010, by section 28 of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Section RC 11(4): amended, on 1 October 2008, by section 42 of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).
RC 12 Voluntary payments A person who is liable to pay provisional tax may at any time make a voluntary payment of an amount of provisional tax that— (a) relates to their income tax liability for a tax year in which they are not liable for provisional tax; or is more than the provisional tax payable by them for the tax year; or is more than the income tax payable by them for the tax year.
(b) (c) Deﬁned in this Act: amount, income tax, income tax liability, pay, provisional tax, tax year Compare: 2004 No 35 s MB 12 RC 13 Paying 2 instalments for tax year Who this section applies to This section applies for a tax year to— (1) 2645 Part R s RC 14 Income Tax Act 2007 Reprinted as at 2 September 2013 (a) (b) a person with an initial provisional tax liability whose ﬁrst business day occurs in the period that starts 30 days before the date of instalment B and ends 30 days before the date of instalment D; or a person liable to pay provisional tax whose return of income for the preceding tax year is provided in the period that starts on the date of instalment B and ends on the date of instalment D if— (i) they were required to provide a return for the pre- ceding tax year but, under section 37 of the Tax Administration Act 1994 or an extension under that section, are not required to provide the re- turn by the date of instalment B; and their residual income tax for the tax year before the preceding tax year was $2,500 or less.
(ii) Exclusion (2) Despite subsection (1), this section does not apply to a person liable to pay provisional tax who pays GST on a 6-monthly basis.

(3) (4) When instalments are payable For the purposes of section RC 9(9)(b), the instalments are payable on the date of instalments D and F for the person’s corresponding income year.

Formula for amount of instalment The amount of each instalment is calculated under section RC 10.
Deﬁned in this Act: amount, corresponding income year, ﬁrst business day, GST, initial provisional tax liability, pay, provisional tax, residual income tax, return of income, tax year Compare: 2004 No 35 s MB 13 RC 14 Paying 1 instalment for tax year Who this section applies to This section applies for a tax year to— (a) a person with an initial provisional tax liability whose ﬁrst business day occurs in the period that starts 30 days before the date of instalment D and ends at the end of the corresponding income year: (1) 2646 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RC 15 (b) (c) a person liable to pay provisional tax whose return of income for the preceding tax year is not provided on or before the date of instalment D if— (i) they were required to provide a return for the pre- ceding tax year but, under section 37 of the Tax Administration Act 1994 or an extension under that section, are not required to provide the re- turn by the date of instalment D; and their residual income tax for the tax year before the preceding tax year was $2,500 or less: (ii) a person who pays GST on a 6-monthly basis if— (i) their ﬁrst business day occurs in the period that starts 30 days before the date of instalment C and ends at the end of the corresponding income year; or they meet the requirements of paragraph (b)(i) and (ii) as if the reference to instalment D in para- graph (b)(i) were a reference to instalment C. (ii) (2) (3) When instalment payable For the purposes of section RC 9(9)(c), the instalment is payable on the date of instalment F for the person’s corres- ponding income year.
Amount of instalment The amount of the instalment is calculated under section RC 10.
Deﬁned in this Act: amount, corresponding income year, ﬁrst business day, GST, initial provisional tax liability, pay, provisional tax, residual income tax, return of income, tax year Compare: 2004 No 35 s MB 14 Requirements for using GST ratio RC 15 Choosing to use GST ratio A person who meets the requirements of section RC 16(2) and (3) for a tax year may choose to use a GST ratio for the corres- ponding income year if they inform the Commissioner of their election before the start of the income year.
Deﬁned in this Act: Commissioner, corresponding income year, GST ratio, tax year Compare: 2004 No 35 s MB 16 2647 Part R s RC 16 Income Tax Act 2007 Reprinted as at 2 September 2013 RC 16 Who may use GST ratio?

General eligibility (1) A person liable to pay provisional tax may choose to use a GST ratio to determine under section RC 5(6) the amount of provisional tax payable for a tax year only if they meet all the requirements of subsections (2) and (3) in relation to the same entity.
(2) Requirements for preceding tax year For the purposes of determining their eligibility for a tax year, the person must meet the following requirements in the pre- ceding tax year and corresponding income year: (a) their residual income tax, as calculated, was more than $2,500 but no more than $150,000; and they were a registered person for the whole income year, and provided a return under the Goods and Services Tax Act 1985 for an entity whose taxable activity did not begin operations in that tax year; and the ratio of their residual income tax to total taxable sup- plies, as calculated under section RC 11 and expressed as a percentage, is between zero and 100%.
(b) (c) (3) Requirement for current year For the tax year in which the person uses a GST ratio, they must be liable to ﬁle a return under the Goods and Services Tax Act 1985 for a 2-month or a 1-month period under section 15(1)(b) and (c) of that Act.

When election applies (4) A person’s election under section RC 15 to use a GST ratio applies for the tax year for which the election is made and in later tax years, unless the person changes their calculation method under section RC 18.
References to preceding tax year In this section, a reference to a preceding tax year includes a reference to a tax year earlier than the preceding tax year if that earlier tax year is used for the purposes of calculating a GST ratio.
Deﬁned in this Act: amount, GST ratio, pay, provisional tax, registered person, residual income tax, tax year, taxable activity, total taxable supplies Compare: 2004 No 35 s MB 15(1)–(4), (11) (5) 2648 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RC 17 Section RC 16(2): amended, on 1 April 2008, by section 531(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section RC 16(2)(b): amended, on 1 April 2008, by section 531(2) of the Tax- ation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section RC 16(5): amended, on 1 April 2008, by section 531(3) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
RC 17 When GST ratio must not be used Requirement to discontinue use of GST ratio (1) Despite section RC 16, a person must stop using a GST ratio for a tax year and must apply section RC 18(4) or (5) if— (a) their GST registration ends under section 52 of the Goods and Services Tax Act 1985 in the tax year; or they no longer qualify under section RC 16(2) as a result of an amended assessment of their income tax liability or their GST liability for the preceding tax year; or they no longer qualify under section RC 16(3) as a result of a change in their taxable period.
(b) (c) No GST return (2) A person must not use, or must stop using, a GST ratio for a tax year if they— (a) are liable to provide a return under the Goods and Services Tax Act 1985 for a period in their correspond- ing income year; and do not ﬁle the return within 60 days after the due date for ﬁling the return.
(b) Instalments following default (3) A person who is required by subsection (2) to stop using a GST ratio must pay the provisional tax instalments required under section RC 18 for an instalment period beginning on or after the due date for ﬁling the return referred to in subsection (2) that is not the subject of notiﬁcation under subsection (4).
Further use of GST ratio (4) Despite subsections (2) and (3), a person may use a GST ratio for an instalment period referred to in subsection (3) if— (a) they apply in writing or by telephone to the Commis- sioner; and the Commissioner considers— (b) 2649 Part R s RC 18 Income Tax Act 2007 Reprinted as at 2 September 2013 (i) (ii) (iii) the failure to ﬁle the return is caused by an event or circumstance beyond the person’s control; and the event or circumstance provides reasonable justiﬁcation or excuse for the failure; and the person remedied the failure as soon as prac- ticable; and (5) (c) the Commissioner notiﬁes the person that they may use the GST ratio for the instalment period.
Standard required For the purposes of subsection (4)(b), the Commissioner must use the same approach that would be used to justify the remis- sion of a penalty under section 183A of the Tax Administration Act 1994.
Later default (6) Notiﬁcation under subsection (4) does not apply to an instal- ment period if— (a) the person fails to ﬁle a return due after the date of the notice unless the failure is anticipated and referred to in the notice; and the instalment period begins on or after the due date of the return described in paragraph (a).
(b) Deﬁned in this Act: assessment, Commissioner, corresponding income year, GST ratio, income tax liability, notify, pay, provisional tax, tax year, taxable period Compare: 2004 No 35 s MB 15(5)–(10) Section RC 17(4)(a): amended, on 1 April 2008, by section 532 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
RC 18 Changing calculation method When this section applies This section applies if, after having chosen to use a GST ratio for a tax year, a person liable to pay provisional tax either— (a) chooses another way to calculate the amount of provi- sional tax payable for the tax year; or is required under section RC 17(1) or (2) to stop using a GST ratio for the corresponding income year.
(b) Informing Commissioner of decision to change The person must inform the Commissioner of their decision under subsection (1)(a), and may do this either in writing or by (1) (2) 2650 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RC 18 (3) (4) (5) (6) (7) telephone.

Subsection (4) or (5) then applies for the remaining instalments of provisional tax for the tax year.
Date on which use of GST ratio stopped For the purposes of subsection (1)(b), the date on which the person stops using a GST ratio is, as applicable,— the date their GST registration ends; or (a) the date of the amended assessment of their income tax (b) liability or GST liability for the preceding tax year; or the effective date of a change in taxable period; or the last day of the period in which a return is liable to be provided under the Goods and Services Tax Act 1985.
(c) (d) Changing method before date of instalment A If the person is unable or decides not to use a GST ratio before the date of instalment A, they may choose to determine the amount of provisional tax payable under section RC 5(2), (3) or (5).

The person is treated as never having chosen to use the GST ratio method and, for the purposes of section 120KE(5) of the Tax Administration Act 1994, as never having changed the way they determine an amount of provisional tax under this section.
Changing method after instalment date If the person is unable or decides not to use the GST ratio after an instalment date, they must determine the amount of provi- sional tax payable on instalment for the remainder of the in- come year under section RC 5(5) using the estimation method.

For this purpose, the person may provide the estimate in writ- ing or by telephone.
Date of application when method changed If the person changes their calculation method under subsec- tion (4) or (5), the date on which the change applies may be a future date agreed between the person and the Commissioner.
Other consequences of changing method For the purposes of this section,— (a) the number of instalments and the instalment dates re- maining for an income year depend on— (i) the requirements of the method chosen by the person when they stop using the GST ratio; and 2651 Part R s RC 19 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) (c) (ii) the cycle of taxable periods chosen by the person, being either a monthly or 2-monthly basis: a person may change from using a GST ratio to a 6-monthly cycle of taxable periods only if— (i) the requirements of section 15C of the Goods and Services Tax Act 1985 are met; and their 6-month taxable period is aligned with their balance date under section 15B of the Goods and Services Tax Act 1985: (ii) section 120KE(5) to (7) of the Tax Administration Act 1994 applies in deciding whether use of money inter- est is payable in relation to instalments under the new method.
Deﬁned in this Act: amount, assessment, balance date, Commissioner, corres- ponding income year, GST ratio, income tax liability, income year, instalment date, pay, provisional tax, tax year, taxable period Compare: 2004 No 35 s MB 17 Section RC 18(2): amended, on 1 April 2008, by section 533(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section RC 18(4): amended, on 1 April 2008, by section 533(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
RC 19 Disposal of assets When this section applies This section applies if, as part of the taxable activity of an entity referred to in section RC 16(2) and (3), a person who is liable to pay provisional tax, disposes of an asset— that is not revenue account property; and (a) the value of the supply of which is not less than the (b) greater of— (i) an amount equal to 5% of the total taxable sup- plies of the business for the previous 12 months; or $1,000.
(ii) Adjustment to GST ratio for current and next income year The person may choose to take the disposal of the asset into account in adjusting their taxable supplies for the relevant tax- able period and income year, by subtracting the value, includ- ing GST, of the asset from— (1) (2) 2652 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RC 20 (a) (b) the total taxable supplies for a taxable period for the pur- poses of the formula in section RC 11(1), in proportion to the output tax which is attributed under section 20(4) of that Act to that taxable period for the supply of the asset: the base amount of total taxable supplies for the corres- ponding income year under section RC 8(2), in propor- tion to the output tax which is attributed under section 20(4) of that Act to a taxable period in that income year for the supply of the asset.
Informing Commissioner For the purposes of subsection (2), the person must inform the Commissioner of both the disposal of the asset and the value of its supply, and may do this either in writing or by telephone.

Rounding percentages In the determination of the value of the supply of the asset under subsection (1)(b)(i), the amount must be rounded to a whole percentage number.
Deﬁned in this Act: amount, base amount, business, Commissioner, GST, GST ratio, income year, pay, provisional tax, revenue account property, taxable ac- tivity, taxable period, taxable supply, total taxable supplies Compare: 2004 No 35 s MB 18 Section RC 19(2): substituted, on 1 April 2008, by section 534 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
(3) (4) Transitional years RC 20 Calculating residual income tax in transitional years (1) Calculation for transitional year This section applies for the purposes of section RC 5(2) and (3) and the calculation of a person’s residual income tax for a tax year if— (a) (b) the preceding tax year is a transitional year: the tax year before the preceding tax year is a transi- tional year.
(2) Amount increased or decreased The amount of residual income tax for the transitional year must be increased or decreased by the amount calculated under 2653 Part R s RC 21 Income Tax Act 2007 Reprinted as at 2 September 2013 (3) (4) subsection (3) to reﬂect the amount that would apply in a 12-month period.

Formula The amount of residual income tax is calculated using the for- mula— residual income tax × days in current tax year days in transitional year.
Deﬁnition of items in formula In the formula,— (a) residual income tax is a person’s residual income tax, as applicable— (i) (ii) for the preceding tax year, uplifted by 5%; or for the tax year before the preceding tax year, uplifted by 10%; or the amount estimated by them: (iii) days in current tax year is the number of days in the current tax year: days in transitional year is the number of days in the person’s transitional year.
(b) (c) Deﬁned in this Act: amount, residual income tax, tax year, transitional year Compare: 2004 No 35 s MB 19 RC 21 Paying provisional tax in transitional years Total amount payable (1) A person liable to pay provisional tax in a transitional year must pay the sum of all instalments of provisional tax payable for the transitional year, both interim instalments under sub- section (2) and a ﬁnal instalment under subsection (3).
When instalments payable The person must pay an instalment other than a ﬁnal instalment on— (a) the 28th day of the months set out in schedule 3, part B (Payment of provisional tax and terminal tax) unless paragraph (b) or (c) applies: 15 January, when the month set out in schedule 3, part B is December and the year is a transitional year: (b) (2) 2654 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RC 21 (c) 7 May, when the month set out in schedule 3, part B is April and the year is a transitional year.
(3) (4) (5) When ﬁnal instalment payable The person must pay the ﬁnal instalment on— (a) the 28th day of the month following the ﬁnal month in the transitional year; or the 15th day of January, when November is the ﬁnal month; or 7 May, when March is the ﬁnal month and the year is a transitional year.
Modiﬁcations to instalment dates For the purposes of subsection (2), provisional tax is not payable on— (a) the date of instalment B, if section RC 13 would have applied if the year were not a transitional year; or the dates of instalments B and D, if section RC 14(1)(a) and (b) would have applied if the year were not a tran- sitional year; or the dates of instalments B, D, and F, if the person li- able to pay provisional tax is a person with an initial provisional tax liability whose ﬁrst business day occurs within 30 days of the date of instalment F; or the date of instalment C, if section RC 14(1)(c) would have applied if the year were not a transitional year; or the dates of instalments C and F, if the person liable to pay provisional tax is a person with an initial provisional tax liability who pays GST on a 6-monthly basis whose ﬁrst business day occurs after the day that is 30 days before the date of instalment F. (b) (c) (b) (c) (d) (e) Counting months in transitional years In this section, and in sections RC 22 to RC 25, and in sched- ule 3, part B, the number of months in a transitional year is determined as follows: (a) the ﬁrst month in a person’s transitional year is the ﬁrst whole month in the transitional year: the ﬁnal month in a person’s transitional year is the month in which their new balance date under section 39 of the Tax Administration Act 1994 occurs: (b) 2655 Part R s RC 22 Income Tax Act 2007 Reprinted as at 2 September 2013 (c) each month falling between the ﬁrst and ﬁnal months must be included in determining the length of the tran- sitional year.
Deﬁned in this Act: balance date, ﬁnal instalment, ﬁrst business day, GST, initial provisional tax liability, pay, provisional tax, transitional year, year Compare: 2004 No 35 s MB 20 Section RC 21(2)(a): substituted, on 1 April 2008, by section 535(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section RC 21(2)(b): substituted, on 1 April 2008, by section 535(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section RC 21(2)(c): added, on 1 April 2008, by section 535(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section RC 21(3)(b): amended, on 1 April 2008, by section 535(2) of the Tax- ation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section RC 21(3)(c): added, on 1 April 2008, by section 535(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
RC 22 Calculating instalments in transitional years: standard method When this section applies This section applies to a person liable to pay provisional tax using the standard method in relation to instalments of provi- sional tax payable in a transitional year under section RC 21.
Instalment other than ﬁnal instalment For an instalment date other than the date of the ﬁnal instal- ment, the person must pay an amount calculated using the for- mula— person’s provisional tax × instalments payable total instalments tax previously payable.
Deﬁnition of items in formula In the formula in subsection (2),— (a) person’s provisional tax is the person’s provisional tax liability under section RC 5(2) or (3): instalments payable is the number of instalments that the person has in the transitional year on or before the instalment date: total instalments is whichever of the following applies: (b) (c) (1) (2) (3) 2656 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RC 23 (i) (ii) 3, for a person who pays on instalment dates B, D, and F; or 2, for a person who pays on instalment dates C and F: (d) tax previously payable is the amount for the transi- tional year of the person’s provisional tax payable be- fore the instalment date.
(4) Final instalment For the ﬁnal instalment, the person must pay an amount calcu- lated using the formula— person’s provisional tax × transitional year days preceding year days tax previously payable.
(5) Deﬁnition of items in formula In the formula in subsection (4),— (a) (b) (c) (d) person’s provisional tax is the person’s provisional tax liability under section RC 5(2) or (3): transitional year days is the number of days in the person’s transitional year: preceding year days is the number of days in the per- son’s preceding tax year: tax previously payable is the amount of provisional tax for a tax year calculated on the basis of the person’s transitional year that is payable before the instalment date.
Deﬁned in this Act: amount, instalment date, ﬁnal instalment, pay, provisional tax, tax year, transitional year Compare: 2004 No 35 s MB 21 RC 23 Calculating instalments in transitional years: estimation method (1) When this section applies This section applies to a person liable to pay provisional tax using the estimation method in relation to instalments of pro- visional tax payable in a transitional year under section RC 21.
2657 Part R s RC 23 Income Tax Act 2007 Reprinted as at 2 September 2013 (2) (3) Instalment other than ﬁnal instalment For an instalment date other than the date of the ﬁnal instal- ment, the person must pay an amount calculated using the for- mula— tax estimate × instalments payable transitional months tax previously payable.
Deﬁnition of items in formula In the formula,— (a) (b) (c) (d) tax estimate is the person’s provisional tax liability last estimated by the person under section RC 5(5): instalments payable is either— (i) 4 multiplied by the number of instalments in the person’s transitional year payable on or before the instalment date, for a person who pays on the equivalent of instalment dates B, D, and F; or 6 multiplied by the number of instalments in the person’s transitional year payable on or before the instalment date, for a person who pays on the equivalent of instalment dates C and F: (ii) transitional months is the number of months in the person’s transitional year: tax previously payable is the amount of provisional tax for a tax year calculated on the basis of the person’s transitional year that is payable before the instalment date.
(4) Final instalment For the ﬁnal instalment, the person must pay the amount calcu- lated under section RC 5(5) less the amount of any instalment previously payable.
Deﬁned in this Act: amount, ﬁnal instalment, instalment date, pay, provisional tax, tax year, transitional year Compare: 2004 No 35 s MB 22 2658 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RC 25 RC 24 Calculating instalments in transitional years: GST ratio method (1) (2) What this section applies to This section applies to a person liable to pay provisional tax using a GST ratio in relation to instalments of provisional tax payable in a transitional year.
Adjustment if required For a period or part period before the start of the new income year, the person must apply the GST ratio under section RC 11 on whichever dates of instalments A to F for their correspond- ing income year occur in the transitional year.
Deﬁned in this Act: corresponding income year, GST ratio, income year, pay, provisional tax, transitional year Compare: 2004 No 35 s MB 23 RC 25 Consequences of change in balance date (1) (2) (3) (4) Continuing frequency This section applies to a person liable to pay provisional tax who changes their balance date.
Continuing to use instalment dates to new balance date The person must continue to use the instalment dates that ap- plied before the change in balance date was approved until the new balance date is reached.

How amounts determined Sections RC 20 to RC 24 and schedule 3, part B (Payment of provisional tax and terminal tax) apply for the person’s tran- sitional year to determine the amount and payment date of the instalments.
Estimation method In a transitional year, if the person uses the estimation method, they must,— (a) before the date on which the Commissioner notiﬁes a change in balance date, estimate the residual income tax as if no change in balance date is or will be approved; and after the date on which the Commissioner notiﬁes a change in balance date, re-estimate the residual income tax.
(b) 2659 Part R s RC 26 Income Tax Act 2007 Reprinted as at 2 September 2013 (5) (6) (7) GST ratio method Subsection (6) applies if the person uses a GST ratio to deter- mine the provisional tax payable for a tax year, and in changing their balance date, moves from— (a) a set of instalment dates in even-numbered months to a set of instalment dates in odd-numbered months; or a set of instalment dates in odd-numbered months to a set of instalment dates in even-numbered months.
(b) Adjustment to liability The person must— (a) (b) adjust their provisional tax liability for the part-period of 1 month before the start of the new income year; and pay the instalment of provisional tax for the part-period as their ﬁnal taxable period— (i) 28 days after the end of the part period, unless subparagraph (ii) or (iii) applies; or by 15 January if the part-period falls in Novem- ber; or by 7 May if the part period falls in March.
(ii) (iii) Aligning taxable periods For a registered person, if a change in balance date means that their taxable period is not aligned with the balance date, an adjustment must be made to their taxable period under section 15B(3) or 15C of the Goods and Services Tax Act 1985.
Deﬁned in this Act: amount, balance date, Commissioner, GST ratio, income year, instalment date, notify, pay, provisional tax, registered person, residual income tax, tax year, taxable period, transitional year Compare: 2004 No 35 s MB 24 Section RC 25(6): substituted, on 1 April 2008, by section 536 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
When persons start or stop paying GST, or change taxable periods RC 26 Registering for GST or cancelling registration When this section applies This section applies if a person who uses the standard or es- timation method to determine the amount of provisional tax payable for a tax year— (1) 2660 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RC 26 (a) (b) (c) applies to the Commissioner to become a registered per- son under section 51 of the Goods and Services Tax Act 1985; or is treated as registered under section 51B of that Act; or asks the Commissioner to cancel their GST registration, or has their GST registration cancelled under section 52 of that Act.
Starting or ending GST registration: monthly or 2-monthly basis For a person liable to pay provisional tax who becomes regis- tered for GST paying on a monthly or 2-monthly basis, or who cancels or has their GST registration cancelled having paid on that basis, the instalments of provisional tax payable by them for the tax year are unaffected.
(2) Starting GST registration: 6-monthly basis (3) A person liable to pay provisional tax who becomes registered for GST paying on a 6-monthly basis must pay their instal- ments of provisional tax on whichever dates of instalments C and F for their corresponding income year coincide with the cycle of their taxable periods after they become a registered person.
Ending GST registration: 6-monthly basis (4) A person liable to pay provisional tax who pays GST on a 6-monthly basis and cancels their GST registration or has their registration cancelled, must pay their instalments of provi- sional tax on whichever dates of instalments B, D, and F for their corresponding income year occur after 30 days from the date of cancellation.
(5) Date of cancellation For the purposes of subsection (4) and the provisional tax rules, the date of cancellation is the later of the date on which— the cancellation of GST registration is notiﬁed: (a) the person’s liability under section 52 of the Goods and (b) Services Tax Act 1985 stops.

2661 Part R s RC 27 Income Tax Act 2007 Reprinted as at 2 September 2013 (6) Formula for amount of instalment The amount of each instalment is calculated under section RC 10.
Deﬁned in this Act: amount, Commissioner, corresponding income year, GST, pay, provisional tax, provisional tax rules, registered person, tax year, taxable period Compare: 2004 No 35 s MB 25 Section RC 26(5): substituted, on 1 April 2008, by section 537 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
RC 27 Payment of provisional tax instalments when GST cycle changed When subsection (2) applies Subsection (2) applies in a tax year to a person liable to pay provisional tax who— (a) uses the standard or estimation method to determine the amount of provisional tax payable; and has been paying GST on a monthly or 2-monthly basis; and changes to a 6-monthly basis under section 15C(1) of the Goods and Services Tax Act 1985.
(b) (c) Changing to 6-monthly basis The person must pay their instalments of provisional tax on whichever dates of instalments C and F for their correspond- ing income year occur after the change in taxable period takes effect.
When subsection (4) applies Subsection (4) applies in a tax year to a person liable to pay provisional tax who— (a) uses the standard or estimation method to determine the amount of provisional tax payable; and has been paying GST on a 6-monthly basis; and changes to a monthly or 2-monthly basis under section 15C(2) or (3) of the Goods and Services Tax Act 1985.
(b) (c) Changing to monthly or 2-monthly basis The person must pay their instalments of provisional tax on whichever dates of instalments B, D, and F for the person’s corresponding income year occur after the change in taxable period takes effect.
(1) (2) (3) (4) 2662 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RC 28 (5) (6) Interest instalment dates in new cycle If an instalment of provisional tax that falls on an instalment date in the new cycle is payable in relation to a period in the person’s original cycle that was, under that original cycle, an interest instalment date, it remains an interest instalment date in the new cycle.
However, if the instalment falls on an instal- ment date other than an interest instalment date, the change does not affect the nature of the instalment.

Formula for amount of instalment The amount of each instalment is calculated under section RC 10.
Deﬁned in this Act: amount, corresponding income year, GST, instalment date, interest instalment date, pay, provisional tax, tax year, taxable period Compare: 2004 No 35 s MB 27 Treatment of groups of companies and amalgamated companies RC 28 Provisional tax rules and consolidated groups (1) (2) (3) Single company The provisional tax rules apply, modiﬁed as necessary, to a consolidated group of companies as if it were a single com- pany.
Joint and several liability Each company in a consolidated group in a tax year is jointly and severally liable for the amount of provisional tax payable by the consolidated group to be credited against the income tax liability of the group for the tax year.

The liability of a group company for income tax for the tax year is substituted by that joint and several liability to the extent to which the liability arises while the company is part of the consolidated group.
Relationship with section FM 4 Section FM 4(3) to (5) (Limiting joint and several liability of group companies) overrides this section.
Deﬁned in this Act: amount, company, consolidated group, income tax, income tax liability, pay, provisional tax, provisional tax rules, tax year Compare: 2004 No 35 s MB 29 2663 Part R s RC 29 Income Tax Act 2007 Reprinted as at 2 September 2013 RC 29 Residual income tax of consolidated groups (1) (2) (3) When this section applies This section applies for the purposes of the provisional tax rules if a company is part of a consolidated group of companies in a tax year but was not part of the group for some or all of the preceding tax year.
Increased residual income tax The residual income tax of the consolidated group for the pre- ceding tax year is treated as increased by an amount equal to the residual income tax of the company for the preceding tax year.

If the company is part of the group for part of the current tax year, the amount of residual income tax is increased as a proportion on the basis of the part of the tax year during which the company is part of the group.
Instalments after company joins group If the company is part of a group for part of the tax year, this section applies only to instalments of provisional tax payable after the date on which the company becomes part of the group.
Deﬁned in this Act: amount, company, consolidated group, pay, provisional tax, provisional tax rules, residual income tax, tax year Compare: 2004 No 35 s MB 30 RC 30 Consolidated groups using estimation method When subsection (2) applies Subsection (2) applies for the purposes of the provisional tax rules if a company is part of a consolidated group of companies for some or all of a tax year but is not part of the group for some or all of the following tax year.
Estimation before ﬁnal instalment date The company must estimate its residual income tax on or be- fore the date of instalment F for the following income year that corresponds to the tax year, and the company is treated as a person to which section RC 7 applies for the purposes of its estimate.
When company part of another consolidated group The consolidated group, in the case of a company that is part of another consolidated group, must make an estimate of re- sidual income tax on or before the date of instalment F for the (1) (2) (3) 2664 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RC 31 (4) following income year that corresponds to the tax year, and the consolidated group is treated as a person to which section RC 7 applies for the purposes of its estimate.
When company no longer part of group If a company stops being part of the consolidated group in the following tax year, the company’s estimate applies only to instalments of provisional tax payable after the date on which it stopped being part of the group.
Deﬁned in this Act: company, consolidated group, corresponding income year, pay, provisional tax, provisional tax rules, residual income tax, tax year Compare: 2004 No 35 s MB 31 RC 31 Consolidated groups using GST ratio method Sections RC 8, RC 9(6), RC 11, and RC 15 to RC 19 apply to a consolidated group of companies with the following modiﬁ- cations: (a) if a consolidated group that is eligible to use, or is using, a GST ratio for a tax year is joined by a company, the following subparagraphs apply: (i) (ii) (iii) if the company joins at the start of the tax year and, as a result, the threshold in section RC 16(2)(a) is exceeded, the group is no longer eligible to use a GST ratio: if the company joins at the start of the tax year, and the group, allowing for the inclusion of the company, is eligible under section RC 16(1), the group may use a GST ratio, subject to the recal- culation of the ratio under paragraph (c): if the company joins at some time in the tax year, the group may continue to use a GST ratio for the tax year, as recalculated under paragraph (c), pro- vided the requirements for eligibility other than the threshold in section RC 16(2)(a) are met: (b) (c) if a consolidated group that does not determine provi- sional tax payable for a tax year using a GST ratio, is joined by a company that is using a GST ratio for the tax year, the group may not start using a GST ratio for this purpose for the tax year: for the purposes of paragraph (a),— 2665 Part R s RC 32 Income Tax Act 2007 Reprinted as at 2 September 2013 (i) (ii) the group must recalculate the GST ratio apply- ing for a tax year to include the residual income tax of the company for the preceding tax year and the total taxable supplies of the company for the corresponding income year, applying section RC 8(3) if required; and the recalculated GST ratio applies to provisional tax payments made for the corresponding income year on or after the date on which the company joins the group: (d) sections RC 17(3) and RC 18(4) or (5), as applicable,
 apply to a company that leaves a consolidated group at some time in a tax year.
Deﬁned in this Act: company, consolidated group, corresponding income year, GST ratio, pay, provisional tax, residual income tax, tax year, total taxable sup- plies Compare: 2004 No 35 s MB 32 RC 32 Wholly-owned groups of companies When this section applies This section applies for the purposes of the provisional tax rules and Part 7 of the Tax Administration Act 1994 in rela- tion to a company (company A) that is in a tax year part of a wholly-owned group of companies that includes another com- pany (company B).
Sections RM 13 to RM 17 (which relate to refunds) override this section.

Company A transferring overpayment to company B If, for a tax year, company A has paid an amount that is more than the provisional tax payable for the tax year, the company may transfer some or all of the overpayment to company B to the extent to which the amount of provisional tax paid by com- pany B is less than their residual income tax for the tax year.

Company A must notify the Commissioner under subsection (4).
When transfer made Company A may transfer an amount under subsection (2) on or after the later of— (a) the day on which company A overpays the provisional tax; or (1) (2) (3) 2666 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RC 33 (b) the day on which the ﬁrst instalment of provisional tax for the tax year becomes payable by company B.
Notice (4) A notice under subsection (2) must— (a) (b) (c) name company B, and the amount to be transferred; and state the date on which the overpayment is treated as transferred to company B; and be given to the Commissioner within— (i) the time for providing a return of income for the tax year for company B; or an extension of time allowed by the Commis- sioner.
(ii) (5) When transfer made, and how transfer treated For the purposes of this section,— (a) (b) a transfer under subsection (2) is treated as made on the date stated in the notice; and provisional tax transferred by company A to company B is treated as provisional tax paid by company B and not by company A. Deﬁned in this Act: amount, Commissioner, company, notice, notify, pay, pro- visional tax, provisional tax rules, residual income tax, return of income, tax year, wholly-owned group of companies Compare: 2004 No 35 s MB 33 RC 33 Amalgamated companies: calculating residual income tax (1) (2) When this section applies This section applies for a tax year when an amalgamating com- pany ends its existence on an amalgamation.
Residual income tax for preceding tax year The residual income tax of the amalgamated company for the preceding tax year is the amount that would have been the re- sidual income tax of the amalgamated company for the pre- ceding tax year if the amalgamating company and the amalga- mated company had been 1 company.
2667 Part R s RC 34 Income Tax Act 2007 Reprinted as at 2 September 2013 (3) Exclusion Subsection (2) does not apply for the purposes of the provi- sional tax rules in relation to instalments of provisional tax payable before the amalgamation.
Deﬁned in this Act: amalgamated company, amalgamating company, amalgam- ation, amount, pay, provisional tax, provisional tax rules, residual income tax, tax year Compare: 2004 No 35 s MB 34 Attribution rule for income from personal services RC 34 Attribution rule for income from personal services When this section applies This section applies for the purposes of the provisional tax rules and Part 7 of the Tax Administration Act 1994 for pro- visional tax paid for income from personal services to which section GB 27 (Attribution rule for income from personal ser- vices) may apply.
The references in this section to working person and associated entity reﬂect the terminology used in section GB 27.

Associated entity transferring amount to working person If, in a tax year, the associated entity pays an amount of tax that is more than the provisional tax payable for the tax year, the entity may transfer some or all of the overpayment to the working person to the extent to which the amount of provi- sional tax paid by the person is less than their residual income tax for the tax year.
Working person transferring amount to associated entity If, in a tax year, the working person pays an amount of tax that is more than the provisional tax payable for the tax year, they may transfer some or all of the overpayment to the associated entity to the extent to which the amount of provisional tax paid by the entity is less than their residual income tax for the tax year.
When transfer made The associated entity and the working person may transfer an amount under subsection (2) or (3), as applicable, on or after the later of— (1) (2) (3) (4) 2668 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RC 34 (a) (b) the day on which the overpayment of provisional tax is paid by the entity or person, as applicable: the day on which the instalment of provisional tax payable for the tax year becomes payable by— (i) (ii) the person, if the entity is making the transfer; or the entity, if the person is making the transfer.
(5) (6) Notice The Commissioner must be notiﬁed of a transfer under sub- section (2) or (3) in a notice that— (a) names the person to whom a transfer is made, and the amount to be transferred; and states the date on which the overpayment is treated as transferred to the associated entity or working person, as applicable; and is provided within the time for ﬁling a return of income for the tax year for the person to whom the transfer is made, or an extended time allowed by the Commis- sioner.
(b) (c) (b) When transfer made and how transfer treated For the purposes of this section,— (a) a transfer under subsection (2) or (3) is treated as made on the day stated in the notice; and provisional tax transferred by the associated entity to the working person for a tax year is treated as provisional tax paid by the working person and not by the associated entity; and provisional tax transferred by the working person to the associated entity is treated as provisional tax paid by the associated entity and not by the working person.
Deﬁned in this Act: amount, amount of tax, associated person, Commissioner, income, notice, notify, pay, provisional tax, provisional tax rules, residual in- come tax, return of income, tax year Compare: 2004 No 35 s MB 35 (c) Section RC 34(1) heading: substituted (with effect on 1 April 2008), on 6 Oc- tober 2009, by section 500(1) of the Taxation (International Taxation, Life In- surance, and Remedial Matters) Act 2009 (2009 No 34).
Section RC 34(1): substituted (with effect on 1 April 2008), on 6 October 2009, by section 500(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

2669 Part R s RC 35 Income Tax Act 2007 Reprinted as at 2 September 2013 Section RC 34(2) heading: substituted (with effect on 1 April 2008), on 6 Oc- tober 2009, by section 500(1) of the Taxation (International Taxation, Life In- surance, and Remedial Matters) Act 2009 (2009 No 34).
Section RC 34(2): substituted (with effect on 1 April 2008), on 6 October 2009, by section 500(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RC 34(3) heading: substituted (with effect on 1 April 2008), on 6 Oc- tober 2009, by section 500(1) of the Taxation (International Taxation, Life In- surance, and Remedial Matters) Act 2009 (2009 No 34).
Section RC 34(3): substituted (with effect on 1 April 2008), on 6 October 2009, by section 500(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RC 34(4) heading: substituted (with effect on 1 April 2008), on 6 Oc- tober 2009, by section 500(1) of the Taxation (International Taxation, Life In- surance, and Remedial Matters) Act 2009 (2009 No 34).
Section RC 34(4): substituted (with effect on 1 April 2008), on 6 October 2009, by section 500(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RC 34(5) heading: substituted (with effect on 1 April 2008), on 6 Oc- tober 2009, by section 500(1) of the Taxation (International Taxation, Life In- surance, and Remedial Matters) Act 2009 (2009 No 34).
Section RC 34(5): substituted (with effect on 1 April 2008), on 6 October 2009, by section 500(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RC 34(6) heading: substituted (with effect on 1 April 2008), on 6 Oc- tober 2009, by section 500(1) of the Taxation (International Taxation, Life In- surance, and Remedial Matters) Act 2009 (2009 No 34).
Section RC 34(6): substituted (with effect on 1 April 2008), on 6 October 2009, by section 500(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RC 34 list of deﬁned terms amount of tax: inserted (with effect on 1 April 2008), on 6 October 2009, by section 500(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RC 34 list of deﬁned terms associated person: inserted (with effect on 1 April 2008), on 6 October 2009, by section 500(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
RC 35 Further income tax credited to provisional tax liability Credits When this section applies This section applies for the purposes of sections RC 9 to RC 11 if, under sections OB 65 to OB 69 (which relate to further income tax for ICA companies), a company applies an amount (1) 2670 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RC 37 (2) (3) of further income tax to pay an instalment of provisional tax for which the company becomes liable after the date of payment of the further income tax.
Amount treated as provisional tax The instalment is satisﬁed to the extent of the amount of further income tax.

The amount is treated as provisional tax paid on the date on which the instalment was payable.
Order The Commissioner must credit the amount of the further in- come tax in payment successively of— (a) the instalment of provisional tax that is ﬁrst payable after the date of payment of the further income tax; and to the extent of the amount of further income tax, to later instalments in the order in which they are payable.
Deﬁned in this Act: amount, Commissioner, company, further income tax, ICA company, pay, provisional tax Compare: 2004 No 35 s MB 37 (b) RC 36 Persons affected by adverse events Disaster relief [Repealed] Section RC 36: repealed, on 6 October 2009, by section 501 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Early-payment discounts RC 37 Availability of early-payment discounts Sections RC 38 and RC 39 apply for an income year to a small- business person who is not liable to pay provisional tax for the income year and, for earlier income years,— (a) has never been liable to pay provisional tax and either— has never received an early-payment discount; or (i) has not derived assessable income from a busi- (ii) ness in a period of 4 income years starting after the latest income year for which they received an early-payment discount; or 2671 Part R s RC 38 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) has not derived assessable income from a business in a period of 4 income years starting after the latest income year for which they were liable to pay provisional tax.
Deﬁned in this Act: assessable income, business, early-payment discount, in- come year, pay, provisional tax, small-business person Compare: 2004 No 35 s MBB 2(1)(a), (d) RC 38 Crediting income tax with early-payment discount When this section applies This section applies when a small-business person— (a) (b) (c) (d) pays income tax on or before their balance date for the income year; and during the period from the balance date for the income year to their terminal tax date for the income year, has a credit in their tax account with the Commissioner that is greater than or equal to the lesser of— (i) (ii) the total amount paid under paragraph (a): the amount that would be their terminal tax for the income year in the absence of this section; and ﬁles a return of income for the tax year corresponding to the income year; and applies for an early-payment discount on or before the last date for ﬁling a return of income under section 37(5) of the Tax Administration Act 1994.
Crediting early-payment discount The Commissioner must credit the tax account of the small-business person with an early-payment discount calcu- lated under subsection (3).

Amount of early-payment discount The amount of the early-payment discount is found by multi- plying the discount rate under subsection (4) by the lesser of— (a) (b) the total amount paid under subsection (1)(a): 105% of the small-business person’s residual income tax for the income year.
Discount rate The discount rate is— (a) 6.7%, if no rate is set under paragraph (b): (1) (2) (3) (4) 2672 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RC 40 (b) the rate set by the Governor-General by Order in Coun- cil.
Deﬁned in this Act: amount, balance date, Commissioner, corresponding in- come year, early-payment discount, income, income tax, income year, pay, re- sidual income tax, return of income, small-business person, tax account with the Commissioner, tax year, terminal tax Compare: 2004 No 35 s MBB 2(1)(b), (c), (2)–(4) RC 39 Credit treated as payment of income tax A credit of an early-payment discount under section RC 38 is treated as a payment made by a small-business person on the day after the last day of the income year referred to in section RC 38 as income tax for the income year.
Deﬁned in this Act: early-payment discount, income tax, income year, pay, small-business person Compare: 2004 No 35 s MBB 3 RC 40 Some deﬁnitions In this subpart,— early-payment discount means a discount of income tax under sections RC 38 and RC 39 small-business person means a person who— (a) conducts a business on their own account, acting alone or as a partner in a partnership; and does not use a company or a trust in the conduct of the business; and derives income that is mainly from the business, and does not consist of interest, dividends, royalties, rent, or beneﬁciary income.
(b) (c) Deﬁned in this Act: beneﬁciary income, business, company, dividend, income, income tax, interest, royalty Compare: 2004 No 35 s MBB 4 Subpart RD—Employment-related taxes Contents Introductory provision RD 1 What this subpart does Page 2676 2673 Income Tax Act 2007 Reprinted as at 2 September 2013 PAYE rules and PAYE income payments Introductory provisions RD 2 RD 3 RD 4 PAYE rules and their application PAYE income payments Payment of amounts of tax to Commissioner Types of PAYE income payments Salary or wages RD 5 RD 6 Certain beneﬁts and payments RD 7 Extra pay RD 8 Schedular payments Calculating amounts of tax RD 9 Maximum amount RD 10 Amounts of tax for PAYE income payments RD 11 Reduction in certain circumstances Adjustments for certain PAYE income payments RD 12 Multiple payments of salary or wages RD 13 Advance payments of salary or wages RD 13B Adjustments for payroll donations RD 14 Changes to tax rates for salary or wages RD 15 Payments of salary or wages in pay periods RD 16 Payments to private domestic workers RD 17 Payment of extra pay with other PAYE income payments RD 18 Schedular payments without notiﬁcation RD 19 Schedular payments to non-resident entertainers RD 20 Schedular payments to subcontractors Paying amounts of tax RD 21 When amounts of tax not withheld or payment insufﬁcient RD 22 Returns for amounts of tax paid to Commissioner RD 23 Bonds given by employers of certain non-resident employees RD 24 Exemption certiﬁcates for non-resident contractors Fringe beneﬁt tax (FBT) rules and fringe beneﬁts Introductory provisions RD 25 FBT rules and their application RD 26 Liability for FBT Value of fringe beneﬁts RD 27 Determining fringe beneﬁt values RD 28 Private use of motor vehicle: calculation methods 2674 2677 2678 2680 2680 2684 2685 2686 2688 2688 2689 2691 2691 2692 2693 2694 2695 2695 2697 2698 2699 2700 2700 2704 2705 2706 2707 2707 2708 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RC 40 RD 29 Private use of motor vehicle: formulas RD 30 Private use of motor
 vehicle: 24-hour period RD 31 Motor vehicle test period RD 32 Replacement motor vehicles RD 33 Subsidised transport RD 34 Employment-related loans: value using prescribed interest 2709 2711 2712 2713 2714 2714 rates RD 35 Employment-related loans: value using market interest 2715 rates RD 36 Repayment of employment-related loans RD 37 Contributions to superannuation schemes RD 38 Contributions to funds, trusts, and insurance premiums RD 39 Beneﬁts provided by charitable organisations RD 40 Goods RD 41 Services RD 42 Goods at staff discount RD 43 Goods on special with staff discount RD 44 Goods sold by group companies RD 45 Unclassiﬁed beneﬁts RD 46 Adjustments for unclassiﬁed beneﬁts on amalgamation Attributing fringe beneﬁts to employees RD 47 Attribution of certain fringe beneﬁts RD 48 When attributed beneﬁts provided to more than 1 employee RD 49 Application of thresholds to attributed beneﬁts RD 50 Employer’s liability for attributed beneﬁts RD 51 Calculation of all-inclusive pay RD 52 Calculation for certain employees when information lacking RD 53 Pooling non-attributed beneﬁts Taxable value of fringe beneﬁts RD 54 Value of and payments towards fringe beneﬁts RD 55 Private use of motor vehicle: taxable value in cases of part ownership 2717 2718 2718 2719 2720 2721 2723 2723 2724 2724 2726 2728 2729 2729 2730 2731 2734 2735 2736 2737 RD 56 Private use of motor vehicle: when schedular value not 2737 used RD 57 Private use of motor vehicle: when schedular value used 2738 Options for payment of FBT RD 58 Single rate option RD 59 Alternate rate option RD 60 Close company option 2739 2740 2741 2675 Part R s RD 1 Income Tax Act 2007 Reprinted as at 2 September 2013 RD 61 Small business option RD 62 Changes in payment periods RD 63 When employer stops employing staff Employer’s superannuation contribution tax (ESCT) rules and employer’s superannuation contributions Introductory provisions RD 64 ESCT rules and their application RD 65 Employer’s superannuation cash
 contributions RD 66 Complying fund rules [Repealed] Calculating amounts of tax 2743 2745 2746 2747 2747 2751 RD 67 Calculating amounts of tax for employer’s superannuation 2751 cash contributions RD 68 Choosing to have amount treated as salary or wages RD 69 Choosing different rates for employer’s superannuation cash contributions [Repealed] RD 70 Calculating amounts of tax on failure to withhold RD 71 Amounts of tax treated as paid to and received by 2752 2753 2753 2754 superannuation funds Tax on certain withdrawals from superannuation funds [Repealed] RD 72 Recovery of tax paid by superannuation funds [Repealed] 2755 Introductory provision RD 1 What this subpart does This subpart establishes and measures an employer’s liability under— (a) the PAYE rules by— (i) (ii) listing the types of payments to which the rules apply: calculating the amounts of tax that must be with- held and paid to the Commissioner under the rules: providing for certain adjustments to the amounts: providing some rules related to the payment of the amounts: the FBT rules by— (i) calculating the value of the beneﬁt provided: (iii) (iv) (b) 2676 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 2 (ii) (iii) (iv) attributing certain fringe beneﬁts to employees: setting out the taxable value of certain fringe beneﬁts: providing options for the payment of FBT to the Commissioner: the ESCT rules and RSCT rules by setting out the payments to which the rules apply and calculating the amounts of tax that must be withheld and paid to the Commissioner under the rules.
(c) Deﬁned in this Act: amount of tax, Commissioner, employee, employer, ESCT rules, FBT, FBT rules, fringe beneﬁt, fringe beneﬁt tax, pay, PAYE rules, RSCT rules Section RD 1(c): amended, on 1 April 2008, by section 538 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section RD 1 list of deﬁned terms RSCT rules: inserted (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 140(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
PAYE rules and PAYE income payments Introductory provisions RD 2 PAYE rules and their application (1) Meaning The PAYE rules means— (a) (b) section BC 1 (Non-ﬁling and ﬁling taxpayers); and sections LA 6, LB 1, and LD 4 (which relate to tax credits); and sections RD 3 to RD 24; and sections RP 2 to RP 16 (which relate to PAYE inter- mediaries); and sections 15C to 15M, 24, 24B to 24P, 48, and 133, Part 9, and sections 167 to 169of the Tax Administration Act 1994.
(c) (d) (e) (2) Application The PAYE rules apply to a person who makes or is required to make a PAYE income payment and, in certain circumstances, to the person to whom the PAYE income payment is made.

2677 Part R s RD 3 Income Tax Act 2007 Reprinted as at 2 September 2013 (3) Deceased employers The executor or administrator of a deceased employer must complete any uncompleted PAYE obligations of the employer.
Deﬁned in this Act: employer, PAYE income payment, PAYE rules Compare: 2004 No 35 ss NC 15(4), OB 1 “PAYE rules” Section RD 2(1)(b): substituted, on 6 January 2010, by section 502 of the Tax- ation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
RD 3 PAYE income payments Meaning generally The PAYE rules apply to a PAYE income payment which— (a) means— (i) a payment of salary or wages, see section RD 5; or extra pay, see section RD 7; or a schedular payment, see section RD 8: (ii) (iii) does not include— (i) (b) (ii) (iii) an amount attributed under section GB 29 (Attri- bution rule: calculation): an amount paid to a shareholder-employee in the circumstances set out in subsection (2): an amount paid or beneﬁt provided, by a person (the claimant) who receives a personal service rehabilitation payment from which an amount of tax has been withheld at the rate speciﬁed in schedule 4, part I (Rates of tax for schedular pay- ments) or under section RD 18 (Schedular pay- ments without notiﬁcation), to another person for providing a key aspect of social rehabilitation re- ferred to in paragraph (c) of the deﬁnition of per- sonal service rehabilitation payment in section YA 1 (Deﬁnitions).
When subsections (3) and (4) apply: close companies Subsections (3) and (4) apply for an income year when a per- son is a shareholder-employee of a close company, and— (a) they do not derive as an employee salary or wages of a regular amount for regular pay periods— (i) of 1 month or less throughout the income year; or (1) (2) 2678 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 3 (ii) that total 66% or more of the annual gross income of the person in the corresponding tax year as an employee; or (b) an amount is paid as income that may later be allocated to them as an employee for the income year.
(3) Income in current tax year The person may choose to treat all amounts paid to them in the income year in their capacity as employee of the close com- pany as income other than from a PAYE income payment.

Income in later tax years (4) All amounts paid to the person in later income years in their capacity as employee of the close company are treated as in- come other than from a PAYE income payment.
(5) If questions arise If a question arises whether the PAYE rules apply to all or part of a PAYE income payment, other than an amount referred to in subsections (2) to (4), the Commissioner must determine the matter.
Deﬁned in this Act: amount, annual gross income, close company, Commis- sioner, employee, extra pay, income, income year, pay, pay period, PAYE in- come payment, PAYE rules, salary or wages, schedular payment, shareholder- employee, tax year Compare: 2004 No 35 ss NC 1(2), OB 2 Section RD 3(1)(b)(ii): amended, on 1 July 2008, by section 539 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section RD 3(1)(b)(iii): substituted (with effect on 1 July 2008), on 6 October 2009, by section 503(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RD 3(1)(b)(iii): added, on 1 July 2008, by section 539 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section RD 3(3): substituted (with effect on 1 April 2008), on 6 October 2009, by section 503(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RD 3(4): substituted (with effect on 1 April 2008), on 6 October 2009, by section 503(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2679 Part R s RD 4 Income Tax Act 2007 Reprinted as at 2 September 2013 RD 4 Payment of amounts of tax to Commissioner Payments monthly or fortnightly (1) An employer or PAYE intermediary who withholds an amount of tax for a PAYE income payment must pay the amount to the Commissioner as follows (a) on a monthly basis, if they are an employer to whom section RD 22(3) or (4) applies: for 2 payment periods in a month, if paragraph (a) does not apply.
(b) (2) (3) Liability when amount not withheld If some or all of the amount of tax for a PAYE income payment is not withheld under subsection (1), the employee in relation to whom the payment is made must— (a) pay an amount equal to the amount of tax to the Com- missioner by the 20th day of the month following that in which the PAYE income payment was made; and provide an employer monthly schedule to the Commis- sioner by the date described in paragraph (a).
(b) When taxable activity ends Section RA 17 (Payment date when RWT exemption certiﬁ- cate expires) overrides subsection (1).
Deﬁned in this Act: amount, amount of tax, Commissioner, employee, em- ployer, employer monthly schedule, pay, PAYE income payment, PAYE inter- mediary Compare: 2004 No 35 ss NC 15(1), NC 16 Section RD 4(2): amended (with effect on 1 April 2008), on 21 December 2010 (applying for the 2008–09 and later income years), by section 125(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Types of PAYE income payments RD 5 Salary or wages (1) Meaning Salary or wages— (a) means a payment of salary, wages, or allowances made (b) to a person in connection with their employment; and includes— (i) a bonus, commission, gratuity, overtime pay, or other pay of any kind; and a payment described in subsections (2) to (8); and (ii) 2680 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 5 (iii) an accident compensation earnings-related pay- ment; and (c) does not include— (i) (ii) (iii) (iv) income described in section an amount of exempt income: an extra pay: a schedular payment: an amount of RD 3(3) and (4): an employer’s superannuation contribution other than a contribution referred to in subsection (9): a payment excluded by regulations made under this Act.
(v) (vi) (d) [Repealed] Employees’ expenditure on account (2) A payment of expenditure on account of an employee is in- cluded in their salary or wages.

Payments to working partners (3) A payment to a working partner under section DC 4 (Payments to working partners) is included in their salary or wages.

Payments to working owners (3B) A payment to a working owner under section DC 3B (Pay- ments to working owners) is included in their salary or wages.
Payments to past employees (4) A periodic payment of a pension, allowance, or annuity made to a person or their spouse, civil union partner, de facto partner, child, or dependant in connection with the past employment of the person is included in their salary or wages.
(5) Payments to Governor-General, members of Parliament, and judicial ofﬁcers The following payments made under a determination of the Remuneration Authority are included in salary or wages (aa) (a) (b) salary made to the Governor-General: salary or allowances made to a member of Parliament: salary and principal allowances made to a judicial ofﬁ- cer.

(5B) A payment to a person made under section 7 of the Governor- General Act 2010 is included in the salary and wages of that person.
2681 Part R s RD 5 Income Tax Act 2007 Reprinted as at 2 September 2013 Certain beneﬁts and grants (6) A payment of the following beneﬁts or grants is included in salary or wages (a) (b) (bb) a gratuitous payment as described in paragraph (a) of the deﬁnition of pension in section CF 1(2) (Beneﬁts, pensions, compensation, and government grants): an income-tested beneﬁt: a veteran’s pension, other than a veteran’s pension paid under section 74J(2)(b) of the War Pensions Act 1954: (bc) New Zealand superannuation, other than New Zealand superannuation paid under section 26(2)(b) of the New Zealand Superannuation and Retirement Income Act 2001: [Repealed] a basic grant and independent circumstances grant made under regulations made under section 193 of the Educa- tion Act 1964, section 303 of the Education Act 1989, or an enactment substituted for those sections.
(bd) (c) Parental leave payments (7) A parental leave payment made under Part 7A of the Parental Leave and Employment Protection Act 1987 is included in salary or wages.

Accommodation beneﬁts (8) A beneﬁt treated as income under section CE 1(1B) (Amounts derived in connection with employment) is included in salary or wages.
Cash contributions (9) An amount of an employer’s superannuation cash contribution that an employee chooses to have treated as salary or wages under section RD 68 is included in salary or wages.
Deﬁned in this Act: accident compensation earnings-related payment, accom- modation, amount, de facto partner, employer’s superannuation cash contribu- tion, employer’s superannuation contribution, employment, exempt income, ex- penditure on account of an employee, extra pay, income, income-tested beneﬁt, New Zealand superannuation, pay, salary or wages, schedular payment, vet- eran’s pension Compare: 2004 No 35 s OB 1 “salary or wages” Section RD 5(1)(b)(ii): amended (with effect on 1 April 2008), on 6 October 2009, by section 504(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2682 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 5 Section RD 5(1)(c)(v): amended (with effect on 1 April 2008), on 21 December 2010 (applying for the 2008–09 and later income years), by section 126(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section RD 5(1)(c)(v): substituted (with effect on 1 April 2008), on 6 October 2009, by section 504(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RD 5(1)(c)(vi): amended, on 1 April 2012, by section 8(1) of the Tax- ation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).

Section RD 5(1)(c)(vi): amended, on 1 April 2008, by section 133 of the Taxa- tion (KiwiSaver) Act 2007 (2007 No 110).

Section RD 5(1)(d): repealed, on 1 April 2012, by section 8(2) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).
Section RD 5(3B) heading: inserted, on 1 April 2011 (applying for income years beginning on or after 1 April 2011), by section 126(2) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section RD 5(3B): inserted, on 1 April 2011 (applying for income years be- ginning on or after 1 April 2011), by section 126(2) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section RD 5(5) heading: amended, on 23 November 2010, by section 24(1) of the Governor-General Act 2010 (2010 No 122).

Section RD 5(5)(aa): inserted, on 23 November 2010, by section 24(2) of the Governor-General Act 2010 (2010 No 122).

Section RD 5(5B): inserted, on 23 November 2010, by section 24(3) of the Governor-General Act 2010 (2010 No 122).
Section RD 5(6)(a): substituted (with effect on 1 April 2008), on 6 October 2009, by section 504(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RD 5(6)(b): substituted, on 5 January 2010, by section 102 of the Tax- ation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section RD 5(6)(bb): inserted, on 5 January 2010, by section 102 of the Tax- ation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section RD 5(6)(bc): inserted, on 5 January 2010, by section 102 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section RD 5(6)(bd): repealed, on 2 September 2013 (applying for the 2011–12 tax year and later tax years), by section 16(1) of the Social Assistance (Living Alone Payments) Amendment Act 2013 (2013 No 11).

Section RD 5(6)(c): substituted (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 122(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section RD 5(8) heading: added (with effect on 1 April 2008), on 6 October 2009, by section 504(5) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

2683 Part R s RD 6 Income Tax Act 2007 Reprinted as at 2 September 2013 Section RD 5(8): added (with effect on 1 April 2008), on 6 October 2009, by section 504(5) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
Section RD 5(8): amended (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 140(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section RD 5(9) heading: added (with effect on 1 April 2008), on 6 October 2009, by section 504(6) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RD 5(9): added (with effect on 1 April 2008), on 6 October 2009, by section 504(6) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).

Section RD 5 list of deﬁned terms accommodation: inserted (with effect on 1 April 2008), on 6 October 2009, by section 504(7) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RD 5 list of deﬁned terms employer’s superannuation cash contri- bution: inserted (with effect on 1 April 2008), on 6 October 2009, by section 504(8) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RD 5 list of deﬁned terms living alone payment: repealed, on 2 Sep- tember 2013 (applying for the 2011–12 tax year and later tax years), by section 16(1) of the Social Assistance (Living Alone Payments) Amendment Act 2013 (2013 No 11).
RD 6 Certain beneﬁts and payments When this section applies This section applies when an employee receives— (a) an accommodation beneﬁt treated as income under sec- tion CE 1(1B) (Amounts derived in connection with em- ployment); or another beneﬁt in kind that is included in their salary or wages; or 1 or more of the following payments: (i) (ii) (iii) (iv) a superannuation payment: a pension: a retiring or other allowance: an annuity.
(b) (c) Value or amount included in salary or wages The value of the beneﬁt or amount of the payment is treated as— (a) accruing from day to day; and (1) (2) 2684 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 7 (b) included in the employee’s salary or wages for the pay period or, as applicable, as part of their salary or wages for the pay period.
(3) When non-cash beneﬁt treated as paid If the employee receives the beneﬁt otherwise than in cash, the value is treated as paid— (a) for a beneﬁt that constitutes the only salary or wages of the employee, on the last day of the pay period; or for all other beneﬁts, when the last amount of salary or wages for the pay period is paid.
(b) Deﬁned in this Act: accommodation, employee, employment, pay, pay period, salary or wages Compare: 2004 No 35 s NC 4 Section RD 6(1)(a): substituted (with effect on 1 April 2008), on 6 October 2009, by section 505(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RD 6(1)(a): amended (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 140(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section RD 6(1)(b): substituted (with effect on 1 April 2008), on 6 October 2009, by section 505(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RD 6 list of deﬁned terms accommodation: inserted (with effect on 1 April 2008), on 6 October 2009, by section 505(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
RD 7 Extra pay Meaning (1) An extra pay— (a) means a payment that— (i) (ii) (iii) (iv) is made to a person in connection with their em- ployment; and is not a payment regularly included in salary or wages payable to the person for a pay period; and is not overtime pay; and is made in 1 lump sum or in 2 or more instal- ments; and (b) includes a payment of the kind described in paragraph (a) made— (i) as a bonus, gratuity, or share of proﬁts; or 2685 Part R s RD 8 Income Tax Act 2007 Reprinted as at 2 September 2013 as a redundancy payment; or (ii) (iii) when the person retires from employment; or (iv) as a result of a retrospective increase in salary or wages, but only to the extent described in subsec- tion (2); and (c) (d) includes an amount of income that a person derives under section CE 9 (Restrictive covenants) or CE 10 (Exit inducements) if the income is derived in connec- tion with an employment relationship between the per- son and the person who paid the amount; and does not include a payment of exempt income.
Limit on retrospective increase in salary or wages (2) A payment described in subsection (1)(b)(iv) is included in extra pay only to the extent to which,— (a) it accrues from the start of the increase until the start of the ﬁrst pay period in which the increase is included in salary or wages; and (b) when a week ends with a Saturday, the total of the in- crease for the week, and of the salary or wages for the week excluding the increase, and of any other salary or wages that the person earns for the week, is more than $4.
Deﬁned in this Act: amount, employment, exempt income, income, pay, pay period, salary or wages Compare: 2004 No 35 s OB 1 “extra pay” RD 8 Schedular payments Meaning (1) A schedular payment— (a) means— (i) (ii) a payment of a class set out in schedule 4 (Rates of tax for schedular payments); and in relation to a sale, the net amount paid after sub- tracting from the purchase price all commission, insurance, freight, classing charges and other ex- penses incurred by the seller in connection with the sale; and does not include— (i) salary or wages; or (b) 2686 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 8 (ii) (iii) (iv) (v) (vi) an extra pay; or a payment for services provided by a public au- thority, a local authority, a Maori authority, or a company, other than a non-resident contractor, a non-resident entertainer, or an agricultural, horti- cultural, or viticultural company; or a payment covered by an exemption certiﬁcate provided under section 24M of the Tax Admin- istration Act 1994; or a payment for services provided by a non-resi- dent contractor who has full relief from tax under a double tax agreement, and is present in New Zealand for 92 or fewer days in a 12-month period; or a contract payment for a contract activity or ser- vice of a non-resident contractor when the total amount paid for those activities to the contractor or another person on their behalf is $15,000 or less in a 12-month period.
(2) (3) Protected payments The fact that a schedular payment may be protected against assignment or charge does not override a person’s obligation to withhold the amount of tax for the payment.

Determination of expenditure incurred The Commissioner may determine from time to time the amount or proportion of expenditure that a person incurs in deriving a particular schedular payment or class of schedular payments.
Deﬁned in this Act: agricultural, horticultural, or viticultural company, amount, amount of tax, Commissioner, company, contract activity or service, contract payment, double tax agreement, exemption certiﬁcate, extra pay, local author- ity, Maori authority, New Zealand, non-resident contractor, non-resident enter- tainer, pay, public authority, salary or wages, schedular payment Compare: 2004 No 35 s NC 21(f)–(h), Income Tax (Withholding Payments) Regulations 1979, regulations 2, 4, 6–8 Section RD 8(1)(b)(v): amended (with effect on 1 April 2008), on 6 October 2009, by section 506 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2687 Part R s RD 9 Income Tax Act 2007 Reprinted as at 2 September 2013 Calculating amounts of tax RD 9 Maximum amount When a person calculates an amount of tax for a PAYE income payment, they must use the maximum rate under schedule 2 (Basic tax rates for PAYE income payments) at the time for the payment and the person receiving the payment, unless this Act states otherwise.
Deﬁned in this Act: amount of tax, pay, PAYE income payment Compare: 2004 No 35 s NC 6(1A), (3) RD 10 Amounts of tax for PAYE income payments (1) PAYE income payments other than schedular payments The amount of tax for a PAYE income payment that a per- son must withhold and pay to the Commissioner under section RA 5 (Tax obligations for employment-related taxes) is the relevant amount under schedule 2 (Basic tax rates for PAYE in- come payments).
Subsections (2) and (3) and sections RD 12 to RD 20 override this subsection.
Choosing rate for extra pay (2) An employee who notiﬁes their employer of their tax code may choose to have the amount of tax for an extra pay ﬁxed as follows: (a) for an employee whose taxable income for the income year is expected to be not more than $48,000, the rate set out in schedule 2, part B, table 1, row 2; or for an employee whose taxable income for the income year is expected to be not more than $70,000, the rate set out in schedule 2, part B, table 1, row 3; or for other employees, the rate set out in schedule 2, part B, table 1, row 4.
(b) (c) Relationship with section RD 17 (2B) Despite subsection (2), a person must not choose a rate set out in schedule 2, part B, table 1 that is lower than the rate that would apply to the amount of extra pay under section RD 17.
Schedular payments The amount of tax for a schedular payment is determined— (a) at the relevant rate set out in schedule 4 (Rates of tax for schedular payments); and (3) 2688 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 11 (4) (b) on the basis of the gross amount of the payment, whether— (i) (ii) some or all of the payment is income; and the full income tax liability lies with the person receiving the payment, or lies partly with an em- ployee or subcontractor of the person.
Tax tables The Commissioner may provide tables for the calculation of an amount of tax for a PAYE income payment that may in- corporate other relevant information.
Deﬁned in this Act: amount, amount of tax, Commissioner, employee, em- ployer, extra pay, gross, income, income tax liability, income year, notify, pay, PAYE income payment, schedular payment, tax code, taxable income Compare: 2004 No 35 ss NC 6, NC 8(1A), Income Tax (Withholding Payments) Regulations 1979, regulation 3 Section RD 10(2)(a): substituted, on 1 April 2010 (applying for the 2010–11 and later income years), by section 103(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section RD 10(2)(b): substituted, on 1 April 2010 (applying for the 2010–11 and later income years), by section 103(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section RD 10(2)(c): added, on 1 April 2010 (applying for the 2010–11 and later income years), by section 103(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
inserted, on 1 April 2010 (applying for the Section RD 10(2B) heading: 2010–11 and later income years), by section 103(2) of the Taxation (Conse- quential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section RD 10(2B): inserted, on 1 April 2010 (applying for the 2010–11 and later income years), by section 103(2) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
RD 11 Reduction in certain circumstances Special circumstances (1) Despite sections RD 2 to RD 10, the Commissioner may, in special circumstances, reduce the amount of tax for a PAYE income payment to an employee or a class of employees.

The PAYE rules then apply as if amended.
(2) When schedule or regulations inapplicable If the amount of tax for a PAYE income payment cannot be determined under schedule 2 (Basic tax rates for PAYE income payments) or under regulations made under this Act because 2689 Part R s RD 11 Income Tax Act 2007 Reprinted as at 2 September 2013 of the size of the PAYE income payment, or the number of the employee’s dependants, or for any other reason, the amount of tax for the payment must be determined by the Commissioner, taking into account the factors considered in ﬁxing the amount of tax for other similar payments.
Income-tested beneﬁts and education allowances The amount of tax for a PAYE income payment that is an in- come-tested beneﬁt or an allowance paid under regulations made under section 303 of the Education Act 1989 must be de- termined by the Commissioner in consultation with the chief executive of the administering department or the Secretary of Education.
When Commissioner makes determination under section RD 8(3) If the Commissioner makes a determination under section RD 8(3) in relation to the amount or proportion of expenditure that a person incurs in deriving a schedular payment, the basis for calculating the amount of tax for the schedular payment is the reduced amount found after subtracting the amount or proportion of expenditure determined by the Commissioner from the amount of the payment.

This subsection overrides section RD 10(3).
Deﬁned in this Act: amount, amount of tax, chief executive of the administer- ing department, Commissioner, employee, income-tested beneﬁt, PAYE income payment, PAYE rules, schedular payment Compare: 2004 No 35 ss NC 6(1C), (1D), NC 13, Income Tax (Withholding Payments) Regulations 1979, regulation 6(3) Section RD 11(4) heading: added (with effect on 1 April 2008), on 6 October 2009, by section 507(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RD 11(4): added (with effect on 1 April 2008), on 6 October 2009, by section 507(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RD 11 list of deﬁned terms amount: inserted (with effect on 1 April 2008), on 6 October 2009, by section 507(2) of the Taxation (International Tax- ation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RD 11 list of deﬁned terms schedular payment: added (with effect on 1 April 2008), on 6 October 2009, by section 507(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
(3) (4) 2690 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 13 Section RD 11 compare note: amended (with effect on 1 April 2008), on 6 Oc- tober 2009, by section 507(3) of the Taxation (International Taxation, Life In- surance, and Remedial Matters) Act 2009 (2009 No 34).
Adjustments for certain PAYE income payments RD 12 Multiple payments of salary or wages (1) (2) (3) When this section applies This section applies when an employee receives more than 1 payment of salary or wages in a week or part of a week that ends on a Saturday.

The employment may relate to 1 or more employment situations.
When this section does not apply This section does not apply— (a) when an employee leaves regular full-time employment before engaging in another regular full-time employ- ment; or to salary or wages from employment as a casual agri- cultural employee, election day worker, or non-resident seasonal worker.
(b) Treatment as 1 payment The total amount of tax for all payments of salary or wages is the amount that would be required to be withheld if all the payments were treated as 1 payment made by 1 employer for the week.
Deﬁned in this Act: amount of tax, casual agricultural employee, election-day worker, employee, employer, employment, non-resident seasonal worker, pay, salary or wages Compare: 2004 No 35 s NC 10 Section RD 12(2)(b): substituted (with effect on 1 April 2009), on 6 October 2009, by section 508(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RD 12 list of deﬁned terms non-resident seasonal worker: inserted (with effect on 1 April 2009), on 6 October 2009, by section 508(2) of the Tax- ation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
RD 13 Advance payments of salary or wages When this section applies: increase in amount of tax This section applies when— (1) 2691 Part R s RD 13B Income Tax Act 2007 Reprinted as at 2 September 2013 (2) (3) (a) (b) (c) an employee receives from an employer a payment of salary or wages referred to in section RA 5(1)(a) and (c) (Tax obligations for employment-related taxes); and the amount of tax under schedule 2 (Basic tax rates for PAYE income payments) for all or part of the payment is increased; and the payment is made before the date of the increase.
When this section applies: becoming subject to PAYE rules This section also applies when all or part of a payment of salary or wages becomes subject to the PAYE rules, but the payment is made before the date on which it becomes subject to the rules.

Addition to amount of tax for next payment The amount of the difference caused by the increase referred to in subsection (1)(b) is added to the amount of tax for the next payment of salary or wages made by the employer to the employee.
Deﬁned in this Act: amount of tax, employee, employer, pay, PAYE rules, salary or wages Compare: 2004 No 35 s NC 11 Section RD 13(1)(a): substituted (with effect on 1 April 2008) on 6 October 2009, by section 509(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
RD 13B Adjustments for payroll donations When this section applies This section applies when an employee makes a payroll do- nation for a pay period for which they have a tax credit under section LD 4 (Tax credits for payroll donations).

Subtracting amount of tax credit The employer or PAYE intermediary must subtract the amount of the tax credit from the amount of tax for the employee’s PAYE income payment for the pay period and record the in- formation in the relevant employer monthly schedule.
Deﬁned in this Act: employee, employer, employer monthly schedule, pay period, PAYE income payment, PAYE intermediary, payroll donation, tax credit Section RD 13B: inserted, on 6 January 2010, by section 510 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
(1) (2) 2692 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 14 RD 14 Changes to tax rates for salary or wages (1) (2) (3) (4) (5) When subsection (2) applies Subsection (2) applies when a change occurs to the amounts of tax for PAYE income payments set out in schedule 2 (Basic tax rates for PAYE income payments).
(b) Determining amount of tax The amount of tax for a payment of salary or wages for the pay period in which the change occurs is determined as follows: (a) for a pay period of 1 month or less, the amount of tax for the full payment for the pay period is the altered amount: for a pay period of more than 1 month, the amount of tax is determined on the basis set out in schedule 2, clause 2, by— (i) determining the proportionate parts of the pay- ment before and after the change; and calculating each part of the relevant amount of tax; and adding together the relevant amounts of tax.
(ii) (iii) When subsection (4) applies Subsection (4) applies for a week when— (a) a change occurs to the amounts of tax for PAYE income payments set out in schedule 2; and an employee receives more than 1 payment of salary or wages for the week as described in section RD 12.

(b) Determining amount of tax The total amount of tax for all payments of salary or wages for the week in which the change occurs is the amount determined under section RD 12.
Later payment for earlier services The amount of tax for a payment of salary or wages made after the date of the change for a pay period ending before the date in relation to services provided before the date must be calculated using the basic amounts of tax for PAYE income payments applicable in the pay period or week.
Deﬁned in this Act: amount of tax, employee, pay, pay period, PAYE income payment, salary or wages Compare: 2004 No 35 s NC 12 2693 Part R s RD 15 Income Tax Act 2007 Reprinted as at 2 September 2013 RD 15 Payments of salary or wages in pay periods (1) (2) (3) Payment for part of period If an employee who is in regular full-time employment is paid salary or wages for part of a pay period, the payment is treated as a payment for a full pay period.
Payment on production basis If an employee who is paid on a production basis for work performed as a piece worker or out-worker is paid salary or wages, the payment is treated as payment for the period that runs from the date the work starts to the date of its completion.

Payments in several sums If a PAYE income payment for a pay period is paid in 2 or more separate sums, those sums must be added together to determine the amount of tax for the payment.
When impractical to make payments at same time (4) Despite subsection (3), if it is impractical for an employer to pay an employee overtime pay and other salary or wages for a pay period at the same time, the employer may add the amount of the overtime pay of the employee to their salary or wages for a later pay period, but not their overtime pay if, for both pay periods,— (a) the amounts of the employee’s salary or wages are more or less the same; and the amounts of tax withheld from the employee’s salary or wages are the same; and the employee has the same tax code.
(b) (c) Periods not coinciding For the purposes of subsection (4), if overtime pay is paid for a particular period that is the same length as a pay period but does not coincide with a pay period, it may be treated as over- time pay for the pay period in which the particular period ends.
Deﬁned in this Act: amount of tax, employee, employer, employment, pay, pay period, PAYE income payment, salary or wages, tax code, tax withheld Compare: 2004 No 35 s NC 2(2)–(4) (5) 2694 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 17 RD 16 Payments to private domestic workers (1) When this section applies This section applies to a person who is employed as a private domestic worker by another person and— (a) the employer is the occupier, or 1 of the occupiers, of a house or premises used exclusively for residential pur- poses; and the employment— (i) (b) is for the performance of work in or about the house or premises, or a garden or grounds be- longing to the house or premises; and is not for a business carried on by the employer, or an occupation or calling of the employer; and is not regular full-time employment.
(ii) (iii) No amount of tax withheld (2) No amount of tax is required to be withheld for a PAYE income payment relating to the person’s employment as a private do- mestic worker when sections RA 8 (Liability of persons re- ceiving payments or beneﬁts) and RD 4(2) apply.
Deﬁned in this Act: amount of tax, business, employer, employment, PAYE income payment, private domestic worker Compare: 2004 No 35 s NC 2(1) RD 17 Payment of extra pay with other PAYE income payments (1) When this section applies This section applies when a person pays an amount of extra pay to an employee who also receives a PAYE income payment from the person, regardless of whether the extra pay is paid with or separately from a PAYE income payment.
The amount of tax for the extra pay is based on the sum of— (a) (b) the amount of the extra pay; and the annualised value of all PAYE income payments made to the employee in the period that starts 4 weeks before the date of the payment of the extra pay and ends on the date of that payment.
2695 Part R s RD 17 Income Tax Act 2007 Reprinted as at 2 September 2013 Calculating annualised value (1B) For the purposes of calculating the amount that is the annu- alised value referred to in subsection (1)(b), the amount of the extra pay referred to in subsection (1)(a) is excluded.
(2) Rates applying For the sum of the amounts referred to in subsection (1) listed in the following paragraphs, the amount of tax for the extra pay that must be withheld is the amount determined using the basic amounts of tax for PAYE income payments set out in the relevant row of schedule 2, part B, table 1 (Basic tax rates for PAYE income payments): (a) if the sum of the amounts is $14,000 or less, the amount determined by applying row 1: if the sum of the amounts is more than $14,000 but not more than $48,000, the amount determined by applying row 2: if the sum of the amounts is more than $48,000 but not more than $70,000, the amount determined by applying row 3: if the sum of the amounts is more than $70,000, the amount determined by applying row 4.
(b) (c) (d) When secondary tax codes apply (3) Despite subsection (2), if the person pays an amount of extra pay to an employee in relation to which the employee has notiﬁed the person that a secondary code under section 24B(3)(bb), (c), (d), or (e) of the Tax Administration Act 1994 applies, the rate under schedule 2, part B, table 1 applying to the extra pay is determined using the formula— extra pay + annualised amount + low threshold amount.
Deﬁnition of items in formula In the formula,— (a) (b) (c) extra pay is the amount of the employee’s extra pay: annualised amount is the amount given by subsections (1)(b) and (1B): low threshold amount is, as applicable,— (i) (ii) (iii) for secondary code SB, $0: for secondary code S, $14,001: for secondary code SH, $48,001: (4) 2696 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 18 (iv) for secondary code ST, $70,001.
Deﬁned in this Act: amount, amount of tax, employee, extra pay, pay, PAYE income payment Compare: 2004 No 35 s NC 2(5) Section RD 17(1) heading: substituted (with effect on 1 April 2008), on 7 De- cember 2009, by section 104(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section RD 17(1): substituted (with effect on 1 April 2008), on 7 December 2009, by section 104(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section RD 17(1B) heading: inserted (with effect on 1 April 2008), on 7 De- cember 2009, by section 104(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section RD 17(1B): inserted (with effect on 1 April 2008), on 7 December 2009, by section 104(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section RD 17(2) heading: substituted, on 1 April 2010 (applying for the 2010–11 and later income years), by section 104(2) of the Taxation (Conse- quential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section RD 17(2): substituted, on 1 April 2010 (applying for the 2010–11 and later income years), by section 104(2) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section RD 17(3) heading: substituted, on 1 April 2010 (applying for the 2010–11 and later income years), by section 104(2) of the Taxation (Conse- quential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section RD 17(3): substituted, on 1 April 2010 (applying for the 2010–11 and later income years), by section 104(2) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section RD 17(4) heading: added, on 1 April 2010 (applying for the 2010–11 and later income years), by section 104(2) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section RD 17(4): added, on 1 April 2010 (applying for the 2010–11 and later income years), by section 104(2) of the Taxation (Consequential Rate Align- ment and Remedial Matters) Act 2009 (2009 No 63).
RD 18 Schedular payments without notiﬁcation (1) (2) When this section applies This section applies when a person makes a schedular payment but the notiﬁcation required under section 24L of the Tax Ad- ministration Act 1994 has not been provided to them.

When this section does not apply This section does not apply when a person other than a company incorporates a company to obtain a reduction in an amount of tax for a schedular payment.
2697 Part R s RD 19 Income Tax Act 2007 Reprinted as at 2 September 2013 (3) (4) Additional amount of tax The person must withhold, in addition to the amount calculated under section RD 10(3), an amount of tax for the schedular payment determined as follows: (a) (ii) 5% of the amount of the schedular payment if— (i) the person receiving the payment is a company that is a non-resident contractor; and the non-resident contractor receives the payment other than as a result of a choice that is made for the purposes that include a purpose of defeating the intent and application of paragraph (b): 15% of the amount of the schedular payment in all other cases.
(b) Non-application to non-resident entertainers This section does not apply if the schedular payment is made to a non-resident entertainer.
Deﬁned in this Act: amount, amount of tax, company, non-resident contractor, non-resident entertainer, notify, pay, schedular payment Compare: 2004 No 35 s NC 7(2) Section RD 18(3) heading: substituted (with effect on 1 April 2008) on 6 Oc- tober 2009, by section 512(1) of the Taxation (International Taxation, Life In- surance, and Remedial Matters) Act 2009 (2009 No 34).
Section RD 18(3): substituted (with effect on 1 April 2008) on 6 October 2009, by section 512(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RD 18(4) heading: added (with effect on 1 April 2008) on 6 October 2009, by section 512(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RD 18(4): added (with effect on 1 April 2008) on 6 October 2009, by section 512(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

RD 19 Schedular payments to non-resident entertainers When this section applies This section applies when a non-resident entertainer derives income from an activity or performance connected with any of the activities or performances described in the deﬁnition of non-resident entertainer.
Amounts withheld (1) 2698 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 20 (2) (3) [Repealed] [Repealed] Amounts not withheld If the entertainer has received a schedular payment from which no amount of tax has been withheld, the entertainer must pay the amount of tax to the Commissioner by the 20th day of the month following that in which the payment was made, or by the date of their departure from New Zealand if that is earlier.
Deﬁned in this Act: amount, amount of tax, Commissioner, income, income tax liability, New Zealand, non-resident entertainer, pay, schedular payment, tax year Compare: Income Tax (Withholding Payments) Regulations 1979, regulations 10, 11 Section RD 19(2) heading: repealed (with effect on 1 April 2008), on 6 Octo- ber 2009, pursuant to section 513 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RD 19(2): repealed (with effect on 1 April 2008), on 6 October 2009, by section 513 of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).

RD 20 Schedular payments to subcontractors (1) (2) When this section applies This section applies when a contractor is paid a schedular pay- ment for services provided under a contract, and a subcon- tractor has provided services under the contract.
Obligation to retain amount The PAYE rules apply to the contractor in relation to a payment made to the subcontractor in relation to the work carried out under the contract.
Deﬁned in this Act: pay, PAYE rules, schedular payment Compare: Income Tax (Withholding Payments) Regulations 1979, regulation 12 2699 Part R s RD 21 Income Tax Act 2007 Reprinted as at 2 September 2013 Paying amounts of tax RD 21 When amounts of tax not withheld or payment insufﬁcient (1) (2) (3) Employees’ obligations If, for any reason, some or all of the amount of tax for a PAYE income payment is not withheld at the time it is paid to an employee, the employee must— (a) provide an employer monthly schedule with the relevant details; and pay the amount of the deﬁciency.
(b) When person exempt or not liable to pay Subsection (1)(b) does not apply if the employee is exempt from paying the amount or is not liable for the amount of tax.

When payment less than amount of tax If the amount of a PAYE income payment is less than the amount of tax for the payment, the employee must pay the amount of the deﬁciency to their employer or PAYE intermedi- ary.
If the employee does not pay the amount of the deﬁciency to their employer or PAYE intermediary, they must pay the amount to the Commissioner under section RD 4(2).
Deﬁned in this Act: amount, amount of tax, Commissioner, employee, em- ployer, employer monthly schedule, pay, PAYE intermediary, PAYE income payment Compare: 2004 No 35 s NC 5 RD 22 Returns for amounts of tax paid to Commissioner Paying amount withheld with returns (1) An employer or a PAYE intermediary who withholds an amount of tax from a PAYE income payment must pay the amount to the Commissioner under section RD 4 and provide an employer monthly schedule and a PAYE income payment form in relation to the amount.
General rule The employer or PAYE intermediary must provide the PAYE income payment form referred to in subsection (1) by— (a) the 20th day of the month in which they withhold an amount of tax for a PAYE income payment in a ﬁrst (2) 2700 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 22 (b) payment period described in section RA 15(3) (Payment dates for interim and other tax payments): the 5th day of the month following that in which they withhold an amount of tax for a PAYE income pay- ment in a second payment period described in section RA 15(3), or if the month is December, by the 15th day of January.
Employer monthly schedule (2B) The employer or PAYE intermediary must provide the em- ployer monthly schedule referred to in subsection (1) by the 5th day of the month following that in which they withhold an amount of tax for a PAYE income payment, or if the month is December, by the 15th day of January.
Returns when gross amounts of tax are less than $500,000 (3) Despite subsections (2) and (2B), an employer who meets the requirements of subsection (3B) must provide the employer monthly schedule and the PAYE income payment form by the 20th day of the month following that in which an amount of tax is withheld.
Requirements (3B) For the purposes of subsection (3), the employer must— (a) (b) not be a new employer; and have gross amounts of tax of less than $500,000 with- held under section RA 5(1)(a) and (c) (Tax obligations for employment-related taxes) for both— (i) (ii) PAYE income payments: employer’s superannuation cash contributions.
New employers (4) Despite subsections (2) and (2B), an employer who is a new employer must provide the employer monthly schedule and the PAYE income payment form by the 20th day of the month following that in which an amount of tax is withheld until their gross amounts of tax for PAYE income payments and em- ployer’s superannuation cash contributions payable for the tax year are more than $500,000.
(5) Thresholds For the purposes of determining whether the threshold referred to in subsections (3) and (4) is reached, if the employer ends 2701 Part R s RD 22 Income Tax Act 2007 Reprinted as at 2 September 2013 their business and starts a new business, or operates 2 or more businesses at the same time, all amounts of tax withheld must be aggregated.
When business ended In addition to the requirements of subsections (2) to (4), if the employer stops carrying on a business in relation to which an amount of tax for a PAYE income payment has been withheld, they must notify the Commissioner of the cessation by the 15th day of the second month following the month in which the business is ended.
(b) (c) Single employer For the purposes of subsections (3) and (4), the following are treated as 1 employer: (a) 2 or more companies if they were a group of companies at a time in the relevant tax year: all partners in a partnership: all persons in whom property has become vested, or to whom the control of property has passed in the case of— (i) (ii) (iii) (iv) (v) an estate of a deceased person; or a trust; or a company in liquidation; or an assigned estate; or another ﬁduciary relationship.
Deﬁned in this Act: amount of tax, business, Commissioner, company, em- ployer, employer monthly schedule, employer’s superannuation cash contribu- tion, employer’s superannuation contribution, ﬁrst payment period, gross, group of companies, liquidation, notify, pay, PAYE income payment, PAYE income payment form, PAYE intermediary, second payment period, tax withheld, tax year Compare: 2004 No 35 s NC 15(1), (5), (6) Section RD 22 heading: substituted (with effect on 1 April 2008), on 6 October 2009, by section 514(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RD 22(1) heading: substituted (with effect on 1 April 2008), on 6 Oc- tober 2009, by section 514(2) of the Taxation (International Taxation, Life In- surance, and Remedial Matters) Act 2009 (2009 No 34).

Section RD 22(1): substituted (with effect on 1 April 2008), on 6 October 2009, by section 514(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
(6) (7) 2702 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 22 Section RD 22(2): amended (with effect on 1 April 2008), on 21 December 2010 (applying for the 2008–09 and later income years), by section 127(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section RD 22(2): amended (with effect on 1 April 2008), on 6 October 2009, by section 514(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RD 22(2B) heading: inserted (with effect on 1 April 2008), on 21 De- cember 2010 (applying for the 2008–09 and later income years), by section 127(2) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section RD 22(2B): inserted (with effect on 1 April 2008), on 21 December 2010 (applying for the 2008–09 and later income years), by section 127(2) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section RD 22(3) heading: substituted (with effect on 1 April 2008), on 6 Oc- tober 2009, by section 514(4) of the Taxation (International Taxation, Life In- surance, and Remedial Matters) Act 2009 (2009 No 34).

Section RD 22(3) heading: amended (with effect on 1 April 2009), on 6 October 2009, by section 514(5) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RD 22(3) heading: amended, on 1 April 2009, by section 15(a) of the Taxation (Business Tax Measures) Act 2009 (2009 No 5).

Section RD 22(3): substituted (with effect on 1 April 2008), on 6 October 2009, by section 514(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RD 22(3): amended (with effect on 1 April 2008), on 21 December 2010 (applying for the 2008–09 and later income years), by section 127(3) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section RD 22(3): amended, on 1 April 2009, by section 15(b) of the Taxation (Business Tax Measures) Act 2009 (2009 No 5).
Section RD 22(3B) heading: inserted (with effect on 1 April 2008), on 6 October 2009, by section 514(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RD 22(3B): inserted (with effect on 1 April 2008), on 6 October 2009, by section 514(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RD 22(3B)(b): amended (with effect on 1 April 2009), on 6 October 2009, by section 514(6) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RD 22(4): substituted (with effect on 1 April 2008), on 6 October 2009, by section 514(7) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RD 22(4): amended (with effect on 1 April 2008), on 21 December 2010 (applying for the 2008–09 and later income years), by section 127(3) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section RD 22(4): amended (with effect on 1 April 2009), on 6 October 2009, by section 514(8) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2703 Part R s RD 23 Income Tax Act 2007 Reprinted as at 2 September 2013 Section RD 22(4): amended, on 1 April 2009, by section 15(c) of the Taxation (Business Tax Measures) Act 2009 (2009 No 5).

Section RD 22(6): substituted (with effect on 1 April 2008), on 6 October 2009, by section 514(9) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RD 22 list of deﬁned terms employer monthly schedule: inserted (with effect on 1 April 2008), on 6 October 2009, by section 514(10) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RD 22 list of deﬁned terms employer’s superannuation cash contri- bution: inserted (with effect on 1 April 2008), on 6 October 2009, by section 514(10) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
RD 23 Bonds given by employers of certain non-resident employees When this section applies This section applies if it cannot reasonably be determined at the time an employer or PAYE intermediary is required to withhold the amount of tax for a PAYE income payment whether the payment will be exempt income of an em- ployee under either section CW 19 (Amounts derived during short-term visits) or a double tax agreement.
Providing bond The employer or PAYE intermediary may apply to the Com- missioner to be released from their obligation to withhold the amount by providing a bond or other security for the amount that would be required to be withheld but for this section.
Consequences of acceptance of bond If the Commissioner accepts the bond or security referred to in subsection (2),— (a) the employer or PAYE intermediary must not withhold the amount of tax for a PAYE income payment to the employee; and information concerning the employee must not be in- cluded in an employer monthly schedule; and the no notiﬁcation rate referred to in section 24B(3)(h) of the Tax Administration Act 1994 must not be used in relation to the PAYE income payment.
(b) (c) (1) (2) (3) 2704 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 24 (4) (5) When subsection (3) no longer applies If the employee later becomes liable to pay income tax because of an event provided for in an arrangement made under section BH 1 (Double tax agreements) or CW 19, the application of subsection (3) ends, and the employer or PAYE intermediary must withhold the amount of tax for a PAYE income payment made to the employee.
Employee’s liability If the Commissioner considers that the employee is liable for income tax in relation to a PAYE income payment from which no amount of tax is withheld because of the application of subsection (3), the Commissioner must notify the employer or PAYE intermediary, as applicable.

The employer or inter- mediary must then account for and pay the total amount of tax for all PAYE income payments that would have been due, or a lesser amount as the Commissioner determines.
Treatment of amount paid under subsection (5) (6) An amount paid to the Commissioner under subsection (5) is treated as the amount of tax for a PAYE income payment made on the date of the Commissioner’s notice.

Section 120U of the Tax Administration Act 1994 overrides this subsection.
Deﬁned in this Act: amount, amount of tax, arrangement, Commissioner, dou- ble tax agreement, employee, employer, employer monthly schedule, exempt income, income tax, notify, pay, PAYE income payment, PAYE intermediary Compare: 2004 No 35 s NC 18 Section RD 23(4): amended (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 140(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
RD 24 Exemption certiﬁcates for non-resident contractors (1) When this section applies This section applies when— (a) a non-resident contractor derives an amount from a con- tract activity or service that is not income, whether be- cause of a double tax agreement or for another reason; or the contractor provides a bond or other security for the payment of any income tax payable on an amount de- rived by them from a contract activity or service; or (b) 2705 Part R s RD 25 Income Tax Act 2007 Reprinted as at 2 September 2013 (2) (c) the contractor has in the period of 24 months before the date of the application referred to in subsection (2) paid all income tax payable by them and complied with their obligations under the Inland Revenue Acts, and the Commissioner is satisﬁed that the contractor will continue to do this.
Exemption certiﬁcate The non-resident contractor may apply to the Commissioner to provide them with an exemption certiﬁcate under section 24M of the Tax Administration Act 1994 for a contract pay- ment made to them or another person acting on their behalf in relation to a contract activity or service set out in the certiﬁcate for which no amount of tax is to be withheld.
Deﬁned in this Act: amount, amount of tax, Commissioner, contract activity or service, contract payment, double tax agreement, exemption certiﬁcate, income, income tax, Inland Revenue Acts, non-resident contractor, pay Compare: 2004 No 35 s NC 18(1), Income Tax (Withholding Payments) Regu- lations 1979, regulation 5(3) Fringe beneﬁt tax (FBT) rules and fringe beneﬁts Introductory provisions RD 25 FBT rules and their application Meaning The FBT rules means— (a) sections CX 2 to CX 38 (which relate to fringe beneﬁts); and sections GA 2, GB 31, and GB 32 (which relate to FBT); and sections RD 26 to RD 63; and schedules 1, part C (Basic tax rates: income tax, ESCT, RWT, and attributed fringe beneﬁts) and 5 (Fringe bene- ﬁt values for motor vehicles); and sections 46B to 46E, 93, Part 7, and section 139B of the Tax Administration Act 1994.
(b) (c) (d) (e) (1) 2706 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 27 (2) Application The FBT rules apply to an employer who provides a fringe beneﬁt to their employee in connection with their employment.
Deﬁned in this Act: employee, employer, employment, FBT, FBT rules, fringe beneﬁt Compare: 2004 No 35 s OB 1 “FBT rules” RD 26 Liability for FBT Liability (1) An employer who provides a fringe beneﬁt to an employee is liable to pay FBT under sections RD 27 to RD 57, choosing a method of payment described in subsection (2).
Payment options (2) An employer must choose 1 of the following options for the payment of FBT: (a) (b) (c) the single rate option, see section RD 58; or the alternate rate option, see section RD 59; or if eligible, the close company option, see section RD 60; or if eligible, the small business option, see section RD 61.

(d) Election (3) An employer may make an election under subsection (2)(a) or (b) by providing a return setting out the rate chosen.
Deﬁned in this Act: business, close company, employee, employer, FBT, fringe beneﬁt, pay Compare: 2004 No 35 s ND 1(1)–(3) Value of fringe beneﬁts RD 27 Determining fringe beneﬁt values (1) What sections RD 28 to RD 53 do Sections RD 28 to RD 53 set out the rules for determining the value of a fringe beneﬁt provided by an employer to an employee in connection with their employment.
The taxable value of a fringe beneﬁt when an employee pays an amount for receiving the beneﬁt is dealt with in sections RD 54 to RD 57.

2707 Part R s RD 28 Income Tax Act 2007 Reprinted as at 2 September 2013 (2) (3) When value cannot be ascertained If, under sections RD 28, RD 29, and RD 33 to RD 41, the value of a fringe beneﬁt cannot be ascertained, the value is the market value or otherwise as the Commissioner determines.
Meaning of market value In subsection (2), market value means the price, at the time at which the goods or services were provided to the employee, for which the goods or services would normally be sold in a sale— (a) (b) (c) made on ordinary trade terms; and (d) Deﬁned in this Act: amount, Commissioner, employee, employer, employment, fringe beneﬁt, market value, New Zealand, pay Compare: 2004 No 35 ss ND 1A(1), ND 1L in the open market in New Zealand; and freely offered; and to a member of the public at arm’s length.
RD 28 Private use of motor vehicle: calculation methods (1) What this section does This section limits the way an employer may use a method for calculating the value of the beneﬁt that they provide to an em- ployee by making a motor vehicle available for the employee’s private use.
Choosing method in ﬁrst return (2) When a person ﬁrst ﬁles a return relating to a vehicle for the purposes of this section, they may calculate the value of the beneﬁt using either of the valuation methods set out in sched- ule 5 (Fringe beneﬁt values for motor vehicles).
Using method in ﬁrst return The person must use the method chosen in the ﬁrst return re- ferred to in subsection (2) in calculating the value of the beneﬁt for the length of time— (a) (b) starting after the end of the period of the ﬁrst return; and continuing to the earliest of the following dates: (i) (ii) the date of the disposal of the vehicle: the date on which the vehicle ceases to be leased by the employer or an associated person without (3) 2708 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 29 a consecutive or successive lease of the vehicle by them: the date that is 5 years after start of the period of the ﬁrst return.
(iii) (4) Returns after 5 years In a return relating to the vehicle for a period beginning 5 years or more after the start of the period of the ﬁrst return, the per- son may calculate the value of the beneﬁt using either of the valuation methods set out in schedule 5.
Cost price valuation method (5) Despite subsections (3) and (4), the person must apply sched- ule 5, clause 1 or 2, using the cost price valuation method if— the vehicle is owned, leased, or rented by the employer (a) or an associated person; and the employer or the associated person owned, leased, or rented the vehicle— (i) (b) during the period of the ﬁrst return, if the period begins before 1 April 2006: before 1 April 2006.
(ii) (6) (7) Exception: vehicle not subject to arrangement Subsection (5) does not apply if a ﬁrst return for the vehicle is for a period that starts on or after 1 April 2006 and the vehicle is not the subject of an agreement or arrangement referred to in section CX 7 (Employer or associated person treated as having right to use vehicle under arrangement).
Exception: 5 years after ﬁrst return Subsection (5) does not apply if the person owns the vehicle and a period of 5 years or more since the start of the period of the ﬁrst return has elapsed.
Deﬁned in this Act: arrangement, associated person, employee, employer, lease, motor vehicle, private use Compare: 2004 No 35 s ND 1A(1)–(1D) RD 29 Private use of motor vehicle: formulas (1) What this section does This section sets out the formulas for calculating the value of the beneﬁt that an employer provides to an employee by making a motor vehicle available for their private use.
2709 Part R s RD 29 Income Tax Act 2007 Reprinted as at 2 September 2013 Quarterly payment If FBT is paid quarterly, the value of the beneﬁt is calculated using the formula— days × schedule 5 amount 90.

Annual payment If FBT is paid on an annual basis, the value of the beneﬁt is the total of the amounts calculated under subsection (2) for the 4 quarters in the applicable tax year.
Payment by income year If FBT is paid on an income year basis, the value of the beneﬁt is calculated using the formula— days × schedule 5 amount 365.
Deﬁnition of items in formulas In the formula,— (a) in subsection (2), days refers to the number of days in the quarter on which the vehicle is made available for private use, reduced by the number of days on which the vehicle was a work-related vehicle, or 90, whichever is less: in subsection (4), days refers to the number of days in the income year on which the vehicle is made available for private use, reduced by the number of days on which the vehicle was a work-related vehicle: in subsections (2) and (4), schedule 5 amount refers to the amount calculated under schedule 5 (Fringe beneﬁt values for motor vehicles) as the value of the beneﬁt that would have been received for unlimited private use of the vehicle in that quarter or income year, as applicable.
(b) (c) Test period To calculate the value of the beneﬁt, an employer may choose to use a test period under section RD 31 to establish private use.
Deﬁned in this Act: amount, employee, employer, FBT, income year, motor vehicle, private use, quarter, tax year, work-related vehicle Compare: 2004 No 35 s ND 1A(2)–(6) (2) (3) (4) (5) (6) 2710 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 30 RD 30 Private use of motor vehicle: 24-hour period (1) (2) (3) When this section applies This section applies for the purposes of a calculation of the value of a beneﬁt under section RD 29.
Meaning of day In section RD 29(5)(a) and (b), in relation to a motor vehicle and the item days in the formulas, a day is— (a) a 24-hour period starting from a time in a day that a person who owns or leases the vehicle chooses; or a 24-hour period starting at midnight if paragraph (a) does not apply.
(b) Choosing starting point and notifying Commissioner For the purposes of subsection (2)(a), the person must— (a) choose a starting point for the day that is a whole num- ber of an hour after midnight; and notify the Commissioner of their election when ﬁling the next return relating to the vehicle.
(b) Elections (4) An election under subsection (2)(a)— (a) (b) is effective from the start of the quarter, income year, or tax year to which a return relates; and applies to all vehicles in relation to which the person ﬁles a return.
Hour applying for 2 income years If the person chooses under subsection (3)(a) a particular hour in the 24-hour period as the starting point of the day, that hour continues to apply to the use of the vehicle from the start of the relevant quarter, income year, or tax year, as applicable, for a minimum period of 2 income years.
(5) When circumstances change (6) An employer may ask the Commissioner to amend the starting point of the 24-hour period, or to treat the election as revoked, if the employer’s circumstances have changed in a way that— (a) is more than minor; and 2711 Part R s RD 31 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) makes the starting point no longer relevant to the em- ployer’s business.
Deﬁned in this Act: business, Commissioner, day, employer, income year, motor vehicle, notify, quarter, tax year Compare: 2004 No 35 s ND 1AB RD 31 Motor vehicle test period (1) (2) (3) (4) Recording details for test period To establish the value of the beneﬁt provided through a motor vehicle being made available to an employee for their private use, an employer may choose to record the details of the use of the vehicle by the employee for a test period.
Number used in calculations The number of days on which a vehicle is available for an employee’s private use that is ascertained in the test period is the number used in the calculation in section RD 29(2).

For the calculation in section RD 29(4), the relevant number is the number of days ascertained in the test period multiplied by 4.

Quarter or 3 months for test period If FBT is paid quarterly or annually, the test period is a quarter.
If FBT is paid on an income year basis, the test period is 3 consecutive months of an income year.
Period showing pattern of use The employer must— (a) choose a test period that shows, or is likely to show, a pattern of use of the motor vehicle by the employee that fairly represents the use of the vehicle by the employee over the whole of the applicable term; and keep a record of the test period, including accurate de- tails of the days in the period on which the vehicle is available for the employee’s private use.
(b) (5) Work-related vehicles In subsection (4), a day on which the vehicle is a work-related vehicle is treated as a day on which the vehicle is not available for private use.

2712 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 32 (6) (7) (8) Term of 3 years The number of days of availability for private use ascertained in the test period applies for a term of 3 years.
The term starts, as applicable, as follows: (a) if FBT is paid quarterly, on the ﬁrst day of the test period: if FBT is paid on an annual basis, on the ﬁrst day of the tax year in which the test period occurs: if FBT is paid on an income year basis, on the ﬁrst day of the income year in which the test period occurs.
(b) (c) Reduction of term The term referred to in subsection (6) is reduced if the number of days of actual private use of the motor vehicle is 20%, or more than 20%, higher than the number ascertained in the test period.

In this case, the term ends on the last day of the applic- able quarter, year, or income year.

If the employer chooses to start another test period, the existing term ends just before the start of the new term.
When test period no longer representative If the Commissioner considers that the result ascertained in the test period does not, or does no longer, fairly represent the actual private use of the motor vehicle by the employee, the Commissioner may notify the employer that the term will end on a particular date.

Following notiﬁcation, the employer must not use that result again.
Deﬁned in this Act: Commissioner, employee, employer, FBT, income year, motor vehicle, notify, private use, quarter, tax year, work-related vehicle Compare: 2004 No 35 s ND 1B(1)–(6) RD 32 Replacement motor vehicles For the purposes of section RD 31, a replacement motor ve- hicle is treated in the same way as the vehicle it replaces if the result ascertained in the test period is likely to be fairly repre- sentative of the average availability for the private use of the vehicle during the term.
Deﬁned in this Act: motor vehicle, private use Compare: 2004 No 35 s ND 1B(7) 2713 Part R s RD 33 Income Tax Act 2007 Reprinted as at 2 September 2013 RD 33 Subsidised transport (1) Percentage of highest public fare The value of a beneﬁt that an employer provides to their em- ployee in subsidised transport is 25% of the highest fare the employer charges the public for the equivalent transport in terms of class, extent, and occasion.

This subsection is over- ridden by subsection (2).


When beneﬁt provided under arrangement (2) Despite section CX 2(2) (Meaning of fringe beneﬁt), if the fringe beneﬁt is provided under an arrangement with a third person, the value of the beneﬁt is determined under subsection (3).
(3) (4) Percentage or actual payment If a third person provides the employee with subsidised trans- port under an arrangement with their employer, the value of the beneﬁt is the greatest of— (a) 25% of the highest fare the employer charges the public for the equivalent transport in terms of class, extent, and occasion; and 25% of the highest fare the third person charges the pub- lic for the equivalent transport in terms of class, extent, and occasion, if the third person is a company in the same group of companies as the employer; and the amount that the employer has paid or is liable to pay the person for the beneﬁt provided.
(b) (c) GST In this section, for a registered person who may claim input tax for subsidised transport, amount means the GST-inclusive amount.
Deﬁned in this Act: amount, arrangement, company, employee, employer, fringe beneﬁt, group of companies, GST, input tax, pay, subsidised transport Compare: 2004 No 35 s ND 1C RD 34 Employment-related loans: value using prescribed interest rates When this section applies This section applies when an employer provides a beneﬁt to their employee in an employment-related loan and the em- (1) 2714 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 35 (2) (3) ployer does not choose to determine the value of the beneﬁt under section RD 35.
Amount of interest or amount under ﬁnancial arrangement The value of the beneﬁt in a period is the amount by which the prescribed interest on the loan is more than— (a) the amount of interest that accrued on the loan in the period; or (b) when the loan is a ﬁnancial arrangement and it is appro- priate for the nature of the loan, the income that would have accrued to the employer’s beneﬁt in the period as calculated under the yield to maturity method.
Meaning of prescribed interest For the purposes of this section, prescribed interest means,— except as provided in paragraph (b), the amount of in- (a) terest that would have accrued on the loan during the quarter or tax year had the interest been calculated on the daily balance of that loan at the prescribed rate of interest: for loans made on or before 31 March 1985, the interest on which is not subject to review, the amount of interest that would have accrued on the loan during the quarter or tax year had the interest been calculated on the daily balance of the loan at the non-concessionary rate of in- terest for— (i) (b) the tax year in which the agreement to make the loan was signed; or if the agreement was not in writing, the year in which the loan was agreed to by all parties.
(ii) Deﬁned in this Act: amount, employee, employer, employment-related loan, ﬁnancial arrangement, income, interest, non-concessionary rate of interest, pre- scribed interest, quarter, tax year Compare: 2004 No 35 ss ND 1D, ND 1G RD 35 Employment-related loans: value using market interest rates Choosing to use market interest rate (1) An employer who is in the business of lending money to the public may choose to value a beneﬁt provided to their em- 2715 Part R s RD 35 Income Tax Act 2007 Reprinted as at 2 September 2013 (2) ployee in an employment-related loan using the market interest on the loan.
Value of beneﬁt The value of the beneﬁt referred to in subsection (1) in a period is the amount by which the market interest on the loan is more than— (a) the amount of interest that accrued on the loan in the period; or (b) when the loan is a ﬁnancial arrangement and it is appro- priate having regard to the nature of the loan, the income that would have accrued to the employer’s beneﬁt in the period as calculated under the yield to maturity method.
Using method for 2 income years (3) Having made an election under subsection (1), the employer must use the method for the income year to which the election relates and for the next income year.

Notifying Commissioner of change to method (4) An employer may not change the method of calculating the value of the beneﬁt for an income year unless the employer no- tiﬁes the Commissioner of the proposed change at least 1 year before the start of the income year in which the change is to occur.
Market interest In this section, market interest means the amount of interest calculated at the interest rate that would apply to a borrower belonging to a group of persons to whom a loan of the kind provided to the employee is offered when the group meets the following requirements: (a) the group has a comparable credit risk to the group to which the employee belongs; and (b) membership of the group arises from a factor or factors that do not include a connection between a member and the employer; and the group is sufﬁcient in number to ensure a transaction on an arm’s-length basis.
(c) Calculating amount of interest For the purposes of subsection (5), the amount of interest is the amount accrued on the loan during the quarter or tax year (5) (6) 2716 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 36 calculated on the daily balance of the loan at the rate referred to in the subsection.
Deﬁned in this Act: amount, business, Commissioner, employee, employer, employment-related loan, ﬁnancial arrangement, group of persons, income, in- come year, interest, market interest, notify, quarter, tax year Compare: 2004 No 35 s ND 1DB RD 36 Repayment of employment-related loans (1) (2) (3) (4) Repayment at start of tax year For the purposes of sections RD 34 and RD 35, an amount of income of an employee applied in an income year to repay an employment-related loan provided to the employee is treated as applied towards repayment on the ﬁrst day of the income year or, if the date of the advance of the loan falls after that day, the later date.
Limitation Subsection (1) applies only when an employee derives income that— (a) is salary or wages, an extra pay, a dividend, or interest; and is payable to the employee without any amount of tax withheld under the PAYE rules, the RWT rules, or the NRWT rules; and is income of the employee in the tax year in which it is applied to repay the loan, or in an earlier income year.
(b) (c) Amounts derived and applied in different tax years Subsection (4) applies when an employee derives income that— (a) (b) is applied to repay an employment-related loan; and relates to an income year after the income year in which it is applied to repay the loan.
Treatment of amount The employee may treat the amount as derived in the earlier income year, but must notify the Commissioner of their deci- sion within the time allowed to the employer for providing a return of income for the income year, or a longer time if the Commissioner allows.
Deﬁned in this Act: amount, amount of tax, Commissioner, dividend, em- ployee, employer, employment-related loan, extra pay, income, income year, 2717 Part R s RD 37 Income Tax Act 2007 Reprinted as at 2 September 2013 interest, notify, NRWT rules, pay, PAYE rules, return of income, RWT rules, salary or wages, tax year Compare: 2004 No 35 s ND 1E Section RD 36(2)(b): substituted (with effect on 1 April 2008), on 21 December 2010 (applying for the 2008–09 and later income years), by section 128(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section RD 36 list of deﬁned terms amount of tax: inserted (with effect on 1 April 2008), on 21 December 2010, by section 128(2)(a) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section RD 36 list of deﬁned terms non-resident passive income: amended (with effect on 1 April 2008), on 21 December 2010, by section 128(2)(b) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section RD 36 list of deﬁned terms NRWT rules: inserted (with effect on 1 April 2008), on 21 December 2010, by section 128(2)(a) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section RD 36 list of deﬁned terms resident passive income: amended (with effect on 1 April 2008), on 21 December 2010, by section 128(2)(b) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section RD 36 list of deﬁned terms RWT rules: inserted (with effect on 1 April 2008), on 21 December 2010, by section 128(2)(a) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

RD 37 Contributions to superannuation schemes (1) (2) Amount of contribution The value of a beneﬁt that an employer provides in contribut- ing to a superannuation scheme for an employee is the amount of the contribution made by the employer.
GST In this section, for a registered person who may claim input tax for a contribution to a superannuation scheme, amount means the GST-inclusive amount.
Deﬁned in this Act: amount, contribution, GST, employee, employer, input tax, superannuation scheme Compare: 2004 No 35 s ND 1H RD 38 Contributions to funds, trusts, and insurance premiums Sickness, accident, or death beneﬁt fund The value of the beneﬁt that an employer provides in contribut- ing to a sickness, accident, or death beneﬁt fund for an em- ployee is the amount of the contribution made by the employer.
(1) 2718 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 39 (2) (3) (4) Funeral trust The value of the beneﬁt that an employer provides in contribut- ing to a funeral trust for an employee is the amount of the con- tribution made by the employer.

Speciﬁed insurance premium The value of the beneﬁt that an employer provides in paying an insurance premium described in section CX 16 (Contributions to life or health insurance) for an employee is the amount of the premium paid by the employer.
Insurance fund of friendly society The value of the beneﬁt that an employer provides in contribut- ing to an insurance fund of a friendly society for an employee is the amount of the contribution made by the employer.
Deﬁned in this Act: amount, contribution, employee, employer, friendly soci- ety, sickness, accident, or death beneﬁt fund, speciﬁed insurance premium Compare: 2004 No 35 s ND 1I RD 39 Beneﬁts provided by charitable organisations (1) Value of beneﬁt The value of a beneﬁt under section CX 25(2) (Beneﬁts pro- vided by charitable organisations) that a charitable organisa- tion provides in a short-term charge facility is the sum of— (a) the amount that the organisation pays for or towards buying or hiring the goods and services obtained by the employee under the short-term charge facility: any interest incurred in relation to buying or hiring the goods and services: when the short-term charge facility is a credit card or charge card provided for an employee’s use solely for purposes unconnected with the organisation or its oper- ations, the associated account or service fee.
(b) (c) (2) When subsections (3) and (4) apply Subsections (3) and (4) apply in a tax year to an employer that is a charitable organisation when— (a) the employer provides a beneﬁt to their employee in a short-term charge facility that is a fringe beneﬁt under section CX 25(1); and 2719 Part R s RD 40 Income Tax Act 2007 Reprinted as at 2 September 2013 (3) (4) (b) (c) the employer is required to pay FBT for the tax year on a quarterly basis; and the value of the beneﬁt in the short-term charge facility in the ﬁrst quarter of the tax year is no more than 5% of the employee’s salary or wages for the tax year.
Employer’s liability The employer’s liability to pay FBT on a beneﬁt provided in a quarter of the tax year depends on whether the taxable value of all the beneﬁts (the accumulated value) that the employer provides to the employee in the period from the start of the tax year to the end of the quarter is more than 5% of the em- ployee’s salary or wages for the tax year (the threshold value).
Calculation of liability The employer is liable to pay FBT for a quarter of a tax year on the following amounts: (a) zero, if the accumulated value for the quarter is no more than the threshold value: the accumulated value if the quarter is the ﬁrst in the tax year for which the accumulated value is more than the threshold value: the taxable value of all the beneﬁts provided in the quar- ter, if neither paragraph (a) or (b) applies.
(b) (c) Deﬁned in this Act: amount, charitable organisation, employee, employer, FBT, fringe beneﬁt, interest, quarter, salary or wages, short-term charge facility, tax year Compare: 2004 No 35 ss ND 1IB, ND 8B RD 40 Goods Market value or cost The value of a fringe beneﬁt that an employer provides to an employee in goods is determined as follows: (a) when the person providing the goods manufactured, produced, or processed them, their market value: (b) when the person providing the goods bought them, or paid for them to be bought, dealing at arm’s length with the supplier of the goods, the cost of the goods to the person: if the person providing the goods is a company included in a group of companies, then, as the person chooses, (c) (1) 2720 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 41 the value of the beneﬁt under either paragraph (a) or (b), applying the provisions as if the group of companies were 1 company.
Sale in open market (2) Despite subsection (1), if the value of the fringe beneﬁt as de- termined under that subsection would be more than the amount that would have been paid to the employer for the purchase of the goods in a sale described in paragraphs (a) to (d), then the value is treated as that amount.
The sale must be— (a) (b) (c) made on ordinary trade terms; and (d) at retail in the open market in New Zealand; and freely offered; and to a member of the public with whom the employer is at arm’s length.
(3) Some deﬁnitions In this section,— cost, for a registered person who may claim input tax for the goods, means the GST-inclusive cost of the goods bought or the amount that the person paid for the goods market value means the lowest price, at the time at which the goods were provided to the employee, for which identical goods were sold by the same person to an arm’s length buyer, whether wholesaler, retailer, or the public, in the open market in New Zealand in a sale freely offered and made on ordinary trade terms price, for a registered person who may claim input tax for goods that they manufacture, produce, or process, means the GST-inclusive price of those goods to that person.
Deﬁned in this Act: amount, company, cost, employee, employer, group of companies, GST, identical goods, input tax, market value, New Zealand, pay, price, registered person Compare: 2004 No 35 s ND 1J RD 41 Services (1) Price, amount paid, or fee The value of a fringe beneﬁt that an employer provides to an employee in services is,— 2721 Part R s RD 41 Income Tax Act 2007 Reprinted as at 2 September 2013 (a) when an employer normally provides the services as part of their business, the price charged by the em- ployer— (i) (ii) at the time they provided the services; and for the same or similar services to the public in the open market in New Zealand; and on ordinary trade or professional terms between buyers and sellers independent of each other: (iii) (c) (b) when an employer pays for the services to be provided, dealing at arm’s length with the supplier of the services, the amount paid or payable: if neither paragraph (a) nor (b) applies, the price or fee that the employer or supplier providing the services would at that time have charged the public, had they provided the same or similar services to the public in the open market in New Zealand on ordinary trade or professional terms.
Exclusions This section does not apply to a service that consists of making available a motor vehicle for private use, providing an employ- ment-related loan, or providing subsidised transport.
Services provided to group of employees For the purposes of this section, a person who provides ser- vices to an employee belonging to a group of employees is treated as providing the same or similar services to the pub- lic in the open market in New Zealand on ordinary trade or professional terms if the person provides the same or similar services to a group of persons that— (a) (b) negotiates the transaction on an arm’s-length basis; and is comparable in number to the group of employees.
(2) (3) (4) Some deﬁnitions In this section,— amount, for a registered person who may claim input tax for that service, means the GST-inclusive amount 2722 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 43 fee and price, for a registered person who may claim input tax for that service, means the GST-inclusive fee or price.
Deﬁned in this Act: amount, business, employee, employer, employment-re- lated loan, fee, fringe beneﬁt, GST, input tax, motor vehicle, New Zealand, pay, price, private use, registered person, subsidised transport Compare: 2004 No 35 s ND 1K RD 42 Goods at staff discount (1) Goods discounted for employees This section applies when an employer sells goods in the nor- mal course of their business to an employee when all the fol- lowing apply: (a) the retail price of identical goods is $200 or less to an arm’s length buyer in the open market in New Zealand in a sale freely offered and made on ordinary trade terms; and the price of the goods to the employee is lower than their cost to the employer, the difference resulting from a staff discount that the employer normally provides to employees; and at the time of the sale, the staff discount is no more than 5% of the price of identical goods in the circumstances referred to in paragraph (a).
(b) (c) (2) Cost of goods The goods are treated as having been sold at a price equal to the cost of the goods to the employer.
Deﬁned in this Act: business, cost, employee, employer, identical goods, New Zealand, price Compare: 2004 No 35 s ND 1N RD 43 Goods on special with staff discount (1) Sale of identical goods This section applies when an employer sells goods to an em- ployee on a day when the employer is offering identical goods for sale in the normal course of their business at a special price and when all the following apply: (a) the price of the identical goods is $200 or less to an arm’s length buyer in the open market in New Zealand 2723 Part R s RD 44 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) (c) (d) in a sale freely offered and made on ordinary trade terms; and the price of the goods to the employee is lower than their cost to the employer, the difference resulting from a staff discount that the employer offers to the employee in addition to any other discount; and just before or after the sale to the employee, a reasonable quantity of the identical goods is available in the open market in New Zealand; and the price is at least 95% of the cost of the goods to the employer, or at least 95% of the price on the day of the sale of the identical goods to the public in the open market in New Zealand, whichever is less.
(2) Cost of goods The goods are treated as having been sold at a price equal to the cost of the goods to the employer.

Deﬁned in this Act: business, cost, employee, employer, identical goods, New Zealand, price Compare: 2004 No 35 s ND 1O RD 44 Goods sold by group companies For the purposes of sections RD 42 and RD 43, if a company that is included in a group of companies sells goods to an em- ployee of another company in the group, the sale is treated as if it were made directly from employer to employee.
Deﬁned in this Act: company, employee, employer, group of companies Compare: 2004 No 35 s ND 1P(2) RD 45 Unclassiﬁed beneﬁts Liability limited (1) An employer is liable to pay FBT on an unclassiﬁed beneﬁt only within the limits described in this section.
Quarterly payment (2) When FBT is paid quarterly, an employer is liable for FBT on an unclassiﬁed beneﬁt provided to an employee in a quarter only if— 2724 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 45 (a) (b) the total taxable value of all unclassiﬁed beneﬁts pro- vided in the quarter by the employer to the employee is more than $300; or the total taxable value of all unclassiﬁed beneﬁts pro- vided in the last 4 quarters including the current quar- ter by the employer to all employees of the employer, whether accounted for on a quarterly or an income year basis, is more than $22,500.
Yearly payment (3) When FBT is paid on either an annual basis or an income year basis, except when subsection (4) applies, an employer is li- able for FBT on unclassiﬁed beneﬁts provided to an employee in the tax year or income year only if— (a) the total taxable value of all unclassiﬁed beneﬁts pro- vided in the tax year or income year by the employer to the employee is more than $1,200; or the total taxable value of all unclassiﬁed beneﬁts pro- vided in the tax year or income year by the employer to all employees of the employer is more than $22,500.
(b) Period longer or shorter than income year (4) When an employer accounts for FBT on an income year basis, and the period for which they have accounted under section RD 60 differs from an income year for the reasons described in subsection (5), an employer is liable for FBT on unclassiﬁed beneﬁts provided in the period only if— (a) the total taxable value of all unclassiﬁed beneﬁts pro- vided in the period by the employer to an employee is more than the ﬁgure that is the same fraction or multiple of $1,200 as the number of days in the period is a frac- tion or multiple of 365; or the total taxable value of all unclassiﬁed beneﬁts pro- vided in the period by the employer to all employees of the employer is more than the ﬁgure that is the same fraction or multiple of $22,500 as the number of days in the period is a fraction or multiple of 365.
(b) 2725 Part R s RD 46 Income Tax Act 2007 Reprinted as at 2 September 2013 (5) (6) Reasons for difference In subsection (4), the income year for which the employer has accounted may be longer or shorter than the normal income year because the employer has either— (a) (b) started or ceased business during that income year; or chosen, with the agreement of the Commissioner, to ﬁle a return under this subpart for the income year ending with the date of the annual balance of their accounts.
Employer and associated persons In this section, employer includes a person associated with them at any time in the relevant period.

Deﬁned in this Act: associated person, balance date, business, Commissioner, employee, employer, FBT, income year, pay, quarter, return of income, tax year, unclassiﬁed beneﬁt Compare: 2004 No 35 s ND 1Q Section RD 45(2)(a): amended, on 1 April 2009, by section 16(a) of the Taxa- tion (Business Tax Measures) Act 2009 (2009 No 5).
Section RD 45(2)(b): amended, on 1 April 2009, by section 16(b) of the Taxa- tion (Business Tax Measures) Act 2009 (2009 No 5).

Section RD 45(3)(a): amended, on 1 April 2009, by section 16(c) of the Taxa- tion (Business Tax Measures) Act 2009 (2009 No 5).

Section RD 45(3)(b): amended, on 1 April 2009, by section 16(d) of the Taxa- tion (Business Tax Measures) Act 2009 (2009 No 5).
Section RD 45(4)(a): amended, on 1 April 2009, by section 16(e) of the Taxa- tion (Business Tax Measures) Act 2009 (2009 No 5).

Section RD 45(4)(b): amended, on 1 April 2009, by section 16(f) of the Taxation (Business Tax Measures) Act 2009 (2009 No 5).

RD 46 Adjustments for unclassiﬁed beneﬁts on amalgamation When employer ceases to exist This section applies when a company that is an employer ends its existence on amalgamation or when a new company is es- tablished on amalgamation.
An adjustment is allowed for un- classiﬁed beneﬁts in the period in which the amalgamation oc- curs.
Quarterly payment If the amalgamating company pays FBT quarterly, an adjust- ment must be made in the quarter in which the amalgamation occurs reducing the ﬁgure of $22,500 referred to in section RD 45(2)(b) by an amount calculated using the formula— (1) (2) 2726 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 46 (3) (4) (5) $22,500 × number of days in the quarter after amalgamation days in the quarter.
Adjustment in quarter of amalgamation If the amalgamated company pays FBT quarterly, and the amalgamated company is a new company established on amalgamation, an adjustment must be made in the quarter in which the amalgamation occurs reducing the ﬁgure of $22,500 referred to in section RD 45(2)(b) by an amount calculated using the formula— $22,500 × number of days in the quarter before amalgamation days in the quarter.
Annual payment If the amalgamating company pays FBT annually, an adjust- ment must be made for the year in which the amalgamation occurs reducing the ﬁgure of $22,500 referred to in section RD 45(2)(b) by an amount calculated using the formula— $22,500 × number of days in the year after amalgamation 365.
Adjustment in year of amalgamation If the amalgamated company pays FBT annually, and the amalgamated company is a new company established on amalgamation, an adjustment must be made for the year in which the amalgamation occurs reducing the ﬁgure of $22,500 referred to in section RD 45(2)(b) by an amount calculated using the formula— $22,500 × number of days in the year before amalgamation 365.
Deﬁned in this Act: amount, amalgamated company, amalgamating company, amalgamation, company, employer, FBT, pay, quarter, unclassiﬁed beneﬁt, year Compare: 2004 No 35 s ND 1R Section RD 46(2): amended, on 1 April 2009, by section 17(a) of the Taxation (Business Tax Measures) Act 2009 (2009 No 5).

2727 Part R s RD 47 Income Tax Act 2007 Reprinted as at 2 September 2013 Section RD 46(2) formula: amended, on 1 April 2009, by section 17(a) of the Taxation (Business Tax Measures) Act 2009 (2009 No 5).
Section RD 46(3): amended, on 1 April 2009, by section 17(b) of the Taxation (Business Tax Measures) Act 2009 (2009 No 5).

Section RD 46(3) formula: amended, on 1 April 2009, by section 17(b) of the Taxation (Business Tax Measures) Act 2009 (2009 No 5).

Section RD 46(4): amended, on 1 April 2009, by section 17(c) of the Taxation (Business Tax Measures) Act 2009 (2009 No 5).

Section RD 46(4) formula: amended, on 1 April 2009, by section 17(c) of the Taxation (Business Tax Measures) Act 2009 (2009 No 5).
Section RD 46(5): amended, on 1 April 2009, by section 17(d) of the Taxation (Business Tax Measures) Act 2009 (2009 No 5).

Section RD 46(5) formula: amended, on 1 April 2009, by section 17(d) of the Taxation (Business Tax Measures) Act 2009 (2009 No 5).
Attributing fringe beneﬁts to employees RD 47 Attribution of certain fringe beneﬁts (b) What this section applies to This section applies when an employer provides a fringe bene- ﬁt by— (a) making available a motor vehicle for an employee’s pri- vate use under section CX 6 (Private use of motor ve- hicle): providing an employment-related loan to an employee under section CX 10 (Employment-related loans) but not a loan by a life insurer under section CX 11 (Em- ployment-related loans: loans by life insurers): providing to an employee a beneﬁt with a taxable value of $1,000 or more in a year for each of the following categories: (i) (c) subsidised transport under section CX 9 (Sub- sidised transport): a contribution to a superannuation scheme under section CX 13 (Contributions to superannuation schemes): a contribution to a sickness, accident, or death beneﬁt fund under section CX 14 (Contributions to sickness, accident, or death beneﬁt funds): a contribution to a funeral trust under section CX 15 (Contributions to funeral trusts): (ii) (iii) (iv) (1) 2728 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 49 (v) the payment of a speciﬁed insurance premium or a contribution to an insurance fund of a friendly society under section CX 16 (Contributions to life or health insurance): (d) providing unclassiﬁed beneﬁts to an employee under section CX 2(1)(b)(ii) (Meaning of fringe beneﬁt) with a total taxable value of $2,000 or more in a year.
Attributing fringe beneﬁt to employee The employer must attribute the fringe beneﬁt to the employee, calculating the FBT liability under section RD 50.
Deﬁned in this Act: employee, employer, employment-related loan, FBT, friendly society, fringe beneﬁt, life insurer, loan, motor vehicle, pay, private use, sickness, accident, or death beneﬁt fund, speciﬁed insurance premium, subsidised transport, superannuation scheme, unclassiﬁed beneﬁt Compare: 2004 No 35 s ND 3(1), (1A) (2) RD 48 When attributed beneﬁts provided to more than 1 employee If an employer provides a fringe beneﬁt to which section RD 47 applies to more than 1 employee, the employer must attribute the beneﬁt to the employee who mainly uses or receives it in a quarter or income year, as applicable.
If the employer cannot determine which employee mainly uses or receives the beneﬁt, they must pool the beneﬁt under section RD 53.

Deﬁned in this Act: contribution, employee, employer, fringe beneﬁt, income year, quarter Compare: 2004 No 35 s ND 3(2) RD 49 Application of thresholds to attributed beneﬁts (1) (2) When this section applies This section applies when the value of a fringe beneﬁt de- scribed in section RD 47 is above or below the threshold re- ferred to in that section.
Below threshold If the taxable value of a beneﬁt under section RD 47(1)(c) and (d) is under the relevant threshold, the employer must either— 2729 Part R s RD 50 Income Tax Act 2007 Reprinted as at 2 September 2013 (a) (b) attribute all fringe beneﬁts with an annual taxable value under the relevant threshold that fall within the particu- lar category; or pool the value of the beneﬁt under section RD 53.
Exception for subsidised transport (3) Despite section RD 47(1)(c)(i), if the employer provides sub- sidised transport under section CX 9 (Subsidised transport) with a taxable value over the threshold, they may pool the value of the beneﬁt under section RD 53 if all their employees have the same or a similar entitlement to the fringe beneﬁt.
(4) Amending thresholds The Governor-General by Order in Council may determine the amount of the thresholds referred to in section RD 47, setting out the ﬁrst tax year in which the threshold is to apply.
Deﬁned in this Act: amount, employee, employer, fringe beneﬁt, subsidised transport, tax year Compare: 2004 No 35 ss ND 3(4)–(7), ND 4, ND 16 RD 50 Employer’s liability for attributed beneﬁts (1) (2) (3) When this section applies This section applies when an employer is required to attribute the value of a fringe beneﬁt to an employee under sections RD 47 and RD 49.
Tax liability The employer’s FBT liability in relation to the employee is the amount calculated using the formula— tax on all-inclusive pay – tax on cash pay.
Deﬁnition of items in formula In the formula,— (a) tax on all-inclusive pay is the amount determined at the rate set out in schedule 1, part C, table 1 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe beneﬁts) on the amount of the employee’s all-inclusive pay calculated using the formula in section RD 51(2): tax on cash pay is the amount calculated under section RD 51(3)(b) or (4)(b).
(b) 2730 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 51 (4) (5) Exception for shareholder-employees and persons with attributed income If the employer has an exception for an employee under sec- tion RD 52 in a tax year, and the employer pays FBT at the rate of 42.86% of the taxable value of the attributed fringe bene- ﬁts under section RD 52(3)(a), the employer must deduct the FBT payable in the tax year from the result of the formula in subsection (2).
Further option Instead of calculating FBT under subsections (2) and (4), an employer may choose to pay FBT at the rate of 49.25% on the taxable value of the attributed fringe beneﬁts.

Deﬁned in this Act: amount, employee, employer, FBT, fringe beneﬁt, pay, tax year Compare: 2004 No 35 s ND 5(3)–(6) Section RD 50(3)(a): amended, on 1 April 2008, by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section RD 50(4): amended, on 1 April 2011 (applying for the 2011–12 income year and later income years), by section 64(2)(a) of the Taxation (Budget Meas- ures) Act 2010 (2010 No 27).

Section RD 50(4): amended (with effect on 1 April 2010), on 28 May 2010 (ap- plying for the 2010–11 income year and later income years), by section 64(1)(a) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Section RD 50(5): amended, on 1 April 2011 (applying for the 2011–12 in- come year and later income years), by section 64(2)(b) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section RD 50(5): amended (with effect on 1 April 2010), on 28 May 2010 (ap- plying for the 2010–11 income year and later income years), by section 64(1)(b) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Section RD 50(5): amended, on 1 April 2009, by section 29(1) of the Taxation (Business Tax Measures) Act 2009 (2009 No 5).

RD 51 Calculation of all-inclusive pay (1) (2) When this section applies This section applies to determine the amount of an employee’s all-inclusive pay for the purposes of section RD 50.

Calculation The amount of an employee’s all-inclusive pay is calculated using the formula— cash pay – tax on cash pay + taxable value of all fringe beneﬁts.
2731 Part R s RD 51 Income Tax Act 2007 Reprinted as at 2 September 2013 Deﬁnition of items in formula for major shareholder If the employee is a major shareholder, the items in the formula are— (a) cash pay is the cash pay of the employee for the income year in which the fringe beneﬁt is attributed that is paid to the employee by the employer or a related employer, and includes— (i) a dividend and interest derived by the employee from their employer; and a dividend and interest derived by the employee from a related employer: (ii) (b) (c) tax on cash pay is the tax on the cash pay of the em- ployee calculated using the basic rate of income tax set out in schedule 1, part A, clause 1 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe beneﬁts),— (i) treating the cash pay as if it were the only taxable income of the employee: [Repealed] (ii) taxable value of all fringe beneﬁts is— (i) the taxable value of all fringe beneﬁts attributed to the employee in the tax year; and the taxable value of all fringe beneﬁts attributed to a person associated with the employee in the income year if the person does not receive the fringe beneﬁts as an employee of the employer.
(ii) Deﬁnition of items in formula for person who is not major shareholder If the employee is not a major shareholder, the items in the formula are— (a) cash pay is the cash pay of the employee for the tax year in which the fringe beneﬁt is attributed that is paid to the employee by the employer or a related employer: tax on cash pay is the tax on the cash pay of the em- ployee calculated using the basic rate of income tax set out in schedule 1, part A, clause 1,— (i) treating the cash pay as if it were the only taxable income of the employee: (b) (3) (4) 2732 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 51 (5) (6) (c) [Repealed] (ii) taxable value of all fringe beneﬁts is the taxable value of all fringe beneﬁts attributed to the employee in the tax year.
Timing of amounts In this section, the cash pay of a shareholder-employee who derives an amount of pay referred to in paragraph (b) or (c) of the deﬁnition of pay in subsection (6) is treated as derived in the income year following the income year in which it was received or attributed.
Some deﬁnitions In this section,— pay means— (a) (b) (c) salary or wages; and income to which section RD 3(2) to (4) applies; and an amount attributed under section GB 29 (Attribution rule: calculation); and an extra pay; and a schedular payment (d) (e) related employer means a branch or division of an employer, or a person associated with the employer.
Deﬁned in this Act: amount, associated person, dividend, employee, employer, extra pay, FBT, fringe beneﬁt, income, income tax, income year, interest, major shareholder, pay, related employer, resident in New Zealand, salary or wages, schedular payment, shareholder-employee, tax, tax credit, tax year, taxable in- come Compare: 2004 No 35 ss ND 5(1), (2), ND 7, ND 7A Section RD 51(3)(a): amended (with effect on 1 April 2008), on 6 October 2009, by section 515 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RD 51(3)(b): amended, on 1 April 2008, by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section RD 51(3)(b)(i): amended (with effect from 1 April 2008), on 29 May 2008, by section 43(1) of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).

Section RD 51(3)(b)(ii): repealed, on 1 April 2008, by section 43(1) of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).
Section RD 51(4)(b)(i): amended (with effect from 1 April 2008), on 29 May 2008, by section 43(2) of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).

2733 Part R s RD 52 Income Tax Act 2007 Reprinted as at 2 September 2013 Section RD 51(4)(b)(ii): repealed, on 1 April 2008, by section 43(2) of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).
RD 52 Calculation for certain employees when information lacking When this section applies This section applies in relation to the following persons when an employer does not have sufﬁcient information to complete a calculation under section RD 50 or RD 51: (a) a shareholder-employee who derives salary or wages, or income to which section RD 3(2) to (4) applies; or an employee receiving attributed income under section GB 29 (Attribution rule: calculation) from a company or trust that is their employer.
(b) Calculations under sections RD 50 and RD 51 not required Sections RD 50 and RD 51 do not apply in the tax year or income year, as applicable, in which the employer is required to attribute a fringe beneﬁt to the employee.
Alternative rates The employer must either— (a) pay FBT at the rate of 42.86% of the taxable value of the fringe beneﬁts attributed for the tax year, and apply sections RD 50 and RD 51 to the beneﬁts in the next tax year; or pay FBT at the rate of 49.25% of the taxable value of the fringe beneﬁts attributed for the tax year.
(b) Deﬁned in this Act: company, employee, employer, FBT, fringe beneﬁt, in- come, income year, pay, salary or wages, shareholder-employee, tax year Compare: 2004 No 35 s ND 5A Section RD 52(3)(a): amended, on 1 April 2011 (applying for the 2011–12 income year and later income years), by section 65(2)(a) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Section RD 52(3)(a): amended (with effect on 1 April 2010), on 28 May 2010 (applying for the 2010–11 income year and later income years), by section 65(1)(a) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section RD 52(3)(b): amended, on 1 April 2011 (applying for the 2011–12 in- come year and later income years), by section 65(2)(b) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
(1) (2) (3) 2734 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 53 Section RD 52(3)(b): amended (with effect on 1 April 2010), on 28 May 2010 (applying for the 2010–11 income year and later income years), by section 65(1)(b) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section RD 52(3)(b): amended, on 1 April 2009, by section 30(1) of the Taxa- tion (Business Tax Measures) Act 2009 (2009 No 5).
RD 53 Pooling non-attributed beneﬁts (1) (2) (3) (4) When this section applies This section applies in a tax year when an employer provides a fringe beneﬁt that is— (a) (b) a beneﬁt provided to a former employee; or an employment-related loan provided by a life insurer under section CX 11 (Employment-related loans: loans by life insurers); or a beneﬁt to which section RD 48 applies that cannot be attributed to a particular employee; or an attributed beneﬁt to which section RD 49(2) applies; or subsidised transport to which section RD 49(3) applies.
(c) (d) (e) Pooling value The employer must pool the value of the beneﬁts.

Final quarter pooling For the ﬁnal quarter of the tax year, the employer must create 2 pools, 1 for each of the following groups of persons: (a) the ﬁrst pool is for an employee who is a major share- holder, or a person associated with an employee who is a major shareholder (unless that person receives the fringe beneﬁt as an employee of the employer): the second pool is for all other employees.
(b) Final quarter calculation The employer must calculate FBT for the ﬁnal quarter of the tax year on the annual taxable value of the pooled fringe bene- ﬁts— (a) (b) Deﬁned in this Act: associated person, employee, employer, employment-re- lated loan, FBT, fringe beneﬁt, group of persons, life insurer, major shareholder, quarter, subsidised transport, tax year Compare: 2004 No 35 s ND 6 at the rate of 49.25% for the ﬁrst pool; and at the rate of 42.86% for the second pool.
2735 Part R s RD 54 Income Tax Act 2007 Reprinted as at 2 September 2013 Section RD 53(4)(a): amended, on 1 April 2011 (applying for the 2011–12 income year and later income years), by section 66(2)(a) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section RD 53(4)(a): amended (with effect on 1 April 2010), on 28 May 2010 (applying for the 2010–11 income year and later income years), by section 66(1)(a) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Section RD 53(4)(a): amended, on 1 April 2009, by section 31(1) of the Taxa- tion (Business Tax Measures) Act 2009 (2009 No 5).

Section RD 53(4)(b): amended, on 1 April 2011 (applying for the 2011–12 in- come year and later income years), by section 66(2)(b) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Section RD 53(4)(b): amended (with effect on 1 April 2010), on 28 May 2010 (applying for the 2010–11 income year and later income years), by section 66(1)(b) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Taxable value of fringe beneﬁts RD 54 Value of and payments towards fringe beneﬁts Value of beneﬁt The taxable value of a fringe beneﬁt is the value of the beneﬁt.

Subsection (2) overrides this subsection.


Reduction for payment by employee If an employee pays an amount for receiving a fringe beneﬁt, the value of the beneﬁt is reduced by the amount paid.

When associate pays amount If section GB 32 (Beneﬁts provided to employee’s associates) applies, the value of the beneﬁt is reduced when a person as- sociated with the employee pays an amount for the beneﬁt.
Exclusions This section does not apply to— (a) (b) an employment-related loan: a payment to acquire or improve an asset if receiving or using the asset does not constitute a fringe beneﬁt.
Deﬁned in this Act: amount, associated person, employee, employment-related loan, fringe beneﬁt, pay Compare: 2004 No 35 ss GC 15(3), (4), ND 1S Section RD 54 compare note: amended (with effect on 1 April 2008), on 6 Octo- ber 2009, by section 516 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
(1) (2) (3) (4) 2736 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 56 RD 55 Private use of motor vehicle: taxable value in cases of part ownership If a fringe beneﬁt is provided by making available a motor ve- hicle to an employee for their private use, and the vehicle is owned in part by the employee (or, if section GB 32 (Beneﬁts provided to employee’s associates) applies, a person associ- ated with the employee), the taxable value of the fringe beneﬁt is determined under section RD 56 or RD 57.
Deﬁned in this Act: associated person, employee, fringe beneﬁt, motor vehicle, private use Compare: 2004 No 35 s ND 1T RD 56 Private use of motor vehicle: when schedular value not used (1) (2) (3) When this section applies This section applies when the employer has not valued the motor vehicle using schedule 5, clause 9 (Fringe beneﬁt values for motor vehicles).
Reduction In the calculation of the taxable value of the fringe beneﬁt, the value of the beneﬁt determined under sections RD 28 to RD 30 is reduced by an amount that is the applicable percentage of the cost (determined including GST under schedule 5, clause 8(a)) of the motor vehicle to the employee or the associated person as follows: (a) (b) if FBT is paid quarterly, 2.5%: if FBT is paid on an annual basis, 2.5% for each quarter in which the vehicle was part-owned by the employee or the associated person: if FBT is paid on an income year basis, 10%.
(c) When period longer or shorter than income year In subsection (2)(c) and section RD 57(2)(c) and (3), if the period for which the employer accounts for FBT differs from a normal income year for the reasons described in subsection (4), the amount by which the taxable value of the fringe bene- ﬁt is reduced is a percentage of the cost (determined including GST under schedule 5, clause 8(a)) of the motor vehicle to the employer or the associated person equal to the amount calcu- lated using the formula— 2737 Part R s RD 57 Income Tax Act 2007 Reprinted as at 2 September 2013 (4) (5) 10% × number of days in period 365.
Reasons for difference The period for which the employer has accounted may be longer or shorter than the normal income year because the em- ployer has either— (a) (b) started or ceased business during that income year; or chosen, with the agreement of the Commissioner, to provide a fringe beneﬁt return for the income year end- ing with the date of the annual balance of their accounts.
When vehicle owned less than whole year If an employee has not been part-owner of the motor vehicle for the whole of the income year, or the period referred to in subsection (4), a reduction under this section is reduced by the proportion of the number of days of the income year or period for which the employee was not a part-owner to the total number of days of that income year or period.
Deﬁned in this Act: amount, associated person, business, Commissioner, em- ployee, employer, FBT, fringe beneﬁt, GST, income year, motor vehicle, pay, quarter Compare: 2004 No 35 s ND 1U Section RD 56(1): amended, on 1 April 2008, by section 540(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section RD 56(2): amended, on 1 April 2008, by section 540(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section RD 56(3): amended, on 1 April 2008, by section 540(3) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

RD 57 Private use of motor vehicle: when schedular value used When this section applies This section applies when an employer has valued the motor vehicle using schedule 5, clause 9 (Fringe beneﬁt values for motor vehicles).
Reduction In the calculation of the taxable value of the fringe beneﬁt, the value of the beneﬁt determined under sections RD 28 to RD 30 is reduced by an amount that is the applicable percentage of the cost, determined excluding GST, under schedule 5, clause 6(a) in the following way: (1) (2) 2738 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 58 (a) when FBT is paid quarterly, by a percentage calculated using the formula— 2.5 + (2.5 × schedule 5 rate): (b) when FBT is paid on an annual basis, by a percentage for each quarter in which the vehicle was part-owned by the employee or associated person calculated using the formula— (c) 2.5 + (2.5 × schedule 5 rate): when FBT is paid on an income year basis, by a per- centage calculated using the formula— 10 + (10 × schedule 5 rate).
Schedule 5 rate In the formulas, schedule 5 rate is the rate of GST speciﬁed in schedule 5, clause 6(b), (c), (d), or (e) for the employer and the relevant quarter and relevant income year, as applicable.

Deﬁned in this Act: amount, associated person, employee, employer, FBT, fringe beneﬁt, GST, income year, motor vehicle, pay, quarter Compare: 2004 No 35 s ND 1V Section RD 57(1): amended, on 1 April 2008, by section 541 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
(3) Options for payment of FBT RD 58 Single rate option Rate for all quarters (1) An employer who chooses to pay their FBT liability under the single rate option must pay FBT at the rate of 49.25% of the taxable value of a fringe beneﬁt for each of the 4 quarters of a tax year.
Replacing ﬁnal quarter calculation (2) Despite subsection (1), an employer may ask the Commis- sioner to replace the FBT liability determined for the ﬁnal quarter under this section with an amount calculated under sec- tion RD 59(4).

The employer must provide the information necessary for the calculation.
Deﬁned in this Act: amount, Commissioner, employer, FBT, fringe beneﬁt, pay, quarter, tax year Compare: 2004 No 35 ss ND 1(2)(b), (4), ND 2(2) 2739 Part R s RD 59 Income Tax Act 2007 Reprinted as at 2 September 2013 Section RD 58(1): substituted, on 1 April 2011 (applying for the 2011–12 in- come year and later income years), by section 67(2) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
RD 59 Alternate rate option Election This section applies when an employer chooses to pay their FBT liability under the alternate rate option.

First three quarters The employer may pay FBT for any or all of the ﬁrst 3 quarters of a tax year at 43% of the taxable value of a fringe beneﬁt.

Alternate rate The employer must pay FBT at the rate of 49.25% of the tax- able value of a fringe beneﬁt for any of the ﬁrst 3 quarters of a tax year for which they do not pay at the rate of 43% under subsection (2).
Final quarter For the ﬁnal quarter of the tax year, the employer must calcu- late the total FBT payable for each employee under sections RD 50 and RD 53 for the tax year and subtract the amount of FBT payable for the previous 3 quarters of the tax year.

Decision irrevocable The decision to use the alternate rate option cannot be changed after the return is ﬁled.
Deﬁned in this Act: amount, employee, employer, FBT, fringe beneﬁt, pay, quarter, tax year Compare: 2004 No 35 ss ND 1(2)(a), ND 2(1)–(4), ND 10(1) Section RD 59(2): amended, on 1 April 2011 (applying for the 2011–12 income year and later income years), by section 68(2)(a) of the Taxation (Budget Meas- ures) Act 2010 (2010 No 27).
Section RD 59(2): amended (with effect on 1 April 2010), on 28 May 2010 (ap- plying for the 2010–11 income year and later income years), by section 68(1)(a) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section RD 59(3): substituted, on 1 April 2011 (applying for the 2011–12 in- come year and later income years), by section 68(2)(b) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Section RD 59(4): amended, on 2 November 2012, by section 138 of the Tax- ation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
(1) (2) (3) (4) (5) 2740 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 60 RD 60 Close company option (1) (2) (3) When this section applies This section applies in an income year when an employer that is a close company provides a fringe beneﬁt to a shareholder- employee if, in the preceding income year,— (a) the gross amounts of tax for both PAYE income pay- ments and employer’s superannuation cash contribu- tions withheld under section RA 5(1)(a) and (c) (Tax obligations for employment-related taxes) for the tax year, as modiﬁed by section RA 20(2) (Amalgamation of companies), were no more than $500,000; or the only beneﬁt provided by the employer was a fringe beneﬁt— (i) arising under section CX 6(1) (Private use of motor vehicle); and limited to making available to shareholder-em- ployees 1 vehicle or 2 vehicles for their private use; or (ii) (b) (c) the employer did not employ any employees.
Income year basis The employer may choose to pay their FBT liability on an in- come year basis, informing the Commissioner of their decision in writing or by telephone no later than— (a) the last day of the ﬁrst quarter of the relevant income year; or the last day of the quarter in which the employer ﬁrst starts employing employees, if subsection (1)(c) ap- plies.
(b) Rate or calculation The employer must pay FBT on the taxable value of fringe beneﬁts in the income year in which they make their election and in later income years either— (a) at the rate of 49.25% of the taxable value of a fringe beneﬁt; or by calculating for the relevant income year the total pay of each employee under sections RD 50 and RD 53.
(b) 2741 Part R s RD 60 Income Tax Act 2007 Reprinted as at 2 September 2013 Replacing rate with calculated liability (4) Despite subsection (3), the employer may ask the Commis- sioner to replace the FBT liability determined under subsec- tion (3)(a) with a calculation under subsection (3)(b).

The em- ployer must provide the information necessary for the calcu- lation.
Part-periods If an income year for which an employer chooses to pay FBT on an income year basis does not start on the same day as the ﬁrst day of a quarter, the employer must treat the period between the ﬁrst day of the quarter in which the ﬁrst day of the income year falls and the ﬁrst day of the income year as if it were a quarter.
More than 1 business If an employer ceases business and starts a new business, or operates 2 or more businesses at the same time, the total of all amounts of tax withheld under section RA 5(1)(a) and (c) must be aggregated.
Deﬁned in this Act: amount of tax, business, close company, Commissioner, employee, employer, employer’s superannuation cash contribution, FBT, fringe beneﬁt, gross, income year, pay, PAYE income payment, quarter, shareholder- employee, tax year Compare: 2004 No 35 ss ND 1(2)(c), (5), ND 14, ND 15(7), (8) Section RD 60(1): substituted, on 1 April 2009, by section 18(1) of the Taxation (Business Tax Measures) Act 2009 (2009 No 5).
Section RD 60(1)(a): substituted (with effect on 1 April 2008), on 6 October 2009, by section 517(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RD 60(1)(a): amended (with effect on 1 April 2008 and applying for the 2008–09 and later income years), on 17 July 2013, by section 86(1) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Section RD 60(1)(a): amended (with effect on 1 April 2009), on 6 October 2009, by section 517(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RD 60(2)(b): amended, on 1 April 2009, by section 18(2) of the Taxa- tion (Business Tax Measures) Act 2009 (2009 No 5).

Section RD 60(3)(a): amended, on 1 April 2011 (applying for the 2011–12 income year and later income years), by section 69(2) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Section RD 60(3)(a): amended (with effect on 1 April 2010), on 28 May 2010 (applying for the 2010–11 income year and later income years), by section 69(1) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

(5) (6) 2742 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 61 Section RD 60(3)(a): amended, on 1 April 2009, by section 8(1) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).
Section RD 60(6): amended (with effect on 1 April 2008), on 6 October 2009, by section 517(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RD 60 list of deﬁned terms employer’s superannuation cash contri- bution: inserted (with effect on 1 April 2008), on 6 October 2009, by section 517(4)(b) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RD 60 list of deﬁned terms employer’s superannuation contribution: repealed (with effect on 1 April 2008), on 6 October 2009, by section 517(4)(a) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
RD 61 Small business option (1) (2) (3) When this section applies This section applies when an employer provides a fringe bene- ﬁt to an employee who is not a shareholder-employee in a tax year if, for the preceding tax year,— (a) the gross amounts of tax for both PAYE income pay- ments and employer’s superannuation cash contribu- tions withheld under section RA 5(1)(a) and (c) (Tax obligations for employment-related taxes) for the tax year were no more than $500,000; or the employer did not employ any employees.
(b) Annual basis The employer may choose to pay their FBT liability on an annual basis, informing the Commissioner of their decision in writing or by telephone no later than— (a) (b) 30 June in the relevant tax year; or the last day of the quarter in which the employer ﬁrst starts employing employees, if subsection (1)(b) ap- plies.
Rate or calculation The employer must pay FBT on the taxable value of fringe beneﬁts in the tax year in which they make their election and in later tax years either— (a) at the rate of 49.25% of the taxable value of a fringe beneﬁt; or by calculating for the relevant tax year the total pay of each employee under sections RD 50 and RD 53.
(b) 2743 Part R s RD 61 Income Tax Act 2007 Reprinted as at 2 September 2013 Replacing rate with calculated amount (4) Despite subsection (3), the employer may ask the Commis- sioner to replace the FBT liability determined under subsec- tion (3)(a) with a calculation under subsection (3)(b).

The em- ployer must provide the information necessary for the calcu- lation.

Quarters in year For the purposes of subsection (3), the tax year is treated as if it were 4 consecutive quarters.
More than 1 business If an employer ceases business and starts a new business, or operates 2 or more businesses at the same time, the total of all amounts of tax withheld under section RA 5(1)(a) and (c) must be aggregated.
Deﬁned in this Act: amount of tax, business, Commissioner, employee, em- ployer, employer’s superannuation cash contribution, employer’s superannu- ation contribution, FBT, fringe beneﬁt, gross, pay, PAYE income payment, quarter, shareholder-employee, tax year Compare: 2004 No 35 ss ND 1(2)(c), (4), (5), ND 13 Section RD 61(1)(a): substituted (with effect on 1 April 2008), on 6 October 2009, by section 518(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RD 61(1)(a): amended (with effect on 1 April 2009), on 6 October 2009, by section 518(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RD 61(1)(a): amended, on 1 April 2009, by section 19 of the Taxation (Business Tax Measures) Act 2009 (2009 No 5).

Section RD 61(3)(a): amended, on 1 April 2011 (applying for the 2011–12 income year and later income years), by section 70(2) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Section RD 61(3)(a): amended (with effect on 1 April 2010), on 28 May 2010 (applying for the 2010–11 income year and later income years), by section 70(1) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section RD 61(3)(a): amended, on 1 April 2009, by section 9(1) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).
Section RD 61(6): amended (with effect on 1 April 2008), on 6 October 2009, by section 518(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RD 61 list of deﬁned terms employer’s superannuation cash contri- bution: inserted (with effect on 1 April 2008), on 6 October 2009, by section 518(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
(5) (6) 2744 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 62 RD 62 Changes in payment periods No changes for simple or alternate rate options (1) An employer’s decision to pay FBT on a quarterly basis under the single rate option or the alternate rate option cannot be changed.
(2) When requirements for yearly basis no longer met If an employer who has chosen for a tax year to pay FBT on an income year basis or on an annual basis no longer meets the relevant requirements of section RD 60(1) or RD 61(1), the employer must pay their FBT liability for fringe beneﬁts provided to employees on or after the ﬁrst day of the tax year under the single rate option or the alternate rate option.
Choosing to change to quarterly basis (3) An employer who has chosen for a tax year to pay FBT on an income year basis or on an annual basis, may choose at any time to pay FBT on a quarterly basis.
When change takes effect (4) An employer who chooses to change their payment period under subsection (3) must pay their FBT liability on a quar- terly basis for a fringe beneﬁt provided from— (a) the ﬁrst day of the next tax year, if the employer previ- ously paid on an annual basis; or the ﬁrst day of the next income year of the employer, if the employer previously paid on an income year basis; or another date agreed by the employer and the Commis- sioner.
(b) (c) (5) Choosing to change to income year basis If an employer who is eligible to use the close company op- tion has been paying FBT on a quarterly basis, and chooses to change to payment on an income year basis, a calculation must be made under section RD 59 for the period— (a) beginning immediately after the end of the last full tax year for which the employer pays FBT on a quarterly basis: ending immediately before the start of the ﬁrst income year for which the election applies.
(b) 2745 Part R s RD 63 Income Tax Act 2007 Reprinted as at 2 September 2013 (6) Part-periods If an employer changes their payment period from an income year to a quarter, and the day referred to in subsection (4)(b) is not the same day as the ﬁrst day of a quarter, then for the purposes of the payment of FBT, the employer must treat the period between that day and the ﬁrst day of the next quarter as if it were a quarter.
Deﬁned in this Act: close company, Commissioner, employee, employer, FBT, income year, pay, quarter, tax year Compare: 2004 No 35 ss ND 2(4), ND 14(2B), ND 15 RD 63 When employer stops employing staff (1) (2) Who this section applies to This section applies in a tax year to an employer who stops employing staff and does not intend to replace them.

But this section does not apply to an employer who continues to pro- vide a fringe beneﬁt to a former employee.
Treated as ﬁnal quarter The employer must pay FBT under section RD 59, treating the quarter of the tax year in which the employment ended as if it were the ﬁnal quarter.
Single rate option (3) As an alternative to the application of section RD 50(2) or RD 53(3), the employer may choose to pay FBT under the single rate option— (a) making the calculation in relation to the period from the start of the tax year to the date on which the employer stops employing staff; and taking into account any earlier payments of FBT made in relation to an employee.
(b) Deﬁned in this Act: employee, employer, FBT, fringe beneﬁt, pay, quarter, tax year Compare: 2004 No 35 s ND 8 2746 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 65 Employer’s superannuation contribution tax (ESCT) rules and employer’s superannuation contributions Introductory provisions RD 64 ESCT rules and their application (1) (2) Meaning The ESCT rules means— (a) section CX 49 (Employer’s superannuation contribu- tions); and sections RD 65 to RD 71; and sections 15C to 15M, 24J to 24P, 47, 48, and Part 9 of the Tax Administration Act 1994.
(b) (c) Application The ESCT rules apply to an employer or a person who makes an employer’s superannuation cash contribution.

Deﬁned in this Act: employer, employer’s superannuation cash contribution, ESCT rules Compare: 2004 No 35 ss NE 1, OB 1 “SSCWT rules” Section RD 64(2): amended (with effect on 1 April 2008), on 2 November 2012, by section 139(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section RD 64 list of deﬁned terms employer’s superannuation contribution: repealed, on 2 November 2012, by section 139(2) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section RD 64 list of deﬁned terms employer’s superannuation cash contri- bution: inserted (with effect on 1 April 2008), on 2 November 2012, by section 139(2) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
RD 65 Employer’s superannuation cash contributions Contribution in money for beneﬁt of employees or past employees (1) An employer’s superannuation cash contribution means a superannuation contribution paid in money either to a super- annuation fund or under the KiwiSaver Act 2006 to the Com- missioner for later payment to a superannuation fund, if the contribution is— (a) (b) made by a person for the beneﬁt of 1 or more of their an employer’s superannuation contribution: past employees.
2747 Part R s RD 65 Income Tax Act 2007 Reprinted as at 2 September 2013 (2) Determining amount of contribution The amount of an employer’s superannuation cash contribu- tion is the sum of— (a) the amount of the contribution received by the super- annuation fund or, for a contribution paid to the Com- missioner under the KiwiSaver Act 2006, received by the Commissioner for payment to the superannuation fund; and the amount of tax withheld for the employer’s super- annuation contribution.
(b) Payment of amount of tax (3) An employer or person who makes an employer’s superannu- ation cash contribution on behalf of an employee or past em- ployee must pay to the Commissioner the amount of tax for the contribution.

The amount is payable in 2 payment periods in a month as set out in section RA 15 (Payment dates for interim and other tax payments) unless they are an employer to whom section RD 22(3) applies.
Contributions to KiwiSaver schemes and complying superannuation funds [Repealed] [Repealed] Formula: subsection (4)(b)(i) [Repealed] [Repealed] Formula: subsection (4)(b)(ii) [Repealed] [Repealed] Deﬁnition of items in formulas [Repealed] [Repealed] Contributions to complying superannuation funds [Repealed] [Repealed] Formula: subsection (8)(c)(i) (4) (5) (6) (7) (8) 2748 Reprinted as at 2 September 2013 [Repealed] [Repealed] (9) Income Tax Act 2007 Part R s RD 65 (10) (11) (12) (13) Formula: subsection (8)(c)(ii) [Repealed] [Repealed] Deﬁnition of items in formulas [Repealed] [Repealed] When contribution paid [Repealed] [Repealed] Some deﬁnitions [Repealed] [Repealed] Deﬁned in this Act: amount, amount of tax, Commissioner, employee, em- ployer, employer’s superannuation cash contribution, ESCT, pay, superannu- ation fund Compare: 2004 No 35 ss NE 2(2), NE 3, NE 3B, NE 6, OB 1 “employer’s superannuation contribution”, “speciﬁed superannuation contribution” Section RD 65(1) heading: replaced (with effect on 1 April 2008), on 2 Novem- ber 2012, by section 140(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section RD 65(1): replaced (with effect on 1 April 2008), on 2 November 2012, by section 140(2) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section RD 65(2): amended (with effect on 1 April 2008), on 6 October 2009, by section 519(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RD 65(2)(b): amended (with effect on 1 April 2008), on 6 October 2009, by section 519(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RD 65(3): amended (with effect on 1 April 2008), on 2 November 2012, by section 140(2) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section RD 65(3): amended (with effect on 1 April 2012), on 2 November 2012, by section 140(3) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section RD 65(4) heading: repealed, on 1 April 2012, pursuant to section 9(1) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).

Section RD 65(4): repealed, on 1 April 2012, by section 9(1) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).
Section RD 65(5) heading: repealed, on 1 April 2009, pursuant to section 55(b) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).

2749 Part R s RD 65 Income Tax Act 2007 Reprinted as at 2 September 2013 Section RD 65(5): repealed, on 1 April 2009, by section 55(b) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).
Section RD 65(6) heading: repealed, on 1 April 2009, pursuant to section 55(b) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).

Section RD 65(6): repealed, on 1 April 2009, by section 55(b) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).

Section RD 65(7) heading: repealed, on 1 April 2009, pursuant to section 55(b) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).
Section RD 65(7): repealed, on 1 April 2009, by section 55(b) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).

Section RD 65(8) heading: repealed, on 1 April 2009, pursuant to section 55(b) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).

Section RD 65(8): repealed, on 1 April 2009, by section 55(b) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).
Section RD 65(9) heading: repealed, on 1 April 2009, pursuant to section 55(b) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).

Section RD 65(9): repealed, on 1 April 2009, by section 55(b) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).

Section RD 65(10) heading: repealed, on 1 April 2009, pursuant to section 55(b) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).
Section RD 65(10): repealed, on 1 April 2009, by section 55(b) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).

Section RD 65(11) heading: repealed, on 1 April 2009, pursuant to section 55(b) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).

Section RD 65(11): repealed, on 1 April 2009, by section 55(b) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).
Section RD 65(12) heading: repealed (with effect on 1 April 2008), on 6 Octo- ber 2009, pursuant to section 519(10) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RD 65(12): repealed (with effect on 1 April 2008), on 6 October 2009, by section 519(10) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RD 65(13) heading: repealed, on 1 April 2012, pursuant to section 9(2) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).

Section RD 65(13): repealed, on 1 April 2012, by section 9(2) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).

Section RD 65 list of deﬁned terms complying fund calculation period: re- pealed, on 1 April 2012, by section 9(3) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).
Section RD 65 list of deﬁned terms complying fund rules: repealed, on 1 April 2012, by section 9(3) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).

Section RD 65 list of deﬁned terms complying superannuation fund: re- pealed, on 1 April 2012, by section 9(3) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).
2750 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 67 Section RD 65 list of deﬁned terms compulsory employer contribution: re- pealed, on 1 April 2012, by section 9(3) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).
Section RD 65 list of deﬁned terms employer’s superannuation cash contri- bution: inserted (with effect on 1 April 2008), on 6 October 2009, by section 519(12) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RD 65 list of deﬁned terms employer’s superannuation contribution: repealed (with effect on 1 April 2008), on 6 October 2009, by section 519(12) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RD 65 list of deﬁned terms KiwiSaver calculation period: repealed, on 1 April 2012, by section 9(3) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).
Section RD 65 list of deﬁned terms KiwiSaver contribution: repealed, on 1 April 2012, by section 9(3) of the Taxation (Annual Rates and Budget Meas- ures) Act 2011 (2011 No 23).

Section RD 65 list of deﬁned terms KiwiSaver scheme: repealed, on 1 April 2012, by section 9(3) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).
Section RD 65 list of deﬁned terms salary or wages: repealed, on 1 April 2012, by section 9(3) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).

RD 66 Complying fund rules [Repealed] Section RD 66: repealed, on 1 April 2012, by section 10 of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).
Calculating amounts of tax RD 67 Calculating amounts of tax for employer’s superannuation cash contributions The amount of tax for an employer’s superannuation cash con- tribution is— (a) the amount determined under schedule 1, part D, clause 1 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe beneﬁts), unless paragraph (b) applies; or 33% of the employer’s superannuation cash contribu- tion, if— (i) the contribution is made by a person for the bene- ﬁt of 1 or more of their past employees: (b) 2751 Part R s RD 68 Income Tax Act 2007 Reprinted as at 2 September 2013 (ii) an employer chooses 33% and the contribution is to a deﬁned beneﬁt fund.
Deﬁned in this Act: amount, amount of tax, deﬁned beneﬁt fund, employer, employer’s superannuation cash contribution Section RD 67: replaced (with effect on 1 April 2012), on 2 November 2012, by section 142 of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
RD 68 Choosing to have amount treated as salary or wages Amount treated as salary or wages (1) With the agreement of their employer who makes an em- ployer’s superannuation cash contribution on their behalf, an employee may choose to have some or all of an employer’s superannuation cash contribution made on their behalf treated as salary or wages under the PAYE rules.

Revoking election The employee’s election is valid until revoked in writing.
Deﬁned in this Act: employee, employer, employer’s superannuation cash con- tribution, PAYE rules, salary or wages Compare: 2004 No 35 s NE 2A(1), (2) Section RD 68(1) heading: inserted (with effect on 1 April 2008), on 6 October 2009, by section 521(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RD 68(1): amended (with effect on 1 April 2008), on 6 October 2009, by section 521(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RD 68(2) heading: added (with effect on 1 April 2008), on 6 October 2009, by section 521(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RD 68(2): added (with effect on 1 April 2008), on 6 October 2009, by section 521(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RD 68 list of deﬁned terms employer’s superannuation cash contri- bution: inserted (with effect on 1 April 2008), on 6 October 2009, by section 521(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RD 68 list of deﬁned terms employer’s superannuation contribution: repealed (with effect on 1 April 2008), on 6 October 2009, by section 521(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
(2) 2752 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 70 RD 69 Choosing different rates for employer’s superannuation cash contributions [Repealed] Section RD 69: repealed, on 1 April 2012, by section 12 of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).
RD 70 Calculating amounts of tax on failure to withhold (1) When this section applies This section applies when an employer, person, or PAYE inter- mediary does not withhold under section RD 65(3) an amount of tax for an employer’s superannuation cash contribution.

Calculation of amount of tax The amount of tax is calculated using the formula— (2) tax rate tax rate 1 × contribution to fund tax already paid.
(3) Deﬁnition of items in formula In the formula,— (a) tax rate is the basic rate set out in schedule 1, part D (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe beneﬁts) at the time the contribution was made: contribution to fund is the amount of the contribu- tion received by the superannuation fund excluding the amount of tax: tax already paid is any amount of tax for the contribu- tion that has already been paid.
(b) (c) Deﬁned in this Act: amount, amount of tax, basic rate, employer, employer’s superannuation cash contribution, pay, PAYE intermediary, superannuation fund Compare: 2004 No 35 s NE 5 Section RD 70(1): substituted (with effect on 1 April 2008), on 6 October 2009, by section 523(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RD 70(1): amended (with effect on 1 April 2008), on 2 November 2012, by section 144(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section RD 70(3)(a) tax rate: amended, on 1 April 2008, by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section RD 70 list of deﬁned terms employer’s superannuation cash contri- bution: inserted (with effect on 1 April 2008), on 6 October 2009, by section 2753 Part R s RD 71 Income Tax Act 2007 Reprinted as at 2 September 2013 523(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RD 70 list of deﬁned terms employer’s superannuation contribution: repealed (with effect on 1 April 2008), on 6 October 2009, by section 523(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
RD 71 Amounts of tax treated as paid to and received by superannuation funds In determining whether an employer or a person has met their obligation to pay a contribution to a superannuation fund— (a) the employer, the person, or their PAYE intermediary is treated as having paid to the superannuation fund an amount of tax withheld under the ESCT rules or the PAYE rules, if applicable; and the fund is treated as having received the amount re- ferred to under paragraph (a); and the payment referred to in paragraph (a) and the receipt referred to in paragraph (b) are treated as having oc- curred when the superannuation fund received the em- ployer’s superannuation cash contribution.
(b) (c) Deﬁned in this Act: amount of tax, employer, employer’s superannuation cash contribution, ESCT rules, pay, PAYE intermediary, PAYE rules, superannuation fund Compare: 2004 No 35 s NE 6 Section RD 71: amended (with effect on 1 April 2008), on 2 November 2012, by section 145(1)(a) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section RD 71(a): amended (with effect on 1 April 2008), on 2 November 2012, by section 145(1)(b) of the Taxation (Annual Rates, Returns Filing, and Remed- ial Matters) Act 2012 (2012 No 88).

Section RD 71(a): amended (with effect on 1 April 2008), on 6 October 2009, by section 524(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RD 71(c): substituted (with effect on 1 April 2008), on 6 October 2009, by section 524(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RD 71 list of deﬁned terms employer’s superannuation cash contri- bution: inserted (with effect on 1 April 2008), on 6 October 2009, by section 524(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RD 71 list of deﬁned terms employer’s superannuation contribution: repealed (with effect on 1 April 2008), on 6 October 2009, by section 524(3) 2754 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RD 72 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Tax on certain withdrawals from superannuation funds [Repealed] Heading: repealed, on 1 April 2011, by section 114 of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).

RD 72 Recovery of tax paid by superannuation funds [Repealed] Section RD 72: repealed, on 1 April 2011, by section 114 of the Taxation (An- nual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Mat- ters) Act 2010 (2010 No 109).
Subpart RE—Withholding tax on resident passive income (RWT) Contents Introductory provisions RE 1 RWT rules and their application RE 2 Resident passive income Withholding obligations RE 3 Obligation to withhold RWT Persons who have withholding obligations RE 4 RE 5 No withholding obligation in certain circumstances RE 6 When obligation to withhold unreasonable RE 7 When resident passive income paid to trustees RE 8 When resident passive income paid to nominees RE 9 Agents’ or trustees’ obligations in relation to certain dividends RE 10 Special rule relating to payments of interest RE 10B Amounts withheld from distributions to holders of FIF attributing interests RE 11 Notiﬁcation by companies Calculating amounts of tax RE 12 Interest RE 13 Dividends other than non-cash dividends Page 2756 2757 2762 2762 2764 2765 2766 2766 2767 2768 2769 2770 2770 2772 2755 Part R s RE 1 Income Tax Act 2007 Reprinted as at 2 September 2013 RE 14 Non-cash dividends other than certain share issues RE 15 Bonus issues in lieu and shares issued under proﬁt distribution plans RE 16 Taxable Maori authority distributions RE 17 Replacement payments under share-lending arrangements RE 18 Payments made by RWT proxies RE 19 Choosing other rates Paying amounts of tax RE 20 Paying RWT RE 21 Basis for payment of RWT RE 22 When payment treated as non-resident passive income RE 23 When amount of tax treated as FDP credit RE 24 When amount of tax treated as Maori authority credit RE 25 When amount of tax treated as imputation credit RE 26 Payment by proxy RWT exemption certiﬁcates RE 27 RWT exemption certiﬁcates RE 28 When certiﬁcates expire RE 29 Establishing whether person holds certiﬁcate RE 30 When unincorporated bodies hold certiﬁcates 2774 2775 2777 2778 2779 2779 2780 2780 2781 2782 2783 2783 2783 2784 2784 2785 2786 Introductory provisions RE 1 RWT rules and their application Meaning The RWT rules means— (a) (b) this subpart; and sections LA 4, LA 6, and LB 3 (which relate to tax credits for RWT); and sections 15N, 25 to 28, 32E to 32L, 50
 to 55, 78D, and 99, Part 9, sections 170 to 172, and 185 of the Tax Administration Act 1994.
(c) Application The RWT rules apply to a person who pays an amount of resi- dent passive income.

Deﬁned in this Act: amount, pay, resident passive income, RWT rules Compare: 2004 No 35 s OB 1 “RWT rules” (1) (2) 2756 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RE 2 Section RE 1(1)(c): amended (with effect on 1 April 2008), on 7 December 2009, by section 105(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
RE 2 Resident passive income Interest, dividends, and certain distributions (1) Resident passive income means an amount paid to a person to the extent to which it consists of— (a) (b) (c) interest: a dividend: a taxable Maori authority distribution other than a re- tirement scheme contribution: a replacement payment paid to a person under a share- lending arrangement.

(d) (2) (3) Exclusions and inclusions Subsections (3) to (5) override subsection (1).
Exclusions from interest The following amounts are excluded from interest under this section: (a) (b) exempt interest: interest derived by a person who holds an RWT exemp- tion certiﬁcate issued under section RE 27: interest that is non-resident passive income: interest derived from outside New Zealand by a non- resident: interest that is exempt income under section CW 27 (Certain income derived by transitional resident): interest paid by a company and derived by another com- pany when both companies are part of the same group of companies at the time of the payment: interest paid to an intermediary— (i) (c) (d) (e) (f) (g) by a client in relation to the operation of a tax pooling account; or by the Commissioner under section RP 18 (De- posits in tax pooling accounts): (ii) (h) interest payable under section 120D or Part 7 of the Tax Administration Act 1994.
2757 Part R s RE 2 Income Tax Act 2007 Reprinted as at 2 September 2013 Inclusions in interest For the purposes of this section, the following amounts are treated as interest and not as a dividend: (a) a dividend that a building society pays to a member in relation to a withdrawable share in the society: a dividend that a friendly society pays to its member in relation to a share in the society.
(b) Exclusions from dividends The following amounts are excluded from a dividend under this section: (a) a dividend that is exempt income— (i) through the application of either of sections CW 9 and CW 10 (which relate to income from equity); or under section CW 27 (Certain income derived by transitional resident); or under section CW 64 (Exemption under other Acts): (ii) (iii) (b) (bb) (c) (d) (e) (f) (g) (h) (i) an amount treated as a dividend under— (i) section CB 34(5)(a) (Amounts derived by mem- bers from mutual associations); or sections GB 23 to GB 25 (which relate to exces- sive remuneration): (ii) a dividend from a portfolio investment entity: [Repealed] a dividend derived by a person who holds an RWT ex- emption certiﬁcate issued under section RE 27: a dividend that is non-resident passive income: a dividend derived by a non-resident other than a divi- dend that has a source in New Zealand: a dividend paid by a company and derived by another company when both are part of the same group of com- panies at the time of the payment: is excluded income under section a dividend that CX 50B (Contributions to retirement savings schemes) or would be excluded income under that section in the absence of subsection (2)(a) and (b): a dividend other than a non-cash dividend that— (4) (5) 2758 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RE 2 (i) (ii) has an imputation ratio, FDP ratio, or combined imputation and FDP ratio of 30/70 or more; and is paid by a unit trust or group investment fund (or RWT proxy on their behalf) that has not withheld RWT from any earlier dividend: (j) a dividend treated as derived by a person under section GB 1(3) (Arrangements involving dividend stripping).
(6) Beneﬁciary income If a person derives an amount described in this section in their capacity as trustee and the amount is beneﬁciary income, the amount is treated as not derived by the trustee.

Trustees’ RWT substitution payment (7) A trustee may pay an amount of money (the RWT substitu- tion payment) to the relevant beneﬁciary that is equal to or less than the amount of RWT withheld for an amount to which subsection (6) applies (the RPI beneﬁciary income).
(8) Effect of RWT substitution payment The RWT substitution payment is treated as an amount of resi- dent passive income that is beneﬁciary income, with the same nature as the RPI beneﬁciary income.

There is no liability or obligation to withhold RWT in relation to the RWT substitu- tion payment.
Deﬁned in this Act: amount, attributed repatriation, beneﬁciary, beneﬁciary income, building society, combined imputation and FDP ratio, Commissioner, company, dividend, excluded income, exempt income, exempt interest, friendly society, FDP ratio, group investment fund, group of companies, imputation ra- tio, interest, New Zealand, non-cash dividend, non-resident, non-resident pas- sive income, pay, portfolio investment entity, replacement payment, resident passive income, RWT, RWT exemption certiﬁcate, RWT proxy, RWT substi- tution payment, share, share-lending arrangement, source in New Zealand, tax pooling account, taxable Maori authority distribution, trustee, unit trust, with- drawable share Compare: 2004 No 35 s NF 1(2), (4), (5) Section RE 2(1): amended (with effect on 1 April 2008), on 6 October 2009, by section 525(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RE 2(1)(c): amended, on 1 April 2008, by section 542(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section RE 2(3)(c): amended (with effect on 1 April 2008), on 6 October 2009, by section 525(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2759 Part R s RE 2 Income Tax Act 2007 Reprinted as at 2 September 2013 Section RE 2(5)(a)(i): amended (with effect on 1 July 2011 and applying for in- come years beginning on or after that date), on 7 May 2012, by section 127(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section RE 2(5)(bb): inserted (with effect from 1 April 2008), on 29 May 2008, by section 44(1) of the Taxation (Personal Tax Cuts, Annual Rates, and Remed- ial Matters) Act 2008 (2008 No 36).
Section RE 2(5)(c): repealed (with effect on 30 June 2009), on 2 November 2012 (applying for income years beginning on or after 1 July 2009), by section 146(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section RE 2(5)(f): amended, on 21 December 2010, by section 129(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section RE 2(5)(g): amended, on 1 April 2008, by section 542(2) of the Taxa- tion (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section RE 2(5)(h): added, on 1 April 2008, by section 542(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section RE 2(5)(i): added, on 1 April 2008, by section 542(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section RE 2(5)(j): added (with effect on 1 April 2008), on 7 December 2009, by section 106(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section RE 2(7) heading: added (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years if the trustee has taken a tax position in a tax return that is consistent with subsection (1)), by section 124(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section RE 2(7): added (with effect on 1 April 2008), on 29 August 2011 (apply- ing for the 2008–09 and later income years if the trustee has taken a tax position in a tax return that is consistent with subsection (1)), by section 124(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section RE 2(8) heading: added (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years if the trustee has taken a tax position in a tax return that is consistent with subsection (1)), by section 124(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section RE 2(8): added (with effect on 1 April 2008), on 29 August 2011 (apply- ing for the 2008–09 and later income years if the trustee has taken a tax position in a tax return that is consistent with subsection (1)), by section 124(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section RE 2 list of deﬁned terms beneﬁciary: inserted (with effect on 1 April 2008), on 29 August 2011, by section 124(2) of the Taxation (Tax Administra- tion and Remedial Matters) Act 2011 (2011 No 63).

Section RE 2 list of deﬁned terms combined imputation and FDP ratio: in- serted, on 1 April 2008, by section 542(3) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
2760 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RE 2 Section RE 2 list of deﬁned terms derived from New Zealand: repealed, on 21 December 2010, by section 129(2)(a) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section RE 2 list of deﬁned terms excluded income: inserted, on 1 April 2008, by section 542(3) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section RE 2 list of deﬁned terms FDP ratio: inserted, on 1 April 2008, by section 542(3) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section RE 2 list of deﬁned terms group investment fund: inserted, on 1 April 2008, by section 542(3) of the Taxation (Business Taxation and Remedial Mat- ters) Act 2007 (2007 No 109).
Section RE 2 list of deﬁned terms imputation ratio: inserted, on 1 April 2008, by section 542(3) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section RE 2 list of deﬁned terms non-cash dividend: inserted, on 1 April 2008, by section 542(3) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section RE 2 list of deﬁned terms portfolio investment entity: inserted (with effect from 1 April 2008), on 29 May 2008, by section 44(2) of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).

Section RE 2 list of deﬁned terms resident in New Zealand: repealed (with effect on 1 April 2008), on 6 October 2009, by section 525(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RE 2 list of deﬁned terms RWT: inserted, on 1 April 2008, by sec- tion 542(3) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section RE 2 list of deﬁned terms RWT proxy: inserted, on 1 April 2008, by section 542(3) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section RE 2 list of deﬁned terms RWT substitution payment: inserted (with effect on 1 April 2008), on 29 August 2011, by section 124(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section RE 2 list of deﬁned terms source in New Zealand: inserted, on 21 De- cember 2010, by section 129(2)(b) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section RE 2 list of deﬁned terms unit trust: inserted, on 1 April 2008, by section 542(3) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
2761 Part R s RE 3 Income Tax Act 2007 Reprinted as at 2 September 2013 Withholding obligations RE 3 Obligation to withhold RWT Obligation to withhold and pay (1) A person to whom section RE 1(2) applies is liable to withhold resident withholding tax (RWT) and pay the amount to the Commissioner if they make the payment and— (a) they have an obligation to withhold an amount of tax under section RE 4 and are not excluded under sections RE 5 and RE 6 from meeting the obligation: [Repealed] they are an RWT proxy in relation to the payment.
(b) (c) (2) Non-cash dividends For the purposes of subsection (1), if the payment is a non-cash dividend, the person must calculate the amount of tax under section RE 14 and pay the amount to the Commissioner.
Deﬁned in this Act: amount, amount of tax, Commissioner, non-cash dividend, pay, RWT, RWT proxy Compare: 2004 No 35 s NF 2(1A), (1AB) Section RE 3(1)(a): substituted (with effect on 1 April 2008), on 6 October 2009, by section 526(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RE 3(1)(b): repealed (with effect on 1 April 2008), on 6 October 2009, by section 526(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

RE 4 Persons who have withholding obligations Requirements (1) A person referred to in section RE 3(1)(a) must meet at least 1 requirement of each of subsections (2) and (3) in relation to a payment of resident passive income.
Requirement for person The person must be, at the time the payment is made,— (a) (b) resident in New Zealand; or if not resident in New Zealand,— (i) carrying on a taxable activity in New Zealand through a ﬁxed establishment in New Zealand; and not excluded under subsection (4).
(ii) (2) 2762 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RE 4 (3) (4) Requirements for person and payment In addition to meeting a requirement of subsection (2), 1 of the following requirements must be met at the time the payment is made: (a) (b) the person holds an RWT exemption certiﬁcate: the payment is made in whole or in part in carrying on a taxable activity, whether or not the person acts as agent or trustee for another person: the payment is a dividend: the payment is a taxable Maori authority distribution: the payment is a replacement payment under a share- lending arrangement.
(c) (d) (e) When person not treated as resident or carrying on taxable activity For the purposes of subsection (2), a person who is not resi- dent in New Zealand and is carrying on a taxable activity in New Zealand through a ﬁxed establishment in New Zealand, is treated as not meeting the requirements of the subsection if they establish that, at the time the payment is made,— (a) either,— (i) (ii) for interest or a dividend, the payment is at- tributable to or effectively connected with a ﬁxed establishment of the person outside New Zealand; or for a dividend, the company is not resident in New Zealand; and (b) all amounts payable in relation to money lent or shares to which the payment relates are payable in a currency other than New Zealand currency.
Currency conversion (5) A person who is required to withhold RWT in relation to a payment of resident passive income that is in a currency other than New Zealand currency may withhold and pay the amount of the RWT in the foreign currency.
(6) Conversion rates: credit For the purposes of subsection (5), in the calculation of the amount of RWT to be credited against income tax, the amount 2763 Part R s RE 5 Income Tax Act 2007 Reprinted as at 2 September 2013 must be converted to New Zealand currency at the option of the person deriving the resident passive income at either— (a) the close of trading spot exchange rate on the day the RWT is paid; or an exchange rate speciﬁed by the Commissioner for this purpose in relation to the month in which the RWT is paid.
(b) (7) Conversion rates: payment For the purposes of subsection (5), in the calculation of the amount of RWT to be paid to the Commissioner, the amount must be converted to New Zealand currency either at— (a) the close of trading spot exchange rate on the ﬁrst work- ing day of the month after the month in which the day the RWT is withheld; or a conversion rate applying under section OB 60(6) (Im- putation credits attached to dividends) if the resident passive income is a dividend and the person required to withhold RWT under subsection (5) is an Australian ICA company that chooses to use that rate.
(b) Deﬁned in this Act: amount, Australian ICA company, close of trading spot exchange rate, Commissioner, company, dividend, ﬁxed establishment, income tax, interest, money lent, New Zealand, pay, replacement payment, resident in New Zealand, resident passive income, RWT, RWT exemption certiﬁcate, share, share-lending arrangement, taxable activity, taxable Maori authority dis- tribution, trustee, working day Compare: 2004 No 35 s NF 2(3), (4) Section RE 4(6): amended (with effect on 30 June 2009), on 6 October 2009, by section 527(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RE 4 list of deﬁned terms FDP: repealed (with effect on 30 June 2009), on 6 October 2009, by section 527(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

RE 5 No withholding obligation in certain circumstances When this section applies This section applies when a person (person A)— (a) (b) pays an amount to another person (person B); or receives a payment while acting as agent or bare trustee for person B.
(1) 2764 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RE 6 (2) (3) No obligation if person B exempt For the purposes of determining whether person A is required under section RE 4 to withhold RWT, the payment is treated as not consisting of resident passive income if person A has established that person B holds an RWT exemption certiﬁcate issued under section RE 27.
No obligation if person B transitional resident If person A receives an amount of resident passive income while acting as agent or bare trustee for person B, they are not required to withhold RWT in relation to the amount when— (a) person B notiﬁes person A that— (i) (ii) they are a transitional resident for a period; and an amount paid during the period from a particu- lar source is exempt income of person B under section CW 27 (Certain income derived by tran- sitional resident); and (b) (c) person A receives the payment during the period from the particular source; and person A has no reasonable grounds for believing that the payment is not exempt income of person B under section CW 27.
Deﬁned in this Act: amount, exempt income, notify, pay, resident passive in- come, RWT, RWT exemption certiﬁcate, transitional resident, trustee Compare: 2004 No 35 s NF 2(7), (7B) RE 6 When obligation to withhold unreasonable (1) (2) When this section applies This section applies when a person (person A) who is a person listed in a paragraph in section 32E(2)(a) to (h) of the Tax Administration Act 1994— (a) (b) makes a payment at person B’s request.
receives an amount from another person (person B); or No obligation if unreasonable For the purposes of determining whether person A is required under section RE 4 to withhold RWT, the payment is treated as not consisting of resident passive income of person B to the extent to which— (a) person A could not reasonably be expected to be aware that the payment was resident passive income; or 2765 Part R s RE 7 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) for an amount that is a redemption payment, person A could not reasonably be expected to be aware of the amount that consisted of resident passive income.
Deﬁned in this Act: amount, pay, redemption payment, resident passive income, RWT Compare: 2004 No 35 s NF 2(8) RE 7 When resident passive income paid to trustees (1) Who this section applies to This section applies when— (a) (b) (c) an amount is paid to a person (person A) who is acting as trustee for another person (person B) at the time; and some or all of the amount is resident passive income other than a replacement payment under a share-lending arrangement; and person A— (i) does not hold an RWT exemption certiﬁcate at the time of the payment; and is paid the amount in the conduct of a taxable activity carried on by them; and is not a nominee to whom section RE 8 applies.
(ii) (iii) Obligation to withhold (2) At the time the payment is made and to the extent to which it has not already been withheld, person A must withhold RWT for the payment and pay it to the Commissioner.

(3) Relationship with section RE 9 Section RE 9 overrides this section.
Deﬁned in this Act: amount, Commissioner, nominee, pay, replacement pay- ment, resident passive income, RWT, RWT exemption certiﬁcate, share-lending arrangement, taxable activity, trustee Compare: 2004 No 35 s NF 3(1), (2) RE 8 When resident passive income paid to nominees Who this section applies to This section applies when— (a) an amount is paid to a person (person A) who is a nom- inee for another person (person B) at the time; and some or all of the amount is resident passive income; and (b) (1) 2766 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RE 9 (c) person A— (i) holds an RWT exemption certiﬁcate at the time of the payment; or is paid the amount in the conduct of a taxable activity carried on by them.
(ii) Obligation to withhold (2) At the time the payment is received and to the extent to which it has not already been withheld, person A must withhold RWT for the payment and pay it to the Commissioner.

(3) Relationship with section RE 9 Section RE 9 overrides this section.
Deﬁned in this Act: amount, Commissioner, nominee, pay, resident passive income, RWT, RWT exemption certiﬁcate, taxable activity Compare: 2004 No 35 s NF 3(1) RE 9 Agents’ or trustees’ obligations in relation to certain dividends (1) (2) (3) When this section applies This section applies when an agent or trustee is required to withhold RWT from certain dividends.
Dividends other than those having the nature of interest To the extent to which the resident passive income consists of a dividend other than a dividend treated as interest, an amount of tax that must be withheld under section RE 3 is treated as an amount to which the RWT rules apply.
Non-cash dividends To the extent to which the resident passive income consists of a non-cash dividend, the trustee or agent must pay to the Commissioner an amount equal to the amount of tax for the dividend as if it were the amount of tax required to be withheld and paid under the RWT rules.
2767 Part R s RE 10 Income Tax Act 2007 Reprinted as at 2 September 2013 (4) Obligation of person paying not overridden This section does not override the obligation of the person who pays the resident passive income to the agent or trustee to with- hold RWT for the payment under section RE 4.
Deﬁned in this Act: amount, amount of tax, Commissioner, dividend, dividend treated as interest, non-cash dividend, pay, resident passive income, RWT, RWT rules, trustee Compare: 2004 No 35 s NF 3(3)–(5) Section RE 9(2): substituted (with effect on 30 June 2009), on 6 October 2009, by section 528(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RE 9 list of deﬁned terms FDP rules: repealed (with effect on 30 June 2009), on 6 October 2009, by section 528(2) of the Taxation (International Tax- ation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
RE 10 Special rule relating to payments of interest (1) Threshold for amounts of interest This section applies to a person who— (a) (b) pays resident passive income consisting of interest; and either does not hold an RWT exemption certiﬁcate at the time of the payment, or is described in section 32E(2)(k) or (l) of the Tax Administration Act 1994 or holds a certiﬁcate under section 32I of that Act; and has paid an amount of resident passive income consist- ing of interest that totals less than $5,000 in the tax year before the tax year in which the payment is made; and (d) would be liable to withhold RWT for the resident pas- (c) sive income in the absence of this section.
Minimum amount (2) Despite section RE 4(3), the person is required to withhold the amount of tax for the payment only if the total resident passive income consisting of interest paid by the person in the tax year in which the payment is made is more than $5,000.
Deﬁned in this Act: amount, amount of tax, interest, pay, resident passive in- come, RWT, RWT exemption certiﬁcate, tax year Compare: 2004 No 35 s NF 2(5) 2768 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RE 10B RE 10B Amounts withheld from distributions to holders of FIF attributing interests (1) (2) (3) (4) When this section applies This section applies when— (a) (b) (c) (b) a distribution is made to a holder of an attributing inter- est in a FIF; and section CD 36 (Foreign investment fund income) or EX 59(2) (Codes: comparative value method, deemed rate of return method, fair dividend rate method, and cost method) applies to the distribution; and an amount is withheld by the payer from the distribution because the payer has treated the distribution as resident passive income subject to the RWT rules.
Treatment of amount The amount withheld is treated as— (a) RWT for the purposes of this subpart and subpart LA (General rules for tax credits), and sections LB 3 (Tax credits for resident withholding tax), and RM 1 to RM 10 (which relate to refunds); and tax paid in excess for the purposes of Part 10B of the Tax Administration Act 1994.

Treatment of distribution The distribution is treated as resident passive income for the purposes of the sections listed in subsection (2).
Refunds Subsection (2) does not apply if the payer or the holder applies under section RM 8(4) or (5) (Overpaid RWT or NRWT), as applicable, for a refund in relation to the amount withheld be- fore the next 31 March after the date on which the amount of tax was withheld.
Deﬁned in this Act: amount of tax, attributing interest, FIF, pay, resident passive income, RWT, tax Section RE 10B: inserted (with effect on 1 April 2008), on 7 December 2009, by section 107(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
2769 Part R s RE 11 Income Tax Act 2007 Reprinted as at 2 September 2013 RE 11 Notiﬁcation by companies (1) (2) (3) (4) When this section applies This section applies when a company that is not a trustee or a Maori authority is entitled to receive a payment of resident pas- sive income other than a replacement payment under a share- lending arrangement.

Notiﬁcation required The company must notify the person making the payment that they are a company.
Withholding rate The person making the payment must withhold RWT for the payment at the relevant rate set out in schedule 1, part D, clause 4 (Basic tax rates: income tax, ESCT, RSCT, RWT, and at- tributed fringe beneﬁts) for a payment made on or after the date of notiﬁcation.

Consequence of failure to notify If the company does not notify the person making the payment, the person must apply the higher withholding rate set out in section RE 19(3).
Deﬁned in this Act: company, Maori authority, notify, pay, replacement pay- ment, resident passive income, RWT, share-lending arrangement, trustee Compare: 2004 No 35 s NF 2B Section RE 11(3): amended (with effect on 1 April 2008), on 6 October 2009, by section 529(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RE 11(3): amended, on 1 April 2008, by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Calculating amounts of tax RE 12 Interest When this section applies This section applies when a person makes a payment of resi- dent passive income that consists of interest.

Calculation of amount of tax The amount of tax for the payment that the person must with- hold and pay to the Commissioner is calculated using the for- mula— (1) (2) 2770 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RE 12 (tax rate × (interest paid + foreign withholding tax)) – foreign withholding tax.
(3) Deﬁnition of items in formula In the formula,— (a) tax rate is the basic rate set out in schedule 1, part D, clause 3 or 4 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe beneﬁts): interest paid is the interest paid before the amount of tax is determined: foreign withholding tax is the amount of foreign with- holding tax paid or payable on the interest paid.
(b) (c) Modiﬁcation for 2009–10 (4) Despite subsection (3)(a), the amount of tax that the person must withhold and pay may, if the person chooses, be calcu- lated, under subsection (3), using a tax rate of 0.38 if— (a) the payment of resident passive income is made in the 2009–10 tax year; and the tax rate under subsection (3)(a) would be 0.39 in the absence of this subsection.
(b) Modiﬁcation for companies and portfolio investment entities for 2010–11 tax year (5) Despite subsection (3)(a), the amount of tax that the person must withhold and pay may, if the person chooses, be calcu- lated under subsection (3) using a tax rate of 0.30 if— (a) the payment of resident passive income that consists of interest is made in the 2010–11 tax year to— a portfolio investment entity; or (i) a company that is not a trustee or a Maori author- (ii) ity; and (b) the tax rate under subsection (3)(a) would be 0.33 in the absence of this subsection.
Deﬁned in this Act: amount of tax, Commissioner, company, foreign withhold- ing tax, income year, interest, Maori authority, pay, portfolio investment entity, resident passive income, trustee Compare: 2004 No 35 s NF 2(1)(a) Section RE 12(3)(a) tax rate: amended (with effect on 1 April 2008), on 6 Oc- tober 2009, by section 530(1) of the Taxation (International Taxation, Life In- surance, and Remedial Matters) Act 2009 (2009 No 34).
2771 Part R s RE 13 Income Tax Act 2007 Reprinted as at 2 September 2013 Section RE 12(3)(a) tax rate: amended (with effect from 1 April 2008), on 15 December 2008, by section 33(1) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).

Section RE 12(3)(a) tax rate: amended, on 1 April 2008, by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section RE 12(4) heading: added, on 1 April 2009, by section 33(2) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).

Section RE 12(4): added, on 1 April 2009, by section 33(2) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).

Section RE 12(5) heading: added, on 1 April 2010 (applying for the 2010–11 income year), by section 108(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section RE 12(5) heading: amended (with effect on 1 April 2010), on 7 Septem- ber 2010, by section 115(1) of the Taxation (Annual Rates, Trans-Tasman Sav- ings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).

Section RE 12(5): added, on 1 April 2010 (applying for the 2010–11 income year), by section 108(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section RE 12(5)(a): substituted (with effect on 1 April 2010), on 7 September 2010, by section 115(2) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).

Section RE 12 list of deﬁned terms company: inserted (with effect on 1 April 2008), on 7 December 2009, by section 126 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section RE 12 list of deﬁned terms income year: inserted (with effect on 1 April 2008), on 7 December 2009, by section 126 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section RE 12 list of deﬁned terms Maori authority: inserted (with effect on 1 April 2010), on 7 September 2010, by section 115(3) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Section RE 12 list of deﬁned terms portfolio investment entity: inserted (with effect on 1 April 2008), on 7 December 2009, by section 126 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section RE 12 list of deﬁned terms trustee: inserted (with effect on 1 April 2010), on 7 September 2010, by section 115(3) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
RE 13 Dividends other than non-cash dividends When this section applies This section applies when a person makes a payment of resi- dent passive income that consists of a dividend other than a non-cash dividend.
(1) 2772 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RE 13 (2) (3) Calculation of amount of tax The amount of tax for the payment that the person must with- hold and pay to the Commissioner is calculated using the for- mula— (tax rate × (dividend paid + tax paid or credit attached)) – tax paid or credit attached.
Deﬁnition of items in formula In the formula,— (a) (b) (c) tax rate is the basic rate set out in schedule 1, part D, clause 5 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe beneﬁts): dividend paid is the amount of the dividend paid before the amount of tax is determined: tax paid or credit attached is the total of the following amounts: (i) (ii) if the dividend is paid in relation to shares issued by an imputation credit account (ICA) company, the amount of an imputation credit attached to the dividend: if the dividend is paid in relation to shares is- sued by a company not resident in New Zealand, the amount of foreign withholding tax paid or payable on the amount of dividend: if the dividend is paid in relation to shares is- sued by a company resident in New Zealand, the amount of an FDP credit attached to the dividend.
Deﬁned in this Act: amount, amount of tax, Commissioner, company, dividend, FDP credit, foreign withholding tax, ICA company, imputation credit, non-cash dividend, pay, resident in New Zealand, resident passive income, share Compare: 2004 No 35 s NF 2(1)(b) (iii) Section RE 13(3)(a) tax rate: amended (with effect from 1 April 2008), on 29 May 2008, by section 45 of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).
Section RE 13(3)(a) tax rate: amended, on 1 April 2008, by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
2773 Part R s RE 14 Income Tax Act 2007 Reprinted as at 2 September 2013 RE 14 Non-cash dividends other than certain share issues When this section applies This section applies when a person makes a payment of resi- dent passive income that consists of a non-cash dividend other than— (a) (b) a bonus issue in lieu: a share issued under a proﬁt distribution plan.
Calculation of amount of tax The amount of tax for the payment that the person must pay under subsection (4) to the Commissioner is calculated using the formula— (tax rate × dividend paid) tax rate 1 tax paid or credit attached.
Deﬁnition of items in formula In the formula,— (a) (b) (c) tax rate is the basic rate set out in schedule 1, part D, clause 5 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe beneﬁts): dividend paid is the amount of the dividend paid before the amount of tax is determined: tax paid or credit attached is the total of the following amounts: (i) if the dividend is paid in relation to shares issued by an ICA company, the amount of an imputation credit attached to the dividend: if the dividend is paid in relation to shares is- sued by a company not resident in New Zealand, the amount of foreign withholding tax paid or payable on the amount of dividend: if the dividend is paid in relation to shares is- sued by a company resident in New Zealand, the amount of an FDP credit attached to the dividend.
(ii) (iii) (1) (2) (3) 2774 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RE 15 (4) Treatment as if amount of tax withheld For the purposes of subsection (2), the person must pay to the Commissioner the amount calculated as if it were the amount of tax required to be withheld and paid under the RWT rules.
Deﬁned in this Act: amount, amount of tax, bonus issue in lieu, Commis- sioner, company, FDP credit, foreign withholding tax, ICA company, imput- ation credit, non-cash dividend, pay, proﬁt distribution plan, resident in New Zealand, resident passive income, RWT rules, share Compare: 2004 No 35 s NF 2(1)(c), (2) Section RE 14 heading: replaced (with effect on 1 October 2012), on 2 Novem- ber 2012, by section 147(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section RE 14(1): replaced (with effect on 1 October 2012), on 2 November 2012, by section 147(2) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section RE 14(3)(a) tax rate: amended, on 1 April 2008, by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section RE 14 list of deﬁned terms proﬁt distribution plan: inserted (with ef- fect on 1 October 2012), on 2 November 2012, by section 147(3) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
RE 15 Bonus issues in lieu and shares issued under proﬁt distribution plans (1) (2) (3) When this section applies This section applies when a person makes a payment of resi- dent passive income that consists of a dividend that is— (a) (b) a bonus issue in lieu: a share issued under a proﬁt distribution plan.

Calculation of amount of tax The amount of tax for the payment is calculated using the for- mula— (tax rate × (alternative amount + tax paid or credit attached)) – tax paid or credit attached.
Deﬁnition of items in formula In the formula,— (a) tax rate is the basic rate set out in schedule 1, part D, clause 5 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe beneﬁts): alternative amount is, as applicable,— (b) 2775 Part R s RE 15 Income Tax Act 2007 Reprinted as at 2 September 2013 (i) (ii) the net amount of money offered as an alternative to the bonus issue before the amount of tax is determined; or for a share issued under a proﬁt distribution plan, the net amount offered by the company for the repurchase of the share before the amount of tax is determined: (c) (ii) tax paid or credit attached is the total of the following amounts: (i) if the dividend is paid in relation to shares issued by an ICA company, the amount of an imputation credit attached to the dividend: if the dividend is paid in relation to shares is- sued by a company not resident in New Zealand, the amount of foreign withholding tax paid or payable on the amount of dividend: if the dividend is paid in relation to shares is- sued by a company resident in New Zealand, the amount of an FDP credit attached to the dividend.
Deﬁned in this Act: amount, amount of tax, bonus issue in lieu, Commissioner, company, dividend, FDP credit, foreign withholding tax, ICA company, imput- ation credit, pay, proﬁt distribution plan, RWT rules, resident in New Zealand, resident passive income, share Compare: 2004 No 35 s NF 2(1)(d) (iii) Section RE 15 heading: replaced (with effect on 1 October 2012), on 2 Novem- ber 2012, by section 148(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section RE 15(1): replaced (with effect on 1 October 2012), on 2 November 2012, by section 148(2) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section RE 15(3)(a) tax rate: amended, on 1 April 2008, by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section RE 15(3)(b) alternative amount: replaced (with effect on 1 October 2012), on 2 November 2012, by section 148(3) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section RE 15 list of deﬁned terms Commissioner: inserted (with effect on 1 October 2012), on 2 November 2012, by section 148(4) of the Taxation (An- nual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section RE 15 list of deﬁned terms proﬁt distribution plan: inserted (with ef- fect on 1 October 2012), on 2 November 2012, by section 148(4) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
2776 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RE 16 Section RE 15 list of deﬁned terms RWT rules: inserted (with effect on 1 Oc- tober 2012), on 2 November 2012, by section 148(4) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
RE 16 Taxable Maori authority distributions (1) (2) When this section applies This section applies when a Maori authority makes a payment of resident passive income that consists of a taxable Maori authority distribution in the form of a sum of money or an amount of a credit in the balance of an account with the Maori authority.
Calculation of amount of tax The amount of tax for the payment that the Maori authority must withhold and pay to the Commissioner is calculated us- ing the formula— (tax rate × (distribution amount + credit attached)) – credit attached.
Non-cash amounts (3) Despite subsection (2), if the resident passive income is not paid in cash, the amount of tax for the payment that the Maori authority must pay to the Commissioner is calculated using the formula— (tax rate × distribution amount) tax rate 1 credit attached.
(4) Deﬁnition of items in formulas In the formulas in subsections (2) and (3),— (a) tax rate is the basic rate set out in schedule 1, part D, clause 6 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe beneﬁts): distribution amount is the amount of the distribution before the amount of tax is determined: credit attached is the amount of the Maori authority credit attached to the distribution.
(b) (c) Deﬁned in this Act: amount, amount of tax, Commissioner, Maori authority, Maori authority credit, pay, resident passive income, taxable Maori authority distribution Compare: 2004 No 35 s NF 2(1)(e), (f) 2777 Part R s RE 17 Income Tax Act 2007 Reprinted as at 2 September 2013 Section RE 16(4)(a) tax rate: amended, on 1 April 2008, by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
RE 17 Replacement payments under share-lending arrangements When this section applies This section applies when a person makes a payment of resi- dent passive income that consists of a replacement payment under a share-lending arrangement.

Calculation of amount of tax The amount of tax for the payment is calculated using the for- mula— tax rate × payment credit attached credit transferred FDP credit transferred.
tax rate 1 Deﬁnition of items in formula In the formula,— (a) tax rate is the basic rate set out in schedule 1, part D, income tax, ESCT, RSCT, clause 5 (Basic tax rates: RWT, and attributed fringe beneﬁts): payment is the amount of the replacement payment excluding an imputation credit attached under section OB 64 (Replacement payments): credit attached is the amount of an imputation credit attached to the replacement payment under section OB 64: credit transferred is the amount of an imputation credit shown in a credit transfer notice relating to the replace- ment payment: FDP credit transferred is the amount of an FDP credit shown in a credit transfer notice relating to the replace- ment payment.
(b) (c) (d) (e) Deﬁned in this Act: amount, amount of tax, credit transfer notice, FDP credit, imputation credit, pay, replacement payment, resident passive income, share- lending arrangement Compare: 2004 No 35 s NF 2(1)(g) Section RE 17(3)(a) tax rate: amended, on 1 April 2008, by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
(1) (2) (3) 2778 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RE 19 RE 18 Payments made by RWT proxies Calculation of amount of tax (1) A person who is an RWT proxy for a person paying resident passive income that consists of a dividend must withhold an amount of tax for the payment calculated using the formula— tax rate × amount paid 1 rate.
Deﬁnition of items in formula In the formula,— (a) (2) tax rate is the basic rate set out in schedule 1, part D, income tax, ESCT, RSCT, clause 3 (Basic tax rates: RWT, and attributed fringe beneﬁts): amount paid is the amount of the dividend paid.
(b) Deﬁned in this Act: amount, amount of tax, dividend, pay, resident passive income, RWT proxy Compare: 2004 No 35 s NF 2(1B) Section RE 18(2)(a) tax rate: amended (with effect on 1 April 2008), on 7 Sep- tember 2010 (applying for the 2008–09 and later income years), by section 116(1) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, Kiwi- Saver, and Remedial Matters) Act 2010 (2010 No 109).
Section RE 18(2)(a) tax rate: amended, on 1 April 2008, by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

RE 19 Choosing other rates (1) (2) When this section applies This section applies when a person (person A) is entitled to receive resident passive income other than a replacement pay- ment under a share-lending arrangement.
Person choosing rate Person A may notify the person who is required to withhold the amount of tax for the payment to use 1 of the rates set out in schedule 1, part D, clause 3 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe beneﬁts).

Company choosing rate (3) Despite subsection (1), if person A is a company, they may notify the person making the payment to withhold the amount of tax for the payment at the rate set out in schedule 1, part D, clause 4.
2779 Part R s RE 20 Income Tax Act 2007 Reprinted as at 2 September 2013 (4) Application of rate The rate chosen under subsection (2) or (3) applies to amounts of tax withheld from the date on which notice is given.
Deﬁned in this Act: amount of tax, company, notify, pay, replacement payment, resident passive income, share-lending arrangement, tax withheld Compare: 2004 No 35 ss NF 2A(1), (3), NF 2D(1), (3) Section RE 19 heading: substituted, on 1 April 2010 (applying for the 2010–11 and later income years), by section 109(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section RE 19(2): amended (with effect from 1 April 2008), on 29 May 2008, by section 46(a) of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).

Section RE 19(2): amended, on 1 April 2008, by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section RE 19(3): amended (with effect from 1 April 2008), on 29 May 2008, by section 46(b) of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).

Paying amounts of tax RE 20 Paying RWT A person who is required under the RWT rules to withhold RWT must pay the amount of tax to the Commissioner under sections RA 15 and RA 16 (which relate to payment dates and the basis on which the payment dates are set).
Deﬁned in this Act: amount of tax, Commissioner, pay, RWT, RWT rules Compare: 2004 No 35 s NF 4(1), (2) RE 21 Basis for payment of RWT When this section applies Subsections (2) to (5) apply for the purposes of section RA 6(1) (Withholding and payment obligations for passive income) to a person who is required under the RWT rules to withhold RWT for resident passive income consisting of interest.
Interest of more than $500 in total If the person estimates for a tax year that they will be required to withhold more than $500 in total for each month of the tax year, they must pay the amount of tax to the Commissioner on a monthly basis.
(1) (2) 2780 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RE 22 (3) (4) Interest of less than $500 in total If the person estimates for a tax year that they will be required to withhold less than $500 in total for each month of the tax year, they must pay the amount of tax to the Commissioner in 2 instalments as described in section RA 15 (Payment dates for interim and other tax payments).
When subsection (5) applies Subsection (5) applies when the person has withheld more than $500 in total amounts of tax for a 2 month-period from the start of 1 month in a tax year to the end of the month following that month.

Total in 2-month period (5) Despite subsections (2) and (3), the person must pay the total amount of tax to the Commissioner for the 2-month period by the 20th day of the month following the end of the period.
(6) (7) When subsection (7) applies Subsection (7) applies for the purposes of section RA 6(1) to a person who is required under the RWT rules to withhold RWT for resident passive income consisting of a dividend, a replace- ment payment, or a taxable Maori authority distribution.

Dividends, replacement payments, and taxable Maori authority distributions The person must pay the amount of tax to the Commissioner on a monthly basis.
Deﬁned in this Act: amount of tax, Commissioner, dividend, interest, pay, re- placement payment, resident passive income, RWT, RWT rules, tax year, tax- able Maori authority distribution Compare: 2004 No 35 s NF 4(1)–(5), (7), (8) RE 22 When payment treated as non-resident passive income (1) When this section applies This section applies when— (a) a person (person A) is required to pay an amount that would be treated as resident passive income in the ab- sence of this section to another person (person B); and person A receives resident passive income as agent or trustee for person B.
(b) 2781 Part R s RE 23 Income Tax Act 2007 Reprinted as at 2 September 2013 (2) (3) No liability If person A concludes on reasonable grounds after making rea- sonable inquiries that an amount is non-resident passive in- come derived by person B, and person A has complied with their obligations under this Act and the Tax Administration Act 1994 in relation to paying non-resident withholding tax (NRWT) to the Commissioner, they have no liability under the RWT rules in relation to the amount.
Payment derived by non-resident For the purposes of determining person A’s liability under the RWT rules, the amount is treated as derived by a non-resident.
Deﬁned in this Act: amount, Commissioner, pay, non-resident, non-resident passive income, NRWT, resident passive income, RWT rules, trustee Compare: 2004 No 35 s NF 5 Section RE 22(1)(a): substituted (with effect on 1 April 2008), on 7 December 2009, by section 110(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section RE 22 list of deﬁned terms resident in New Zealand: repealed (with effect on 1 April 2008), on 7 December 2009, by section 126 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

RE 23 When amount of tax treated as FDP credit When this section applies This section applies when a company withholds RWT for resi- dent passive income consisting of a dividend other than a divi- dend treated as interest.
FDP credit The amount is treated as an FDP credit attached to the dividend by the company which is treated as a FDPA company for the purposes of sections LE 6, LF 1, LF 3, LF 4, and LF 9 (which relate to the amount and treatment of FDP credits), and section 185 of the Tax Administration Act 1994.
Deﬁned in this Act: company, dividend, dividend treated as interest, FDPA company, FDP credit, resident passive income, RWT Compare: 2004 No 35 s NF 8(1) Section RE 23(2): amended, on 1 April 2008, by section 543 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
(1) (2) 2782 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RE 26 RE 24 When amount of tax treated as Maori authority credit (1) (2) When this section applies This section applies when a Maori authority withholds an amount of tax for a taxable Maori authority distribution.
Maori authority credit The amount is treated as a Maori authority credit attached to the distribution by the Maori authority for the purposes of sec- tions LO 1 to LO 4, OK 16, OK 19, and OK 20 (which relate to the amount and treatment of Maori authority credits).
Deﬁned in this Act: amount of tax, Maori authority, Maori authority credit, taxable Maori authority distribution Compare: 2004 No 35 s NF 8A(1) RE 25 When amount of tax treated as imputation credit (1) (2) When this section applies This section applies when a share user under a share-lending arrangement withholds under the RWT rules an amount of tax for a replacement payment.
Imputation credit The amount of tax withheld— (a) is treated for the share supplier as an imputation credit attached to the replacement payment in addition to an imputation credit that the share user attached to the pay- ment under section OB 64 (Replacement payments); and does not give rise under section LB 3 (Tax credits for resident withholding tax) to a tax credit or refund for the share supplier.
(b) Deﬁned in this Act: amount of tax, imputation credit, replacement payment, RWT rules, share-lending arrangement, share supplier, share user, tax credit Compare: 2004 No 35 s NF 8B RE 26 Payment by proxy An RWT proxy who is required to withhold RWT in relation to a payment of resident passive income is treated as having 2783 Part R s RE 27 Income Tax Act 2007 Reprinted as at 2 September 2013 withheld the amount from the payment at the time the payment is made.
Deﬁned in this Act: amount, pay, resident passive income, RWT, RWT proxy Compare: 2004 No 35 s NF 4(9) RWT exemption certiﬁcates RE 27 RWT exemption certiﬁcates Application (1) A person may apply to the Commissioner for an RWT exemp- tion certiﬁcate if— (a) they are a person listed in section 32E(2) of the Tax Administration Act 1994; and they meet the requirements of section 32G of that Act.
(b) When certiﬁcate expires (2) An RWT exemption certiﬁcate expires if— (3) (a) (b) the holder loses the basis of their exemption; or the Commissioner cancels the certiﬁcate under section 32L of the Tax Administration Act 1994.

Notifying Commissioner If the holder of an RWT exemption certiﬁcate becomes aware they no longer meet the requirements, they must notify the Commissioner under section 32K of the Tax Administration Act 1994.
Deﬁned in this Act: Commissioner, notify, RWT exemption certiﬁcate Compare: 2004 No 35 ss NF 9(1), NF 11(1), (2) RE 28 When certiﬁcates expire (1) When this section applies This section applies in a month when a person’s RWT exemp- tion certiﬁcation expires.

But the section does not apply if the person continues to be required to withhold RWT in the course of carrying out a taxable activity.
2784 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RE 29 (2) Payment of outstanding amounts of tax The person must pay to the Commissioner all amounts of RWT withheld and not paid to the Commissioner by the 20th day of the month following the month in which the certiﬁcate expired.
Deﬁned in this Act: amount, Commissioner, pay, RWT, RWT exemption cer- tiﬁcate, taxable activity Compare: 2004 No 35 s NF 4(6) RE 29 Establishing whether person holds certiﬁcate (1) (2) (3) When this section applies This section applies for the purposes of section RE 5(2) to set out the ways available to person A to establish whether person B is a person holding an RWT exemption certiﬁcate.
Requirements Person A may establish that— (a) they have taken reasonable steps to conﬁrm that person B is a person listed in section 32E(2)(a) to (h) of the Tax Administration Act 1994; or except in relation to a person listed in section 32E(2)(k) or (l) or to whom a certiﬁcate has been provided under section 32I, they have been given person B’s tax ﬁle number and have been notiﬁed that person B holds an RWT exemption certiﬁcate; or they have seen person B’s certiﬁcate and have taken reasonable steps to conﬁrm that person B is the person named in the certiﬁcate.
(b) (c) Additional requirements In addition to the requirements of subsection (2), the follow- ing requirements must be met in relation to person B’s RWT exemption certiﬁcate: (a) no notice of cancellation has been published in the Gazette— (i) for interest, more than 5 working days before the date on which the money was lent: for a dividend or a taxable Maori authority distri- bution, more than 5 working days before the date on which payment was made: (ii) (b) person A has not been advised by the Commissioner or person B of a cancellation of a certiﬁcate more than 2785 Part R s RE 30 Income Tax Act 2007 Reprinted as at 2 September 2013 5 working days before the date on which payment is made: person A has no other grounds for believing that person B is not eligible for a certiﬁcate.
(c) (4) (5) Later certiﬁcate For the purposes of subsection (3)(a) and (b), if a notice of can- cellation has been published or if person A has been advised as described, the requirements are still met if— (a) a certiﬁcate has been provided to person B and notiﬁed in the Gazette in the period that is after the notice of cancellation and more than 5 working days before the date on which the payment is made; or person A has seen a certiﬁcate provided to person B after the date of publication of the notice of cancellation.
(b) When person B listed or income of particular type For the purposes of this section, person A has no ground for believing that the payment is income derived by a person other than person B when— (a) person B is a person listed in section 32E(2)(a) to (h) of the Tax Administration Act 1994; and the payment is not interest, a dividend, or a taxable Maori authority distribution derived by person B as trustee on behalf of a third person.
(b) Deﬁned in this Act: Commissioner, dividend, income, interest, notice, notify, pay, RWT exemption certiﬁcate, tax ﬁle number, taxable Maori authority dis- tribution, trustee, working day Compare: 2004 No 35 s NF 2(7) RE 30 When unincorporated bodies hold certiﬁcates When this section applies This section applies when— (a) an unincorporated body that is carrying on a taxable activity holds an RWT exemption certiﬁcate; and the exemption relates to the carrying on of the taxable activity.
(b) Treatment of payments made by unincorporated bodies For the purposes of the RWT rules, a payment that the body makes in the course of carrying on the taxable activity is (1) (2) 2786 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RE 30 (3) (4) (5) (6) (7) (8) treated as a payment made by the body and not by a member of the body.

This subsection overrides subsection (7).


Treatment of payments to members of unincorporated bodies For the purposes of the RWT rules, a payment made to a mem- ber of the body in their capacity as a member and in the course of carrying on the taxable activity of the body is treated as a payment made to the body and not to the member.
Joint and several liability for amounts of tax Each member of the body is jointly and severally liable for the RWT that the body is required to pay for as long as the member remains part of the body.
Natural persons, partnerships, joint ventures, trustees For the purposes of subsection (4),— (a) if the member is a natural person, their estate is liable after their death for an amount payable that remains un- paid: if the body is a partnership, joint venture, or the trustees of a trust, a member continues as a member until the date the Commissioner is notiﬁed of a change of mem- bership.
(b) Members and committees Subsection (7) applies to an unincorporated body other than a partnership, joint venture, or the trustees of a trust, when the business of the body is managed by the members or a commit- tee of its members.

Responsibility of committee ofﬁcers and members If something is required to be done under the RWT rules by or on behalf of the body, each member holding ofﬁce as presi- dent, chair, treasurer, secretary, or a similar ofﬁce is jointly and severally responsible.
In default, each member holding ofﬁce bears the responsibility.

Action taken by 1 ofﬁcer or commit- tee member is sufﬁcient.

Joint and several liability for actions required If something is required to be done under the RWT rules by or on behalf of the body, each member is jointly and severally liable to do it.

However, action taken by 1 member is sufﬁcient.

Subsection (7) overrides this subsection.


2787 Income Tax Act 2007 Reprinted as at 2 September 2013 Changes in membership (9) A change in membership of the unincorporated body has no effect for the purposes of the RWT rules.

Subsection (5)(b) overrides this subsection.

(10) Some deﬁnitions In this section,— member means a partner, joint venturer, a trustee, or a member of a body.
Deﬁned in this Act: amount, member, partner, partnership, pay, RWT, RWT exemption certiﬁcate, RWT rules, taxable activity, trustee Compare: 2004 No 35 s NF 10 Section RE 30(10) partnership and partner: repealed, on 1 April 2008, by section 22(1) of the Taxation (Limited Partnerships) Act 2008 (2008 No 2).
Subpart RF—Withholding tax on non-resident passive income (NRWT) Contents Introductory provisions RF 1 NRWT rules and their application RF 2 Non-resident passive income Page 2789 2790 RF 3 Obligation to withhold amounts of tax for non-resident 2793 Withholding obligations passive income RF 4 Non-resident passive income received by agents and others RF 5 When amounts of tax already withheld RF 6 When amounts of tax not withheld or partly withheld Calculating amounts of tax RF 7 General rate for NRWT RF 8 Certain dividends RF 9 When dividends fully imputed or fully credited RF 10 Non-cash dividends RF 11 Dividends paid to companies associated with non-residents RF 11B Dividends paid by companies in certain situations RF 12 Interest paid by approved issuers or transitional residents RF 12B Interest derived jointly with residents 2794 2794 2795 2796 2796 2797 2799 2802 2803 2803 2805 2788 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RF 1 RF 12C Amount derived from non-resident life insurer becoming 2805 resident Paying amounts of tax RF 13 Basis for payment of amounts of tax for non-resident passive income RF 14 Treatment of FDP credits RF 15 Commissioner’s power to vary amounts of tax RF 16 Relationship with RSCT rules 2806 2806 2807 2807 Introductory provisions RF 1 NRWT rules and their application (1) (2) (3) (c) Meaning The NRWT rules means— this subpart; and (a) section LB 5 (Tax credits for non-resident withholding (b) tax); and sections LJ 1 to LJ 3, LJ 6, and LJ 7 (which relate to tax credits for foreign income tax); and sections LK 1 to LK 5, and LK 7 (which relate to tax credits related to attributed CFC income); and sections 32M, 49, 100, Part 9, and sections 165B and 185 of the Tax Administration Act 1994.
(d) (e) Application The NRWT rules apply to a person who makes a payment that consists of non-resident passive income.

What this section does not apply to This section does not apply to an amount referred to in section CC 1(2)(a) to (d) (Land) to which section CC 9 (Royalties) applies.
Exception: certain income from land (4) Despite subsection (3), this section does apply to non-resident passive income that is an amount paid for— (a) the exploitation of, or right to exploit, plant material or a naturally occurring material or mineral arising in or on the land: 2789 Part R s RF 2 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) the removal of, or right to remove, plant material or a naturally occurring material or mineral arising in or on the land.
Deﬁned in this Act: amount, non-resident passive income, NRWT rules, pay Compare: 2004 No 35 s OB 1 “NRWT rules” Section RF 1(3) heading: added (with effect on 1 April 2008), on 7 December 2009, by section 111(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section RF 1(3): added (with effect on 1 April 2008), on 7 December 2009, by section 111(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section RF 1(4) heading: added (with effect on 1 April 2008), on 7 December 2009, by section 111(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section RF 1(4): added (with effect on 1 April 2008), on 7 December 2009, by section 111(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section RF 1 list of deﬁned terms amount: inserted (with effect on 1 April 2008), on 7 December 2009, by section 126 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
RF 2 Non-resident passive income Interest, certain dividends, and royalties (1) Non-resident passive income means income having a source in New Zealand that a non-resident derives and that consists of— (a) (b) (c) a dividend other than an investment society dividend: a royalty: an investment society dividend when the non-resident is not engaged in business in New Zealand through a ﬁxed establishment in New Zealand: interest when the non-resident is not engaged in busi- ness in New Zealand through a ﬁxed establishment in New Zealand.
(d) (2) Exclusions The following amounts derived by a non-resident are excluded from non-resident passive income: (a) an amount of exempt income: 2790 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RF 2 (b) (c) [Repealed] an amount of excluded income under sections CX 56B and CX 56C (which relate to attributed PIE income), as applicable.
(3) When subsection (4) applies Subsection (4) applies in an income year when a person derives non-resident passive income consisting of— (a) (b) a dividend other than an investment society dividend: a royalty for the use, production, or reproduction of, or for the right to use, produce, or reproduce, a literary, dramatic, musical, or artistic work in which copyright subsists: interest or a royalty derived by a life insurer from a company resident in New Zealand when the interest or royalty is treated as arising as a result of the life insurer’s election under section EY 49 (Non-resident life insurer becoming resident): interest or an investment society dividend when the per- son paying and the person deriving the interest or divi- dend are not associated persons.
(c) (d) (4) Final withholding If the person is a ﬁling taxpayer, the schedular income tax liability for the corresponding tax year under section BC 7 (Income tax liability of person with schedular income) for schedular income that is non-resident passive income is de- termined by the amount of tax required to be withheld under this Part.
Exception: minimum amount (5) Despite subsection (4), if a person derives non-resident passive income consisting of interest, investment society dividends, or a royalty other than those described in subsection (3), the person’s income tax liability for the corresponding tax year is the greater of— (a) the sum of the total non-resident withholding tax (NRWT) for which they are liable and the amount that would be their income tax liability for the tax year if they had not derived non-resident passive income in the tax year: 2791 Part R s RF 2 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) the amount that would be their income tax liability in the absence of this subsection.
Company deriving minimum amount For the purposes of subsection (5) for a company, if the total amount of non-resident passive income and other income de- rived by the company in the corresponding tax year is not more than $1,000, the income tax liability of the company for the tax year is the sum referred to in subsection (5)(a).

Application of ﬁnancial arrangements rules The ﬁnancial arrangements rules do not apply to the calcula- tion of an amount of non-resident passive income.
Interest payable by Commissioner For interest payable under Part 7 of the Tax Administration Act 1994, NRWT withheld by the Commissioner is treated as paid on the date it is withheld.

Sections 50, 55, 100, and Part 9 of that Act do not apply to the Commissioner and that interest, but the other provisions of the NRWT rules do apply.
Deﬁned in this Act: amount, amount of tax, associated person, business, Com- missioner, company, dividend, excluded income, exempt income, ﬁling tax- payer, ﬁnancial arrangements rules, ﬁxed establishment, income, income tax liability, interest, investment society dividend, life insurer, New Zealand, non- resident, non-resident passive income, NRWT, NRWT rules, pay, resident in New Zealand, royalty, schedular income, schedular income tax liability, source in New Zealand, tax year Compare: 2004 No 35 ss NG 1(2)–(4), NG 3, NG 4 Section RF 2(1) heading: substituted (with effect on 1 April 2008), on 6 October 2009, by section 531(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RF 2(1): amended, on 21 December 2010, by section 130(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section RF 2(2)(b): repealed, on 2 November 2012, by section 149 of the Tax- ation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section RF 2(2)(c): added (with effect on 1 April 2008), on 6 October 2009, by section 531(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RF 2(2)(c): amended (with effect on 1 April 2010), on 21 December 2010 (applying for the 2010–11 and later income years), by section 130(2) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section RF 2(2)(c): amended, on 1 April 2010 (applying for the 2010–11 and later income years), by section 531(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
(6) (7) (8) 2792 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RF 3 Section RF 2(5): amended (with effect on 1 April 2008), on 6 October 2009, by section 531(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RF 2 list of deﬁned terms derived from New Zealand: repealed, on 21 December 2010, by section 130(3)(a) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section RF 2 list of deﬁned terms excluded income: inserted (with effect on 1 April 2008), on 6 October 2009, by section 531(5) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RF 2 list of deﬁned terms source in New Zealand: inserted, on 21 De- cember 2010, by section 130(3)(b) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Withholding obligations RF 3 Obligation to withhold amounts of tax for non-resident passive income Withholding amount of tax (1) A person who makes a payment of non-resident passive in- come must withhold the amount of tax for the payment and pay it to the Commissioner.

The obligation to withhold arises under section RA 6(2) (Withholding and payment obligations for passive income) at the time of payment.
Exclusion (2) Despite subsection (1), no obligation to withhold NRWT arises in relation to an amount treated as a dividend under section GB 1(3) (Arrangements involving dividend stripping).
Deﬁned in this Act: amount, amount of tax, Commissioner, dividend, non-resi- dent passive income, NRWT, pay Compare: 2004 No 35 s NG 8(1) Section RF 3(1) heading: inserted (with effect on 1 April 2008), on 7 December 2009, by section 112(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section RF 3(2) heading: added (with effect on 1 April 2008), on 7 December 2009, by section 112(2) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section RF 3(2): added (with effect on 1 April 2008), on 7 December 2009, by section 112(2) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section RF 3 list of deﬁned terms amount: inserted (with effect on 1 April 2008), on 7 December 2009, by section 126 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

2793 Part R s RF 4 Income Tax Act 2007 Reprinted as at 2 September 2013 Section RF 3 list of deﬁned terms dividend: inserted (with effect on 1 April 2008), on 7 December 2009, by section 126 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section RF 3 list of deﬁned terms NRWT: inserted (with effect on 1 April 2008), on 7 December 2009, by section 126 of the Taxation (Consequential Rate Align- ment and Remedial Matters) Act 2009 (2009 No 63).
RF 4 Non-resident passive income received by agents and others (1) (2) (3) When this section applies This section applies when— (a) an agent or other person in New Zealand receives a pay- ment of non-resident passive income on behalf of a per- son entitled to the payment; and some or all of the amount of tax for the payment has not been withheld.
(b) Obligation to withhold: agent or other person The agent or other person must withhold the amount of tax referred to in subsection (1)(b) for the payment and pay it to the Commissioner.

The obligation to withhold arises at the time of receipt.

Notifying agent or other person If, in the circumstances described in subsection (1)(a), the per- son paying the non-resident passive income has withheld the amount of tax for the payment, they must notify the agent or other person of the amount withheld.
Notiﬁcation must be made at the time the payment is made.

Deﬁned in this Act: amount of tax, Commissioner, New Zealand, non-resident passive income, notify, pay Compare: 2004 No 35 s NG 8(2), (3) RF 5 When amounts of tax already withheld A person is not required to withhold NRWT when some or all of the payment consists of resident passive income to the extent to which the amount of tax has already been collected.
Deﬁned in this Act: amount of tax, non-resident passive income, NRWT, pay, resident passive income Compare: 2004 No 35 s NF 2(6) 2794 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RF 6 RF 6 When amounts of tax not withheld or partly withheld Person as ﬁling taxpayer (1) When a person is required under section RA 6(2) (Withhold- ing and payment obligations for passive income) to withhold NRWT and does not withhold the full amount required under this Part, the person deriving the non-resident passive income is treated for this purpose as a ﬁling taxpayer.
When amount treated as dividend (1B) A person who derives non-resident passive income that is a dividend under section GB 1(3) (Arrangements involving divi- dend stripping) is treated as a ﬁling taxpayer.

(2) (3) (4) Debt payable The amount of tax referred to in subsection (1) as not with- held is a debt payable by the person to the Commissioner, and is treated as having become due under section RA 10 (When obligations not met).
Non-cash dividends Subsection (2) applies in relation to a non-cash dividend de- scribed in section RF 10 as if the amount equal to the amount of tax for the dividend were the amount payable.

Commissioner’s powers to recover In recovering the amount, the Commissioner may take the steps the Commissioner thinks ﬁt in relation to the person in default or liable to pay, whether or not they are the same per- son.
Deﬁned in this Act: amount, amount of tax, Commissioner, ﬁling taxpayer, non-cash dividend, non-resident passive income, NRWT, pay Compare: 2004 No 35 s NG 13 Section RF 6(1B) heading: inserted (with effect on 1 April 2008), on 7 Decem- ber 2009, by section 113(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section RF 6(1B): inserted (with effect on 1 April 2008), on 7 December 2009, by section 113(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

2795 Part R s RF 7 Income Tax Act 2007 Reprinted as at 2 September 2013 Calculating amounts of tax RF 7 General rate for NRWT (1) When this section applies This section applies to a payment of non-resident passive in- come other than a payment to which sections RF 8 to RF 12 apply.
Calculation of amount of tax The amount of tax is calculated using the formula— (2) payment × 0.15.
Deﬁned in this Act: amount of tax, non-resident passive income, NRWT, pay Compare: 2004 No 35 s NG 2(1)(c) RF 8 Certain dividends (1) When this section applies This section applies when a person makes a payment of non- resident passive income that consists of a dividend, except to the extent to which the payment is— (a) (b) an investment society dividend; or a supplementary dividend under subpart LP (Tax credits for supplementary dividends); or [Repealed] a fully imputed dividend; or an amount of a dividend that is fully credited for FDP.
[Repealed] an amount paid by a foreign investment PIE to a no- tiﬁed foreign investor under section HM 44B (NRWT calculation option) to the extent to which the amount represents the fully imputed portion of a dividend and the related supplementary dividend derived by the PIE.

(c) (d) (e) (f) (g) Calculation of amount of tax The amount of tax is calculated using the formula— (2) dividend payment × 0.3.
Deﬁned in this Act: amount of tax, dividend, FDP, foreign investment PIE, fully imputed, investment society dividend, non-resident passive income, noti- ﬁed foreign investor, pay, supplementary dividend Compare: 2004 No 35 s NG 2(1)(a) Section RF 8(1)(c): repealed (with effect on 1 July 2011 and applying for in- come years beginning on or after that date), on 7 May 2012, by section 128(1) of 2796 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RF 9 the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section RF 8(1)(f): repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 128(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section RF 8(1)(g): inserted, on 1 April 2013 (applying for the 2013–14 and later income years), by section 150(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section RF 8 list of deﬁned terms CTR additional dividend: repealed (with effect on 1 July 2011), on 7 May 2012, by section 128(2) of the Taxation (Inter- national Investment and Remedial Matters) Act 2012 (2012 No 34).

Section RF 8 list of deﬁned terms foreign investment PIE: inserted, on 1 April 2013 (applying for the 2013–14 and later income years), by section 150(2) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section RF 8 list of deﬁned terms fully credited for conduit tax relief: repealed (with effect on 1 July 2011), on 7 May 2012, by section 128(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section RF 8 list of deﬁned terms fully imputed: inserted (with effect on 1 April 2008), on 6 October 2009, by section 532 of the Taxation (International Taxa- tion, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RF 8 list of deﬁned terms notiﬁed foreign investor: inserted, on 1 April 2013 (applying for the 2013–14 and later income years), by section 150(2) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

RF 9 When dividends fully imputed or fully credited (1) (2) (3) When this section applies This section applies for the purposes of sections RF 8, RF 10, and RF 11B to determine the extent to which a dividend is fully imputed or fully credited for FDP.
Fully imputed The extent to which a dividend is fully imputed is calculated using the formula— (imputation credit amount + supplementary dividend amount) × 1 tax rate tax rate.
Deﬁnition of items in formula In the formula in subsection (2),— (a) imputation credit amount is the amount of an imput- ation credit attached to the dividend: 2797 Part R s RF 9 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) (c) supplementary dividend amount is the amount of a supplementary dividend payable under subpart LP (Tax credits for supplementary dividends) for the dividend: tax rate is the basic rate of income tax set out in sched- ule 1, part A, clause 2, (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe beneﬁts) for the tax year in which the dividend is paid.
Fully credited for FDP The extent to which a dividend is fully credited for FDP is calculated using the formula— FDP credit amount tax rate.

Deﬁnition of items in formula In the formula in subsection (4),— (a) FDP credit amount is the amount of FDP credit at- tached to the dividend: tax rate is the basic rate of income tax set out in sched- ule 1, part A, clause 2.
(b) Fully credited for conduit tax relief [Repealed] [Repealed] Deﬁnition of item in formula [Repealed] [Repealed] Deﬁned in this Act: amount, dividend, FDP, FDP credit, imputation credit, income tax, pay, supplementary dividend, tax year Compare: 2004 No 35 ss NG 2(3), (4), OB 1 “fully conduit tax relief credited” Section RF 9(1): amended (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 129(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section RF 9(1): amended, on 1 February 2010, by section 114 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section RF 9(1): amended (with effect on 1 April 2008), on 6 October 2009, by section 533(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RF 9(3)(c) tax rate: amended, on 1 April 2008, by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
(4) (5) (6) (7) 2798 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RF 10 Section RF 9(6) heading: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, pursuant to section 129(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section RF 9(6): repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 129(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section RF 9(7) heading: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, pursuant to section 129(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section RF 9(7): repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 129(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section RF 9 list of deﬁned terms fully credited for conduit tax relief: repealed (with effect on 1 July 2011), on 7 May 2012, by section 129(3) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
RF 10 Non-cash dividends (1) (2) (3) When subsections (2) to (5) apply Subsections (2) to (5) apply when a person makes a payment of non-resident passive income that consists of a non-cash divi- dend to the extent to which the amount is not fully imputed.

When amount not taxable bonus issue The amount of tax, when the payment is not a taxable bonus issue, is calculated using the formula— (rate A (1 rate A × dividend payment) + (rate B × amount paid).
Deﬁnition of items in formula In the formula in subsection (2),— (a) (b) rate A is the rate of tax set out in section RF 8: dividend payment is the amount of the dividend paid to the extent to which the amount of the dividend is not fully imputed or fully credited for FDP, as described in section RF 9(2) and (4), disregarding the amount of tax to be withheld: rate B is the rate set out in section RF 7: amount paid is the amount of the dividend paid to the extent to which the amount of the dividend is fully cred- (c) (d) 2799 Part R s RF 10 Income Tax Act 2007 Reprinted as at 2 September 2013 (4) (5) ited for FDP, as described in section RF 9(4), disregard- ing the amount of tax to be withheld.
When amount taxable bonus issue The amount of tax, when the payment is a taxable bonus issue, is calculated using the formula— (rate A × dividend payment) + (rate B × amount paid).
Deﬁnition of items in formula In the formula in subsection (4),— (a) (b) rate A is the rate of tax set out in section RF 8: dividend payment is the amount of the dividend paid calculated under section CD 7(2), CD 7B(2), or CD 8(3) (which relate to bonus issues)— (i) other than a dividend referred to in the item bonus issue: to the extent to which the amount of the dividend is not fully imputed or fully credited for FDP (as described in sections RF 9 and RF 14), before the amount of tax is withheld: (ii) (c) (d) (e) rate B is the rate of tax set out in section RF 7: amount paid is the amount of the dividend calculated under section CD 7(2), CD 7B(2), or CD 8(3) together with the amount of an FDP credit attached to the divi- dend to the extent to which the amount of the dividend is fully credited for FDP, as described in section RF 9(4), before the amount of tax is withheld.
[Repealed] Fully imputed non-cash dividends (5B) When a payment of non-resident passive income consists of a non-cash dividend, the rate of NRWT payable on the amount is 0% to the extent to which the amount is fully imputed.

Amount treated as amount withheld and paid under NRWT rules (6) A person who is liable under this section for NRWT must pay the amount to the Commissioner.
The amount is treated as if it were an amount withheld and paid under the NRWT rules for the purposes of this Act and the Tax Administration Act 1994.
Amount part of dividend 2800 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RF 10 (7) [Repealed] [Repealed] Deﬁned in this Act: amount, amount of tax, Commissioner, dividend, FDP, FDP credit, fully imputed, non-cash dividend, non-resident passive income, NRWT, NRWT rules, pay, tax, taxable bonus issue Compare: 2004 No 35 ss NG 2(1)(b)(ii), NG 9 Section RF 10(1) heading: substituted (with effect on 1 April 2008), on 6 Oc- tober 2009, by section 534(1) of the Taxation (International Taxation, Life In- surance, and Remedial Matters) Act 2009 (2009 No 34).
Section RF 10(1): substituted (with effect on 1 April 2008), on 6 October 2009, by section 534(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RF 10(2) formula: substituted (with effect on 1 April 2008), on 6 Oc- tober 2009, by section 534(2) of the Taxation (International Taxation, Life In- surance, and Remedial Matters) Act 2009 (2009 No 34).
Section RF 10(3)(a): replaced (with effect on 1 July 2011 and applying for in- come years beginning on or after that date), on 7 May 2012, by section 130(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section RF 10(4) formula: amended (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 130(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section RF 10(5)(b): amended (with effect on 1 October 2012), on 2 Novem- ber 2012, by section 151(a) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section RF 10(5)(d): amended (with effect on 1 October 2012), on 2 November 2012, by section 151(b) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section RF 10(5)(d): amended (with effect on 1 July 2011 and applying for in- come years beginning on or after that date), on 7 May 2012, by section 130(3) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section RF 10(5)(e): repealed (with effect on 1 July 2011 and applying for in- come years beginning on or after that date), on 7 May 2012, by section 130(3) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section RF 10(5B) heading: inserted (with effect on 1 April 2008), on 6 October 2009, by section 534(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RF 10(5B): inserted (with effect on 1 April 2008), on 6 October 2009, by section 534(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RF 10(7) heading: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, pursuant to section 130(4) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
2801 Part R s RF 11 Income Tax Act 2007 Reprinted as at 2 September 2013 Section RF 10(7): repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 130(4) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section RF 10 list of deﬁned terms CTR additional dividend: repealed (with effect on 1 July 2011), on 7 May 2012, by section 130(5) of the Taxation (Inter- national Investment and Remedial Matters) Act 2012 (2012 No 34).

Section RF 10 list of deﬁned terms fully credited for conduit tax relief: re- pealed (with effect on 1 July 2011), on 7 May 2012, by section 130(5) of the Tax- ation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section RF 10 list of deﬁned terms fully imputed: inserted (with effect on 1 April 2008), on 6 October 2009, by section 534(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RF 10 compare note: amended (with effect on 1 April 2008), on 6 Oc- tober 2009, by section 534(5) of the Taxation (International Taxation, Life In- surance, and Remedial Matters) Act 2009 (2009 No 34).
RF 11 Dividends paid to companies associated with non-residents (1) When this section applies This section applies when— (a) a non-resident formerly held a share in a company (company A) resident in New Zealand; and (b) while the non-resident held the share, company A was (c) (d) associated with the non-resident; and the non-resident has disposed of the share to another company (company B) that is resident in New Zealand and associated with the non-resident; and some or all of the price for which company B acquired the share remains after the acquisition unpaid or ow- ing in any way to the non-resident, whether or not the amount is secured.
Dividend derived (2) While an amount of the price remains unpaid or owing, a divi- dend paid to company B in relation to the share is treated as having been paid to the non-resident and as derived as a divi- dend by the non-resident at the time the dividend is paid.
Deﬁned in this Act: amount, company, dividend, non-resident, pay, resident in New Zealand, share Compare: 2004 No 35 s NG 14 2802 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RF 12 Section RF 11 heading: substituted, on 1 April 2010 (applying for the 2010–11 and later income years), by section 535(1) of the Taxation (International Taxa- tion, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RF 11(1)(b): substituted, on 1 April 2010 (applying for the 2010–11 and later income years), by section 535(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RF 11(1)(c): substituted, on 1 April 2010 (applying for the 2010–11 and later income years), by section 535(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RF 11 list of deﬁned terms control: repealed, on 1 April 2010, by sec- tion 594 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
RF 11B Dividends paid by companies in certain situations The rate of NRWT payable on a payment of non-resident pas- sive income in the form of a dividend paid by a company to a non-resident is— (a) (ii) to the extent to which the payment is a fully-imputed dividend, 0% if— (i) the non-resident has a direct voting interest in the company of 10% or more: the non-resident does not have a direct voting interest in the company of 10% or more and, in the absence of this section, the post-treaty tax rate for the dividend would be less than 15% if no imputation credits were attached to the payment: to the extent to which the payment is not a fully-imputed dividend, the post-treaty tax rate for the dividend that, in the absence of this section, would apply if no imputation credits were attached to the payment.
(b) Deﬁned in this Act: company, direct voting interest, dividend, fully-imputed dividend, imputation credits, non-resident, non-resident passive income, NRWT, pay, post-treaty tax rate Section RF 11B: replaced (with effect on 1 February 2010), on 2 November 2012, by section 152 of the Taxation (Annual Rates, Returns Filing, and Re- medial Matters) Act 2012 (2012 No 88).
RF 12 Interest paid by approved issuers or transitional residents (1) When this section applies This section applies in relation to an amount of non-resident passive income that consists of— 2803 Part R s RF 12 Income Tax Act 2007 Reprinted as at 2 September 2013 (a) (b) interest that— (i) is paid by an approved issuer under a registered security; and is derived by a person not associated with the ap- proved issuer except by being a beneﬁciary of a trust established for the main purpose of protect- ing and enforcing beneﬁciaries’ rights under the registered security; and is not a payment to which section RF 12B ap- plies: is paid by a transitional resident in relation to money borrowed by them while non-resident; and is not paid in relation to a business carried on through a ﬁxed establishment in New Zealand; and is derived by a person not associated with the transitional resident; and is not a payment to which section RF 12B applies.
(ii) (iii) (ii) (iii) (iv) interest that— (i) Zero-rating The rate of NRWT payable on the amount is 0%.

Interest paid under registered securities For the purposes of the NRWT rules, an amount of interest is paid by an approved issuer under a registered security only if it is treated as paid in relation to a registered security under section 86I of the Stamp and Cheque Duties Act 1971.
Deﬁned in this Act: amount, approved issuer, associated person, business, com- pany, ﬁxed establishment, income, interest, life insurer, New Zealand, non-resi- dent, non-resident passive income, NRWT, NRWT rules, pay, registered secur- ity, resident in New Zealand, transitional resident Compare: 2004 No 35 s NG 2(1)(b)(i), (ib) Section RF 12: substituted (with effect on 1 April 2008), on 6 October 2009, by section 536(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RF 12(1)(a)(ii): replaced (with effect on 1 April 2010), on 7 May 2012 (applying for the 2010–11 and later income years), by section 131(1) of the Tax- ation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section RF 12(3): amended (with effect on 1 April 2008), on 7 December 2009, by section 116 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
(2) (3) 2804 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RF 12C RF 12B Interest derived jointly with residents (1) (2) (3) When payment derived jointly with resident If a person makes a payment of non-resident passive income that consists of interest derived by 2 or more persons jointly and at least 1 person deriving the interest is a New Zealand resident, the amount of tax for the payment is calculated using the formula— (tax rate × (interest paid + foreign withholding tax)) foreign withholding tax.
Deﬁnition of items in formula In the formula,— (a) tax rate is the basic rate set out in schedule 1, part D, clause 3 or 4 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe beneﬁts): interest paid is the amount of interest paid before the amount of tax is determined: foreign withholding tax is the amount of foreign with- holding tax paid or payable on the amount of interest paid.
(b) (c) Treatment as ﬁling taxpayer For the purposes of this section, the New Zealand resident re- ferred to in subsection (1) is treated as a ﬁling taxpayer.
Deﬁned in this Act: amount, amount of tax, ﬁling taxpayer, foreign withholding tax, interest, New Zealand resident, non-resident passive income, pay Compare: 2004 No 35 s NG 2(1)(ab) Section RF 12B: inserted (with effect on 1 April 2008), on 6 October 2009, by section 536(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
RF 12C Amount derived from non-resident life insurer becoming resident (1) When this section applies This section applies when an amount of non-resident passive income is— (a) derived by a life insurer from a company resident in New Zealand; and treated as income as a result of the granting of the in- surer’s application under section EY 49 (Non-resident life insurer becoming resident).
(b) 2805 Part R s RF 13 Income Tax Act 2007 Reprinted as at 2 September 2013 (2) Zero-rating The rate of NRWT payable on the amount is 0%.

Deﬁned in this Act: amount, company, life insurer, New Zealand, non-resident passive income, NRWT, pay, resident in New Zealand Compare: 2004 No 35 s NG 2(1)(b)(iii) Section RF 12C: inserted (with effect on 1 April 2008), on 6 October 2009, by section 536(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Paying amounts of tax RF 13 Basis for payment of amounts of tax for non-resident passive income (1) (2) (3) When this section applies This section applies when a person estimates for a tax year that they will not be required by the NRWT rules to withhold total NRWT of $500 or more.

Two instalments The person may pay to the Commissioner the amount withheld for the tax year in 2 instalments.
When threshold reached during tax year If the threshold amount of $500 is reached at a time in a tax year, the person must pay to the Commissioner— (a) the amount of tax withheld from the start of the tax year to the end of the month in which the threshold is reached; and for the remainder of the tax year, the amount of tax on a monthly basis.
(b) Deﬁned in this Act: amount of tax, Commissioner, NRWT, NRWT rules, pay, tax withheld, tax year Compare: 2004 No 35 s NG 11(1)–(3) RF 14 Treatment of FDP credits A person who is required under the NRWT rules to withhold NRWT for non-resident passive income consisting of a divi- dend is treated as having withheld the amount of tax to the extent of an amount of an FDP credit attached to the dividend.
Deﬁned in this Act: amount of tax, dividend, FDP credit, non-resident passive income, NRWT, NRWT rules Compare: 2004 No 35 s NG 2(2) 2806 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RF 16 RF 15 Commissioner’s power to vary amounts of tax (1) (2) Special circumstances For the purposes of meeting the special circumstances of a case or class of cases, the Commissioner may— (a) relieve a person from an obligation to withhold NRWT under section RA 6(2) (Withholding and payment obli- gations for passive income), RF 3, RF 4, or RF 10; or vary the amount of tax that a person must withhold under section RA 6(2).
(b) Exclusion for certain payments of interest This section does not apply to an amount of tax for a pay- ment of interest derived jointly with a person resident in New Zealand as described in section RF 12(1).

NRWT rules apply as if amended (3) On the exercise of a power under subsection (1), the NRWT rules apply in the particular case as if they were amended in the way in which the power is exercised.
Deﬁned in this Act: amount of tax, Commissioner, interest, NRWT, NRWT rules, pay, resident in New Zealand Compare: 2004 No 35 s NG 10 RF 16 Relationship with RSCT rules (1) (2) (3) When this section applies This section applies when a retirement scheme contributor makes a retirement scheme contribution for a person who is non-resident and pays RSCT for the contribution.
NRWT The contributor is treated as having withheld from the contri- bution an amount of NRWT equal to the lesser of— (a) (b) the amount of RSCT paid: the NRWT payable in relation to the contribution.

Treatment of balance Section LB 6 (Tax credits for RSCT) applies to any balance of RSCT paid.
Deﬁned in this Act: non-resident, NRWT, pay, retirement scheme contribution, retirement scheme contributor, RSCT Compare: 2004 No 35 s NG 16B 2807 Income Tax Act 2007 Reprinted as at 2 September 2013 Section RF 16: added, on 1 April 2008, by section 544 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Subpart RG—Payments for foreign dividends (FDP) [Repealed] Subpart RG: repealed (with effect on 30 June 2009), on 6 October 2009, by section 540(1) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
Contents Introductory provisions [Repealed] RG 1 RG 2 FDP rules and their application [Repealed] Foreign dividends [Repealed] Obligation to make payments [Repealed] RG 3 Obligation to pay FDP [Repealed] Calculation of payments [Repealed] RG 4 Calculating amount of FDP [Repealed] Adjustments to payments [Repealed] Page 2809 2809 2809 2809 RG 5 Credit balance in branch equivalent tax account [Repealed] RG 6 Using loss balances [Repealed] RG 7 Reduction of payments for conduit tax relief [Repealed] 2810 2810 2810 Introductory provisions [Repealed] Heading: repealed (with effect on 30 June 2009), on 6 October 2009, by section 540(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2808 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RG 4 RG 1 FDP rules and their application [Repealed] Section RG 1: repealed (with effect on 30 June 2009), on 6 October 2009, by section 540(1) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
RG 2 Foreign dividends [Repealed] Section RG 2: repealed (with effect on 30 June 2009), on 6 October 2009, by section 540(1) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).

Obligation to make payments [Repealed] Heading: repealed (with effect on 30 June 2009), on 6 October 2009, by section 540(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
RG 3 Obligation to pay FDP [Repealed] Section RG 3: repealed (with effect on 30 June 2009), on 6 October 2009, by section 540(1) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).

Calculation of payments [Repealed] Heading: repealed (with effect on 30 June 2009), on 6 October 2009, by section 540(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
RG 4 Calculating amount of FDP [Repealed] Section RG 4: repealed (with effect on 30 June 2009), on 6 October 2009, by section 540(1) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).

Adjustments to payments [Repealed] Heading: repealed (with effect on 30 June 2009), on 6 October 2009, by section 540(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2809 Part R s RG 5 Income Tax Act 2007 Reprinted as at 2 September 2013 RG 5 Credit balance in branch equivalent tax account [Repealed] Section RG 5: repealed (with effect on 30 June 2009), on 6 October 2009, by section 540(1) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
RG 6 Using loss balances [Repealed] Section RG 6: repealed (with effect on 30 June 2009), on 6 October 2009, by section 540(1) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).

RG 7 Reduction of payments for conduit tax relief [Repealed] Section RG 7: repealed (with effect on 30 June 2009), on 6 October 2009, by section 540(1) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
Subpart RH—Withholding tax on retirement scheme contributions Subpart RH: inserted, on 1 April 2008, by section 545 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Contents RH 1 RSCT rules and their application RH 2 Retirement scheme contributions RH 3 Retirement savings schemes RH 4 Retirement scheme contributors RH 5 Calculating amounts of tax for retirement scheme Calculating amounts of tax contribution RH 6 Calculating amounts of tax on failure to withhold Page 2810 2811 2812 2813 2814 2814 RH 1 RSCT rules and their application Meaning The RSCT rules means— (a) (b) this subpart; and section BE 1(5B) (Withholding liabilities); and (1) 2810 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RH 2 (c) (d) (e) (f) (g) (h) (i) (j) section CX 50B (Contributions to retirement savings schemes); and section LB 6 (Tax credits for RSCT); and section LE 7B (Credit of RSCT for imputation credit); and section LO 2B (Credit of RSCT for Maori authority credit); and section MB 1(5B) (Adjustments for calculation of fam- ily scheme income); and section MB 6 (Treatment of distributions from retire- ment savings schemes); and schedule 1, part D, clause 7; and sections 28C and 48B and Part 9 of the Tax Administra- tion Act 1994.
(2) Application The RSCT rules apply to a retirement scheme contributor who makes a retirement scheme contribution.

Deﬁned in this Act: retirement scheme contribution, retirement scheme con- tributor, RSCT rules Compare: 2004 No 35 s OB 1 “RSCWT rules” Section RH 1: inserted, on 1 April 2008, by section 545 of the Taxation (Busi- ness Taxation and Remedial Matters) Act 2007 (2007 No 109).
RH 2 Retirement scheme contributions Contribution for beneﬁt of members (1) A retirement scheme contribution means a contribution in money by a retirement scheme contributor to a retirement sav- ings scheme for the beneﬁt of a person who is a member of, or who has an ownership interest in, the contributor.

(2) (3) Tax credits For the purposes of subsection (1), money includes an amount of an imputation credit or a Maori authority credit.
Determining amount of contribution The amount of a retirement scheme contribution is the sum of— (a) the amount of the contribution received by the retire- ment savings scheme and not withheld under subsection (5) on behalf of the retirement scheme contributor; and 2811 Part R s RH 3 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) the amount of tax for the retirement scheme contribu- tion.
Payment of amount of tax (4) A retirement scheme contributor who pays an amount that rep- resents a retirement scheme contribution must withhold and pay to the Commissioner the amount of tax for the contribu- tion.

The amount is payable monthly under section RA 15 (Payment dates for interim and other tax payments).

(5) Appointment of agent For the purposes of subsection (4), a contributor may appoint the retirement savings scheme as agent in relation to the cal- culation and payment of the amount of tax.
Deﬁned in this Act: amount, amount of tax, Commissioner, imputation credit, Maori authority credit, retirement savings scheme, retirement scheme contribu- tion, retirement scheme contributor Compare: 2004 No 35 ss NEB 1(2), NEB 2, NEB 3(1)(a), OB 1 “retirement scheme contribution” Section RH 2: inserted, on 1 April 2008, by section 545 of the Taxation (Busi- ness Taxation and Remedial Matters) Act 2007 (2007 No 109).
RH 3 Retirement savings schemes Requirements for entity (1) An entity is a retirement savings scheme for a person if the entity— (a) (b) (c) is a portfolio investment entity; and holds funds from a retirement scheme contribution for the person; and has rules (the distribution rules) governing the distri- bution by the entity of funds in which the person has an interest that— (i) are approved by the Commissioner as fair and reasonable; and (ii) meet the requirements of subsection (2).
Requirements for rules The rules must provide that— (a) the availability of a distribution to the person is re- stricted before the person reaches an age of retirement set out in the rules: (2) 2812 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RH 4 (b) the person is not permitted to make a withdrawal before the age of retirement other than a withdrawal— (i) (ii) (iii) (iv) (v) to repay a student loan under the Student Loan Scheme Act 2011: to pay fees and expenses related to tertiary edu- cation: to buy a home if the person does not own one: that the person would be permitted to make if the scheme were a KiwiSaver scheme under the KiwiSaver Act 2006: in circumstances set out in the distribution rules that have been approved under subsection (1)(c)(i): (c) the entity may require the person to provide information to ensure that the requirements relating to a withdrawal are met.
Deﬁned in this Act: Commissioner, income year, portfolio investment entity, retirement savings scheme, retirement scheme contribution, retirement scheme contributor Compare: 2004 No 35 s NEB 5 Section RH 3: inserted, on 1 April 2008, by section 545 of the Taxation (Busi- ness Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section RH 3(2)(b)(i): amended, on 1 April 2012, by section 223 of the Student Loan Scheme Act 2011 (2011 No 62).
RH 4 Retirement scheme contributors An entity is a retirement scheme contributor for a person for an income year if— the entity is— (a) (i) the trustee of a widely-held trust that is a unit trust: a company other than a close company: a Maori authority; and (ii) (iii) the person is a unit holder, shareholder, or member of the entity: in or before the income year, the entity makes a payment intended to be a retirement scheme contribution for the person.
(b) (c) Deﬁned in this Act: close company, company, income year, Maori author- ity, pay, retirement savings scheme, retirement scheme contribution, retirement 2813 Part R s RH 5 Income Tax Act 2007 Reprinted as at 2 September 2013 scheme contributor, shareholder, trustee, unit holder, unit trust, widely-held trust Compare: 2004 No 35 s NEB 6 Section RH 4: inserted, on 1 April 2008, by section 545 of the Taxation (Busi- ness Taxation and Remedial Matters) Act 2007 (2007 No 109).
Calculating amounts of tax Heading: inserted, on 1 April 2008, by section 545 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

RH 5 Calculating amounts of tax for retirement scheme contribution The amount of tax for a retirement scheme contribution is the amount determined under schedule 1, part D, clause 7 (Basic tax rates: income tax, ESCT, RSCT, RWT, and at- tributed fringe beneﬁts).
Deﬁned in this Act: amount of tax, retirement scheme contribution Compare: 2004 No 35 s NEB 1(1) Section RH 5: inserted, on 1 April 2008, by section 545 of the Taxation (Busi- ness Taxation and Remedial Matters) Act 2007 (2007 No 109).

RH 6 Calculating amounts of tax on failure to withhold (1) When this section applies This section applies when a retirement scheme contributor or retirement savings scheme does not withhold an amount of tax for a retirement scheme contribution under section RH 2(4).
Calculation of amount The amount is calculated using the formula— (2) tax rate tax rate 1 × contribution to scheme – tax already paid.
Deﬁnition of items in formula In the formula,— (a) tax rate is the rate of RSCT for the person set out in schedule 1, part D, clause 7 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe beneﬁts): contribution to scheme is the amount of the retirement scheme contribution received by the retirement savings scheme excluding the amount of tax: (b) (3) 2814 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RH 6 (c) tax already paid is any amount of tax for the contribu- tion that has already been paid.
Deﬁned in this Act: amount, amount of tax, retirement savings scheme, retire- ment scheme contribution, retirement scheme contributor, RSCT Compare: 2004 No 35 s NEB 4(1) Section RH 6: inserted, on 1 April 2008, by section 545 of the Taxation (Busi- ness Taxation and Remedial Matters) Act 2007 (2007 No 109).
Subpart RM—Refunds Contents Introductory provision RM 1 What this subpart does Refunds for overpaid amounts RM 2 Refunds for overpaid tax RM 3 Refunds for overpaid FDP RM 4 Overpayment on amended assessment RM 5 Overpayment on income statements RM 6 Refunds after 4-year period ends [Repealed] RM 7 Refunds to PAYE intermediaries RM 8 Overpaid RWT or NRWT RM 9 Calculations for attributed and non-attributed fringe beneﬁts Use of refunds RM 10 Using refund to satisfy tax liability RM 11 Using GST refund to pay instalment of provisional tax RM 12 Reduction in provisional tax liability Limits on refunds and transfers ICA companies RM 13 Limits on refunds for ICA companies RM 14 Limits on refunds when company stops being ICA company RM 15 Changes in credit balances RM 16 Treatment of amounts not refunded RM 17 Treatment of further income tax paid Companies receiving foreign dividends RM 18 Limits on refunds related to foreign dividends RM 19 Treatment of ﬁnancial arrangements Page 2816 2817 2818 2818 2819 2820 2820 2820 2823 2823 2825 2825 2826 2827 2828 2828 2829 2830 2831 2815 Part R s RM 1 Income Tax Act 2007 Reprinted as at 2 September 2013 RM 20 Treatment of amounts not refunded RM 21 Refunds when loss balances used to reduce net income Maori authorities RM 22 Limits on refunds for Maori authorities RM 23 Limits on refunds when Maori authority stops being Maori authority RM 24 Increase in credit balances RM 25 Treatment of amounts not refunded RM 26 Treatment of further income tax paid RM 27 Application when no credits arise Persons with policyholder credit accounts RM 28 Limits on refunds for PCA persons RM 29 Limits on refunds when person no longer PCA person RM 30 Changes in credit balances RM 31 Treatment of amounts not refunded 2831 2832 2834 2835 2835 2836 2836 2837 2837 2838 2838 2838 Qualifying companies RM 32 Application of sections RM 13 to RM 17 to qualifying 2839 companies Certain unit trusts and group investment funds RM 33 Limits on refunds for certain unit trusts and group 2839 investment funds
 Introductory provision RM 1 What this subpart does This subpart establishes and measures a person’s entitlement to a refund for an overpayment under this Part or another Part of this Act, how the amount of the refund may be used, and the limits placed on the amount and use of a refund for— an imputation credit account (ICA) company: (a) a company receiving a foreign dividend: (b) a Maori authority: (c) a policyholder credit account (PCA) person: (d) a qualifying company: (e) (f) certain unit trusts and group investment funds.
Deﬁned in this Act: amount, company, foreign dividend, group investment fund, ICA company, Maori authority, pay, PCA person, qualifying company, unit trust 2816 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RM 2 Refunds for overpaid amounts RM 2 Refunds for overpaid tax (1) Amount more than required The Commissioner must refund an amount of tax that a person has paid if— (a) (b) the amount is more than the tax required to be paid by the person under this Part; and the Commissioner is satisﬁed, or receives notice, that the person is entitled to the refund before the end of— the 4-year period under section 108 of the Tax (i) Administration Act 1994 for amendment of an assessment, if subparagraph (ii) does not apply; or the extended period allowed by the Commis- if the sioner under section 78B of that Act, Commissioner exercises the discretion under that section.
(ii) Refundable credits (1B) An amount of tax under subsection (1) includes an amount of a refundable tax credit to which section LA 5(5) (Treatment of remaining credits) applies.
(2) Refunds arising from mistakes [Repealed] [Repealed] Deﬁned in this Act: amount of tax, assessment, Commissioner, pay, refundable tax credit, tax Compare: 2004 No 35 s MD 1(1) Section RM 2(1)(b): replaced (with effect on 1 April 2013 and applying to overpayments for the 2013–14 and later tax years), on 17 July 2013, by section 87(1) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Section RM 2(1B) heading: inserted (with effect on 1 April 2008), on 6 October 2009, by section 541(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RM 2(1B): inserted (with effect on 1 April 2008), on 6 October 2009, by section 541(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RM 2(2) heading: repealed (with effect on 1 April 2013 and applying to overpayments for the 2013–14 and later tax years), on 17 July 2013, pursuant to section 87(2) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
2817 Part R s RM 3 Income Tax Act 2007 Reprinted as at 2 September 2013 Section RM 2(2): repealed (with effect on 1 April 2013 and applying to over- payments for the 2013–14 and later tax years), on 17 July 2013, by section 87(2) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Mat- ters) Act 2013 (2013 No 52).
Section RM 2 list of deﬁned terms refundable tax credit: inserted (with ef- fect on 1 April 2008), on 6 October 2009, by section 541(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

RM 3 Refunds for overpaid FDP If a company pays to the Commissioner FDP in relation to a foreign dividend paid to it, and the amount is more than the amount required to be paid under this Part, the Commissioner must refund the overpayment.
Deﬁned in this Act: amount, Commissioner, company, foreign dividend, FDP, pay Compare: 2004 No 35 s NH 4(1) RM 4 Overpayment on amended assessment Assessment increasing tax The Commissioner must refund an amount of tax that a person has paid if— (a) the person paid the amount as a result of an amendment to an assessment increasing the amount of tax payable by the person; and the amount is more than the amount required to be paid by the person under this Part; and the 4-year period under section 108 of the Tax Adminis- tration Act 1994 beginning from the end of the tax year in which the assessment was amended has not ended.
(b) (c) Refunds arising from mistakes [Repealed] [Repealed] Deﬁned in this Act: amount, amount of tax, assessment, Commissioner, pay, tax year Compare: 2004 No 35 s MD 1(2) Section RM 4(1)(c): amended (with effect on 1 April 2013 and applying to overpayments for the 2013–14 and later tax years), on 17 July 2013, by section 88(1) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
(1) (2) 2818 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RM 5 Section RM 4(2) heading: repealed (with effect on 1 April 2013 and applying to overpayments for the 2013–14 and later tax years), on 17 July 2013, pursuant to section 88(2) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Section RM 4(2): repealed (with effect on 1 April 2013 and applying to over- payments for the 2013–14 and later tax years), on 17 July 2013, by section 88(2) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Mat- ters) Act 2013 (2013 No 52).
Section RM 4 list of deﬁned terms income year: repealed (with effect on 1 April 2013 and applying to overpayments for the 2013–14 and later tax years), on 17 July 2013, by section 88(3)(a) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Section RM 4 list of deﬁned terms tax year: inserted (with effect on 1 April 2013 and applying to overpayments for the 2013–14 and later tax years), on 17 July 2013, by section 88(3)(b) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

RM 5 Overpayment on income statements (1) When this section applies This section applies when an income statement has been pro- vided to a person and the result is that an amount of tax must be refunded to the person.
For the purposes of this section, the amount of tax must be more than $200.

Refundable credits (1B) An amount of tax under subsection (1) includes an amount of a refundable tax credit to which section LA 5(5) (Treatment of remaining credits) applies.

(2) (3) Refund on conﬁrmation of correctness The Commissioner may refund the amount of tax only after the person has conﬁrmed that the income statement is correct.
Threshold amount The Governor-General may make an Order in Council increas- ing the amount set out in subsection (1).

Deﬁned in this Act: amount of tax, Commissioner, income statement, refund- able tax credit Compare: 2004 No 35 s MD 1(1A) Section RM 5(1B) heading: inserted (with effect on 1 April 2008), on 6 October 2009, by section 542(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RM 5(1B): inserted (with effect on 1 April 2008), on 6 October 2009, by section 542(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

2819 Part R s RM 6 Income Tax Act 2007 Reprinted as at 2 September 2013 Section RM 5 list of deﬁned terms refundable tax credit: added (with ef- fect on 1 April 2008), on 6 October 2009, by section 542(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
RM 6 Refunds after 4-year period ends [Repealed] Section RM 6: repealed (with effect on 1 April 2013 and applying to overpay- ments for the 2013–14 and later tax years), on 17 July 2013, by section 89(1) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
RM 7 Refunds to PAYE intermediaries (1) (2) When this section applies This section applies when a PAYE intermediary pays to the Commissioner an amount of tax for a PAYE income payment for an employer— (a) relying on a payment made to the trust account of the intermediary— by the employer and later dishonoured; or (i) (ii) mistakenly by a person and later recovered from the intermediary: (b) mistakenly from funds not provided by the employer for a purpose related to the PAYE income payment.
Refund to intermediary The Commissioner must refund the amount of tax to the inter- mediary.
Deﬁned in this Act: amount of tax, Commissioner, employer, pay, PAYE inter- mediary, PAYE income payment Compare: 2004 No 35 s NBA 7 RM 8 Overpaid RWT or NRWT When this section applies This section applies when a person is required to withhold and pay to the Commissioner an amount of resident withholding tax (RWT) or non-resident withholding tax (NRWT), and the amount is more than the amount required to be paid under this Part.
(1) 2820 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RM 8 (2) (3) (4) Refund to person deriving payment or person withholding amount The Commissioner must refund the amount of the overpay- ment to— (a) the person who derives the payment from which the amount of tax was withheld; or the person who withheld the amount if they have paid the amount of the overpayment to the person deriving the payment and not subtracted the amount under sec- tion RA 12(5) and (6) (Adjustment to correct errors: certain excess amounts).
(b) When subsections (4) and (5) apply Subsections (4) and (5) apply when— (a) a holder of an attributing interest in a FIF receives a distribution from which an amount of tax for resident passive income has been withheld; and section CD 36 (Foreign investment fund income) ap- plies to the distribution.
Certain FIF income: application by holder The holder may apply for a refund if— (a) they apply before the next 31 March after the date on which the amount was withheld, with supporting in- formation to show that the threshold referred to in sec- tion CQ 5(1)(d) (When FIF income arises) has been ex- ceeded for their corresponding income year; and the person making the distribution has not— paid them a refund of the amount; or (i) applied themselves under subsection (5) for a re- (ii) fund in relation to the amount; and they notify the person making the distribution of their application under this subsection.
(b) (b) (c) (5) Certain FIF income: application by payer The person making the distribution may apply for a refund if— they apply before the next 31 March after the date on (a) which the amount was withheld, with supporting infor- mation to show the payment has been made to the holder without any subtraction permitted by section RA 12(5) 2821 Part R s RM 8 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) (c) and (6) (Adjustment to correct errors: certain excess amounts); and the holder has not applied for a refund under subsec- tion (4) in relation to the amount; and they provide, in relation to the amount,— (i) a statement that they will not include particulars in an RWT withholding reconciliation statement made under section 51 of the Tax Administration Act 1994; and the disclosure information required by section 52 of that Act.
(ii) Use of refund (6) An amount of a refund paid under subsection (4) or (5) may be used under section RM 10 to satisfy a liability under the Inland Revenue Acts.
Deﬁned in this Act: amount, amount of tax, attributing interest, Commissioner, corresponding income year, FIF, Inland Revenue Acts, notify, NRWT, pay, resi- dent passive income, RWT Compare: 2004 No 35 ss MD 1(4)(b), (c), NF 7(1), (2), (5), NG 16(1), (1A) Section RM 8(3) heading: added (with effect on 1 April 2008), on 7 December 2009, by section 117(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section RM 8(3): added (with effect on 1 April 2008), on 7 December 2009, by section 117(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section RM 8(4) heading: added (with effect on 1 April 2008), on 7 December 2009, by section 117(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section RM 8(4): added (with effect on 1 April 2008), on 7 December 2009, by section 117(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section RM 8(5) heading: added (with effect on 1 April 2008), on 7 December 2009, by section 117(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section RM 8(5): added (with effect on 1 April 2008), on 7 December 2009, by section 117(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section RM 8(6) heading: added (with effect on 1 April 2008), on 7 December 2009, by section 117(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section RM 8(6): added (with effect on 1 April 2008), on 7 December 2009, by section 117(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

2822 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RM 10 Section RM 8 list of deﬁned terms attributing interest: inserted (with effect on 1 April 2008), on 7 December 2009, by section 126 of the Taxation (Conse- quential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section RM 8 list of deﬁned terms corresponding income year: inserted (with effect on 1 April 2008), on 7 December 2009, by section 126 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section RM 8 list of deﬁned terms FIF: inserted (with effect on 1 April 2008), on 7 December 2009, by section 126 of the Taxation (Consequential Rate Align- ment and Remedial Matters) Act 2009 (2009 No 63).
Section RM 8 list of deﬁned terms Inland Revenue Acts: inserted (with effect on 1 April 2008), on 7 December 2009, by section 126 of the Taxation (Conse- quential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section RM 8 list of deﬁned terms notify: inserted (with effect on 1 April 2008), on 7 December 2009, by section 126 of the Taxation (Consequential Rate Align- ment and Remedial Matters) Act 2009 (2009 No 63).
Section RM 8 list of deﬁned terms resident passive income: inserted (with effect on 1 April 2008), on 7 December 2009, by section 126 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

RM 9 Calculations for attributed and non-attributed fringe beneﬁts (1) (2) When this section applies This section applies when an employer chooses to pay fringe beneﬁt tax (FBT) under sections RD 47 to RD 53 (which relate to attributed fringe beneﬁts and non-attributed fringe beneﬁts).
Result of calculations If the result of the calculations of FBT on attributed fringe beneﬁts or non-attributed fringe beneﬁts is negative, the Com- missioner must refund to the employer an amount equal to the deﬁciency.
Deﬁned in this Act: amount, Commissioner, employer, FBT, pay Compare: 2004 No 35 s ND 10(4)(a) RM 10 Using refund to satisfy tax liability Use of refunds (1) When this section applies This section applies when a person is entitled to a refund of an amount of tax under sections RM 2, RM 4, and RM 5.

An amount of tax under this section includes an amount of a refundable tax credit under section LA 5(5) (Treatment of 2823 Part R s RM 10 Income Tax Act 2007 Reprinted as at 2 September 2013 remaining credits).
Section LB 4 (Tax credits for families) may apply to adjust the amount available.

Request for particular application The person may ask under section 173T of the Tax Adminis- tration Act 1994 for the Commissioner to apply some or all of the amount on a particular date to satisfy a liability under the Inland Revenue Acts.
Commissioner applying refund If no request is made under subsection (2), the Commissioner may apply the amount of the refund to satisfy a liability that the person has under the Inland Revenue Acts.

(2) (3) Exclusion (4) Despite subsection (3), the Commissioner must not apply the amount of a refund under section LA 7(1)(a) (Remaining re- fundable credits: tax credits under social policy schemes) or RM 8 to satisfy a liability of the person.
Deﬁned in this Act: amount, amount of tax, Commissioner, Inland Revenue Acts, refundable tax credit Compare: 2004 No 35 ss MD 1(3), (3A), MD 1(4) Section RM 10(1): substituted (with effect on 1 April 2008), on 6 October 2009, by section 543(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RM 10(1): amended (with effect on 1 April 2013), on 17 July 2013, by section 90 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Section RM 10(1): amended (with effect on 1 April 2008), on 6 October 2009, by section 543(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RM 10(4): amended (with effect on 1 April 2008), on 2 November 2012, by section 153 of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section RM 10(4): amended (with effect on 1 April 2008), on 6 October 2009, by section 543(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RM 10(4): amended, on 1 April 2008, by section 546 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section RM 10 list of deﬁned terms refundable tax credit: added (with ef- fect on 1 April 2008), on 6 October 2009, by section 543(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2824 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RM 12 RM 11 Using GST refund to pay instalment of provisional tax (1) (2) (3) When this section applies This section applies when a person who is liable to pay pro- visional tax has a goods and services tax (GST) refund in a taxable period as a result of the application of section 20(5) of the Goods and Services Tax Act 1985.
Using amount The person may choose to use the amount of the refund to pay some or all of an instalment of provisional tax that is payable on the same instalment date.

Reduction in amount If the Commissioner amends the assessment reducing the amount of the refund, the person’s payment of provisional tax arising from the GST refund is the reassessed amount.
Deﬁned in this Act: amount, assessment, Commissioner, GST, instalment date, pay, provisional tax, taxable period Compare: 2004 No 35 s MB 11 RM 12 Reduction in provisional tax liability (1) (2) When this section applies This section applies when the amount of provisional tax payable for a tax year is reduced by the person liable to pay the provisional tax, or by the Commissioner under section 119(2) of the Tax Administration Act 1994.
Reduction in amount of provisional tax payable If the person applies in writing for a refund of the amount of provisional tax already paid that is as a result of the reduction more than the amount that would have been payable in relation to earlier instalment dates for the tax year, the Commissioner must— (a) apply the overpayment as the person asks under sec- tion 173T of the Tax Administration Act 1994 or, if no request is made, in a way that the Commissioner de- termines in payment of tax or another amount that is payable by them; and refund any balance of the overpayment.
(b) 2825 Part R s RM 13 Income Tax Act 2007 Reprinted as at 2 September 2013 (3) Reduction in assessment If the person’s residual income tax for the relevant tax year is no more than $2,500, and they apply in writing for the refund of an amount of provisional tax that has been determined under section RC 9 (Provisional tax payable in instalments) and al- ready paid, other than on a ﬁnal instalment, the Commissioner must— (a) apply the amount as the person asks under section 173T of the Tax Administration Act 1994 or, if no request is made, in a way the Commissioner determines in pay- ment of tax or another amount that is payable by them; and refund any balance of the amount.
(b) Treatment of amount refunded or credited (4) When an overpayment or amount of provisional tax for a tax year has been applied or refunded under subsection (2) or (3)— (a) a later instalment payable under section RC 10 or RC 11 (which relate to the methods used to calculate the amount of an instalment), as applicable, is calcu- lated as if the total instalments previously payable were reduced by the amount of the overpayment or amount; and the overpayment or amount applied or refunded is, from the date of action taken by the Commissioner, treated as not being provisional tax paid for the tax year.
Deﬁned in this Act: amount, Commissioner, instalment date, pay, provisional tax, residual income tax, tax, tax year Compare: 2004 No 35 s MB 36 (b) Limits on refunds and transfers ICA companies RM 13 Limits on refunds for ICA companies When this section applies This section applies when an ICA company is entitled to— (a) a refund of income tax under sections RM 2, RM 4, and RM 5; or (1) 2826 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RM 14 (b) transfer an amount under section RC 32 (Wholly-owned groups of companies).
(2) (3) Amount of refund or transfer limited The amount of the refund or transfer must be no more than the credit balance of the ICA company in the imputation credit account at the latest of the following dates: (a) (b) the last day of the tax year that has just ended: the last day of a period for which the company is re- quired to ﬁle a return under section 70(1) of the Tax Administration Act 1994: the last day of a period for which the company ﬁled an annual ICA return under section 70(3) of that Act.
(c) Time for ﬁling returns Subsection (2) does not apply if the ICA company has an ex- tension of time to ﬁle its annual ICA return for a tax year.

In that case, the total amount refunded or transferred must be no more than the credit balance of the ICA company in its imput- ation credit account on the last day of the tax year to which the ICA return relates.
Deﬁned in this Act: amount, annual ICA return, ICA company, imputation credit account, income tax, tax year Compare: 2004 No 35 s MD 2(1), (1A) Section RM 13(1)(a): amended (with effect on 1 April 2013), on 17 July 2013, by section 91 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
RM 14 Limits on refunds when company stops being ICA company (1) (2) When this section applies This section applies when a company stops being an ICA com- pany and is entitled to have a refund or to make a transfer under section RM 13(1) for a tax year in which it was an ICA com- pany.
Limit on amount of refund or transfer The total amount refunded or transferred must be no more than the ﬁnal balance of the imputation credit account arising as a 2827 Part R s RM 15 Income Tax Act 2007 Reprinted as at 2 September 2013 debit under section OB 56 (ICA ﬁnal balance) just before the company stopped being an ICA company.
Deﬁned in this Act: amount, company, ICA company, imputation credit ac- count, tax year Compare: 2004 No 35 s MD 2(2) RM 15 Changes in credit balances Credit balance reduced (1) A credit balance is treated as reduced by the amount of a refund or transfer as described in sections RM 13 and RM 14 that is made earlier in the same tax year.
Credit balance increased (2) A credit balance is treated as increased by an amount equal to a debit to the company’s imputation credit account under sec- tion OB 41 (ICA debit for loss of shareholder continuity) aris- ing after a credit is made to the company’s imputation credit account for an amount that has satisﬁed the company’s income tax liability for the tax year and before the date on which the credit balance is to be determined under sections RM 13 and RM 14.
Deﬁned in this Act: amount, company, imputation credit account, income tax liability, tax year Compare: 2004 No 35 s MD 2(3), (4) RM 16 Treatment of amounts not refunded When this section applies This section applies when, through the application of sections RM 13 and RM 14, an overpayment of income tax by a com- pany is not refunded to the company or transferred within a wholly-owned group of companies.
Satisfying liabilities or retained The amount prevented from being a refund or transfer— (a) is applied to satisfy an income tax or provisional tax liability of the company for the tax year of the entitle- ment; and (b) may be used by the company to satisfy an income tax or provisional tax liability for a tax year other than the tax year of entitlement; and (1) (2) 2828 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RM 17 (c) is retained in the company’s tax account with the Com- missioner to the extent to which paragraphs (a) and (b) do not apply, whether because the company is liquidated or for another reason.
Credit for provisional tax (3) Despite subsection (2), the amount may be credited on a pro- visional tax instalment date if residual income tax is treated under section 120K of the Tax Administration Act 1994 as payable on the date set out in Part 7 of that Act.

(4) Relationship with section RZ 6 Section RZ 6 (Limits on refunds: transitional dates) overrides subsection (2)(c).
Deﬁned in this Act: amount, Commissioner, company, income tax, income tax liability, instalment date, liquidation, pay, provisional tax, residual income tax, tax account with the Commissioner, tax year, wholly-owned group of compan- ies Compare: 2004 No 35 s MD 2(5), (5A) RM 17 Treatment of further income tax paid (1) (2) When this section applies This section applies for the purposes of sections RM 2, RM 4, and RM 5 when a company pays further income tax under sections OB 65 and OB 66 (which relate to further tax payable by ICA companies).
No refund The company is not entitled to a refund of the amount of fur- ther income tax paid which is treated as tax paid to satisfy an obligation yet to arise.

Deﬁned in this Act: amount, company, further income tax, pay Compare: 2004 No 35 s MD 2(6) Section RM 17(1): amended (with effect on 1 April 2013), on 17 July 2013, by section 92 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
2829 Part R s RM 18 Income Tax Act 2007 Reprinted as at 2 September 2013 Companies receiving foreign dividends RM 18 Limits on refunds related to foreign dividends Maximum refund (1) Despite section RM 3, if the overpayment described in that section relates to an earlier tax year, the refund must be no more than the relevant credit balance as follows: (a) (b) (c) for an FDPA company, the credit balance of the com- pany’s FDP account at the end of the tax year that is before the tax year in which the entitlement to the re- fund arises: for an ICA company that is not an FDPA company, the credit balance of the company’s imputation credit ac- count at the end of the tax year that is before that in which the entitlement to the refund arises: for a company described in paragraph (a) or (b) that ends its residence in New Zealand, the credit balance, just before the company stops being resident, of— (i) the company’s imputation credit account arising as a debit under section OC 15 (FDPA overpay- ment of FDP); or the company’s FDP account arising as a debit under section OC 26 (FDPA ﬁnal balance).
(ii) Treatment of amount not refunded If the amount of a company’s overpayment is not refunded because it is more than the maximum allowed under subsection (1), the amount may still be used to reduce FDP for a foreign dividend paid to the company.

Reductions in credit balances For the purposes of this section, a credit balance referred to in subsection (1) is treated as reduced by an earlier refund under this section paid to the company in the tax year in which the entitlement to the refund arises.
The refund of income tax under sections RM 13 to RM 17 in the same tax year must be no more than the relevant credit balance.
Deﬁned in this Act: amount, company, FDP, FDP account, FDPA company, foreign dividend, ICA company, imputation credit account, income tax, pay, resident in New Zealand, tax year Compare: 2004 No 35 s NH 4(2), (3) (2) (3) 2830 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RM 20 RM 19 Treatment of ﬁnancial arrangements (1) (2) When this section applies This section applies when a company is entitled to a refund of FDP under section CD 50(10) to (13) (Outstanding balances of ﬁnancial arrangements).
Credit balance increased The amount of the company’s credit balance under section RM 18(1) is treated as increased by the amount of a debit in the company’s imputation credit account or FDP account aris- ing under section OB 41 or OC 24 (which relate to imputation debits and FDP debits for loss of shareholder continuity), as applicable, after the date on which the payment was made and before the date on which the credit balance is determined under section RM 18(1).
Deﬁned in this Act: amount, company, FDP, FDP account, foreign dividend, imputation credit account, pay Compare: 2004 No 35 s NH 4(4)(a) RM 20 Treatment of amounts not refunded (1) (2) When this section applies This section applies when, through the application of section RM 18(1), an overpayment is not refunded.
Satisfying liabilities or retained The amount prevented from being a refund is— (a) applied to satisfy an income tax or provisional tax li- ability of the company for the tax year of an entitle- ment to a refund or FDP for a foreign dividend that is payable after the date on which the entitlement to the refund arises; and retained by the Commissioner to the extent to which paragraph (a) does not apply, whether because the com- pany is liquidated or for another reason.
(b) Credit for provisional tax (3) Despite subsection (2), the amount may be credited on a pro- visional tax instalment date if residual income tax is treated 2831 Part R s RM 21 Income Tax Act 2007 Reprinted as at 2 September 2013 under section 120KE(5) to (7) of the Tax Administration Act 1994 as payable on the date set out in Part 7 of that Act.
Deﬁned in this Act: amount, Commissioner, company, foreign dividend, FDP, income tax liability, instalment date, liquidation, pay, provisional tax, residual income tax, tax year Compare: 2004 No 35 s NH 4(4)(b) RM 21 Refunds when loss balances used to reduce net income When subsection (2) applies Subsection (2) applies when a company that is liable to pay FDP to the Commissioner has a loss balance that may be used under sections IA 2 to IA 9 (which relate to the treatment of tax losses) to reduce its net income for the income year in which the foreign dividend is paid.
Refund The company is entitled to a refund of an amount equal to the least of the following, as applicable: (a) the amount of FDP that the company pays in the income year in which the foreign dividend is paid; or the amount of the loss balance multiplied by the basic rate of income tax set out in schedule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe beneﬁts) for the income year in which the foreign dividend is paid; or the credit balance of the company’s FDP account at the end of the tax year that has just ended.
(b) (c) (b) Group company’s tax loss This section also applies, treating the group of companies as the company, when— (a) a company (group company A) pays FDP to the Com- missioner; and another company (group company B) that is part of the same group of companies as group company A, has a tax loss for the income year in which the foreign dividend is paid or an earlier income year that may be used under sections IA 2 to IA 9 to reduce the net income of group company A; and (1) (2) (3) 2832 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RM 21 (c) group company B makes the tax loss available so that group company A is able to get a refund of some or all of the payment.
(4) Application and return requirements For this section to apply,— (a) the company must apply to the Commissioner in writ- ing; and the company must meet the return requirements of sec- tion 71B of the Tax Administration Act 1994 for the income year in which the dividend is paid; and if group company B’s tax loss is used, group company B must make an election to use the tax loss in writing.
(b) (c) Reduction in tax loss (5) When a refund is paid under this section, the amount of tax loss is reduced by an amount calculated using the formula— refund tax rate.

(6) Deﬁnition of items in formula In the formula,— (a) (b) refund is the amount of the refund paid to group com- pany A under this section: tax rate is the basic rate of income tax set out in sched- ule 1, part A, clause 2 for the income year that corres- ponds to the tax year referred to in subsection (2)(c).
Late payment penalties (7) Group company A is entitled to a refund of a late payment penalty imposed under section 139B of the Tax Administration Act 1994 in relation to the failure to pay the amount that is refunded.
Deﬁned in this Act: amount, Commissioner, company, corresponding income year, foreign dividend, FDP, FDP account, group of companies, income tax, income year, loss balance, net income, pay, tax loss, tax year Compare: 2004 No 35 s NH 4(5), (6) Section RM 21(2)(b): amended, on 1 April 2008, by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
2833 Part R s RM 22 Income Tax Act 2007 Reprinted as at 2 September 2013 RM 22 Limits on refunds for Maori authorities Maori authorities When this section applies This section applies when a Maori authority is entitled to a refund of income tax under sections RM 2, RM 4, and RM 5.
Amount of refund limited The amount of the refund must be no more than the credit balance of the Maori authority in the Maori authority credit account at the latest of the following dates: (a) (b) the last day of the tax year that has just ended: the last day of a period for which the Maori authority is required to ﬁle a return under section 70B(1) of the Tax Administration Act 1994: the last day of a period for which the Maori authority ﬁles a Maori authority credit account return under sec- tion 70B(3) of that Act.
(c) Time for ﬁling returns Subsection (2) does not apply if the Maori authority has an extension of time to ﬁle its Maori authority credit account re- turn for a tax year, and ﬁles the return with the extended time.

In that case, the total amount refunded must be no more than the credit balance of the Maori authority in its Maori author- ity credit account on the last day of the tax year to which the return relates.
Satisfying liabilities or retained If the Maori authority has a refund of income tax, and an amount paid in excess is not refunded because of the applica- tion of subsection (2) or section RM 23, the amount prevented from being a refund or transfer— (a) is used to satisfy an income tax or provisional tax liabil- ity of the Maori authority for the tax year of the entitle- ment; and (b) may be used by the Maori authority to satisfy an income tax or provisional tax liability for a tax year other than the tax year of entitlement; and is retained in the authority’s tax account with the Com- missioner to the extent to which paragraphs (a) and (b) do not apply.
(c) (1) (2) (3) (4) 2834 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RM 24 Credit for provisional tax (5) Despite subsection (4), the amount may be credited on a pro- visional tax instalment date if residual income tax is treated under section 120K of the Tax Administration Act 1994 as payable on the date set out in Part 7 of that Act.

(6) Relationship with section RZ 6 Section RZ 6 (Limits on refunds: transitional dates) overrides subsection (4)(b).
Deﬁned in this Act: amount, income tax, income tax liability, instalment date, Maori authority, Maori authority credit account, Maori authority credit account return, provisional tax, residual income tax, tax account with the Commissioner, tax year Compare: 2004 No 35 s MD 2B(1), (1B) Section RM 22(1): amended (with effect on 1 April 2013), on 17 July 2013, by section 93 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
RM 23 Limits on refunds when Maori authority stops being Maori authority (1) (2) When this section applies This section applies when a Maori authority stops being a Maori authority and is entitled to a refund under section RM 2, RM 4, or RM 5 for a tax year in which it maintained a Maori authority credit account.
Limit on amount of refund The amount refunded must be no more than the ﬁnal balance of the Maori authority credit account arising as a debit under section OK 18 (MACA ﬁnal balance) just before the Maori authority stopped being a Maori authority.
Deﬁned in this Act: amount, Maori authority, Maori authority credit account, tax year Compare: 2004 No 35 s MD 2B(2) Section RM 23(1): amended (with effect on 1 April 2013), on 17 July 2013, by section 94 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
RM 24 Increase in credit balances A credit balance is treated as increased by an amount equal to a debit to the Maori authority credit account under section OK 15 (MACA debit for loss of shareholder continuity) arising 2835 Part R s RM 25 Income Tax Act 2007 Reprinted as at 2 September 2013 after the date of payment of instalment B set out in schedule 3, part A (Payment of provisional tax and terminal tax) for the authority’s income year that corresponds to the tax year and before the date on which the credit balance is to be determined under sections RM 22 and RM 23.
Deﬁned in this Act: amount, corresponding income year, Maori authority credit account, pay, tax year Compare: 2004 No 35 s MD 2B(3) RM 25 Treatment of amounts not refunded (1) (2) When this section applies This section applies when, through the application of sections RM 22 and RM 23, an overpayment of income tax by a Maori authority is not refunded to the authority.
Satisfying liabilities or retained The amount prevented from being a refund is— (a) applied to satisfy an income tax or provisional tax li- ability of the Maori authority for the tax year of the en- titlement; and retained by the Commissioner to the extent to which paragraph (a) does not apply.
(b) Credit for provisional tax (3) Despite subsection (2), the amount may be credited on a pro- visional tax instalment date if residual income tax is treated under section 120K of the Tax Administration Act 1994 as payable on the date set out in Part 7 of that Act.
Deﬁned in this Act: amount, Commissioner, income tax, income tax liability, instalment date, Maori authority, pay, provisional tax, residual income tax Compare: 2004 No 35 s MD 2B(4), (4B) RM 26 Treatment of further income tax paid When this section applies This section applies for the purposes of sections RM 2, RM 4, and RM 5 when a Maori authority pays further income tax under section OK 21 or OK 22 (which relate to further income tax for closing debit balance or when Maori authority stops being a Maori authority).
(1) 2836 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RM 28 (2) No refund The authority is not entitled to a refund of the amount of fur- ther income tax paid which is treated as tax paid to satisfy an obligation yet to arise.
Deﬁned in this Act: amount, further income tax, Maori authority, pay, tax Compare: 2004 No 35 s MD 2B(5) Section RM 26(1): amended (with effect on 1 April 2013), on 17 July 2013, by section 95 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

RM 27 Application when no credits arise Sections RM 22 to RM 26 do not apply in relation to an amount of tax paid for which no credit arises under section OK 2 (MACA payment of tax).
Deﬁned in this Act: amount, amount of tax, pay Compare: 2004 No 35 s MD 2B(6) Persons with policyholder credit accounts RM 28 Limits on refunds for PCA persons (1) (2) When this section applies This section applies when a PCA person is entitled to a refund of income tax under sections RM 2, RM 4, and RM 5.
Amount of refund limited The amount of the refund must be no more than the credit balance of the PCA person in the policyholder credit account at the latest of the following dates: (a) (b) the last day of the tax year that has just ended: the last day of a period for which the person is required to ﬁle a return under section 66(4) of the Tax Adminis- tration Act 1994: the last day of a period for which the person ﬁles an annual PCA return under section 66(5) of that Act.
Deﬁned in this Act: amount, annual PCA return, income tax, PCA person, pol- icyholder credit account, tax year Compare: 2004 No 35 s MD 3(1) (c) Section RM 28(1): amended (with effect on 1 April 2013), on 17 July 2013, by section 96 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
2837 Part R s RM 29 Income Tax Act 2007 Reprinted as at 2 September 2013 RM 29 Limits on refunds when person no longer PCA person (1) (2) When this section applies This section applies when a person stops being a PCA person and is entitled to a refund as described in section RM 28(1) for a tax year in which they were a PCA person.

Limit on amount of refund The amount refunded must be no more than the ﬁnal balance of the policyholder credit account just before the person stopped being a PCA person.
Deﬁned in this Act: amount, PCA person, PCA return, policyholder credit ac- count, return, tax year Compare: 2004 No 35 s MD 3(2) RM 30 Changes in credit balances A credit balance is treated as reduced by the amount of an ear- lier refund paid to the person during the same tax year within the limits imposed by sections RM 28 and RM 29.
Deﬁned in this Act: amount, pay, tax year Compare: 2004 No 35 s MD 3(3) RM 31 Treatment of amounts not refunded (1) (2) When this section applies This section applies when, through the application of sections RM 28 and RM 29, an overpayment of income tax by a PCA person is not refunded to the person.
Satisfying liabilities or retained The amount prevented from being a refund— (a) is used to satisfy an income tax or provisional tax liabil- ity of the person for the tax year of the entitlement; and (b) may be used by the person to satisfy an income tax or provisional tax liability for a tax year other than the tax year of entitlement; and retained in the person’s tax account with the Commis- sioner to the extent to which paragraphs (a) and (b) do not apply.
(c) Credit for provisional tax (3) Despite subsection (2), the amount may be credited on a pro- visional tax instalment date if residual income tax is treated 2838 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RM 33 (4) under section 120K of the Tax Administration Act 1994 as payable on the date set out in Part 7 of that Act.

Relationship with section RZ 6 Section RZ 6 (Limits on refunds: transitional dates) overrides subsection (2)(c).
Deﬁned in this Act: amount, Commissioner, income tax, income tax liability, instalment date, pay, PCA person, provisional tax, residual income tax, tax ac- count with the Commissioner, tax year Compare: 2004 No 35 s MD 3(4) Qualifying companies RM 32 Application of sections RM 13 to RM 17 to qualifying companies Sections RM 13 to RM 17 do not apply to an overpayment of tax by a qualifying company that may be refunded to or allocated by the company unless— (a) the overpayment was made as part of or under an ar- rangement— (i) to obtain a tax advantage of a kind referred to in section GB 35 (Imputation arrangements to obtain tax advantage); or to avoid a tax liability of a shareholder under this Act; and (ii) (b) the arrangement, or a part of it, was based on the com- pany’s ability to obtain a refund of tax that the company would have under those sections in the absence of this section.
Deﬁned in this Act: arrangement, pay, qualifying company, shareholder, tax advantage Compare: 2004 No 35 s MD 2(7) Certain unit trusts and group investment funds RM 33 Limits on refunds for certain unit trusts and group investment funds (1) When this section applies This section applies when a public unit trust or group invest- ment fund— 2839 Income Tax Act 2007 Reprinted as at 2 September 2013 (a) (b) (c) is entitled to a refund under section RM 2, RM 4, or RM 5; and goes into liquidation or chooses to become a portfolio investment entity; and at the time of the liquidation or election, has— (i) a credit balance in its available subscribed capital (ASC) account on liquidation; and a zero balance in its imputation credit account.
(ii) (2) (3) Calculating amount of refund The refund must be no more than an amount calculated using the formula— ASC credit balance × maximum imputation ratio.
Deﬁnition of items in formula In the formula,— (a) ASC credit balance is the credit balance in the ASC ac- count of the public unit trust or group investment fund, as applicable: (b) maximum imputation ratio is the maximum permitted ratio calculated under section OA 18(2) (Calculation of maximum permitted ratios), read as if the words “in which the dividend or distribution is paid” in subsection (3) were “in which the liquidation occurs or the election is made”.
Deﬁned in this Act: amount, ASC account, group investment fund, imputation credit account, liquidation, maximum permitted ratio, portfolio investment en- tity, public unit trust Compare: 2004 No 35 s MD 2A Section RM 33(1)(a): amended (with effect on 1 April 2013), on 17 July 2013, by section 97 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Subpart RP—Intermediaries Contents Introductory provision RP 1 What this subpart does Page 2841 2840 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RP 1 PAYE intermediaries Obligations and treatment of PAYE intermediaries PAYE intermediaries RP 2 RP 3 Requirements for listed PAYE intermediaries RP 4 RP 5 RP 6 Operation of PAYE intermediaries’ trust accounts Payment of subsidies to certain PAYE intermediaries Subsidy claims Employers’ responsibilities RP 7 General responsibilities of employers RP 8 Information required from employers RP 9 Authorised transfers from accounts RP 10 When transfers from accounts not authorised RP 11 Employer’s superannuation cash contributions RP 12 When payments made directly to employees PAYE intermediaries’ responsibilities RP 13 General responsibilities of PAYE intermediaries RP 14 Collection, payment, and information requirements RP 15 When employers have authorised transfers from accounts RP 16 Obligations for employer’s superannuation contributions Tax pooling intermediaries RP 17 Tax pooling intermediaries RP 17B Tax pooling accounts and their use RP 18 Deposits in tax pooling accounts RP 19 Transfers from tax pooling accounts RP 19B Transfers for certain expected tax liabilities RP 20 Declining, amending, or reversing transfers RP 21 Refunds from tax pooling accounts 2842 2842 2843 2844 2845 2846 2847 2848 2848 2849 2849 2850 2851 2851 2852 2852 2853 2858 2859 2861 2862 2863 Introductory provision RP 1 What this subpart does This subpart establishes the obligations of PAYE intermediar- ies and tax pooling intermediaries in relation to the collection and payment of tax and the provision of information, and sets out the requirements for the operation of their respective ac- counts.
Deﬁned in this Act: intermediary, pay, PAYE intermediary, tax Compare: 2004 No 35 s MBA 1 2841 Part R s RP 2 Income Tax Act 2007 Reprinted as at 2 September 2013 PAYE intermediaries Obligations and treatment of PAYE intermediaries RP 2 PAYE intermediaries Transferring obligations (1) An employer may arrange to transfer their pay-as-you-earn (PAYE) and employer’s superannuation contribution tax (ESCT) obligations to a person approved under section 15D or 15G of the Tax Administration Act 1994 as a PAYE inter- mediary or a listed PAYE intermediary.
Paying amounts of tax and ﬁling returns (2) A PAYE intermediary or listed PAYE intermediary must, on behalf of an employer who has transferred an obligation to them under subsection (1),— (a) withhold and pay to the Commissioner the amount of tax for a payment under the PAYE rules and the ESCT rules; and ﬁle a return of income relating to the payment and the amount of tax for the payment.
(b) When person no longer intermediary (3) A person who stops being a PAYE intermediary or a listed PAYE intermediary for an employer has the rights and obliga- tions under the PAYE rules and ESCT rules of a PAYE inter- mediary or listed PAYE intermediary, as applicable, in relation to funds that— (a) (b) the employer pays to the person as intermediary; and the person holds at the time they stop being an inter- mediary.
Deﬁned in this Act: amount of tax, Commissioner, employer, ESCT, ESCT rules, listed PAYE intermediary, pay, PAYE, PAYE intermediary, PAYE rules, return of income Compare: 2004 No 35 ss NBA 1, NBA 8, NBB 7(3) RP 3 Requirements for listed PAYE intermediaries For a period in which a person remains a listed PAYE inter- mediary, they must— (a) continue to qualify under section 15D of the Tax Ad- ministration Act 1994 as a PAYE intermediary; and 2842 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RP 4 (b) meet all the obligations under this subpart of a PAYE (c) (d) intermediary; and continue to meet the requirements of section 15F of the Tax Administration Act 1994; and operate technology systems to enable them to return by electronic means a subsidy claim form that contains a correct calculation of the amount of a subsidy under section RP 5 and section 15M of the Tax Administration Act 1994.
Deﬁned in this Act: amount, listed PAYE intermediary, PAYE intermediary, subsidy claim form Compare: 2004 No 35 s NBB 3 RP 4 Payment of subsidies to certain PAYE intermediaries (1) (2) Requirements for payment of subsidy The Commissioner may pay a subsidy to a listed PAYE inter- mediary for a payroll service that they provide to an employer to whom section RD 22(3) or (4) (PAYE income payment forms for amounts of tax paid to Commissioner) applies if the listed PAYE intermediary— (a) has a contract with the employer to provide the services; and has met their obligations under sections RP 13 to RP 16; and ﬁles a correct subsidy claim form under section 15M of the Tax Administration Act 1994.
(b) (c) Notiﬁcation requirements If a subsidy under subsection (1) is paid to a listed PAYE inter- mediary, the Commissioner must notify the intermediary of the following matters within 14 days of the date of the payment: the amount of the subsidy paid in relation to each em- (a) ployer; and the period to which the subsidy relates; and other information that may be relevant to the payroll ser- vices provided as the Commissioner considers appropri- ate.
(b) (c) 2843 Part R s RP 5 Income Tax Act 2007 Reprinted as at 2 September 2013 (3) (4) (5) (6) Calculating amount of subsidy The listed PAYE intermediary must calculate the amount of the subsidy in the manner provided by regulations made under this section.
Paying amount of subsidy The Commissioner must pay the amount of the subsidy within 30 days of receiving the last of— (a) the employer monthly schedule to which the subsidy claim form relates: the payment of the amounts of tax for a PAYE income payment to which the subsidy claim form relates: the subsidy claim form.
(b) (c) Bank accounts The Commissioner must pay the subsidy to a bank account nominated by the listed PAYE intermediary for the purpose or, if an overpayment has been made to the listed PAYE inter- mediary, to the listed PAYE intermediary’s bank account.
Prescribing amount of subsidy The Governor-General may from time to time by Order in Council prescribe the amount of the subsidy to be paid for an employee of an employer who contracts the services of a listed PAYE intermediary under section 15J of the Tax Administra- tion Act 1994.
Deﬁned in this Act: amount, amount of tax, Commissioner, employee, em- ployer, employer monthly schedule, listed PAYE intermediary, pay, PAYE in- come payment, subsidy claim form Compare: 2004 No 35 ss NBB 1, NBB 6 RP 5 Subsidy claims When this section applies This section applies when a listed PAYE intermediary ﬁles a subsidy claim form under section 15M of the Tax Adminis- tration Act 1994 and the Commissioner amends the details to correct an error.
Overpaid or underpaid amounts If an overpayment or underpayment results from the amend- ment, the intermediary or Commissioner, as applicable, must (1) (2) 2844 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RP 6 pay the amount overpaid or underpaid within 30 days of the date of notice under section 15M(3) of that Act.
Using overpayment to pay subsidy (3) Despite subsection (2), the Commissioner may choose to use the amount of an overpayment resulting from an amendment to pay a subsidy claim made after the end of the 14-day period referred to in section 15M(3) of that Act.
Deﬁned in this Act: amount, Commissioner, listed PAYE intermediary, pay, subsidy claim form Compare: 2004 No 35 s NBB 5(4), (5) RP 6 Operation of PAYE intermediaries’ trust accounts Nature of account (1) A PAYE intermediary’s trust account must be named as a trust account and established at a registered bank within the mean- ing of the Reserve Bank of New Zealand Act 1989.
(2) (3) Deposits The deposits to the account consist of— (a) (b) a payment of gross salary or wages paid by an employer: an amount of employer’s superannuation cash contribu- tion paid by an employer: an amount of tax for a payment of salary or wages re- quired under the PAYE rules and ESCT rules, or made under section RP 12: an amount of a refund made by the Commissioner under section RM 7 (Refunds to PAYE intermediaries): interest on the amount of the funds in the trust account.
(c) (d) (e) Withdrawals The withdrawals from the account consist of— (a) (b) a payment of net salary or wages to an employee: an amount of employer’s superannuation cash contribu- tion paid by an employer: an amount of tax for a payment of salary or wages with- held under section RP 12: a payment that an employer would be required to make but for the arrangement with the PAYE intermediary, in relation to an amount of tax for a payment of salary or (c) (d) 2845 Part R s RP 7 Income Tax Act 2007 Reprinted as at 2 September 2013 wages to an employee or an employer’s superannuation cash contribution made on behalf of an employee: interest on the amount of the funds in the trust account.
(e) Payments held on trust (4) A payment relating to an employee that is credited to the trust account of a PAYE intermediary is held by the PAYE inter- mediary on trust for the beneﬁt of the employee and the Com- missioner according to their respective rights and obligations.

(5) Interest Interest earned in the trust account of a PAYE intermediary by a payment that relates to an employee is held beneﬁcially by the PAYE intermediary.
Deﬁned in this Act: amount, amount of tax, Commissioner, employee, em- ployer, employer’s superannuation cash contribution, ESCT rules, gross, inter- est, pay, PAYE intermediary, PAYE rules, salary or wages Compare: 2004 No 35 s NBA 6 Section RP 6(2)(b): amended (with effect on 1 April 2008), on 6 October 2009, by section 544(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RP 6(3)(b): amended (with effect on 1 April 2008), on 6 October 2009, by section 544(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RP 6(3)(d): amended (with effect on 1 April 2008), on 6 October 2009, by section 544(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RP 6 list of deﬁned terms employer’s superannuation cash contri- bution: inserted (with effect on 1 April 2008), on 6 October 2009, by section 544(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RP 6 list of deﬁned terms employer’s superannuation contribution: repealed (with effect on 1 April 2008), on 6 October 2009, by section 544(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Employers’ responsibilities RP 7 General responsibilities of employers When this section applies This section applies when an employer who meets the require- ments of sections RP 8 to RP 11 arranges to transfer their PAYE obligations in relation to an employee and a pay period to a PAYE intermediary.

(1) 2846 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RP 8 (2) (3) PAYE liabilities The employer is not liable under the PAYE rules in relation to the employee and the pay period.
However, the employer remains liable for the payment to the employee of the salary or wages for the pay period.

ESCT liabilities If the PAYE intermediary assumes the employer’s obligations under the ESCT rules, the employer is not liable under the ESCT rules in relation to the employee and the pay period.

However, the employer remains liable for the payment to the employee of the employer’s superannuation cash contribution made on the employee’s behalf.
Deﬁned in this Act: employee, employer, employer’s superannuation cash con- tribution, ESCT rules, pay period, PAYE, PAYE intermediary, PAYE rules, salary or wages Compare: 2004 No 35 s NBA 4(2), (3) Section RP 7(3): amended (with effect on 1 April 2008), on 6 October 2009, by section 545(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RP 7 list of deﬁned terms employer’s superannuation cash contri- bution: inserted (with effect on 1 April 2008), on 6 October 2009, by section 545(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RP 7 list of deﬁned terms employer’s superannuation contribution: repealed (with effect on 1 April 2008), on 6 October 2009, by section 545(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
RP 8 Information required from employers An employer must— (a) keep a record of— (i) the gross salary or wages of an employee for a pay period; and the amounts of tax withheld by the employer for the pay period; and the amount of any payroll donations for the pay period; and the amount of any tax credit under section LD 4 (Tax credits for payroll donations); and (ii) (iii) (iv) 2847 Part R s RP 9 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) provide information a PAYE intermediary seeks in the time agreed by the employer and PAYE intermediary.
Deﬁned in this Act: amount of tax, employee, employer, gross, pay period, PAYE intermediary, salary or wages, tax withheld Compare: 2004 No 35 s NBA 4(1B) Section RD 8(a)(iii): added, on 6 January 2010, by section 546 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RD 8(a)(iv): added, on 6 January 2010, by section 546 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
RP 9 Authorised transfers from accounts (1) (2) When this section applies This section applies when an employer has authorised the PAYE intermediary to direct the transfer of an amount from the employer’s bank account to meet an obligation that the PAYE intermediary has on the employer’s behalf in relation to an employee and a pay period.

Sufﬁcient funds The employer must ensure, at a time ﬁxed by the PAYE inter- mediary, that the bank account has sufﬁcient funds available for the transfer.
Deﬁned in this Act: amount, employee, employer, pay period, PAYE intermedi- ary Compare: 2004 No 35 s NBA 4(1)(a) RP 10 When transfers from accounts not authorised Employer to pay amount of tax to trust account If an employer has not authorised a PAYE intermediary to di- rect the transfer of funds as described in section RP 9, and the employer pays salary or wages directly to an employee for a pay period under section RP 12, the employer must pay the amount of tax for the payment required under the PAYE rules and ESCT rules into the PAYE intermediary’s trust account.
Employer to pay salary or wages to trust account If the employer has not authorised the PAYE intermediary to direct the transfer of funds as described in section RP 9, and subsection (1) does not apply, the employer must pay the (1) (2) 2848 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RP 12 amount of the employee’s gross salary or wages for the pay period into the PAYE intermediary’s trust account.
However, the employer may retain an amount lawfully owed to them by the employee before making the payment.
Deﬁned in this Act: amount, amount of tax, employee, employer, ESCT rules, pay, pay period, PAYE intermediary, PAYE rules, salary or wages Compare: 2004 No 35 s NBA 4(1)(b)(i), (ii) RP 11 Employer’s superannuation cash contributions If a PAYE intermediary has assumed the obligations of an em- ployer under the ESCT rules in relation to an employee and a pay period, the employer must pay the amount of the em- ployer’s superannuation cash contribution made in the pay period on behalf of the employee into the PAYE intermedi- ary’s trust account.
Deﬁned in this Act: amount, employee, employer, employer’s superannuation cash contribution, ESCT rules, pay, pay period, PAYE intermediary Compare: 2004 No 35 s NBA 4(1)(b)(iii) Section RP 11 heading: substituted (with effect on 1 April 2008), on 6 October 2009, by section 547(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RP 11: amended (with effect on 1 April 2008), on 6 October 2009, by section 547(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RP 11 list of deﬁned terms employer’s superannuation cash contri- bution: inserted (with effect on 1 April 2008), on 6 October 2009, by section 547(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RP 11 list of deﬁned terms employer’s superannuation contribution: repealed (with effect on 1 April 2008), on 6 October 2009, by section 547(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
RP 12 When payments made directly to employees Despite sections RP 9 and RP 10, an employer may pay an employee’s salary or wages directly to the employee in the following circumstances: (a) the payment is made on a day in a pay period that is not the usual day for a payment of salary or wages for the pay period; and the payment is— (i) an advance of the employee’s salary or wages: (b) 2849 Part R s RP 13 Income Tax Act 2007 Reprinted as at 2 September 2013 (ii) (iii) salary or wages owed to the employee for an ear- lier pay period: a payment on the termination of the employee’s employment; and the employer withholds for the salary or wages of the employee the amount of tax that would be required under the PAYE rules and the ESCT rules if the em- ployer did not have an arrangement with a PAYE inter- mediary; and the employer pays the amount referred to in paragraph (c) in the way described in sections RP 9 to RP 11.
(c) (d) Deﬁned in this Act: amount of tax, arrangement, employee, employer, employ- ment, ESCT rules, pay, pay period, PAYE rules, salary or wages Compare: 2004 No 35 s NBA 4(4) PAYE intermediaries’ responsibilities RP 13 General responsibilities of PAYE intermediaries When this section applies This section applies when a PAYE intermediary assumes the PAYE and ESCT obligations in relation to an employee and a pay period that an employer would have under those rules in the absence of section RP 2(1).
No liability as employer The PAYE intermediary does not become liable as an employer for the payment to the employee of the salary or wages for the pay period, or for the payment of an employer’s superannu- ation cash contribution made on behalf of the employee.
Deﬁned in this Act: employee, employer, employer’s superannuation cash con- tribution, ESCT, pay, pay period, PAYE, PAYE intermediary, salary or wages Compare: 2004 No 35 s NBA 5(1), (2) Section RP 13(2): amended (with effect on 1 April 2008), on 6 October 2009, by section 548(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RP 13 list of deﬁned terms employer’s superannuation cash contri- bution: inserted (with effect on 1 April 2008), on 6 October 2009, by section 548(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RP 13 list of deﬁned terms employer’s superannuation contribution: repealed (with effect on 1 April 2008), on 6 October 2009, by section 548(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
(1) (2) 2850 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RP 15 RP 14 Collection, payment, and information requirements A PAYE intermediary must— (a) calculate and withhold the amount of tax for a payment of salary or wages, and pay the amount to the Commis- sioner by electronic means and in the format required; and transfer the amount of any payroll donation to the rele- vant recipient within the period described in section 24Q of the Tax Administration Act 1994; and provide an employer monthly schedule to the Commis- sioner by electronic means and in the format required; and provide a PAYE income payment form to the Commis- sioner if required; and keep the records referred to in section 24 of the Tax Administration Act 1994.
(ab) (b) (c) (d) Deﬁned in this Act: amount of tax, Commissioner, employer monthly schedule, pay, PAYE income payment form, PAYE intermediary, salary or wages Compare: 2004 No 35 s NBA 5(1) Section RP 14(ab): inserted, on 6 January 2010, by section 549 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
RP 15 When employers have authorised transfers from accounts If a PAYE intermediary has been given an authorisation by an employer under section RP 2(1), the intermediary must direct that, at or before the time of the transfer of the payment of salary or wages, an amount equal to the amount of tax for the payment required under the PAYE rules and ESCT rules is transferred to— (a) (b) the Commissioner; or the trust account established by the PAYE intermediary and identiﬁed in the employer’s notice under section 15J of the Tax Administration Act 1994.
Deﬁned in this Act: amount, amount of tax, Commissioner, employer, ESCT rules, notice, pay, PAYE intermediary, PAYE rules, salary or wages Compare: 2004 No 35 s NBA 5(1B) 2851 Part R s RP 16 Income Tax Act 2007 Reprinted as at 2 September 2013 RP 16 Obligations for employer’s superannuation contributions When section RP 11 applies, the PAYE intermediary assumes the obligations under the ESCT rules in relation to the em- ployee and the pay period that the employer would have in the absence of section RP 2(1).
Deﬁned in this Act: employee, employer, ESCT rules, pay period, PAYE inter- mediary Compare: 2004 No 35 s NBA 5 Tax pooling intermediaries RP 17 Tax pooling intermediaries Meeting person A’s obligations (1) A person (person A) may ask a person who maintains a tax pooling account to act as a tax pooling intermediary between person A and the Commissioner in using funds in the tax pool- ing account to meet an obligation of person A to pay provi- sional tax, terminal tax, or an increase in an assessment of tax as described in section RP 17B(3).
Person A and group companies For the purposes of this section, if person A is a company in a group of companies, person A also includes the other com- panies that are in the group at the time— (a) an amount is deposited in a tax pooling account under section RP 18; and as applicable,— (i) (ii) is used or transferred under section RP 17B: is transferred under section RP 19.
Deﬁned in this Act: amount, Commissioner, company, group of companies, intermediary, provisional tax, tax pooling account Compare: 2004 No 35 s MBA 2 (b) Section RP 17: amended (with effect on 1 April 2009), on 6 October 2009, by section 550 of the Taxation (International Taxation, Life Insurance, and Remed- ial Matters) Act 2009 (2009 No 34).

Section RP 17(1) heading: inserted, on 29 August 2011, by section 125(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section RP 17(2) heading: added, on 29 August 2011, by section 125(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section RP 17(2): added, on 29 August 2011, by section 125(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
(2) 2852 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RP 17B Section RP 17 list of deﬁned terms amount: inserted, on 29 August 2011, by section 125(3) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section RP 17 list of deﬁned terms company: inserted, on 29 August 2011, by section 125(3) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section RP 17 list of deﬁned terms group of companies: inserted, on 29 Au- gust 2011, by section 125(3) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

RP 17B Tax pooling accounts and their use Meaning (1) A tax pooling account means a trust account into which a tax pooling intermediary pays an amount that they receive from a person in their role as intermediary.
Use of funds in tax pooling accounts (2) An amount held in a tax pooling account on behalf of a person may be refunded, transferred, sold, or used to satisfy a per- son’s liability for terminal tax, provisional tax, or an increased amount of tax described in subsection (3).
(3) When original liability increased For the purposes of this section, an increased amount of tax— arises when a person’s previous assessed liability is in- (a) creased after— (i) (ii) (iii) the Commissioner amends an assessment under section 113 of the Tax Administration Act 1994: the Commissioner makes a determination under section 119 of that Act: an assessment is made because the Commis- sioner or the person is treated under section 89H of that Act as having accepted a proposed adjustment: the person makes a voluntary disclosure: (iv) also arises when a person has— (i) before taking any action under subparagraph (ii), ﬁled a return required to be provided for a tax type listed in subsection (8); and has made a voluntary disclosure in relation to the return: also arises when— (ii) (ab) (ac) 2853 Part R s RP 17B Income Tax Act 2007 Reprinted as at 2 September 2013 (i) (ii) before any assessment or adjustment under sub- paragraph (ii) is made, the person has ﬁled a re- turn required to be provided for a tax type listed in subsection (8); and the Commissioner makes an assessment or adjustment increasing an amount previously payable: (b) (c) includes deferrable tax as deﬁned in section 3(1) of the Tax Administration Act 1994 payable by the person: does not include the amount of the previous assessment or the amount that was previously payable under para- graph (ab) or (ac), as applicable.
Transfers for provisional tax or terminal tax (4) A person who chooses to use funds in a tax pooling account to satisfy an obligation for provisional tax or terminal tax for a tax year may ask the tax pooling intermediary to arrange the transfer of an amount to their tax account with the Commis- sioner as follows: (a) (b) (c) on or before the date that is 75 days after their terminal tax date for the tax year unless paragraph (b) or (c) ap- plies: on or before the date that is 76 days after their terminal tax date for the tax year if— (i) the person’s balance date falls at the end of Oc- tober, November, or December; and the terminal tax date falls in a tax year that has a 29 February in it: (ii) if the amount is to be transferred from funds deposited on the person’s behalf in the tax pooling account under section RP 18 and the person’s return ﬁling require- ments have been met, at any time.
Group companies (4B) For the purposes of subsection (4)(c), if the person is part of a group of companies, the person includes the other companies in the group at the time at which a deposit to the tax pooling account is made, or funds purchased or used, as applicable.
2854 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RP 17B (5) (6) (7) (8) Transfer within 60 days for increased amounts If a person chooses to use funds in a tax pooling account to sat- isfy an obligation for an increased amount of tax as described in subsection (3)(a) to (ac), the tax pooling intermediary must ask the Commissioner within 60 days from the date on which the Commissioner issues the notice of assessment increasing the amount to transfer the amount to the person’s tax account with the Commissioner.
Transfer within 60 days for deferrable tax If a person chooses to use funds in a tax pooling account to satisfy an obligation for deferrable tax under subsection (3)(b), the tax pooling intermediary must ask the Commis- sioner within 60 days from the date on which the court pro- ceedings are ﬁnally determined to transfer the amount to the person’s tax account with the Commissioner.

For the purposes of this subsection, court proceedings include proceedings be- fore the Taxation Review Authority.
Maximum amount of transfer The maximum amount that a person may ask a tax pooling intermediary to transfer to meet an obligation to pay tax is— for a transfer under subsection (4)(a) or (b), the amount (a) payable: for a transfer under subsection (4)(c), the amount of the funds deposited by the person under section RP 18: for a transfer under subsection (5), the increased amount of tax payable: for a transfer under subsection (6), the amount of de- ferrable tax payable.
(d) (b) (c) Extended meaning for increased amount of tax and deferrable tax For the purposes of sections RP 17 to RP 21, an increased amount of tax or deferrable tax includes an amount relating to— (a) tax paid or payable under the PAYE rules, ESCT rules, RSCT rules, RWT rules, or NRWT rules: income tax, GST, FBT, further income tax, and imput- ation penalty tax payable under section 140B of the Tax Administration Act 1994.
(b) 2855 Part R s RP 17B Income Tax Act 2007 Reprinted as at 2 September 2013 (b) (c) (b) (c) (9) When subsection (10) applies Subsection (10) applies when— (a) a person is liable for an increased amount of tax that relates to income tax or resident withholding tax; and subsection (3)(ab)(ii) applies in relation to the amount; and the person has not ﬁled the return required by subsection (3)(ab)(i) before the voluntary disclosure is made.
Commissioner’s discretion to allow use of funds (10) On application by the person, the Commissioner may agree in writing that they may use funds in a tax pooling account for the increased amount of tax if the Commissioner is satisﬁed that— (a) the increased amount arises as a result of an event or circumstance beyond the person’s control; and the person has a reasonable justiﬁcation or excuse for not ﬁling the return by the required date; and the person has an otherwise good compliance history for the 2 income years before the income year in which the voluntary disclosure referred to in subsection (3)(ab)(ii) is made.
Review (11) After the expiry of 1 year, but before the expiry of 2 years, after the commencement of subsection (10), the Commissioner must— (a) (b) (c) review the operation of subsections (9) and (10); and assess the impact of these subsections; and consider whether any amendments to the law are neces- sary or desirable and, in particular, whether these sub- sections are needed; and (d) report the ﬁndings to the Minister of Revenue.
Deﬁned in this Act: amount, amount of tax, assessment, balance date, Com- missioner, corresponding income year, income tax, notice, pay, provisional tax, return of income, tax account with the Commissioner, tax pooling account, ter- minal tax Section RP 17B: inserted, on 6 October 2009, by section 551 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RP 17B(3)(ab): inserted, on 29 August 2011, by section 126(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

2856 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RP 17B Section RP 17B(3)(ac): inserted, on 29 August 2011, by section 126(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section RP 17B(3)(c): amended, on 29 August 2011, by section 126(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section RP 17B(4) heading: substituted, on 29 August 2011, pursuant to section 126(3) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section RP 17B(4): substituted, on 29 August 2011, by section 126(3) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section RP 17B(4B) heading: inserted, on 29 August 2011, by section 126(3) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section RP 17B(4B): inserted, on 29 August 2011, by section 126(3) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section RP 17B(5): amended, on 29 August 2011, by section 126(4) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section RP 17B(7) heading: added, on 29 August 2011, by section 126(5) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section RP 17B(7): added, on 29 August 2011, by section 126(5) of the Taxa- tion (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section RP 17B(8) heading: added, on 29 August 2011, by section 126(5) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section RP 17B(8): added, on 29 August 2011, by section 126(5) of the Taxa- tion (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section RP 17B(9) heading: added, on 29 August 2011, by section 126(5) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section RP 17B(9): added, on 29 August 2011, by section 126(5) of the Taxa- tion (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section RP 17B(10) heading: added, on 29 August 2011, by section 126(5) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section RP 17B(10): added, on 29 August 2011, by section 126(5) of the Tax- ation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section RP 17B(11) heading: added, on 29 August 2011, by section 126(5) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section RP 17B(11): added, on 29 August 2011, by section 126(5) of the Tax- ation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section RP 17B list of deﬁned terms balance date: inserted, on 29 August 2011, by section 126(6) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section RP 17B list of deﬁned terms corresponding income year: inserted, on 29 August 2011, by section 126(6) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

2857 Part R s RP 18 Income Tax Act 2007 Reprinted as at 2 September 2013 Section RP 17B list of deﬁned terms income tax: inserted, on 29 August 2011, by section 126(6) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section RP 17B list of deﬁned terms return of income: inserted, on 29 Au- gust 2011, by section 126(6) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

RP 18 Deposits in tax pooling accounts (1) (2) When this section applies This section applies when a tax pooling intermediary makes a deposit in a tax pooling account on behalf of a person.
Deposit held in trust The intermediary holds the principal amount of the person’s deposit in trust for the person until the amount is— (a) credited to the person’s tax account with the Commis- sioner: credited to another person’s tax account with the Com- missioner: refunded to the person: transferred at the person’s request to another intermedi- ary: transferred at the intermediary’s request to another intermediary.
(b) (c) (d) (e) Effective date (2B) For the purposes of this section and sections RP 17B and RP 19, a deposit that is transferred between intermediaries under subsection (2)(d) or (e) retains its pre-transfer date.
Notiﬁcation required The intermediary must— (a) (b) notify the person, at or before the time the person pays an amount to the intermediary, that the payment does not satisfy an obligation of the person to make a pay- ment to the Commissioner; and notify the Commissioner by electronic means, provid- ing for each person who has contributed an amount as a deposit,— (i) (ii) the person’s name and tax ﬁle number; and the amount of the person’s contribution.
(3) 2858 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RP 19 Conﬁrming receipt of deposit and details (4) On receiving the deposit and details described in subsection (3), the Commissioner must provide conﬁrmation of receipt.

(5) Refunding deposit If the details described in subsection (3) are not provided within 5 working days after a deposit is made, the Commis- sioner must refund the deposit.
Deﬁned in this Act: amount, Commissioner, intermediary, notify, pay, tax ac- count with the Commissioner, tax ﬁle number, tax pooling account, working day Compare: 2004 No 35 ss MBA 3, MBA 4(3), MBA 5(1)–(4) Section RP 18(2)(c): amended, on 6 October 2009, by section 552(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RP 18(2)(d): added, on 6 October 2009, by section 552(1) of the Tax- ation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RP 18(2)(e): added, on 6 October 2009, by section 552(1) of the Tax- ation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RP 18(2B) heading: inserted, on 6 October 2009, by section 552(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RP 18(2B): inserted, on 6 October 2009, by section 552(2) of the Tax- ation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RP 18(4) heading: substituted, on 6 October 2009, by section 552(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RP 18(4): substituted, on 6 October 2009, by section 552(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
RP 19 Transfers from tax pooling accounts Transferring amounts (1) A tax pooling intermediary may ask the Commissioner to transfer an amount in their tax pooling account to the tax account of a person who is their client or to another inter- mediary.
Treatment of transferred amounts (1B) An amount transferred and credited to the tax account of a person is treated as follows: 2859 Part R s RP 19 Income Tax Act 2007 Reprinted as at 2 September 2013 (a) (b) for an amount credited on or before the person’s ter- minal tax date for a tax year, as income tax paid to meet a provisional tax obligation under the provisional tax rules: for an amount credited after the person’s terminal tax date for a tax year,— (i) ﬁrst, as applied under section 120F of the Tax Administration Act 1994 to pay interest that the person is liable to pay; and secondly, as income tax paid to meet the person’s provisional tax obligation.
(ii) Credited on date of deposit or later The intermediary may ask the Commissioner that the amount of a transfer under subsection (1) is credited in the person’s tax account or the account of another intermediary on the date on which the amount was deposited in the tax pooling account or on some later date.
Credit date The credit date for an amount transferred to a person’s tax account is— (a) for a transfer under section RP 17B(4)(a) or (b), the relevant instalment date set out in schedule 3, part A (Payment of provisional tax and terminal tax): for a transfer under section RP 17B(4)(c), the date on which the person deposited the funds in a tax pooling account: for a request made within the 60-day period referred to in section RP 17B(5) or (6), a date nominated that is no earlier than the original due date for the relevant period: in any other case, the date on which the Commissioner receives the request for the transfer.
(b) (c) (d) Details For the purposes of this section, the intermediary must pro- vide the following details to the Commissioner by electronic means: (a) the date of the transfer and the credit date, if it is differ- ent; and the amount of the transfer; and (2) (3) (4) (b) 2860 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RP 19B (c) the tax ﬁle number of the person for whom the amount is transferred.
Statement (5) When an amount is transferred, the Commissioner must pro- vide a statement showing the effect of the transfer to both the intermediary and the person for whom the transfer is made.
Deﬁned in this Act: amount, Commissioner, income tax, intermediary, pay, provisional tax, provisional tax rules, tax ﬁle number, tax pooling account, tax year, terminal tax Compare: 2004 No 35 s MBA 6(1)–(3) Section RP 19(1) heading: substituted, on 6 October 2009, by section 553(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RP 19(1): substituted, on 6 October 2009, by section 553(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RP 19(1B) heading: inserted, on 6 October 2009, by section 553(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section RP 19(1B): inserted, on 6 October 2009, by section 553(1) of the Tax- ation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RP 19(2): amended, on 6 October 2009, by section 553(2) of the Tax- ation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section RP 19(3): substituted, on 29 August 2011, by section 127 of the Taxa- tion (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
RP 19B Transfers for certain expected tax liabilities (1) (2) Who this section applies to This section applies to a person who— (a) expects to have an income tax or provisional tax liability for a tax year; and has acquired funds in a tax pooling account other than by depositing them on their own account; and has not yet ﬁled a return of income in relation to the liability for the tax year.
(b) (c) Using funds The person may choose to use the funds towards the payment of the liability for the tax year on meeting all the requirements of this section.
2861 Part R s RP 20 Income Tax Act 2007 Reprinted as at 2 September 2013 Requirements at time of making request (3) At the time of making the request, the person must— (a) (b) for an income tax liability, have met all their return ﬁling requirements for earlier tax years: for a provisional tax liability, have met all their obliga- tions under the provisional tax rules for the tax year.
Effective date of transfer The effective date that the person nominates for the transfer of funds must correspond to the relevant instalment date set out in schedule 3, part A (Payment of provisional tax and terminal tax).
Refunds If, as a result of a transfer under this section, excess tax arises for the person, the amount of excess tax is treated as follows: ﬁrst, the amount is transferred to meet a liability for the (a) person, as applicable, for— (i) provisional tax or terminal tax under section RP 17B(4)(a) or (b): an increased amount of RP 17B(5): an obligation to pay deferrable tax under section RP 17B(6): tax under section (ii) (iii) (b) (c) second, the amount is transferred with an effective date that is no earlier than the date on which the Commis- sioner received the later request: third, the amount is refunded to the person.
Relationship with section RP 17B This section overrides section RP 17B(7)(a).

Deﬁned in this Act: amount, Commissioner, instalment date, provisional tax, provisional tax rules, return of income, tax pooling account, tax year, terminal tax Section RP 19B: inserted, on 29 August 2011, by section 128 of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
(4) (5) (6) RP 20 Declining, amending, or reversing transfers When this section applies This section applies when a tax pooling intermediary asks to transfer an amount under section RP 19.

(1) 2862 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RP 21 (2) (2B) (3) Tax avoidance The Commissioner may refuse to accept the request, or may reverse the transfer, if the request is made for the purpose or effect of tax avoidance.
Non-compliance If the Commissioner considers that the request does not com- ply with sections RP 17 to RP 21, the Commissioner may— (a) (b) (c) decline to process the request: amend the request: reverse the transfer.

Failure to provide details The Commissioner must refuse the transfer if— (a) it relates to a deposit for which the details have not been provided under section RP 18(3) and the period of 5-working days has not expired: the details required under section RP 19(4) have not been provided.
(b) Deﬁned in this Act: amount, Commissioner, intermediary, tax avoidance, work- ing day Compare: 2004 No 35 s MBA 6(4)–(9) Section RP 20 heading: substituted, on 29 August 2011, by section 129(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section RP 20(2B) heading: inserted, on 29 August 2011, by section 129(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section RP 20(2B): inserted, on 29 August 2011, by section 129(2) of the Tax- ation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

RP 21 Refunds from tax pooling accounts A tax pooling intermediary may ask the Commissioner to re- fund some or all of the balance in their tax pooling account.
Deﬁned in this Act: Commissioner, intermediary, tax pooling account Compare: 2004 No 35 s MBA 7 2863 Income Tax Act 2007 Reprinted as at 2 September 2013 Subpart RZ—Terminating provisions Contents Provisional tax Page RZ 1 Certain elections to become person with provisional tax 2864 liability RZ 2 Amount of provisional tax based on 1997–98 or earlier 2865 tax year RZ 3 Standard method: 2010–11 to 2012–13 income years RZ 4 GST ratio method: 2010–11 to 2013–14 income years RZ 5 Calculating amounts under standard method: 2010–11 to 2012–13 income years RZ 5B Standard method: new personal tax rate persons from 1 October 2008 to end 2009–10 income year [Repealed] 2865 2867 2869 2870 RZ 5C GST ratio method: new personal tax rate persons from 2870 1 October 2008 to end 2009–10 income year [Repealed] RZ 5D Standard method or GST method: transition for Maori 2871 authorities RZ 6 Limits on refunds: transitional dates Refunds Withdrawal income Payment and rate of withdrawal tax RZ 7 Withdrawal income RZ 8 RZ 9 Relief in certain cases RZ 10 Recovery of amounts payable to Commissioner RZ 11 Refunds for life insurers 2872 2872 2873 2874 2874 2874 Provisional tax RZ 1 Certain elections to become person with provisional tax liability When this section applies This section applies when a person has a non-standard income year and has, between 10 October 2000 and the date on which the Taxation (Relief, Refunds, and Miscellaneous Provisions) Act 2002 received Royal asset, ﬁled a return of income for the 1998–99 income year or a later income year on the basis (1) 2864 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RZ 3 (2) that section MB 3(a) of the Income Tax Act 2004 (section MB 2A(1)(a)(i) before the enactment of that Act) applied.
Choosing to have provisional tax liability The person may choose to be a person with a provisional tax liability for the income year for which the return was ﬁled if they have paid provisional tax of more than $2,500 on or before the date of instalment F for the income year corresponding to the tax year for which the return was ﬁled.
Deﬁned in this Act: corresponding income year, income year, non-standard income year, provisional tax, return of income, tax year Compare: 2004 No 35 s MZ 8 RZ 2 Amount of provisional tax based on 1997–98 or earlier tax year For the purposes of sections MB 4 and MB 5 other than sec- tion MB 5(3) and (4) of the Income Tax Act 2004 (which relate to the methods for calculating provisional tax), and for a per- son who is a New Zealand superannuitant for the 1997–98 tax year, the person’s residual income tax for the tax year or for an earlier tax year is the amount that would have been their residual income tax if they— (a) had not been liable to pay the New Zealand superannu- itant surcharge; and had not paid any New Zealand superannuitant surcharge by way of surcharge deduction.
(b) Deﬁned in this Act: amount, New Zealand superannuitant, residual income tax, tax year Compare: 2004 No 35 s MZ 9 RZ 3 Standard method: 2010–11 to 2012–13 income years (1) When this section applies This section applies to the calculation of a person’s provisional tax liability, when section RC 5 (Methods for calculating pro- visional tax liability) applies,— (a) for instalments payable on or after 1 October 2010 for the 2010–11 income year and for instalments for the 2011–12 and 2012–13 income years, if the person is a new personal tax rate person: 2865 Part R s RZ 3 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) for instalments payable for the 2011–12 and 2012–13 income years, if the person is a new company tax rate person.
Standard method modiﬁed: for 5% uplift The standard method under section RC 5(2) is modiﬁed so that— (a) for instalments payable on or after 1 October 2010 for the 2010–11 income year, instead of using 105%, the amount of provisional tax payable is calculated using 95%, if the person is a new personal tax rate person: for the 2011–12 income year, instead of using 105%, the amount of provisional tax payable is calculated using— 95%, if the person is a new personal tax rate per- (i) son; or 100%, if the person is a new company tax rate person.
(ii) (b) Standard method modiﬁed: for 10% uplift The standard method under section RC 5(3) is modiﬁed so that— (a) for instalments payable on or after 1 October 2010 for the 2010–11 income year, instead of using 110%, the amount of provisional tax payable is calculated using 95%, if the person is a new personal tax rate person: for the 2011–12 income year, instead of using 110%, the amount of provisional tax payable is calculated using— 95%, if the person is a new personal tax rate per- (i) son; or 105%, if the person is a new company tax rate person: (ii) for the 2012–13 income year, instead of using 110%, the amount of provisional tax payable is calculated using— 100%, if the person is a new personal tax rate (i) person; or 105%, if the person is a new company tax rate person.
(ii) (b) (c) Deﬁned in this Act: amount, income year, new company tax rate person, new personal tax rate person, pay, provisional tax Section RZ 3: substituted, on 1 October 2010, by section 29 of the Taxation (Budget Measures) Act 2010 (2010 No 27).
(2) (3) 2866 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RZ 4 RZ 4 GST ratio method: 2010–11 to 2013–14 income years (1) (2) When this section applies This section applies to the calculation of a person’s provisional tax liability, when section RC 8 (GST ratio method) applies and requires an amount of residual income tax or an assess- ment of income tax for the calculation of the GST ratio,— (a) for instalments payable on or after 1 October 2010 for the 2010–11 income year and for instalments for the 2011–12, 2012–13, and 2013–14 income years, if the person is a new personal tax rate person: for instalments payable for the 2011–12, 2012–13, and 2013–14 income years, if the person is a new company tax rate person.
(b) The GST ratio method under section RC 8 is modiﬁed so that— (a) (ii) for instalments payable on or after 1 October 2010 for the 2010–11 income year, and for the 2011–12 income year, if the person is a new personal tax rate person,— the amount of residual income tax or the amount (i) of an assessment of income tax for the preceding year, as applicable, is reduced by multiplying the amount by 0.90: the amount of residual income tax or the amount of an assessment of income tax for the tax year before the preceding year or the transitional year, as applicable, is reduced by multiplying the amount by 0.85: the amount of residual income tax or the amount of an assessment of income tax for the year that is 2 years before the preceding year or the tran- sitional year, as applicable, is reduced by multi- plying the amount by 0.80: (iii) (b) for instalments payable for the 2012–13 income year, if the person is a new personal tax rate person,— (i) the amount of residual income tax or the amount of an assessment of income tax for the tax year before the preceding year or the transitional year, as applicable, is reduced by multiplying the amount by 0.90: 2867 Part R s RZ 4 Income Tax Act 2007 Reprinted as at 2 September 2013 (ii) the amount of residual income tax or the amount of an assessment of income tax for the year that is 2 years before the preceding year or the tran- sitional year, as applicable, is reduced by multi- plying the amount by 0.85: (c) (d) (e) for instalments payable for the 2013–14 income year, if the person is a new personal tax rate person, the amount of residual income tax or the amount of an assessment of income tax for the year that is 2 years before the preceding year or the transitional year, as applicable, is reduced by multiplying the amount by 0.90: for instalments payable for the 2011–12 income year, if the person is a new company tax rate person,— (i) the amount of residual income tax or the amount of an assessment of income tax for the preceding year, as applicable, is reduced by
 multiplying the amount by 0.95: the amount of residual income tax or the amount of an assessment of income tax for the tax year before the preceding year or the transitional year, as applicable, is reduced by multiplying the amount by 0.95: the amount of residual income tax or the amount of an assessment of income tax for the year that is 2 years before the preceding year or the tran- sitional year, as applicable, is reduced by multi- plying the amount by 0.95: (ii) (iii) for instalments payable for the 2012–13 income year, if the person is a new company tax rate person,— (i) the amount of residual income tax or the amount of an assessment of income tax for the tax year before the preceding year or the transitional year, as applicable, is reduced by multiplying the amount by 0.95: the amount of residual income tax or the amount of an assessment of income tax for the year that is 2 years before the preceding year or the tran- sitional year, as applicable, is reduced by multi- plying the amount by 0.95: (ii) 2868 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RZ 5 (f) for instalments payable for the 2013–14 income year, if the person is a new company tax rate person, the amount of residual income tax or the amount of an assessment of income tax for the year that is 2 years before the preceding year or the transitional year, as applicable, is reduced by multiplying the amount by 0.95.
Deﬁned in this Act: amount, assessment, GST ratio, income tax, income year, new company tax rate person, new personal tax rate person, pay, provisional tax, residual income tax Section RZ 4: substituted, on 1 October 2010, by section 29 of the Taxation (Budget Measures) Act 2010 (2010 No 27).
RZ 5 Calculating amounts under standard method: 2010–11 to 2012–13 income years (1) (2) When this section applies This section applies to the calculation of a person’s provisional tax liability, when section RC 10 (Calculating amount of in- stalment under standard and estimation methods) applies,— (a) for instalments payable on or after 1 October 2010 for the 2010–11 income year and for instalments for the 2011–12 and 2012–13 income years, if the person is a new personal tax rate person: for instalments payable for the 2011–12 and 2012–13 income years, if the person is a new company tax rate person.
(b) Calculation modiﬁed: for 5% uplift In the calculation of the amount of an instalment, in section RC 10(3)(a), subparagraph (i) is modiﬁed so that— (a) for instalments payable on or after 1 October 2010 for the 2010–11 income year, instead of using a 5% uplift, a 5% reduction is used, if the person is a new personal tax rate person: for the 2011–12 income year, instead of using a 5% up- lift, the amount of provisional tax payable is calculated using— (i) a 5% reduction, if the person is a new personal tax rate person; or no uplift, if the person is a new company tax rate person.
(ii) (b) 2869 Part R s RZ 5B Income Tax Act 2007 Reprinted as at 2 September 2013 (3) Calculation modiﬁed: for 10% uplift In the calculation of the amount of an instalment, in section RC 10(3)(a), subparagraph (ii) is modiﬁed so that— (a) (b) (c) for instalments payable on or after 1 October 2010 for the 2010–11 income year, instead of using a 10% uplift, a 5% reduction is used, if the person is a new personal tax rate person: for the 2011–12 income year, instead of using a 10% uplift, the amount of provisional tax payable is calcu- lated using— (i) a 5% reduction, if the person is a new personal tax rate person; or a 5% uplift, if the person is a new company tax rate person: (ii) for the 2012–13 income year, instead of using a 10% uplift, the amount of provisional tax payable is calcu- lated using— (i) no uplift, if the person is a new personal tax rate person; or a 5% uplift, if the person is a new company tax rate person.
(ii) Deﬁned in this Act: amount, income year, new company tax rate person, new personal tax rate person, pay, provisional tax Section RZ 5: substituted, on 1 October 2010, by section 29 of the Taxation (Budget Measures) Act 2010 (2010 No 27).

RZ 5B Standard method: new personal tax rate persons from 1 October 2008 to end 2009–10 income year [Repealed] Section RZ 5B: repealed, on 1 October 2010, by section 29 of the Taxation (Budget Measures) Act 2010 (2010 No 27).
RZ 5C GST ratio method: new personal tax rate persons from 1 October 2008 to end 2009–10 income year [Repealed] Section RZ 5C: repealed, on 1 October 2010, by section 29 of the Taxation (Budget Measures) Act 2010 (2010 No 27).
2870 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RZ 5D RZ 5D Standard method or GST method: transition for Maori authorities (1) (2) When this section applies This section applies when the provisional tax liability of a Maori authority is calculated for the 2011–12 and 2012–13 in- come years (the transitional period).
Application of modiﬁed sections RZ 3 to RZ 5 Sections RZ 3 to RZ 5 apply for the transitional period to the Maori authority and the Maori authority’s provisional tax li- ability as if— (a) the Maori authority were a new company tax rate per- son: in section RZ 3,— (i) in subsection (2)(b)(ii), 100% had been replaced by 95%: in subsection (3)(b)(ii), 105% had been replaced by 100%: in subsection (3)(c)(ii), 105% had been replaced by 100%: in section RZ 4,— (i) in subsection (2)(d), 0.95 had been replaced by 0.9 in each place where it appears: in subsection (2)(e), 0.95 had been replaced by 0.9 in each place where it appears: (b) (c) (d) in section RZ 5,— (i) in subsection (2)(b)(ii), a reference to no uplift had been replaced by a reference to a 5% reduc- tion: in subsection (3)(b)(ii), a reference to a 5% uplift had been replaced by a reference to no uplift: in subsection (3)(c)(ii), a reference to a 5% uplift had been replaced by a reference to no uplift.
(ii) (iii) (ii) (ii) (iii) Deﬁned in this Act: Maori authority, new company rate person, provisional tax liability Section RZ 5D: inserted (with effect on 1 October 2010), on 21 December 2010, by section 131 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
2871 Part R s RZ 6 Income Tax Act 2007 Reprinted as at 2 September 2013 RZ 6 Limits on refunds: transitional dates Refunds (1) (2) (3) ICA companies If an imputation credit account (ICA) company has a refund of income tax, and an amount paid in excess is dealt with under section RM 16(2)(c) (Treatment of amounts not refunded), the amount may be used only for a tax year commencing after the 1988–89 tax year, whether that is before or after the year of that entitlement.
Maori authorities If a Maori authority has a refund of income tax, and an amount paid in excess is dealt with under section RM 22(4)(b) (Limits on refunds for Maori authorities), the amount may be used only for a tax year commencing after the 2004–05 tax year, whether that is before or after the year of that entitlement.
PCA persons If a policyholder credit account (PCA) person has a refund of income tax, and an amount paid in excess is dealt with under section RM 31(2)(c) (Treatment of amounts not refunded), the amount may be used only for a tax year commencing after the 1990–91 tax year, whether that is before or after the year of that entitlement.
Deﬁned in this Act: amount, ICA company, income tax, Maori authority, PCA person, tax year Compare: 2004 No 35 ss MD 2(5)(a)(ii), MD 3(4)(a) Withdrawal income RZ 7 Withdrawal income When this section applies This section applies when a special home ownership account is closed in a tax year, and an amount is withdrawn on the closure other than an amount withdrawn under a withdrawal certiﬁcate.
Excluded income The amount withdrawn is treated as withdrawal income de- rived in the tax year by the person who operated the account and is excluded income of the person.
(1) (2) 2872 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RZ 8 (3) (4) Amounts withdrawn under withdrawal certiﬁcates If an amount is withdrawn from a special home ownership ac- count under a withdrawal certiﬁcate and the requirements re- lating to that account have not been met, the amount is treated as withdrawal income derived by the person who operated the account in the tax year in which the Commissioner is notiﬁed that the requirements were not met.
Maximum amount For the purposes of subsections (2) and (3), the amount of withdrawal income must be no more than $10,250 less the total amount withdrawn from the account under a withdrawal cer- tiﬁcate.
Deﬁned in this Act: amount, Commissioner, excluded income, notify, special home ownership account, tax year, withdrawal certiﬁcate, withdrawal income Compare: 2004 No 35 s IZ 3 RZ 8 Payment and rate of withdrawal tax (1) (2) (3) (4) (5) When this section applies This section applies when a person withdraws an amount from a special home ownership account that they have with an authorised savings institution and derives withdrawal income under section RZ 7(2).
Withholding withdrawal tax The authorised savings institution must withhold the amount of withdrawal tax from the amount payable to the person.

Rate of withdrawal tax The rate of withdrawal tax on withdrawal income is 45% of the gross amount of the income.

Paying withdrawal tax The authorised savings institution must pay the amount of tax to the Commissioner no later than the 20th day of the month following the month in which it becomes liable to withhold the amount.
Institution’s payment but failure to withhold If an authorised savings institution fails to withhold and pay the amount of withdrawal tax under subsection (2), and has paid an amount to the Commissioner under subsection (3), it may recover the amount from the person.
2873 Part R s RZ 9 Income Tax Act 2007 Reprinted as at 2 September 2013 Person paying withdrawal tax (6) A person who derives withdrawal income under section RZ 7(3) must pay to the Commissioner within the time al- lowed the amount of withdrawal tax payable for the income.
Deﬁned in this Act: amount, amount of tax, authorised savings institution, Com- missioner, gross, pay, special home ownership account, withdrawal income, withdrawal tax Compare: 2004 No 35 ss IZ 1, IZ 2, IZ 4 RZ 9 Relief in certain cases If the Commissioner is satisﬁed that an amount of withdrawal tax is more than the total tax credit allowed in relation to a person’s account under section LZ 9(2) (Savings in special home ownership accounts), the Commissioner must reduce the amount of the withdrawal tax as is fair and reasonable in the circumstances.
Deﬁned in this Act: amount, Commissioner, tax credit, withdrawal tax Compare: 2004 No 35 s IZ 6 RZ 10 Recovery of amounts payable to Commissioner An amount payable to the Commissioner under section RZ 8(3) or (5) is recoverable as if it were income tax imposed under section BB 1 (Imposition of income tax).
Deﬁned in this Act: amount, Commissioner, income tax, pay Compare: 2004 No 35 s IZ 5 RZ 11 Refunds for life insurers The Commissioner must refund an amount of tax that a life insurer has paid to the extent to which— (a) (b) the tax paid gave rise to imputation credits; and for a tax year corresponding to an income year before the income year that includes 1 July 2010, the life insurer would be entitled to a refund under section RM 2(1) (Refunds for overpaid tax) or any provision corresponding to it in an earlier Act, treating section RM 2(1)(a) and any corresponding provision as modi- ﬁed so as to exclude the amount of the life insurer’s policyholder base income tax liability from the tax required to be paid by them; and 2874 Reprinted as at 2 September 2013 Income Tax Act 2007 Part R s RZ 11 all other relevant requirements for a refund are met.
(c) Deﬁned in this Act: amount of tax, Commissioner, imputation credit, income year, life insurer, pay, policyholder base income tax liability, tax Section RZ 11: added (with effect on 1 April 2008), on 6 October 2009, by sec- tion 556 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
2875 Income Tax Act 2007 Reprinted as at 2 September 2013 Part Y Deﬁnitions and related matters Subpart YA—General deﬁnitions Contents YA 1 Deﬁnitions YA 2 Meaning of income tax varied YA 3 Treatment of qualifying company election tax, FBT, FDP penalty tax, imputation penalty tax, and withdrawal tax [Repealed] Page 2876 3137 3139 YA 1 Deﬁnitions In this Act, unless the context requires otherwise,— 1973 version provisions [Repealed] [Repealed] 1988 version provisions [Repealed] [Repealed] 1990 version provisions [Repealed] [Repealed] abating WFF tax credit is deﬁned in section MA 8 (Some deﬁnitions for family scheme) for the purposes of subparts MA to MF and MZ (which relate to tax credits for families) absentee— (a) means a person other than a person who is resident in (b) New Zealand during any part of the tax year: is deﬁned in section HD 18 (Agency in relation to absen- tees generally) for the purposes of subpart HD (Agents) absolute value means the value irrespective of whether the value’s sign is positive or negative ACC means the Accident Compensation Corporation con- tinued by section 259 of the Accident Compensation Act 2001 ACC levy or premium is deﬁned in section EF 3(5) (Accident compensation levies and premiums) for the purposes of that section 2876 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 acceptable property is deﬁned in section GB 45(3) (Arrange- ments involving money not at risk) for the purposes of that sec- tion accident compensation earnings-related payment means a payment included in salary or wages of the following kinds and under the following Acts: (a) under the Accident Compensation Act 1982, a payment of earnings related compensation, as deﬁned in section 2, and of compensation under section 80(4), that are not payments of account made under section 88 in circum- stances in which, at the time the payments are made, the nature of the compensation has not been determined: under the Accident Rehabilitation and Compensation Insurance Act 1992,— (i) (ii) (iii) (iv) (v)
 (ii) a vocational rehabilitation allowance payable under section 25; and a payment of compensation for loss of earnings payable under any of sections 38, 39, and 43; and a payment of compensation for loss of potential earning capacity payable under section 45 or 46; and a payment of weekly compensation payable under any of sections 58, 59, and 60; and a payment of continued compensation payable under section 138: under the Accident Insurance Act 1998,— (i) a payment or weekly compensation made by an insurer, as deﬁned in that Act: a payment of compensation for loss of earnings, or loss of potential earning capacity in relation to a work-related personal injury, as deﬁned in that Act, made by an insurer under a policy of personal accident or sickness insurance to which section 188(1)(a) (as it read immediately before its repeal by section 7 of the Accident Insurance Amendment Act 2000) applies: (b) (c) (d) under the Accident Compensation Act 2001, a payment of weekly compensation made by the Corporation, as deﬁned in that Act 2877 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 is deﬁned in section accident compensation payment CF 1(2) (Beneﬁts, pensions, compensation, and government grants) for the purposes of that section accident compensation payment for attendant care [Re- pealed] [Repealed] accident insurance contract is deﬁned in section CW 34(2) (Compensation payments) for the purposes of that section accommodation is deﬁned in section CE 1(2) (Amounts de- rived in connection with employment) for the purposes of that section and section CX 28 (Accommodation) account advantage— (a) is deﬁned in section GB 36(5) (Reconstruction of im- putation arrangements to obtain tax advantage) for the purposes of that section: is deﬁned in section GB 43(5) (Reconstruction of Maori authority credit arrangements to obtain tax advantage) for the purposes of that section (b) accounting period, for a foreign company, means— (a) (b) its accounting year; or the
 relevant period of other than 12 months, if a person’s attributed CFC income or loss or FIF income or loss from the foreign company is allowed or required to be calculated on the basis of a period other than 12 months because of a change of residence of the foreign company accounting proﬁts method [Repealed] [Repealed] accounting year,— (a) for any person, means a tax year or another 12 month period that ends with the date of the annual balance of the person’s accounts: for a company, includes— (i) a period, shorter than 12 months, that is the period for which accounts are prepared, includ- ing under the international tax rules, because of the formation of the company or the termination of the company’s existence; and (b) 2878 Reprinted as at 2 September 2013 (ii) Income Tax Act 2007 Part Y s YA 1 a period, shorter or longer than 12 months, that is the period for which accounts are prepared, including under the international tax rules, be- cause of the company or a person under section EX 25 (Change of CFC’s balance date) or EX 69 (Change of FIF’s balance date) adopting a new accounting balance date accrual accounting method is deﬁned in section EG 2(4) (Adjustment for changes to accounting practice) for the pur- poses of that section accrued entitlement, for a party to a ﬁnancial arrangement at any time, means the party’s rights under the arrangement at the time accrued obligation, for a party to a ﬁnancial arrangement at any time, means the party’s obligations under the arrangement at the time acquire, for depreciable property, includes— (a) make: (b) (c) be granted, for a patent or plant variety rights: lodge, for a patent application or a plant variety rights application acquisition is deﬁned in section GC 14 (Deﬁnitions for sec- tions GC 6 to GC 13) for the purposes of sections GC 6 to GC 13 (which relate to transfer pricing arrangements) acquisition price is deﬁned in section EZ 48 (Deﬁnitions) for the purposes of the old ﬁnancial arrangements rules active service
 area is deﬁned in section CW 24(2) (Deferred military pay for active service) for the purposes of that section actuarial reserves is deﬁned in section EZ 59 (Meaning of actuarial reserves) actuarially determined, for an amount, means a requirement that is met when an actuary has calculated the amount using relevant actuarial standards and a proper and reasonable cal- culation methodology actuary means a person who is— (a) (b) (c) a Fellow of the New Zealand Society of Actuaries; or a Fellow of the Institute of Actuaries of Australia; or a Fellow of the Institute of Actuaries (of London); or 2879 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (d) the holder of an equivalent professional qualiﬁcation approved by the Commissioner for the purposes of this deﬁnition additional transport costs is deﬁned in section CW 18(3) (Allowance for additional transport costs) for the purposes of that section adjusted tax value— (a) is deﬁned in sections EE 55 to EE 60 (which relate to depreciation): for software acquired before 1 April 1993, is deﬁned in section EZ 20 (Adjusted tax value for software acquired before 1 April 1993): is deﬁned in paragraphs (a) and (b) and sections EE 21 to EE 24 (which relate to depreciation) for the purposes of section FO 16 (Amortising property) (b) (c) adverse event deposit is deﬁned in section EH 62 (Other def- initions) adverse event income equalisation account is deﬁned in sec- tion EH 62 (Other deﬁnitions) adverse event income equalisation scheme means the scheme referred to in section EH 1(2)(b) (Income equalisation schemes) adverse event maximum deposit is deﬁned in section EH 61 (Meaning of adverse event maximum deposit) affected associate is deﬁned in section GB 48(1) (Deﬁned terms for sections GB 45 and GB 46) for the purposes of sec- tions GB 45 and GB 46 (which relate to arrangements involv- ing money not at risk) after-income tax earnings [Repealed] [Repealed] after-income tax loss [Repealed] [Repealed] agent means a
 person declared by this Act to be an agent for the purposes of income tax agreement for the sale and purchase of property is deﬁned in section EZ 48 (Deﬁnitions) for the purposes of the old ﬁ- nancial arrangements rules 2880 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 agreement for the sale and purchase of property or ser- vices— (a) means a ﬁnancial arrangement that is a conditional or acquire or dispose of property; or obtain or supply services; and unconditional agreement to— (i) (ii) does not include a forward contract, a futures contract, an option, or a speciﬁed option (b) agricultural, horticultural, or viticultural company means a company that carries on a business that comprises or includes performing any work or rendering a service set out in schedule 4, part C, clause 1(b) (Rates of tax for schedular payments) air transport from New Zealand is deﬁned in section CW 56(3) (Non-resident aircraft operators) for the purposes of that section airport is deﬁned in section HR 7(2) (Meaning of airport op- erator’s activities) for the purposes of that section airport asset is deﬁned in section HR 6(7) (Airport operator’s assets) for the purposes of that section airport authority is deﬁned in section 2 of the Airport Au- thorities Act 1966 airport operator means the Crown, acting by and through the Minister of Transport, and any local authority that is an airport authority, in their respective capacities as joint venturers under a joint venture agreement airport operator’s activities is deﬁned in section HR 7 (Meaning of airport operator’s activities) for the purposes of sections HR 5 and HR 6 (which relate to airport operators) amalgamated company means— (a) the 1 company that results from and continues after an amalgamation and that may be 1 of the amalgamating companies or a new company: for an amalgamation of building societies, a building so- ciety described as society B in the deﬁnition of amal- gamation, paragraph (b) (b) amalgamating
 company means— (a) a company that amalgamates with 1 or more other com- panies under an amalgamation: 2881 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) for an amalgamation of building societies, a building society described as society A or as society B in the deﬁnition of amalgamation, paragraph (b) amalgamation means— (a) an amalgamation to which both of the following apply: it occurs under Part 13 or 15 of the Companies (i) Act 1993, or it occurs or occurred under a foreign law that has the same or similar effect to Part 13 or 15 of the Companies Act 1993; and it causes 2 or more companies to amalgamate and continue as 1 company: (ii) (b) (ii) a transfer by a building society (society A) of all of its engagements to another building society (society B) under section 33 of the Building Societies Act 1965 if— a notice of the transfer (the notice) is registered (i) under section 34(3) of the Building Societies Act 1965; and society A’s funds, property, and assets are trans- ferred or assigned to society B, except to the ex- tent required to settle its affairs before being re- moved from the register of building societies; and society A does not carry on business after the notice is registered, except to the extent required to settle its affairs before being removed from the register of building societies; and society A’s liabilities are satisﬁed or assumed by society B; and society A is or will be removed from the register of building societies as soon as practicable after the notice is registered (iii) (iv) (v) amalgamation rules means the provisions listed in section FO 2 (Amalgamation rules) amortising property means property for which a person— (a) is allowed a deduction for an amount of depreciation loss; or (b) may make a deduction on account of amortisation of ex- penditure under section EZ 7 (Buying patent rights be- fore 1 April 1993), EZ 8 (Premium paid on land leased 2882 Reprinted as at 2 September 2013 Income Tax Act 2007
 Part Y s YA 1 before 1 April 1993), or any other amortisation provi- sion amount— (a) (b) includes an amount in money’s worth: in sections CB 24 (Disposal of timber or right to take timber), CB 25 (Disposal of land with standing timber), and CB 29 (Disposal of minerals), includes the amount treated as— (i) the price paid or realised under section EB 24 (Apportionment on disposal of business assets that include trading stock): the consideration under sections FB 6 and FB 7 (which relate to the disposal of timber on a settle- ment of relationship property): the price realised under sections GC 1 and GC 2 (which relate to the disposal of trading stock for inadequate consideration): (ii) (iii) (c) (d) (e) (f) (g) (h) is deﬁned in section EH 35(2) (Meaning of main maxi- mum deposit) for the purposes of that section: is deﬁned in section EH 78(3) (Meaning of thinning operations maximum deposit) for the purposes of that section: is deﬁned in section GC 14 (Deﬁnitions for sections GC 6 to GC 13) for the purposes of sections GC 6 to GC 13 (which relate to transfer pricing arrangements): is deﬁned in section RD 33(4) (Subsidised transport) for the purposes of that section: is deﬁned in section RD 37(2) (Contributions to super- annuation schemes) for the purposes of that section: is deﬁned in section RD 41(4) (Services) for the pur- poses of that section amount of all consideration is deﬁned in section EZ 48 (Def- initions) for the purposes of the old ﬁnancial arrangements rules amount of tax, for a payment, includes the amount of tax that must be withheld and paid, or paid to the Commissioner under the PAYE rules, ESCT rules, RSCT rules, RWT rules, or NRWT rules 2883 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 ancillary tax means— provisional tax: (a) further income tax: (b) imputation penalty tax: (c) penalty tax for a Maori authority payable under section (d) 140DB of the Tax Administration Act 1994: FDP: (e) further FDP: (f) FDP penalty tax: (g)
 qualifying company election tax: (h) PAYE: (i) FBT: (j) (k) ESCT: (kb) RSCT: (l) RWT: (m) NRWT: (n) withdrawal tax annual branch equivalent tax account return means the re- turn to be ﬁled with the Commissioner by a company under sections 77 and 78 of the Tax Administration Act 1994 annual FDPA return means the return to be ﬁled with the Commissioner by a company under sections 71 and 72 of the Tax Administration Act 1994 annual gross income is deﬁned in section BC 2 (Annual gross income) annual ICA return means the return to be ﬁled with the Com- missioner by a company under section 69 of the Tax Admin- istration Act 1994 annual income tax balance date is deﬁned in section EG 1(10) (Election to use balance date used in foreign coun- try) for the purposes of that section annual PCA return means the return to be ﬁled with the Com- missioner by a company under section 66 of the Tax Admin- istration Act 1994 annual rate is deﬁned in section EE 61 (Meaning of annual rate) annual rates means the rates of income tax ﬁxed for a tax year by the annual taxing Act for that year 2884 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 annual taxing Act means the provisions of any Act by which the rates of income tax are ﬁxed for a tax year annual total deduction is deﬁned in section BC 3 (Annual total deduction) approved issuer means a person for whom an approval under section 32M of the Tax Administration Act 1994 is in force arm’s length amount, for an arrangement that is a cross-bor- der arrangement under section GC 6 (Purpose of rules and na- ture of arrangements) means an arm’s length amount of con- sideration under section GC 13 (Calculation of arm’s length amounts) arrangement means an agreement, contract, plan, or under- standing, whether enforceable or unenforceable, including all steps and transactions by which it is carried into effect arrangement for assistance entered into by the government of New Zealand is deﬁned in section CW 22(3) (Amounts
 derived by overseas experts and trainees in New Zealand by government arrangement) for the purposes of that section arrangement property is deﬁned in section GB 45(3) (Ar- rangements involving money not at risk) for the purposes of that section ASC has the same meaning as available subscribed capital ASC account means a memorandum account established by an ASC account company under section OF 1(2) (General rules for companies with ASC accounts) ASC account company means a company that chooses under section OF 1(1) and OF 3 (which relate to ASCA companies) to become an ASCA company ASC credit means a credit referred to in section OA 5(6) (Credits) ASC debit means a debit referred to in section OA 6(6) (Debits) ASCA means available subscribed capital account assessable income is deﬁned in section BD 1(5) (Income, exempt for- eign-sourced income, and assessable income) excluded income, non-residents’ income, 2885 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 assessment is deﬁned in section 3(1) of the Tax Administra- tion Act 1994 assessment period is deﬁned in section GB 45(3) (Arrange- ments involving money not at risk) for the purposes of that section asset— (a) is deﬁned in section CU 11 (Meaning of asset for sec- tions CU 3 to CU 10) for the purposes of sections CU 3 to CU 10 (which relate to income from mining): is deﬁned in section DG 3 (Meaning of asset for this subpart) for the purposes of subpart DG (Expenditure related to use of certain assets) and sections CC 1(2B) and CW 8B (which relate to the treatment of certain income): is deﬁned in section DU 8 (Meaning of asset for sections DU 1 to DU 7) for the purposes of sections DU 1 to DU 7 (which relate to deductions for mining): is deﬁned in section EZ 68 (Deﬁnitions) for the pur- poses of sections EZ 64 to EZ 67 (which relate to New Zealand Railways Corporation restructure) (ab) (b) (c) asset base means a segregated or identiﬁable group of assets or proportion of a group of assets
 attributable to proﬁt partici- pation policies asset value is deﬁned in section DG 11(8) (Interest expend- iture: close companies) for the purposes of subpart DG (Ex- penditure related to use of certain assets) associated, associated person, person associated, and other expressions indicating the association of persons with each other are deﬁned in sections YB 1 to YB 16 (which relate to associated persons) associated internal software developer is deﬁned in section LH 17 (Some deﬁnitions) for the purposes of subpart LH (Tax credits for expenditure on research and development) associated mining operations is deﬁned in section CU 29 (Other deﬁnitions) associated non-attributing active CFC, for a CFC, means a person who is associated with the CFC under section YB 2 2886 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (Two companies) if the person and the CFC meet the following requirements: (a) (b) the person is a non-attributing active CFC; and the person and the CFC each have a taxed CFC connec- tion with the same country or territory association, in subpart HE (Mutual associations), and sections CB 33, CB 34, and DV 19, (which relate to mutual associ- ations), means a body or association of persons, whether in- corporated or not association rebate is deﬁned in section HE 3 (Association re- bates) for the purposes of subpart HE (Mutual associations) and sections CB 34 and DV 19 (which relate to mutual asso- ciations) attributable CFC amount is deﬁned in section EX 20B (At- tributable CFC amount) attributable FIF income method means the method of calcu- lating FIF income or FIF loss in section EX 50 (Attributable FIF income method) attributed CFC income is deﬁned in section CQ 2 (When attributed CFC income arises) attributed CFC loss is deﬁned in section DN 2 (When at- tributed CFC loss arises) attributed CFC net loss, for a person and for an income year in which they have an attributed CFC loss, means the part of the loss that the person is denied
 as a deduction because of sec- tion DN 4 (Ring-fencing cap on deduction), but must instead deal with under Part I (Treatment of tax losses) attributed PIE income means an amount of income attributed by a multi-rate PIE to an investor in the PIE under section HM 36 (Calculating amounts attributed to investors) attributed PIE loss means an amount of loss attributed by a multi-rate PIE to an investor in the PIE under section HM 36 (Calculating amounts attributed to investors) attributed repatriation is deﬁned in section CD 45 (When does a person have attributed repatriation from a controlled foreign company?)
2887 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 attributing interest means an attributing interest in a foreign investment fund as deﬁned in sections EX 29 to EX 43 (which relate to attributing interests in FIFs) attribution period, for a multi-rate PIE, means a period de- scribed in section HM 34 (Attribution periods) Australian approved deposit fund means an approved de- posit fund as deﬁned in section 10 of the Superannuation In- dustry (Supervision) Act 1993 (Aust) Australian complying superannuation scheme means an en- tity that is a complying superannuation fund for the purposes of Part 5, Division 2 of the Superannuation Industry (Supervi- sion) Act 1993 (Aust) and that is regulated by the Australian Prudential Regulation Authority Australian exempt public sector superannuation scheme means an exempt public sector superannuation scheme as de- ﬁned in section 10 of the Superannuation Industry (Supervi- sion) Act 1993 (Aust) Australian ﬁnancial year is deﬁned in section CV 8(3) (Regu- lations: Australian wine producer rebate) for the purposes of that section Australian ICA company means a company referred to in section OB 2(1) (Australian companies with imputation credit accounts) Australian non-attributing shares is deﬁned in section EM 8 (Some deﬁnitions) for the purposes of subpart EM (Hedging of currency movements in Australian non-attributing shares and attributing FDR method interests) Australian regulated superannuation fund means a regu- lated superannuation fund as deﬁned in section 19 of the Superannuation Industry (Supervision) Act 1993 (Aust) Australian retirement savings account means a retirement savings account as deﬁned in section 8 of the Retirement Sav- ings Accounts Act 1997 (Aust) Australian wine producer rebate means a producer rebate (under A New Tax System (Wine Equalisation Tax) Act 1999 (Aust) and regulations made under that Act) that relates to wine exported from New Zealand on or after 1 July 2005 2888 Reprinted as at 2 September 2013 Income Tax Act 2007
 Part Y s YA 1 author is deﬁned in section EI 3(6) (Assigning or granting copyright) for the purposes of that section authorised savings institution means an authorised savings institution as deﬁned in the Home Ownership Savings Act 1974 available capital distribution amount means the amount cal- culated for a share in a company under section CD 44 (Avail- able capital distribution amount) available subscribed capital means the amount calculated for a share in a company under section CD 43 (Available sub- scribed capital (ASC) amount) available tax loss, for a person and their net income, means— a loss balance carried forward that, under Part I (Treat- (a) ment of tax losses), is required to be subtracted from the net income: an amount of another company’s tax loss that, under Part I, the person, if it is a company, is allowed to sub- tract from the net income: an attributed CFC net loss or FIF net loss carried for- ward that, under subpart IQ (Attributed controlled for- eign company net losses and foreign investment fund net losses), is required to be subtracted from the net in- come: the amount of another company’s attributed CFC net loss or FIF net loss that, under subpart IQ, is subtracted from the net income (d) (b) (c) balance date, for the purposes of section RC 10 (Calculating amount of instalment under standard and estimation methods) and subpart RC (Provisional tax), section RP 17B (Tax pool- ing accounts and their use), and schedule 3 (Payment of pro- visional tax and terminal tax) means the date of the annual balance of a person’s ﬁnancial statements for their tax year balloted loan right is deﬁned in section DV 10(3) (Building societies) for the purposes of that section banking company means a person carrying on in New Zealand the business of banking base amount is deﬁned in section RC 8(2) (GST ratio method) for the purposes of that section 2889 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) base premium for the 1998–99 premium year
 is deﬁned in section EZ 30(3) (Base premium for 1998–99 premium year under Accident Insurance Act 1998) for the purposes of that section basic tax rate, for a person,— (a) means the basic rate of income tax for the person set out in schedule 1 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe beneﬁts) and sched- ule 2 (Basic tax rates for PAYE income payments); and in the case of a transitional year, resulting from a change in a person’s balance date, has the meaning given in section 39(5) of the Tax Administration Act 1994 benchmark distribution means the ﬁrst taxable Maori au- thority distribution by a Maori authority in a tax year benchmark dividend, means the ﬁrst dividend paid by a com- pany in a tax year that is not 1 of the following kinds: (a) a dividend to which the company is not allowed by sec- tion OB 63 (Australian dividends) to attach an imput- ation credit: a distribution of a co-operative company for which the company has made an election under section OB 82 (When and how co-operative company makes election) beneﬁcial interest includes an interest that is contingent, dis- cretionary or unvested beneﬁciary is deﬁned in section DX 1(5) (Testamentary an- nuities) for the purposes of that section beneﬁciary income is deﬁned in section HC 6 (Beneﬁciary income) beneﬁt is deﬁned in section DB 45(4) (Bribes paid to public ofﬁcials) for the purposes of that section beneﬁt fund PIE means a deﬁned beneﬁt fund that— (a) meets the requirements of section HM 7 (Require- (b) ments); and chooses to become a PIE under section HM 71 (Choos- ing to become PIE); and has not chosen to cancel PIE status under section HM 29 (Choosing to cancel status); and does not attribute amounts to investors (b) (c) (d) 2890 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 best estimate assumptions means assumptions about the fu- ture that— (a) (b) are actuarially determined; and are made using professional judgement, training and ex- perience; and
 are not deliberately overstated or understated (c) BETA has the same meaning as branch equivalent tax ac- count BETA company [Repealed] [Repealed] BETA person means a person who chooses under sections OE 1(2) and OE 17 (which relate to persons with branch equivalent tax accounts) to become a BETA person binding ruling is deﬁned in section 3 of the Tax Administra- tion Act 1994 bloodstock— (a) means a horse that is a member of the standardbred or thoroughbred breed of horses; and includes a share or interest in such a horse (b) bonus issue means— (a) the issue or subdivision of shares in a company, or the giving of credit for or forgiveness of an amount unpaid on any shares in a company, if the company receives no consideration for the issue, subdivision, crediting, or forgiveness other than the shareholder choosing not to receive an amount as an alternative to the issue or subdivision: (b) the issue of shares under a proﬁt distribution plan bonus issue in lieu means a bonus issue made, on or after 1 October 1988, under an arrangement conferring on share- holders of a company an election whether to receive— (a) (b) money; or (c) money’s worth, other than money’s worth that is a a bonus issue; or bonus issue boutique investor class, for a portfolio investment entity, means an investor class of the entity if— (a) the class does not have 20 or more members; and 2891 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) (c) (d) the entity has 1 or more other investor classes that in- clude 20 or more persons; and no investor in the class described in paragraph (a), other than the manager or trustee of the entity, can control investment decisions relating to the class; and the investor interests of investors in all investor classes described in paragraph (a) of the entity add up to less than 10% of the total value of interests in the entity branch equivalent company [Repealed] [Repealed] branch equivalent income, for a foreign company and for an accounting
 period, means the amount of income for the accounting period calculated under section EX 21 (Branch equivalent income or loss: calculation rules) as that provision read immediately before being amended by section 161 of the Taxation (International Taxation, Life Insurance, and Remed- ial Matters) Act 2009 branch equivalent loss, for a foreign company and for an ac- counting period, means the amount of loss for the accounting period calculated under section EX 21 (Branch equivalent in- come or loss: calculation rules) as that provision read imme- diately before being amended by section 161 of the Taxation (International Taxation, Life Insurance, and Remedial Mat- ters) Act 2009 branch equivalent method means the method of calculat- ing FIF income or FIF loss in section EX 50 (Branch equiva- lent method) as that provision read immediately before being amended by section 35 of the Taxation (International Invest- ment and Remedial Matters) Act 2012 branch equivalent tax account means the account main- tained by a BETA person under section OE 17(3) (Person choosing to become BETA person) branch equivalent tax credit means a credit referred to in section OA 5(5) (Credits) branch equivalent tax debit means a debit referred to in sec- tion OA 6(5) (Debits) bribe is deﬁned in section DB 45(4) (Bribes paid to public ofﬁcials) for the purposes of that section 2892 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 a grandparented structure: commercial ﬁt-out broodmare means a broodmare that is bloodstock building, in subparts EE and EZ, does not include— (a) (b) building society is deﬁned in section 2 of the Building Societies Act 1965 business— (a) includes any profession, trade, or undertaking carried on for proﬁt: includes the activities of— (i) (ii) is further deﬁned in section DD 11 (Some deﬁnitions) for the purposes of subpart DD (Entertainment expend- iture) a statutory producer board: an airport operator: (b) (c) business contacts is deﬁned in section DD
 11 (Some deﬁni- tions) for the purposes of subpart DD (Entertainment expend- iture) business premises is deﬁned in section DD 11 (Some deﬁni- tions) for the purposes of subpart DD (Entertainment expend- iture) business tool means an item that is used by an employee in the performance of their work duties and in the absence of section CX 21 (Business tools) would give rise to an unclassiﬁed bene- ﬁt business use, for a motor vehicle and for a person, means travel undertaken by the vehicle wholly in deriving the per- son’s income calculation method, for the calculation of FIF income or FIF loss, means any of the attributable FIF income method, the comparative value method, the deemed rate of return method, the fair dividend rate method, and the cost method calculation period, for a multi-rate PIE, means a period in which the entity calculates an amount under section HM 47 (Calculation of tax liability or tax credit of multi-rate PIEs) that— (a) consists of 1 or more attribution periods: 2893 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) (c) (d) for a calculation under the quarterly calculation option, is a quarter: for a calculation under the exit calculation or provi- sional tax calculation options, is an income year: for a calculation under the exit calculation option when an exit period arises, is the exit period cancellation, for a company and for a share, means the acqui- sition, redemption, or other cancellation of the whole share by the company, including on the liquidation of a company, and when a stapled debt security ceases to be a share capital contribution— (a) in sections CG 8, DB 64, and EE 48 (which relate to capital contributions), means an amount that— (i) (ii) (iii) (iv) (v) is paid by a person (the payer) to a person (the re- cipient) under an agreement between them; and is paid by the payer other than in their capacity of settlor, partner, or shareholder of the recipient; and is not income of the recipient, ignoring
 sections CC 1B and CG 8; and is paid, under the express terms and conditions of the agreement, as a contribution for capital contribution property; and if the agreement is a contract of insurance, in- demnity, or compensation, is paid in relation to an interruption or impairment of business activ- ities: (b) is deﬁned in section HG 11(12) (Limitation on deduc- tions by partners in limited partnerships) for the pur- poses of that section capital contribution property means, for a recipient of an amount,–– (a) depreciable property owned or to be acquired by the recipient: an improvement for which expenditure is or would be deductible for the recipient under section DO 4, DO 11, DO 12, or DO 13 (which relate to farming, horticultural, aquacultural, and forestry improvements): (b) 2894 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (c) (d) a listed horticultural plant or land for which expenditure is or would be deductible for the recipient under section DO 5 or DO 6 (which relate to horticultural expenditure on land): a listed horticultural plant or land to the extent to which some but not all expenditure for replacement plants is deductible under section DO 6 capital limitation is deﬁned in section DA 2(1) (General limi- tations) capital property is deﬁned in section CD 44(18) (Available capital distribution amount) for the purposes of that section car,— (a) (ii) in section EZ 16 (Amount of depreciation loss for plant or machinery additional to section EZ 15 amount), and in the deﬁnition of qualifying asset,— (i) means a motor vehicle designed exclusively or mainly to carry up to 9 people, including the driver; and includes such a motor vehicle that has rear doors and collapsible rear seats; and (iii) does not include a moped or a motorcycle: in the FBT rules, and in the deﬁnition of work-related vehicle,— (i) means a motor vehicle designed exclusively or mainly to carry people: includes such a motor vehicle that has rear doors or collapsible rear
 seats: does not include a minibus, moped, motorcycle, or taxi (ii) (iii) (b) cash accounting method is deﬁned in section EG 2(4) (Ad- justment for changes to accounting practice) for the purposes of that section cash basis person is deﬁned in section EW 54 (Meaning of cash basis person) casual agricultural employee means— a casual agricultural worker: (a) a shearer: (b) a shearing shed hand (c) 2895 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 casual agricultural worker means a person engaged on a day to day basis for a period of no more than 3 months as a casual seasonal worker for the exclusive purpose of doing seasonal agricultural, horticultural, market gardening, nursery, orchard, or tobacco farming work, or other seasonal work that, in the opinion of the Commissioner, is work of a like nature to those classes of work category A income is deﬁned in section HR 3(1) (Deﬁnitions for section HR 2: group investment funds) for the purposes of section HR 2 (Group investment funds) category B income is deﬁned in section HR 3(3) (Deﬁnitions for section HR 2: group investment funds) for the purposes of section HR 2 (Group investment funds) CFC has the same meaning as controlled foreign company charitable or other public beneﬁt gift is deﬁned in section LD 3 (Meaning of charitable or other public beneﬁt gift) charitable organisation— (a) means, for a quarter or an income year, an association, fund, institution, organisation, society, or trust to which section LD 3(2) (Meaning of charitable or other public beneﬁt gift) or schedule 32 (Recipients of charitable or other public beneﬁt gifts) applies— (i) (ii) in the quarter; or in the income year, if fringe beneﬁt tax is payable on an income year basis under section RD 60 (Close company option); and (b) does not include a local authority, a public authority, or a university charitable purpose includes every charitable purpose, whether it relates to the relief of poverty, the advancement of education or
 religion, or any other matter beneﬁcial to the community, and— (a) the purpose of a trust, society, or institution is charit- able under this Act if the purpose would meet the public beneﬁt requirement apart from the fact that the beneﬁ- ciaries of the trust, or the members of the society or in- stitution, are related by blood: a marae has a charitable purpose if— (b) 2896 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (i) (ii) the physical structure of the marae is situated on land that is a Maori reservation referred to in Te Ture Whenua Maori Act 1993 (the Maori Land Act 1993); and the funds of the marae are not used for a pur- pose other than the administration and mainten- ance of the land and of the physical structure of the marae, or not used for a purpose that is a char- itable purpose other than under this paragraph charitable trust is deﬁned in section HC 13 (Charitable trusts) for the purposes of the trust rules chief executive is deﬁned in section MA 8 (Some deﬁnitions for family scheme) for the purposes of subparts MA to MF and MZ (which relate to tax credits for families) chief executive of the administering department— (a) means the chief executive, appointed under the State Sector Act 1988, of the department responsible for ad- ministering the Social Security Act 1964; and includes any person authorised to perform any of the functions of the chief executive (b) child in subparts MA to MF and MZ (which relate to tax credits for families), and in the deﬁnition of dependent child, means a person who is not in a marriage, civil union, or de facto relationship, and who— (a) (b) is aged 15 years or less; or is aged 16 or 17 years and is not ﬁnancially independent; or is aged 18 years and is a person for whom a tax credit is allowed under section MD 1 (Abating WFF tax credit) or both sections MD 1 and ME 1 (Minimum family tax credit) (c) child tax credit is deﬁned in section MA 8 (Some deﬁnitions for family scheme) for the purposes of
 subparts MA to MF and MZ (which relate to tax credits for families) civil union partner, in subparts MA to MF and MZ (which relate to tax credits for families) and in section LC 13 (Tax credits for independent earners) and in the deﬁnitions of en- 2897 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 titlement period, full-time earner, and separated person, does not include a separated person claim, in the life insurance rules, is deﬁned in section EY 7 (Meaning of claim) claim of right means a belief that an act is lawful, although the belief may be based on ignorance, or mistake, of— (a) (b) fact; or any matter of law other than the enactment against which the offence is alleged to have been committed class, in subpart EC (Valuation of livestock), and in the deﬁn- ition of national average market value,— (a) means a category of livestock listed in schedule 17, col- umn 2 (Types and classes of livestock); and (b) when used of a particular type of livestock, means any of the categories listed for that particular type class closing animal balance is deﬁned in section EC 8(4) (Restrictions arising from use of herd scheme) for the purposes of that section class of policies means life insurance policies that have sub- stantially the same terms and conditions, and that are priced by the life insurer using substantially the same assumptions close company— (a) means, at any time, a company to which 1 of the follow- ing applies: (i) (ii) at the time there are 5 or fewer natural persons the total of whose voting interests in the company is more than 50% (treating all natural persons associated at the time as 1 natural person); or at the time a market value circumstance exists for the company and there are 5 or fewer natural persons the total of whose market value interests in the company is more than 50% (treating all natural persons associated at the time as 1 natural person); and (b) (c) in section RD 3(2) to (4) (PAYE income payments), in- cludes a
 company with 25 or fewer shareholders; and does not include a special corporate entity 2898 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 close of trading spot exchange rate, for any foreign currency on any day, means the rate determined by applying the follow- ing paragraphs in order: (a) the rate of a spot contract for the purchase of New Zealand dollars using the foreign currency at any time on that day on a market approved, with the rate ob- tained from the sources of information approved, by the Commissioner in determination G6D made under sec- tion 64E of the Income Tax Act 1976 (or a determination issued in substitution for that determination); and if no such rate can be obtained for that day, then the rate on the next day on which it can be obtained and that is no later than 5 working days after the ﬁrst day; and if no such rate of a spot contract can be obtained, the cross rate determined as at 3.00 pm New Zealand time on that day by applying the method outlined in para- graph 6(3)(c) of determination G6D made under section 64E of the Income Tax Act 1976 (or in the correspond- ing paragraph of a determination issued in substitution for that determination); and if no such rate can be obtained, the rate determined by applying the method set out in paragraph 6(2) of deter- mination G9A made under section 64E of the Income Tax Act 1976 (or in the corresponding paragraph of a determination issued in substitution for that determin- ation) (b) (c) (d) close relative is deﬁned in section FC 1(2) (What this subpart does) for the purposes of subpart FC (Distribution, transmis- sion, and gifts of property) closely-held company means, at any time, a company to which 1 of the following applies: (a) at the time there are 5 or fewer persons the total of whose direct voting interests in the company is more than 50%, treating all persons associated at the time as 1 person; or at the time,— (i) a market value circumstance exists for the com- pany; and
 (b) 2899 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (ii) there are 5 or fewer persons the total of whose direct market value interests in the company is more than 50%, treating all persons associated at the time as 1 person closing stock, for a person and for an income year, means trading stock of the person at the end of the income year combined imputation and CTR ratio [Repealed] [Repealed] combined imputation and FDP ratio means the ratio set out in section OC 29 (FDP credits and imputation credits attached to dividends) combined tax and earner-related payment means, for a PAYE income payment, the total of— (a) the amount of tax for the PAYE income payment re- quired to be withheld and paid under the PAYE rules; and the amount withheld from the PAYE income payment under— (i) (b) section 115 of the Accident Rehabilitation and Compensation Insurance Act 1992, on account of the earner’s premium payable by employees under the Act; or section 285 of the Accident Insurance Act 1998, on account of the earner’s premium payable by employees under the Act; or section 221 of the Accident Compensation Act 2001, on account of the earner’s levy payable by employees under the Act (ii) (iii) commencement of this Act, in sections ZA 3 (Transitional provisions), ZA 4 (Saving of binding rulings), ZA 5 (Saving of accrual determinations), and ZA 6 (Comparative tables of old and new provisions), means commencement under section A 2(2) (Commencement) commercial bill— (a) includes— (i) a document creating or securing a legal or equit- able security over goods, as deﬁned in section 16 of the Personal Property Securities Act 1999, for 2900 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 the payment of money owing or to become ow- ing, whether or not the document is registered under an Act; and a bill of exchange, as deﬁned in section 3 of the Bills of Exchange Act 1908; and a promissory note, as deﬁned in section 84 of the Bills of Exchange Act
 1908, other than a ban- knote; and a Treasury Bill; and a document or agreement that has substantially the same purpose or effect as an item referred to in any of subparagraphs (i) to (iv); and a share or interest in an item referred to in any of subparagraphs (i) to (v); and (ii) (iii) (iv) (v) (vi) (b) does not include— (i) a debenture or bond for the payment of a security issued by a body corporate; or a security, whether legal or equitable, over an estate or interest in land (ii) commercial building means a building that is not, in part or in whole, a dwelling, unless use as a dwelling is a secondary and minor use commercial ﬁt-out means an item to the extent to which it is— (a) plant attached to a commercial building, but not used inside a dwelling within the commercial building: attached to, and non-structural in relation to, a building, if the item is not used for weatherprooﬁng the building and— (i) is not used in relation to, and is not part of, a dwelling within the building; or is used in relation to, but is not part of, a dwelling within the building, and the building is a commer- cial building (ii) (b) commercial production means the production of petrol- eum— (a) in a state suitable for delivery to a buyer, consumer, processor, reﬁnery, or user; and in commercial quantities; and (b) 2901 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 on a continuing basis (c) Commissioner means the Commissioner of Inland Revenue as deﬁned in section 3 of the Tax Administration Act 1994 common interest is deﬁned in section YC 13(4) (Corporate spin-outs) for the purposes of that section common market value interest— (a) means the market value interest measured under section IC 3(4) (Common ownership: group of companies) for the purposes of that section and section IC 4: is deﬁned in section YC 13(6) (Corporate spin-outs) for the purposes of that section (b) common span is deﬁned in section IP 2(1) (Group compan- ies’ common span) for the purposes
 of subpart IP (Meeting requirements for part-years) common voting interest— (a) means the voting interest measured under section IC 3(3) (Common ownership: group of companies) for the purposes of that section and section IC 4: is deﬁned in section YC 13(5) (Corporate spin-outs) for the purposes of that section (b) commonality period is deﬁned in section IC 6(1) (Common ownership for period) for the purposes of Part I (Treatment of tax losses) Commonwealth— (a) means the British Commonwealth of Nations; and (b) includes every territory for whose international rela- tions the Government of any country of the Common- wealth is responsible community trust is deﬁned in section 4 of the Community Trusts Act 1999 company— (a) means a body corporate or other entity that has a legal existence separate from that of its members, whether it is incorporated or created in New Zealand or elsewhere: (ab) does not include a partnership: (abb) does not include a look-through company, except in the PAYE rules, the FBT rules, the NRWT rules, the RWT 2902 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (ac) (ad) (b) (c) rules, the ESCT rules, the RSCT rules, and for the pur- poses of subpart FO (Amalgamation of companies): includes a listed limited partnership: includes a foreign corporate limited partnership: includes a unit trust: includes a group investment fund that is not a designated group investment fund, but only to the extent to which the fund results from investments made into it that are— not from a designated source, as deﬁned in sec- (i) tion HR 3(5) (Deﬁnitions for section HR 2: group investment funds); and including an not made before 23 June 1983, amount treated as invested at that date under the deﬁnition of pre-1983 investment in section HR 3(8): (ii) (g) (d) (e) (f) (h) (i) (j) includes an airport operator: includes a statutory producer board: includes a society registered under the Incorporated Societies Act 1908: includes a society registered
 under the Industrial and Provident Societies Act 1908: includes a friendly society: includes a building society: is further deﬁned in section EX 30(7) (Direct income interests in FIFs) for the purposes of that section company dividend statement means a statement required by section 67 of the Tax Administration Act 1994 to be completed and retained by a company for a dividend comparative value method means the method of calculating FIF income or FIF loss in section EX 51 (Comparative value method) compensation [Repealed] [Repealed] completed, for a ﬁlm, means the completion of the ﬁlm to— the stage of production at which the ﬁlm has been com- (a) pletely edited, shot by shot, to its ﬁnal length; or a production stage equivalent to that described in para- graph (a) (b) 2903 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 complying fund calculation period [Repealed] [Repealed] complying fund rules means, for a superannuation fund and an employee’s superannuation accumulation, rules that— (a) meet all the requirements set out in schedule 28 (Re- quirements for complying fund rules); and do not detract from those requirements (b) complying superannuation fund means a superannuation fund that is approved as a complying superannuation fund under section 35 of the Superannuation Schemes Act 1989 complying trust is deﬁned in section HC 10 (Complying trusts) compulsory employer contribution has the same meaning as in the KiwiSaver Act 2006 conduct is deﬁned in section IZ 1(12) (Use of speciﬁed activ- ity net losses) for the purposes of that section conduit company is a company that meets the requirements of section FF 2 (When interest apportionment rule applies) consideration— (aa) includes the amount owing under a stapled debt security when the security ceases to be a share, in section CD 43 (Available subscribed capital (ASC) amount): is deﬁned in section EE 45 (Consideration for purposes of section EE 44) for the purposes of section EE 44 (Application
 of sections EE 48 to EE 52): (a) (b) means an amount determined under the ﬁnancial ar- rangements rules in— (i) (ii) the ﬁnancial arrangements rules: section EX 21(11) (Attributable CFC amount and net attributable CFC income or loss: calculation rules): sections FO 12 to FO 15 (which relate to the treatment of ﬁnancial arrangements on amalgam- ation): sections FO 18 to FO 20 (which relate to compan- ies that are parties to ﬁnancial arrangements): section HC 31(4) (When existing trusts come into tax base) (iii) (iv) (v) 2904 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 consolidated BETA group [Repealed] [Repealed] consolidated FDP group is deﬁned in section OP 51(1) (FDP accounts of consolidated FDP groups) consolidated group means, at any time, a consolidated group formed under section FM 35 (Forming consolidated group) as it is constituted at that time consolidated imputation group means— (a) (b) (c) an imputation group: a resident imputation subgroup: a consolidated group, no member of which is a member of an imputation group consolidation rules means the provisions listed in section FM 2(2) (Consolidation rules) contaminant means a contaminant as deﬁned in section 2(1) of the Resource Management Act 1991 continental shelf is deﬁned in the Continental Shelf Act 1964 continuity period— (a) is deﬁned in section IA 5(6) (Restrictions on compan- ies’ loss balances carried forward) for the purposes of that section: is deﬁned in section LP 4(3) (Continuity rules for carry- ing credits forward) for the purposes of that section (b) continuity provisions means— (a) section GB 3 (Arrangements for carrying forward loss balances: companies); and section GB 4 (Arrangements for grouping tax losses: companies); and sections IA 3 and IA 4 (which relate to the use of tax losses); and section IA 5 (Restrictions on companies’ loss balances carried forward); and section IC 1 (Company A making tax loss available to company B); and section LP 3(4) (Use of
 remaining credits); and section OB 41 (ICA debit for loss of shareholder con- tinuity); and (b) (c) (d) (e) (f) (g) 2905 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (h) (i) (j) section OC 24 (FDPA debit for loss of shareholder con- tinuity); and [Repealed] section OK 15 (MACA debit for loss of shareholder continuity) contract activity or service, for a non-resident contractor, means— (a) (b) (c) performing any work in New Zealand: rendering a service of any kind in New Zealand: providing the use of, or right to use, in New Zealand, any personal property or services of a person other than the non-resident contractor contract of employment is deﬁned in section DC 3B(3) (Pay- ments to working owners) for the purposes of that section and the deﬁnition of working owner contract of service is deﬁned in section DC 4(5) (Payments to working partners) for the purposes of that section contract payment, for a non-resident contractor, means any payment other than— (a) (b) a royalty; or a payment made to the non-resident contractor by or on behalf of a person who is not associated with the contractor to reimburse costs incurred by the contractor; or a payment referred to in schedule 4, part E (Rates of tax for schedular payments) (c) directly; or indirectly by reimbursement through another person contribution, in the FBT rules, means a contribution made— (a) (b) control [Repealed] [Repealed] control interest, for a foreign company, is deﬁned in sections EX 2 (Four categories for calculating control interests) and EX 7 (Indirect control interests) control interest category means 1 of the categories of control interest listed in section EX 2(2) (Four categories for calculat- ing control interests) 2906 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 controlled foreign company is deﬁned in section EX 1 (Meaning of controlled foreign company) controlled petroleum mining company means a company that is a petroleum miner if— (a) 90% or more in
 value of its outstanding shares are held, directly or indirectly, by or for 5 or fewer persons; and the market value of a petroleum permit, including an asset of the kind described in section CT 7(1)(b) or (c) (Meaning of petroleum mining asset) attributable to the permit, held by the company is at least 75% of the value of its assets minus its liabilities, as shown in the com- pany’s audited ﬁnancial statement or accounts prepared under generally accepted accounting practice (b) (b) a controlled petroleum mining company; or a controlled petroleum mining holding company; or a controlled petroleum mining trust; or a controlled petroleum mining holding trust controlled petroleum mining entity means— (a) (b) (c) (d) controlled petroleum mining holding company means a company if— (a) 90% or more in value of its outstanding shares are held, directly or indirectly, by or for 5 or fewer persons; and the total market value of the following shares and trust interests held by the company is at least 75% of the value of its assets minus its liabilities, as set out in the company’s audited ﬁnancial statement or accounts pre- pared according to generally accepted accounting prac- tice: (i) (ii) (iii) (iv) shares in petroleum mining companies: shares in petroleum mining holding companies: trust interests in petroleum miners that are trusts: trust interests in petroleum mining holding trusts controlled petroleum mining holding trust means a trust that is a petroleum miner if— (a) 90% or more in value of the trust is owned, directly or indirectly, by or for 5 or fewer persons; and the total market value of the following shares and trust interests held by the trust is at least 75% of the value of its assets minus its liabilities, as set out in the trust’s (b) 2907 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 accounts prepared according to generally accepted ac- counting practice: (i) (ii) trust interests in petroleum miners that are trusts: trust interests in
 other petroleum mining holding trusts: shares in petroleum miners that are companies: shares in petroleum mining holding companies (iii) (iv) (b) controlled petroleum mining trust means a trust that is a petroleum miner if— (a) 90% or more in value of the trust is owned, directly or indirectly, by or for 5 or fewer persons; and the market value of a petroleum permit, including an asset of the kind described in section CT 7(1)(b) or (c) (Meaning of petroleum mining asset) attributable to the permit, held by the trust is at least 75% of the value of its assets minus its liabilities, as shown in the trust’s accounts prepared under generally accepted accounting practice controlling shareholder is deﬁned in section HD 15(9) (Asset stripping of companies) for the purposes of that section convert, for a New Zealand emissions unit, means convert as deﬁned in section 4(1) of the Climate Change Response Act 2002 convertible credit means a credit that a person is allowed under Part L (Tax credits and other credits)— (a) (b) for an imputation credit; or for FDP, if the person is not entitled to a refund of the credit under Part R (General collection rules) convertible note means a document or a combination of docu- ments that— (a) (b) is issued or given by a company; and creates or relates to money lent to the company, whether or not secured; and provides, whether exclusively or not,— (i) (c) for the holder to have a right to subscribe for shares or stock in the capital of the company or in the capital of another company; or for the amount or any part of the amount, with or without interest and whether at par or otherwise, (ii) 2908 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 to be converted into or repaid by the issue of shares in the company, whether the conversion or repayment by the issue of shares is mandatory or is at the option of the company or of the holder co-operative company does not include a statutory producer board copyright in a sound
 recording means the copyright in the version of the recording of which copies have been sold or offered for sale to the public core acquisition price is deﬁned in section EZ 48 (Deﬁni- tions) for the purposes of the old ﬁnancial arrangements rules corpus is deﬁned in section HC 4 (Corpus of trust) for the purposes of the trust rules corresponding income year, for a tax year, means an income year that ends in the period starting on 1 October in the tax year and ending on 30 September immediately after the tax year cost,— (a) in subpart EB (Valuation of trading stock (including dealer’s livestock)), for trading stock, means costs in- curred in the ordinary course of business to bring trad- ing stock to its present location and condition, including purchase costs and costs of production, calculated under sections EB 6 to EB 8 (which relate to costs for stand- ard valuations), EB 15 to EB 18 (which relate to costs for low-turnover traders), and EB 22 (Valuing closing stock consistently for low-turnover traders): is deﬁned in section RD 40(3) (Goods) for the purposes of that section: in sections RD 42 and RD 43 (which relate to goods pro- vided with staff discount), for a registered person who may claim input tax for the cost of the goods, means the GST-inclusive cost of the goods to the person (b) (c) cost method means a method of calculating FIF income or FIF loss under section EX 56 (Cost method) cost of timber, in sections DP 11, EJ 1, EW 2, EZ 44, FB 6, and FB 7 (which relate to the disposal of timber),— (a) means the amount of expenditure incurred by a person in relation to timber— 2909 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (i) (ii) before harvest, for a disposal of harvested timber: before the disposal of the timber or the relevant right, for a disposal of standing timber or a dis- posal of a right to take timber, or another right referred to in section DP 11(4) (Cost of timber); and includes, for section DP 11,— (i) expenditure on
 planning, planting, and growing the timber: expenditure incurred in relation to the rights listed in section DP 11(4); and (b) (c) excludes— (i) (ii) (ii) (iii) expenditure for which a deduction is allowed under a provision of this Act other than section DP 11: expenditure to which section DB 46 (Avoiding, remedying, or mitigating effects of discharge of contaminant) applies: an amount allowed as a deduction under sec- tion DQ 4 (Environmental restoration accounts scheme) cost price,— (a) in subpart EC (Valuation of livestock), does not include any amount of input tax in relation to the supply of live- stock or trading stock to a person; and in section FZ 2 (Effect of speciﬁed lease on lessor and lessee), and in the deﬁnition of speciﬁed lease, and for a personal property lease asset, means the amount of expenditure of a capital nature that is incurred, in ac- quiring and installing the asset,— (i) (ii) by the lessor; or if the lessor under a lease acquires the asset as lessee under any other lease, by the person who is the lessor in the other lease; and as a qualiﬁcation on paragraph (b), if, in carrying on a business in the income year in which the asset is ac- quired, the lessor acquires, manufactures, or assembles as trading stock, and distributes or sells, an asset of the same kind as the asset, the cost price for the asset is an (b) (c) 2910 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (d) (e) amount equal to the normal price for which, at the start of the lease period, the lessor would have sold an asset of the same kind as the asset to the lessee; and as another qualiﬁcation on paragraph (b), if the lessor has used the asset in deriving income before the lease is entered into, the cost price of the asset is equal to the capital expenditure incurred by the lessor in acquiring the asset, reduced by the total of the amounts of depre- ciation loss for which the lessor has been allowed de- ductions for the asset; and as another
 qualiﬁcation on paragraph (b), if, for an asset and a lease entered into on or after 29 October 1983, an amount cannot be determined under any of paragraphs (b) to (d), the cost price for the asset is an amount equal to the market price of the asset at the start of the term of the lease or, if there is no such market price or there are 2 or more, is an amount equal to the amount that, in the circumstances of the case, is reasonable, having regard to the nature of the asset and to the tenor of this deﬁnition council-controlled organisation— (a) means— (i) (ii) (iii) an organisation that is a council-controlled trad- ing organisation as deﬁned in section 6 of the Local Government Act 2002, and is not a com- pany: a company that is a council-controlled organisa- tion, under paragraph (a)(i) of the deﬁnition of council-controlled organisation in section 6(1) of the Local Government Act 2002: an organisation that is a council-controlled or- ganisation, under paragraph (b) of the deﬁnition of council-controlled organisation in section 6(1) of the Local Government Act 2002, and that has, in an organisation of a kind described in subparagraph (i) or (ii), control of at least 50% of the votes at any meeting of the members or the controlling body of the organisation, or the right to appoint at least 50% of the directors, man- 2911 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (iv) (v) (vi) agers, or trustees of the organisation (however the positions are described): an organisation that would be a council-con- trolled organisation of a kind described in paragraph (a) or (b) or (c) if it did not have an exemption granted under section 6(4)(i) of the Local Government Act 2002: the New Zealand Local Government Association Incorporated: a company or organisation, as deﬁned in section 6(2) of the Local Government Act 2002, that is subject to the control, directly or indirectly, of the New Zealand Local Government Association Incorporated: (vii) New Zealand Local
 Government Insurance Cor- poration and any subsidiaries it has: (viii) Watercare Services Limited and any subsidiaries it has: but (b) does not include Auckland Transport (as established by section 38 of the Local Government (Auckland Coun- cil) Act 2009) or Auckland Regional Holdings (as es- tablished by section 18 of the Local Government (Auck- land) Amendment Act 2004 or the New Zealand Local Government Funding Agency Limited counted associate is deﬁned in section CD 22(9) (Returns of capital: off-market share cancellations) for the purposes of that section cover review period is deﬁned in section EY 30 (Transitional adjustments: life risk) credit account continuity provisions means— (a) section OB 41 (ICA debit for loss of shareholder con- tinuity); and section OC 24 (FDPA debit for loss of shareholder con- tinuity) [Repealed] (c) credit card repayment insurance is deﬁned in section EY 30 (Transitional adjustments: life risk) credit of tax has the same meaning as tax credit (b) 2912 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 credit transfer notice means a credit transfer notice issued under section 30C of the Tax Administration Act 1994 creditable membership, for a person,— (a) means membership of a KiwiSaver scheme or a com- (b) plying superannuation fund; and includes the following periods: (i) (ib) (ii) (iii) the period beginning on the ﬁrst day of a month in which a KiwiSaver contribution for the person is ﬁrst deducted or a contribution for the person is ﬁrst received by the Commissioner and ending on the day on which securities are ﬁrst allotted by the scheme for the person: the period beginning on the day which the Com- missioner nominates when requested by the per- son, in circumstances where, due to matters out- side the control of the person, the ﬁrst deduc- tion of KiwiSaver contributions was delayed, and ending on the day on which securities are ﬁrst al- lotted by the KiwiSaver scheme for the person: the days in the month
 in which securities are ﬁrst allotted by the scheme or fund for the person: for the period beginning on 1 July 2007 and end- ing on the day on which securities are ﬁrst allot- ted by the scheme for the person, and for a person who contributes to the scheme before 1 Novem- ber 2007, the days in the month on which the scheme receives a valid application for member- ship from the person and the days remaining in the period in relation to a ﬁnancial arrangement, creditor workout, means— (a) a compromise, as that term is deﬁned in section 227 of the Companies Act 1993, in writing that, for the parties to the ﬁnancial arrangement, is binding under Part 14, 15, or 15A of that Act, or is otherwise legally binding, to the extent to which the compromise does not cancel all of a debt: a suspension in part of the repayment of any deposit, the payment of any debt, or the discharge of any obligation, (b) 2913 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 under section 44 of the Corporations (Investigation and Management) Act 1989 Crown Research Institute is deﬁned in section 2 of the Crown Research Institutes Act 1992 CTR [Repealed] [Repealed] CTR account [Repealed] [Repealed] CTR additional dividend [Repealed] [Repealed] CTR company [Repealed] [Repealed] CTR credit [Repealed] [Repealed] CTR debit [Repealed] [Repealed] CTR group member [Repealed] [Repealed] CTR holding company [Repealed] [Repealed] CTR ratio [Repealed] [Repealed] CTRA [Repealed] [Repealed] current accounting year [Repealed] [Repealed] current value is deﬁned in section HR 3(4) (Deﬁnitions for section HR 2: group investment funds) for the purposes of section HR 2 (Group investment funds) date of transfer, in subpart FB (Transfers of relationship property), and in the deﬁnitions of year of transfer, for property transferred under a relationship agreement, means the date on which the property was transferred date the deposit ends— (a) is deﬁned in section EH 36 (Other deﬁnitions) for the purposes
 of the main income equalisation scheme: 2914 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (b) (c) is deﬁned in section EH 62 (Other deﬁnitions) for the purposes of the adverse event income equalisation scheme: is deﬁned in section EH 79 (Other deﬁnitions) for the purposes of the thinning operations income equalisation scheme day is deﬁned in section RD 30(2) (Private use of motor ve- hicle: 24-hour period) for the purposes of section RD 29 (Pri- vate use of motor vehicle: formulas) de facto partner means a person who is party to a de facto relationship debenture includes debenture stock debenture holder includes the owner of debenture stock debt security is deﬁned in section FA 2B(4) (Stapled debt securities) debt value is deﬁned in section DG 11(9) (Interest expend- iture: close companies) for the purposes of subpart DG (Ex- penditure related to use of certain assets) deductible foreign equity distribution means a distribution by a foreign company to a company, in relation to a share in the foreign company,— (a) for which a deduction is allowed in the calculation of the income tax imposed by a country or territory other than New Zealand on the income of the foreign company or on the income of a company in the same group as the foreign company: sourced directly or indirectly out of an amount paid to the foreign company in relation to a ﬁnancial arrange- ment or share by another company if— (i) (b) (ii) the foreign company is not liable for income tax imposed by a country or territory other than New Zealand on the amount paid to the foreign com- pany; and the other company is allowed a deduction, in the calculation of the income tax imposed by a coun- try or territory other than New Zealand on the in- come of the other company, for the amount paid to the foreign company 2915 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 deductible output tax, in sections DB 2 (Goods and services tax) and EE 54 (Cost: GST) the sum of the
 following amounts, as applicable: (a) (iii) an amount of output tax charged in relation to a supply of goods and services that the Goods and Services Tax Act 1985 treats a registered person as making under— (i) (ii) section 5(23) of that Act: section 5B of that Act when they have no deduc- tion for any input tax on the acquisition of the goods or services: the old apportionment rules referred to in section 21H of that Act: section 21I(1) to (3) of that Act; and (iv) an amount that is the result of an apportionment of input tax made in relation to the supply under section 20(3C) to (3I) of that Act to the extent to which the person does not have a deduction from output tax for the full amount of input tax: an amount of output tax accounted for in relation to the supply under section 20(3J) of that Act: an amount of output tax that is the result of adjustment made in relation to the supply under sections 21 to 21H of that Act (b) (c) (d) deduction, for a person, means a deduction of the person under section BD 2 (Deductions) deemed rate of return method means the method of calcu- lating FIF income or FIF loss in section EX 55 (Deemed rate of return method) deferred military pay is deﬁned in section CW 24(2) (De- ferred military pay for active service) for the purposes of that section deﬁned beneﬁt fund means a superannuation scheme, regis- tered under the Superannuation Schemes Act 1989, that must comply with section 15(1)(a) of that Act dependent child, for a child and a person,— (a) means a child— (i) whose care is primarily the responsibility of the person; and 2916 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (ii) who is maintained as a member of that person’s family; and (b) (c) (iii) who is ﬁnancially dependent on that person: does not include a child in relation to whom— (i) a payment is made under section 363 of the Chil- dren, Young Persons, and Their Families Act 1989: a beneﬁt is being paid under section 28 or 29 of the Social Security Act
 1964: (ii) despite paragraph (b)(i), includes a child or a young person, as deﬁned in section 2(1) of the Children, Young Persons, and Their Families Act 1989,— (i) of whom the person is a parent within the mean- ing of that Act; and to whom section 361 of that Act applies; and (ii) (iii) who, under section 362 of that Act, is placed in the charge of the person deposit— (a) (b) (c) is deﬁned in section EH 36 (Other deﬁnitions) for the purposes of the main income equalisation scheme: is deﬁned in section EH 62 (Other deﬁnitions) for the purposes of the adverse event income equalisation scheme: is deﬁned in section EH 79 (Other deﬁnitions) for the purposes of the thinning operations income equalisation scheme depreciable intangible property is deﬁned in section EE 62 (Meaning of depreciable intangible property) depreciable property is deﬁned in sections EE 6 (What is de- preciable property?)
and EE 7 (What is not depreciable prop- erty?)
depreciation loss— (a) means a loss that a person has in the circumstances set (b) out in section EE 1(2) (What this subpart does); and includes a deduction for depreciation that a person was allowed under an earlier Act depreciation method is deﬁned in section EE 12 (Depreci- ation methods) 2917 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 depreciation percentage means a percentage set by the Com- missioner under section EC 33 (Determining depreciation per- centages) depreciation recovery income— (a) means income that a person has in the circumstances set (b) out in section EE 1(3) (What this subpart does); and includes income that a person had under the correspond- ing provision of an earlier Act derivative instrument means a derivative as deﬁned in NZIAS 39 derived from New Zealand [Repealed] [Repealed] descendant is deﬁned in section EC 4B(7) (Compulsory use of herd scheme method for associated persons) for the purposes of that section descended associate is deﬁned in section EC 4B(7) (Compul- sory use of herd scheme method for associated persons) for the purposes of that section designated group investment fund is deﬁned in section HR 3(6) (Deﬁnitions for section HR 2: group investment funds) for the purposes of section HR 2 (Group investment funds) designated source investments is deﬁned in section HR 3(7) (Deﬁnitions for section HR 2: group investment funds) for the purposes of section HR 2 (Group investment funds) designated sources is deﬁned in section HR 3(5) (Deﬁnitions for section HR 2: group investment funds) for the purposes of section HR 2 (Group investment funds) development is deﬁned in section DB 35 (Some deﬁnitions) for the purposes of that section and section DB 34 (Research or development) development investments [Repealed] [Repealed] diminished value, for an income year, means the value es- tablished by subtracting from the amount of expenditure de- 2918 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (b) (ii) scribed in sections DO 4 and DO 5, DO 12,
 or DP 3 (which relate to certain businesses on land) the following amounts: (a) the total income derived under section CB 28(8) (En- vironmental restoration accounts) in relation to the ex- penditure; and the total amount allowed as a deduction for the expend- iture to any person— (i) in an earlier income year under this Act or an earlier Act: in the income year under this Act, except an amount allowed in the income year under section DB 46, DO 5, DO 6, DO 12, or DP 3 diminishing value equivalent is deﬁned in section EC 34(4) (General rule) for the purposes of that section diminishing value method, for depreciation, is deﬁned in sec- tion EE 67 (Other deﬁnitions) diminishing value rate is deﬁned in section EE 67 (Other deﬁnitions) direct control interest is deﬁned in section EX 5 (Direct con- trol interests) direct income interest— (a) is deﬁned in section EX 9 (Direct income interests) ex- cept for the FIF rules: is deﬁned in section EX 30 (Direct income interests in FIFs) for the FIF rules (b) direct market value circumstance means a market value cir- cumstance for a company other than a market value circum- stance described in paragraph (g) of the deﬁnition of market value circumstance direct market value interest means a market value interest of a person in a company other than a market value interest of the person in the company to the extent to which it is treated as arising only under section YC 4(5) (Look-through rule for corporate shareholders) direct voting interest means a voting interest of a person in a company other than a voting interest of the person in the com- pany to the extent to which it is treated as arising only under 2919 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 section YC 4(2) (Look-through rule for corporate sharehold- ers) director— (a) means— (i) (ii) (iii) (iv) a person occupying the position of director, what- ever title is used: a person in accordance with whose directions or instructions the persons occupying
 the position of directors of a company are accustomed to act: a person treated as being a director by any other provision of this Act: in the case of an entity that does not have dir- ectors and that is treated as, or assumed to be, a company by a provision of this Act, any trustee, manager, or other person who acts in relation to the entity in the same way as a director would act, or in a similar way to that in which a director would act, were the entity a company incorpor- ated in New Zealand under the Companies Act 1993: (b) is deﬁned in section HD 15(9) (Asset stripping of com- panies) for the purposes of that section disabled workshop payment is deﬁned in section CW 33(2) (Allowances and beneﬁts) for the purposes of that section discontinuance proﬁt means the amount calculated by a life insurer following the steps in section EY 36 (Discontinuance proﬁt for income year) discontinuance proﬁt formula means the formula in section EY 37 (Discontinuance proﬁt formula (existing policies)) or the formula in section EY 38 (Discontinuance proﬁt formula (new policies)) discount payment date is deﬁned in section EZ 30(3) (Base premium for 1998–99 premium year under Accident Insurance Act 1998) for the purposes of that section dispose,— (a) in sections CB 6 to CB 16, CB 18, CB 19, CB 21, and CB 22 (which relate to the disposal of land), for land, includes— 2920 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (b) (c) (d) (e) (f) (i) (ii) compulsory acquisition under any Act by the Crown, a local authority, or a public authority: if there is a mortgage secured on the land, a dis- posal by or for the mortgagee as a result of the mortgagor’s defaulting under the mortgage: in sections CB 24 (Disposal of timber or right to take timber), CB 25 (Disposal of land with standing timber), DP 10 (Cost of acquiring timber or right to take timber: other cases), DP 11 (Cost of timber), and GC 2 (Dispos- als of timber rights or standing timber), includes— (i) (ii) (iii)
 (iv) to grant a licence or easement: to grant a right to take timber: to create a right to take timber: to create a forestry right, as deﬁned in the Forestry Rights Registration Act 1983, other than a right in favour of the proprietor: in sections CB 29 (Disposal of minerals) and DB 30 (Cost of non-speciﬁed mineral), includes— to grant a licence or easement: (i) (ii) to grant a right to take minerals from land: is deﬁned in section CE 2 (Value and timing of beneﬁts under share purchase agreements) for the purposes of that section: in sections CT 1, DT 2 to DT 4, DT 8 to DT 11, DT 13, DT 19, DZ 6, EJ 15, EJ 16, EJ 17, EZ 3, and GB 20 (which relate to petroleum mining),— (i) means to sell or transfer an asset, voluntarily or involuntarily; and includes to lose or destroy an asset: (ii) for depreciable property, includes destroy, withdraw, or let lapse, but does not include the following: (i) for a patent application, conclude the patent ap- plication because a patent is granted in relation to the patent application: for a geothermal well, have the well stop being available for use because section EE 6(4) (What is depreciable property) no longer applies: (ii) 2921 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (g) (h) in subpart FC (Distribution, transmission, and gifts of property) means a disposal of property in the manner provided for in that subpart: for a partner,— (i) includes surrendering or extinguishing some or all of their partner’s interests: does not include when their partner’s interests may be treated as disposed of by operation of law because another partner disposes of that partner’s interests, unless section HG 4 (Disposal upon ﬁ- nal dissolution) applies (ii) disposition of property in the trust rules, and in the deﬁnition of superannuation contribution, but not for a unit trust,— (a) means an assignment, conveyance, delivery, payment, transfer, or other alienation of property, settlement, whether at law or in equity; and (b)
 without limiting the generality of paragraph (a), in- cludes— (i) (ii) (iii) (iv) (v) the issue of shares in a company: the creation of a trust: the grant or creation of a charge, lease, licence, mortgage, power, servitude, or other estate, in- terest, or right, in or over property: the abandonment, discharge, forfeiture, release, or surrender of a contract, debt, or thing in ac- tion, or of an estate, interest, power, or right in or over property; and for this purpose a debt, or any other estate, interest, or right, is treated as having been released or surrendered when it becomes ir- recoverable or unenforceable by action or for any reason ceases to exist: the exercise of a general power of appointment in favour of a person other than the holder of the power; and (c) (d) includes a disposition as deﬁned in paragraph (a) or (b) by will or intestacy; and does not include a disclaimer of an interest under a dis- position made during life or by will; and 2922 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (e) does not include a disclaimer of an interest under an intestacy (b) (c) (d) distinctive work clothing is deﬁned in section CX 30(2) (Dis- tinctive work clothing) for the purposes of that section distribution is deﬁned in section HC 14 (Distributions from trusts) for the purposes of the trust rules district health board [Repealed] [Repealed] dividend— (a) is deﬁned in sections CD 3 to CD 20 (which relate to income from equity) for the purposes of this Act, except for the deﬁnition of investment society dividend: in the RWT rules, does not include a dividend of the kind listed in section RE 2(5) (Resident passive income) and modiﬁed by section RE 2(6), as applicable: in the NRWT rules,— (i) includes an FDP credit attached to the dividend; and includes an amount paid to a shareholder that is a company and a person associated with the company paying the amount, if the amount is ex- cluded from dividend treatment generally only as a result of
 sections CD 26(2)(b) (Capital distri- butions on liquidation or emigration) and CD 44; and does not include the amount of any imputation credit attached to the dividend: (ii) (iii) in subpart LP (Tax credits for supplementary divi- dends),— (i) includes an amount paid to a shareholder that is a company and a person associated with the company paying the amount, if the amount is ex- cluded from dividend treatment generally only as a result of sections CD 26(2)(b) and CD 44; and does not include any non-cash dividend; and does not include any dividend derived by a life in- surer from a company treated as resident in New Zealand because of the Commissioner granting (ii) (iii) 2923 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (e) (f) an application under section EY 49 (Non-resident life insurer becoming resident): in sections FM 30, GB 38, OP 58, and OP 64 to OP 68 (which relate to consolidated groups), subpart OE (Branch equivalent tax accounts (BETA)), subpart OJ (Policyholder credit accounts (PCA)), in the FDP rules and the imputation rules, and in the deﬁnitions of benchmark dividend, combined imputation and FDP ratio, company dividend statement, excess credit amount, FDP credit, FDP ratio, foreign divi- dend, imputation credit, imputation ratio, pay, and shareholder dividend statement, does not include any amount treated as a dividend under section CB 34(5) (Amounts derived by members from mutual associ- ations), GB 23 (Excessive remuneration to relatives), or GB 25 (Close company remuneration to shareholders, directors, or relatives): in sections FM 30, GB 38, OP 58, and OP 64 to OP 68 (which relate to consolidated groups), subpart OE (Branch equivalent tax accounts (BETA)), subpart OJ (Policyholder credit accounts (PCA)), in the FDP rules and the imputation rules, and in the deﬁnitions of benchmark dividend, combined imputation and FDP ratio, company dividend statement, excess credit amount, FDP credit, FDP ratio, imputation credit,
 imputation ratio, pay, and shareholder divi- dend statement, does not include an amount treated as a dividend under section GB 1(3) (Arrangements involving dividend stripping) dividend treated as interest means a dividend that is paid in relation to a share issued by a company that is at the time of payment— (a) (b) a company not resident in New Zealand; or a company whose constitution prohibits all of its income or property from being distributed to a proprietor, mem- ber, or shareholder of the company; or a company all the income of which is exempt income other than under section CW 9 (Dividend derived by (c) 2924 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (d) company from overseas) or CW 10 (Dividend within New Zealand wholly-owned group); or a company that, in New Zealand, is engaged solely in the business of life insurance referred to in section EY 8(2)(c) (Meaning of life insurance) and is not a com- pany that maintains an FDP account because of an elec- tion made under section OC 1 (General rules for com- panies with FDP accounts) donee organisation means an entity described in section LD 3(2) (Meaning of charitable or other public beneﬁt gift) or listed in schedule 32 (Recipients of charitable or other public beneﬁt gifts) double tax agreement is deﬁned in section BH 1 (Double tax agreements) dwelling— (a) means any place used predominantly as a place of resi- dence or abode, including any appurtenances belonging to or enjoyed with the place; but does not include any of the following: (i) (ii) (iii) (b) a hospital: a hotel, motel, inn, hostel, or boardinghouse: a serviced apartment for which paid services in addition to the supply of accommodation are pro- vided to a resident, and in relation to which a resi- dent does not have quiet enjoyment, as that term is used in section 38 of the Residential Tenancies Act 1986: a convalescent home, nursing home, or hospice: a rest home or retirement village, except to the extent that, in
 relation to a relevant place, it is, or can reasonably be foreseen to be, occupied as a person’s principal place of residence for inde- pendent living: a camping ground (iv) (v) (vi) early balance date has the meaning given in section YE 1(6) (References to balance dates and years) early life regime application day means, for a life insurer that chooses to apply the new life insurance rules, as provided in the Taxation (International Taxation, Life Insurance, and 2925 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Remedial Matters) Act 2009, for an income year that includes 1 July 2010, the ﬁrst day of that income year early-payment discount is deﬁned in section RC 40 (Some deﬁnitions) for the purposes of sections RC 37 to RC 39 (which relate to discounts of income tax) economic rate is deﬁned in section EE 67 (Other deﬁnitions) education grant is deﬁned in section CF 1(2) (Beneﬁts, pen- sions, compensation, and government grants) for the purposes of that section effective interest is deﬁned in section HA 43 (Meaning of effective interest) effective look-through interest is deﬁned in section HB 1(5) (Look-through companies are transparent) election commencement year, for an interest holder and an elective attributing CFC, or elective attributing FIF, of the in- terest holder for an accounting period, means the ﬁrst year for which the election under section EX 73 (Election that CFC not non-attributing active CFC or FIF not non-attributing ac- tive FIF) for the accounting period was effective election day worker means a person to whom all the follow- ing apply: (a) (ii) the person is engaged as a Deputy Returning Ofﬁcer, poll clerk, interpreter, or usher, or for any other purpose, for— (i) an election or poll held under the provisions of the Electoral Act 1993 or the Local Electoral Act 2001 or the Local Restoration Polls Act 1990; or an election or poll to which any of the provisions of the Electoral Act 1993 or the Local Electoral Act 2001 or
 the Local Restoration Polls Act 1990 applies; or an election or poll held simultaneously with and in the same premises as an election or poll re- ferred to in subparagraph (i) or (ii); and the person is paid by the authority controlling the elec- tion or poll; and (iii) (b) 2926 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (c) the person’s payment is exclusively for work done or services rendered immediately before, on, or immedi- ately after the day on which the election or poll is held election expiry date is deﬁned in section HC 30(5) (Treat- ment of foreign trusts when settlor becomes resident) for the purposes of that section elective attributing CFC, for an interest holder and an ac- counting period, means a CFC for which the interest holder has made an election under section EX 73 (Election that CFC not non-attributing active CFC or FIF not non-attributing ac- tive FIF) that is effective for the accounting period elective attributing FIF for an interest holder and an account- ing period, means a FIF for which the interest holder uses the attributable FIF income method and has made an election under section EX 73 (Election that CFC not non-attributing ac- tive CFC or FIF not non-attributing active FIF) that is effective for the accounting period electronic format means the format and the electronic means by which a return or particulars that are ﬁled electronically are provided eligible hedge is deﬁned in section EM 8 (Some deﬁnitions) for the purposes of subpart EM (Hedging of currency move- ments in Australian non-attributing shares and attributing FDR method interests) emergency call is deﬁned in section CX 34 (Meaning of emer- gency call) emergency event means an event that was declared by the Governor-General to be an emergency event by Order in Coun- cil under section 183ABA of the Tax Administration Act 1994 emigrating company is deﬁned in section FL 1(1) (What this subpart does) emissions unit means a unit as deﬁned in section 4(1)
 of the Climate Change Response Act 2002 emissions unit shortfall year, for a person means an income year that— (a) is an emissions unit shortfall year for the person under section ED 1B(9)(a) (Valuation of emissions units is- sued for zero price); and 2927 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) has not ceased to be an emissions unit shortfall year for the person under section ED 1B(10)(c) employee— (a) means a person who receives or is entitled to receive a (ab) (b) (c) PAYE income payment: for the purposes of the FBT rules, includes a share- holder-employee who has chosen under section RD 3(3) to treat amounts paid to them in the income year in their capacity as employee as income other than from a PAYE income payment: in sections CW 17, CW 17B, CW 17C, and CW 18 (which relate to expenditure, reimbursement, and allow- ances of employees) includes a person to whom section RD 3(2) to (4) (PAYE income payments) applies: in the FBT rules, and in the deﬁnition of shareholder- employee (paragraph (b)), does not include a person if the only PAYE income payment received or receivable is— (i) a payment referred to in section RD 5(1)(b)(iii), (3), (3B), (6)(b) and (c) and (7) (Salary or wages): a schedular payment referred to in schedule 4, parts A and I (Rates of tax for schedular pay- ments) for which the person is liable for income tax under section BB 1 (Imposition of income tax): (ii) (d) is deﬁned in section DC 15 (Some deﬁnitions) for the purposes of sections DC 12 to DC 14 (which relate to share purchase schemes): (db) does not include an owner of a look-through company or a person who has a look-through interest for a look- through company, unless the owner or person is a work- ing owner: for an employer, means an employee of the employer (e) employee share loan is deﬁned in section CX 35 (Meaning of employee share loan) employee’s superannuation accumulation means the total superannuation contributions, together with any return on them,
 to which the complying fund rules apply, and are— employer’s superannuation cash contributions: (a) 2928 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (b) the amount of a tax credit under section MK 3 (Payment of tax credits) that is treated as a Crown contribution for an employee under section MK 5 (Crown contributions for members): withheld from the employee’s salary or wages (c) employer— (a) means a person who pays or is liable to pay a PAYE (b) (c) income payment: includes,— (i) for an unincorporated body of persons other than a partnership, the manager or other principal of- ﬁcer: for a partnership, each partner: (ii) (iib) a look-through company: (iii) for the estate of a deceased person, a trust, a com- pany in liquidation, an assigned estate, or for any other property vested or controlled in a ﬁduciary capacity, each person in whom the property has become vested or to whom control of the prop- erty has passed: the Crown: (iv) in the FBT rules, does not include a person if the only PAYE income payment that they pay or are liable to pay is— (i) a payment referred to in section RD 5(1)(b)(iii), (3), (3B), (6)(b) and (c), and (7) (Salary or wages): a schedular payment referred to in schedule 4, parts A and I (Rates of tax for schedular pay- ments): (ii) (d) is deﬁned in section RD 45(6) (Unclassiﬁed beneﬁts) for the purposes of that section: (e) for an employee, means the employer of the employee employer contribution has the same meaning as in the Kiwi- Saver Act 2006 employer monthly schedule means a form that an employer must provide to the Commissioner in manual format or in elec- 2929 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 tronic format, or that a PAYE intermediary must provide to the Commissioner in electronic format, showing— (a) (b) the name and tax ﬁle number of the employer; and the name of every person who was an employee of the employer at any time during the period to which the employer monthly
 schedule relates; and if supplied to the employer, the tax ﬁle number of each employee to whom paragraph (b) refers; and the tax code of each employee to whom a PAYE income payment that is not an extra pay is made; and for each employee in the month to which the schedule relates,— (i) (ii) (iii) the amount of gross earnings: the total amount of tax withheld: the total amount of tax credits under section LD 4 (Tax credits for payroll donations): the amount of earnings not liable to the earner premium; and (iv) if applicable, particulars of child support deductions made, and salary or wage deductions made under the Student Loan Scheme Act 2011; and for each employee in the month to which the sched- ule relates, if applicable, the amount of total KiwiSaver contribution deductions made under Part 3, subpart 1 of the KiwiSaver Act 2006; and for each employee in the month to which the schedule relates, if applicable, the amount of employer’s super- annuation cash contributions, less any ESCT payable under the ESCT rules; and in the month in which an employee starts, the date on which they started to be an employee of the employer; and in the month in which an employee ceases, the date on which they ceased to be an employee of the employer; and the identity of each employee who received an extra pay at a rate less than the rate set out in schedule 2, part B, table 1, row 3 (Basic tax rates for PAYE income payments); and (c) (d) (e) (f) (g) (h) (i) (j) (k) 2930 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (l) other particulars required by the Commissioner for a class of employer employer-sourced superannuation savings means— (a) employer’s superannuation cash contributions under section RA 5(1)(c) (Tax obligations for employment-re- lated taxes) made on or after 1 April 2000 other than— those that are treated as salary and wages under (i) section RD 68 (Choosing to have amount treated as salary or wages); or those on which ESCT has been paid at the
 rate set out in schedule 1, part A, clause 10(a) of the Income Tax Act 2004 before that clause was re- placed by a new clause 10(a) on 1 April 2007; and (ii) (b) (c) any return on those employer’s superannuation contri- butions; and reserves, that is, employer’s superannuation cash con- tributions under section RA 5(1)(c) made on or after 1 April 2000 that do not vest in a member of the super- annuation fund and any return on those employer’s superannuation cash contributions, as follows: (i) for a superannuation fund with 10 or more unassociated members, reserves that have been allocated to a member of the superannuation fund, other than those allocated to an account of the member’s contributions for smoothing investment returns; or for all other superannuation funds, reserves (ii) employer sponsored group policy [Repealed] [Repealed] employer’s superannuation cash contribution is deﬁned in section RD 65(1) (Employer’s superannuation cash contribu- tions) employer’s superannuation contribution means a super- annuation contribution made by an employer for the beneﬁt of 1 or more of their employees employing company is deﬁned in section DC 15 (Some def- initions) for the purposes of sections DC 12 to DC 14 (which relate to share purchase schemes) 2931 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 employment has a meaning corresponding to the meaning of employee, and— (a) includes the activities performed by the Governor-Gen- eral, a member of Parliament, or a judicial ofﬁcer that give rise to an entitlement to receive a PAYE income payment for the activities: is deﬁned in section ME 2(1) (Meaning of employment for this subpart) for the purposes of subpart ME (Min- imum family tax credit) and the deﬁnition of full-time earner (b) employment income means an amount that is income under section CE 1 (Amounts derived in connection with employ- ment), and includes salary or wages or other income to which section RD 3(2) to (4) (PAYE income payments)
 applies employment limitation is deﬁned in section DA 2(4) (General limitations) employment-related loan means a loan that is a fringe beneﬁt end date is deﬁned in section RA 15(3) (Payment dates for interim and other tax payments) for the purposes of that section engaged in full-time work [Repealed] [Repealed] entering owner— (a) means a person who acquires an owner’s interests for a (b) look-through company: includes a person who already has owner’s interests for a look-through company when they acquire another owner’s interests entering partner— (a) means a person who acquires a partner’s interests in a (b) partnership: includes a person who is already a partner in the part- nership when they acquire another partner’s interests entitlement period is deﬁned in section MC 11(1) (Relation- ship periods and entitlement periods) for the purposes of sub- parts MA to MF and MZ (which relate to tax credits for fami- lies) 2932 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 environmental restoration account is deﬁned in section EK 23(3) (Other deﬁnitions) for the purposes of subpart EK (Environmental restoration accounts) equity instrument is deﬁned in section EW 15I(3) (Manda- tory use of yield to maturity method for some arrangements) for the purposes of that section ESCT— (a) means employer’s superannuation contribution tax; and relates to an employer’s superannuation cash contribu- (b) tion; and refers to an amount payable as income tax under the ESCT rules (c) ESCT rate threshold amount, for an employer’s superannu- ation cash contribution, means— (a) for an employee employed by an employer for the whole of a tax year immediately before the tax year in which the employer’s superannuation contribution is paid, the total amount of— (i) salary or wages derived by the employee in the previous tax year; and the gross amount of employer’s superannuation contributions before ESCT is withheld that the employer paid on behalf of the employee in the previous
 tax year; or (ii) (b) if paragraph (a) does not apply, the total amount of— (i) salary or wages that the employer estimates will be derived by the employee in the tax year in which the contribution is paid; and the gross amount of employer’s superannuation contributions before ESCT is withheld that the employer estimates that they will pay on behalf of the employee in the tax year in which the con- tribution is paid (ii) ESCT rules means the provisions listed in section RD 64 (ESCT rules and their application) established activity is deﬁned in section IZ 1(12) (Use of spe- ciﬁed activity net losses) for the purposes of that section 2933 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) estate, for land,— (a) means an estate in the land, whether legal or equitable, and whether vested or contingent, in possession, rever- sion, or remainder; and includes a right, whether direct or through a trustee or otherwise, to— (i) (ii) (iii) does not include a mortgage the possession of the land: the receipt of the rents or proﬁts from the land: the proceeds of the disposal of the land; and (c) estimated residual market value,— (a) (b) for an item of depreciable property, is deﬁned in section EE 67 (Other deﬁnitions): for high-priced livestock, means its market value at the end of its estimated useful life, estimated reasonably as at the date of acquisition and based upon an assump- tion of normal and reasonable maintenance over its es- timated useful life estimated useful life,— (a) for an item of depreciable property, is deﬁned in section EE 63 (Meaning of estimated useful life): for high-priced livestock, means the period over which the livestock might reasonably be expected to be useful in deriving income or carrying on a business in New Zealand, taking into account— (i) the passage of time, likely wear and tear, exhaus- tion, and obsolescence; and an assumption of normal and reasonable main- tenance: (ii) for a listed horticultural plant, means the
 period of time over which the listed horticultural plant might reason- ably be expected to be useful to a person in deriving in- come or in carrying on a business in New Zealand, with the expectation based on an assumption of normal and reasonable maintenance: for a type of pasture, means the period of time over which the pasture might reasonably be expected to be useful to a person in deriving income or carrying on a farming or agricultural business on land in New Zealand (b) (c) (d) 2934 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 ETS unit [Repealed] [Repealed] excepted ﬁnancial arrangement— (a) is deﬁned in section EW 5 (What is an excepted ﬁnan- cial arrangement?)
for the purposes of this Act except the old ﬁnancial arrangements rules; and is deﬁned in section EZ 48 (Deﬁnitions) for the pur- poses of the old ﬁnancial arrangements rules (b) excess credit amount means an amount calculated under sec- tion OC 29(5) (FDP credits and imputation credits attached to dividends) for a dividend with a combined imputation and FDP ratio excess debt entity is deﬁned in section FE 4 (Some deﬁni- tions) for the purposes of subpart FE (Interest apportionment on thin capitalisation) excess debt outbound company is deﬁned in section FE 4 (Some deﬁnitions) for the purposes of subpart FE (Interest ap- portionment) excess expenditure— (a) is deﬁned in section CZ 8(2) (Farm-out arrangements for petroleum mining before 16 December 1991) for the purposes of that section: is deﬁned in section DZ 5(6) (Farm-out arrangements for petroleum mining before 16 December 1991) for the purposes of that section (b) excess tax payment, for a company at a time, and for the pur- poses of Part O (Memorandum accounts), means the amount at the time by which a payment made by or on behalf of the company to the Commissioner for income tax or provisional tax is more than the liability at the time of the company to pay income tax and provisional tax exchange variation is deﬁned in section CZ 3(5) (Exchange variations on 8 August 1975) for the purposes of that section excluded ancillary tax means— (a) (b) (c) imputation penalty tax: FDP penalty tax: qualifying company election tax: 2935 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 [Repealed] withdrawal tax (d) (e) excluded depreciable property is deﬁned in section EE 64 (Meaning of excluded depreciable property) excluded ﬁxed rate security means a ﬁxed rate share issued by a company or a debenture issued by a company, if it is a substituting debenture or stapled debt security and not a proﬁt- related debenture, when the holder of the share or debenture does not have, because of it, any right to vote or participate in any shareholder
 decision-making, except to the extent of any such right that— (a) arises only in circumstances in which the position of the holder of the share or debenture may be altered to the holder’s detriment; and is granted to the holder of the share or debenture for the purpose of assisting the holder to prevent the alteration; and at the time of the issue of the share or debenture, is not expected to arise (b) (c) income, excluded income, non-residents’ excluded income is deﬁned in section BD 1(3) (Income, exempt for- eign-sourced income, and assessable income) excluded option means, for a company, an option to acquire or dispose of a share in the company if— (a) the directors of the company did not know and could not reasonably be expected to know that the option had been granted; or neither the grantor of the option nor any person associ- ated with the grantor of the option at the time the op- tion is granted holds a share in the company over which the option is granted at the time the option is granted, whether directly or indirectly, but this paragraph does not apply in a case in which the grantor of the option is the company; or the option is granted on arm’s length terms, without the grant having a purpose or effect of defeating the intent and application of any provision of this Act whose ap- plication is dependent on the measurement of voting and market value interests, and the holder of the option does (b) (c) 2936 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 not have, because of it, any right to vote or participate in any shareholder decision-making, except to the ex- tent of any such right that— (i) arises only in circumstances in which the position of the holder of the option in relation to it may be altered to the holder’s detriment; and is granted to the holder of the option for the pur- pose of assisting the holder to prevent the alter- ation; and at the time of the issue of the option, is not ex- pected to arise; or (ii) (iii) (d) (e)
 (f) the price payable to acquire the share on the exercise of the option is equal to or not materially different from the market value of the share at the date of exercise, and the holder of the option does not have, because of it, any right to vote or participate in any shareholder decision-making, except to the extent of any such right that— (i) arises only in circumstances in which the position of the holder of the option in relation to it may be altered to the holder’s detriment; and is granted to the holder of the option for the pur- pose of assisting the holder to prevent the alter- ation; and at the time of the issue of the option, is not ex- pected to arise; or (ii) (iii) the share is an excluded ﬁxed rate security, subject to section YC 20 (Credit account continuity provisions: excluded ﬁxed rate securities) in the case of the credit amount continuity provisions; or the option— (i) relates to a pre-1991 budget security; and (ii) was itself granted before 8.00 pm New Zealand Standard Time on 30 July 1991 (the speciﬁed time), or was granted under a binding contract entered into before the speciﬁed time no term of which is altered at any time after the speciﬁed time; and 2937 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (iii) is not an option any term of which is altered at any time after the speciﬁed time (whether under a provision for roll-over or extension or under an option held at the speciﬁed time by the option holder or the grantor of the option, or both, or any other person, or otherwise), except when the term is altered under a binding contract entered into before the speciﬁed time no term of which is altered at any time after the speciﬁed time excluded preference share is deﬁned in section YC 18B (Cor- porate reorganisations not affecting economic ownership) for the purposes of that section exempt income is deﬁned in section BD 1(2) (Income, exempt income, excluded income, non-residents’ foreign-sourced in- come, and
 assessable income) exempt income limitation is deﬁned in section DA 2(3) (Gen- eral limitations) exempt interest means interest that is— (a) payable for a debt entered into under generally accepted commercial practice for the purchase of goods or ser- vices, if the purchase is made in the ordinary course of the purchaser’s taxable activity; or payable under a hire purchase agreement, the deﬁnition of which applies, for this purpose, as if it did not contain paragraph (g); or exempt income under section CW 8 (Money lent to gov- ernment of New Zealand) or CW 64 (Exemption under other Acts); or payable under a speciﬁed lease or a ﬁnance lease; or payable for bonus bonds or Post Ofﬁce bonus bonds (as each of those terms is deﬁned in section 2 of the Post Ofﬁce Bank Act 1987); or payable on an overpaid levy under section 173 of the Accident Compensation Act 2001; or payable by the Commissioner under section 84 of the KiwiSaver Act 2006 (b) (c) (d) (e) (f) (g) exemption certiﬁcate means a certiﬁcate provided by the Commissioner under section 24M of the Tax Administration Act 1994 2938 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 existing business is deﬁned in section EY 28 (Shareholder base other proﬁt: proﬁt participation policies that are existing business) for the purposes of that section and section EY 29 (Shareholder base other proﬁt: proﬁt participation policies that are new business) existing farmer is deﬁned in section IZ 1(12) (Use of speciﬁed activity net losses) for the purposes of that section existing privilege is deﬁned in section 2(1) of the Crown Min- erals Act 1991, and includes mining privilege and mining li- cence under the Mining Act 1971 and prospecting licence or mining licence under the Petroleum Act 1937 exit level, for a multi-rate PIE, means the relationship of the entity’s tax liability to the value of the investor’s interest de- scribed in section HM 62 (Exit levels for investors) exit period, for an investor in a multi-rate
 PIE, means a period set out in section HM 63 (Exit periods) expected life risk proportion is deﬁned in section EY 25 (Pre- mium smoothing reserving amount: non-participation policies not annuities) for the purposes of that section expenditure— (a) is deﬁned in section DD 2(7) (Limitation rule) for the purposes of that section: is deﬁned in section DW 1(2) (Airport operators) for the purposes of that section (b) expenditure on account of an employee is deﬁned in section CE 5 (Meaning of expenditure on account of an employee) exploration and development activities is deﬁned in section CW 57(2) (Non-resident company involved in exploration and development activities) for the purposes of that section exploration permit is deﬁned in section 2 of the Crown Min- erals Act 1991 exploratory material means anything acquired with explora- tory well expenditure or prospecting expenditure exploratory well means a well in a permit area, drilled for the purpose of— (a) (b) locating petroleum; or conﬁrming the existence, non-existence, quantity, or composition of petroleum; or 2939 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (c) ascertaining whether petroleum is recoverable in com- mercial quantities exploratory well expenditure— (a) means expenditure incurred by a petroleum miner in planning, drilling, testing, completing, and abandoning an exploratory well; and does not include residual expenditure (b) extended return date is deﬁned in section IC 9(3) (Date for payment and notice to Commissioner) for the purposes of Part I (Treatment of tax losses) extra pay is deﬁned in section RD 7 (Extra pay) fair dividend rate hedge portion is deﬁned in section EM 8 (Some deﬁnitions) for the purposes of subpart EM (Hedging of currency movements in Australian non-attributing shares and attributing FDR method interests) fair dividend rate method means the method of calculating FIF income or FIF loss under sections EX 52 (Fair dividend rate method: usual method) and EX 53
 (Fair dividend rate method for unit-valuing funds and others by choice) fair value method means a method under section EW 15D (IFRS ﬁnancial reporting method) of calculating income or expenditure for an income year that takes into account move- ments in fair value as determined under IFRSs family assistance credit [Repealed] [Repealed] family credit abatement is deﬁned in section MA 8 (Some deﬁnitions for family scheme) for the purposes of subparts MA to MF and MZ (which relate to tax credits for families) family plus [Repealed] [Repealed] family scheme is deﬁned in section MA 8 (Some deﬁnitions for family scheme) for the purposes of subparts MA to MF and MZ (which relate to tax credits for families) family scheme income is deﬁned in section MA 8 (Some def- initions for family scheme) for the purposes of subparts MA to MF and MZ (which relate to tax credits for families) family support [Repealed] [Repealed] 2940 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 family tax credit is deﬁned in section MA 8 (Some deﬁnitions for family scheme) for the purposes of subparts MA to MF and MZ (which relate to tax credits for families) farmer is deﬁned in section EH 3(1)(a) (Persons to whom main income equalisation scheme applies) for the purposes of the main income equalisation scheme farm-in expenditure means expenditure that a farm-in party under a farm-out arrangement agrees that they will incur farm-out arrangement— (a) means an arrangement between a petroleum miner (the farm-out party) and a person (the farm-in party) under which the farm-in party agrees that they will incur expenditure in doing work or paying for work done in or for the permit area of the farm-out party’s petroleum permit, after the arrangement is made, and, in return, they— (i) (ii) (iv) (iii) acquire an interest in the farm-out party’s petrol- eum permit; or receive a right or option to acquire an interest in the farm-out party’s petroleum permit; or become entitled in another way to
 acquire an in- terest in the farm-out party’s petroleum permit; or become entitled to a direct or indirect interest in petroleum from the permit area of the farm-out party’s petroleum permit; or become entitled to a direct or indirect interest in the proﬁts, however measured, from petroleum from the permit area of the farm-out party’s pet- roleum permit; or become entitled to a direct or indirect right to reimbursement from petroleum from the permit area of the farm-out party’s petroleum permit; or (vii) become entitled to a direct or indirect right to reimbursement from the proﬁts, however mea- sured, from petroleum from the permit area of the farm-out party’s petroleum permit; or (vi) (v) (viii) become entitled to a rental, royalty, or other con- sideration of whatever nature calculated by ref- 2941 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (ix) erence to petroleum from the permit area of the farm-out party’s petroleum permit; or become entitled to a rental, royalty, or other con- sideration of whatever nature calculated by ref- erence to the proﬁts, however measured, from petroleum from the permit area of the farm-out party’s petroleum permit: (b) (c) is deﬁned in section CZ 8(2) (Farm-out arrangements for petroleum mining before 16 December 1991) for the purposes of that section: is deﬁned in section DZ 5(6) (Farm-out arrangements for petroleum mining before 16 December 1991) for the purposes of that section FBT has the same meaning as fringe beneﬁt tax FBT rules means the provisions listed in section RD 25 (FBT rules and their application), and fringe beneﬁt tax rules has the same meaning FDP means foreign dividend payment and refers to an amount payable under the FDP rules to the Commissioner in relation to a foreign dividend FDP account means a memorandum account referred to in section OA 2(1)(b) (Memorandum accounts) FDP credit is a credit referred to in section OA 5(3) (Credits) FDP debit is a debit referred to in section OA 6(3)
 (Debits) FDP penalty tax means tax payable under section 140C of the Tax Administration Act 1994 FDP ratio means the ratio set out in section OC 27 (FDP credits attached to dividends) FDP reference period is deﬁned in section OC 35(2) (Mean- ing of FDP reference period) for the purposes of sections OC 23, and OC 36 to OC 39 (which relate to FDP credits and debits) FDP rules means— (a) section GB 41 (FDPA arrangements for carrying amounts forward): sections LF 1, LF 5, and LF 8 to LF 10 (which relate to tax credits for FDP credits): (b) 2942 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (c) subpart OC (Foreign dividend payment accounts (FDPA)) [Repealed] (d) FDPA means foreign dividend payment account FDPA company means a company that chooses under sec- tions OC 1(1) and OC 3 (which relate to companies with FDP accounts) to maintain an FDP account feature ﬁlm means a ﬁlm that— is produced mainly for exhibition in a cinema; and (a) is exhibited in 35mm gauge; and (b) has a continuous running time of no less than 75 minutes (c) fee is deﬁned in section RD 41(4) (Services) for the purposes of that section FIF means a foreign investment fund as deﬁned in section EX 28 (Meaning of FIF) FIF income is deﬁned in section CQ 5 (When FIF income arises) FIF loss is deﬁned in section DN 6 (When FIF loss arises) FIF net loss, for a person and for an income year in which the person has a FIF loss, means the part of the FIF loss for which the person is denied a deduction because of section DN 8 (Ring-fencing cap on deduction: attributable FIF income method), but must instead deal with under Part I (Treatment of tax losses) FIF rules means sections EX 28 to EX 72 (which relate to foreign investment funds) ﬁfteen percent capital reduction is deﬁned in section CD 22(9) (Returns of capital: off-market share cancellations) for the purposes of that section ﬁfteen percent interest reduction is deﬁned in section CD 22(9) (Returns of capital: off-market share
 cancellations) for the purposes of that section ﬁling taxpayer means a person, other than— (a) a person who is a non-ﬁling taxpayer for the applicable tax year: a person that is an unincorporated body of persons, if section 42 of the Tax Administration Act 1994 applies to (b) 2943 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 require the members of the body to ﬁle separate returns of income for the applicable tax year ﬁlm, except in section CC 9 (Royalties),— (a) means a recording on any medium from which a moving image may by any means be produced; and includes a part of any such recording (b) ﬁlm income means income of a person under section CC 10 (Films) ﬁlm production expenditure— (a) means— (i) (ii) (iii) an expenditure or loss incurred in producing a ﬁlm: an amount of depreciation loss on property used in producing the ﬁlm: an amount of depreciation loss from disposing of depreciable property used in producing the ﬁlm allowed under section EE 48 (Effect of disposal or event); and (b) (ii) (iii) does not include an expenditure incurred— (i) in acquiring an asset for which a deduction for an amount of depreciation loss is allowed: in acquiring a ﬁlm right after the ﬁlm is com- pleted: directly in marketing or selling a ﬁlm ﬁlm reimbursement scheme is deﬁned in section DS 4 (Meaning of ﬁlm reimbursement scheme) ﬁlm right means a right or interest, including a future or con- tingent right or interest, of any of the following kinds: (a) (b) (c) (d) copyright in a ﬁlm; or a licence relating to the copyright in a ﬁlm; or an equitable right in the copyright in a ﬁlm; or an equitable right in a licence relating to the copyright in a ﬁlm; or any other right existing in or attaching to a ﬁlm; or a right to income, or a share of income, from the rental, sale, use, or other exploitation of a ﬁlm (e) (f) ﬁnal instalment, in relation to provisional tax, means the last instalment of provisional tax due in a transitional year 2944 Reprinted as at 2
 September 2013 Income Tax Act 2007 Part Y s YA 1 ﬁnance lease means a lease of a personal property lease asset entered into by a person on or after 20 May 1999 that— (a) when the person enters the lease, involves or is part of an arrangement that involves— (i) (ii) (iii) the transfer of the ownership of the asset to the lessee or an associate of the lessee during or at the end of the term of the lease: 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: a right of an associate of the lessee to acquire the asset, or a right of the lessor to require an associate of the lessee to acquire the asset, during the term of the lease under an arrangement that does not entitle the associate to receive all of the personal property lease payments that may fall due after the acquisition: (c) (b) when the person enters the lease or from a later time, involves a term of the lease that is more than 75% of the asset’s estimated useful life as deﬁned in section EE 63 (Meaning of estimated useful life): the person enters on or after 20 June 2007 and is, or is part of, an arrangement that, when the person enters the lease or when a change in the terms of the arrangement changes the allocation or size of the risks and rewards incidental to ownership of the lease asset,— (i) (ii) (iii) involves the use of the asset outside New Zealand for all or most of the term of the lease; and involves income of any person who is not the lessor, arising from the use of the asset by any person, that is exempt income, or excluded in- come, or non-residents’ foreign sourced income; and is a ﬁnance lease under NZIAS 17 for the lessor, or for a company that is in the same group of companies as the lessor and derives assessable income from the arrangement, or is an arrange- ment under which persons who do not include the 2945 Part Y s YA 1 Income Tax Act 2007
 Reprinted as at 2 September 2013 lessor bear substantially all the risks and rewards incidental to ownership of the lease asset, deter- mined as at the time the person enters the lease and taking into account later changes to the ar- rangement ﬁnance-related deduction means a deduction of a company that is part of a consolidated group, calculated as if the com- pany were not part of the group and determined under section FM 3 (Liability of consolidated groups and group compan- ies) for an amount, other than an amount that arises only from movement in currency exchange rates, of— (a) (b) interest incurred: expenditure under the ﬁnancial arrangements rules or the old ﬁnancial arrangements rules ﬁnancial arrangement— (a) is deﬁned in section EW 3 (What is a ﬁnancial arrange- ment?)
for the purposes of this Act except the old ﬁnan- cial arrangements rules; and is deﬁned in section EZ 48 (Deﬁnitions) for the pur- poses of the old ﬁnancial arrangements rules (b) ﬁnancial arrangements rules is deﬁned in section EW 1(2) (What this subpart does) ﬁnancial asset has the same meaning as in NZIAS 32 ﬁnancial assistance is deﬁned in section HC 36(5) (Trusts and minor beneﬁciary rule) for the purposes of that section ﬁnancial institution means a registered bank or an entity sub- ject to the Deposit Takers (Credit Ratings) Regulations 2009 that must use IFRSs to prepare ﬁnancial statements and to which section 15 of the Financial Reporting Act 1993 applies ﬁnancial institution special purpose vehicle means a com- pany or a trustee of a trust that, ignoring section HR 9,— (a) (b) derives no exempt income; and has all of its ﬁnancial arrangements that are its assets treated as a ﬁnancial institution’s ﬁnancial arrange- ments for ﬁnancial reporting purposes, but ignoring any current account balance that is incidental to the com- pany’s or trustees’ sole purpose described in paragraph (e); and 2946 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 receives only funds that— (i) relate to ﬁnancial arrangements described in paragraph (b): are incidental to the company’s or trustees’s sole purpose described in paragraph (e); and (c) (d) operates to guarantee liabilities of the ﬁnancial institution or of a company, incorporated in and resident in New Zealand, that is a member of a wholly-owned group of companies which in- cludes the ﬁnancial institution; or operates in relation to the company’s or trustees’ issue of residential mortgage backed securities; and (ii) either— (i) (ii) (e) (f) has interests in ﬁnancial arrangements only for the sole purpose of carrying out the company’s or trustees’ op- erations described in paragraph (d)(i) or (ii); and has ﬁnancial statements that are prepared using IFRSs and are audited ﬁnancial risk is deﬁned in section EY 12 (Meaning of life reinsurance)
 ﬁnancial statements is deﬁned in section 8 of the Financial Reporting Act 1993, but the references in the deﬁnition to an entity and to a reporting entity are to be read as references to a person ﬁnancial value is deﬁned in section FE 20(1) (Financial value and regulatory value) for the purposes of sections FE 7, FE 19, and FE 21 to FE 23 (which relate to a New Zealand banking group’s equity threshold) ﬁnancially independent means— in full employment— (a) (i) under a contract of service or apprenticeship that requires a person to work, whether on time or piece rates, no less than an average of 30 hours each week; or as the self-employment of a person in a business, manufacture, profession, trade, or undertaking carried on for pecuniary proﬁt for not less than an average of 30 hours each week; or (ii) 2947 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (iii) for any number of hours that is regarded as full- time employment for the purpose of an agree- ment, award, or contract relating to the employ- ment; or in receipt of a basic grant or an independent circum- stances grant under the Student Allowances Regulations 1998 (SR 1998/277) or any regulations in substitution for those regulations; or in receipt of payments under a Government-assisted scheme that the chief executive of the administering department considers analogous to a beneﬁt payable under any of Parts 1A to 1P of the Social Security Act 1964; or in receipt of a beneﬁt, as deﬁned in section 3 of the Social Security Act 1964 (b) (c) (d) ﬁrst business day, in relation to provisional tax, means— (a) the ﬁrst day in an income year on which a person with a provisional tax liability derives income or incurs ex- penditure as a result of carrying on a taxable activity, if the person is not a natural person; and the day following the last day in an income year on which a person with a provisional tax liability derived income from employment, if the person is a natural per- son (b) ﬁrst payment
 period means the period starting on the 1st day of a month and ending with the 15th day of the month ﬁrst publication is deﬁned in section EI 3(6) (Assigning or granting copyright) for the purposes of that section ﬁrst tracking date [Repealed] [Repealed] ﬁsher is deﬁned in section EH 3(1)(b) (Persons to whom main income equalisation scheme applies) ﬁshing boat is deﬁned in section EJ 2(6) (Spreading forward of deductions for repairs to ﬁshing boats) for the purposes of that section 2948 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 ﬁshing business— (a) is deﬁned in section EH 36 (Other deﬁnitions) for the purposes of this Act except the provision to which para- graph (b) refers: is deﬁned in section EJ 2(6) (Spreading forward of de- ductions for repairs to ﬁshing boats) for the purposes of that section ﬁshing quota emissions unit means an emissions unit— (a) transferred, under an allocation plan made under sec- tion 74 of the Climate Change Response Act 2002, to a person as an owner of individual transferable quota as deﬁned in section 2 of the Fisheries Act 1996; and held continuously by the person since the issue (b) ﬁxed establishment— (a) means a ﬁxed place of business in which substantial business is carried on by a person; and includes— (i) a branch, factory, shop, or workshop in which, in each case, substantial business is carried on; and a mine, oil well, quarry, or other place of natural resources subject to exploitation; and an agricultural, forestry, or pastoral property; and (b) (b) (c) (iii) does not include— (i) the use of facilities solely for the purpose of the delivery, display, or storage of goods or merchan- dise belonging to a business; or the maintenance of a ﬁxed place of business solely for the purpose of purchasing goods or merchandise or for collecting information or for advertising for business (ii) (ii) ﬁxed life intangible property is deﬁned in section EE 67 (Other deﬁnitions) ﬁxed principal ﬁnancial arrangement—
 (a) means a ﬁnancial arrangement other than a variable (b) principal debt instrument: is deﬁned in section EZ 48 (Deﬁnitions) for the pur- poses of the old ﬁnancial arrangements rules 2949 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 ﬁxed-rate foreign equity means an interest (the equity) in the capital of a foreign company held by a company (the holder) in relation to which the foreign company makes distributions— at a rate that is a speciﬁc ﬁxed percentage of the amount (a) subscribed for the issue of the equity; or at a rate that— (i) (b) is a percentage of the amount subscribed for the issue of the equity; and has a ﬁxed relationship to economic, commodity, industrial, or ﬁnancial indices, to banking rates of interest, or to general commercial rates of inter- est; or (ii) (c) (d) at a rate that would be given by paragraph (a) or (b) but for variations due to— (i) (ii) a ﬁxed relationship to a rate of income tax: compensation to the holder for default by the for- eign company: compensation to the holder for expenditure or loss related to the holding of the equity and suf- fered by the holder or by a person associated with the holder; or (iii) equivalent to the payment of interest for money lent, having regard to— (i) (ii) whether or not the equity is redeemable: any security provided to the holder, including put or call options over the equity or an amount payable determined by reference to the amount of distributions payable: the variability or lack of variability of the distri- butions payable (iii) ﬁxed-rate share,— (a) in sections CD 22 (Returns of capital: off-market share cancellations), CX 55(4) (Proceeds from disposal of in- vestment shares), GC 8, and GC 14 (which relate to transfer pricing arrangements between associated per- sons), and in the deﬁnitions of excluded ﬁxed rate se- curity and pre-1991 budget security, means a share is- sued by a company if the only dividend payable on the share, disregarding any dividend payable on
 the issue 2950 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 of the share, and any imputation credits or FDP credits attached to any dividend, is payable at a rate that— is described in paragraph (b), (c), or (d); and (i) is not set with a purpose and does not have an (ii) effect of defeating the intent and application of any provision of this Act whose application is de- pendent on the measurement of voting and mar- ket value interests: (b) (c) (d) (e) (f) for the purposes of paragraph (a)(i), the rate is a speciﬁc ﬁxed percentage of the amount subscribed for the issue of the share: for the purposes of paragraph (a)(i), the rate is a percent- age of the amount subscribed for the issue of the share that is determined by a ﬁxed relationship to commodity, economic, ﬁnancial, or industrial indices, or to banking rates or general commercial rates of interest: for the purposes of paragraph (a)(i), the rate is a per- centage that could be of a kind referred to in paragraph (b) or (c) but for any variation in the rate of dividend that may occur only— (i) (ii) by a ﬁxed relationship to a rate of income tax; or as may be necessary to compensate the share- holder for a default on the part of the paying com- pany or expenditure or loss suffered by the share- holder, or a person associated with the share- holder, through holding the share; or by a combination of the factors in subparagraphs (i) and (ii): (iii) [Repealed] in section FA 2B (Stapled debt securities), and the deﬁ- nitions of proportional-stapling company and stapled debt security, means— (i) (ii) a share described in paragraph (a): a share that would be a share described in para- graph (a) but for a dividend or a variation in the rate of dividend that may occur when the share is converted into another share (the other share) if the gain is attributable solely to a cause set out in paragraph (g): 2951 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (iii) a share for which the
 dividend payable is the equivalent of the payment of interest for money lent, having regard to the factors set out in para- graph (h): (g) (h) (i) for the purposes of paragraph (f)(ii), the causes are— (i) a change in value of the other share occurs in a period that starts no more than 30 days before the share is converted and ends when the share is converted, and the period was a term or condition of the share when the share was ﬁrst issued: a term or condition of the share that existed when the share was ﬁrst issued, and the term or con- dition sets the gain at a ﬁxed percentage equal to 5% or a lesser percentage of the amount sub- scribed for the share: (ii) for the purposes of paragraph (f)(iii), the factors are— whether or not the share is redeemable: (i) any security provided to the shareholder, in- (ii) cluding put or call options over the share or any amount payable determined by reference to the amount of dividend payable: the variability or lack of variability of the divi- dend payable: (iii) in section EX 46(10)(a) and subpart FE (Interest appor- tionment on thin capitalisation), means a share meeting the requirements of paragraph (f)(i) and (iii) ﬂat-owning company is deﬁned in section CD 31(2) (Flat- owning companies) for the purposes of that section, section HA 6 (Corporate requirements), and the deﬁnition of look- through company FMA means the Financial Markets Authority established under Part 2 of the Financial Markets Authority Act 2011 foreign attributed income means a company’s income for the income year that is— (a) (b) attributed CFC income: FIF income calculated under the attributed FIF income method foreign attributed loss offsets [Repealed] [Repealed] 2952 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 foreign company means a company that— (a) (b) is not resident in New Zealand; or is treated under a double tax agreement as not being resident in New Zealand foreign corporate limited partnership means an entity or group of
 persons that— (a) meets the deﬁnition of overseas limited partnership in (b) section 4 of the Limited Partnerships Act 2008; and is treated as a separate legal entity under the laws (other than taxation laws) of the country, territory, or jurisdic- tion where it is established foreign country is deﬁned in section DB 45(4) (Bribes paid to public ofﬁcials) for the purposes of that section foreign dividend [Repealed] [Repealed] foreign dividend company [Repealed] [Repealed] foreign dividend company net earnings [Repealed] [Repealed] foreign exempt entity is deﬁned in section CW 12(4) (Pro- ceeds of share disposal by qualifying foreign equity investor) for the purposes of that section foreign exempt partnership is deﬁned in section CW 12(4) (Proceeds of share disposal by qualifying foreign equity in- vestor) for the purposes of that section foreign exempt person is deﬁned in section CW 12(4) (Pro- ceeds of share disposal by qualifying foreign equity investor) for the purposes of that section foreign expenditure is deﬁned in section EG 1(10) (Election to use balance date used in foreign country) for the purposes of that section foreign group [Repealed] [Repealed] foreign income tax is deﬁned in section LJ 3 (Meaning of foreign income tax) for the purposes of Part L (Tax credits and other credits) foreign investment fund is deﬁned in section EX 28 (Meaning of FIF) 2953 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) foreign investment PIE means a multi-rate PIE that— (a) meets the requirements of sections HM 55C to HM 55H (which relate to the particular requirements for and treatment of foreign investment PIEs); and chooses under section HM 71B (Choosing to become a foreign investment PIE) to become a foreign investment zero-rate PIE or a foreign investment variable-rate PIE foreign investment variable-rate PIE means a foreign invest- ment PIE that— (a) meets the requirements of section HM 19C (Modiﬁed (b) rules for foreign investment variable-rate
 PIEs); and chooses under section HM 71B (Choosing to become a foreign investment PIE) to become a foreign investment variable-rate PIE foreign investment vehicle means an entity that— (a) has become a foreign investment vehicle under section HL 5(1) (Foreign investment vehicles); and has not ceased to be a foreign investment vehicle under section HL 5(2) (b) foreign investment zero-rate PIE means a foreign investment PIE that— (a) meets the requirements of section HM 19B (Modiﬁed rules for foreign investment zero-rate PIEs); and chooses under section HM 71B (Choosing to become a foreign investment PIE) to become a foreign investment zero-rate PIE (b) foreign non-dividend income means income that— (a) (b) (c) does not have a source in New Zealand; and is not a dividend; and is not FIF income calculated under the fair dividend rate method foreign PIE equivalent is deﬁned in section HM 3 (Foreign PIE equivalents) foreign public ofﬁcial is deﬁned in section DB 45(4) (Bribes paid to public ofﬁcials) for the purposes of that section foreign source income is deﬁned in section EG 1(10) (Elec- tion to use balance date used in foreign country) for the pur- poses of that section 2954 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 is withheld from an amount of income; and is of substantially the same nature as NRWT foreign-sourced amount means an amount of income that is not treated as having a source in New Zealand under sec- tions YD 4 (Classes of income treated as having New Zealand source) and YZ 1 (Source rule for interest) foreign superannuation scheme means a superannuation scheme constituted outside New Zealand foreign tax, in subpart LJ (Tax credits for foreign income tax), means tax, other than New Zealand tax, that is the subject of a double tax agreement foreign trust is deﬁned in section HC 11 (Foreign trusts) foreign withholding tax means a tax, other than a New Zealand tax, that— (a) (b) forest land emissions unit means a pre-1990 forest land
 emis- sions unit, a post-1989 forest land emissions unit, or a forest sink emissions unit forest sink emissions unit means an emissions unit issued to a person in relation to a forest sink covenant under section 67Y of the Forests Act 1949 entered by the person forester is deﬁned in section EH 3(1)(c) (Persons to whom main income equalisation scheme applies) forest land unit [Repealed] [Repealed] forestry assets is deﬁned in section FC 6 (Forestry assets transferred to close relatives) for the purpose of that section forestry business includes forestry activities carried on by a person for the purpose of deriving income in relation to an emissions unit forestry company means a company that is incorporated, under an agreement between the Crown, the Maori owners, and a holding company of the company, for the purposes of— buying land partly from the Crown, partly from the (a) Maori owners, and partly from a holding company of the company; and carrying on a forestry business on the land (b) formation loss, for a PIE, means an amount of tax loss or a loss balance arising from a period before the entity became a 2955 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 PIE as described in sections HM 66 to HM 70 (which relate to the treatment of formation losses) forward contract,— (a) in the ﬁnancial arrangements rules, means— (i) an agreement that is a conditional or an uncon- ditional agreement to acquire or dispose of prop- erty, or obtain or supply services, if the agree- ment can be settled without the property being delivered or the services being performed: an agreement that is a conditional or an uncondi- tional agreement to acquire or dispose of foreign exchange or a ﬁnancial arrangement: (ii) (b) in the old ﬁnancial arrangements rules, is deﬁned in sec- tion EZ 48 (Deﬁnitions) friendly society means a society or credit union or association of credit unions registered or treated as registered under the Friendly Societies and Credit Unions Act
 1982 fringe beneﬁt is deﬁned in section CX 2 (Meaning of fringe beneﬁt) fringe beneﬁt tax means fringe beneﬁt tax payable under sec- tion RD 26 (Liability for FBT), and FBT has the same meaning fringe beneﬁt tax rules means the provisions listed in section RD 25 (FBT rules and their application) and FBT rules has the same meaning full reinsurance is deﬁned in section EY 12(2) (Meaning of life reinsurance) full-time earner is deﬁned in section MA 7 (Meaning of full- time earner for family scheme) for the purposes of subparts MA to MF and MZ (which relate to tax credits for families) fully credited is deﬁned in section CD 43(26) (Available sub- scribed capital (ASC) amount) for the purposes of that section fully credited for conduit tax relief [Repealed] [Repealed] fully imputed,— (a) for the purposes of sections CB 26, EX 20B, RF 8, RF 10, and schedule 6, table 1B (which relate to distribu- tions by PIEs and certain dividends), means the amount 2956 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (b) calculated under section RF 9(2) (When dividends fully imputed or fully credited): for the purposes of sections CW 15, HA 14, HA 16, and HA 19 (which relate to dividends paid by qualifying companies), means the amount calculated under section HA 15(2) (Fully imputed distributions) fund provider, for a person and a KiwiSaver scheme or a complying superannuation fund of which they are a member, means the trustees of the scheme or fund further FDP means an amount that a company may be liable to pay under sections OC 30 to OC 34 (which relate to further FDP payable by companies) further income tax means an amount of tax by way of further income tax that a company may be liable to pay under— (a) sections OB 65 to OB 70 (which relate to further tax payable by a company for a closing debit balance, or when the company stops being an ICA company): sections OK 21 or OK 22 (which relate to further tax payable by a Maori authority for a closing debit balance, or
 when it stops being a Maori authority) (b) futures contract means a forward contract traded on a recog- nised futures exchange gaming-machine gambling means class 4 gambling, as de- ﬁned in section 30 of the Gambling Act 2003, that utilises or involves a gaming machine gaming-machine operator’s licence means a class 4 oper- ator’s licence as deﬁned in section 4 of the Gambling Act 2003 gaming-machine venue licence means a class 4 venue licence as deﬁned in section 4 of the Gambling Act 2003 general insurance means insurance that is not life insurance general insurance contract [Repealed] [Repealed] general limitation means a rule described in any of section DA 2(1) to (6) (General limitations) general partner— (a) means a general partner of a limited partnership: 2957 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) includes a general partner of an overseas limited part- nership as deﬁned in section 4 of the Limited Partner- ships Act 2008 general permission is deﬁned in section DA 1(1) (General permission) general power of appointment— (a) (ii) (iii) includes a power or authority that— (i) is conferred by will or conferred by a settlement during life or created in any other manner; and is exercisable orally or by instrument made dur- ing life or by will or by any other means; and enables its holder, or would enable its holder if they were of full capacity, to obtain or appoint or dispose of any property, or to charge any sum or money on any property, as the holder thinks ﬁt for their own beneﬁt; and does not include a power or authority— (i) exercisable by a person in a ﬁduciary capacity under a disposition not made by them; or exercisable as a mortgagee (ii) (b) generally accepted accounting practice is deﬁned in section 3 of the Financial Reporting Act 1993 geothermal energy proving period means, for a person’s geothermal well that is not used to exploit geothermal energy, a period— (a) starting with the completion or acquisition of the
 well; and other than the case of the person disposing of the well to another person, ending when the well for the fore- seeable future is not intended, and cannot reasonably be expected, to be used or available for use in— (i) (ii) deriving assessable income: carrying on a business for the purposes of deriv- ing assessable income (b) geothermal well means a bore or well solely for the purpose of investigating or exploiting geothermal energy in New Zealand gifting settlor is deﬁned in section EX 46(12) (Limits on choice of calculation methods) 2958 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 goods, in sections CX 1 (Goods and services tax), DB 2 (Goods and services tax), and EA 3 (Prepayments), and in the deﬁnition of services, is deﬁned in section 2 of the Goods and Services Tax Act 1985 government screen production payment [Repealed] [Repealed] government stock is deﬁned in section DZ 11(3) (Film reim- bursement scheme on or before 30 June 2001) for the purposes of that section Government Superannuation Fund means the fund estab- lished under the Government Superannuation Fund Act 1956 grandparented consolidated company, for a company that is part of a consolidated group and for an income year (the current income year), means a company that before 17 May 2006 chose to form or join the consolidated group, when— (a) the current income year is the 2005–06 or 2006–07 in- come year: the company carries on a business, and the total amount of the company’s ﬁnance-related deductions allocated to the income year before the current income year (the previous income year) is— (i) (b) zero, because no deductions are allocated to the previous income year; or less than 50% of the company’s total deductions allocated to the previous income year, calculated as if the company were not part of the group and determined under section FM 3 (Liability of con- solidated groups and group companies) (ii) grandparented structure means, for a person, any item on the
 following list, if the person acquired the item, or entered into a binding contract for the purchase or construction of the item, on or before 30 July 2009: (a) (b) (c) (d) (e) (f) barns, including barns (drying): carparks (buildings): chemical works: fertiliser works: powder drying buildings: site huts 2959 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 grandparenting income year is deﬁned in section HA 5(5) (Elections to become qualifying company) grandparenting start day is deﬁned in section EY 30 (Tran- sitional adjustments: life risk) grant-related suspensory loan means a loan— (a) that— (i) (ii) (iii) is made by a public authority; and is not a loan of the kind described in section CF 2(1) (Remission of speciﬁed suspensory loans); and includes the term that the liability of the borrower may be wholly or partly remitted; or (b) (c) that is made by the Rural Banking and Finance Corpor- ation of New Zealand as an irrigation suspensory loan and designated as such; or that is made by the Rural Banking and Finance Corpor- ation of New Zealand as a West Coast drainage suspen- sory loan and designated as such grey list means the list of countries in schedule 24, part A (International tax rules: grey list countries) grey list company means a company that is resident under section YD 3 (Country of residence of foreign companies) in a grey list country if either— (a) the company is liable in the country to income tax on the company’s income because the company— is domiciled in the country: (i) is resident in the country: (ii) is incorporated in the country: (iii) (iv) has its place of management in the country: the company is organised under the laws of the country and the country— (i) imposes on persons holding income interests in the company the liability for income tax on the company’s income; and under the laws of the country, is the source of 80% or more of the income of the company (ii) (b) grey list dividend [Repealed] [Repealed] 2960 Reprinted
 as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 Public Trust Act 2001; or Trustee Companies Act 1967; or Public Trust Ofﬁce Act 1957 gross, for an amount, means without any deduction from the amount gross gambling proceeds means gross proceeds, as deﬁned in regulation 3(1) of the Gambling (Class 4 New Proceeds) Regulations 2004, plus prizes group funding debt means the amount calculated under sec- tion FE 23 (Banking group’s funding debt) group investment fund means a group investment fund estab- lished under the— (a) (b) (c) group life master policy is deﬁned in section EY 30 (Transi- tional adjustments: life risk) group of companies is deﬁned in section IC 3 (Common own- ership: group of companies) group of persons includes 1 person GST means goods and services tax under the Goods and Services Tax Act 1985 GST charged means GST charged under section 8(1) of the Goods and Services Tax Act 1985 GST payable in sections CX 1 (Goods and services tax), DB 2 (Goods and services tax), and DB 3(3) (Determining tax liabil- ities), has the same meaning as tax payable in section 2 of the Goods and Services Tax Act 1985, but does not include inter- est payable under Part 7 of the Tax Administration Act 1994 GST ratio is deﬁned in section RC 8(2) (GST ratio method) guaranteed residual value means an amount to which both the following apply: (a) it is equal to the value of a personal property lease asset as agreed in the lease by the lessor and the lessee; and its receipt by the lessor, on the expiry of the term of the lease, is assured or guaranteed by the lessee (b) guarantor is deﬁned in— (a) section HB 11(12) (Limitation on deductions by per- sons with interests in look-through companies) for the purposes of that section: 2961 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) section HG 11(12) (Limitation on deductions by part- ners in limited partnerships) for the purposes of that sec- tion guardian is deﬁned in section HC 36(5) (Trusts and
 minor beneﬁciary rule) for the purposes of that section hedge and hedging are deﬁned in section EM 8 (Some deﬁ- nitions) for the purposes of subpart EM (Hedging of currency movements in Australian non-attributing shares and attribut- ing FDR method interests) herd livestock means a type of speciﬁed livestock that a per- son— (a) (b) chooses to value under the herd scheme; and values for an income year under sections EC 14 to EC 21 (which relate to the herd scheme) herd scheme— (a) means the livestock valuation method described in sec- tions EC 14 to EC 21 (which relate to the herd scheme); and includes the livestock valuation method set out in— (i) (b) sections EC 14 to EC 21of the Income Tax Act 2004; and sections EL 5 and EL 6 of the Income Tax Act 1994; and section 86A of the Income Tax Act 1976 as in force before its repeal by section 21 of the Income Tax Amendment Act (No 2) 1993; and section 86D of the Income Tax Act 1976 (ii) (iii) (iv) herd value means, for an animal that is herd livestock and for an income year, the national average market value of the livestock declared for the income year herd value ratio means— (a) the ratio calculated or recalculated under section EC 17 (Herd value ratio) or EC 18 (Inaccurate herd value ratio) for herd livestock other than livestock on the Chatham Islands: the adjustment set by the Commissioner under section EC 19 (Chatham Islands adjustment to herd value) for herd livestock on the Chatham Islands (b) 2962 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 higher credit value— (a) is deﬁned in section GB 35(4) (Imputation arrange- ments to obtain tax advantage) for the purposes of that section: is deﬁned in section GB 42(4) (Maori authority credit arrangements to obtain tax advantage) for the purposes of that section (b) high-priced livestock means an animal of a type set out in schedule 17, column 1 (Types and classes of livestock) to which both the following apply: (a) a person buys it for a purchase price
 that is at least— (i) (ii) $500; and 5 times the national average market value, in the income year of purchase or in the previous in- come year, whichever is greater, for the class in schedule 17, column 2 in which the livestock is able to be classiﬁed at the end of the income year of purchase; and (b) at the time the person buys it,— (i) (ii) it is capable of being used for breeding; or it is expected to be capable of being used for breeding when it reaches maturity hire purchase agreement— (a) means— (i) an agreement under which goods are let or hired with an option to purchase, however the agree- ment describes the payments, under which the person who agrees to purchase the goods is given possession of them before the total amount payable has been paid: an agreement for the purchase of goods by in- stalment payments, however the agreement de- scribes the payments, under which the person who agrees to purchase the goods is given pos- session of them before the total amount payable has been paid; and (ii) (b) includes an agreement to sell goods at retail under which— 2963 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (i) (ii) the buyer grants security over the goods to the seller for some or all of the purchase price; and the property in the goods passes to the buyer sub- ject to the security, in which case the agreement is a hire purchase agreement made at the time the sale is made; and (c) (d) (e) (f) (ii) includes a sale and loan arrangement under which— (i) a person lends money on the security of goods that have been bought or are to be bought at retail if some or all of the purchase price is paid out of the proceeds of the loan; and the loan is made by the seller or by a third party, arranged by the seller, who is engaged in the busi- ness of lending money or who habitually lends money in the course of the third party’s business, in which case the arrangement is a hire purchase agreement made at the time the loan is made; and does not
 include an agreement under which property in the goods passes absolutely to the person who agrees to purchase them at the time of the agreement or on or at any time before delivery of the goods, unless the agreement is of a kind described in paragraph (a) or (b); and does not include an agreement made otherwise than at retail; and does not include an agreement to the extent to which the property that is the subject of the agreement is livestock or bloodstock hire purchase asset means the personal property that is the subject of a hire purchase agreement hire purchase payment means a payment made under a hire purchase agreement holder is deﬁned in section EZ 48 (Deﬁnitions) for the pur- poses of the old ﬁnancial arrangements rules holding company,— (a) for a forestry company, means a company associated with the forestry company: for a mining company, is deﬁned in section CU 29 (Other deﬁnitions) (b) 2964 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 home [Repealed] [Repealed] home ownership requirements means home ownership re- quirements as deﬁned in the Home Ownership Savings Act 1974 home vendor mortgage is deﬁned in section LZ 8 (Meaning of home vendor mortgage) for the purposes of sections LZ 6 and LZ 7 (which relate to credits for interest on home vendor mortgages) honorarium is deﬁned in section CW 62B (Voluntary activ- ities) for the purposes of that section household member [Repealed] [Repealed] housekeeper [Repealed] [Repealed] housekeeping payments [Repealed] [Repealed] ICA means imputation credit account ICA company means a company referred to in section OB 1(1) (General rules for companies with imputation credit accounts) identical goods, for the purposes of the FBT rules, for any goods, means other goods that are the same in terms of phys- ical characteristics, quality, and reputation, except for minor differences in appearance that do not affect the value of the goods identical share means a share that confers the same rights and
 imposes the same obligations on a holder as an original share IFRS means a New Zealand Equivalent to International Finan- cial Reporting Standard, approved or issued under the Finan- cial Reporting Act 1993, and as amended from time to time or an equivalent standard issued in its place IFRS 4 means the IFRS, numbered NZ IFRS 4, that relates to insurance contracts IFRSE means an International Financial Reporting Standard approved by the International Accounting Standards Board, as amended from time to time 2965 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 impaired credit adjustment is deﬁned in section EW 15D(3) (IFRS ﬁnancial reporting method) for the purposes of that sec- tion.
implementation date is deﬁned in section EZ 48 (Deﬁnitions) for the purposes of the old ﬁnancial arrangements rules improvement, for an item of depreciable property, is deﬁned in section EE 67 (Other deﬁnitions) improvements, in sections CB 7 (Disposal: land acquired for purposes of business relating to land) and CB 11 (Disposal within 10 years of improvement: building business), means improvements to land that— (a) (b) by a person erecting a building or otherwise; or by an associated person erecting a building or otherwise are not minor; and are made— (i) (ii) imputation additional tax means an amount of tax arising under section OB 71 (Imputation additional tax on leaving wholly-owned group) or OB 72 (Imputation additional tax on joining wholly-owned group) imputation credit— (a) means a credit referred to in section OA 5(2) (Credits): is further deﬁned in section CD 16(4) (Certain dividends (b) not increased by tax credits) for the purposes of that section: is further deﬁned in section CD 17(4) (Credit transfer notice) for the purposes of that section (c) imputation credit account means the account referred to in section OA 2(1)(a) (Memorandum accounts) imputation debit means a debit referred to in section OA 6(2) (Debits) imputation group means, at a time, an imputation group formed under section FN 7 (Forming imputation groups) imputation penalty tax means tax payable under section 140B of the Tax Administration Act 1994 imputation ratio means the ratio set out in section OB 60(3) (Imputation credits attached to dividends) 2966 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 imputation rules means the provisions listed in section FN 2 (Imputation rules) income, for a person, means income of the person under sec- tion BD 1(1) (Income, exempt income, excluded income, non- residents’ foreign-sourced income, and assessable income) income derived from New Zealand [Repealed] [Repealed] income from employment— (a) means salary or wages or an extra pay: (b) (ii) in sections DA 2(4) (General
 limitations) and DE 1 (What this subpart does), excludes payments referred to in section RD 5(1)(b)(iii) (Salary or wages) to the extent to which those payments are made to 1 of the following: a self-employed person, as deﬁned in section 2 of (i) that Act, under the Accident Compensation Act 1982; or an earner in relation to compensation for loss of earnings other than as an employee, as deﬁned under regulations made under section 167 of that Act, under the Accident Rehabilitation and Com- pensation Insurance Act 1992; or a self-employed person, as deﬁned in section 13 of that Act, under the Accident Insurance Act 1998, for compensation paid under schedule 1, part 2, clause 7 of that Act; or a self-employed person, as deﬁned in section 6 of the Act, under the Accident Compensation Act 2001, for compensation paid under schedule 1, part 2, clause 32 of that Act: (iii) (iv) (c) (d) in sections DA 2(4) and DE 1, includes salary, wages, or other income to which section RD 3(2) to (4) (PAYE income payments) applies: in section DA 2(4), includes excluded income derived by a person from employment income from forestry is deﬁned in section EH 34 (Meaning of income from forestry) income from mining is deﬁned in section CU 21 (Meaning of income from mining) 2967 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 income from personal exertion is deﬁned in section IZ 1(12) (Use of speciﬁed activity net losses) for the purposes of that section income interest,— (a) for a foreign company, is deﬁned in sections EX 8 to EX 13 (which relate to the calculation of a person’s income interest): in subparts FE (Interest apportionment on thin cap- italisation) and OE (Branch equivalent tax accounts (BETA)), and in the FDP rules and the imputation rules, means an income interest of 10% or greater under the rules in sections EX 14 to EX 17 (which relate to the 10% threshold and variations in the income interest level) (b) income statement means a statement issued by the
 Commis- sioner to a natural person that contains the information re- quired by section 80E of the Tax Administration Act 1994 income tax means income tax imposed under section BB 1 (Imposition of income tax) except to the extent to which it has a different meaning under section YA 2 (Meaning of income tax varied) income tax liability— (a) means, for a person,— (i) (b) (ii) an income tax liability for the person and a tax year calculated under subpart BC (Calculating and satisfying income tax liabilities), if subpara- graph (ii) does not apply; or income tax for the person and a tax year calcu- lated under subpart HM (Portfolio investment en- tities), if the person is a multi-rate PIE; and in sections EF 5 (Use of money interest payable by per- son) and EF 6 (Different tax years), includes circum- stances in which a person has no tax to pay or is entitled to a refund of tax income year means,— (a) for a person who has elected, under section 38 of the Tax Administration Act 1994 and with the Commissioner’s consent, to have a period not ending on 31 March, the 2968 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 elected period (which may be less than a year in some cases): for any other person, the tax year sole parent support: emergency beneﬁt: [Repealed] supported living payment: [Repealed] jobseeker support: [Repealed] young parent payment: youth payment (b) income-tested beneﬁt means any of the following beneﬁts paid or payable under the Social Security Act 1964: (a) (b) (c) (d) (e) (f) (g) (h) (i) increase in savings is deﬁned in section LZ 12 (Meaning of increase in savings) for the purposes of sections LZ 9 to LZ 11 (which relate to credits for savings in special accounts) independent living means occupancy of a place under an ar- rangement that— (a) (b) does not have a level of compulsory care: has a level of compulsory care that is merely incidental to the occupancy indirect income interest is deﬁned in section EX 10 (Indirect income
 interests) industry research co-operative [Repealed] [Repealed] initial period is deﬁned in section FZ 3(4) (Income of lessor under speciﬁed lease) for the purposes of that section initial provisional tax liability, means— (a) for a person who is not a natural person, or a person who is a natural person and a trustee of a trust, a provisional tax liability for a tax year in which the person starts to derive income from a taxable activity, when they did not derive income from a taxable activity in any of the 4 previous tax years; and for a person who is a natural person and not a trustee of a trust, a provisional tax liability for a tax year when— (b) 2969 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (i) (ii) (iii) they did not have residual income tax of more than $2,500 in any of the 4 previous tax years; and they have residual income tax of $50,000 or more in the tax year; and in the tax year, they stopped deriving income from employment and then started to derive in- come from a taxable activity initial treatment is deﬁned in section CU 29 (Other deﬁni- tions) Inland Revenue Acts means the Acts listed in the schedule of the Tax Administration Act 1994 input tax— (a) is deﬁned in section 3A of the Goods and Services Tax Act 1985; and includes, for a supply, GST levied on goods entered for home consumption under the Customs and Excise Act 1996 (b) instalment, in sections FZ 2 to FZ 4 (which relate to speci- ﬁed leases), and in the deﬁnitions of instalment period and outstanding balance, means an amount payable by a lessee, under a lease, by way of— (a) repayment of some or all of a loan that a lessor is treated as having advanced under section FZ 2(2) (Effect of speciﬁed lease on lessor and lessee); or payment of interest; or both (b) (c) instalment date means a date for payment of provisional tax for a tax year that is the day and month speciﬁed for a person with a provisional tax liability in schedule 3, part A (Payment of provisional tax and
 terminal tax) instalment period is deﬁned in section FZ 3(4) (Income of lessor under speciﬁed lease) for the purposes of that section institution [Repealed] [Repealed] 2970 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 insurance,— (a) in section CR 3 (Income of non-resident general in- surer) means insurance of a kind described in section CR 3(3): in section YD 8 (Apportionment of premiums derived by non-resident general insurers) means insurance of a kind described in section YD 8(4)(a) (b) insurance contract includes a cover note and a renewal of an insurance contract insured person, in sections CR 3, HD 16, and YD 8 (which relate to non-resident general insurers),— (a) in relation to general insurance as described in sections CR 3(3)(a) and YD 8(4)(a), means a person who is liable to pay a premium to an insurer for the insurance and is entitled by the payment of the premium to make a claim against the insurer: in relation to a guarantee against risk as described in sections CR 3(3)(b) and (c) and YD 8(4)(b) and (c), means a person who is liable to pay a premium to an insurer for the guarantee, whether or not the payment of the premium entitles the person to make a claim against the insurer (b) insurer— (a) means a person who assumes liability under a contract (b) of insurance: in sections CR 3, DW 3, HD 16, HD 17, and YD 8 (which relate to non-resident general insurers),— (i) in relation to general insurance as described in sections CR 3(3)(a) and YD 8(4)(a), means a per- son who provides the insurance and to whom an insured person is liable to pay a premium: in relation to a guarantee against risk as described in sections CR 3(3)(b) and (c) and YD 8(4)(b) and (c), means a person who provides the guarantee and to whom an insured person is liable to pay a premium (ii) interest,— (a) for a person’s income,— 2971 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) (c) (i) means a payment made to the person by another person for
 money lent to any person, whether or not the payment is periodical and however it is described or calculated; and does not include a redemption payment; and does not include a repayment of money lent: (ii) (iii) for the RWT rules and the NRWT rules, includes a re- demption payment: in sections DB 6 (Interest: not capital expenditure), DB 7 (Interest: most companies need no nexus with in- come), and DB 8 (Interest: money borrowed to acquire shares in group companies),— (i) includes expenditure incurred under the ﬁnancial arrangements rules or the old ﬁnancial arrange- ments rules; and to which section does not DB 1(1)(e) (Taxes, other than GST, and penal- ties) applies: include interest (ii) for land, has the same meaning as estate (d) interest expenditure is deﬁned in section DG 5 (Meaning and treatment of interest expenditure for this subpart) for the pur- poses of subpart DG (Expenditure related to use of certain as- sets) interest instalment date means an instalment date— (a) on which an instalment of provisional tax is due and payable under section RC 9 (Provisional tax payable in instalments); and after which, except in a case to which section 120KC(1) of the Tax Administration Act 1994 applies, an instal- ment amount that is overpaid or underpaid attracts use of money interest, a late payment penalty, or a shortfall penalty, as applicable (b) interested shareholder is deﬁned in section HD 15(9) (Asset stripping of companies) for the purposes of that section intermediary means a person described in section RP 2 or RP 17 (which relate to PAYE intermediaries and tax pooling intermediaries) for the purposes of subpart RP (Intermediar- ies) 2972 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 internal software development is deﬁned in section LH 17 (Some deﬁnitions) for the purposes of subpart LH (Tax credits for expenditure on research and development) internal software development controller is deﬁned in sec- tion LH 17 (Some deﬁnitions) for
 the purposes of subpart LH (Tax credits for expenditure on research and development) internal software development group is deﬁned in section LH 17 (Some deﬁnitions) for the purposes of subpart LH (Tax credits for expenditure on research and development) international aircraft is deﬁned in section EE 67 (Other def- initions) international organisation is deﬁned in section CW 22(3) (Amounts derived by overseas experts and trainees in New Zealand by government arrangement) for the purposes of that section international tax rules means— (a) the following provisions: (i) section CD 21 (Attributed repatriations from con- trolled foreign companies): sections CD 45 to CD 52 (which relate to CFC attributed repatriation calculation rules): subpart CQ (Attributed income from foreign equity): section CZ 10 (Transitional relief for calculation of attributed repatriation dividends: 2 July 1992): subpart DN (Attributed losses from foreign equity): subpart EX (Controlled foreign company and for- eign investment fund rules): section FM 6(4) (Some general rules for treat- ment of consolidated groups): (ii) (iii) (iv) (v) (vi) (vii) (viii) sections GB 7 to GB 16 (which relate to avoid- (ix) (x) ance arrangements): section GC 4 (Disposals and acquisitions of FIF attributing interests): subpart IQ (Attributed controlled foreign com- pany net losses and foreign investment fund net losses): 2973 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (xi) sections LK 1 to LK 7 (which relate to foreign tax credits and CFCs): [Repealed] (xii) (xiii) section YA 2 (Meaning of income tax varied): (xiv) [Repealed] (xv) [Repealed] (xvi) section YD 3 (Country of residence of foreign companies); and (b) section 61 of the Tax Administration Act 1994 investment activity is deﬁned in section MB 3 (When person carries on 1 or more businesses or investment activities) for the purpose of that section investment society dividend means— (a) (b) a dividend declared by a friendly society; or a
 dividend declared by a registered society as deﬁned in section 2 of the Industrial and Provident Societies Act 1908; or for a building society,— (i) (ii) a dividend declared by the society; or some tangible or intangible beneﬁt that a mem- ber or a shareholder receives for disposing to the society of a share in the society; the beneﬁt may or may not be relief from an obligation and may or may not be convertible into money (c) investor means,— (a) (b) for a group investment fund, a person who is entitled, by reason of the terms of the trust under which the group investment fund is established, to the income from the money, investments, and other property of the group investment fund: for a portfolio investment entity, is deﬁned in section HM 4 (Who is an investor?)
[Repealed] (c) investor class, for a portfolio investment entity, is deﬁned in section HM 5 (What is an investor class?)
investor interest,–– (a) for an investor in a portfolio investment entity, means an interest in the entity that gives the holder an entitle- 2974 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (b) ment to a distribution of proceeds from the entity’s in- vestments: is deﬁned in section EM 8 (Some deﬁnitions) for the purposes of subpart EM (Hedging of currency move- ments in Australian non-attributing shares and attribut- ing FDR method interests) in-work payment [Repealed] [Repealed] in-work tax credit is deﬁned in section MA 8 (Some deﬁni- tions for family scheme) for the purposes of subparts MA to MF and MZ (which relate to tax credits for families) issue,— (a) for a ﬁnancial arrangement, means the act of creating the ﬁnancial arrangement: is deﬁned in section YZ 1 (Source rule for interest) for the purposes of that section (b) issuer is deﬁned in section EZ 48 (Deﬁnitions) for the pur- poses of the old ﬁnancial arrangements rules joint venture agreement, for an airport operator,— (a) means an agreement made between an airport authority and the Crown acting by and through the Minister of Transport under section 94 of the Civil Aviation Act 1990; and includes any other agreement of a similar nature made between the Crown and an airport authority, whether or not the airport authority was, at the time the agreement was made, an airport authority, and whether or not the agreement was made before the commencement of the Civil Aviation Act 1990 (b) jurisdictional attributed income is deﬁned in section IQ 2B(9) (Effect of attributed CFC net loss and some FIF net loss from before ﬁrst affected year) for the purposes of that section and section LK 5B (Credits from tax year before ﬁrst affected year) jurisdictional BE income is deﬁned in section IQ 2B(9) (Ef- fect of attributed CFC net loss and some FIF net loss from before ﬁrst affected year) for the purposes of that section and section LK 5B (Credits from tax year before ﬁrst affected year) 2975 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2
 September 2013 jurisdictional income ratio is deﬁned in section IQ 2B(9) (Ef- fect of attributed CFC net loss and some FIF net loss from before ﬁrst affected year) for the purposes of that section and section LK 5B (Credits from tax year before ﬁrst affected year) KiwiSaver calculation period [Repealed] [Repealed] KiwiSaver contributions means a contribution required to be deducted under Part 3, subpart 1 of the KiwiSaver Act 2006 KiwiSaver scheme means a KiwiSaver scheme, as deﬁned in section 4 of the KiwiSaver Act 2006 Kyoto unit [Repealed] [Repealed] land— (a) (b) includes any estate or interest in land: includes an option to acquire land or an estate or interest in land: does not include a mortgage: is deﬁned in section CB 19(3) (Business exclusion from sections CB 6 to CB 11) for the purposes of that section: is deﬁned in section IZ 1(12) (Use of speciﬁed activity net losses) for the purposes of that section: in the deﬁnitions of permit area, petroleum mining asset, prospecting expenditure, and residual expend- iture,— (i) (ii) (iii) (iv) means all land within the territorial limits of New Zealand; and includes land below the territorial sea of New Zealand or any other waters within the territorial limits of New Zealand; and includes the continental shelf; and includes the seabed and subsoil below any sea that is beyond the territorial sea of New Zealand but that, by New Zealand legislation and under international law, has been or may be designated as an area in which the rights of New Zealand relating to natural resources may be exercised (c) (d) (e) (f) 2976 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 land investment company means a company that, in a tax year,— (a) (b) is not a portfolio investment entity; and on 80% or more of the days in the corresponding income year on which the company has property with a market value of $100,000 or more, owns property that— (i) consists of interests in land or shares in a land investment company
 that does not own, directly or indirectly, shares in the company; and has a market value of 90% or more of the market value of all the property of the company; and (ii) (c) meets the requirements of section HM 12 (Income types) land loss is deﬁned in section HM 65(3) (Use of land losses of investor classes) for the purposes of that section land provisions means the following provisions: (a) sections CB 7 to CB 11 (which relate to certain land transactions), except CB 8 (Disposal: land used for landﬁll, if notice of election): section CB 15 (Transactions between associated per- sons): section EI 4B (Consideration for agreement to grant, renew, extend, or transfer leasehold estate or licence): sections FB 3 to FB 5 (which relate to the transfer of land on a settlement of relationship property) (b) (bb) (c) LAQC [Repealed] [Repealed] large budget ﬁlm grant means a payment that— (a) (b) (c) is in the nature of a large budget screen production grant or post-production digital and visual effects grant; and is made in relation to a ﬁlm or television production; and is authorised by the New Zealand Film Commission in relation to a company that— (i) (ii) is resident in New Zealand: has a permanent establishment in New Zealand large budget screen production grant [Repealed] [Repealed] 2977 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 late balance date has the meaning given in section YE 1(7) (References to balance dates and years) lease— (a) means a disposition that creates a leasehold estate: (b) (c) (d) in sections DZ 9 (Premium paid on land leased before 1 April 1993) and EZ 8 (Premium paid on land leased before 1 April 1993),— (i) means a disposition by which a leasehold estate is created; and includes a licence: (ii) for the purposes of subpart EE (Depreciation), includes a licence to occupy: in sections EJ 10 (Personal property lease payments), EX 21(30) and (31) (Attributable CFC amount and net attributable CFC income or loss: calculation rules),
 FA 6 to FA 11 (which relate to ﬁnance leases), FZ 2 to FZ 4 (which relate to speciﬁed leases) and in the deﬁnitions of cost price (paragraphs (b) to (e)), ﬁnance initial period, lease, guaranteed residual value, instalment, lessee (paragraph (b)), lessor (paragraph (b)), operating lease, outstanding balance, personal property lease asset, speciﬁed lease, and term of the lease,— (i) means an agreement under which a lessor trans- fers to a lessee for the term of the lease a personal property lease asset or the right to possess a per- sonal property lease asset in consideration for a personal property lease payment; and includes a sublease; and includes a licence to use intangible property; and includes a hire or bailment; and includes a lease that is 2 or more consecutive or successive leases treated as 1 lease because the same personal property lease asset had been leased to the same lessee or an associated person of the lessee under the consecutive or successive leases and the Commissioner, having regard to the tenor of this paragraph, regards the consecu- tive or successive leases as 1 lease; and (ii) (iii) (iv) (v) 2978 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (vi) does not include a hire purchase agreement, the deﬁnition of which applies, for this purpose, as if it did not contain paragraph (f); and (vii) does not include an assignment of a hire purchase agreement, the deﬁnition of which applies, for this purpose, as if it did not contain paragraph (f): is deﬁned in section GC 5(5) (Leases for inadequate rent) for the purposes of that section: in the ﬁnancial arrangements rules, means— a lease as described in paragraph (d): (i) an arrangement that would be a lease as described (ii) in paragraph (d) if the arrangement did not relate to real property, livestock, or bloodstock (e) (f) leasehold estate includes any estate, however created, other than a freehold estate legal and equitable rights is deﬁned in section EZ 68 (Def- initions) for the
 purposes of sections EZ 64 to EZ 67 (which relate to New Zealand Railways Corporation restructure) legal defeasance means a defeasance in which the release of a party to a ﬁnancial arrangement or an excepted ﬁnancial arrangement from the primary obligation of the ﬁnancial ar- rangement or the excepted ﬁnancial arrangement is— acknowledged formally by the creditor; or (a) acknowledged formally by a duly appointed trustee or (b) agent of the creditor; or established by legal judgment (c) legal expenses is deﬁned in section DB 62 (Deduction for legal expenses) for the purposes of that section legal life is deﬁned in section EE 67 (Other deﬁnitions) less than 10% holder is deﬁned in section YC 15(3) (Direct- ors’ knowledge of failure to meet requirements of continuity provision) for the purposes of that section lessee,— (a) for a lease as described in paragraph (c) of the deﬁnition of lease, includes the holder of a licence to occupy: for a lease as described in paragraph (d) of the deﬁnition of lease,— (b) 2979 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (i) means a person who leases a personal property lease asset from a lessor; and (ii) includes a trustee or assignee of the person: for a hire purchase agreement, means the person who obtains the use of, or the right to use, the hire purchase asset under the agreement (c) lessor,— (a) (b) (c) for a lease as described in paragraph (c) of the deﬁnition of lease, includes the grantor of a licence to occupy: for a lease as described in paragraph (d) of the deﬁnition of lease,— (i) means a person who assembles, manufactures, purchases, or otherwise acquires a personal prop- erty lease asset and leases it to a lessee; and includes a trustee or assignee of the person: (ii) for a hire purchase agreement,— (i) means the person who grants to the lessee the use of, or the right to use, a hire purchase asset under the agreement; and includes an assignee of the person in relation to the hire purchase
 agreement (ii) levy, for a statutory producer board, means a sum payable by a member of the board under a power of the board to require or request the member to pay an amount of levy liabilities is deﬁned in section EZ 68 (Deﬁnitions) for the pur- poses of sections EZ 64 to EZ 67 (which relate to New Zealand Railways Corporation restructure) licence-speciﬁc assets is deﬁned in section DZ 5(6) (Farm- out arrangements for petroleum mining before 16 December 1991) for the purposes of that section life ﬁnancial reinsurance is deﬁned in section EY 12 (Mean- ing of life reinsurance) life fund PIE means a separate identiﬁable fund forming part of a life insurer that— (a) meets the requirements of section HM 7 (Require- (b) ments); and chooses to become a PIE under section HM 71 (Choos- ing to become PIE); and 2980 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (c) (d) has not chosen to cancel PIE status under section HM 29 (Choosing to cancel status); and holds investment subject to life insurance policies under which beneﬁts are directly linked to the value of the investments held in the fund life insurance is deﬁned in sections EY 8 (Meaning of life in- surance) and EY 14 (Life insurance and life reinsurance: how sections relate) Life Insurance Fund means a Life Insurance Fund as deﬁned in section 15 of the Life Insurance Act 1908 and, for a life insurer, means the life insurer’s Life Insurance Fund life insurance policy— (a) is deﬁned in sections EY 9 (Meaning of life insurance policy) and EY 14 (Life insurance and life reinsurance: how sections relate); and (b) when referred to in relation to a life insurer, means a life insurance policy under which the life insurer is the insurer life insurance rules [Repealed] [Repealed] life insured means— (a) life insurer— (a) a human being on whose death or survival the payment of a beneﬁt under a life insurance policy is contingent, including the payment of an annuity whose term is con- tingent on human life;
 and a human being to whom an annuity whose term is not contingent on human life is payable under a life insur- ance policy is deﬁned in sections EY 10 (Meaning of life insurer) and EY 14 (Life insurance and life reinsurance: how sections relate): is deﬁned in section CX 11(3) (Employment-related loans: loans by life insurers) for the purposes of that section: in section YC 17 (Demutualisation of insurers), and in the FBT rules, means a person carrying on a business of providing life insurance (b) (b) (c) 2981 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 life reinsurance is deﬁned in sections EY 12 (Meaning of life reinsurance) and EY 14 (Life insurance and life reinsurance: how sections relate) life reinsurance policy— (a) is deﬁned in sections EY 13 (Meaning of life reinsur- ance policy) and EY 14 (Life insurance and life rein- surance: how sections relate); and (b) when referred to in relation to a life reinsurer, means a life reinsurance policy under which the life reinsurer is the reinsurer life reinsurer is deﬁned in sections EY 12(4) (Meaning of life reinsurance) and EY 14 (Life insurance and life reinsurance: how sections relate) life risk means an actuarially determined risk contingent on human life life risk component— (a) means— (i) for a premium paid under a life insurance pol- icy, the amount of the premium that gives rise to income derived by the life insurer for providing services, including the bearing of life risk: for a claim payable under a life insurance policy, the amount of the claim that gives rise to deduc- tions for the life insurer for providing services, including the bearing of life risk: (ii) does not include an amount that is a savings component (b) limitation rule is deﬁned in section DD 1(3) (Entertainment expenditure generally) limited attribution company is a company that is— (a) (b) a building society: a co-operative company registered under Part 2 or 3 of the Co-operative Companies Act 1996: a listed
 company: a widely-held company: a foreign company that is not a closely-held company (c) (d) (e) limited non-transaction shares is deﬁned in section CD 34B (Distributions to members of co-operative companies) 2982 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 limited partner means a limited partner of a limited partner- ship or an overseas limited partnership as deﬁned in section 4 of the Limited Partnerships Act 2008 limited partnership— (a) means a limited partnership registered under the (b) (c) Limited Partnerships Act 2008; and includes an overseas limited partnership as deﬁned in section 4 of that Act; and despite paragraph (a) or (b), does not include a listed limited partnership or a foreign corporate limited part- nership limited partnership deduction is deﬁned in section HG 11(12) (Limitations on deductions by partners in limited partnerships) for the purposes of that section limited partnership net deduction [Repealed] [Repealed] limited-recourse amount is deﬁned in section GB 48(2) (De- ﬁned terms for sections GB 45 and GB 46) for the purposes of sections GB 45 and GB 46 (which relate to arrangements involving money not at risk) limited-recourse loan is deﬁned in section GB 48(3) (Deﬁned terms for sections GB 45 and GB 46) for the purposes of sec- tions GB 45 and GB 46 (which relate to arrangements involv- ing money not at risk) lines trust means a trustee of a trust that— (a) has had shares allocated or transferred to or vested in it, being shares in— (i) an energy company as deﬁned in section 2(1) of the Energy Companies Act 1992 under an ap- proved establishment plan under that Act: a company under section 76 of the Energy Com- panies Act 1992: a company to which have been transferred assets and liabilities of the Crown under section 16 of the Southland Electricity Act 1993; and continues to hold shares described in paragraph (a) (iii) (ii) (b) liquidation, for a company,— (a) includes— 2983 Part Y s YA 1 Income Tax Act 2007
 Reprinted as at 2 September 2013 (i) (ii) removal of the company from the register of com- panies under the Companies Act 1993; and termination of the company’s existence under any other procedure of New Zealand or foreign law; and (b) includes, in references in this Act to anything occurring on liquidation, anything occurring— (i) during the period that starts with a step that is legally necessary to achieve liquidation, includ- ing the appointment of a liquidator or a request of the kind referred to in section 318(1)(d) of the Companies Act 1993; and for the purpose of enabling liquidation (ii) listed company means, at any time, a company any shares in which are at that time quoted on an ofﬁcial list of a recognised exchange listed horticultural plant, in sections DO 5 to DO 9 (which relate to deductions relating to horticultural plants),— (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 Commis- sioner under section 91AAB of the Tax Administration Act 1994: does not include— (i) (b) a tree planted mainly for the purposes of timber production: a tree or other similar plant planted mainly for the purposes of ornamentation: a vine planted mainly for the purposes of produc- ing grapes for wine production (ii) (iii) listed limited partnership means an entity or group of per- sons that is listed on a recognised exchange, and that entity or group of persons— (a) is a limited partnership registered under the Limited Partnerships Act 2008; or (b) meets the deﬁnition of overseas limited partnership in section 4 of that Act 2984 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 listed PAYE intermediary means a person which the Com- missioner may list as an intermediary under section 15G of the Tax Administration Act 1994 listed PIE means a company that— (a) is listed on a recognised exchange in New Zealand or meets the requirements of
 section HM 18 (Require- ments for listed PIEs: unlisted companies); and (b) meets the requirements of section HM 7 (Require- (c) (d) (e) (f) ments); and chooses to become a PIE under section HM 71 (Choos- ing to become PIE); and has not chosen to cancel PIE status under section HM 29 (Choosing to cancel status); and is not a life fund PIE; and has not chosen under section HM 2(3) (What is a port- folio investment entity?)
to become a multi-rate PIE listed research provider [Repealed] [Repealed] livestock on the Chatham Islands means livestock that are on hand on the Chatham Islands at the end of an income year living alone payment [Repealed] [Repealed] loan,— (a) (b) has the same meaning as money lent: in sections CD 27 (Property made available intra-group) and CD 39 (Calculation of amount of dividend when property made available) and in the FBT rules, includes any amount that a person advances or gives as princi- pal under a ﬁnancial arrangement, but not an excepted ﬁnancial arrangement: for a holding company and a mining company, is de- ﬁned in section CU 29 (Other deﬁnitions): is deﬁned in section CZ 3(5) (Exchange variations on 8 August 1975) for the purposes of that section (c) (d) local authority— (a) means a local authority as deﬁned in the Local Government Act 2002: includes— (b) 2985 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (i) (ii) (iii) (iv) (v) (vi) the administering body, as deﬁned in the Reserves Act 1977, of any reserve classiﬁed under the Act as a recreation reserve or a scenic reserve: an airport authority, other than an airport com- pany, as deﬁned in the Airport Authorities Act 1966: the Aotea Centre Board of Management es- tablished by the Auckland Aotea Centre Empowering Act 1985: the council of the Auckland Institute and Mu- seum constituted under the Charitable Trusts Act 1957: the Canterbury Museum Trust Board continued in existence by section 5(1) of the Canterbury Museum Trust Board Act 1993: the Otago Museum Trust Board continued in ex- istence by section 5(1) of the Otago Museum Trust Board Act 1996: (vii) Auckland Transport (as established by section 38 of the Local Government (Auckland Council) Act 2009): (ix) (viii) other than for the purposes of section CW 39(4) (Local authorities), Auckland Regional Holdings as established by section 18 of the Local Govern- ment (Auckland) Amendment Act 2004: the New Zealand Local Government Funding Agency Limited while it is a
 council-controlled organisation within the meaning of section 6(1) of the Local Government Act 2002: the Auckland Council Independent Maori Statu- tory Board established by section 81 of the Local Government (Auckland Council) Act 2009 (x) logbook term is deﬁned in section DE 8 (Logbook term) long-term bailment is deﬁned in section EC 27 (Some deﬁni- tions) for the purposes of subpart EC (Valuation of livestock) look-through company means an entity— (a) that is described in paragraph (a) of the deﬁnition of company; and 2986 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (c) (e) (d) (b) that, treating the entity as a company for the purposes of this deﬁnition, is resident in New Zealand under section YD 2 (Residence of companies); and that is not treated under, or for the purposes of, a double tax agreement as not resident in New Zealand; and for which there are 5 or fewer look-through counted owners, treating look-through counted owners who are relatives, ignoring any later death or dissolution of mar- riage, union, or relationship, as 1 person; and for which all owners have only look-through interests; and that is not a ﬂat-owning company; and for which an election under section HB 13 (Valid elec- tions) has been received by the Commissioner look-through company deduction is deﬁned in section HB 11(12) (Limitation on deductions by persons with inter- ests in look-through companies) look-through counted owner means, for an entity, a person who— (a) (f) (g) is a natural person that— is not a trustee; and (i) (ii) has a look-through interest for the entity: is a natural person who has derived, as beneﬁciary in- come of a trust, income that arose from a direct or in- direct beneﬁcial interest in a look-through interest for the entity for the current income year or 1 of the last 3 income years: is a trustee of a trust that— (i) has a look-through interest for the entity or that has a direct or indirect beneﬁcial interest in a look-through interest
 for the entity, treating co-trustees as 1 person; and has not distributed, as beneﬁciary income, all in- come that arose from a direct or indirect beneﬁ- cial interest in a look-through interest for the en- tity for the current income year and all of the last 3 income years: (ii) (b) (c) (d) is a natural person that has a voting interest or a market value interest in relation to a company that has derived, 2987 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 as beneﬁciary income from a trust, income that arose from a direct or indirect beneﬁcial interest in a look- through interest for the entity for the current income year or 1 of the last 3 income years look-through interest means a person’s shares in an entity, or in a look-through company (LTC) treating the look-through company as a company for the purposes of this deﬁnition, if— every other shareholder in the entity or LTC has the (a) same rights, proportionally, as the person to vote or par- ticipate in any decision-making concerning— (i) the distributions to be made by the entity or LTC; and the entity’s or LTC’s constitution; and varying the capital of the entity or LTC; and appointing or electing directors of the entity or LTC; and (ii) (iii) (iv) (b) (c) loss— (a) every other shareholder has the same rights, proportion- ally, as the person in relation to when the entity or LTC distributes its proﬁts or its assets if the entity or LTC acquires, redeems, or cancels its shares, or reduces or returns its share capital, whether on liquidation or not; and the entity or LTC has only shareholders that are natural persons, or corporate trustees includes an amount of depreciation loss, except when any of paragraphs (b) to (d) applies: (b) means an attributed CFC loss when used in the expres- sion “attributed CFC income or loss”: (c) means a net attributable FIF loss when used in the ex- pression “net attributable FIF income or loss”: (d) means a FIF loss when used in the expression “FIF in- come or
 loss” loss-attributing qualifying company [Repealed] [Repealed] loss balance, for a tax year,— (a) means the sum of all tax loss components— (i) arising in the tax year and included in the tax loss for the tax year under section IA 2(3) and (4) 2988 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (ii) (Tax losses), to the extent not used under section IA 3(1) to (3) or IA 4(1)(a) (which relate to the ﬁrst use and to particular losses): arising in an earlier tax year and carried forward under section IA 3(4) to the tax year, to the ex- tent not used under section IA 3(1) to (3) or IA 4(1)(a): (b) does not include a tax loss component included in a company’s loss balance at the end of the tax year if the requirements of section IA 5 (Restrictions on compan- ies’ loss balances carried forward), as modiﬁed by sec- tions IZ 4 to IZ 6 (which relate to tax losses for tax years before 1992), have not been met loss period is deﬁned in section IQ 7(4) (When group mem- bership lacking in loss period) for the purposes of that section low-turnover trader is deﬁned in section EB 13(2) (Low- turnover valuation) for the purposes of subpart EB (Valuation of trading stock (including dealer’s livestock)) lump sum payment is deﬁned in section EI 3(6) (Assigning or granting copyright) for the purposes of that section MACA means Maori authority credit account main deposit is deﬁned in section EH 36 (Other deﬁnitions) main income equalisation account is deﬁned in section EH 36 (Other deﬁnitions) main income equalisation scheme means the scheme re- ferred to in section EH 1(2)(a) (Income equalisation schemes) main maximum deposit is deﬁned in section EH 35 (Meaning of main maximum deposit) major shareholder, for a close company, means any person who— (a) owns, or has the right to acquire, at least 10% of the ordinary shares of the company: has the power to control, directly or indirectly, at least 10% of the ordinary shares of the company: owns, or has the right to
 acquire, at least 10% of the voting and market value interests in the company: (b) (c) 2989 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (d) (e) has the power to control, directly or indirectly, at least 10% of the voting and market value interests in the com- pany: has, in any other way, 10% or more of the control of the company Maori authority means a person who has made an election under section HF 11 (Choosing to become Maori authority) Maori authority credit, for a distribution by a Maori author- ity, means— (a) (b) a credit referred to in section OA 5(8) (Credits): the amount treated as attached to the distribution under section RE 24 (When amount of tax treated as Maori authority credit) Maori authority credit account means the account referred to in section OA 2(1)(g) (Memorandum accounts) Maori authority credit account return means a return that must be ﬁled under section 70B of the Tax Administration Act 1994 Maori authority credit ratio means the ratio set out in section OK 19 (Maori authority credits attached to distributions) Maori authority debit means a debit referred to in section OA 6(8) (Debits) Maori authority rules means the provisions listed in section HF 1(2) (Maori authorities and the Maori authority rules) Maori incorporation is deﬁned in section 4 of the Maori Land Act 1993 Maori investment company means a company that is incorp- orated for the purpose of acquiring shares or debentures issued by a forestry company for unpaid purchase money for Maori land bought by the forestry company from the Maori owners Maori land means Maori freehold land as deﬁned in the Maori Land Act 1993 Maori owners— (a) means the persons who have a beneﬁcial interest in Maori land bought by a forestry company; and includes every trustee for a Maori owner, the Maori Trustee, and every Maori incorporation that has a bene- ﬁcial interest in the land (b) 2990 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 market interest is
 deﬁned in section RD 35(5) (Employment- related loans: value using market interest rates) for the pur- poses of that section market value,— (a) for a share or option quoted on the ofﬁcial list of a recog- nised exchange, at the time, means an amount equal to the middle market quotation at the time for a share or option having the same terms as the share or option to be valued, unless the quotation is not a fair reﬂection of the market value, having regard at the time to the matters referred to in paragraph (e) of the deﬁnition of recog- nised exchange: for a share or option not quoted on the ofﬁcial list of a recognised exchange at the time, means the amount that a willing purchaser would pay to acquire the share or option in an arm’s length acquisition at the time and that is determined using a method that— (i) conforms with commercially acceptable practice; and (ii) may, in appropriate cases, have regard to the pre- sent value at the time of the company’s antici- pated income or cash ﬂows and the realisable value at the time of the company’s assets; and (iii) results in a valuation that is fair and reasonable: is deﬁned in section DG 3(4) (Meaning of asset for this subpart) for the purposes of subpart DG (Expenditure related to use of certain assets): in subpart EB (Valuation of trading stock (including dealer’s livestock)), does not include any GST that would be charged on the disposal by a person of their trading stock if the disposal would be a taxable supply: is deﬁned in section EX 70 (Market value of life policy and superannuation entitlements) for certain purposes of sections EX 28 to EX 72 (which relate to the FIF rules): is deﬁned in section RD 27(3) (Determining fringe beneﬁt values) for the purposes of that section: is deﬁned in section RD 40(3) (Goods) for the purposes of that section 2991 (b) (bb) (c) (d) (e) (f) Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 market value circumstance, for a company at any time,— (a) means an
 occasion or situation in which, at the time, the company has on issue a debenture— (i) that is not an excluded ﬁxed rate security or pre- 1991 budget security; and to which section FA 2 (Recharacterisation of cer- tain debentures) or FA 2B (Stapled debt secur- ities) applies: (ii) (b) (c) (d) (e) also means an occasion or situation in which, at the time,— (i) the company has on issue a share that is not an excluded ﬁxed rate security or a pre-1991 budget security; and the payment of a dividend is guaranteed or se- cured to the holder by some person other than the company; and the directors of the company know or could rea- sonably be expected to know at the time that the payment of a dividend is so guaranteed or se- cured: (ii) (iii) also means an occasion or situation in which, at the time, an option exists that— (i) (ii) (iii) is not an excluded option; and is to acquire a share in the company; and is granted by the company or a person other than the company: also means an occasion or situation in which, at the time, an option exists that— (i) (ii) is not an excluded option; and is to require a person to acquire a share in the company: also means an occasion or situation in which, at the time, an arrangement or a series of related or connected arrangements exists that— (i) relates to shares or options over shares in the company issued by the company or any other per- son; and has a purpose or effect of defeating the intent and application of any provision of this Act whose (ii) 2992 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 application is dependent on the measurement of voting and market value interests: (f) (g) does not exist under any of paragraphs (a) to (e) if, at the time, no share in the company has a value higher than zero, except for an excluded ﬁxed rate security or a pre-1991 budget security, and no option over a share in the company has a value higher than zero, except for an excluded option: also means an occasion or situation in
 which, at the time,— (i) under any of paragraphs (a) to (e), a direct market value circumstance exists for another company (the shareholder company); and the shareholder company is associated with the company; and under section YC 4 (Look-through rule for cor- porate shareholders), any fraction of any market value interest held, or treated under section YC 4 as held, by the shareholder company in the com- pany is treated as held by any other person (ii) (iii) market value interest— (a) means, for a person and a company and a time, the per- centage market value interest that the person is treated as holding in the company at the time under sections YC 2 to YC 20 (which relate to the measurement of company ownership): is further deﬁned in section HA 44 (Measuring effective interests) for the purposes of subpart HA (Qualifying companies (QC)) and the deﬁnition of effective interest (b) master fund means— (a) a group investment fund that derives category A in- come; or a public unit trust (b) maturity,— (a) in the ﬁnancial arrangements rules, means,— (i) for an agreement for the sale and purchase of property or services or an option, the date on which the agreement or option ends: 2993 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (ii) for any other ﬁnancial arrangement, the date on which the last payment contingent on the ﬁnan- cial arrangement is made: (b) in the old ﬁnancial arrangements rules, is deﬁned in sec- tion EZ 48 (Deﬁnitions) maximum account balance is deﬁned in section EK 23 (Other deﬁnitions) for the purposes of subpart EK (Environ- mental restoration accounts) maximum deﬁcit debit is deﬁned in section OC 36 (Meaning of maximum deﬁcit debit) for the purposes of section OC 23 (FDPA breach of FDP ratio by PCA company) maximum payment is deﬁned in section EK 22 (Meaning of maximum payment) for the purposes of subpart EK (Environ- mental restoration accounts) maximum permitted ratio, for an imputation credit, an FDP credit, or a Maori
 authority credit, means a ratio calculated under section OA 18 (Calculation of maximum permitted ra- tios) maximum pooling value is deﬁned in section EE 65 (Meaning of maximum pooling value) measurement period, for an income year of a reporting bank, means 1 of the measurement periods for the income year de- scribed in section FE 8 (Measurement dates) for the purposes of subpart FE (Interest apportionment on thin capitalisation) member,— (a) in sections CD 33(1) (Payments corresponding to no- tional distributions of producer boards and co-operative companies) and OB 73 to OB 75 (which relate to im- putation credit accounts of statutory producer boards), and in the deﬁnitions of levy and produce transactions, for a statutory producer board and for an income year, means a person who— (i) (ii) is resident in New Zealand; and carries on in the year a farming or agricultural or other business in relation to which the board has special statutory functions; and 2994 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (iii) is liable to pay a levy to the board for the year or enters into produce transactions with the board during the year: (b) (c) (d) (e) [Repealed] in subpart HE (Mutual associations) in relation to a statutory producer board and to an income year, means a person who— (i) is liable for the year to pay a levy to the statutory producer board; or during the year, supplies produce or goods to the statutory producer board, in terms of the body’s primary statutory functions: (ii) is deﬁned in section RE 30(10) (When unincorporated bodies hold certiﬁcates) for the purposes of that section: in the Maori authority rules, means a person, or group of persons, who is— (i) a shareholder of a Maori authority that is a com- pany: a beneﬁciary of a Maori authority that is the trustees of a trust (ii) member credit contribution, for a person, means the total of the following amounts: (a) an amount of a superannuation contribution to the per- son’s KiwiSaver
 scheme or complying superannuation fund that is subject to the KiwiSaver scheme rules or complying fund rules, as applicable, other than— (i) an employer’s superannuation cash contribution made for the person: a contribution withdrawn under a mortgage di- version facility provided for in regulations made under section 229 of the KiwiSaver Act 2006: (ii) (iib) Crown contribution (as that term is deﬁned in the (iii) (iv) KiwiSaver Act 2006) for the person: an amount accounted for under paragraph (b): a superannuation contribution that was trans- ferred from an Australian complying superannu- ation scheme and contributed to a KiwiSaver scheme: 2995 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) (ii) an amount received and held for the person by the Com- missioner that is an amount to which section 73, 74, or 75 of the KiwiSaver Act 2006 applies, other than— (i) an employer’s superannuation cash contribution made for the person: an amount received and held by the Commis- sioner but not paid to the provider of the person’s KiwiSaver scheme in the relevant member credit year unless the amount has not been paid because of the person’s death or because of a refund under section 113 of the KiwiSaver Act 2006 in relation to a superannuation includes any return on the contribution member’s contribution, fund,— (a) means a member’s contribution to the fund; and (b) memorandum account means an account listed in section OA 2(1) (Memorandum accounts) mineral— (a) means all minerals and metals; and (b) includes clay, coal, gravel, kauri gum, precious stones, sand, and stone minibus means a motor vehicle, designed wholly or mainly for the carriage of persons, the interior of which contains— (a) 3 seats, each of which— (i) is designed for the seating of 2 or more adult persons; and is permanently ﬁxed to the motor vehicle; and is neither collapsible nor capable of being folded down; or (ii) (iii) (i) (b) more than 3 seats, of which not less than 3 are each— designed
 for the seating of 2 or more adult per- sons; and permanently afﬁxed to the motor vehicle; and neither collapsible nor capable of being folded down (ii) (iii) minimum family tax credit is deﬁned in section MA8 (Some deﬁnitions for family scheme) for the purposes of subparts MA to MF and MZ (which relate to tax credits for families) 2996 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 minimum market value interest— (a) is deﬁned in section IA 5(6) (Restrictions on compan- ies’ loss balances carried forward) for the purposes of Part I (Treatment of tax losses): is deﬁned in section LP 4(3) (Continuity rules for carry- ing credits forward) for the purposes of that section minimum voting interest— (a) is deﬁned in section IA 5(6) (Restrictions on compan- ies’ loss balances carried forward) for the purposes of Part I (Treatment of tax losses): is deﬁned in section LP 4(3) (Continuity rules for carry- ing credits forward) for the purposes of that section (b) (b) mining company is deﬁned in section CU 22 (Meaning of mining company) mining development expenditure is deﬁned in section CU 23 (Meaning of mining development expenditure) mining exploration expenditure is deﬁned in section CU 24 (Meaning of mining exploration expenditure) mining holding company is deﬁned in section CU 29 (Other deﬁnitions) mining operations is deﬁned in section CU 25 (Meaning of mining operations) mining or prospecting right is deﬁned in section CU 29 (Other deﬁnitions) mining outgoing excess is deﬁned in section DU 7(4) (Limit on deduction) mining permit is deﬁned in section 2 of the Crown Minerals Act 1991 and includes an existing privilege under paragraphs (a) and (b) of the deﬁnition of existing privilege in section 2(1) of that Act mining permit area means an area, and may include more than 1 area, of— (a) (b) a mining permit; or an existing privilege referred to in paragraphs (a) and (b) of the deﬁnition of existing privilege in section 2(1) of the Crown Minerals Act 1991
 mining prospecting information is deﬁned in section CU 29 (Other deﬁnitions) 2997 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 mining purposes is deﬁned in section CU 29 (Other deﬁni- tions) mining share is deﬁned in section CU 29 (Other deﬁnitions) mining venture is deﬁned in section CU 26 (Meaning of min- ing venture) Minister means the Minister of Finance minor is deﬁned in section HC 35(3) (Beneﬁciary income of minors) for the purposes of that section and sections HC 36, HC 37, LE 4, and LF 2 (which relate to beneﬁciary minors) mixed-ownership enterprise means an entity speciﬁed in schedule 36, part B (Government enterprises) money,— (a) in section GB 48 (Deﬁned terms for sections GB 45 and GB 46), in the ﬁnancial arrangements rules, and in the deﬁnition of security payment, includes— (i) money’s worth, whether or not convertible into money: the right to money, including the deferral or can- cellation of some or all of an obligation to pay money: (ii) (b) in the old ﬁnancial arrangements rules, is deﬁned in sec- tion EZ 48 (Deﬁnitions) money lent means— (a) an amount of money that a person lends in some way, including by depositing it in an account, whether or not the lending is secured or evidenced in writing: an amount of credit that a person gives, including by not enforcing a debt, whether or not the giving is secured or evidenced in writing: an amount of money that a person lends, or credit that a person gives, under an obligation or arrangement, whether or not secured or evidenced in writing: an amount of money that goes from a person (person A) to another person (person B) in consideration for per- son B’s promise to pay person A an amount of money and that is less than the amount that person B promises to pay person A.
For the purposes of this paragraph,— (b) (c) (d) 2998 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (i) (ii) (iii) money goes from person A when it is paid to person B: person B’s promise is not required to be secured or evidenced in writing: person B includes any other person with whom person B is an associated person monthly instalment plan is deﬁned in section EZ 30(3) (Base premium for 1998–99 premium year under the Accident Insur- ance Act 1998) for the purposes of that section mortality proﬁt [Repealed] [Repealed] mortality proﬁt formula [Repealed] [Repealed] mortgage means a mortgage, charge, or other security, whether legal or equitable motor vehicle,— (a) in subpart DE (Motor vehicle expenditure), means a motor vehicle that— (i) (ii) (iii) is a road vehicle, whenever or however used; and is not a trailer; and is of the kind ordinarily used for the carriage of persons or the transport or delivery of goods or animals: (b) in the FBT rules, and in the deﬁnition of car,— (i) is deﬁned in section 2(1) of the Land Transport Act 1998; and does not include a vehicle the gross laden weight of which is more than 3500 kilograms (ii) multi-rate PIE means a company, superannuation fund, or group investment fund that— (a) meets the requirements of section HM 7 (Require- ments); and chooses to become a PIE under section HM 71 (Choos- ing to become PIE); and has not chosen to cancel PIE status under section HM 29 (Choosing to cancel status); and is not a beneﬁt fund PIE; and (b) (c) (d) 2999 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 [Repealed] (e) mutual transaction means a transaction of the kind described in section HE 2 (Classes of mutual transaction) entered into between an association and its members, or with members and other persons who are not members national average market value, for a class of livestock and for an income year, means the national average market value determined under section EC 15 (Determining national aver- age market values) for livestock of the
 class for the income year national standard cost scheme means the livestock valuation method speciﬁed in section EC 22 (National standard cost scheme) natural person is deﬁned in section FE 4 (Some deﬁnitions) for the purposes of subpart FE (Interest apportionment on thin capitalisation) natural resource includes— (a) land: (b) water: (c) (d) (e) (f) (g) (h) (i) air: soil or subsoil below land, water, or air: a mineral: a geographic or geological feature: a part of the electromagnetic spectrum: a form of energy: a living organism, whether naturally or artiﬁcially gen- erated: an ecosystem: a right to or interest in an item referred to in any of the preceding paragraphs (j) (k) net asset balance is deﬁned in section DG 11(7) for the pur- poses of subpart DG (Expenditure related to use of certain as- sets) net attributable CFC income, for a foreign company and for an accounting period, means the amount calculated for the ac- counting period under section EX 20C(1)(a) (Net attributable CFC income or loss) 3000 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 net attributable CFC loss, for a foreign company and for an accounting period, means the amount calculated for the ac- counting period under section EX 20C(1)(b) (Net attributable CFC income or loss) net attributable FIF income, for a FIF and for an accounting period, means an amount of zero or more calculated for the accounting period under section EX 50(3) (Attributable FIF income method) net attributable FIF loss, for a FIF and for an accounting period, means an amount of less than zero calculated for the accounting period under section EX 50(3) (Attributable FIF income method) net family scheme income is deﬁned in section ME 3 (Mean- ing of net family scheme income) for the purposes of subparts MA to MF and MZ (which relate to tax credits for families) net gambling proceeds means net proceeds as deﬁned in sec- tion 4 of the Gambling Act 2003 net income means net income for a tax year calculated
 under section BC 4 (Net income and net loss) net loss means a net loss for a tax year calculated under section BC 4 (Net income and net loss) and reduced by the amount extinguished by the Commissioner under section 177C(5) of the Tax Administration Act 1994 net mining loss is deﬁned in section IS 1(3) (General treat- ment of mining companies’ net losses) for the purposes of sub- part IS (Mining companies’ and petroleum miners’ tax losses) new asset is deﬁned in section EZ 24 (Meaning of new asset) new business is deﬁned in section EY 29 (Shareholder base other proﬁt: proﬁt participation policies that are new business) for the purposes of that section new company tax rate person,— (a) means a person who uses a 28% basic tax rate for the (b) (c) 2011–12 income year or later income years: includes, for the purposes of subpart OZ (Terminating provisions), a multi-rate PIE: does not include, for the purposes of subpart RZ (Ter- minating provisions), a multi-rate PIE 3001 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 new personal tax rate person means a person whose basic rate of income tax is calculated under schedule 1, part A, clause 1 for the 2010–11 income year or a later income year new reporting standard is deﬁned in section DB 35 (Some deﬁnitions) for the purposes of section DB 34 (Research or development) new start grant means a grant of money that is— (a) designated by the Minister of Agriculture as a new start grant; and paid by the Government of New Zealand to a person (b) new tax rate person [Repealed] [Repealed] New Zealand includes— (a) (b) the continental shelf: the water and the air space above any part of the contin- ental shelf that is beyond New Zealand’s territorial sea, as deﬁned in section 3 of the Territorial Sea, Contigu- ous Zone, and Exclusive Economic Zone Act 1977, if and to the extent to which— (i) any exploration or exploitation in relation to the part, or any natural resource of the part, is or may be undertaken; and
 the exploration or exploitation, or any related matter, involves, or would involve any activity on, in, or in relation to the water or air space (ii) New Zealand banking group, for a registered bank, means the New Zealand banking group referred to in sections FE 36 and FE 36B (which identify the members of a New Zealand banking group) for the purposes of subpart FE (Interest appor- tionment on thin capitalisation) New Zealand business, in relation to a life insurer not resi- dent in New Zealand, means the part of the business of the life insurer that consists of life insurance policies or life reinsur- ance policies offered or entered into in New Zealand New Zealand emissions unit means a New Zealand unit as deﬁned in section 4(1) of the Climate Change Response Act 2002 3002 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 New Zealand net equity, for a New Zealand banking group is the amount referred to in section FE 21 (Banking group’s New Zealand net equity) for the purposes of subpart FE (Interest apportionment on thin capitalisation) New Zealand-new asset is deﬁned in section EZ 25 (Meaning of New Zealand-new asset) New Zealand partnership means a partnership that— (a) is a limited partnership registered under the Limited Partnerships Act 2008; or has 50% or more of its partners’ interests in capital, by value, held by New Zealand residents; or has its centre of management in New Zealand ignoring section HG 2 (b) (c) New Zealand repatriation amount is deﬁned in section CD 46 (New Zealand repatriation amount) New Zealand resident— (a) means a person resident in New Zealand under— (i) (ii) section EY 49 (Non-resident life insurer becom- ing resident): sections YD 1 to YD 3 (which relate to resi- dence): (b) is deﬁned in section MA 8 (Some deﬁnitions for family scheme) for the purposes of subparts MA to MF and MZ (which relate to tax credits for families) (b) New Zealand superannuation— (a) means New Zealand superannuation payable under Part 1 of the
 New Zealand Superannuation and Retirement Income Act 2001; and includes— (i) (ii) (iii) does not include— (i) (ii) portable New Zealand superannuation; or a supplement or beneﬁt paid or payable under any of sections 61DB, 61DC, 61DD, 61DE, 61EA, 61G, and 69C of the Social Security Act 1964 [Repealed] [Repealed] [Repealed] (c) 3003 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 New Zealand superannuitant, for a tax year,— (a) means a person who receives New Zealand superannu- (b) ation in the tax year; and does not include a person who receives New Zealand superannuation at a rate speciﬁed in— (i) schedule 1, clause 2 of the New Zealand Super- annuation and Retirement Income Act 2001; or [Repealed] (ii) New Zealand tax means income tax imposed by this Act or any earlier Act New Zealand unit [Repealed] [Repealed] Niue International Trust Fund means the trust governed by the Deed concerning the Niue International Trust Fund dated 25 October 2006 and signed by Her Majesty the Queen in right of New Zealand and the Governments of Niue and Australia nominated company,— (a) for a consolidated group, means the company described in section FM 34 (Nominated companies) for the time being nominated as agent of the group under section FM 35 (Forming consolidated group): for an imputation group, means the company described in section FN 6 (Nominated companies) for the time being nominated as agent of the group under section FN 7 (Forming imputation groups) (b) nominee, in sections RE 7 and RE 8 (which relate to resident passive income paid to trustees and nominees) means a person described in section YB 21(2) (Transparency of nominees) non-attributing active CFC is deﬁned in section EX 21B (Non-attributing active CFCs) non-attributing Australian CFC is deﬁned in section EX 22 (Non-attributing Australian CFCs) non-cash dividend means a dividend to the extent to which it does not consist of— (a) (b) an unconditional payment in money; or an unconditional credit in
 money to the balance of a shareholder’s current or other form of account with the company 3004 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 non-complying trust is deﬁned in section HC 12 (Non-com- plying trusts) non-concessionary rate of interest, for an employment-re- lated loan made on or before 31 March 1985, means the rate of interest declared by regulations to be the non-concessionary rate of interest for the period of 12 consecutive months, ending on 31 March, in which the loan was made non-contingent fee means a fee that— (a) is for services provided for a person becoming a party to a ﬁnancial arrangement; and is payable whether or not the ﬁnancial arrangement pro- ceeds (b) non-creditable dividend [Repealed] [Repealed] non-discretionary trust is deﬁned in section HC 16(8) (Ordering rule for distributions from non-complying and foreign trusts) for the purposes of that section non-executive director is deﬁned in section CD 20(4) (Bene- ﬁts of shareholder-employees or directors) non-ﬁling taxpayer means— (a) (ii) (iii) a person to whom section 33A(1) of the Tax Adminis- tration Act 1994 applies and to whom 1 of the following applies: (i) they do not receive an income statement for a tax year; or the Commissioner is not required to send them an income statement for a tax year; or the Commissioner is prohibited from sending them an income statement for a tax year; or a person whose only income having a source in New Zealand is schedular payments derived in the person’s capacity as a non-resident entertainer and who chooses not to ﬁle a return for the relevant tax year; or a person who, in the relevant tax year, derives only non- resident passive income to which section RB 3 (Schedu- lar income tax liability for ﬁling taxpayers for non-resi- dent passive income) applies (b) (c) 3005 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 non-integral fee means a fee or transaction cost that, for the purposes of ﬁnancial reporting
 under IFRSs, is not an integral part of the effective interest rate of a ﬁnancial arrangement non-Kyoto greenhouse gas unit means a unit that is— (a) issued by reference to the sequestration, reduction, or avoidance of emission, of human-induced greenhouse gases; and veriﬁed to an internationally recognised standard; and not an emissions unit (b) (c) non-listed horticultural plant, in section DO 4 (Improve- ments to farm land) and schedule 20, part A, item 8 (Expend- iture on farming, horticultural, aquacultural, and forestry im- provements)— (a) means— (i) a horticultural plant, tree, vine, bush, cane, or similar plant that is cultivated on land, that is not a listed horticultural plant: a tree or other similar plant planted mainly for the purposes of ornamentation: (ii) (b) does not include a tree planted mainly for the purposes of timber production non-participating redeemable share is deﬁned in section CD 22(9) (Returns of capital: off-market share cancellations) non-refundable tax credit means— (a) a tax credit under subpart LC (Tax credits for natural persons): a tax credit under section LD 4 (Tax credits for payroll donations): a tax credit under subpart LJ (Tax credits for foreign income tax): a tax credit under subpart LK (Tax credits relating to attributed controlled foreign company income): [Repealed] a tax credit under subpart LR (Tax credits for policy- holder income): an amount in a person’s branch equivalent tax account or policyholder credit account that the person chooses, under Part O (Memorandum accounts), to credit in pay- ment of income tax: (ab) (b) (c) (d) (e) (f) 3006 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (fb) (g) a tax credit under sections LS 2, LS 3(2), and LS 4(2) (which relate to multi-rate PIEs and certain of their in- vestors), if the person having the tax credit is a natural person not having the tax credit as a beneﬁciary of a trust: a tax credit under sections LS 3(3) and (4) and LS 4(3) and (4) and
 under section LS 1 (Tax credits for multi- rate PIEs) to the extent to which it arises under section HM 51 (Use of foreign tax credits by PIEs) non-resident means a person who is not a New Zealand resi- dent non-resident aircraft operator is deﬁned in section CW 56(3) (Non-resident aircraft operators) for the purposes of that section non-resident company means a company that is not a New Zealand resident non-resident contractor, in the PAYE rules, means a person who— (a) is not resident in New Zealand under subpart YD (Resi- dence and source in New Zealand); and undertakes under a contract, agreement, or arrangement (other than a contract of service or apprenticeship)— (i) (ii) to perform services of any kind in New Zealand: to supply the use, or right to use, in New Zealand any personal property or services of another per- son (b) non-resident crew member is deﬁned in section CW 21(2) (Amounts derived by visiting crew of pleasure craft) for the purposes of that section non-resident entertainer is deﬁned in section CW 20(4) (Amounts derived by visiting entertainers including sportsper- sons) for the purposes of that section, and in the PAYE rules, means a person who— (a) is not resident in New Zealand under subpart YD (Resi- dence and source in New Zealand); and undertakes a Part F activity (b) 3007 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 [Repealed] (c) non-resident investment company [Repealed] [Repealed] non-resident mining operator is deﬁned in section CU 29 (Other deﬁnitions) non-resident passive income is deﬁned in section RF 2 (Non- resident passive income) non-resident person is deﬁned in section CW 22(3) (Amounts derived by overseas experts and trainees in New Zealand by government arrangement) for the purposes of that section non-resident seasonal worker [Repealed] [Repealed] non-resident taxpayer is deﬁned in section HD 26(2) (Agency in relation to non-residents generally) for the pur- poses of sections HD 27 and HD 28 (which
 relate to employers and certain payments) non-resident trader means a person who— (a) (b) is in New Zealand; and carries on business here without having a ﬁxed and per- manent place of business or home here non-residents’ foreign-sourced income is deﬁned in section BD 1(4) (Income, exempt income, excluded income, non-resi- dents’ foreign-sourced income, and assessable income) non-residents’ foreign-sourced income limitation is deﬁned in section DA 2(6) (General limitations) non-speciﬁed livestock means livestock other than blood- stock, high-priced livestock, and speciﬁed livestock non-standard accounting year has the meaning given in sec- tion YE 1(5) (References to balance dates and years) non-standard balance date has the meaning given in section YE 1(5) (References to balance dates and years) non-standard income year has the meaning given in section YE 1(5) (References to balance dates and years) non-taxable bonus issue means a bonus issue that is not a taxable bonus issue 3008 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 normal retiring age is deﬁned in section DC 15 (Some deﬁ- nitions) for the purposes of sections DC 12 to DC 14 (which relate to share purchase schemes) notice is deﬁned in section 3(1) of the Tax Administration Act 1994 notice of entitlement means a notice issued under section 80KD(2) of the Tax Administration Act 1994 notice period is deﬁned in section FM 38(6) (Notice require- ments on forming or joining consolidated group) for the pur- poses of that section notiﬁed investor rate, for a multi-rate PIE and an investor, means an investor rate notiﬁed under section HM 60 (Notiﬁed investor rates) or a notiﬁed investor rate under section HM 58 (Transition of rate for certain investors) notiﬁed foreign investor means an investor in a foreign in- vestment PIE who— (a) meets the requirements of sections HM 55D(3) and (4) (Requirements for investors in foreign investment PIEs); and notiﬁes the PIE under section HM 55D(2) that
 they wish to be treated as a notiﬁed foreign investor (b) notify means to give notice notional offshore investment amount, for a reporting bank, is the amount referred to in section FE 22(2) (Notional offshore investment) for the purposes of section FE 21(14) (Banking group’s New Zealand net equity) notional sale price is deﬁned in section FA 10(2) (Treatment when lease ends: lessor acquiring asset) for the purposes of that section novelty is deﬁned in section LH 7(4) (Research and develop- ment activities and related terms) for the purposes of subpart LH (Tax credits for expenditure on research and development) NRWT means non-resident withholding tax and refers to an amount payable as income tax under the NRWT rules NRWT rules means the provisions listed in section RF 1 (NRWT rules and their application) NZIAS 2 means New Zealand Equivalent to International Ac- counting Standard 2, approved or issued under the Financial 3009 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Reporting Act 1993 and as amended from time to time, or an equivalent standard issued in its place NZIAS 8 means New Zealand Equivalent to International Ac- counting Standard 8, approved or issued under the Financial Reporting Act 1993 and as amended from time to time, or an equivalent standard issued in its place NZIAS 17 means New Zealand Equivalent to International Accounting Standard 17, approved or issued under the Finan- cial Reporting Act 1993 and as amended from time to time, or an equivalent standard issued in its place NZIAS 23 means New Zealand Equivalent to International Accounting Standard 23, approved or issued under the Finan- cial Reporting Act 1993 and as amended from time to time, or an equivalent standard issued in its place NZIAS 28 means New Zealand Equivalent to International Accounting Standard 28 approved by the Accounting Stand- ards Review Board and as amended from time to time, or an equivalent standard issued in its place NZIAS 31 means New Zealand
 Equivalent to International Accounting Standard 31 approved by the Accounting Stand- ards Review Board and as amended from time to time, or an equivalent standard issued in its place NZIAS 32 means New Zealand Equivalent to International Accounting Standard 32, approved or issued under the Finan- cial Reporting Act 1993 and as amended from time to time, or an equivalent standard issued in its place NZIAS 39 means New Zealand Equivalent to International Accounting Standard 39, approved or issued under the Finan- cial Reporting Act 1993 and as amended from time to time, or an equivalent standard issued in its place NZIAS 41 is deﬁned in section EB 6(3) (Cost) for the purposes of that section offered or entered into in New Zealand, for an insurance contract, a reinsurance contract, and a life insurance policy, means a contract or policy offered or entered into in New Zealand, whether or not— (a) (b) the contract or policy is executed in New Zealand; or the insurer under the contract or policy— 3010 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (i) (ii) (iii) is resident in New Zealand; or has a ﬁxed establishment in New Zealand; or has an agent in New Zealand offered or was offered or entered into, in sections EY 12 (Meaning of life reinsurance) and EY 48 (Non-resident life insurers with life insurance policies in New Zealand), has the same meaning as offered or entered into in New Zealand off-market cancellation means a share cancellation that is not an on-market cancellation offshore development [Repealed] [Repealed] offshore permit area is deﬁned in section CW 57 (Non-resi- dent company involved in exploration and development activ- ities) for the purposes of that section old company tax rate means a 30% or 33% basic tax rate applying before the 2011–12 income year old ﬁnancial arrangements rules means— (a) the following provisions: (i) sections EZ 33 to EZ 52 (which relate to the old ﬁnancial arrangements rules): section FF 2 (Financial
 arrangements) of the In- come Tax Act 2004, as that section was before the commencement of the Taxation (Accrual Rules and Other Remedial Matters) Act 1999: sections RA 11 and RA 12 (which relate to ad- justments to correct errors); and (ii) (iii) (b) the following provisions of the Tax Administration Act 1994: (i) section 60 (as in force before the enactment of section 70 of the Taxation (Accrual Rules and Other Remedial Matters) Act 1999): section 90 (ii) old reporting standard is deﬁned in section DB 35 (Some deﬁnitions) for the purposes of section DB 34 (Research or development) 3011 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 on-market cancellation means an acquisition by a company of a share in the company if— (a) the company acquires the share in a transaction occur- ring on a recognised exchange, through a broker or some other similar agent independent of the company; and before the transaction, no arrangement existed between the shareholder and the company for the company to acquire the share; and the acquisition is not a treasury stock acquisition to which section CD 25 (Treasury stock acquisitions) ap- plies, but this paragraph does not limit the application of section CD 25(2) to (6); and it includes an acquisition of the company’s shares on the recognised exchange that is undertaken by an associated person under an arrangement for the associate to acquire the shares in lieu of the company (b) (c) (d) is not a ﬁnance lease; and is entered into on or after 20 May 1999 onshore development [Repealed] [Repealed] operating lease means, except in section EW 15I(1)(b)(iib) (Mandatory use of yield to maturity method for some arrange- ments), a lease that— (a) (b) operational allowance is deﬁned in section CW 23(4) (In- come for military or police service in operational area) for the purposes of that section operational area is deﬁned in section CW 23(4) (Income for military or police service in operational area) for the purposes of that
 section option, in sections FB 10 (Continuity provisions: shares and options), GB 5 (Arrangements involving trust beneﬁciaries), and YC 2, YC 3, YC 5, YC 8, and YC 9 (which relate to the measurement of company ownership), and in the deﬁnitions of excluded option, market value (paragraphs (a) and (b)), market value circumstance (paragraphs (c) to (f)), pre-1991 budget security, recognised exchange, and shareholder de- cision-making right, includes an agreement for sale at a time 3012 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 when beneﬁcial ownership of the property sold has not com- pletely passed to the purchaser ordering rule means the rule set out in section CD 23(1) (Ordering rule and slice rule) for calculating the amount of available subscribed capital per share original share means a share in a company that is described as the original share in the deﬁnition of returning share transfer other amortisation provision means a provision of this Act that has similar intent and application to sections EE 1 (What this subpart does), EZ 7 (Buying patent rights before 1 April 1993), and EZ 8 (Premium paid on land leased before 1 April 1993) output tax is deﬁned in section 2 of the Goods and Services Tax Act 1985 outstanding balance,— (a) in section FA 10 (Treatment when lease ends: lessor ac- quiring asset), includes principal, interest, and penalties that are owing by the lessee to the lessor on the date that the lease is terminated is deﬁned in section FZ 2(9) (Effect of speciﬁed lease on lessor and lessee) for the purposes of sections FZ 2 and FZ 3 (which relate to speciﬁed leases) (b) outstanding claims reserve means— (a) for an insurer who uses IFRS 4, the amount of the in- surer’s outstanding claims liability for general insur- ance contracts, excluding contracts having premiums to which section CR 3 (Income of non-resident general in- surer) applies, as that liability is measured under Ap- pendix D, paragraphs 5.1 to 5.2.12 of IFRS 4 for
 the insurer’s ﬁnancial statements less the amount of rein- surance and non-reinsurance recoveries receivable, as measured for the ﬁnancial statements: for a life insurer, the amount that would be the life insurer’s outstanding claims reserve under section EY 24(3) and (4) (Outstanding claims reserving amount: non-participation policies not annuities) for general insurance contracts, excluding contracts having premiums to which section CR 3 applies, if section (b) 3013 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 EY 24(3) and (4) were modiﬁed so as to apply to general insurance contracts and reinsurance contracts, instead of to life insurance policies and reinsurance contracts overseas eligible expenditure [Repealed] [Repealed] overseas pension is deﬁned in section CW 28(2) (Pensions) for the purposes of that section overtime is deﬁned in section CW 17C(4) (Payments for over- time meals and certain other allowances) for the purposes of that section own,— (a) for land, means to have an estate or interest in the land, alone or jointly or in common with any other person: for the ownership of depreciable property, is deﬁned in sections EE 2 to EE 5 (which relate to depreciation) (b) ownership interest is deﬁned in section YC 18(6) (Reverse takeovers) for the purposes of that section, and in sections YC 18B, YC 18C and YC 19B (which relate to corporate re- organisations) owner’s associate is deﬁned in section HB 11(12) (Limitation on deductions by persons with interests in look-through com- panies) for the purposes of that section owner’s interests means the relevant interests in rights and obligations and other property, status, and things that a person who has an effective look-through interest for a look-through company has as a result of applying section HB 1 (Look- through companies are transparent) or otherwise paid work [Repealed] [Repealed] parental entitlement period means the period of time de- scribed in section MD 11(1)(b)(i)
 (Entitlement to parental tax credit) parental tax credit is deﬁned in section MA 8 (Some deﬁni- tions for family scheme) for the purposes of subparts MA to MF and MZ (which relate to tax credits for families) Part F activity is deﬁned in schedule 4, part F, clause 7 (Rates of tax for schedular payments) 3014 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 partial reinsurance is deﬁned in section EY 12(3) (Meaning of life reinsurance) participating share is deﬁned in section CD 22(9) (Returns of capital: off-market share cancellations) for the purposes of that section partner, in relation to a partnership,— (a) means a person who is a member of the partnership: (b) includes— (i) (ii) (iii) a limited partner of a limited partnership: a general partner of a limited partnership: a joint venturer or a co-owner, if they make the relevant choice to be treated as partnership partner’s associate is deﬁned in section HG 11(12) (Limita- tion on deductions by partners in limited partnerships) for the purposes of that section partner’s interests means the relevant interests in rights and obligations and other property, status, and things that a part- ner has as a result of applying section HG 2 (Partnerships are transparent) partnership means— (a) a group of 2 or more persons who have, between them- selves, the relationship described in section 4(1) of the Partnership Act 1908: a joint venture, if the joint venturers all choose to be treated as a partnership for the purposes of this Act and the Tax Administration Act 1994: co-owners of property, other than persons who are co-owners only because they are shareholders of the same company, or settlors, trustees, or beneﬁciaries of the same trust, if the co-owners all choose to be treated as a partnership for the purposes of this Act and the Tax Administration Act 1994: a limited partnership (d) partnership share means, for a particular right, obligation, or other property, status, or thing, the share that a
 partner has the partnership it patent right means the right to do or authorise anything that would, but for the right, be an infringement of a patent (b) (c) 3015 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 pay,— (a) for an amount and a person, includes— to distribute the amount to them: (i) to credit them for the amount: (ii) to deal with the amount in their interest or on their (iii) behalf, in some other way: (b) (bb) (c) for a dividend that is a bonus issue, means to issue shares or to give credit for the shares comprising the bonus issue: is deﬁned in section LD 4(7) (Tax credits for payroll donations) for the purposes of that section and section LD 8(1) (Meaning and ranking of payroll donation) and for section 24Q of the Tax Administration Act 1994: is deﬁned in section RD 51(6) (Calculation of all-inclu- sive pay) for the purposes of that section pay period, for an employee receiving regular payments of salary or wages, means the period for which any such payment is payable PAYE means pay-as-you-earn and refers to an amount payable as income tax under the PAYE rules PAYE income payment is deﬁned in section RD 3 (PAYE income payments) PAYE income payment form, for an employer, means a form authorised by the Commissioner that shows— the period to which the form relates; and (a) the name of the employer; and (b) the tax ﬁle number of the employer; and (c) the total amounts of tax withheld and paid; and (d) the total amount of child support payments; and (e) the total amount of salary or wage deductions made (f) under the Student Loan Scheme Act 2011; and the total KiwiSaver contribution deductions made under the KiwiSaver Act 2006, Part 3, subpart 1; and the amount of an employer’s superannuation cash con- tribution and the amount of ESCT withheld and paid; and the amount of an employer’s superannuation cash con- tribution and the amount of tax withheld and paid, other than that described in paragraph (h); and (h) (g) (i) 3016 Reprinted as
 at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (j) other similar information that the Commissioner may require PAYE intermediary, for an employer, means— (a) a person who— (i) is accredited as a PAYE intermediary by the Commissioner under section 15D or 15G of the Tax Administration Act 1994; and has entered an agreement with the employer, ap- plying to employees of the employer, that has been approved by the Commissioner under sec- tion 15J of that Act; and has entered into agreements that have been ap- proved by the Commissioner under section 15J of that Act with not less than 10 employers: no longer meets the requirements of paragraph (a); and has responsibilities under section RP 2(3) (PAYE intermediaries) (ii) (iii) (ii) (b) a person who— (i) PAYE rules means the provisions listed in section RD 2(1) (PAYE rules and their application) payer, in the RWT rules, means a person who makes a pay- ment of resident passive income payment relating to incapacity for work is deﬁned in section CW 34(2) (Compensation payments) for the purposes of that section payroll donation is deﬁned in section LD 8 (Meaning and ranking of payroll donation) PCA means policyholder credit account PCA company means a company described in section OJ 1(1) (General rules for companies and other persons with policy- holder credit accounts) PCA person means a person who chooses under section OJ 1(2) and OJ 12 (which relate to persons with policyholder credit accounts) to maintain a policyholder credit account penalties and interest is deﬁned in section HD 15(9) (Asset stripping of companies) for the purposes of that section 3017 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 pension is deﬁned in section CF 1(2) (Beneﬁts, pensions, com- pensation, and government grants) for the purposes of that sec- tion period of restriction is deﬁned in section DC 15(2) to (4) (Some deﬁnitions) for the purposes of sections DC 13 to DC 15 (which relate to share purchase schemes) permit
 is deﬁned in section 2 of the Crown Minerals Act 1991 permit area means the area of land covered by a petroleum permit permit-speciﬁc asset is deﬁned in section DZ 5(6) (Farm- out arrangements for petroleum mining before 16 December 1991) for the purposes of that section permitted withdrawal means a withdrawal permitted under the KiwiSaver scheme rules as deﬁned in section 4 of the Kiwi- Saver Act 2006 or under the complying fund rules person— (a) is deﬁned in section EH 3(2) (Persons to whom main income equalisation scheme applies) for the purposes of the main income equalisation scheme: is deﬁned in section EH 37(2) (Persons to whom adverse event income equalisation scheme applies) for the pur- poses of the adverse event income equalisation scheme: is deﬁned in section EH 63(2) (Persons to whom thin- ning operations income equalisation scheme applies) for the purposes of the thinning operations income equalisation scheme (b) (c) personal injury by accident [Repealed] [Repealed] personal property, in sections CB 4 (Personal property ac- quired for purpose of disposal) and CB 5 (Business of dealing in personal property) does not include land personal property lease asset— (a) means any personal property subject to a lease; and (b) does not include any livestock or bloodstock personal property lease payment means a payment made by a lessee to a lessor, in money or money’s worth, in relation to, or in consideration for, a personal property lease asset 3018 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 personal service rehabilitation payment, means an amount paid for the person’s beneﬁt— (a) for a person, under section 81(3), 372, or 374 of the Accident Com- pensation Act 2001; and by the Accident Compensation Corporation or an em- ployer that is an accredited employer as deﬁned in sec- tion 181 of that Act; and in providing to a person— (i) (b) (c) a key aspect of rehabilitation referred to in sec- tion 81(1)(b), (c), (e), or (g) (relating to
 attendant care, child care, home help, and training for in- dependence) of that Act: a key aspect of rehabilitation referred to in sec- tion 81(1)(h) (relating to transport for independ- ence) of that Act to the extent provided by para- graph (a)(i) of the deﬁnition of transport for in- dependence in schedule 1, clause 12 of that Act: similar rehabilitation referred to in an earlier Act corresponding to that Act (ii) (iii) petroleum is deﬁned in section 2 of the Crown Minerals Act 1991 petroleum development expenditure— (a) means expenditure incurred by a petroleum miner that— (i) (ii) directly concerns a permit area; and is for acquiring, constructing, or planning petrol- eum mining assets; and (b) does not include— (i) (ii) (iii) residual expenditure; or petroleum exploration expenditure; or other expenditure allowed as a deduction under any provision of this Act, other than a provision in subpart DT (Petroleum mining expenditure) or DZ (Terminating provisions), and allocated to the income year in which the expenditure is incurred petroleum exploration expenditure— (a) means— (i) (ii) exploratory well expenditure; and prospecting expenditure; and 3019 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) (iii) expenditure to acquire an existing privilege, a prospecting permit for petroleum, or an explor- ation permit for petroleum; and does not include— (i) (ii) residual expenditure; or expenditure that is required by section DT 6 (Expenditure on petroleum mining assets) to be treated as petroleum development expenditure petroleum miner is deﬁned in section CT 6 (Meaning of pet- roleum miner) petroleum mining asset is deﬁned in section CT 7 (Meaning of petroleum mining asset) petroleum mining company means a company to which sec- tions IZ 2 and IZ 3 (which relate to companies engaged in ex- ploring for, searching for, or mining petroleum) apply petroleum mining development is deﬁned in section EJ 20 (Meaning of petroleum mining development) for
 the purposes of sections EJ 12 and EJ 12B (which relate to petroleum de- velopment expenditure) petroleum mining development expenditure is deﬁned in section DZ 3(4) (Petroleum mining: development expenditure from 1 October 1990 to 15 December 1991) for the purposes of that section petroleum mining operations is deﬁned in section CT 6B (Meaning of petroleum mining operations) petroleum mining permit is deﬁned in section 2 of the Crown Minerals Act 1991 petroleum permit means— a prospecting permit: (a) an exploration permit: (b) (c) a mining permit to the extent to which it remains current petroleum-related depreciable property is deﬁned in section EE 67 (Other deﬁnitions) PFSI forestry business means the forestry activities carried on by a person who, as landowner, is subject to obligations under a forest sink covenant referred to in section 67X of the Forests Act 1949 in relation to the land speciﬁed in the covenant 3020 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 PFSI forestry income, for a person, means the income from a PFSI forestry business— (a) relating to a forest sink covenant entered into by the person; and derived by the person from— (i) (b) receiving an emissions unit under the covenant; or entering into a transaction in relation to an emis- sions unit received under the covenant (ii) physical cost of production is deﬁned in section DZ 11(3) (Film reimbursement scheme on or before 30 June 2001) for the purposes of that section PIE means a portfolio investment entity PIE rules means— (a) the following provisions: (i) section BC 7(4) (Income tax liability of person with schedular income): section CB 26 (Disposal of certain shares by port- folio investment entities): section CP 1 (Attributed income of investors in multi-rate PIEs): sections CX 55 to CX 57 (which relate to ex- cluded income of investors in PIEs): sections DB 53 to DB 54B (which relate to losses of certain investors in PIEs): section EX 20B(3)(o) amount): subpart HM
 (Portfolio investment entities): section IA 7(10) (Restrictions relating to ring- fenced tax losses): (Attributable CFC (ii) (iii) (iv) (v) (vb) (vi) (vii) (viii) IC 3(2B) to (2D) (Common ownership: group of (ix) (x) companies): subpart LS (Tax credits for multi-rate PIEs and investors): section OB 9B (ICA attributed PIE income with imputation credit): (b) sections 28B, 28D, 31B, 31C, 33(1C), 38(1B), 57B, and 61(1C) of the Tax Administration Act 1994 3021 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 plant does not include an item that is structural in relation to a building plant variety rights means proprietary rights granted for a plant variety under the Plant Variety Rights Act 1987 or similar rights given similar protection under the laws of a country or territory other than New Zealand planting is deﬁned in section DO 8 (Meaning of planting and plot) for the purposes of sections DO 5 to DO 8 (which relate to horticultural plants) pleasure craft is deﬁned in section CW 21(2) (Amounts de- rived by visiting crew of pleasure craft) for the purposes of that section plot is deﬁned in section DO 8 (Meaning of planting and plot) for the purposes of sections DO 5 to DO 8 (which relate to horticultural plants) policy liabilities is deﬁned in section EY 29(8) (Shareholder base other proﬁt: proﬁt participation policies that are new busi- ness) for the purposes of section EY 29 policyholder base means, for a life insurer, the base for pol- icyholder base income and allowable deductions and to which income of a particular source or nature, and tax credits re- ceived are apportioned under section EY 4 (Apportionment of income of particular source or nature, and of tax credits) policyholder base allowable deductions means policyholder base allowable deductions described in section EY 2(2) (Pol- icyholder base) policyholder base income means policyholder base income described in section EY 2(1) (Policyholder base) policyholder base income tax liability
 [Repealed] [Repealed] policyholder credit [Repealed] [Repealed] policyholder credit account [Repealed] [Repealed] policyholder debit [Repealed] [Repealed] 3022 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 policyholder FDP ratio [Repealed] [Repealed] policyholder income [Repealed] [Repealed] policyholder income formula [Repealed] [Repealed] policyholder net loss [Repealed] [Repealed] policyholder unvested liabilities means beneﬁts that are al- located to policyholders of proﬁt participation policies but are not vested in a speciﬁc policyholder pool is deﬁned in section EE 67 (Other deﬁnitions) pool method is deﬁned in section EE 67 (Other deﬁnitions) poolable property is deﬁned in section EE 66 (Meaning of poolable property) portable New Zealand superannuation means New Zealand superannuation paid or payable overseas under— (a) section 26(2)(a) of the New Zealand Superannuation and Retirement Income Act 2001, or under section 26(2)(b) where the superannuitant is residing in a coun- try to which section 26(1)(a) of that Act applies; or section 31 of the New Zealand Superannuation and Re- tirement Income Act 2001; or section 19 of the Social Welfare (Transitional Provi- sions) Act 1990 (b) (c) portable veteran’s pension means a veteran’s pension paid or payable overseas under— (a) section 74J(2)(a) of the War Pensions Act 1954, or under section 74J(2)(b) where the pensioner is residing in a country to which section 74J(1)(a) of that Act applies; or section 74O of the War Pensions Act 1954; or section 19 of the Social Welfare (Transitional Provi- sions) Act 1990 (b) (c) portfolio allocation period [Repealed] [Repealed] portfolio calculation period [Repealed] [Repealed] 3023 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 portfolio class fraction [Repealed] [Repealed] portfolio class investment value [Repealed] [Repealed] portfolio class net income [Repealed] [Repealed] portfolio class net loss [Repealed] [Repealed] portfolio class
 taxable income [Repealed] [Repealed] portfolio class taxable loss [Repealed] [Repealed] portfolio deﬁned beneﬁt fund [Repealed] [Repealed] portfolio entity formation loss [Repealed] [Repealed] portfolio entity investment [Repealed] [Repealed] portfolio entity tax liability [Repealed] [Repealed] portfolio investment means an investment of an entity in an item of property of a type to which section HM 11 (Investment types) refers portfolio investment entity means— (a) (b) (c) (d) (e) a multi-rate PIE: a listed PIE: a beneﬁt fund PIE: a life fund PIE: a foreign investment PIE that is either a foreign invest- ment zero-rate PIE or a foreign investment variable-rate PIE portfolio investment-linked life fund means a separate iden- tiﬁable fund forming part of a life insurer, that— (a) holds investments subject to life insurance policies under which beneﬁts are directly linked to the value of the investments held in the fund; and has become a portfolio investment entity under section HL 13 (Becoming portfolio investment entity); and (b) 3024 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (c) has not ceased to be a portfolio investment entity under section HL 15 (Ceasing to be portfolio investment en- tity) portfolio investor allocated income [Repealed] [Repealed] portfolio investor allocated loss [Repealed] [Repealed] portfolio investor class [Repealed] [Repealed] portfolio investor exit period [Repealed] [Repealed] portfolio investor interest [Repealed] [Repealed] portfolio investor interest fraction [Repealed] [Repealed] portfolio investor proxy [Repealed] [Repealed] portfolio investor rate [Repealed] [Repealed] portfolio land company [Repealed] [Repealed] portfolio listed company [Repealed] [Repealed] portfolio tax rate entity [Repealed] [Repealed] possession includes a use that is in fact or effect substantially exclusive post-1989 forest land means post-1989 forest land as deﬁned in section 4(1) of the Climate Change Response Act 2002 post-1989
 forest land emissions unit, for a person, means an emissions unit transferred under section 64 of the Climate Change Response Act 2002 for growing trees on post-1989 forest land— (a) to the person and held continuously by the person from the transfer: to another person (the recipient), who at the time of the transfer is a party to a forestry rights agreement as (b) 3025 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 deﬁned in the Forestry Rights Registration Act 1983 with the person, and— (i) transferred by the recipient to the person, under a provision of the forestry rights agreement relat- ing to the allocation of income or emissions units between the recipient and the person; and held continuously by the person from the transfer by the recipient (ii) post-1989 forest land unit [Repealed] [Repealed] post-treaty tax rate means the rate of tax, after taking into account the overriding effect of a relevant double tax agree- ment, if there is one, as provided by section BH 1 (Double tax agreements) pre-1983 investments is deﬁned in section HR 3(8) (Deﬁni- tions for section HR 2: group investment funds) for the pur- poses of section HR 2 (Group investment funds) pre-1990 forest land means pre-1990 forest land as deﬁned in section 4(1) of the Climate Change Response Act 2002 pre-1990 forest land emissions unit, for a person, means an emissions unit transferred under Part 4, subpart 2 of the Cli- mate Change Response Act 2002 in relation to pre-1990 forest land— (a) to the person and held continuously by the person from the transfer: to another person (the appointee), as a person appointed under section 73 of that Act or as a person representing iwi that are claimants under a Treaty of Waitangi settle- ment, and— (i) transferred by the appointee to the person, as a person (the claimant) who at the time of the transfer to the appointee is a claimant under a Treaty of Waitangi settlement involving the pre- 1990 forest land or as an agent for the
 claimant; and held continuously by the person, as the agent or the claimant, from the transfer by the appointee: to another person (the recipient), who at the time of the transfer is a party to a forestry rights agreement as (ii) (b) (c) 3026 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 deﬁned in the Forestry Rights Registration Act 1983 with the person, and— (i) transferred by the recipient to the person, under a provision of the forestry rights agreement relat- ing to the allocation of income or emissions units between the recipient and the person; and held continuously by the person from the transfer by the recipient (ii) pre-1990 forest land unit [Repealed] [Repealed] pre-1991 budget security means a ﬁxed-rate share, or a debenture to which section FA 2 (Recharacterisation of certain debentures) applies, that— (a) was itself issued by the company before 8.00 pm New Zealand Standard Time on 30 July 1991 (the speciﬁed time), or was issued under a binding contract entered into before the speciﬁed time no term of which is altered at any time after the speciﬁed time; and is not a share or debenture any term of which is altered at any time after the speciﬁed time, whether under a pro- vision for roll-over or extension or under an option held at the speciﬁed time by the shareholder or debenture holder or the company or both or by any other person or otherwise, except when the term is altered under a binding contract entered into before the speciﬁed time no term of which is altered at any time after the speci- ﬁed time (b) pre-imputation income year means an income year that started before the 1987–88 income year premium,— (a) for life insurance,— (i) means any consideration, however described, payable under a life insurance policy to a life insurer; and does not include interest on an unpaid premium: does not include consideration received by a life insurer for the transfer of life insurance business: in sections CR 3, HD 16, HD 17, and YD 8
 (which relate to non-resident general insurers), for general insurance (ii) (iii) (b) 3027 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (c) or guarantee against risk, means an amount payable in relation to the contract of insurance or guarantee, as applicable, entered into by the insured person: in section EZ 8 (Premium paid on land leased before 1 April 1993) and for the purposes of section DZ 9 (Pre- mium paid on land leased before 1 April 1993),— (i) includes a payment in the nature of a ﬁne, a pay- ment for goodwill attaching to the land, and a payment in consideration of the grant, transfer, or renewal of the lease; and does not include rent (ii) prescribed by regulations under this Act; or prescribed by the Commissioner premium loading [Repealed] [Repealed] premium loading formula [Repealed] [Repealed] premium payback amount means an amount of life risk com- ponent premium refunded in accordance with the terms and conditions of the relevant life insurance policy or the discre- tion of the life insurer prepaid expenditure means expenditure to which section EA 3 (Prepayments) applies prescribed means— (a) (b) prescribed amount is deﬁned in section DU 9(4) (Application of sections to resident mining operators) prescribed interest is deﬁned in section RD 34(3) (Employ- ment-related loans: value using prescribed interest rates) for the purposes of that section prescribed investor rate, for a multi-rate PIE and an investor, means an applicable tax rate set out in schedule 6, table 1 (Prescribed rates: PIE investments and retirement scheme con- tributions), modiﬁed as necessary by section HM 56(2) (Pre- scribed investor rates: schedular rates) or HM 57B (Prescribed investor rates for new residents) prescribed period is deﬁned in section CU 29 (Other deﬁni- tions) 3028 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 prescribed proportion is deﬁned in section CU 29 (Other def- initions) prescribed rate of interest means the rate of
 interest declared by regulations made under section RA 21(3) (Regulations) to be the rate applying to employment-related loans present value (gross) means— (a) a present value calculated using the risk-free rate of re- turn as the discount rate, gross of tax; but face value, if the whole discount period is less than a year (b) present value (net) means— (a) a present value calculated using the risk-free rate of re- turn as the discount rate, net of tax; but face value, if the whole discount period is less than a year price— (a) (b) (b) (c) is deﬁned in section RD 40(3) (Goods) for the purposes of that section: is deﬁned in section RD 41(4) (Services) for the pur- poses of that section: in sections RD 42 and RD 43 (which relate to goods pro- vided with staff discount), for a registered person who may claim input tax for goods provided to an employee, means the GST-inclusive price primary producer co-operative company is deﬁned in section CZ 7(4) (Primary producer co-operative companies: 1987–88 income year) for the purposes of that section principal caregiver is deﬁned in section MC 10 (Principal caregiver) for the purposes of the child tax credit, WFF tax credit, in-work tax credit, and parental tax credit private domestic worker means a person employed by any other person if— (a) the employer is the occupier, or 1 of the occupiers, of a dwellinghouse or other premises used exclusively for residential purposes; and the employment is for the performance of work in or about the dwellinghouse or premises or the garden or (b) 3029 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (c) grounds belonging to the dwellinghouse or premises; and the employment is not for a business carried on by the employer or an occupation or calling of the employer; and the employment is not regular full-time employment (d) private limitation is deﬁned in section DA 2(2) (General limi- tations) private or domestic agreement for the sale and purchase of property is deﬁned in
 section EZ 48 (Deﬁnitions) for the purposes of the old ﬁnancial arrangements rules private use— (a) for a motor vehicle, is deﬁned in section CX 36 (Mean- ing of private use): for the purposes of subpart DG (Expenditure related to use of certain assets), is deﬁned in section DG 4 (Mean- ing of private use for this subpart) (b) pro rata cancellation, for shares of the same class in a com- pany, means the cancellation of— all the shares in the class; or (a) part only of the shares in the class if the cancellation (b) does not alter any person’s voting interest, or market value interest, if a market value circumstance exists at the time in relation to the company, in the company, determined as if no other class of shares existed; or part only of the shares in the class if the cancellation re- sults from an offer from the company to all shareholders in the class and the resulting cancellation would have met paragraph (b) if each shareholder who received the offer accepted it in full (c) produce transactions,— (a) in section CD 33 (Payments corresponding to notional distributions of producer boards and co-operative com- panies), subpart HE (Mutual associations), and sections OB 73 and OB 74 (which relate to imputation credit accounts of statutory producer boards), and in the def- inition of member (paragraph (a)), means transactions that— 3030 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (i) (ii) are between a statutory producer board and its members; and involve the acceptance by the board from its members, in terms of the board’s primary statu- tory functions, of produce that is trading stock or goods that are trading stock: (b) (c) in sections CD 33, OB 78, and OB 79 (which relate to imputation credit accounts of co-operative companies), and in the deﬁnition of shareholder (paragraph (c)), means transactions that— (i) are between a co-operative company and its shareholders; and involve the acceptance of produce that is trading stock or goods that
 are trading stock; and are purchases or other acquisitions of the produce or goods by the company from its shareholders, if a principal activity of the company involves the acceptance of such produce or goods from its shareholders: (ii) (iii) in sections CD 33, OB 78, OB 79, and OB 82, and in the deﬁnition of shareholder (paragraph (c)), also means transactions that— (i) are between a co-operative company and its shareholders; and involve the supply of produce that is trading stock or goods that are trading stock; and are sales or other disposals of the produce or goods by the company to its shareholders, if a principal activity of the company involves the supply of such produce or goods to its sharehold- ers (ii) (iii) producer board has the same meaning as statutory producer board proﬁt is deﬁned in section DB 28(6) (Amount from land af- fected by change and not already in income) for the purposes of that section proﬁt distribution plan— (a) means a scheme comprising 1 or more steps undertaken by a company by which it— 3031 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (i) (ii) notiﬁes some or all of its shareholders that shares are to be issued on a particular date; and gives the notiﬁed shareholders an option to have some or all of the shares issued to them repur- chased by the company: (b) does not include an issue of shares under a share pur- chase agreement or a share purchase scheme proﬁt participation policy— (a) means a class of life insurance policy having— (i) (ii) (iii) a segregated or identiﬁable asset base; and policyholders who are entitled to a share of proﬁts that is distributed to, or vested in, the pol- icyholders from the asset base, and the policies provide for the entitlement; and a ﬁxed formula, expressed in terms of a propor- tion of a policyholder’s share of proﬁts from the asset base, that calculates a transfer to the beneﬁt of the life insurer’s shareholders from the proﬁts of the asset base, and that ﬁxed formula is
 con- sistently applied: (b) (c) includes a class of life insurance policy that substan- tially meets the requirements of paragraph (a) and that has a guarantee by the life insurer that capital invested will be returned or that a minimum return on capital will be paid, if— (i) the life insurer has irrevocably chosen that the class be treated as a proﬁt participation policy; and the Commissioner receives a notice of the elec- tion before the start of the ﬁrst income year to which it relates: (ii) does not include a life insurance policy that covers life risk and is— (i) (ii) life reinsurance: a multiple life policy, as deﬁned in section EY 30(14) (Transitional adjustments: life risk): a workplace group policy, as deﬁned in section EY 30(15) (iii) 3032 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 proﬁt-related debenture is deﬁned in section FA 2(4) (Recharacterisation of certain debentures) proﬁt-sharing arrangement means an arrangement under which— (a) a person (person A) makes speciﬁed livestock avail- able, without specifying a fee for doing so, to another person (person B) who carries on a business in which the livestock are used; and any return or compensation that person A receives for making the livestock available depends on the proﬁts of the business; and person A participates in the proﬁts and losses of the business; and if a partnership between person A and person B arises, person A is bound by the requirements of the Partnership Act 1908 for third parties (b) (c) (d) projected transactions shareholding is deﬁned in section CD 34B (Distributions to members of co-operative compan- ies) property,— (a) in subpart EE (Depreciation), includes consents granted in or after the 1996–97 tax year under the Resource Management Act 1991: in subpart FB (Transfers of relationship property), is deﬁned in section FB 1(4) (What this subpart does): in subpart FC (Distribution, transmission, and gifts of property), is deﬁned in section FC 1(2) (What this
 sub- part does): in the ﬁnancial arrangements rules, and in the deﬁni- tions of agreement for the sale and purchase, for- ward contract, right, short-term agreement for sale and purchase, short-term option, and speciﬁed op- tion does not include a ﬁnancial arrangement or foreign exchange: in the old ﬁnancial arrangements rules, is deﬁned in sec- tion EZ 48 (Deﬁnitions) (ab) (ac) (b) (c) 3033 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 proportional-stapling company means a company if— (a) each share in the company that is not a stapled debt se- curity and not a ﬁxed-rate share (a participating share) is stapled to a stapled debt security; and for each participating share in the company, the amount payable for the issue of its stapled debt security is the same proportion of the available subscribed capital cal- culated under the slice rule of the participating share as it is for each other participating share (b) (b) prospecting expenditure— (a) means expenditure to identify land likely to contain ex- ploitable petroleum deposits or occurrences; and includes prospecting for petroleum by electrical, geo- chemical, gravimetric, magnetic, radioactive, seismic, or other geological methods; and does not include residual expenditure (c) prospecting permit is deﬁned in section 2 of the Crown Min- erals Act 1991 protected family support [Repealed] [Repealed] protected family tax credit, for a person, means an amount of family scheme income derived in the way set out in section MD 14 (Person receiving protected family tax credit) protective right is deﬁned in section CD 22(9) (Returns of capital: off-market share cancellations) for the purposes of that section provisional rate is deﬁned in section EE 67 (Other deﬁnitions) provisional tax means an amount payable as provisional tax under the provisional tax rules provisional tax rules means the provisions listed in section RC 2 (Provisional tax rules and their application) PSR period is deﬁned in section EY 23
 (Reserving amounts for life insurers: non-participation policies) public authority— (a) means every department or instrument of the Executive Government of New Zealand; and includes the Public Trust and the Maori Trustee; and (b) 3034 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (c) (d) includes the Christmas Island Phosphate Commission, incorporated in Australia by the Christmas Island Agreement Act 1949 of the Parliament of Australia and continued under the Christmas Island Agreement Act 1958; and is further deﬁned in section CW 38(6) (Public author- ities) for the purposes of that section; and does not include a mixed-ownership enterprise (e) public entertainer is deﬁned in section CW 19(3) (Amounts derived during short-term visits) for the purposes of that sec- tion public ofﬁcial is deﬁned in section DB 45(4) (Bribes paid to public ofﬁcials) for the purposes of that section public unit trust means— (a) a unit trust that offers securities to the public under the Securities Act 1978 and that has 100 or more unit hold- ers, treating all associated persons as 1 person, who are— (i) (ii) (iii) unit trust managers who hold units in the ordinary course of their activities in relation to the unit trust; or persons with an interest of 25% or less in the unit trust, treating all associated persons as 1 person; or persons with an interest of 25% or more in the unit trust, treating all associated persons as 1 per- son, if their interest is 25% or more because of unusual or temporary circumstances, such as the recent establishment or forthcoming termination of the unit trust, and if the unit trust would meet the requirements of any of paragraphs (b), (c), (d), and (e); or (b) a unit trust whose unit holders are any 1 or more of the following: (i) a public unit trust as described in paragraph (a) or this paragraph: a group investment fund: a life insurance company: a superannuation fund: (ii) (iii) (iv) 3035 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2
 September 2013 (v) (vi) a unit trust manager, trustee, or person nominated by the manager or the trustee who holds units in the ordinary course of management activities in relation to the unit trust: a person with an interest of 25% or less in the unit trust, treating all associated persons as 1 per- son, if the unit trust offers securities to the public under the Securities Act 1978: (vii) a person with an interest of 25% or more in the unit trust, treating all associated persons as 1 per- son, if their interest is 25% or more because of unusual or temporary circumstances, such as the recent establishment or forthcoming termination of the unit trust, and if the unit trust would meet the requirements of any of paragraphs (a), (c), (d), and (e), and if the unit trust offers securities to the public under the Securities Act 1978; or a unit trust that has less than 100 unit holders if it could reasonably be regarded as a widely-held investment ve- hicle for direct investment by members of the public de- spite its number of unit holders or investors; or a unit trust that has less than 100 unit holders if it has less than 100 unit holders or investors because of un- usual or temporary circumstances, such as its recent es- tablishment or forthcoming termination, and if it would otherwise meet the requirements of any of paragraphs (a), (b), (c), and (e); or a unit trust that has less than 100 unit holders if it could reasonably be regarded as a vehicle mainly for invest- ment by widely-held vehicles for direct investment that are 1 or more of the following: (i) (ii) (iii) (iv) unit trusts; or group investment funds; or life insurance companies; or superannuation funds (c) (d) (e) QCP transitional process is deﬁned in section HZ 4B(7) (Qualifying companies: transition into partnership) QCST transitional process is deﬁned in section HZ 4D(4) (Qualifying companies: transition into sole traderships) 3036 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1
 qualifying asset is deﬁned in section EZ 28 (Meaning of quali- fying asset) qualifying capital value is deﬁned in section EZ 26 (Meaning of qualifying capital value) qualifying company is deﬁned in section HA 2 (Meaning of qualifying company) qualifying company election tax means the amount de- scribed in section HA 40 (Liability for qualifying company election tax) qualifying debenture means— (a) a debenture issued by a forestry company for unpaid purchase money for land bought by the forestry com- pany from the Crown or the Maori owners or a holding company of the forestry company; or a debenture issued by a forestry company for capital- ised interest derived from a debenture described in para- graph (a); or a debenture issued by a forestry company for money lent to the forestry company by a holding company for any of the following purposes: (i) ﬁnancing expenditure by the forestry company on planting or maintaining trees; or (ii) meeting administrative overheads, rates, rent, in- surance premiums, or other expenses of the same kind; or paying interest on money borrowed for the pur- poses of the forestry business and employed as capital in the business; or (iii) a debenture issued by a forestry company for capital- ised interest derived from a debenture described in para- graph (c); or a debenture issued by a forestry company for capital- ised interest derived from a debenture described in para- graph (b) or (d); or a debenture issued by a Maori investment company to a shareholder of the company or a trustee for a share- holder (b) (c) (d) (e) (f) qualifying event [Repealed] [Repealed] 3037 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 qualifying foreign equity investor is deﬁned in section CW 12(4) (Proceeds of share disposal by qualifying foreign equity investor) for the purposes of that section qualifying improvement is deﬁned in section EZ 27 (Mean- ing of qualifying improvement) qualifying resident foreign trustee is deﬁned in section
 3(1) of the Tax Administration Act 1994 qualifying share premium is deﬁned in section CD 43(28) (Available subscribed capital (ASC) amount) for the purposes of that section quarantined amount means the amount described in section LK 1(3) (Tax credits relating to attributed CFC income) for the purposes of Part L (Tax credits and other credits) quarter means a period of 3 consecutive calendar months that ends with the last day of March, June, September, or December quarterly FDR hedging ratio is deﬁned in section EM 8 (Some deﬁnitions) for the purposes of subpart EM (Hedging of currency movements in Australian non-attributing shares and attributing FDR method interests) Railways assets is deﬁned in section EZ 68 (Deﬁnitions) for the purposes of sections EZ 64 to EZ 67 (which relate to New Zealand Railways Corporation restructure) Railways assets and liabilities is deﬁned in section EZ 68 (Deﬁnitions) for the purposes of sections EZ 64 to EZ 67 (which relate to New Zealand Railways Corporation restruc- ture) Railways liabilities is deﬁned in section EZ 68 (Deﬁnitions) for the purposes of sections EZ 64 to EZ 67 (which relate to New Zealand Railways Corporation restructure) Railways vesting is deﬁned in section EZ 68 (Deﬁnitions) for the purposes of sections CW 65, EZ 64 to EZ 67, and YC 18C (which relate to New Zealand Railways Corporation restruc- ture) ratio instalment date means an instalment date of a person who uses a GST ratio for a tax year, and is an instalment date for a payment in relation to which no amount of use of money interest or penalties apply other than a late payment penalty or a shortfall penalty 3038 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (c) (b) recognised exchange, at any time,— (a) means a recognised exchange market in New Zealand or anywhere else in the world that at the time has the features described in paragraphs (c) to (e); and includes a recognised exchange market that at the time is approved for the purposes of
 this deﬁnition by the Commissioner, having had regard to the features de- scribed in paragraphs (c) to (e); and for the purposes of paragraphs (a) and (b), the ﬁrst fea- ture is that the exchange market brings together buyers and sellers of shares or options over shares; and for the purposes of paragraphs (a) and (b), the second feature is that the exchange market involves the listing of prices, whether by electronic media or other means, at which persons are willing to buy or sell shares or options; and for the purposes of paragraphs (a) and (b), the third fea- ture is that the exchange market provides a medium for the determination of arm’s length prices likely to prove fair and reasonable, having regard to— (i) (d) (e) (ii) (iii) (iv) (v) (vi) the number of participants in the market or hav- ing access to the market; and the frequency of trading in the market; and the nature of trading in the market, including how prices are determined and transactions are effected; and the potential or demonstrated capacity of a person or persons signiﬁcantly to inﬂuence the market; and any signiﬁcant barriers to entry to the market; and any discrimination on the basis of quantity bought and sold unless based on the risks in- volved, the transaction costs, or economies of scale recognised seasonal employment scheme means the recog- nised seasonal employer policy published by the Department of Labour under section 13A of the Immigration Act 1987 3039 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 recourse property is deﬁned in— (a) section HB 11(12) (Limitation on deductions by per- sons with interests in look-through companies) for the purposes of that section: section HG 11(12) (Limitation on deductions by part- ners in limited partnerships) for the purposes of that sec- tion (b) redemption payment means the amount by which a payment made on the redemption of a commercial bill by the person who issued it is more than the money lent to the person, issue, in
 this deﬁnition, having the meaning given to it by section 2 of the Bills of Exchange Act 1908 reduced deﬁcit debit is deﬁned in section OC 38 (Meaning of reduced deﬁcit debit) for the purposes of section OC 23 (FDPA breach of FDP ratio by PCA company) redundancy payment [Repealed] [Repealed] refundable tax credit means— (a) (b) (bb) (c) (d) (e) a tax credit under subpart LB (Tax credits for payments, deductions, and family payments): a tax credit under subpart LF (Tax credits for foreign dividend payment (FDP) credits), excluding section LF 8 (Credits for persons who are non-resident or who receive exempt income): a tax credit under subpart LH (Tax credits for expend- iture on research and development): a tax credit under subpart LO (Tax credits for Maori authority credits): a tax credit under sections LS 2, LS 3(2), and LS 4(2) (which relate to multi-rate PIEs and certain of their in- vestors), if the person with the tax credit is not a natural person or is a natural person having the tax credit as a beneﬁciary of a trust: a tax credit under section LS 1 (Tax credits for multi- rate PIEs) to the extent to which it arises under section HM 53 or HM 55 (which relate to the use of tax credits other than foreign tax credits) registered as a charitable entity [Repealed] [Repealed] 3040 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 a cover note: a renewal of a reinsurance contract registered bank means a registered bank as deﬁned in section 2 of the Reserve Bank of New Zealand Act 1989 registered person is deﬁned in section 2 of the Goods and Services Tax Act 1985 registered security is deﬁned in section 86F of the Stamp and Cheque Duties Act 1971 regulatory value is deﬁned in section FE 20(2) (Financial value and regulatory value) for the purposes of section FE 19 (Banking group’s equity threshold) reinsurance contract includes— (a) (b) reinsurance grandparenting start day is deﬁned in section EZ 62 (Reinsurance transition: life ﬁnancial
 reinsurance may be life reinsurance) reinvestment proﬁt is deﬁned in section CU 29 (Other deﬁ- nitions) related activity is deﬁned in section IZ 1(12) (Use of speciﬁed activity net losses) for the purposes of that section related by employment is deﬁned in section EY 11(14) (Superannuation schemes providing life insurance) for the purposes of that section related company is deﬁned in section GC 5(5) (Leases for inadequate rent) for the purposes of that section related employer is deﬁned in section RD 51(6) (Calculation of all-inclusive pay) for the purposes of that section related person is deﬁned in section CZ 9B (Available capital distribution amount: 1988 to 2010) for the purposes of that section relationship agreement, for a person, means— (a) an agreement for the purpose of Part 6 of the Property (Relationships) Act 1976 that is made on or after 28 July 1983 by the person with another person: an order under section 25 of the Property (Relation- ships) Act 1976 that is made by a court on or after 28 July 1983 in relation to the person and another per- son (b) 3041 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 relationship period is deﬁned in section MC 11(1) (Relation- ship periods and entitlement periods) for the purposes of sub- parts MA to MF and MZ (which relate to tax credits for fami- lies) relative,— (a) for the purposes of only this Act, other than in section HC 36 (Trusts and minor beneﬁciary rule) and the def- inition of look-through company, means a person con- nected with another person by— (i) being within the second degree of blood relation- ship to the other: being in a marriage, civil union, or de facto rela- tionship with the other: being in a marriage, civil union, or de facto rela- tionship with a person who is within the second degree of blood relationship to the other: being adopted as a child of the other or as a child of a person who is within the ﬁrst degree of rela- tionship to the other: being the trustee of a trust
 under which a relative has beneﬁted or is eligible to beneﬁt: (ii) (iii) (iv) (v) (b) (bb) (c) is deﬁned in section HC 36(5) for the purposes of only that section: in the deﬁnition of look-through company, means a person connected with another person by any of the means described in paragraph (a)(i) to (iv): for the purposes of the deﬁnition of relative in section 2 of the Securities Act 1978, means a person connected with another person by— (i) being within the fourth degree of blood relation- ship to the other: being in a marriage, civil union, or de facto rela- tionship with the other: being in a marriage, civil union, or de facto re- lationship with a person who is within the fourth degree of blood relationship to the other: being adopted as a child of the other or as a child of a person who is within the third degree of re- lationship to the other: (ii) (iii) (iv) 3042 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (v) being the trustee of a trust under which a relative of the other person has beneﬁted or is eligible to beneﬁt relevant balance date is deﬁned in section GB 45 (Arrange- ments involving money not at risk) for the purposes of that section relevant period is deﬁned in section YC 13(3) (Corporate spin-outs) for the purposes of that section relinquishment,— (a) for a petroleum permit, means the abandonment, expiry, forfeiture, revocation, or surrender of the permit other- wise than for a replacement permit; and for an existing privilege applying to a mining licence under the Petroleum Act 1937, includes the expiry of the initial term without an extension of the initial term or an extension of a speciﬁed term (b) remaining deduction— (a) is deﬁned in section EJ 4(6) (Expenditure incurred in acquiring ﬁlm rights in feature ﬁlms) for the purposes of that section: is deﬁned in section EJ 5(4) (Expenditure incurred in acquiring ﬁlm rights in ﬁlms other than feature ﬁlms) for the purposes of that section: is deﬁned in section EJ 8(5) (Film
 production expend- iture for ﬁlms other than New Zealand ﬁlms) for the pur- poses of that section (b) (c) removal or restoration operations, for a petroleum miner, means removing petroleum mining assets of the kind described in section CT 7(1)(b) or (c) (Meaning of petroleum mining asset), or restoring the site of petroleum mining operations, because of the relinquishment of the petroleum permit relating to the assets or the operations rent is deﬁned in section GC 5(5) (Leases for inadequate rent) for the purposes of that section repairs, in sections CC 2 (Non-compliance with covenant for repair) and DB 21 (Amounts paid for non-compliance with covenant for repair), includes painting and general mainten- ance 3043 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 replaced area fraction is deﬁned in section DO 9 (Meaning of replaced area fraction and diminished value) for the pur- poses of sections DO 5 and DO 6 (which relate to horticultural plants) replacement ETS unit [Repealed] [Repealed] replacement forest land emissions unit means an emissions unit acquired by a person if— (a) the person has previously disposed of a post-1989 forest land emissions unit or forest sink emissions unit other than by— (i) surrender under the Climate Change Response Act 2002: transfer to the Crown under a forest sink covenant under section 67Y of the Forests Act 1949; and the person has not since the disposal acquired another emissions unit that replaces the post-1989 forest land emissions unit or forest sink emissions unit (ii) (b) replacement payment, for a returning share transfer, means a payment to a person of an amount that is— (a) economically equivalent to a dividend or part of a divi- dend for an original share: increased by an imputation credit attached to the pay- ment (b) replacement permit— (a) means a petroleum permit obtained in whole or part ex- change for another petroleum permit over the same or part of the same area; and includes a sequential
 series of replacement permits to the extent to which each permit in the series replaces the previous permit in the series (b) replacement plant, in sections DO 6, DO 7, and DO 9 (which relate to horticultural plants) means a listed horticultural plant that replaces a listed horticultural plant, whether or not it is of the same type of listed horticultural plant reporting bank is deﬁned in section FE 4 (Some deﬁnitions) for the purposes of subpart FE (Interest apportionment on thin capitalisation) 3044 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 reporting standard [Repealed] [Repealed] required interest [Repealed] [Repealed] research is deﬁned in section DB 35 (Some deﬁnitions) for the purposes of that section and section DB 34 (Research or development) research and development activities is deﬁned in section LH 7(1) (Research and development activities and related terms) for the purposes of subpart LH (Tax credits for expend- iture on research and development) research and development project [Repealed] [Repealed] resident foreign trustee is deﬁned in section 3(1) of the Tax Administration Act 1994 resident group member is deﬁned in section IQ 2B(9) (Effect of attributed CFC net loss and some FIF net loss from before ﬁrst affected year) for the purposes of that section and section LK 5B (Credits from tax year before ﬁrst affected year) resident imputation subgroup has the meaning given in sec- tion FN 8(2) (Trans-Tasman imputation groups and resident imputation subgroups) resident in Australia, for a company, means being resident under section YD 2(1) (Residence of companies) if Australia were treated as being New Zealand for the purposes of that section resident in New Zealand and resident of New Zealand have the same meaning as New Zealand resident resident mining operator is deﬁned in section CU 27 (Mean- ing of resident mining operator) resident passive income— (a) is deﬁned in section RE 2(1) (Resident passive income); and unless the
 context otherwise requires, includes RWT re- quired to be withheld under the RWT rules (b) residential mortgage backed security means a security that is backed by New Zealand-originated ﬁrst mortgages on New Zealand residential property 3045 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 residential purposes is deﬁned in section CB 18(3) (Residen- tial exclusion from section CB 14) for the purposes of that sec- tion resident’s restricted amalgamation is deﬁned in section FO 3(1) (Resident’s restricted amalgamations) for the pur- poses of the amalgamation rules residual expenditure means— (a) expenditure for which a person is allowed a deduction under section DB 33 (Scientiﬁc research): expenditure incurred for— (i) (b) an application fee payable to the Crown for a petroleum permit; or insurance premiums, royalties paid under the Petroleum Act 1937 or the Crown Minerals Act 1991, land tax under the Land Tax Act 1976, or rates; or a lease of land or buildings; or a ﬁnancial arrangement to which the old ﬁnancial arrangements rules apply: (ii) (iii) (iv) interest (c) residual income tax, for a person and for a tax year, means the positive amount, if any, that remains after subtracting from the person’s income tax liability for the tax year, the following amounts (a) a trustee for the person as a beneﬁciary; or an agent for the person as a principal: the amount of any credit allowed against the income tax liability for tax paid by— (i) (ii) the amount of any credit allowed against the income tax liability under— (i) section LB 1 (Tax credits for PAYE income pay- ments): section LB 3 (Tax credits for resident withhold- ing tax): section LB 5 (Tax credits for non-resident with- holding tax): (ii) (iii) (iiib) section LB 6 (Tax credits for RSCT): (iiic) section LC 13 (Tax credits for independent earn- ers): (b) 3046 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (iv) (v) (vb) (vi) (vii) section LE 1 (Tax credits for imputation
 credits): section LF 1 (Tax credits for FDP credits): section LH 2 (Tax credits relating to expenditure on research and development): section LJ 2 (Tax credits for foreign income tax): section LK 1 (Tax credits relating to attributed CFC income): (viii) section LK 6 (Use of tax credits by group com- (ix) panies): section LO 1 (Tax credits for Maori authority credits): the amount of any credit allowed against the income tax liability arising under subpart LP (Tax credits for supplementary dividends), other than through section LP 3(3) (Use of remaining credits): [Repealed] the amount of a credit used to pay income tax under section OJ 8 or OJ 18 (which relate to the policyholder base) (c) (d) (e) resource consent means a resource consent as deﬁned in sec- tion 2 of the Resource Management Act 1991 restitution is deﬁned in section DB 44(3) (Restitution of stolen property) for the purposes of that section retained earnings [Repealed] [Repealed] retirement savings scheme for a person means an entity eli- gible under section RH 3 (Retirement savings schemes) retirement scheme contribution is deﬁned in section RH 2 (Retirement scheme contributions) retirement scheme contributor means an entity eligible under section RH 4 (Retirement scheme contributors) retirement scheme prescribed rate, for a person and a retire- ment scheme contribution made for the person at a time in an income year, means a rate set out in schedule 6, table 2 (Pre- scribed rates: PIE investments and retirement scheme contri- butions) return, for a person’s income, has the same meaning as return of income 3047 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 return of income means a return of income required under section 33 of the Tax Administration Act 1994 returning share transfer means an arrangement— (a) under which— (i) (ii) a share (the original share) listed on an ofﬁcial list of a recognised exchange is transferred from a share supplier to a share user; and it is
 conditionally or unconditionally agreed that the share user or an associated person pays a re- placement payment to the share supplier or an as- sociated person, if a dividend is payable on the original share; and it is conditionally or unconditionally agreed that the original share or an identical share may be transferred from the share user to the share sup- plier or an associated person; and that is not a warrant or instalment receipt (iii) (b) revenue account property, for a person, means property that— (a) (b) is trading stock of the person: if disposed of for valuable consideration, would pro- duce income for the person other than income under section EE 48 (Effect of disposal or event), FA 5 (As- sets acquired or disposed of after deductions of pay- ments under lease), or FA 9 (Treatment when lease ends: lessee acquiring asset): is an emissions unit of the person: is a non-Kyoto greenhouse gas unit (c) (d) right, in sections EW 32 (Consideration for agreement for sale and purchase of property or services, hire purchase agree- ment, speciﬁed option, or ﬁnance lease) and EW 34 (Consider- ation in foreign currency), and in the deﬁnitions of short-term agreement for sale and purchase and short-term option,— (a) means— (i) (ii) (iii) a right to possess the property; or a right to income derived from the property; or a right to control or inﬂuence the disposal of in- come derived from the property; or 3048 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (iv) (v) (vi) a right, directly or indirectly, to make a decision about the property; or a right, directly or indirectly, to inﬂuence a per- son making a decision about the property; or any other right of a substantially similar nature; and (b) does not include the mere right to enforce an agreement for the sale and purchase of property or services or a speciﬁed option right in the speciﬁed property is deﬁned in section EZ 48 (Deﬁnitions) for the purposes of the old ﬁnancial arrangements rules
 right to take timber includes an easement or licence or right of taking proﬁts or produce from the land to the extent to which the easement, licence, or right relates to timber ring-fenced tax loss means an amount referred to in section IA 7 (Restrictions relating to ring-fenced tax losses) RMBS special purpose vehicle [Repealed] [Repealed] rolling average value is deﬁned in section EZ 4(5) (Valuation of livestock bailed or leased as at 2 September 1992) for the purposes of that section routine government action is deﬁned in section DB 45(4) (Bribes paid to public ofﬁcials) for the purposes of that section royalty is deﬁned in section CC 9(2) and (3) (Royalties) RSCT means retirement scheme contribution tax RSCT rules is deﬁned in section RH 1 (RSCT rules and their application) RWT means resident withholding tax and refers to an amount payable as income tax under the RWT rules RWT exemption certiﬁcate means a certiﬁcate described in section 32E of the Tax Administration Act 1994 RWT proxy is deﬁned in section 15N of the Tax Administra- tion Act 1994 RWT rules means the provisions listed in section RE 1(1) (RWT rules and their application) 3049 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 RWT substitution payment means an RWT substitution pay- ment described in section RE 2(7) (Resident passive income) RWT withholding certiﬁcate means a form provided under section 25 of the Tax Administration Act 1994 salary or wages— (a) (b) is deﬁned in section RD 5 (Salary or wages): is further deﬁned in schedule 28, clause 7 (Require- ments for complying fund rules) for the purposes of that schedule savings component means,— (a) (b) for a premium paid under a life insurance policy, the ac- tuarially determined amount of the premium that is like the policyholder making an investment and is accounted for as increasing policyholder liabilities: for a claim payable under a life insurance policy, the actuarially determined amount of the claim that is like the
 policyholder withdrawing an investment and is ac- counted for as reducing policyholder liabilities savings product policy means a life insurance policy, other than an annuity, that may or may not have a life risk component and that has or will have a surrender value which— (a) (b) is greater than zero; and does not arise wholly from the payback of a some or all of a policyholder’s premiums relating to life risk schedular income means income of any of the following types: (a) (b) schedular policyholder base income: income derived from a mining venture by a non-resident mining operator: [Repealed] category A income derived by a trustee of a group in- vestment fund: income derived by a multi-rate PIE: income derived by a portfolio tax rate entity: non-resident passive income of the kind referred to in section RF 2(3) (Non-resident passive income): (g) (c) (d) (db) (e) (f) 3050 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (h) (i) [Repealed] income to which section YD 8 (Apportionment of pre- miums derived by non-resident general insurers) applies schedular income tax liability means the amount determined under section BC 7 (Income tax liability of person with schedular income) schedular payment is deﬁned in section RD 8 (Schedular payments) schedular policyholder base income means schedular pol- icyholder base income described in section EY 2(3) (Policy- holder base) schedular taxable income, for a tax year and a person who has schedular income of a particular kind for the tax year, means the amount of taxable income that the person has in calculating the schedular income tax liability for the kind for the tax year scientiﬁc or technological uncertainty is deﬁned in section LH 7(3) (Research and development activities and related terms) for the purposes of subpart LH (Tax credits for expend- iture on research and development) seal and abandonment means the seal and abandonment of an exploratory well when a petroleum miner ﬁles a statutory
 declaration with the Commissioner stating that the miner has no intention of utilising the well in petroleum mining oper- ations or of applying for a petroleum mining permit in relation to the area in which the well is located second payment period means the period starting on the 16th day of a month and ending with the last day of the month section 200 is deﬁned in section CZ 7(4) (Primary producer co-operative companies: 1987–88 income year) for the pur- poses of that section secured amounts— (a) is deﬁned in section HB 11(12) (Limitation on deduc- tions by persons with interests in look-through compan- ies) for the purposes of that section: is deﬁned in section HG 11(12) (Limitation on deduc- tions by partners in limited partnerships) for the pur- poses of that section (b) 3051 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 secured arrangement,— (a) in the ﬁnancial arrangements rules, and in the deﬁni- tions of security arrangement and security payment, means an arrangement whose non-performance is se- cured against by a ﬁnancial arrangement: is deﬁned in section EZ 48 (Deﬁnitions) for the pur- poses of the old ﬁnancial arrangements rules security arrangement,— (a) except in the old ﬁnancial arrangements rules, means a ﬁnancial arrangement that secures a party against an- other person failing to perform the person’s obligations under a secured arrangement: in the old ﬁnancial arrangements rules, is deﬁned in sec- tion EZ 48 (Deﬁnitions) security payment,— (a) in the ﬁnancial arrangements rules, means money re- ceived by a party to a security arrangement to the extent to which— (i) the money is received for a loss incurred because of non-performance of the secured arrangement; and the money is income of the party: (ii) in the old ﬁnancial arrangements rules, is deﬁned in sec- tion EZ 48 (Deﬁnitions) (b) (b) (b) segment of foreign-sourced income is deﬁned in section LJ 4 (Meaning of segment of foreign-sourced income) for the pur- poses of Part L
 (Tax credits and other credits) selected period is deﬁned in section MF 1(3) (Application for payment of tax credit by instalment) for the purposes of that section self-assessed adverse event, for a person and a farming, agri- cultural, or ﬁshing business of the person, means an event that— (a) is 1 of the following: (i) (ii) drought, ﬁre, ﬂood, or some other natural event: disease or sickness of livestock; and (b) materially affects the business; and 3052 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (c) is described, together with the effect on the business, by the person in a statutory declaration given to the Com- missioner separated person, in subparts MA to MF and MZ (which re- late to tax credits for families), and in the deﬁnitions of spouse and civil union partner, means a person who is separated and living apart from their spouse or civil union partner, whether under an agreement for separation, or under a court order, or otherwise services,— (a) in sections CD 5 (What is a transfer of value?)
and EA 3 (Prepayments), means anything that is not goods, money, or a chose in action: in sections CX 1 (Goods and services tax) and DB 2 (Goods and services tax), means anything that is not goods or money, as each of those terms is deﬁned in section 2 of the Goods and Services Tax Act 1985 settlement, in section FE 2 (When this subpart applies) and subpart HC (Trusts), in the trust rules, and in the deﬁnitions of complying trust, disposition of property, foreign trust, and general power of appointment,— (a) means— (i) (b) an act or failure to act on the part of a person that has the effect of making the person a settlor; or a transaction or series of transactions that a per- son enters into and that has the effect of making the person a settlor; and (ii) (b) includes a settlement that a person is treated as making because the person is treated as being a settlor of the settlement settlement of relationship property is deﬁned in section FB 1(3) (What this subpart does) for the purposes of subpart FB (Transfers of relationship property) settlor,— (a) is deﬁned in section HC 27 (Who is a settlor?)
for the purposes of section CW 59 (New Zealand companies operating in Niue), section MB 7 (Family scheme in- come of settlor of trust), subpart YB (Associated per- 3053 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) sons and nominees), the consolidation rules, the trust rules, and the deﬁnition of settlement: in sections HC 36 and HC 37 (which relate to minor beneﬁciaries), has the meaning given in paragraph (a), with the following qualiﬁcations: (i) in section HC 27(2) if the transfer of value is the provision of ﬁnancial assistance by way of a loan for less than market value, it means loans existing on or after 1 April 2002 for which the interest rate on the amount borrowed is at any time during a tax year less than the interest rate set out in the Income Tax (Fringe Beneﬁt Tax, Interest on Loans) Regulations on 31 March of the previous tax year; and in section HC 27(2) the transfer of value does not include the provision of ﬁnancial assistance by way of a guarantee that was not called on or the provision of security that was not called on; and in section HC 27(2) the transfer of value does not include services that are incidental to the op- eration of the trust, such as bookkeeping or ac- counting services or those provided in being a trustee: (ii) (iii) (c) has the meaning given in paragraph (a) modiﬁed by sec- tion YB 10 (Who is a settlor?)
for the purposes of sec- tions YB 7 to YB 9 (which relate to associated persons) share— (a) (b) (bb) (c) (d) includes any interest in the capital of a company: includes a debenture to which section FA 2 (Recharac- terisation of certain debentures) applies: includes a stapled debt security to which section FA 2B(2) (Stapled debt securities) applies: includes a unit in a unit trust: includes an investor’s interest in a group investment fund if— (i) the fund is not a designated group investment fund; and the interest does not result from an investment from a designated source; and (ii) 3054 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (iii) the investor’s interest does not result from an in- vestment made in the fund on or before 22 June 1983, including an amount treated as invested at that date as pre-1983 investments under section HR 3(8) (Deﬁnitions for section HR 2: group in- vestment funds): does not include a withdrawable share in a building so- ciety, except in the deﬁnitions of investment society dividend and withdrawable share: is further deﬁned in section CE 6 (Meaning of share: when share acquired) for the purposes of sections CE 2 to CE 4and CE 7 (which relate to share purchase agree- ments): is further deﬁned in section DC 15 (Some deﬁnitions) for the purposes of sections DC 12 to DC 15 (which relate to share purchase schemes) (e) (f) (g) share-lending arrangement means an arrangement, entered into on or after 1 July 2006, that is a returning share transfer, and— (a) (b) the agreed term of the arrangement is 1 year or less; and the terms and conditions of the arrangement, including the share-lending collateral, are ordinary commercial terms and conditions consistent with those that would apply between parties negotiating at arm’s length; and the amount of tax calculated under section RE 17 (Replacement payments under share-lending arrange- ments) for a replacement payment, if any, is paid; and the share user disposes of the original share or an iden- tical share to the share
 supplier during the agreed term of the arrangement, or within a further period allowed by the Commissioner; and the share user— (i) (c) (d) (e) agrees to issue, and issues, a credit transfer no- tice in relation to a dividend paid for the original share: establishes and maintains an imputation credit account, if a dividend is payable for the original share during the agreed term of the arrangement (ii) 3055 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 share-lending collateral means an amount, or an adjustment to the amount, that— (a) is related to the market value of an original share under a share-lending arrangement, and the amount is paid to a person,— (i) by a share user or an associated person to secure the transfer of the original share to the share user: by a share supplier or an associated person for the re-transfer of the original share or an identical share to them; and is not a replacement payment (ii) (b) share-lending right means, for a share supplier under a share- lending arrangement, a conditional or unconditional right to acquire the original share or an identical share under the share- lending arrangement share purchase agreement is deﬁned in sections CE 7 (Mean- ing of share purchase agreement) and CZ 1 (Share purchase agreement income before 19 July 1968) for the purposes of sections CE 1 to CE 4 (which relate to employment income), EX 38 (Exemption for employee share purchase scheme of grey list company), HC 27B(3B) (Who is a settlor?
), and the deﬁnition of proﬁt distribution plan share purchase scheme means a scheme approved for the time being by the Commissioner for the purposes of section DC 12 (Loans to employees under share purchase schemes) share reorganisation, in the FIF rules and for a person and an attributing interest in a FIF, means an action of the FIF that causes an increase or reduction, other than for consideration, of the attributing interests held by persons, including the per- son, who hold attributing interests in the FIF immediately be- fore the action share supplier means a person, described as a share supplier, in the deﬁnition of returning share transfer, from whom a share user acquires an original share under a returning share transfer share user means a person, described as a share user in the deﬁnition of returning share transfer, who acquires an ori- ginal share under a returning share transfer 3056 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 shareholder— (a) includes— (i) (ii) a holder of a share; and a member of a company, whether the company’s capital is divided into shares or not: (c) (b) does not include a holder of a withdrawable share in a building society, except in the deﬁnitions of investment society dividend and withdrawable share: in subparts HA (Qualifying companies (QC)) and OE (Branch equivalent tax accounts (BETA)) and OJ (Pol- icyholder credit accounts (PCA)), in the FDP rules and the imputation rules, and in the deﬁnition of share- holder dividend statement, includes a sharemilker (as deﬁned in section 2 of the Sharemilking Agreements Act 1937), to the extent to which the sharemilker de- rives payment for produce transactions directly from a co-operative dairy or milk company shareholder agreement, for a company,— (a) includes an arrangement to which the shareholders of the company are parties, in their capacity as sharehold- ers; but does not include an arrangement that is— the company’s constitution: (i) the terms of a debt security: (ii) the terms of the company’s shares
 (iii) shareholder base, for a life insurer, means the base for share- holder income and allowable deductions and to which income of a particular source or nature, and tax credits received are apportioned under section EY 4 (Apportionment of income of particular source or nature, and of tax credits) shareholder base allowable deductions means shareholder base allowable deductions described in section EY 3(2) (Shareholder base) shareholder base income means shareholder base income de- scribed in section EY 3(1) (Shareholder base) shareholder decision-making right means a right, carried by a share issued by a company or an option over a share issued (b) 3057 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 by a company, to vote or participate in any decision-making concerning— (a) a dividend or other distribution to be paid or made by the company, whether on a liquidation of the company or otherwise, excluding decision-making undertaken by directors acting only in their capacity as directors; or the constitution of the company; or a variation in the capital of the company; or the appointment of a director of the company (b) (c) (d) shareholder dividend statement means a statement required by section 29 of the Tax Administration Act 1994 to be given by a company to a shareholder to whom is paid a dividend referred to in that section shareholder-employee,— (a) in sections EA 4 (Deferred payment of employment in- come) and EI 9 (Matching rule for employment income of shareholder-employee), means a person who receives or is entitled to receive salary, wages, or other income to which section RD 3(2) to (4) (PAYE income payments) applies: in the FBT rules and in section 177A of the Tax Admin- istration Act 1994, means a person who is, in relation to a close company,— (i) a shareholder in and an employee of the com- pany; and (ii) a person to whom section RD 3(2) to (4) applies: does not include an owner of a look-through company or a person who has a
 look-through interest for a look- through company (b) (c) shareholder FDP ratio is deﬁned in section OC 39 (Meaning of shareholder FDP ratio) for the purposes of sections OC 23 and OC 36 (which relate to FDP credits and debits) shares of the same class means any 2 or more shares of a company— (a) that carry the same shareholder decision-making rights; and that carry the same rights, in terms of priority, amount payable per share, and otherwise, to be paid proﬁts dis- (b) 3058 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (c) tributed by the company and distributions of assets of the company on a cancellation of its shares; and for which either the owner, or the amount paid for the issue, of each share is the same if— (i) the company gives notice to the Commissioner in a form approved by the Commissioner, that the company chooses to treat the shares as a separate class; and the company can at all times from the time of issue of each share identify and distinguish the share from any other shares in the company (ii) shearer means a person who— (a) undertakes the shearing of sheep, other than in the carry- ing on of a business by the person; and is not a person permanently employed on the premises where the shearing shed is situated (b) (b) shearing shed hand means a person who— (a) is employed in or about the shearing shed, other than in the carrying on of a business by the person; and is not— (i) (ii) (iii) a shearer: a wool classer: a person permanently employed on the premises where the shearing shed is situated short term agreement for the sale and purchase of property is deﬁned in section EZ 48 (Deﬁnitions) for the purposes of the old ﬁnancial arrangements rules short term trade credit is deﬁned in section EZ 48 (Deﬁni- tions) for the purposes of the old ﬁnancial arrangements rules short-term agreement for sale and purchase means an agreement for the sale and purchase of property or services of 1 of the following classes: (a) an agreement
 under which settlement must take place or the services must be performed on or before the 93rd day after the date on which the agreement is entered into: if the date on which the agreement is entered into cannot be established, an agreement under which settlement (b) 3059 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (ii) must take place or the services must be performed on or before the 93rd day after the earlier of— (i) the date on which the buyer ﬁrst makes a payment to the seller; and the date on which the ﬁrst right in the property is transferred or the services are performed: if the agreement is continuous and the seller renders periodic invoices for the property or services, an agree- ment under which settlement must take place or the ser- vices must be performed on or before the 93rd day after the date on which each invoice is rendered (c) short-term bailment is deﬁned in section EC 27 (Some deﬁ- nitions) for the purposes of subpart EC (Valuation of livestock) short-term charge facility is deﬁned in section CX 25(3) (Beneﬁts provided by charitable organisations) for the pur- poses of the FBT rules short-term option,— (a) in the ﬁnancial arrangements rules, means a speciﬁed option of 1 of the following classes: (i) (ii) an option under which settlement must take place or the services must be performed on or before the 93rd day after the date on which the option is entered into: if the date on which the option is entered into can- not be established, an option under which settle- ment must take place or the services must be per- formed on or before the 93rd day after the earlier of the date on which the buyer ﬁrst makes a pay- ment to the seller and the date on which the ﬁrst right in the property is transferred or the services are performed: (b) in the old ﬁnancial arrangements rules, is deﬁned in sec- tion EZ 48 (Deﬁnitions) shortfall penalty is deﬁned in section 3(1) of the Tax Admin- istration Act 1994 sickness, accident, or death
 beneﬁt fund means a sickness, accident, or death beneﬁt fund that is— (a) established for the beneﬁt of— (i) employees; or 3060 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (ii) (iii) the members of an incorporated society; or the surviving spouses and dependants of those employees or members; and approved by the Commissioner (b) signiﬁcant capital activity, in section DO 1(1)(g) (Enhance- ments to land) and schedule 20 (Expenditure on farming, horti- cultural, aquacultural, and forestry improvements) and in re- lation to a farming or agricultural business on land in New Zealand,— (a) means an activity that enables a change in the nature or character of a farming activity from that undertaken on the land immediately before the change; and excludes an activity that enables a change in the inten- sity of a farming practice employed in a farming activity on the land (b) signiﬁcant ﬁnancial hardship [Repealed] [Repealed] slice rule means the rule set out in section CD 23(3) (Order- ing rule and slice rule) for calculating the amount of available subscribed capital per share small-business person is deﬁned in section RC 40 (Some def- initions) for the purposes of subpart RC (Provisional tax) small partnership means a partnership that is not a limited partnership and has 5 or less partners, none of whom are com- panies or partnerships social assistance payment is deﬁned in section MA 8 (Some deﬁnitions for family scheme) for the purposes of subparts MA to MF and MZ (which relate to tax credits for families) social assistance suspensory loan is deﬁned in section EZ 48 (Deﬁnitions) for the purposes of the old ﬁnancial arrangements rules sound commercial reason is deﬁned in section EW 26(7) (Change of spreading method) for the purposes of that section.
sound recording is deﬁned in the Copyright Act 1994 source in New Zealand, for income, means a source described in section YD 4 (Classes of income treated as having New Zealand source) and section YZ 1 (Source rule for interest) special account means a special home ownership account 3061 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (e) (f) (g) (h) special corporate entity means— a Crown Research Institute: (a) a group investment fund: (b) a Life Insurance Fund: (c) an entity that has not issued shares and is engaged (d) mainly in the business of providing life insurance or other insurance to the public: a local authority: a public authority: a State enterprise: a statutory producer board other than a body that derives only exempt income: any other statutory body that does not issue shares, if— the statutory body is established by an Act of the (i) Parliament of New Zealand or by a statute of the legislature, whether federal or state or provincial, of any territory outside New Zealand; and the Commissioner, having regard to the terms of the statute by which the body is established, is satisﬁed that it would be appropriate to treat the body as a special corporate entity for the purposes of those provisions of this Act whose application is dependent on the measurement of voting and market value interests: (ii) (i) (j) 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 special excluded depreciable property is deﬁned in section EE 67 (Other deﬁnitions) special home ownership account means a special home own- ership account operated by a person under Part 2 of the Home Ownership Savings Act 1974 special rate is deﬁned in section EE 67 (Other deﬁnitions) speciﬁed activity is deﬁned in section IZ 1(12) (Use of speci- ﬁed activity net losses) for the purposes of that section speciﬁed activity net income is deﬁned in section IZ 1(12) (Use of speciﬁed activity net losses) for
 the purposes of that section 3062 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 speciﬁed activity net loss is deﬁned in section IZ 1(12) (Use of speciﬁed activity net losses) for the purposes of that section speciﬁed base cost for 1983 income year property means the greater of— (a) (b) the cost price or acquisition value of the property; and the market value of the property on the last day of the 1982–83 income year speciﬁed insurance premium is deﬁned in section CX 16(3) (Contributions to life or health insurance) speciﬁed lease means a lease of a personal property lease asset if— (a) the lease is entered into in the period starting on 6 Au- gust 1982 and ending on 19 May 1999 and the lease has a guaranteed residual value, or has a term of the lease that is more than 36 consecutive months, or has a term of the lease that is the economic life of the asset because the Commissioner considers that the asset has an eco- nomic life of less than 36 months, and— (i) (ii) (iii) (iv) the lessee becomes the owner of the asset at the end of the term of the lease: the lessee has the option to repurchase the asset at the end of the term of the lease at a price that the Commissioner considers will be signiﬁcantly lower than the market value of the asset at the end of the term of the lease: the total of all personal property lease payments and the guaranteed residual value is more than or equal to, or to a small extent less than, the cost price of the asset: the lessor and the lessee agree that the lessee is li- able for the payment of all, or nearly all, expend- iture incurred for the costs of repair and mainten- ance of the asset and any other incidental costs arising during the term of the lease for the use of the asset: (b) the lease is entered into in the period starting on 6 Au- gust 1982 and ending on 19 May 1999 and the lessee acquires ownership of the asset by any means, whether from the lessor or another person: 3063 Part Y s YA 1 Income Tax Act
 2007 Reprinted as at 2 September 2013 (c) the lease is entered into in the period starting on 28 Oc- tober 1983 and ending on 19 May 1999 and— (i) a person other than the lessee acquires the asset; and the lessee and the person who acquires the asset are associated (ii) speciﬁed livestock— (a) means an animal of a type speciﬁed in schedule 17, col- (b) umn 1 (Types and classes of livestock); and does not include an animal that is high-priced livestock, except as provided in section EC 37 (Bailment) speciﬁed living allowance means— (a) (b) (c) (d) an income-tested beneﬁt; or a veteran’s pension; or New Zealand superannuation; or a basic grant or an independent circumstances grant, made under regulations made under section 193 of the Education Act 1964, section 303 of the Education Act 1989, or an enactment substituted for those sections; or compensation described in section RD 5(1)(b)(iii) (Salary or wages) if the compensation relates to a day forming part of a continuous period of eligibility for such compensation and the day falls after the earlier of— (i) (e) the day having the same date as the ﬁrst day of the continuous period of eligibility for compensation and occurring in the third calendar month after that ﬁrst day; and the last day of the third calendar month after the ﬁrst day of the continuous period of eligibility for compensation (ii) speciﬁed mineral is deﬁned in section CU 28 (Meaning of speciﬁed mineral) speciﬁed option,— (a) in the ﬁnancial arrangements rules,— (i) means an option to acquire or dispose of property or services; and 3064 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (ii) includes an agreement for the sale and purchase of property or services entered into as a result of the exercise of the option: (b) in the old ﬁnancial arrangements rules, is deﬁned in sec- tion EZ 48 (Deﬁnitions) speciﬁed period,— (a) (b) (c) is deﬁned in section EH 36 (Other deﬁnitions) for the purposes of the main income equalisation scheme:
 is deﬁned in section EH 62 (Other deﬁnitions) for the purposes of the adverse event income equalisation scheme: is deﬁned in section EH 79 (Other deﬁnitions) for the purposes of the thinning operations income equalisation scheme spouse, in subparts MA to MF and MZ (which relate to tax credits for families), and in the deﬁnitions of entitlement period, full-time earner, and separated person, does not include a separated person spreading method means a method listed in section EW 14(2) (What spreading methods do) stallion means a stallion that is bloodstock standard accounting year has the meaning given in section YE 1(4) (References to balance dates and years) standard balance date has the meaning given in section YE 1(4) (References to balance dates and years) standard-cost household service means a service that is a standard-cost household service under a determination made by the Commissioner under section 91AA of the Tax Admin- istration Act 1994 standard dividend means a dividend derived from a company by a shareholder in the form of— (a) money; or (b) (c) (d) standard income year is deﬁned in section YE 1(4) (Refer- ences to balance dates and years) the release of an obligation to repay an amount lent; or a distribution of property of the company; or a taxable bonus issue 3065 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 standard value, for non-speciﬁed livestock, means the value set under section EC 29 (Determining standard values) standing timber includes trees that would be standing timber if they were mature trees stapled, for a debt security and a share, is deﬁned in section FA 2B(5) (Stapled debt securities) stapled debt security means a debt security that is stapled to a share, if the share is not a ﬁxed-rate share starting date [Repealed] [Repealed] State enterprise means a person speciﬁed in schedule 36, part A (Government enterprises) statutory producer board means— (a) a body speciﬁed in schedule 37 (Statutory producer
 boards): a marketing authority as deﬁned in the Primary Products Marketing Act 1953 that is established by regulations made under that Act: a primary producer board or marketing board estab- lished by an Act (b) (c) statutory trustee company is deﬁned in section 2 of the Trustee Companies Act 1967 straight-line method, for depreciation, is deﬁned in section EE 67 (Other deﬁnitions) straight-line rate is deﬁned in section EE 67 (Other deﬁni- tions) subsidised transport means the provision of transport or an entitlement to transport to an employee by the employer, or by a company (the group company) in the same group of com- panies as the employer, in a quarter, or an income year if sec- tion RD 60 (Close company option) applies, if— (a) the employer or group company carries on a business consisting of, or including, transporting the public for hire or reward; and the employer or group company provides the transport or the entitlement to the employee in the course of trans- porting the public; and (b) 3066 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (c) (d) the transport or entitlement is not transport in a motor vehicle; and the amount, if any, the employee pays is less than the highest amount the employer or group company charges the public, in the quarter or income year in which the provision to the employee occurs, for transport that is equivalent in terms of class, extent, and occasion to the transport or entitlement the employer or group company provides to the employee (c) (d) (e) subsidy claim form means a form that a listed PAYE inter- mediary must provide to the Commissioner in an electronic format prescribed by the Commissioner showing,— (a) (b) the tax ﬁle number of the listed PAYE intermediary; and the tax ﬁle number and name of each employer in rela- tion to which a subsidy is claimed; and the tax ﬁle number and name of each employee of each employer in relation to whom a subsidy is claimed under sections RP 4 (Payment of
 subsidies to certain PAYE intermediaries) and 15M of the Tax Administration Act 1994; and the period to which the form relates; and the number of PAYE income payments made by the listed PAYE intermediary to each employee in the period to which the form relates; and the amount of subsidy that the listed PAYE intermediary claims for the period to which the form relates substantial business assets is deﬁned in section GB 28(6) (In- terpretation of terms used in section GB 27) for the purposes of section GB 27 (Attribution rule for income from personal services) substituting debenture is deﬁned in section FA 2(5) (Rechar- acterisation of certain debentures) superannuation category 1 scheme means a scheme or fund that was at the relevant time a superannuation category 1 scheme under the Income Tax Act 1976 superannuation category 2 scheme means a scheme or fund that was at the relevant time a category 2 scheme under the Income Tax Act 1976 (f) 3067 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 superannuation category 3 scheme means a scheme or fund that was at the relevant time a superannuation category 3 scheme under the Income Tax Act 1976 superannuation contribution— (a) means a disposition of property to or for the beneﬁt of a superannuation scheme in consideration for which fully adequate consideration in money or money’ worth does not pass from the scheme to a person; and does not include a beneﬁt that may pass from the scheme to a person under the terms of the scheme (b) superannuation fund— (a) means a superannuation scheme registered under the Superannuation Schemes Act 1989 or a KiwiSaver scheme that is registered under the KiwiSaver Act 2006; and for a superannuation fund that is a trust, means the trustees of the fund (b) superannuation policy is deﬁned in section DZ 2(3) (Life in- surers acquiring property before 1 April 1988) for the purposes of that section and section EZ 1 (Life insurers acquiring prop- erty before 1 April 1988)
 superannuation savings scheme means all the entitlements and tax credits arising under subpart MK (Tax credits for Kiwi- Saver schemes and complying superannuation funds) superannuation scheme— (a) means— (i) a trust or unit trust established by its trust deed mainly for the purposes of providing retirement beneﬁts to beneﬁciaries who are natural persons or paying beneﬁts to superannuation funds; or [Repealed] a company that is not a unit trust, is not resident in New Zealand, and is established mainly for the purpose of providing retirement beneﬁts to members or relatives of members who are natural persons; or an arrangement constituted under an Act of the Parliament of New Zealand, other than the New Zealand Superannuation and Retirement Income (ii) (iii) (iv) 3068 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (v) Act 2001, mainly for the purpose of providing retirement beneﬁts to natural persons; or an arrangement constituted under the legislation of a country, territory, state, or local authority outside New Zealand mainly for the purpose of providing retirement beneﬁts to natural persons; and (b) for a superannuation scheme that is a trust, means the trustees of the scheme supplement, for a provision in Part D (Deductions) means to allow a person a deduction without requiring them to satisfy the general permission supplementary dividend, for a company and for a person deriving a dividend (the ﬁrst dividend) from the company, means a dividend that— (a) is paid by the company in the same income year as the ﬁrst dividend; and is paid in relation to the ﬁrst dividend; and is derived by the person; and is equal in amount to the tax credit calculated, for the ﬁrst dividend, under section LP 2(2) (Tax credits for supplementary dividends) (b) (c) (d) supplementary dividend holding company [Repealed] [Repealed] supply is deﬁned in section GC 14 (Deﬁnitions for sections GC 6 to GC 13) for the purposes of sections GC 6, GC 9 and GC 10 (which relate to
 transfer pricing arrangements) supporting asset base is deﬁned in section EY 17 (Policy- holder base income: proﬁt participation policies) surrender, for an emissions unit, means surrender as deﬁned in section 4(1) of the Climate Change Response Act 2002 surrender value means the amount paid (the surrender amount) when a life insurance policy is cancelled before it reaches the maturity or expiry date contracted for under the policy, excluding an amount that is the repayment of unex- pired premiums.
There is no netting off against the surrender amount of unpaid premiums, outstanding loans, or interest balances (the debt obligations) owed by an insured unless the 3069 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 policy is terminated by the insurer and the debt obligations are greater than the surrender amount systematic, investigative, and experimental activities is de- ﬁned in section LH 7(2) (Research and development activities and related terms) for the purposes of subpart LH (Tax credits for expenditure on research and development) tax means income tax, but in the provisions in which the term “income tax” has an extended or limited meaning, “tax” has a corresponding meaning tax account with the Commissioner, for a person, means an account dealing with the person’s transactions with the Com- missioner in relation to income tax tax advantage, in sections GB 35 and GB 36 (which relate to imputation arrangements to obtain a tax advantage), GB 42 and GB 43 (which relate to Maori authority credit arrange- ments to obtain a tax advantage) and sections OB 61, OC 28, OD 21, and OK 20 (which relate to memorandum accounts), means— (a) the allowance, wholly or partly, of a tax credit under section LE 1 (Tax credits for imputation credits): the allowance, wholly or partly, of a tax credit under section LF 1 (Tax credits for FDP credits): the obtaining of a refund of FDP under section LF 8 (Credits for persons who are non-resident or who re- ceive exempt income): the allowance, wholly or partly, of a tax credit under section LO 1 (Tax credits for Maori authority credits): the arising of a credit to an imputation credit account under sections OB 4 to OB 29 (which relate to credits arising to imputation credit accounts): the arising of a credit to an FDP account under sections OC 6 to OC 12 (which relate to credits arising to FDP accounts): the arising of a credit to a Maori authority credit account under sections OK 2 to OK 9 (which relate to credits arising to Maori authority credit accounts) (b)
 (c) (d) (e) (f) (g) tax agent means a person— (a) who prepares the annual returns required to be ﬁled for 10 or more persons; and 3070 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (b) who— (i) (ii) carries on a professional public practice; or carries on any business in which annual returns required to be ﬁled are prepared; or is the Maori Trustee (iii) tax avoidance includes— (a) (b) (c) directly or indirectly altering the incidence of any in- come tax: directly or indirectly relieving a person from liability to pay income tax or from a potential or prospective liability to future income tax: directly or indirectly avoiding, postponing, or reducing any liability to income tax or any potential or prospect- ive liability to future income tax tax avoidance arrangement means an arrangement, whether entered into by the person affected by the arrangement or by another person, that directly or indirectly— (a) (b) has tax avoidance as its purpose or effect; or has tax avoidance as 1 of its purposes or effects, whether or not any other purpose or effect is referable to ordinary business or family dealings, if the tax avoidance purpose or effect is not merely incidental tax-base property is deﬁned in section FC 1(2) (What this subpart does) for the purposes of subpart FC (Distribution, transmission, and gifts of property) tax charity is deﬁned in section CW 41(5) for the purposes of that section and sections CW 42 and CW 43 tax code, for an employee, means the employee’s tax code under section 24B of the Tax Administration Act 1994 tax credit— (a) (b) is deﬁned in section LA 10 (Meaning of tax credit): is deﬁned in section GA 1(7) (Commissioner’s power to adjust) for the purposes of that section tax credit advantage— (a) is deﬁned in section GB 36(5) (Reconstruction of im- putation arrangements to obtain tax advantage) for the purposes of that section: 3071 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) is deﬁned in section GB
 43(5) (Reconstruction of Maori authority credit arrangements to obtain tax advantage) for the purposes of that section tax ﬁle number means an identiﬁcation number that the Com- missioner has allocated to a person— (a) (b) generally for the purposes of this Act; or speciﬁcally for the purpose of the issue to the person of an RWT exemption certiﬁcate under section RE 27 (RWT exemption certiﬁcates) tax loss means an amount described in section IA 2(1) (Tax losses) and includes unused tax loss components arising in the current tax year or in an earlier tax year tax loss component is deﬁned in section IA 2(7) (Tax losses) tax pooling account is deﬁned in section RP 17B (Tax pooling accounts and their use) tax position means, for the purposes of sections HZ 4B and HZ 4D (which relate to the transition of a qualifying company into a partnership or sole tradership), a status, right, obliga- tion, liability, asset, or other thing authorised or arising under, required or imposed by, or necessary to comply with an Inland Revenue Act, and includes tax assets and accounting positions in relation to an Inland Revenue Act, and debts payable to the Commissioner tax withheld means an amount of tax— (a) withheld from a PAYE income payment under the PAYE rules to the extent to which it is a tax credit under section LB 1 (Tax credits for PAYE income payments): (b) withheld and paid to the Commissioner under the RWT and NRWT rules to the extent to which it is a tax credit under section LB 3 or LB 5 (which relate to tax credits for passive income): paid under regulations made under section 225 of the Tax Administration Act 1994 (c) tax year— (a) means a period starting on 1 April and ending on (b) 31 March: is deﬁned in section IW 1(6) (Shortfall penalties) for the purposes of that section 3072 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 taxable activity,— (a) (b) (c) (d) (e) in the provisional tax rules, the RWT rules, and the NRWT rules, is deﬁned in section 6
 of the Goods and Services Tax Act 1985, except that section 6(3)(d) does not apply: is deﬁned in section DB 3(3) (Determining tax liabil- ities) for the purposes of that section taxable bonus issue means— (a) (b) a bonus issue in lieu: a bonus issue that a company chooses to treat as a divi- dend under section CD 8 (Elections to make bonus issue into dividend): in the case of a bonus issue made before the enactment of this Act, a bonus issue that the company chose to treat as a dividend under a provision of an earlier Act corresponding to section CD 8: a bonus issue that is a dividend under section CD 10 (Bonus issue by foreign unit trust instead of money or property): a bonus issue that is a share issued under a proﬁt distri- bution plan taxable distribution, for a non-complying trust or a foreign trust, is deﬁned in section HC 15 (Taxable distributions from non-complying and foreign trusts) taxable income means taxable income for a tax year calcu- lated under section BC 5 (Taxable income) taxable Maori authority distribution is deﬁned in section HF 7 (Taxable Maori authority distributions) taxable period has the meaning given in section 2(1) of the Goods and Services Tax Act 1985 taxable supply has the meaning given in section 2(1) of the Goods and Services Tax Act 1985 taxation law, in sections EZ 52 (References to new rules in- clude old rules), ZA 3 (Transitional provisions), ZA 4 (Saving of binding rulings), and ZA 5 (Saving of accrual determin- ations), means— (a) a provision that is a taxation law under section 91B of the Tax Administration Act 1994: 3073 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) a provision of the Income Tax Act 1994 or Income Tax Act 2004 taxed CFC connection, for a CFC and a country or territory (the host country), means a relationship meeting the follow- ing requirements: (a) the CFC is resident in the host country under section YD 3 (Country of residence of foreign companies); and there is no other
 country or territory for which the CFC is— (i) (ii) (iii) a resident under the domestic law of the country or territory: liable to income tax because of the CFC’s domi- cile, residence, place of incorporation, or centre of management: treated as a resident under an agreement with the host country that would be a double tax agreement if it were an agreement between New Zealand and the host country; and the CFC has no presence outside the host country that is— (i) (ii) a ﬁxed establishment: a permanent establishment under an agreement, between another country or territory and the host country, that would be a double tax agreement if it were between New Zealand and the host coun- try; and the CFC is liable in the host country to tax on its in- come because of the CFC’s domicile, residence, place of incorporation, or centre of management, or there is another foreign company (the parent company) that— wholly owns the CFC under the laws of New (i) Zealand and the host country; and has a relationship with the host country meeting the requirements of paragraphs (a) to (c); and because of the parent company’s domicile, resi- dence, place of incorporation, or centre of man- agement, is liable in the host country to tax on the CFC’s income in the same period that the CFC (iii) (ii) (b) (c) (d) 3074 (b) (c) (d) Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 would be liable on its income if it were a com- pany liable for tax taxed FIF connection, for a FIF and a country or territory (the host country), means a relationship meeting the following re- quirements: (a) the FIF is resident in the host country under section YD 3 (Country of residence of foreign companies); and there is no other country or territory for which the FIF is— (i) (ii) (iii) a resident under the domestic law of the country or territory: liable to income tax because of the FIF’s domi- cile, residence, place of incorporation, or centre of management: treated as a resident under an agreement
 with the host country that would be a double tax agreement if it were an agreement between New Zealand and the host country; and the FIF has no presence outside the host country that is— (i) (ii) a ﬁxed establishment: a permanent establishment under an agreement, between another country or territory and the host country, that would be a double tax agreement if it were between New Zealand and the host coun- try; and the FIF is liable in the host country to tax on its income because of the FIF’s domicile, residence, place of in- corporation, or centre of management, or there is a for- eign company (the parent company) that— (i) wholly owns the FIF under the laws of New Zealand and the host country; and has a relationship with the host country meeting the requirements of paragraphs (a) to (c); and because of the parent company’s domicile, resi- dence, place of incorporation, or centre of man- agement, is liable in the host country to tax on the FIF’s income in the same period that the FIF (ii) (iii) 3075 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 would be liable on its income if it were a com- pany liable for tax taxi is deﬁned in section 2(1) of the Land Transport Act 1998 taxicab [Repealed] [Repealed] taxpayer means a person who is, or may be, liable to perform or comply with an obligation imposed by this Act technology is deﬁned in section LH 7(5) (Research and devel- opment activities and related terms) for the purposes of subpart LH (Tax credits for expenditure on research and development) telecommunications service means a service, relating to in- formation of any kind including pictures, sound, and data, that is— (a) the transmission, emission, or reception of such infor- mation in analogue or digital code by a technical system using any equipment, including a cable or satellite and associated equipment, for the transmission through any medium of energy in any form, including electric cur- rent or electromagnetic radiation: the transfer or
 assignment of the right to transmit, emit, or receive such information by a system referred to in paragraph (a): the provision of access to a global network for the trans- mission, emission, or reception of such information (b) (c) temporary building means— (a) (b) [Repealed] a building that— (i) (ii) is erected at a construction site; and is to be demolished or removed on or before the completion of the construction; or (c) a building that— (i) was erected, and is used, to house speciﬁc plant or machinery; and (ii) will have to be demolished to remove or replace the plant or machinery ten percent capital reduction is deﬁned in section CD 22(9) (Returns of capital: off-market share cancellations) for the purposes of that section 3076 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 term of the lease— (a) means the period of time from the date on which a lease (b) (c) (d) starts until it ends: if the term is indeﬁnite, means the period of time during which the lessee is unable, under the lease, to terminate the lease without incurring a penalty: if 2 or more consecutive leases are treated under para- graph (d)(v) of the deﬁnition of lease as 1 lease of a personal property lease asset, the term of the lease runs from the start of the ﬁrst term of the lease to the end of the last of the leases: is deﬁned in section EZ 8(5) (Premium paid on land leased before 1 April 1993) for the purposes of that sec- tion terminal tax means an amount calculated for a tax year under section BC 8 (Satisfaction of income tax liability) terminal tax date, for a tax year and a person, means the date determined under section RA 13 (Payment dates for terminal tax) for the payment of terminal tax for the tax year; and if the person does not have terminal tax for the tax year, section RA 13 applies as if the person did have terminal tax for the tax year terminating share means a share in a building society that is included in a group of shares, if the group is to terminate—
 (a) at the end of a period speciﬁed on the issue of the shares; or on the attainment of a result speciﬁed on the issue of the shares (b) tertiary institution [Repealed] [Repealed] thinning operations is deﬁned in section EH 79 (Other deﬁ- nitions) thinning operations deposit is deﬁned in section EH 79 (Other deﬁnitions) thinning operations income equalisation account is deﬁned in section EH 79 (Other deﬁnitions) 3077 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (b) (iii) (iv) (v) (vi) (vii) thinning operations income equalisation scheme means the scheme referred to in section EH 1(2)(c) (Income equalisation schemes) thinning operations maximum deposit is deﬁned in section EH 78 (Meaning of thinning operations maximum deposit) timber— (a) is deﬁned in section DP 11(4) (Cost of timber) for the purposes of that section: includes standing timber in— section DP 11: (i) section EB 24 (Apportionment on disposal of (ii) business assets that include trading stock): section FB 6 (Timber or right to take timber): section GC 1 (Disposals of trading stock at below market value): the deﬁnition of dispose, paragraph (b): the deﬁnition of right to take timber: the deﬁnition of trading stock, paragraph (b)(iv) time bar means the provisions of sections 108 and 108B of the Tax Administration Act 1994 time of emigration for an emigrating company, is the time at which the emigrating company becomes a non-resident for the purposes of subpart FL (Emigration of resident companies) time of the sale, in sections DC 10 (Sale of business: trans- ferred employment income obligations) and EA 4 (Deferred payment of employment income), means the date on which the agreement for sale of the business or part of the business is settled by the exchange of the seller’s business or the part for the buyer’s consideration Tokelau International Trust Fund means the trust governed by the Deed concerning the Tokelau International Trust Fund dated 10 November 2004 and signed by Her
 Majesty the Queen in right of New Zealand and the Government of Tokelau total group assets, for a New Zealand group, is deﬁned in section FE 16 (Total group assets) for the purposes of subpart FE (Interest apportionment on thin capitalisation) 3078 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 total group debt, for a New Zealand group, is deﬁned in sec- tion FE 15 (Total group debt) for the purposes of subpart FE (Interest apportionment on thin capitalisation) total tax credit, for a person, means the total amount of their tax credits under Part L (Tax credits and other credits) total taxable supplies is deﬁned in section RC 8(8) (GST ratio method) for the purposes of that section and sections RC 11, RC 16, RC 19, and RC 31 (which relate to the calculation and payment of provisional tax using the GST ratio method) tracking account [Repealed] [Repealed] tracking associate [Repealed] [Repealed] trade credit is deﬁned in section EZ 48 (Deﬁnitions) for the purposes of the old ﬁnancial arrangements rules trading stock— (a) is deﬁned in section EB 2 (Meaning of trading stock) except for the provisions to which paragraphs (b) and (d) apply: in sections CG 6 (Receipts from insurance, indemnity, or compensation for trading stock), EB 24 (Apportion- ment on disposal of business assets that include trading stock), FB 13 (Trading stock), and GC 1 to GC 3 (which relate to the sale of trading stock for inadequate consid- eration),— (i) (ii) includes anything produced or manufactured: includes anything acquired for the purposes of manufacture or disposal: includes livestock: includes timber or a right to take timber: includes land whose disposal would produce in- come under any of sections CB 6 to CB 15 (which relate to income from land): includes any thing for which expenditure is in- curred and which would be trading stock if pos- session of it were taken: (iii) (iv) (v) (vi) (b) 3079 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (vii)
 does not include a ﬁnancial arrangement to which the ﬁnancial arrangements rules or the old ﬁnan- cial arrangements rules apply: for the purposes of section GC 1 (Disposals of trading stock at below market value), has an expanded meaning as set out in section GC 1(4): in the old ﬁnancial arrangements rules, is deﬁned in sec- tion EZ 48 (Deﬁnitions) (c) (d) trading transactions is deﬁned in section CD 34B (Distribu- tions to members of co-operative companies) transaction shares is deﬁned in section CD 34B (Distribu- tions to members of co-operative companies) transfer means, for the purposes of sections HZ 4B and HZ 4D (which relate to the transition of a qualifying company into a partnership or sole tradership), a sale, purchase, disposal, ac- quisition, cessation, assumption, discharge, assignment, vest- ing, divesting, gift, supply, or other transfer in relation to li- abilities and assets, and associated legal rights and obligations transfer amount is deﬁned in section FB 19(3) (Leased as- sets) for the purposes of that section transfer of value— (a) (b) means a transfer that occurs when— is deﬁned in section CD 5 (What is a transfer of value?
): (i) (ii) person A provides money or money’s worth to person B; and if person B provides any money or money’s worth to person A as part of the arrangement de- scribed in subparagraph (i), the market value of what person A provides is more than the market value of what person B provides; and (c) includes the release of an obligation that person B has to pay money to person A, either by agreement or oper- ation of law; and transfers value has a corresponding meaning (d) transfer pricing arrangement is deﬁned in section GC 6(2) (Purpose of rules and nature of arrangements) 3080 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 transferee— (a) transferor— (a) (b) (b) (c) is deﬁned in section DZ 5(6) (Farm-out arrangements for petroleum mining before 16 December 1991) for the purposes of that section: in subpart FB (Transfers of relationship property), for property transferred under a relationship agreement, means the person to whom the property is transferred under the agreement is deﬁned in section CZ 8(2) (Farm-out arrangements for petroleum mining before 16 December 1991) for the purposes of that section: is deﬁned in section DZ 5(6) (Farm-out arrangements for petroleum mining before 16 December 1991) for the purposes of that section: in subpart FB (Transfers of relationship property), for property transferred under a relationship agreement, means the person from whom the property is trans- ferred under the agreement transitional period is deﬁned in section OZ 7 (Memorandum accounts in transitional period) for the purposes of sections OZ 8 to OZ 15 transitional resident is deﬁned in section HR 8(2) (Transi- tional residents) transitional year, in relation to provisional tax, means the period for which a person ﬁles a return under section 39 of the Tax Administration Act 1994 trans-Tasman imputation group means the group described in section FN 8(1) (Trans-Tasman imputation groups and resi- dent imputation subgroups) trust, in the deﬁnitions of superannuation scheme and unit trust, has the
 meaning given by the Trustee Act 1956 trust rules means— (a) (b) [Repealed] sections DV 1 to DV 7 (which relate to superannuation funds): section DV 9 (Trusts): (c) 3081 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 (d) (e) (f) (g) section GB 22 (Arrangements involving trust beneﬁ- ciary income): subpart HC (Trusts): subpart HZ (Terminating provisions): sections LE 4, LE 5, LF 2, LF 3, and LO 2 (which relate to tax credits for beneﬁciary minors): sections 59 and 93B of the Tax Administration Act 1994 (h) trustee,— (a) for a trust,— (i) means the trustee only in the capacity of trustee of the trust; and includes all trustees, for the time being, of the trust: (ii) (b) (c) (d) (e) (f) includes an executor and administrator: includes the Public Trust: includes the Maori Trustee: for a superannuation scheme that is a trust or that is treated by this Act as a trust, includes a person by whom the investments of the scheme, or a part of the scheme, are managed or controlled: is deﬁned in section DC 15 (Some deﬁnitions) for the purposes of sections DC 12 to DC 15 (which relate to share purchase schemes) trustee income is deﬁned in section HC 7 (Trustee income) turnover, in subpart EB (Valuation of trading stock (includ- ing dealer’s livestock)) and section HG 6 (Disposal of trading stock),— (a) means the total income that a business derives in an income year as a result of trading by that business; and does not include the value of closing stock (b) type, in subparts EC (Valuation of livestock) and FB (Trans- fers of relationship property), and in the deﬁnitions of class and herd livestock, means a category of livestock listed in schedule 17, column 1 (Types and classes of livestock) UFTC [Repealed] [Repealed] UFTC accounting period [Repealed] [Repealed] 3082 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 ultimate owner of a company means a person— (a) who has an ownership interest in the company calcu- lated under section FE 2
 (When this subpart applies); and in whom no ownership interest is held by a person who holds an ownership interest in the company of 50% or more (b) ultimate parent is the company described in section FE 34 (Identifying ultimate parent) for the purposes of subpart FE (Interest apportionment on thin capitalisation) unclassiﬁed beneﬁt is deﬁned in section CX 37 (Meaning of unclassiﬁed beneﬁt) unit holder, for a unit trust, means a person who holds a bene- ﬁcial interest in the property that is subject to the trust unit trust— (a) means a scheme or arrangement that is made for the purpose or has the effect of providing facilities for sub- scribers, purchasers, or contributors to participate, as beneﬁciaries under a trust, in income and capital gains arising from the property that is subject to the trust; and does not include— (i) (ii) (iii) a trust for the beneﬁt of debenture holders: the Common Fund of Public Trust: a group investment fund established by Public Trust: the Common Fund of the Maori Trustee: a group investment fund established under the Trustee Companies Act 1967: a friendly society registered under the Friendly Societies and Credit Unions Act 1982: (iv) (v) (vi) (b) (vii) a superannuation fund: (viii) an employee share purchase scheme: (ix) a fund that meets the requirements of section CW 45 (Funeral trusts): any other trust of any speciﬁed kind that is de- clared by the Governor-General, by Order in Council, not to be a unit trust for the purposes of section HD 13 (Unit trusts) (x) 3083 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 unit trust manager is deﬁned in section CD 16(4) (Certain dividends not increased by tax credits) for the purposes of that section unlisted trust is deﬁned in section CD 22(9) (Returns of cap- ital: off-market share cancellations) for the purposes of that section unlisted widely-held trust means a widely-held trust the units or interests in which are not quoted on the ofﬁcial list of a recognised
 exchange unwind is deﬁned in section HR 10 (What happens when ve- hicle stops being ﬁnancial institution special purpose vehicle?)
valuation premiums is deﬁned in section EY 29(7) (Share- holder base other proﬁt: proﬁt participation policies that are new business) for the purposes of that section variable principal debt instrument,— (a) in the ﬁnancial arrangements rules, means a ﬁnancial arrangement that contemplates that 1 party may, on de- mand or call,— (i) (ii) advance further amounts to the other party; or require the return of all amounts advanced to the other party, if the other party’s rights and obli- gations under the ﬁnancial arrangement are ex- pressed in a foreign currency: (b) in the old ﬁnancial arrangements rules, is deﬁned in sec- tion EZ 48 (Deﬁnitions) is deﬁned in section venture investment agreement CW 13(6) (Proceeds from share or option acquired under venture investment agreement) Venture Investment Fund means the company called New Zealand Venture Investment Fund Limited that is listed in Schedule 2 of the Crown Entities Act 2004 veteran’s pension means a veteran’s pension, other than a portable veteran’s pension, paid or payable under Part 6 of the War Pensions Act 1954 volunteer is deﬁned in section CW 62B (Voluntary activities) for the purposes of that section 3084 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 (b) voting interest— (a) means, for a person and a company and a time, the per- centage voting interest that the person is treated as hold- ing in the company at the time under sections YC 2 to YC 20 (which relate to the measurement of company ownership): in subpart HA (Qualifying companies (QC)), and in the deﬁnition of effective interest, is described in section HA 44 (Measuring effective interests): in section YC 13(4) and (5) (Corporate spin-outs), means, for a person and a company and a time, the percentage voting interest that the person is treated as holding in the company under section YC 2 (Voting interests), as modiﬁed by section YC 13(7) (c) WFF tax credit means Working for Families tax credit and is deﬁned in section MA 8 (Some deﬁnitions for family scheme) wholly-owned group
 has the same meaning as wholly-owned group of companies wholly-owned group of companies is deﬁned in section IC 4(1) (Common ownership: wholly-owned groups of com- panies) widely-held company means, at any time, a company that, at the time,— (a) has no less than 25 shareholders (treating all associated shareholders as 1 person); and is not a closely-held company (b) widely-held GIF means a group investment fund that meets the requirements of— (a) section HM 14(1) (Minimum number of investors), treating the group investment fund as having 1 investor class consisting of all investors in the fund: 1 or more of paragraphs (a) and (c) to (e) of the deﬁn- ition of public unit trust, treating the group investment fund as a unit trust (b) 3085 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 widely-held superannuation fund means a superannuation fund that meets the requirements of— (a) section HM 14(1) (Minimum number of investors), treating the superannuation fund as having 1 investor class consisting of all investors in the fund: 1 or more of paragraphs (a) and (c) to (e) of the deﬁn- ition of public unit trust, treating the superannuation fund as a unit trust (b) (c) (b) widely-held trust means a unit trust or group investment fund to which 1 of the following applies: (a) it has at least 100 unit-holders or investors, treating all associated persons as 1 person; or paragraph (a) does not apply to it but it can still reason- ably be regarded as a widely-held investment vehicle for direct investment by the public; or paragraph (a) does not apply to it but only because of unusual or temporary circumstances, such as the fact that it was recently established or is to be terminated; or paragraph (a) does not apply to it but it can reasonably be regarded as a vehicle mainly for investment by unit trusts, group investment funds, or superannuation funds that are widely-held vehicles for direct investment wine is deﬁned in section CV 8 (Regulations: Australian
 wine producer rebate) for the purposes of that section withdrawal [Repealed] [Repealed] withdrawable share— (a) means a share in a building society— (d) (i) (ii) that bears a rate of dividend set on the issue of the share and that is redeemable at the end of a ﬁxed term or at the option of the shareholder; or that has been issued under section 31A of the Building Societies Act 1965; or that is a terminating share; and (iii) does not include a share in a building society that is ir- redeemable, or redeemable only at the society’s option, on which a dividend is declared and payable from the annual surplus revenue of the building society (b) 3086 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 withdrawal certiﬁcate, for a special account that is a special home ownership account, means a withdrawal certiﬁcate as deﬁned in the Home Ownership Savings Act 1974 withdrawal income means withdrawal income as determined under section RZ 7 (Withdrawal income) withdrawal tax means withdrawal tax imposed by section RZ 8 (Payment and rate of withdrawal tax) withholding tax limitation is deﬁned in section DA 2(5) (General limitations) working day means any day of the week other than— (a) Saturday, Sunday, Good Friday, Easter Monday, Anzac Day, Labour Day, the Sovereign’s birthday, and Wai- tangi Day; and a day in the period starting on 25 December in a year and ending on 15 January (both dates inclusive) in the following year (b) (ii) working owner means a person who, in relation to a look- through company that is not wholly or mainly engaged in in- vesting money or in holding, or dealing in, shares, securities, investments, or estates or interests in land, ignoring section HB 1 (Look-through companies are transparent),— (a) (b) is an owner of the look-through company; and personally and actively performs duties that— (i) are required to be performed in carrying on the business of the look-through company; and are performed by the person during the currency of,
 and as required by, a contract of employment workplace group policy is deﬁned in section EY 30 (Transi- tional adjustments: life risk) work-related relocation is deﬁned in section CW 17B(4) (Re- location payments) work-related vehicle is deﬁned in section CX 38 (Meaning of work-related vehicle) year means a 12-month period year of payment [Repealed] [Repealed] year of transfer, for a relationship agreement, means the in- come year in which the date of transfer falls 3087 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 zero-rated investor, for an investor in an investor class of a PIE, means an investor referred to in section HM 57 (Pre- scribed investor rates for certain investors: 0%).
zero-rated portfolio investor [Repealed] [Repealed] Compare: 2004 No 35 s OB 1 Section YA 1 1973 version provisions: repealed, on 1 April 2010, by sec- tion 557(2) of the Taxation (International Taxation, Life Insurance, and Remed- ial Matters) Act 2009 (2009 No 34).

Section YA 1 1988 version provisions: repealed, on 1 April 2010, by sec- tion 557(3) of the Taxation (International Taxation, Life Insurance, and Remed- ial Matters) Act 2009 (2009 No 34).
Section YA 1 1990 version provisions: repealed, on 1 April 2010, by sec- tion 557(4) of the Taxation (International Taxation, Life Insurance, and Remed- ial Matters) Act 2009 (2009 No 34).

Section YA 1 abating WFF tax credit: inserted, on 1 April 2008, by section 550(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section YA 1 ACC: amended, on 21 December 2010, by section 189 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section YA 1 accident compensation earnings-related payment paragraph (d): amended, on 21 December 2010, by section 189 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section YA 1 accident compensation payment for attendant care: repealed, on 17 July 2013, by section 98(1) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Section YA 1 accommodation: inserted (with effect on 1 April 2008), on 6 Oc- tober 2009, by section 557(5) of the Taxation (International Taxation, Life In- surance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 accounting proﬁts method: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 132(2) of the Taxation (International Investment and Remedial Mat- ters) Act 2012 (2012 No 34).
Section YA 1 actuarial reserves: amended, on 1 July 2010, by section 557(6) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 actuarially determined: inserted (with effect on 1 April 2008), on 6 October 2009, by section 557(7) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 after-income tax earnings: repealed (with effect on 30 June 2009), on 6 October 2009, by section 557(8) of the Taxation (International Tax- ation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 after-income tax loss: repealed (with effect on 30 June 2009), on 6 October 2009, by section 557(9) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
3088 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 Section YA 1 agricultural, horticultural, or viticultural company: amended (with effect on 1 April 2008), on 6 October 2009, by section 557(10) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 amalgamated company: substituted (with effect on 30 Septem- ber 2010), on 29 August 2011, by section 130(2) of the Taxation (Tax Admin- istration and Remedial Matters) Act 2011 (2011 No 63).

Section YA 1 amalgamating company: substituted (with effect on 30 Septem- ber 2010), on 29 August 2011, by section 130(2) of the Taxation (Tax Admin- istration and Remedial Matters) Act 2011 (2011 No 63).
Section YA 1 amalgamation: substituted (with effect on 30 September 2010), on 29 August 2011, by section 130(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section YA 1 amount of tax: amended (with effect on 1 April 2008), on 7 Sep- tember 2010 (applying for the 2008–09 and later income years), by section 117(2) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, Kiwi- Saver, and Remedial Matters) Act 2010 (2010 No 109).
Section YA 1 amount of tax: amended, on 1 April 2008, by section 550(3) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section YA 1 ancillary tax paragraph (kb): inserted, on 1 April 2008, by sec- tion 550(4) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section YA 1 arm’s length amount: inserted (with effect on 30 June 2009), on 6 October 2009, by section 557(11) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 asset paragraph (ab): inserted (with effect on 1 April 2013 and applying for the 2013–14 and later income years for an item of property referred to in section DG 3(2)(a)(i), and for the 2014–15 and later income years for an item of property referred to in section DG 3(2)(a)(ii) and (iii)), on 17 July 2013, by section 98(2) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Section YA 1 asset paragraph (b): amended (with effect on 31 December 2012), on 17 July 2013, by section 98(3) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Section YA 1 asset paragraph (c): inserted (with effect on 31 December 2012), on 17 July 2013, by section 98(3) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Section YA 1 asset base: inserted, on 1 July 2010, by section 557(12) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 asset value: inserted (with effect on 1 April 2013 and applying for the 2013–14 and later income years for an item of property referred to in section DG 3(2)(a)(i), and for the 2014–15 and later income years for an item of property referred to in section DG 3(2)(a)(ii) and (iii)), on 17 July 2013, by section 98(4) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
3089 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Section YA 1 associated, associated person, person associated: substituted, on 1 April 2010, by section 557(13) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 associated internal software developer: inserted, on 1 April 2008, by section 550(5) of the Taxation (Business Taxation and Remedial Mat- ters) Act 2007 (2007 No 109).
Section YA 1 associated non-attributing active CFC: replaced (with effect on 1 July 2009 and applying for income years beginning on or after that date), on 7 May 2012, by section 132(3) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section YA 1 attributable CFC amount: inserted (with effect on 30 June 2009), on 6 October 2009, by section 557(16) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 attributable FIF income method: inserted (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 132(4) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section YA 1 attributed PIE income: inserted, on 1 April 2010, by sec- tion 557(17) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 attributed PIE loss: inserted, on 1 April 2010, by section 557(17) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 attribution period: inserted, on 1 April 2010, by section 557(18) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 Australian complying superannuation scheme: inserted, on 1 July 2013, by section 117(3) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).

Section YA 1 Australian non-attributing shares: inserted, on 17 July 2013, by section 98(5) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Section YA 1 available tax loss paragraph (c): added (with effect on 1 April 2008), on 29 August 2011, by section 130(3) of the Taxation (Tax Administra- tion and Remedial Matters) Act 2011 (2011 No 63).

Section YA 1 available tax loss paragraph (d): added (with effect on 1 April 2008), on 29 August 2011, by section 130(3) of the Taxation (Tax Administra- tion and Remedial Matters) Act 2011 (2011 No 63).
Section YA 1 balance date: amended, on 29 August 2011, by section 130(4) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section YA 1 basic tax rate paragraph (a): amended, on 1 April 2008, by sec- tion 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
3090 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 Section YA 1 basic tax rate paragraph (a): amended, on 1 April 2008, by sec- tion 550(6) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section YA 1 beneﬁcial interest: inserted, on 1 April 2011 (applying for in- come years beginning on or after 1 April 2011), by section 132(2) of the Taxa- tion (GST and Remedial Matters) Act 2010 (2010 No 130).
Section YA 1 beneﬁt fund PIE: inserted, on 1 April 2010, by section 557(19) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 best estimate assumptions: inserted, on 1 July 2010, by sec- tion 557(20) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
Section YA 1 BETA company: repealed, on 1 July 2012 (applying for income years beginning on or after that date), by section 132(5) of the Taxation (Inter- national Investment and Remedial Matters) Act 2012 (2012 No 34).

Section YA 1 bonus issue: replaced (with effect on 1 October 2012), on 17 July 2013, by section 98(7) of the Taxation (Livestock Valuation, Assets Expend- iture, and Remedial Matters) Act 2013 (2013 No 52).
inserted, on 1 April 2010, by sec- Section YA 1 boutique investor class: tion 557(21) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 boutique investor class paragraph (d): amended (with effect on 1 April 2010), on 21 December 2010 (applying for the 2010–11 and later income years), by section 132(3) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section YA 1 branch equivalent company: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 132(6) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section YA 1 branch equivalent income: amended (with effect on 30 June 2009), on 6 October 2009, by section 557(22) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 branch equivalent loss: amended (with effect on 30 June 2009), on 6 October 2009, by section 557(23) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 branch equivalent method: amended (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 132(7) of the Taxation (International Investment and Remedial Mat- ters) Act 2012 (2012 No 34).
Section YA 1 branch equivalent tax account: replaced, on 1 July 2012 (ap- plying for income years beginning on or after that date), by section 132(8) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section YA 1 building: substituted, on 1 April 2011 (applying for the 2011–12 and later income years), by section 132(4) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
3091 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Section YA 1 calculation method: amended (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 132(9) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section YA 1 calculation period: inserted, on 1 April 2010, by section 557(24) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 cancellation: amended (with effect on 1 April 2008), on 6 Oc- tober 2009, by section 557(25) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 capital contribution: substituted (with effect on 20 May 2010), on 28 May 2010, by section 96(3) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Section YA 1 capital contribution paragraph (a)(i): amended (with effect on 1 October 2010), on 2 November 2012, by section 154(3) of the Taxation (An- nual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section YA 1 capital contribution paragraph (a)(iii): replaced (with effect on 1 April 2013), on 17 July 2013, by section 98(8) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Section YA 1 capital contribution paragraph (a)(iv): replaced (with effect on 1 April 2011 and applying for the 2011–12 and later income years), on 17 July 2013, by section 98(9) of the Taxation (Livestock Valuation, Assets Expend- iture, and Remedial Matters) Act 2013 (2013 No 52).

Section YA 1 capital contribution paragraph (a)(v): inserted (with effect on 1 October 2010), on 2 November 2012, by section 154(4) of the Taxation (An- nual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section YA 1 capital contribution property: inserted (with effect on 1 April 2011 and applying for the 2011–12 and later income years), on 17 July 2013, by section 98(10) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Section YA 1 car: amended, on 10 May 2011, by section 100(3) of the Land Transport (Road Safety and Other Matters) Amendment Act 2011 (2011 No 13).
Section YA 1 charitable or other public beneﬁt gift: amended (with effect on 1 April 2008), on 7 September 2010, by section 117(4) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).

Section YA 1 charitable or other public beneﬁt gift: amended, on 6 January 2010, by section 557(26) of the Taxation (International Taxation, Life Insur- ance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 charitable organisation paragraph (a): amended, on 1 April 2008, by section 550(7) of the Taxation (Business Taxation and Remedial Mat- ters) Act 2007 (2007 No 109).

Section YA 1 charitable purpose paragraph (b)(i): amended (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 140(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
3092 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 Section YA 1 child: amended (with effect on 1 April 2008), on 7 September 2010 (applying for the 2008–09 and later income years), by section 117(5) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).

Section YA 1 child paragraph (c): amended, on 1 April 2008, by section 550(8) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section YA 1 civil union partner: amended, on 29 May 2012 (for the purposes of sections LC 4 and LC 5 and schedule 2, and of sections 24B and 24H(7) of the Tax Administration Act 1994, applying for PAYE income payments made on or after 1 April 2013), by section 7(2) of the Taxation (Budget Measures) Act 2012 (2012 No 38).

Section YA 1 civil union partner: amended, on 1 April 2009, by section 36(2) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).
Section YA 1 class closing animal balance: inserted (with effect on 28 March 2012), on 17 July 2013, by section 98(11) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Section YA 1 class of policies: inserted, on 1 July 2010, by section 557(27) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 combined imputation and CTR ratio: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 132(10) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section YA 1 combined tax and earner-related payment paragraph (b)(iii): amended, on 21 December 2010, by section 189 of the Taxation (GST and Re- medial Matters) Act 2010 (2010 No 130).
Section YA 1 commercial building: inserted, on 1 April 2011 (applying for the 2011–12 and later income years), by section 132(5) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section YA 1 commercial ﬁt-out: inserted, on 1 April 2011 (applying for the 2011–12 and later income years), by section 132(6) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section YA 1 company paragraph (ab): inserted, on 1 April 2008, by section 23(3) of the Taxation (Limited Partnerships) Act 2008 (2008 No 2).

Section YA 1 company paragraph (abb): inserted, on 1 April 2011 (applying for income years beginning on or after 1 April 2011), by section 132(7) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section YA 1 company paragraph (ac): inserted, on 1 April 2008, by section 23(3) of the Taxation (Limited Partnerships) Act 2008 (2008 No 2).
Section YA 1 company paragraph (ad): inserted, on 1 April 2008, by section 23(3) of the Taxation (Limited Partnerships) Act 2008 (2008 No 2).

Section YA 1 compensation: repealed, on 29 May 2012 (for the purposes of sections LC 4 and LC 5 and schedule 2, and of sections 24B and 24H(7) of the Tax Administration Act 1994, applying for PAYE income payments made on or after 1 April 2013), by section 7(3) of the Taxation (Budget Measures) Act 2012 (2012 No 38).
3093 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Section YA 1 complying fund calculation period: repealed, on 1 April 2009, by section 56(2) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).

Section YA 1 complying fund rules: replaced, on 1 April 2012, by section 13(2) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).
Section YA 1 complying superannuation fund: amended, on 1 May 2011, by section 82 of the Financial Markets Authority Act 2011 (2011 No 5).

Section YA 1 compulsory employer contribution: inserted, on 1 April 2008, by section 135(2) of the Taxation (KiwiSaver) Act 2007 (2007 No 110).

Section YA 1 consideration paragraph (aa): inserted (with effect on 1 April 2008), on 6 October 2009, by section 557(28) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 consideration paragraph (b)(ii): replaced (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 132(11) of the Taxation (International Investment and Remed- ial Matters) Act 2012 (2012 No 34).

Section YA 1 consolidated BETA group: repealed, on 1 July 2012 (applying for income years beginning on or after that date), by section 132(12) of the Tax- ation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section YA 1 consolidated FDP group: inserted (with effect on 1 April 2008), on 6 October 2009, by section 557(29) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 continuity provisions paragraph (i): repealed, on 1 July 2012 (ap- plying for income years beginning on or after that date), by section 132(13) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section YA 1 contract of employment: inserted, on 1 April 2011 (applying for income years beginning on or after 1 April 2011), by section 132(8) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section YA 1 control: repealed, on 1 April 2010, by section 557(31) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 convert: substituted (with effect on 1 January 2009), on 6 Oc- tober 2009, by section 557(32) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 cost of timber: substituted (with effect on 1 April 2008), on 7 De- cember 2009, by section 118(2) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section YA 1 council-controlled organisation paragraph (b): amended, on 2 December 2011, by section 14(1) of the Local Government Borrowing Act 2011 (2011 No 77).

Section YA 1 council-controlled organisation paragraph (b): amended, on 1 November 2010, by section 113(1) of the Local Government (Auckland Tran- sitional Provisions) Act 2010 (2010 No 37).
3094 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 Section YA 1 cover review period: inserted, on 1 July 2010, by section 557(33) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 credit account continuity provisions paragraph (b): amended, on 1 July 2012 (applying for income years beginning on or after that date), by section 132(14) of the Taxation (International Investment and Remedial Mat- ters) Act 2012 (2012 No 34).
Section YA 1 credit account continuity provisions paragraph (c): repealed, on 1 July 2012 (applying for income years beginning on or after that date), by sec- tion 132(14) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section YA 1 credit card repayment insurance: inserted, on 1 July 2010, by section 557(35) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 creditable membership: inserted, on 1 April 2008, by section 135(3) of the Taxation (KiwiSaver) Act 2007 (2007 No 110).

Section YA 1 creditable membership paragraph (b)(i): amended (with effect on 1 April 2008), on 6 October 2009, by section 557(36)(a) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 creditable membership paragraph (b)(ib): inserted (with effect on 1 April 2008), on 6 October 2009, by section 557(36)(b) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 creditor workout: substituted (with effect on 1 April 2008), on 7 December 2009, by section 118(3) of the Taxation (Consequential Rate Align- ment and Remedial Matters) Act 2009 (2009 No 63).
Section YA 1 CTR: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 132(15) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section YA 1 CTR account: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 132(15) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section YA 1 CTR additional dividend: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 132(15) of the Taxation (International Investment and Remedial Mat- ters) Act 2012 (2012 No 34).

Section YA 1 CTR company: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 132(15) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section YA 1 CTR credit: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 132(15) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
3095 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Section YA 1 CTR debit: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 132(15) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section YA 1 CTR group member: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 132(15) of the Taxation (International Investment and Remedial Mat- ters) Act 2012 (2012 No 34).
Section YA 1 CTR holding company: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 132(15) of the Taxation (International Investment and Remedial Mat- ters) Act 2012 (2012 No 34).

Section YA 1 CTR ratio: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 132(15) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section YA 1 CTRA: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 132(15) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section YA 1 current accounting year: repealed (with effect on 30 June 2009), on 6 October 2009, by section 557(38) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 debt security: inserted (with effect on 1 April 2008), on 6 Oc- tober 2009, by section 557(39) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 debt value: inserted (with effect on 1 April 2013 and applying for the 2013–14 and later income years for an item of property referred to in section DG 3(2)(a)(i), and for the 2014–15 and later income years for an item of property referred to in section DG 3(2)(a)(ii) and (iii)), on 17 July 2013, by section 98(12) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
inserted (with effect Section YA 1 deductible foreign equity distribution: on 30 June 2009), on 6 October 2009, by section 557(40) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 deductible foreign equity distribution paragraph (a): replaced (with effect on 27 October 2010), on 2 November 2012, by section 154(5) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section YA 1 deductible output tax: inserted, on 1 April 2011, by section 132(9) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section YA 1 deductible output tax paragraph (a)(iii): amended (with effect on 1 April 2011), on 2 November 2012, by section 154(6) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section YA 1 deductible output tax paragraph (a)(iv): inserted (with effect on 1 April 2011), on 2 November 2012, by section 154(6) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

3096 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 Section YA 1 dependent child: substituted, on 24 August 2010 (applying for the 2008–09 and later income years), by section 7(1) of the Taxation (Deﬁnitions of Dependent Child) Act 2010 (2010 No 104).
Section YA 1 derivative instrument: substituted (with effect on 30 June 2009), on 6 October 2009, by section 557(41) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 derived from New Zealand: repealed, on 21 December 2010, by section 132(10) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section YA 1 descendant: inserted (with effect on 28 March 2012), on 17 July 2013, by section 98(13) of the Taxation (Livestock Valuation, Assets Expend- iture, and Remedial Matters) Act 2013 (2013 No 52).

Section YA 1 descended associate: inserted (with effect on 28 March 2012), on 17 July 2013, by section 98(14) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Section YA 1 development: amended, on 1 April 2008, by section 550(10) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section YA 1 development investments: repealed (with effect on 1 April 2013 and applying for the 2013–14 and later income years), on 17 July 2013, by section 98(15) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Section YA 1 direct income interest: substituted (with effect on 1 April 2008), on 6 October 2009, by section 557(42) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 dispose paragraph (g): amended, on 1 April 2008, by section 23(4) of the Taxation (Limited Partnerships) Act 2008 (2008 No 2).

Section YA 1 dispose paragraph (h): added, on 1 April 2008, by section 23(4) of the Taxation (Limited Partnerships) Act 2008 (2008 No 2).
Section YA 1 district health board: repealed, on 1 October 2009, by section 20(2) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).

Section YA 1 dividend paragraph (a): substituted (with effect on 30 June 2009), on 6 October 2009, by section 557(43) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 dividend paragraph (b): replaced (with effect on 1 April 2008), on 2 November 2012 (applying for the 2008–09 and later income years), by section 154(7) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section YA 1 dividend paragraph (c)(ii): substituted, on 1 April 2010, by sec- tion 557(44)(a) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
Section YA 1 dividend paragraph (d)(i): substituted, on 1 April 2010, by sec- tion 557(44)(b) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).

3097 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Section YA 1 dividend paragraph (f): added (with effect on 1 April 2008), on 7 December 2009, by section 118(4) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section YA 1 donee organisation: inserted, on 6 January 2010, by sec- tion 557(45) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 dwelling: inserted, on 1 April 2011 (applying for the 2011–12 and later income years), by section 132(11) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
inserted, on 1 July 2010, Section YA 1 early life regime application day: by section 557(46) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 effective look-through interest: inserted, on 1 April 2011 (ap- plying for income years beginning on or after 1 April 2011), by section 132(12) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section YA 1 election commencement year: inserted (with effect on 30 June 2009), on 2 November 2012 (applying for income years beginning on or after 1 July 2009), by section 154(8) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section YA 1 elective attributing CFC: inserted (with effect on 30 June 2009), on 2 November 2012 (applying for income years beginning on or after 1 July 2009), by section 154(8) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section YA 1 elective attributing FIF: inserted (with effect on 30 June 2009), on 2 November 2012 (applying for income years beginning on or after 1 July 2009), by section 154(8) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section YA 1 eligible hedge: inserted, on 17 July 2013, by section 98(16) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Section YA 1 emergency event: inserted, on 6 October 2009, by sec- tion 557(47) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 emissions unit: inserted (with effect on 1 January 2009), on 6 Oc- tober 2009, by section 557(48) of the Taxation (International Taxation, Life In- surance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 emissions unit shortfall year: inserted (with effect on 1 April 2010), on 21 December 2010 (applying for the 2010–11 and later income years), by section 132(13) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section YA 1 employee paragraph (ab): inserted (with effect on 1 April 2008), on 29 August 2011, by section 130(5) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section YA 1 employee paragraph (b): amended (with effect on 1 April 2008), on 6 October 2009, by section 557(49) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

3098 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 Section YA 1 employee paragraph (c)(i): amended (with effect on 1 April 2011), on 2 November 2012, by section 154(9) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section YA 1 employee paragraph (c)(i): amended, on 1 April 2008, by section 550(12) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section YA 1 employee paragraph (c)(ii): amended (with effect on 1 April 2008), on 6 October 2009, by section 557(50) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 employee paragraph (db): inserted, on 1 April 2011 (applying for income years beginning on or after 1 April 2011), by section 132(14) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section YA 1 employee’s superannuation accumulation paragraph (a): sub- stituted (with effect on 1 April 2008), on 6 October 2009, by section 557(51) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 employer paragraph (b)(iib): inserted, on 1 April 2011 (applying for income years beginning on or after 1 April 2011), by section 132(15) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section YA 1 employer paragraph (b)(iib): amended (with effect on 1 April 2011), on 2 November 2012, by section 154(10)(a) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section YA 1 employer paragraph (c)(i): substituted (with effect on 1 April 2008), on 6 October 2009, by section 557(52)(a) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 employer paragraph (c)(i): amended (with effect on 1 April 2011), on 2 November 2012, by section 154(10)(b) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section YA 1 employer paragraph (c)(ii): amended (with effect on 1 April 2008), on 6 October 2009, by section 557(52)(b) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 employer contribution: inserted, on 1 April 2008, by section 135(5) of the Taxation (KiwiSaver) Act 2007 (2007 No 110).
Section YA 1 employer monthly schedule paragraph (e): substituted, on 6 January 2010, by section 557(53) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 employer monthly schedule paragraph (f): amended, on 1 April 2012, by section 223 of the Student Loan Scheme Act 2011 (2011 No 62).
Section YA 1 employer monthly schedule paragraph (h): substituted (with effect on 1 April 2008), on 6 October 2009, by section 557(54) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 employer monthly schedule paragraph (k): amended, on 1 April 2010 (applying for the 2010–11 and later income years), by section 118(5) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
3099 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Section YA 1 employer-sourced superannuation savings paragraph (a): amended (with effect on 1 April 2008), on 6 October 2009, by sec- tion 557(55)(a) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 employer-sourced superannuation savings paragraph (c): amended (with effect on 1 April 2008), on 6 October 2009, by sec- tion 557(55)(b)(i) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 employer-sourced superannuation savings paragraph (c): amended (with effect on 1 April 2008), on 6 October 2009, by sec- tion 557(55)(b)(ii) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 employer sponsored group policy: repealed, on 1 July 2010, by section 118(6) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section YA 1 employer’s superannuation cash contribution: inserted (with effect on 1 April 2008), on 6 October 2009, by section 557(57) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 employer’s superannuation contribution: substituted (with ef- fect on 1 April 2008), on 6 October 2009, by section 557(57) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 employment: amended, on 23 November 2010, by section 25 of the Governor-General Act 2010 (2010 No 122).
Section YA 1 employment paragraph (b): amended, on 1 April 2008, by section 550(13) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section YA 1 employment income: amended (with effect on 1 April 2008), on 2 November 2012 (applying for the 2008–09 and later income years), by section 154(11) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section YA 1 engaged in full-time work: repealed, on 29 May 2012 (for the purposes of sections LC 4 and LC 5 and schedule 2, and of sections 24B and 24H(7) of the Tax Administration Act 1994, applying for PAYE income pay- ments made on or after 1 April 2013), by section 7(4) of the Taxation (Budget Measures) Act 2012 (2012 No 38).
Section YA 1 entering owner: inserted, on 1 April 2011 (applying for income years beginning on or after 1 April 2011), by section 132(16) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section YA 1 entering partner: inserted, on 1 April 2008, by section 23(5) of the Taxation (Limited Partnerships) Act 2008 (2008 No 2).

Section YA 1 equity instrument: inserted, on 1 April 2008, by section 550(14) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section YA 1 ESCT: substituted (with effect on 1 April 2008), on 6 October 2009, by section 557(58) of the Taxation (International Taxation, Life Insur- ance, and Remedial Matters) Act 2009 (2009 No 34).

3100 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 Section YA 1 ESCT rate threshold amount: amended (with effect on 1 April 2008), on 6 October 2009, by section 557(59) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 ETS unit: repealed (with effect on 1 January 2009), on 6 October 2009, by section 557(60) of the Taxation (International Taxation, Life Insur- ance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 excess debt outbound company: inserted (with effect on 30 June 2009), on 6 October 2009, by section 557(61) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 excess credit amount: replaced (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 132(17) of the Taxation (International Investment and Remedial Mat- ters) Act 2012 (2012 No 34).

Section YA 1 excluded ancillary tax paragraph (d): repealed (with effect on 1 April 2008), on 6 October 2009, by section 557(62) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 excluded ﬁxed rate security: amended (with effect on 1 April 2008), on 6 October 2009, by section 557(63) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 excluded preference share: inserted (with effect on 1 April 2008), on 6 October 2009, by section 557(64) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 exempt interest paragraph (f): amended, on 21 December 2010, by section 189 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section YA 1 existing business: inserted, on 1 July 2010, by section 557(65) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 existing privilege: amended, on 24 May 2013, by section 65 of the Crown Minerals Amendment Act 2013 (2013 No 14).
Section YA 1 exit level: inserted, on 1 April 2010, by section 557(66) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 exit period: inserted, on 1 April 2010, by section 557(66) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 expected life risk proportion: inserted, on 1 July 2010, by sec- tion 557(67) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).

Section YA 1 fair dividend rate hedge portion: inserted, on 17 July 2013, by section 98(17) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Section YA 1 fair dividend rate method: substituted (with effect on 1 April 2008), on 6 October 2009, by section 557(68) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

3101 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Section YA 1 fair value method: substituted (with effect on 1 April 2008), on 6 October 2009, by section 557(69) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 family assistance credit: repealed, on 1 April 2008, by section 550(16) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section YA 1 family plus: repealed, on 1 April 2008, by section 550(17) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section YA 1 family support: repealed, on 1 April 2008, by section 550(18) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section YA 1 FDP rules: substituted (with effect on 30 June 2009), on 6 Oc- tober 2009, by section 557(70) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 FDP rules paragraph (d): repealed (with effect on 1 April 2008 and applying for the 2008–09 and later income years), on 17 July 2013, by section 98(18) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Section YA 1 FIF net loss: amended (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 132(18) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section YA 1 ﬁnance lease paragraph (b): amended, on 1 April 2008, by section 550(19) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section YA 1 ﬁnance lease paragraph (c): added, on 1 April 2008, by section 550(19) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section YA 1 ﬁnancial asset: inserted (with effect on 30 June 2009), on 6 Oc- tober 2009, by section 557(71) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 ﬁnancial institution: inserted (with effect on 1 June 2010), on 7 September 2010, by section 117(6) of the Taxation (Annual Rates, Trans- Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).

Section YA 1 ﬁnancial institution special purpose vehicle: inserted (with ef- fect on 1 June 2010), on 7 September 2010, by section 117(6) of the Taxa- tion (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remed- ial Matters) Act 2010 (2010 No 109).
Section YA 1 ﬁnancial institution special purpose vehicle paragraph (c): sub- stituted, on 21 December 2010, by section 132(17)(a) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section YA 1 ﬁnancial institution special purpose vehicle paragraph (d)(ii): amended, on 21 December 2010, by section 132(17)(b) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
3102 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 Section YA 1 ﬁnancial risk: inserted, on 1 July 2010, by section 557(72) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 ﬁnancial statements: substituted, on 1 April 2010, by sec- tion 557(73) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 ﬁnancially independent paragraph (c): amended, on 15 July 2013, by section 138 of the Social Security (Beneﬁt Categories and Work Focus) Amendment Act 2013 (2013 No 13).

Section YA 1 ﬁnancially independent paragraph (d): amended, on 20 August 2012, by section 26(2) of the Social Security (Youth Support and Work Focus) Amendment Act 2012 (2012 No 50).
Section YA 1 ﬁrst tracking date: repealed (with effect on 30 June 2009), on 6 October 2009, by section 557(74) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 ﬁshing quota emissions unit: inserted (with effect on 1 July 2010), on 7 September 2010, by section 117(7) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Section YA 1 ﬁxed-rate foreign equity: inserted (with effect on 30 June 2009), on 6 October 2009, by section 557(75) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 ﬁxed-rate share paragraph (a): amended, on 2 November 2012, by section 154(13) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section YA 1 ﬁxed-rate share paragraph (e): repealed (with effect on 1 April 2008), on 6 October 2009, by section 557(76)(b) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 ﬁxed-rate share paragraph (f): substituted (with effect on 1 April 2008), on 7 December 2009, by section 118(7) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section YA 1 ﬁxed-rate share paragraph (g): substituted (with effect on 1 April 2008), on 7 December 2009, by section 118(7) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section YA 1 ﬁxed-rate share paragraph (h): added (with effect on 1 April 2008), on 7 December 2009, by section 118(7) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section YA 1 ﬁxed-rate share paragraph (h)(iii): amended (with effect on 30 June 2009), on 29 August 2011 (applying for income years beginning on or after 1 July 2009), by section 130(6) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section YA 1 ﬁxed-rate share paragraph (i): added (with effect on 30 June 2009), on 29 August 2011 (applying for income years beginning on or after 1 July 2009), by section 130(6) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
3103 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Section YA 1 ﬂat-owning company: amended (with effect on 1 April 2011), on 2 November 2012, by section 154(14) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section YA 1 FMA: inserted, on 1 May 2011, by section 82 of the Financial Markets Authority Act 2011 (2011 No 5).
Section YA 1 foreign attributed income paragraph (b): replaced (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 132(19) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section YA 1 foreign attributed loss offsets: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 132(20) of the Taxation (International Investment and Remed- ial Matters) Act 2012 (2012 No 34).

Section YA 1 foreign corporate limited partnership: inserted, on 1 April 2008, by section 23(6) of the Taxation (Limited Partnerships) Act 2008 (2008 No 2).
Section YA 1 foreign dividend: repealed (with effect on 30 June 2009), on 6 October 2009, by section 557(77) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 foreign dividend company: repealed (with effect on 30 June 2009), on 6 October 2009, by section 557(78) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 foreign dividend company net earnings: repealed (with ef- fect on 30 June 2009), on 6 October 2009, by section 557(79) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 foreign group: repealed (with effect on 30 June 2009), on 6 Oc- tober 2009, by section 557(80) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 foreign investment PIE: inserted, on 29 August 2011, by section 130(7) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section YA 1 foreign investment variable-rate PIE: inserted, on 29 August 2011, by section 130(7) of the Taxation (Tax Administration and Remedial Mat- ters) Act 2011 (2011 No 63).
Section YA 1 foreign investment variable-rate PIE paragraph (a): amended, on 2 November 2012, by section 154(15) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section YA 1 foreign investment zero-rate PIE: inserted, on 29 August 2011, by section 130(7) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section YA 1 foreign investment zero-rate PIE paragraph (a): amended, on 2 November 2012, by section 154(16) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section YA 1 foreign non-dividend income: substituted, on 21 December 2010, by section 132(18) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
3104 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 inserted, on 1 April 2010, by sec- Section YA 1 foreign PIE equivalent: tion 557(81) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 forest land emissions unit: substituted (with effect on 1 January 2009), on 7 September 2010, by section 117(9) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Section YA 1 forest land unit: repealed (with effect on 1 January 2009), on 6 October 2009, by section 557(82) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 forest sink emissions unit: inserted (with effect on 1 January 2009), on 7 September 2010, by section 117(9) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Section YA 1 forestry business: replaced (with effect on 1 April 2008), on 2 November 2012, by section 154(17) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section YA 1 formation loss: inserted, on 1 April 2010, by section 557(83) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 fully credited for conduit tax relief: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 132(21) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section YA 1 fully imputed: inserted (with effect on 1 April 2008), on 6 Oc- tober 2009, by section 557(84) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 fully imputed paragraph (a): amended, on 1 April 2013, by sec- tion 154(18) of the Taxation (Annual Rates, Returns Filing, and Remedial Mat- ters) Act 2012 (2012 No 88).

Section YA 1 general insurance contract: repealed (with effect on 1 April 2008), on 7 September 2010, by section 117(10) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Section YA 1 general partner: inserted, on 1 April 2008, by section 23(7) of the Taxation (Limited Partnerships) Act 2008 (2008 No 2).

Section YA 1 gifting settlor: inserted, on 1 April 2008, by section 550(21) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section YA 1 government screen production payment: repealed (with effect on 1 January 2010), on 7 September 2010, by section 117(11) of the Taxa- tion (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remed- ial Matters) Act 2010 (2010 No 109).

Section YA 1 grandparented structure: inserted (with effect on 30 July 2009), on 28 May 2010, by section 96(4) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
3105 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 inserted, on 1 April 2011, by Section YA 1 grandparenting income year: section 132(19) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section YA 1 grandparenting start day: inserted, on 1 July 2010, by sec- tion 557(87) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
Section YA 1 grey list company: substituted (with effect on 1 April 2008), on 6 October 2009, by section 557(88) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 grey list dividend: repealed (with effect on 30 June 2008), on 6 October 2009, by section 557(89) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 group life master policy: inserted, on 1 July 2010, by sec- tion 557(90) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).

Section YA 1 group of companies: amended, on 1 April 2008, by section 550(22) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section YA 1 guarantor: replaced (with effect on 1 April 2012), on 2 November 2012, by section 154(20) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section YA 1 guarantor: inserted (with effect on 1 April 2011), on 2 November 2012, by section 154(19) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section YA 1 hedge and hedging: inserted, on 17 July 2013, by section 98(19) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Mat- ters) Act 2013 (2013 No 52).

Section YA 1 holding company paragraph (a): substituted, on 1 April 2010, by section 557(91) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 home: repealed, on 29 May 2012 (applying for the 2012–13 and later tax years), by section 7(5) of the Taxation (Budget Measures) Act 2012 (2012 No 38).

Section YA 1 honorarium: inserted (with effect on 1 April 2009), on 6 Oc- tober 2009, by section 557(92) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 honorarium: amended (with effect on 1 April 2009), on 7 Sep- tember 2010, by section 117(12) of the Taxation (Annual Rates, Trans-Tas- man Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).

Section YA 1 household member: repealed, on 29 May 2012 (applying for the 2012–13 and later tax years), by section 7(6) of the Taxation (Budget Measures) Act 2012 (2012 No 38).
Section YA 1 housekeeper: repealed, on 29 May 2012 (applying for the 2012–13 and later tax years), by section 7(7) of the Taxation (Budget Measures) Act 2012 (2012 No 38).

3106 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 Section YA 1 housekeeping payments: repealed, on 29 May 2012 (applying for the 2012–13 and later tax years), by section 7(8) of the Taxation (Budget Measures) Act 2012 (2012 No 38).
Section YA 1 IFRS: inserted, on 1 April 2008, by section 550(23) of the Taxa- tion (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section YA 1 IFRS: amended, on 1 July 2011, by section 12 of the Financial Reporting Amendment Act 2011 (2011 No 22).

Section YA 1 IFRS 4: inserted (with effect on 1 April 2008), on 6 October 2009, by section 557(93) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 IFRSE: inserted (with effect on 30 June 2009), on 6 October 2009, by section 557(94) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 impaired credit adjustment: inserted, on 1 April 2008, by sec- tion 550(23) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section YA 1 income derived from New Zealand: repealed, on 21 December 2010, by section 132(2) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section YA 1 income from employment paragraph (b)(iv): amended, on 21 December 2010, by section 189 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section YA 1 income from employment paragraph (d): added (with effect on 1 April 2008), on 6 October 2009, by section 557(95) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 income interest paragraph (b): amended (with effect on 30 June 2009), on 6 October 2009, by section 557(96) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 income tax liability paragraph (a)(ii): substituted, on 1 April 2010, by section 557(97) of the Taxation (International Taxation, Life Insur- ance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 income-tested beneﬁt paragraph (a): replaced, on 15 July 2013, by section 86 of the Social Security (Beneﬁt Categories and Work Focus) Amendment Act 2013 (2013 No 13).
Section YA 1 income-tested beneﬁt paragraph (c): repealed, on 20 August 2012, by section 26(3)(a) of the Social Security (Youth Support and Work Fo- cus) Amendment Act 2012 (2012 No 50).

Section YA 1 income-tested beneﬁt paragraph (d): replaced, on 15 July 2013, by section 97 of the Social Security (Beneﬁt Categories and Work Focus) Amendment Act 2013 (2013 No 13).
Section YA 1 income-tested beneﬁt paragraph (e): repealed, on 15 July 2013, by section 114 of the Social Security (Beneﬁt Categories and Work Focus) Amendment Act 2013 (2013 No 13).

Section YA 1 income-tested beneﬁt paragraph (f): replaced, on 15 July 2013, by section 129 of the Social Security (Beneﬁt Categories and Work Focus) Amendment Act 2013 (2013 No 13).
3107 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Section YA 1 income-tested beneﬁt paragraph (g): repealed, on 15 July 2013, by section 86 of the Social Security (Beneﬁt Categories and Work Focus) Amendment Act 2013 (2013 No 13).

Section YA 1 income-tested beneﬁt paragraph (h): inserted, on 20 August 2012, by section 26(4) of the Social Security (Youth Support and Work Focus) Amendment Act 2012 (2012 No 50).
Section YA 1 income-tested beneﬁt paragraph (i): inserted, on 20 August 2012, by section 26(4) of the Social Security (Youth Support and Work Focus) Amend- ment Act 2012 (2012 No 50).

Section YA 1 independent living: inserted, on 1 April 2011 (applying for the 2011–12 and later income years), by section 132(21) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section YA 1 industry research co-operative: repealed, on 1 October 2009, by section 20(3) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).

Section YA 1 initial provisional tax liability paragraph (b)(ii): amended, on 1 April 2009, by section 22(2) of the Taxation (Business Tax Measures) Act 2009 (2009 No 5).

Section YA 1 institution: repealed, on 29 May 2012 (applying for the 2012–13 and later tax years), by section 7(9) of the Taxation (Budget Measures) Act 2012 (2012 No 38).
Section YA 1 interest expenditure: inserted (with effect on 1 April 2013 and applying for the 2013–14 and later income years for an item of property referred to in section DG 3(2)(a)(i), and for the 2014–15 and later income years for an item of property referred to in section DG 3(2)(a)(ii) and (iii)), on 17 July 2013, by section 98(20) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Section YA 1 internal software development: inserted, on 1 April 2008, by section 550(25) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section YA 1 internal software development controller: inserted, on 1 April 2008, by section 550(25) of the Taxation (Business Taxation and Remedial Mat- ters) Act 2007 (2007 No 109).
Section YA 1 internal software development group: inserted, on 1 April 2008, by section 550(25) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section YA 1 international tax rules paragraph (a)(xiv): repealed, on 1 April 2010, by section 557(100) of the Taxation (International Taxation, Life Insur- ance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 international tax rules paragraph (a)(xv): repealed (with ef- fect on 1 April 2008), on 6 October 2009, by section 557(99) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 international tax rules paragraph (a)(xii): repealed, on 1 July 2012 (applying for income years beginning on or after that date), by section 132(22) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
3108 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 Section YA 1 international tax rules paragraph (a)(xiii): substituted (with ef- fect on 1 April 2008), on 6 October 2009, by section 557(98) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 international tax rules paragraph (b): amended, on 1 April 2010, by section 557(101) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 investment activity: inserted, on 1 April 2011 (applying for the 2011–12 and later income years), by section 96(5) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Section YA 1 investor paragraph (b): substituted, on 1 April 2010, by sec- tion 557(102) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).

Section YA 1 investor paragraph (c): repealed, on 1 April 2008, by section 550(26) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section YA 1 investor class: inserted, on 1 April 2010, by section 557(103) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 investor interest: replaced, on 17 July 2013, by section 98(21) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Section YA 1 in-work payment: repealed, on 1 April 2008, by section 550(27) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section YA 1 in-work tax credit: inserted, on 1 April 2008, by section 550(27) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section YA 1 jurisdictional attributed income: inserted (with effect on 30 June 2009), on 6 October 2009, by section 557(104) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 jurisdictional attributed income: amended (with effect on 30 June 2009), on 29 August 2011 (applying for income years beginning on or after 1 July 2009), by section 130(8) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section YA 1 jurisdictional BE income: inserted (with effect on 30 June 2009), on 6 October 2009, by section 557(104) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 jurisdictional BE income: amended (with effect on 30 June 2009), on 29 August 2011 (applying for income years beginning on or after 1 July 2009), by section 130(8) of the Taxation (Tax Administration and Re- medial Matters) Act 2011 (2011 No 63).
Section YA 1 jurisdictional income ratio: inserted (with effect on 30 June 2009), on 6 October 2009, by section 557(104) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
3109 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Section YA 1 jurisdictional income ratio: amended (with effect on 30 June 2009), on 29 August 2011 (applying for income years beginning on or after 1 July 2009), by section 130(8) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section YA 1 KiwiSaver calculation period: repealed, on 1 April 2009, by section 56(3) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).
Section YA 1 Kyoto unit: repealed (with effect on 1 January 2009), on 6 Oc- tober 2009, by section 557(105) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 land investment company: substituted (with effect on 1 April 2010), on 21 December 2010, (applying for the 2010–11 and later income years) by section 132(22) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section YA 1 land investment company paragraph (c): amended (with effect on 1 April 2010), on 29 August 2011 (applying for the 2010–11 and later income years), by section 130(9) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section YA 1 land loss: inserted, on 1 April 2010, by section 557(106) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 land provisions: inserted, on 1 April 2010, by section 557(107) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 land provisions paragraph (bb): inserted (with effect on 1 April 2013), on 17 July 2013, by section 98(22) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Section YA 1 LAQC: repealed, on 1 April 2011 (applying for income years beginning on or after 1 April 2011), by section 132(23) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section YA 1 large budget ﬁlm grant: inserted (with effect on 1 January 2010), on 7 September 2010, by section 117(14) of the Taxation (Annual Rates, Trans- Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Section YA 1 large budget screen production grant: repealed, on 1 January 2010, by section 557(108) of the Taxation (International Taxation, Life Insur- ance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 lease paragraph (d): amended (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 132(23) of the Taxation (International Investment and Remedial Mat- ters) Act 2012 (2012 No 34).
Section YA 1 lease paragraph (d)(vi): amended (with effect on 1 April 2008), on 7 December 2009, by section 118(9) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section YA 1 lease paragraph (d)(vii): amended (with effect on 1 April 2008), on 7 December 2009, by section 118(9) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
3110 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 Section YA 1 lease paragraph (f)(i): amended (with effect on 1 April 2008), on 6 October 2009, by section 557(109) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 lease paragraph (f)(ii): amended (with effect on 1 April 2008), on 7 December 2009, by section 118(10) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section YA 1 legal and equitable rights: inserted (with effect on 31 December 2012), on 17 July 2013, by section 98(23) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Section YA 1 legal expenses: inserted, on 1 April 2009, by section 22(1) of the Taxation (Business Tax Measures) Act 2009 (2009 No 5).
Section YA 1 lessee paragraph (a): amended (with effect on 1 April 2008), on 7 December 2009, by section 118(11)(a) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section YA 1 lessee paragraph (b): amended (with effect on 1 April 2008), on 7 December 2009, by section 118(11)(b) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section YA 1 lessor paragraph (a): amended (with effect on 1 April 2008), on 7 December 2009, by section 118(12)(a) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section YA 1 lessor paragraph (b): amended (with effect on 1 April 2008), on 7 December 2009, by section 118(12)(b) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section YA 1 liabilities: inserted (with effect on 31 December 2012), on 17 July 2013, by section 98(24) of the Taxation (Livestock Valuation, Assets Expend- iture, and Remedial Matters) Act 2013 (2013 No 52).

Section YA 1 life ﬁnancial reinsurance: inserted, on 1 January 2010, by sec- tion 557(110) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
Section YA 1 life fund PIE: inserted, on 1 April 2010, by section 557(111) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 life insurance rules: repealed, on 2 November 2012, by section 154(21) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section YA 1 life risk: inserted, on 1 July 2010, by section 557(112) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 life risk component: inserted, on 1 July 2010, by sec- tion 557(113) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 limited non-transaction shares: inserted (with effect on 1 April 2010), on 7 September 2010, by section 117(15) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).

Section YA 1 limited partner: inserted, on 1 April 2008, by section 23(8) of the Taxation (Limited Partnerships) Act 2008 (2008 No 2).
3111 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Section YA 1 limited partnership: inserted, on 1 April 2008, by section 23(8) of the Taxation (Limited Partnerships) Act 2008 (2008 No 2).

Section YA 1 limited partnership deduction: inserted (with effect on 1 April 2008), on 6 October 2009, by section 557(114) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 limited partnership net deduction: repealed (with effect on 1 April 2008), on 6 October 2009, by section 557(114) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 lines trust: inserted, on 1 April 2010, by section 557(115) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 listed limited partnership: inserted, on 1 April 2008, by section 23(9) of the Taxation (Limited Partnerships) Act 2008 (2008 No 2).

Section YA 1 listed PIE: inserted, on 1 April 2010, by section 557(116) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 listed research provider: repealed, on 1 October 2009, by section 20(4) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).
Section YA 1 living alone payment: repealed, on 2 September 2013 (applying for the 2011–12 tax year and later tax years), by section 16(1) of the Social Assistance (Living Alone Payments) Amendment Act 2013 (2013 No 11).

Section YA 1 loan paragraph (b): amended (with effect on 30 June 2009), on 6 October 2009, by section 557(117) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 local authority paragraph (b)(vii): substituted, on 1 November 2010, by section 113(1) of the Local Government (Auckland Transitional Pro- visions) Act 2010 (2010 No 37).

Section YA 1 local authority paragraph (b)(ix): added, on 2 December 2011, by section 14(2) of the Local Government Borrowing Act 2011 (2011 No 77).
inserted (with effect on Section YA 1 local authority paragraph (b)(x): 1 November 2010), on 2 November 2012, by section 154(22) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section YA 1 look-through company: inserted, on 1 April 2011 (applying for income years beginning on or after 1 April 2011), by section 132(24) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section YA 1 look-through company deduction: inserted, on 1 April 2011 (ap- plying for income years beginning on or after 1 April 2011), by section 132(25) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section YA 1 look-through counted owner: inserted, on 1 April 2011 (apply- ing for income years beginning on or after 1 April 2011), by section 132(26) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section YA 1 look-through interest: inserted, on 1 April 2011 (applying for income years beginning on or after 1 April 2011), by section 132(27) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
3112 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 Section YA 1 loss paragraph (c): replaced (with effect on 1 July 2011 and apply- ing for income years beginning on or after that date), on 7 May 2012, by section 132(24) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section YA 1 loss-attributing qualifying company: repealed, on 1 April 2011 (applying for income years beginning on or after 1 April 2011), by section 132(28) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section YA 1 loss balance: substituted (with effect on 1 April 2008), on 7 De- cember 2009, by section 118(13) of the Taxation (Consequential Rate Align- ment and Remedial Matters) Act 2009 (2009 No 63).
Section YA 1 major shareholder paragraph (c): amended (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 130(10) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section YA 1 major shareholder paragraph (d): amended (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 130(10) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section YA 1 market value paragraph (bb): inserted (with effect on 1 April 2013 and applying for the 2013–14 and later income years for an item of prop- erty referred to in section DG 3(2)(a)(i), and for the 2014–15 and later income years for an item of property referred to in section DG 3(2)(a)(ii) and (iii)), on 17 July 2013, by section 98(25) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Section YA 1 market value circumstance paragraph (a)(ii): amended (with effect on 1 April 2008), on 6 October 2009, by section 557(118) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 market value interest paragraph (a): amended, on 2 November 2012, by section 154(23) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section YA 1 market value interest paragraph (b): amended, on 17 July 2013, by section 172 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Section YA 1 maximum permitted ratio: amended (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 132(25) of the Taxation (International Investment and Remedial Mat- ters) Act 2012 (2012 No 34).
Section YA 1 member paragraph (b): repealed, on 1 April 2011, by section 117(16) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).

Section YA 1 member credit contribution: inserted, on 1 April 2008, by sec- tion 135(6) of the Taxation (KiwiSaver) Act 2007 (2007 No 110).
Section YA 1 member credit contribution paragraph (a)(i): substituted (with effect on 1 April 2008), on 6 October 2009, by section 557(119)(a) of the Tax- ation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
3113 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Section YA 1 member credit contribution paragraph (a)(iib): inserted (with effect on 1 April 2008), on 6 October 2009, by section 557(119)(b) of the Tax- ation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 member credit contribution paragraph (a)(iv): inserted, on 1 July 2013, by section 117(17) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).

Section YA 1 member credit contribution paragraph (b): substituted (with ef- fect on 1 April 2008), on 6 October 2009, by section 557(119)(c) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 minimum family tax credit: inserted, on 1 April 2008, by section 550(29) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section YA 1 mining permit: amended, on 24 May 2013, by section 65 of the Crown Minerals Amendment Act 2013 (2013 No 14).

Section YA 1 mining permit area paragraph (b): amended, on 24 May 2013, by section 65 of the Crown Minerals Amendment Act 2013 (2013 No 14).
Section YA 1 mixed-ownership enterprise: inserted, on 30 June 2012, by sec- tion 11 of the Public Finance (Mixed Ownership Model) Amendment Act 2012 (2012 No 45).

Section YA 1 monthly instalment plan: amended (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by sec- tion 140(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section YA 1 mortality proﬁt: repealed, on 1 July 2010, by section 557(120) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 mortality proﬁt formula: repealed, on 1 July 2010, by sec- tion 557(120) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
Section YA 1 multi-rate PIE: inserted, on 1 April 2010, by section 557(121) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 multi-rate PIE paragraph (e): repealed, on 1 July 2010, by sec- tion 557(122) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
Section YA 1 net asset balance: inserted (with effect on 1 April 2013 and applying for the 2013–14 and later income years for an item of property referred to in section DG 3(2)(a)(i), and for the 2014–15 and later income years for an item of property referred to in section DG 3(2)(a)(ii) and (iii)), on 17 July 2013, by section 98(26) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Section YA 1 net attributable CFC income: inserted (with effect on 30 June 2009), on 6 October 2009, by section 557(123) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
3114 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 Section YA 1 net attributable CFC loss: inserted (with effect on 30 June 2009), on 6 October 2009, by section 557(123) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 net attributable FIF income: inserted (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 132(26) of the Taxation (International Investment and Remedial Mat- ters) Act 2012 (2012 No 34).
Section YA 1 net attributable FIF loss: inserted (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 132(26) of the Taxation (International Investment and Remedial Mat- ters) Act 2012 (2012 No 34).

Section YA 1 net family scheme income: amended, on 1 April 2008, by section 550(30) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section YA 1 net mining loss: inserted (with effect on 1 April 2008), on 7 De- cember 2009, by section 118(14) of the Taxation (Consequential Rate Align- ment and Remedial Matters) Act 2009 (2009 No 63).

Section YA 1 new business: inserted, on 1 July 2010, by section 557(124) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 new company tax rate person: inserted, on 1 October 2010, by section 30(2) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section YA 1 new personal tax rate person: substituted, on 1 October 2010, by section 30(2) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section YA 1 new reporting standard: inserted (with effect on 1 April 2008), on 7 December 2009, by section 118(15) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section YA 1 new start grant: substituted, on 6 October 2009, by sec- tion 557(125) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 new start grant paragraph (b): replaced, on 2 November 2012, by section 154(24) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section YA 1 new tax rate person: repealed, on 1 October 2010, by sec- tion 30(3) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Section YA 1 New Zealand banking group: amended (with effect on 1 July 2009 and applying for income years beginning on or after that date), on 7 May 2012, by section 132(27) of the Taxation (International Investment and Remed- ial Matters) Act 2012 (2012 No 34).

Section YA 1 New Zealand emissions unit: inserted (with effect on 1 January 2009), on 6 October 2009, by section 557(127) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 New Zealand partnership: inserted, on 1 April 2008, by section 23(10) of the Taxation (Limited Partnerships) Act 2008 (2008 No 2).

Section YA 1 New Zealand superannuation paragraph (b)(i): repealed, on 2 September 2013 (applying for the 2011–12 tax year and later tax years), by 3115 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 section 16(1) of the Social Assistance (Living Alone Payments) Amendment Act 2013 (2013 No 11).
Section YA 1 New Zealand superannuation paragraph (b)(ii): repealed, on 17 July 2013, by section 98(27) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Section YA 1 New Zealand superannuation paragraph (b)(iii): repealed, on 17 July 2013, by section 98(27) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Section YA 1 New Zealand superannuitant paragraph (b)(ii): repealed, on 17 July 2013, by section 98(28) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Section YA 1 New Zealand unit: repealed (with effect on 1 January 2009), on 6 October 2009, by section 557(127) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 Niue International Trust Fund: inserted, on 1 April 2008, by section 550(32) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section YA 1 non-attributing active CFC: inserted (with effect on 30 June 2009), on 6 October 2009, by section 557(128) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 non-attributing Australian CFC: inserted (with effect on 30 June 2009), on 6 October 2009, by section 557(128) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 non-creditable dividend: repealed (with effect on 30 June 2009), on 6 October 2009, by section 557(129) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 non-ﬁling taxpayer paragraph (b): substituted (with effect on 1 April 2008), on 6 October 2009, by section 557(130) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 non-ﬁling taxpayer paragraph (b): amended, on 21 December 2010, by section 132(29) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section YA 1 non-integral fee: inserted, on 1 April 2008, by section 550(33) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section YA 1 non-Kyoto greenhouse gas unit: inserted (with effect on 1 Janu- ary 2009), on 6 October 2009, by section 557(131) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 non-Kyoto greenhouse gas unit paragraph (a): amended (with effect on 1 January 2009), on 7 September 2010, by section 117(18) of the Taxa- tion (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remed- ial Matters) Act 2010 (2010 No 109).

Section YA 1 non-refundable tax credit paragraph (a): amended, on 29 May 2012 (applying for the 2012–13 and later tax years), by section 7(10) of the Taxation (Budget Measures) Act 2012 (2012 No 38).
3116 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 Section YA 1 non-refundable tax credit paragraph (ab): inserted, on 6 January 2010, by section 557(132) of the Taxation (International Taxation, Life Insur- ance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 non-refundable tax credit paragraph (d): repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 132(28) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section YA 1 non-refundable tax credit paragraph (fb): inserted, on 17 July 2013, by section 98(29) of the Taxation (Livestock Valuation, Assets Expend- iture, and Remedial Matters) Act 2013 (2013 No 52).
Section YA 1 non-refundable tax credit paragraph (g): substituted, on 1 April 2010, by section 557(133) of the Taxation (International Taxation, Life Insur- ance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 non-refundable tax credit paragraph (g): amended, on 17 July 2013, by section 98(30) of the Taxation (Livestock Valuation, Assets Expend- iture, and Remedial Matters) Act 2013 (2013 No 52).
Section YA 1 non-resident entertainer paragraph (b): substituted (with ef- fect on 1 April 2008), on 6 October 2009, by section 557(134) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 non-resident entertainer paragraph (c): repealed (with effect on 1 April 2008), on 6 October 2009, by section 557(134) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 non-resident investment company: repealed (with effect on 1 April 2013 and applying for the 2013–14 and later income years), on 17 July 2013, by section 98(31) of the Taxation (Livestock Valuation, Assets Expend- iture, and Remedial Matters) Act 2013 (2013 No 52).

Section YA 1 non-resident seasonal worker: repealed (with effect on 6 Octo- ber 2009), on 21 December 2010, by section 132(31) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section YA 1 notiﬁed foreign investor: inserted, on 29 August 2011, by section 130(11) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section YA 1 notiﬁed investor rate: inserted, on 1 April 2010, by sec- tion 557(136) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 notiﬁed investor rate: amended, on 1 October 2010, by sec- tion 30(4) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Section YA 1 novelty: inserted, on 1 April 2008, by section 550(34) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section YA 1 NZIAS 2: inserted, on 1 April 2008, by section 550(35) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section YA 1 NZIAS 2: amended, on 1 July 2011, by section 12 of the Financial Reporting Amendment Act 2011 (2011 No 22).
Section YA 1 NZIAS 8: inserted, on 1 April 2008, by section 550(35) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

3117 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Section YA 1 NZIAS 8: amended, on 1 July 2011, by section 12 of the Financial Reporting Amendment Act 2011 (2011 No 22).

Section YA 1 NZIAS 17: inserted, on 1 April 2008, by section 550(35) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section YA 1 NZIAS 17: amended, on 1 July 2011, by section 12 of the Finan- cial Reporting Amendment Act 2011 (2011 No 22).

Section YA 1 NZIAS 23: inserted (with effect on 1 April 2008), on 6 October 2009, by section 557(137) of the Taxation (International Taxation, Life Insur- ance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 NZIAS 23: amended, on 1 July 2011, by section 12 of the Finan- cial Reporting Amendment Act 2011 (2011 No 22).
Section YA 1 NZIAS 28: inserted (with effect on 1 July 2009 and applying for income years beginning on or after that date), on 7 May 2012, by section 132(29) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section YA 1 NZIAS 31: inserted (with effect on 1 July 2009 and applying for income years beginning on or after that date), on 7 May 2012, by section 132(29) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section YA 1 NZIAS 32: inserted, on 1 April 2008, by section 550(35) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section YA 1 NZIAS 32: amended, on 1 July 2011, by section 12 of the Finan- cial Reporting Amendment Act 2011 (2011 No 22).

Section YA 1 NZIAS 39: inserted, on 1 April 2008, by section 550(35) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section YA 1 NZIAS 39: amended, on 1 July 2011, by section 12 of the Finan- cial Reporting Amendment Act 2011 (2011 No 22).

Section YA 1 NZIAS 41: inserted, on 1 April 2008, by section 550(35) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section YA 1 offshore development: repealed (with effect on 1 April 2008), on 6 October 2009, by section 557(138) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 old company tax rate: inserted, on 1 April 2008, by section 550(36) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section YA 1 old company tax rate: amended (with effect on 1 October 2010), on 7 May 2012, by section 132(30)(a) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section YA 1 old company tax rate: amended (with effect on 1 October 2010), on 7 May 2012, by section 132(30)(b) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section YA 1 old company tax rate: amended, on 1 October 2010, by sec- tion 30(5) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Section YA 1 old reporting standard: inserted (with effect on 1 April 2008), on 7 December 2009, by section 118(16) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

3118 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 Section YA 1 onshore development: repealed (with effect on 1 April 2008), on 6 October 2009, by section 557(139) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 operating lease: amended (with effect on 1 April 2008), on 6 Oc- tober 2009, by section 557(140) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 option: amended, on 2 November 2012, by section 154(26) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
inserted (with effect on 1 April Section YA 1 outstanding claims reserve: 2008), on 6 October 2009, by section 557(141) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 outstanding claims reserve paragraph (a): amended (with effect on 1 April 2008), on 21 December 2010, by section 132(32) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section YA 1 overseas eligible expenditure: repealed, on 1 October 2009, by section 20(5) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).

Section YA 1 overtime: inserted (with effect on 1 April 2008), on 6 October 2009, by section 557(142) of the Taxation (International Taxation, Life Insur- ance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 ownership interest: amended (with effect on 31 December 2012), on 17 July 2013, by section 98(32) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Section YA 1 ownership interest: amended (with effect on 1 January 2011), on 2 November 2012, by section 154(28) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section YA 1 ownership interest: amended (with effect on 1 April 2008), on 6 October 2009, by section 557(143) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 owner’s associate: inserted (with effect on 1 April 2011), on 2 November 2012, by section 154(27) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section YA 1 owner’s interests: inserted, on 1 April 2011 (applying for income years beginning on or after 1 April 2011), by section 132(33) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section YA 1 paid work: repealed, on 29 May 2012 (for the purposes of sec- tions LC 4 and LC 5 and schedule 2, and of sections 24B and 24H(7) of the Tax Administration Act 1994, applying for PAYE income payments made on or after 1 April 2013), by section 7(11) of the Taxation (Budget Measures) Act 2012 (2012 No 38).
Section YA 1 Part F activity: inserted (with effect on 1 April 2008), on 6 Oc- tober 2009, by section 557(144) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 partner: substituted, on 1 April 2008, by section 23(11) of the Taxation (Limited Partnerships) Act 2008 (2008 No 2).
3119 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Section YA 1 partner’s associate: inserted, on 1 April 2008, by section 23(11) of the Taxation (Limited Partnerships) Act 2008 (2008 No 2).

Section YA 1 partner’s interests: inserted, on 1 April 2008, by section 23(11) of the Taxation (Limited Partnerships) Act 2008 (2008 No 2).

Section YA 1 partnership: substituted, on 1 April 2008, by section 23(11) of the Taxation (Limited Partnerships) Act 2008 (2008 No 2).
Section YA 1 partnership share: inserted, on 1 April 2008, by section 23(11) of the Taxation (Limited Partnerships) Act 2008 (2008 No 2).

Section YA 1 partnership share: amended (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 140(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section YA 1 pay paragraph (bb): inserted, on 6 January 2010, by sec- tion 557(145) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 PAYE income payment: amended (with effect on 4 September 2010), on 24 May 2011, by section 11(2) of the Taxation (Canterbury Earth- quake Measures) Act 2011 (2011 No 24).
Section YA 1 PAYE income payment form paragraph (f): amended, on 1 April 2012, by section 223 of the Student Loan Scheme Act 2011 (2011 No 62).

Section YA 1 PAYE income payment form paragraph (g): amended (with ef- fect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 140(1) of the Taxation (Tax Administration and Re- medial Matters) Act 2011 (2011 No 63).
Section YA 1 PAYE income payment form paragraph (h): substituted (with effect on 1 April 2008), on 6 October 2009, by section 557(146)(a) of the Tax- ation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 PAYE income payment form paragraph (i): substituted (with effect on 1 April 2008), on 6 October 2009, by section 557(146)(b) of the Tax- ation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 payroll donation: inserted, on 6 January 2010, by sec- tion 557(147) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 personal injury by accident: repealed, on 29 May 2012 (for the purposes of sections LC 4 and LC 5 and schedule 2, and of sections 24B and 24H(7) of the Tax Administration Act 1994, applying for PAYE income pay- ments made on or after 1 April 2013), by section 7(12) of the Taxation (Budget Measures) Act 2012 (2012 No 38).
Section YA 1 personal service rehabilitation payment: inserted, on 1 April 2008, by section 550(38) of the Taxation (Business Taxation and Remedial Mat- ters) Act 2007 (2007 No 109).

Section YA 1 personal service rehabilitation payment paragraph (a): substi- tuted (with effect on 1 July 2008), on 6 October 2009, by section 557(148)(a) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
3120 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 Section YA 1 personal service rehabilitation payment paragraph (a): amended, on 21 December 2010, by section 189 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section YA 1 personal service rehabilitation payment paragraph (c): substi- tuted (with effect on 1 July 2008), on 6 October 2009, by section 557(148)(b) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 petroleum mining development: inserted (with effect on 1 April 2008), on 6 October 2009, by section 557(149) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 petroleum mining operations: substituted, on 1 April 2008, by section 550(39) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section YA 1 PFSI forestry business: inserted (with effect on 1 April 2008), on 7 December 2009, by section 118(17) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section YA 1 PFSI forestry income: inserted (with effect on 1 April 2008), on 7 December 2009, by section 118(17) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section YA 1 PIE: inserted, on 1 April 2010, by section 557(150) of the Tax- ation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 PIE rules: inserted, on 1 April 2010, by section 557(150) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 PIE rules paragraph (a)(v): amended, on 29 August 2011, by section 130(12)(a) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section YA 1 PIE rules paragraph (a)(vb): inserted, on 29 August 2011, by section 130(12)(b) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section YA 1 PIE rules paragraph (a)(vii): amended, on 1 April 2010 (applying for the 2010–11 and later income years), by section 118(18) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section YA 1 PIE rules paragraph (a)(viii): amended, on 29 August 2011, by section 130(12)(c) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section YA 1 PIE rules paragraph (b): amended, on 29 August 2011, by sec- tion 130(12)(d) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section YA 1 plant: inserted, on 1 April 2011 (applying for the 2011–12 and later income years), by section 132(34) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section YA 1 policy liabilities: inserted, on 1 July 2010, by section 557(151) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

3121 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 substituted, on 1 July 2010, by sec- Section YA 1 policyholder base: tion 557(152) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 policyholder base allowable deductions: inserted, on 1 July 2010, by section 557(152) of the Taxation (International Taxation, Life Insur- ance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 policyholder base income: inserted, on 1 July 2010, by sec- tion 557(152) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
Section YA 1 policyholder base income tax liability: repealed, on 1 July 2010, by section 557(153) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 policyholder credit: repealed, on 1 July 2010, by sec- tion 557(153) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 policyholder credit account: repealed, on 1 July 2010, by sec- tion 557(153) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).

Section YA 1 policyholder debit: repealed, on 1 July 2010, by section 557(153) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 policyholder FDP ratio: repealed, on 1 July 2010, by sec- tion 557(153) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 policyholder income: repealed, on 1 July 2010, by sec- tion 557(153) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 policyholder income formula: repealed, on 1 July 2010, by sec- tion 557(153) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).

Section YA 1 policyholder net loss: repealed, on 1 July 2010, by sec- tion 557(153) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 policyholder unvested liabilities: inserted, on 1 July 2010, by section 118(19) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section YA 1 portable New Zealand superannuation: substituted, on 5 Janu- ary 2010, by section 118(20) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section YA 1 portable veteran’s pension: substituted, on 5 January 2010, by section 118(20) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section YA 1 portfolio allocation period: repealed, on 1 April 2010, by sec- tion 557(154) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
3122 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 Section YA 1 portfolio calculation period: repealed, on 1 April 2010, by sec- tion 557(154) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).

Section YA 1 portfolio class fraction: repealed, on 1 April 2010, by sec- tion 557(154) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
Section YA 1 portfolio class investment value: repealed, on 1 April 2010, by section 557(154) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 portfolio class net income: repealed, on 1 April 2010, by sec- tion 557(154) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
Section YA 1 portfolio class net loss: repealed, on 1 April 2010, by sec- tion 557(154) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 portfolio class taxable income: repealed, on 1 April 2010, by section 557(154) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 portfolio class taxable loss: repealed, on 1 April 2010, by sec- tion 557(154) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).

Section YA 1 portfolio deﬁned beneﬁt fund: repealed, on 1 April 2010, by section 557(154) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 portfolio entity formation loss: repealed, on 1 April 2010, by section 557(154) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 portfolio entity investment: repealed, on 1 April 2010, by sec- tion 557(154) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
Section YA 1 portfolio entity tax liability: repealed, on 1 April 2010, by sec- tion 557(154) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).

Section YA 1 portfolio investment: inserted, on 1 April 2010, by sec- tion 557(155) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 portfolio investment entity: substituted, on 1 April 2010, by section 557(155) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 portfolio investment entity paragraph (e): inserted, on 1 April 2013, by section 154(29) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section YA 1 portfolio investment-linked life fund: inserted, on 1 July 2008, by section 550(42) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

3123 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Section YA 1 portfolio investor allocated income: repealed, on 1 April 2010, by section 557(154) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 portfolio investor allocated loss: repealed, on 1 April 2010, by section 557(154) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 portfolio investor class: repealed, on 1 April 2010, by sec- tion 557(154) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
Section YA 1 portfolio investor exit period: repealed, on 1 April 2010, by section 557(154) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 portfolio investor interest: repealed, on 1 April 2010, by sec- tion 557(154) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
Section YA 1 portfolio investor interest fraction: repealed, on 1 April 2010, by section 557(154) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 portfolio investor proxy: repealed, on 1 April 2010, by sec- tion 557(154) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
Section YA 1 portfolio investor rate: repealed, on 1 April 2010, by sec- tion 557(154) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 portfolio land company: repealed, on 1 April 2010, by sec- tion 557(154) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
Section YA 1 portfolio listed company: repealed, on 1 April 2010, by sec- tion 557(154) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).

Section YA 1 portfolio tax rate entity: repealed, on 1 April 2010, by sec- tion 557(154) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
Section YA 1 post-1989 forest land: substituted (with effect on 1 January 2009), on 6 October 2009, by section 557(159) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 post-1989 forest land emissions unit: substituted (with effect on 1 April 2010), on 7 September 2010, by section 117(19) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Section YA 1 post-1989 forest land unit: repealed (with effect on 1 January 2009), on 6 October 2009, by section 557(159) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 post-treaty tax rate: inserted, on 1 February 2010, by sec- tion 118(21) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
3124 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 Section YA 1 pre-1990 forest land: substituted (with effect on 1 January 2009), on 6 October 2009, by section 557(160) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 pre-1990 forest land emissions unit: substituted (with effect on 1 April 2010), on 7 September 2010, by section 117(20) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).

Section YA 1 pre-1990 forest land emissions unit paragraph (b): replaced (with effect on 9 June 2009), on 2 November 2012, by section 154(30) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section YA 1 pre-1990 forest land unit: repealed (with effect on 1 January 2009), on 6 October 2009, by section 557(160) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 premium paragraph (a)(iii): added, on 1 July 2010, by sec- tion 557(161) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
Section YA 1 premium loading: repealed, on 1 July 2010, by section 557(162) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 premium loading formula: repealed, on 1 July 2010, by sec- tion 557(162) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
Section YA 1 premium payback amount: inserted, on 1 July 2010, by sec- tion 557(163) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).

Section YA 1 prescribed investor rate: inserted, on 1 April 2010, by sec- tion 557(167) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
Section YA 1 prescribed investor rate: amended, on 1 April 2012 (applying for the 2012–13 and later income years), by section 130(13) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section YA 1 prescribed investor rate: amended, on 1 April 2010 (applying for the 2010–11 and later income years), by section 118(22) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section YA 1 present value (gross): inserted, on 1 July 2010, by sec- tion 557(168) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 present value (net): inserted, on 1 July 2010, by section 557(168) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 principal caregiver: amended, on 1 April 2008, by section 550(49) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section YA 1 private use: replaced (with effect on 1 April 2013 and applying for the 2013–14 and later income years for an item of property referred to in section DG 3(2)(a)(i), and for the 2014–15 and later income years for an item 3125 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 of property referred to in section DG 3(2)(a)(ii) and (iii)), on 17 July 2013, by section 98(33) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Section YA 1 proﬁt distribution plan: inserted (with effect on 1 October 2012), on 2 November 2012, by section 154(31) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section YA 1 proﬁt participation policy: inserted, on 1 July 2010, by sec- tion 557(169) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
Section YA 1 proﬁt participation policy paragraph (b)(ii): amended (with ef- fect on 1 July 2010), on 21 December 2010, by section 132(35) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section YA 1 proﬁt participation policy paragraph (c): added (with effect on 1 July 2010), on 21 December 2010, by section 132(35) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section YA 1 proﬁt-related debenture: amended (with effect on 1 April 2008), on 6 October 2009, by section 557(170) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 projected transactions shareholding: inserted (with effect on 1 April 2010), on 7 September 2010, by section 117(21) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Section YA 1 property paragraph (ab): inserted, on 1 April 2011 (applying for income years beginning on or after 1 April 2011), by section 132(36) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section YA 1 property paragraph (ac): inserted, on 1 April 2011 (applying for income years beginning on or after 1 April 2011), by section 132(36) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section YA 1 proportional-stapling company: inserted (with effect on 1 April 2008), on 6 October 2009, by section 557(171) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 protected family support: repealed, on 1 April 2008, by section 550(50) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section YA 1 protected family tax credit: inserted, on 1 April 2008, by section 550(50) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section YA 1 PSR period: inserted, on 1 July 2010, by section 557(172) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 public authority paragraph (b): amended (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 140(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section YA 1 public authority paragraph (d): amended, on 30 June 2012, by section 11 of the Public Finance (Mixed Ownership Model) Amendment Act 2012 (2012 No 45).
3126 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 Section YA 1 public authority paragraph (e): inserted, on 30 June 2012, by section 11 of the Public Finance (Mixed Ownership Model) Amendment Act 2012 (2012 No 45).

Section YA 1 qualifying event: repealed, on 6 October 2009, by sec- tion 557(173) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 quarterly FDR hedging ratio: inserted, on 17 July 2013, by section 98(34) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Section YA 1 QCP transitional process: inserted, on 1 April 2011 (applying for income years beginning on or after 1 April 2011), by section 132(37) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section YA 1 QCST transitional process: inserted, on 1 April 2011 (applying for income years beginning on or after 1 April 2011), by section 132(38) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section YA 1 Railways assets: inserted (with effect on 31 December 2012), on 17 July 2013, by section 98(35) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Section YA 1 Railways assets and liabilities: inserted (with effect on 31 De- cember 2012), on 17 July 2013, by section 98(36) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Section YA 1 Railways liabilities: inserted (with effect on 31 December 2012), on 17 July 2013, by section 98(37) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Section YA 1 Railways vesting: inserted (with effect on 31 December 2012), on 17 July 2013, by section 98(38) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Section YA 1 recognised seasonal employment scheme: inserted, on 6 Oc- tober 2009, by section 557(174) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 recourse property: replaced (with effect on 1 April 2012), on 2 November 2012, by section 154(33) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section YA 1 recourse property: inserted (with effect on 1 April 2011), on 2 November 2012, by section 154(32) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section YA 1 redundancy payment: repealed, on 1 April 2011 (applying for the 2011–12 and later income years), by section 96(6) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Section YA 1 refundable tax credit paragraph (a): amended, on 1 April 2008, by section 550(52) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section YA 1 refundable tax credit paragraph (bb): inserted, on 1 April 2008, by section 550(52) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

3127 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Section YA 1 refundable tax credit paragraph (d): substituted, on 1 April 2010, by section 557(177) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 refundable tax credit paragraph (d): amended, on 17 July 2013, by section 98(39) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Section YA 1 refundable tax credit paragraph (e): substituted, on 1 April 2010, by section 557(177) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 registered as a charitable entity: repealed, on 1 July 2008, by section 48(4) of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).

Section YA 1 reinsurance grandparenting start day: inserted, on 1 July 2010, by section 557(178) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 related person: substituted, on 1 April 2010, by section 557(179) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 relative: substituted, on 1 April 2010, by section 557(180) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 relative paragraph (a): amended, on 2 November 2012 (applying for income years beginning on or after the date on which the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 receives the Royal as- sent), by section 154(34) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section YA 1 relative paragraph (a): amended, on 1 April 2010, by section 118(23)(a) of the Taxation (Consequential Rate Alignment and Remedial Mat- ters) Act 2009 (2009 No 63).

Section YA 1 relative paragraph (b): amended, on 1 April 2010, by section 118(23)(b) of the Taxation (Consequential Rate Alignment and Remedial Mat- ters) Act 2009 (2009 No 63).
Section YA 1 relative paragraph (bb): inserted, on 2 November 2012 (applying for income years beginning on or after the date on which the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 receives the Royal as- sent), by section 154(35) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section YA 1 relative paragraph (c): added, on 1 April 2010, by section 118(23)(c) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section YA 1 replacement ETS unit: repealed (with effect on 1 January 2009), on 6 October 2009, by section 557(181) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 replacement forest land emissions unit: inserted (with effect on 1 January 2009), on 6 October 2009, by section 557(181) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
3128 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 Section YA 1 replacement forest land emissions unit paragraph (a): sub- stituted (with effect on 1 January 2009), on 7 September 2010, by section 117(22)(a) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Section YA 1 replacement forest land emissions unit paragraph (b): amended (with effect on 1 January 2009), on 7 September 2010, by section 117(22)(b) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).

Section YA 1 reporting standard: repealed (with effect on 1 April 2008), on 7 December 2009, by section 118(24) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section YA 1 required interest: repealed (with effect on 30 June 2009), on 6 October 2009, by section 557(182) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 research: amended, on 1 April 2008, by section 550(54) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section YA 1 research and development activities: inserted, on 1 April 2008, by section 550(55) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section YA 1 research and development project: repealed, on 1 October 2009, by section 20(6) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).
Section YA 1 resident group member: inserted (with effect on 30 June 2009), on 6 October 2009, by section 557(183) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 resident group member: amended (with effect on 30 June 2009), on 29 August 2011 (applying for income years beginning on or after 1 July 2009), by section 130(8) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section YA 1 resident in Australia: amended (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 140(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section YA 1 residential mortgage backed security: inserted (with effect on 1 April 2008), on 6 October 2009, by section 557(184) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 residual income tax paragraph (b)(iiib): inserted, on 1 April 2008, by section 550(56) of the Taxation (Business Taxation and Remedial Mat- ters) Act 2007 (2007 No 109).

Section YA 1 residual income tax paragraph (b)(iiic): inserted (with effect on 1 April 2009), on 21 December 2010, by section 132(39) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section YA 1 residual income tax paragraph (b)(vb): inserted, on 1 April 2008, by section 550(56) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

3129 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Section YA 1 residual income tax paragraph (d): repealed, on 1 July 2012 (ap- plying for income years beginning on or after that date), by section 132(31) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section YA 1 retained earnings: repealed (with effect on 30 June 2009), on 6 October 2009, by section 557(185) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 retirement savings scheme: inserted, on 1 April 2008, by section 550(57) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section YA 1 retirement scheme contribution: inserted, on 1 April 2008, by section 550(57) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section YA 1 retirement scheme contributor: inserted, on 1 April 2008, by section 550(57) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section YA 1 retirement scheme prescribed rate: substituted, on 1 April 2010 (applying for the 2010–11 and later income years), by section 118(25) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section YA 1 revenue account property: substituted (with effect on 1 January 2009), on 6 October 2009, by section 557(186) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 revenue account property paragraph (b): amended (with effect on 1 January 2009), on 7 September 2010, by section 117(24) of the Taxa- tion (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remed- ial Matters) Act 2010 (2010 No 109).

Section YA 1 revenue account property paragraph (c): amended (with effect on 1 January 2009), on 29 August 2011, by section 130(14) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section YA 1 revenue account property paragraph (d): added (with effect on 1 January 2009), on 29 August 2011, by section 130(14) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section YA 1 RMBS special purpose vehicle: repealed (with effect on 1 June 2010), on 7 September 2010, by section 117(25) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Section YA 1 RSCT: inserted, on 1 April 2008, by section 550(58) of the Tax- ation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section YA 1 RSCT rules: inserted, on 1 April 2008, by section 550(58) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section YA 1 RWT proxy: amended (with effect on 1 April 2008), on 7 De- cember 2009, by section 118(27) of the Taxation (Consequential Rate Align- ment and Remedial Matters) Act 2009 (2009 No 63).
Section YA 1 RWT substitution payment: inserted (with effect on 1 April 2008), on 29 August 2011, by section 130(15) of the Taxation (Tax Adminis- tration and Remedial Matters) Act 2011 (2011 No 63).

3130 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 Section YA 1 salary or wages paragraph (b): replaced, on 1 April 2012, by section 13(3) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).
Section YA 1 savings component: inserted, on 1 July 2010, by section 557(189) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 savings product policy: substituted, on 1 July 2010, by section 118(28) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section YA 1 savings product policy paragraph (b): amended (with effect on 1 July 2010), on 7 September 2010, by section 117(26) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).

Section YA 1 schedular income paragraph (a): substituted, on 1 July 2010, by section 557(190) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 schedular income paragraph (c): repealed (with effect on 1 April 2008), on 6 October 2009, by section 557(191) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 schedular income paragraph (db): inserted, on 1 April 2010, by section 557(192) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 schedular income paragraph (f): amended (with effect on 1 April 2008), on 6 October 2009, by section 557(193) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 schedular income paragraph (h): repealed, on 2 November 2012, by section 154(36) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section YA 1 schedular policyholder base income: inserted, on 1 July 2010, by section 557(194) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

inserted, on 1 April Section YA 1 scientiﬁc or technological uncertainty: 2008, by section 550(59) of the Taxation (Business Taxation and Remedial Mat- ters) Act 2007 (2007 No 109).
Section YA 1 secured amounts: substituted, on 1 April 2011 (applying for income years beginning on or after 1 April 2011), by section 132(40) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section YA 1 separated person: amended, on 29 May 2012 (applying for the 2012–13 and later tax years), by section 7(13) of the Taxation (Budget Meas- ures) Act 2012 (2012 No 38).
Section YA 1 settlor: amended, on 1 April 2011 (applying for income years beginning on or after 1 April 2011), by section 132(41) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section YA 1 settlor paragraph (c): added, on 1 April 2010, by section 557(196) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
3131 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Section YA 1 share paragraph (bb): inserted (with effect on 1 April 2008), on 6 October 2009, by section 557(197) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 share purchase agreement: substituted (with effect on 1 April 2008), on 6 October 2009, by section 557(198) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 share purchase agreement: amended (with effect on 1 October 2012), on 2 November 2012, by section 154(37) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section YA 1 share purchase agreement: amended (with effect on 1 April 2008), on 7 December 2009, by section 118(29) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section YA 1 share reorganisation: amended (with effect on 1 April 2008), on 6 October 2009, by section 557(199) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 shareholder paragraph (c): amended, on 17 July 2013, by section 172 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Section YA 1 shareholder paragraph (c): amended, on 1 April 2008, by section 550(60) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section YA 1 shareholder agreement: inserted (with effect on 1 April 2008), on 6 October 2009, by section 557(200) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 shareholder base: inserted, on 1 July 2010, by section 557(201) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

inserted, on 1 July Section YA 1 shareholder base allowable deductions: 2010, by section 557(201) of the Taxation (International Taxation, Life Insur- ance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 shareholder base income: inserted, on 1 July 2010, by sec- tion 557(201) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).

Section YA 1 shareholder-employee paragraph (b)(ii): amended, on 1 April 2011 (applying for income years beginning on or after 1 April 2011), by section 132(42) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section YA 1 shareholder-employee paragraph (c): added, on 1 April 2011 (applying for income years beginning on or after 1 April 2011), by section 132(42) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section YA 1 signiﬁcant capital activity: amended (with effect on 1 April 2011 and applying for the 2011–12 and later income years), on 17 July 2013, by section 98(40) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Section YA 1 signiﬁcant ﬁnancial hardship: repealed, on 1 April 2011, by section 117(27) of the Taxation (Annual Rates, Trans-Tasman Savings Porta- bility, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).

3132 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 Section YA 1 small partnership: inserted, on 1 April 2008, by section 23(13) of the Taxation (Limited Partnerships) Act 2008 (2008 No 2).
Section YA 1 sound commercial reason: inserted, on 1 April 2008, by section 550(61) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section YA 1 source in New Zealand: amended, on 21 December 2010, by section 132(43) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section YA 1 special excluded depreciable property: inserted, on 1 April 2011 (applying for the 2011–12 and later income years), by section 96(7) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Section YA 1 spouse: amended, on 29 May 2012 (for the purposes of sections LC 4 and LC 5 and schedule 2, and of sections 24B and 24H(7) of the Tax Administration Act 1994, applying for PAYE income payments made on or after 1 April 2013), by section 7(14) of the Taxation (Budget Measures) Act 2012 (2012 No 38).
Section YA 1 stapled: inserted (with effect on 1 April 2008), on 6 October 2009, by section 557(202) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 stapled debt security: inserted (with effect on 1 April 2008), on 6 October 2009, by section 557(202) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 starting date: repealed (with effect on 30 June 2009), on 6 Oc- tober 2009, by section 557(203) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 State enterprise: amended, on 30 June 2012, by section 11 of the Public Finance (Mixed Ownership Model) Amendment Act 2012 (2012 No 45).
Section YA 1 subsidy claim form paragraph (b): amended (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 140(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section YA 1 subsidy claim form paragraph (f): amended (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 140(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section YA 1 substituting debenture: amended (with effect on 1 April 2008), on 6 October 2009, by section 557(204) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 superannuation scheme paragraph (ii): repealed, on 1 April 2008, by section 135(7) of the Taxation (KiwiSaver) Act 2007 (2007 No 110).
amended, on Section YA 1 superannuation scheme paragraph (a)(iv): 2 November 2012, by section 154(38) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section YA 1 supplementary dividend holding company: repealed, on 1 April 2013 (applying for the 2013–14 and later income years), by section 118(30) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
3133 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 inserted, on 1 July 2010, by sec- Section YA 1 supporting asset base: tion 557(205) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 surrender: substituted (with effect on 1 January 2009), on 6 Oc- tober 2009, by section 557(206) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 surrender value: inserted, on 1 July 2010, by section 557(207) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 systematic, investigative, and experimental activities: inserted, on 1 April 2008, by section 550(62) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section YA 1 tax charity: inserted, on 1 July 2008, by section 48(5) of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).

Section YA 1 tax loss: substituted (with effect on 1 April 2008), on 7 December 2009, by section 118(31) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section YA 1 tax pooling account: substituted (with effect on 1 April 2009), on 6 October 2009, by section 557(209) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 tax position: inserted, on 1 April 2011 (applying for income years beginning on or after 1 April 2011), by section 132(44) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section YA 1 tax withheld: substituted (with effect on 1 April 2008), on 6 Oc- tober 2009, by section 557(210) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 taxable bonus issue paragraph (e): inserted (with effect on 1 Oc- tober 2012), on 2 November 2012, by section 154(39) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section YA 1 taxable distribution: amended (with effect on 1 April 2008), on 7 December 2009, by section 118(32) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section YA 1 taxation law: substituted (with effect on 30 June 2009), on 6 Oc- tober 2009, by section 557(208) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 taxation law: amended (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 132(33) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section YA 1 taxed CFC connection: inserted (with effect on 1 July 2009 and applying for income years beginning on or after that date), on 7 May 2012, by section 132(34) of the Taxation (International Investment and Remedial Mat- ters) Act 2012 (2012 No 34).
Section YA 1 taxed CFC connection paragraph (a): amended (with effect on 1 July 2009), on 2 November 2012, by section 154(40) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
3134 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 1 Section YA 1 taxed FIF connection: inserted (with effect on 1 July 2009 and applying for income years beginning on or after that date), on 7 May 2012, by section 132(34) of the Taxation (International Investment and Remedial Mat- ters) Act 2012 (2012 No 34).

Section YA 1 taxi: inserted, on 10 May 2011, by section 100(3) of the Land Transport (Road Safety and Other Matters) Amendment Act 2011 (2011 No 13).
Section YA 1 taxicab: repealed, on 10 May 2011, by section 100(3) of the Land Transport (Road Safety and Other Matters) Amendment Act 2011 (2011 No 13).

Section YA 1 technology: inserted, on 1 April 2008, by section 550(63) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section YA 1 telecommunications service: inserted (with effect on 30 June 2009), on 6 October 2009, by section 557(211) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 temporary building paragraph (a): repealed, on 1 April 2011 (applying for the 2011–12 and later income years), by section 96(9) of the Tax- ation (Budget Measures) Act 2010 (2010 No 27).
Section YA 1 tertiary institution: repealed, on 1 October 2009, by section 20(7) of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).

Section YA 1 timber: substituted (with effect on 1 April 2008), on 7 December 2009, by section 118(33) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section YA 1 Tokelau International Trust Fund: inserted, on 1 April 2008, by section 550(65) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section YA 1 tracking account: repealed (with effect on 30 June 2009), on 6 October 2009, by section 557(212) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 tracking associate: repealed (with effect on 30 June 2009), on 6 October 2009, by section 557(213) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 trading stock paragraph (b): amended (with effect on 1 April 2008), on 7 September 2010 (applying for the 2008–09 and later income years), by section 117(28)(a) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Section YA 1 trading stock paragraph (c): amended (with effect on 1 April 2008), on 7 September 2010 (applying for the 2008–09 and later income years), by section 117(28)(b) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Section YA 1 trading stock paragraph (c): substituted (with effect on 1 April 2008), on 6 October 2009, by section 557(214)(b) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 trading transaction: inserted (with effect on 1 April 2010), on 7 September 2010, by section 117(29) of the Taxation (Annual Rates, Trans- Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
3135 Part Y s YA 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Section YA 1 transaction shares: inserted (with effect on 1 April 2010), on 7 September 2010, by section 117(29) of the Taxation (Annual Rates, Trans- Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).

Section YA 1 transfer: inserted, on 1 April 2011 (applying for income years beginning on or after 1 April 2011), by section 132(45) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section YA 1 transfer of value paragraph (b)(ii): amended (with effect on 1 April 2008), on 21 December 2010 (applying for the 2008–09 and later in- come years), by section 132(46) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section YA 1 transitional period: inserted, on 1 April 2008, by section 550(66) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Section YA 1 trust rules paragraph (a): repealed, on 1 April 2011, by sec- tion 117(30) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).

Section YA 1 turnover: amended, on 1 April 2008, by section 23(14) of the Taxation (Limited Partnerships) Act 2008 (2008 No 2).
Section YA 1 UFTC: repealed (with effect on 30 June 2009), on 6 October 2009, by section 557(215) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 UFTC accounting period: repealed (with effect on 30 June 2009), on 6 October 2009, by section 557(216) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 unwind: inserted (with effect on 1 April 2008), on 6 October 2009, by section 557(217) of the Taxation (International Taxation, Life Insur- ance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 unwind: amended (with effect on 1 June 2010), on 7 September 2010, by section 117(31) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
inserted, on 1 July 2010, by sec- Section YA 1 valuation premiums: tion 557(218) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 venture investment agreement: amended, on 1 April 2008, by section 550(67) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section YA 1 Venture Investment Fund: amended, on 18 July 2013, by section 57 of the Public Finance Amendment Act 2013 (2013 No 50).
Section YA 1 veteran’s pension: replaced, on 17 July 2013, by section 98(41) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Mat- ters) Act 2013 (2013 No 52).

Section YA 1 volunteer: inserted (with effect on 1 April 2008), on 6 October 2009, by section 557(219) of the Taxation (International Taxation, Life Insur- ance, and Remedial Matters) Act 2009 (2009 No 34).
3136 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 2 Section YA 1 voting interest paragraph (a): amended, on 2 November 2012, by section 154(41) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section YA 1 voting interest paragraph (b): amended, on 17 July 2013, by section 172 of the Taxation (Livestock Valuation, Assets Expenditure, and Re- medial Matters) Act 2013 (2013 No 52).
Section YA 1 WFF tax credit: inserted, on 1 April 2008, by section 550(68) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Section YA 1 widely-held GIF: substituted, on 1 April 2010, by sec- tion 557(220) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 widely-held superannuation fund: substituted, on 1 April 2010, by section 557(221) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 withdrawal: repealed, on 1 April 2011, by section 117(32) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Section YA 1 working owner: inserted, on 1 April 2011 (applying for income years beginning on or after 1 April 2011), by section 132(47) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section YA 1 work-related relocation: inserted (with effect on 1 April 2008), on 6 October 2009, by section 557(222) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YA 1 workplace group policy: inserted, on 1 July 2010, by section 118(34) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section YA 1 year of payment: repealed, on 1 April 2011, by section 118(35) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section YA 1 zero-rated investor: added, on 1 April 2010, by section 557(223) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 1 zero-rated investor: amended, on 1 April 2010 (applying for the 2010–11 and later income years), by section 118(36) of the Taxation (Conse- quential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section YA 1 zero-rated portfolio investor: repealed, on 1 April 2010, by section 557(223) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
YA 2 Meaning of income tax varied (1) DTA and time bar provisions: ancillary tax The term income tax includes ancillary tax in— (a) (b) section BB 3(2) (Overriding effect of certain matters): section BH 1 (Double tax agreements): 3137 Part Y s YA 2 Income Tax Act 2007 Reprinted as at 2 September 2013 (2) (3) (c) sections 107A to 108B of the Tax Administration Act 1994.
DTA provisions: tax recovery agreements The term income tax includes a tax that is prescribed in a tax recovery agreement made under Part 10A of the Tax Admin- istration Act 1994 in— section BB 3(2): (a) section BH 1.

(b) General tax avoidance provisions: ancillary tax The term income tax includes ancillary tax, but not excluded ancillary tax, in— (a) (b) section BB 3(1): sections BG 1 (Tax avoidance) and GA 1 (Commis- sioner’s power to adjust): the deﬁnition of tax avoidance.
(c) Modiﬁed application of section GA 1 (a) (4) When section GA 1 is applied in the case of an ancillary tax,— the words “taxable income” in section GA 1(2) are treated as replaced by the words “liability to the ancil- lary tax”; and the following paragraph is treated as added to section GA 1(5): “(e) an amount subject to the ancillary tax”.
(b) Tax of other countries The term income tax, when speciﬁcally used in relation to tax of another country, whether imposed by a central, state, or local government,— (a) means a tax of substantially the same nature as income tax imposed under section BB 1 (Imposition of income tax); and includes a tax, imposed as a collection mechanism for the foreign tax, that is of substantially the same na- ture as provisional tax, pay-as-you-earn (PAYE), resi- dent withholding tax (RWT), or non-resident withhold- ing tax (NRWT).
(b) UFTC rules (5) 3138 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YA 3 (6) (7) [Repealed] [Repealed] FDP, imputation, and BETA rules The term income tax, in relation to tax that has been paid by a person, includes provisional tax in— the FDP rules: (a) the imputation rules: (b) subpart OE (Branch equivalent tax accounts (BETA)).
(c) Deﬁned in this Act: after-income tax earnings, ancillary tax, BETA, double tax agreement, excluded ancillary tax, FDP rules, ﬁxed-rate share, imputation rules, income tax, NRWT, PAYE, provisional tax, RWT, tax, tax avoidance, taxable income Compare: 2004 No 35 ss HG 12(2), IZ 7, MB 12, ME 9(6), MI 10(5), MI 21(5), MK 8(6), NC 20(1), ND 1W(2), NE 7(2), NF 13, NG 17(2), NH 3(7), OB 6 Section YA 2(5): amended (with effect on 1 April 2008), on 21 December 2010 (applying for the 2008–09 and later income years), by section 133(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section YA 2(6) heading: repealed (with effect on 30 June 2009), on 6 October 2009, pursuant to section 558(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YA 2(6): repealed (with effect on 30 June 2009), on 6 October 2009, by section 558(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
YA 3 Treatment of qualifying company election tax, FBT, FDP penalty tax, imputation penalty tax, and withdrawal tax [Repealed] Section YA 3: repealed (with effect on 1 April 2008), on 6 October 2009, by section 559 of the Taxation (International Taxation, Life Insurance, and Remed- ial Matters) Act 2009 (2009 No 34).
Subpart YB—Associated persons and nominees Contents Table Y1: Associated person rules [Repealed] Associated persons YB 1 What this subpart does YB 2 Two companies Page 3140 3142 3139 Part Y s YB 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Settlor and beneﬁciary Person and trustee for relative YB 3 Company and person other than company YB 4 Two relatives YB 5 YB 6 Trustee and beneﬁciary YB 7 Two trustees with common settlor YB 8 Trustee and settlor YB 9 YB 10 Who is a settlor?
YB 11 Trustee and person with power of appointment or removal YB 12 Partnership and partner YB 13 Look-through companies and owners of interests YB 14 Tripartite relationship YB 15 Exceptions for employee trusts YB 16 Exceptions for certain trusts and charitable organisations YB 17 Partnerships: partnership and associate of partner [Repealed] YB 18 Persons habitually acting together: 1988 version provisions [Repealed] YB 19 Person and controlled non-proﬁt organisation: 1990 version provisions [Repealed] YB 20 Some deﬁnitions [Repealed] YB 21 Transparency of nominees Nominees 3144 3144 3145 3146 3146 3146 3147 3147 3147 3148 3149 3150 3151 3152 3153 3153 3153 3153 3153 Table Y1: Associated person rules [Repealed] Table Y1: repealed, on 1 April 2010, by section 563(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Associated persons Heading: substituted, on 1 April 2010, by section 563(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

YB 1 What this subpart does Associated person rules and nominee rules This subpart sets out the rules that— (a) deﬁne when 2 persons are associated persons; and (1) 3140 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YB 1 (2) (3) (b) determine how nominees are treated.
Other references If a rule in this subpart states that 2 persons are associated persons for 1 or more provisions in this Act, a reference in the relevant provision to persons who are associated with each other includes those persons.
Tests The tests of association are categorised as follows: (a) (b) two companies, see section YB 2: a company and a person other than a company, see sec- tion YB 3: two relatives, see section YB 4: a person and a trustee for a relative, see section YB 5: a trustee and a beneﬁciary, see section YB 6: trustees with a common settlor, see section YB 7: a trustee and a settlor, see section YB 8: a settlor and a beneﬁciary, see section YB 9: a trustee and a person with a power of appointment or removal, see section YB 11: a partnership and a partner, see section YB 12: two persons who are each associated with the same third person, see section YB 14.
(c) (d) (e) (f) (g) (h) (i) (j) (k) Application The sections in this subpart relating to associated persons apply for the purposes of the whole Act unless a section expressly states otherwise.
Loss-attributing qualifying companies and shareholders [Repealed] [Repealed] (4) (5) Low-turnover traders (6) A special rule applies for the purposes of subpart EB (Valu- ation of trading stock (including dealer’s livestock)) to deter- mine when a low-turnover trader is associated with a company, see section EB 13(2) (Low-turnover valuation).
Control interests in foreign companies (7) A special rule applies for the purposes of section EX 3 (Con- trol interests: total of direct, indirect, and associated person interests) to determine when a New Zealand resident is asso- 3141 Part Y s YB 2 Income Tax Act 2007 Reprinted as at 2 September 2013 (8) ciated with a non-resident relative, see section EX 4(1) (Limits to requirement to include associated person interests).
Supplementary dividend holding companies [Repealed] [Repealed] Deﬁned in this Act: associated person, company, low-turnover trader, New Zealand resident, nominee, non-resident, relative, settlor, shareholder, supple- mentary dividend holding company, trustee Section YB 1: substituted, on 1 April 2010, by section 563(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YB 1(5) heading: repealed, on 17 July 2013, pursuant to section 172 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Section YB 1(5): repealed, on 17 July 2013, by section 172 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).

Section YB 1(8) heading: repealed, on 1 April 2011, pursuant to section 119 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section YB 1(8): repealed, on 1 April 2011, by section 119 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section YB 1 list of deﬁned terms loss attributing qualifying company: re- pealed, on 17 July 2013, by section 172 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
YB 2 Two companies Common voting interests Two companies are associated persons if a group of persons exists whose total voting interests in each company are 50% or more.

Common market value interests Two companies are associated persons if— (a) a market value circumstance exists for either company; and a group of persons exists whose total market value inter- ests in each company are 50% or more.
(b) Common control by other means Two companies are associated persons if a group of persons exists who control both companies by any other means.
(1) (2) (3) 3142 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YB 2 (4) (5) (6) (7) (8) General aggregation rule For the purposes of subsections (1) to (3), if a person (person A) and another person (person B) are associated under any of sections YB 4 to YB 14, person A is treated as holding anything held by person B. Aggregation rule for land provisions For the purposes of subsections (1) to (3), if a person (person A) and another person (person B) are associated under any of sections YB 4(1)(b) and (2) to (4), YB 7, YB 8, and YB 10 to YB 14, person A is treated as holding anything held by person B.
Exception for certain government entities Subsection (3) does not apply to 2 companies if either or both are— (a) (ab) (b) (c) (d) a state enterprise: a mixed-ownership enterprise: a Crown Research Institute: a Crown health enterprise: a company that is part of the same group of companies as an entity referred to in any of paragraphs (a) to (c).

Exception for international tax rules In the international tax rules, 2 companies are not associated persons if 1, but not both, is a non-resident.
Exception for managed funds For the purposes of the land provisions, 2 companies are not associated persons if 1 is a portfolio investment entity or an entity that qualiﬁes for PIE status.
Deﬁned in this Act: associated person, company, Crown Research Institute, group of companies, group of persons, international tax rules, land provisions, market value circumstance, market value interest, mixed-ownership enterprise, non-resident, PIE, portfolio investment entity, state enterprise, voting interest Section YB 2: substituted, on 1 April 2010, by section 563(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YB 2(6)(ab): inserted, on 30 June 2012, by section 11 of the Public Finance (Mixed Ownership Model) Amendment Act 2012 (2012 No 45).

Section YB 2 list of deﬁned terms mixed-ownership enterprise: inserted, on 30 June 2012, by section 11 of the Public Finance (Mixed Ownership Model) Amendment Act 2012 (2012 No 45).
3143 Part Y s YB 3 Income Tax Act 2007 Reprinted as at 2 September 2013 YB 3 Company and person other than company Company and 25% voting interest holder (1) A company and a person other than a company are associated persons if the person has a voting interest in the company of 25% or more.
Company and 25% market value interest holder (2) A company and a person other than a company are associated persons if— (a) (b) a market value circumstance exists for the company; and the person has a market value interest in the company of 25% or more.
(3) (4) (5) General aggregation rule For the purposes of subsections (1) and (2), if a person (person A) and another person (person B) are associated under any of sections YB 4 to YB 14, person A is treated as holding anything held by person B. Aggregation rule for land provisions For the purposes of subsections (1) and (2), if a person (person A) and another person (person B) are associated under any of sections YB 4(1)(b) and (2) to (4), YB 7, YB 8, and YB 10 to YB 14, person A is treated as holding anything held by person B.
Person other than company In this section, a person other than a company includes a com- pany acting in its capacity as a trustee of a trust.

Deﬁned in this Act: associated person, company, land provisions, market value circumstance, market value interest, voting interest Section YB 3: substituted, on 1 April 2010, by section 563(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
YB 4 Two relatives Degree of relationship Two persons are associated persons if — (a) (b) they are within 2 degrees of blood relationship: they are married, in a civil union, or in a de facto rela- tionship: (1) 3144 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YB 5 (c) 1 person is within 2 degrees of blood relationship to the other person’s spouse, civil union partner, or de facto partner.
Exception: blood relationships For the purposes of the land provisions and sections EB 13 (Low turnover valuation) and EC 5 (Transfer of livestock be- cause of self-assessed adverse event), subsection (1)(a) and (c) does not apply, and persons are associated persons because of a blood relationship only if 1 is the infant child of the other.
Treatment of adoption For the purposes of this section, a child by adoption is treated as a natural child of the adoptive parents and not as a natural child of the birth parents.

(2) (3) Exception (4) A person is not associated with another person under this section if the person cannot reasonably be expected to know that— (a) (b) the other person exists: the person is within 2 degrees of blood relationship to the other person.
Deﬁned in this Act: associated person, land provisions Section YB 4: substituted, on 1 April 2010, by section 563(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

YB 5 Person and trustee for relative (1) (2) Association Two persons (person A and person B) are associated persons if person A is the trustee of a trust under which a person as- sociated under section YB 4 with person B has beneﬁted or is eligible to beneﬁt.
Land provisions This section does not apply for the purposes of the land provi- sions.

Deﬁned in this Act: associated person, land provisions, trustee Section YB 5: substituted, on 1 April 2010, by section 563(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
3145 Part Y s YB 6 Income Tax Act 2007 Reprinted as at 2 September 2013 YB 6 Trustee and beneﬁciary Association (1) A trustee of a trust and a person who has beneﬁted or is eligible to beneﬁt under the trust are associated persons.

(2) Land provisions This section does not apply for the purposes of the land provi- sions.
Deﬁned in this Act: associated person, land provisions Section YB 6: substituted, on 1 April 2010, by section 563(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

YB 7 Two trustees with common settlor Association (1) A trustee of a trust and a trustee of another trust are associated persons if the same person is a settlor of both trusts.
(2) Treatment of spouses and partners For the purposes of this section, 2 persons who are married, in a civil union, or in a de facto relationship are treated as the same single person.

Deﬁned in this Act: associated person, settlor, trustee Section YB 7: substituted, on 1 April 2010, by section 563(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
YB 8 Trustee and settlor Association (1) A trustee of a trust and a settlor of the trust are associated persons.

(2) Exclusion This section does not apply if the trust is a charitable trust.

Deﬁned in this Act: associated person, charitable trust, settlor, trustee Section YB 8: substituted, on 1 April 2010, by section 563(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
3146 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YB 11 YB 9 Settlor and beneﬁciary Association (1) A settlor of a trust and a person who has beneﬁted or is eligible to beneﬁt under the trust are associated persons.

(2) Land provisions This section does not apply for the purposes of the land provi- sions.
Deﬁned in this Act: associated person, land provisions, settlor, trustee Section YB 9: substituted, on 1 April 2010, by section 563(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

YB 10 Who is a settlor?

For the purposes of sections YB 7 to YB 9, settlor has the meaning set out in section HC 27 (Who is a settlor?)

but does not include a person who provides services to a trust for less than market value.
Deﬁned in this Act: settlor Section YB 10: substituted, on 1 April 2010, by section 563(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

YB 11 Trustee and person with power of appointment or removal Association (1) A trustee of a trust and a person who has a power of appoint- ment or of removal of the trustee are associated persons.
(2) Exclusion This section does not apply if the person— (a) (b) holds the power as a provider of professional services; and is a member of an approved organisation, as that term is deﬁned in section 3(1) of the Tax Administration Act 1994, for such providers of professional services; and has not beneﬁted from the trust; and is not eligible to beneﬁt from the trust.
(c) (d) Deﬁned in this Act: associated person, trustee 3147 Part Y s YB 12 Income Tax Act 2007 Reprinted as at 2 September 2013 Section YB 11: substituted, on 1 April 2010, by section 563(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YB 11(1) heading: inserted (with effect on 1 April 2010 and applying for the purposes of provisions other than the land provisions, for the 2010–11 and later income years, or of the land provisions other than section CB 11, for land acquired on or after 6 October 2009, or of section CB 11, for land on which improvements are begun on or after 6 October 2009), on 17 July 2013, by section 99(1) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Section YB 11(1): replaced (with effect on 1 April 2010 and applying for the purposes of provisions other than the land provisions, for the 2010–11 and later income years, or of the land provisions other than section CB 11, for land ac- quired on or after 6 October 2009, or of section CB 11, for land on which im- provements are begun on or after 6 October 2009), on 17 July 2013, by section 99(1) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Section YB 11(2) heading: inserted (with effect on 1 April 2010 and applying for the purposes of provisions other than the land provisions, for the 2010–11 and later income years, or of the land provisions other than section CB 11, for land acquired on or after 6 October 2009, or of section CB 11, for land on which improvements are begun on or after 6 October 2009), on 17 July 2013, by section 99(1) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Section YB 11(2): inserted (with effect on 1 April 2010 and applying for the purposes of provisions other than the land provisions, for the 2010–11 and later income years, or of the land provisions other than section CB 11, for land ac- quired on or after 6 October 2009, or of section CB 11, for land on which im- provements are begun on or after 6 October 2009), on 17 July 2013, by section 99(1) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
YB 12 Partnership and partner Association (1) A partnership and a partner in the partnership are associated persons.

Limited partnerships Subsection (1) does not apply if the partner is a limited partner.

Instead a limited partnership and a limited partner are associ- ated persons if the limited partner has a partnership share of 25% or more in a right, obligation, or other property, status, or thing of the limited partnership.
Limited partnerships: general aggregation rule For the purposes of subsection (2), if a person (person A) and another person (person B) are associated under any of sections (2) (3) 3148 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YB 13 (4) YB 2 to YB 11 and YB 14, person A is treated as holding anything held by person B.
Limited partnerships: aggregation rule for land provisions For the purposes of subsection (2), if a person (person A) and another person (person B) are associated under any of sections YB 2, YB 3, YB 4(1)(b) and (2) to (4), YB 7, YB 8, YB 10, YB 11, and YB 14, person A is treated as holding anything held by person B. Deﬁned in this Act: associated person, limited partner, limited partnership, part- nership, share Section YB 12: substituted, on 1 April 2010, by section 563(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
YB 13 Look-through companies and owners of interests Association (1) A look-through company and a person who has a look-through interest for the look-through company (an owner) and who is a director or employee for the look-through company are associated persons.
(2) (3) (4) Some owners If subsection (1) does not apply to a look-through company and an owner, then they are associated persons if the owner has ef- fective look-through interests of 25% or more in a right, obli- gation, or other property status, or thing of the look-through company.
Some owners: general aggregation rule For the purposes of subsection (2), if a person (person A) and another person (person B) are associated under any of sections YB 2 to YB 11 and YB 14, person A is treated as holding anything held by person B.
Some owners: aggregation rule for land provisions For the purposes of subsection (2), if a person (person A) and another person (person B) are associated under any of sections YB 2, YB 3, YB 4(1)(b) and (2) to (4), YB 7, YB 8, YB 10, YB 11, and YB 14, person A is treated as holding anything held by person B. Deﬁned in this Act: associated person, director, effective look-through interest, employee, look-through company, look-through interest 3149 Part Y s YB 14 Income Tax Act 2007 Reprinted as at 2 September 2013 Section YB 13: inserted, on 1 April 2011 (applying for income years beginning on or after 1 April 2011), by section 134(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
YB 14 Tripartite relationship Test Two persons (person A and person B) are associated persons if— (a) person B is associated with a third person (person C) under any of sections YB 2 to YB 13; and person C is associated with person A under any of sec- tions YB 2 to YB 13, excluding the section under which person B is associated with person C. (b) Exception: companies tests Subsection (1) does not apply if— (a) person B is associated with person C under section YB 2; and person C is associated with person A under section YB 3.
(b) Association for purposes of research and development tax credits Subsection (1) does not apply in relation to the association of a company and a person, for the purposes of section LH 1(2) (Who this subpart applies to).

Applying test to limited partnership For the purpose of applying subsection (1), a limited partner- ship is treated as being a company.
Deﬁned in this Act: associated person, company, limited partnership, tax credit Section YB 14: substituted, on 1 April 2010, by section 563(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YB 14(1)(a): amended, on 1 April 2011 (applying for income years beginning on or after 1 April 2011), by section 135(1)(a) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
Section YB 14(1)(a): amended, on 1 April 2010, by section 120 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section YB 14(1)(b): amended, on 1 April 2011 (applying for income years beginning on or after 1 April 2011), by section 135(1)(b) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
(1) (2) (3) (4) 3150 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YB 15 Section YB 14(1)(b): amended, on 1 April 2010, by section 120 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section YB 14(4) heading: inserted (with effect on 1 April 2010 and applying for the purposes of provisions other than the land provisions, for the 2010–11 and later income years, or of the land provisions other than section CB 11, for land acquired on or after 6 October 2009, or of section CB 11, for land on which improvements are begun on or after 6 October 2009), on 17 July 2013, by section 100(1) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Section YB 14(4): inserted (with effect on 1 April 2010 and applying for the purposes of provisions other than the land provisions, for the 2010–11 and later income years, or of the land provisions other than section CB 11, for land ac- quired on or after 6 October 2009, or of section CB 11, for land on which im- provements are begun on or after 6 October 2009), on 17 July 2013, by section 100(1) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
Section YB 14 list of deﬁned terms limited partnership: inserted (with effect on 1 April 2010), on 17 July 2013, by section 100(2) of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
YB 15 Exceptions for employee trusts (1) (2) (3) Beneﬁciaries Section YB 6(1) does not apply if— (a) the trust is only for the beneﬁt of employees of an em- ployer; and neither the beneﬁciary nor any person associated with the beneﬁciary directly or indirectly controls the trust.
(b) Non-corporate settlors For a settlor that is not a company, sections YB 7, YB 8, and YB 9(1) do not apply if— (a) the settlor settles property on the terms of the trust only for the beneﬁt of employees of the settlor; and neither the settlor nor any person associated with the settlor directly or indirectly controls the trust.
(b) Corporate settlors For a settlor that is a company, sections YB 7, YB 8, and YB 9(1) do not apply if— (a) the settlor settles property on the terms of the trust only for the beneﬁt of its employees; and none of the following directly or indirectly controls the trust: (i) the settlor: (b) 3151 Part Y s YB 16 Income Tax Act 2007 Reprinted as at 2 September 2013 (ii) (iii) (iv) (v) (vi) a person associated with the settlor: an executive of the settlor: a director of the settlor: a person holding a direct voting interest of 25% or more in the settlor: if a market value circumstance exists for the set- tlor, a person holding a direct market value inter- est of 25% or more in the settlor.
(4) Persons with power of appointment or removal Section YB 11 does not apply if— (a) (b) the trust is only for the beneﬁt of employees of an em- ployer; and neither the person (person A) who has a power of ap- pointment or of removal of a trustee nor a person asso- ciated with person A directly or indirectly controls the trust.
Deﬁned in this Act: associated person, company, direct voting interest, em- ployee, employer, market value circumstance, market value interest, settlor Section YB 15: substituted, on 1 April 2010, by section 563(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
YB 16 Exceptions for certain trusts and charitable organisations Trustee and beneﬁciary and trustee for relative tests: certain trusts Sections YB 5 and YB 6(1) do not apply to a trustee and an- other person if the trust is— (a) a lines trust established under the Energy Companies Act 1992: an approved unit trust referred to in clause 2 of the In- come Tax Act (Exempt Unit Trusts) Order 1990.
(b) Trustee and beneﬁciary and settlor and beneﬁciary tests: charitable organisation Sections YB 6(1) and YB 9(1) do not apply to a trustee and a beneﬁciary or a settlor and a beneﬁciary if the beneﬁciary is a charitable organisation.
Deﬁned in this Act: charitable organisation, lines trust, unit trust (1) (2) 3152 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YB 21 Section YB 16: substituted, on 1 April 2010, by section 563(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
YB 17 Partnerships: partnership and associate of partner [Repealed] Section YB 17: repealed, on 1 April 2010, by section 563(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

YB 18 Persons habitually acting together: 1988 version provisions [Repealed] Section YB 18: repealed, on 1 April 2010, by section 563(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
YB 19 Person and controlled non-proﬁt organisation: 1990 version provisions [Repealed] Section YB 19: repealed, on 1 April 2010, by section 563(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

YB 20 Some deﬁnitions [Repealed] Section YB 20: repealed, on 1 April 2010, by section 563(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
YB 21 Transparency of nominees Nominees (1) Treatment of nominee In this Act, unless the context otherwise requires, if a person holds something or does something as a nominee for another person, the other person holds or does that thing and the nom- inee is ignored.

3153 Income Tax Act 2007 Reprinted as at 2 September 2013 Who is a nominee?

(2) A person holds or does something as a nominee for another person if the person acts on the other person’s behalf.
How- ever, a trustee is a nominee only if the trustee is a bare trustee.

Nominal settlements (3) A person making a nominal settlement at the request of another person is treated for the purposes of this Act as a nominee in relation to the settlement.

Deﬁned in this Act: trustee Compare: 2004 No 35 ss HH 1(1), OD 9 Section YB 21(3) heading: added (with effect on 1 April 2008), on 7 December 2009, by section 121(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Section YB 21(3): added (with effect on 1 April 2008), on 7 December 2009, by section 121(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Section YB 21 compare note: amended (with effect on 1 April 2008), on 6 October 2009, by section 564 of the Taxation (International Taxation, Life In- surance, and Remedial Matters) Act 2009 (2009 No 34).
Subpart YC—Measurement of company ownership Subpart YC heading: substituted, on 1 April 2010, by section 565 of the Tax- ation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Contents Control [Repealed] YC 1 Meaning of control [Repealed] Voting and market value interests YC 2 Voting interests YC 3 Market value interests YC 4 Look-through rule for corporate shareholders YC 5 Treatment of special corporate entities YC 5B Treatment of mixed-ownership enterprises YC 6 Disregarding certain securities Page 3155 3156 3156 3156 3158 3159 3159 3154 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YC 1 Voting and market value interests: modiﬁcations for continuity provisions Shares or options held by trustees YC 7 When sections YC 8 to YC 19B apply YC 8 Death of share or option holder YC 9 YC 10 Shareholders holding less than 10% direct interests YC 11 No look-through rule for companies in certain cases YC 12 Public unit trusts YC 13 Corporate spin-outs YC 14 Disregarding concessionary rules YC 15 Directors’ knowledge of failure to meet requirements of continuity provision YC 16 Disregarding market value changes YC 17 Demutualisation of insurers YC 18 Reverse takeovers YC 18B Corporate reorganisations not affecting economic ownership YC 18C Railways restructure not affecting Crown economic ownership YC 19 Legislative conversion of foreign company of proprietors YC 19B Treatment when certain trusts terminated YC 20 Credit account continuity provisions: excluded ﬁxed rate securities 3160 3160 3161 3162 3162 3163 3164 3167 3167 3169 3170 3173 3176 3178 3179 3180 3180 Control [Repealed] Heading: repealed, on 1 April 2010 (applying for the 2010–11 and later income years), by section 566(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
YC 1 Meaning of control [Repealed] Section YC 1: repealed, on 1 April 2010 (applying for the 2010–11 and later income years), by section 566(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
3155 Part Y s YC 2 Income Tax Act 2007 Reprinted as at 2 September 2013 Voting and market value interests YC 2 Voting interests Percentage of shareholder decision-making rights (1) A person’s voting interest in a company equals the percentage of the total shareholder decision-making rights for the com- pany carried by shares or options held by the person.
When decision-making rights vary (2) Despite subsection (1), if the percentage of shareholder de- cision-making rights for a company carried by shares or op- tions held by any person differs as between the types of de- cision-making listed in the deﬁnition of shareholder deci- sion-making right, the person’s voting interest in the com- pany equals the average of those differing percentages.
Deﬁned in this Act: company, share, shareholder decision-making right, voting interest Compare: 2004 No 35 s OD 3(1), (2) YC 3 Market value interests Percentage of market value (1) A person’s market value interest in a company equals the per- centage of the total market value of shares and options over shares in the company that the market value of shares and op- tions over shares in the company held by the person represents.
(2) Adjustments for options For the purposes of subsection (1), the market value of any share in a company that is subject to an option is calculated having regard to the terms of the option.
Deﬁned in this Act: company, market value, market value interest, option, share Compare: 2004 No 35 s OD 4(1), (2) YC 4 Look-through rule for corporate shareholders When subsection (2) applies Subsection (2) applies if a company (the shareholder com- pany) is or is treated as having, whether under subsection (2) or otherwise, a voting interest in another company (the issuing company).
(1) 3156 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YC 4 (2) (3) (4) (5) (6) (7) Voting interest attributed to shareholders Each person (the shareholder) who has a voting interest in the shareholder company is treated as having (to be added to any other percentage voting interest in the issuing com- pany which the shareholder has) their portion of the share- holder company’s voting interest in the issuing company and the shareholder company is treated as not having that portion.
Calculation of shareholder’s portion The shareholder’s portion of the voting interest is calculated by multiplying the shareholder company’s voting interest in the issuing company by the shareholder’s voting interest in the shareholder company.

When subsection (5) applies Subsection (5) applies if a company (the shareholder com- pany) is or is treated as having, whether under subsection (5) or otherwise, a market value interest in another company (the issuing company).
Attributing market value interest to shareholders Each person (the shareholder) who has a market value interest in the shareholder company is treated as having their portion of the shareholder company’s market value interest in the issuing company and the shareholder company is treated as not having that portion.

The shareholder’s portion is added to any other percentage market value interest in the issuing company which the shareholder has at that time.
Calculation of shareholder’s portion The shareholder’s portion of the market value interest is calcu- lated by multiplying the shareholder company’s market value interest in the issuing company by the shareholder’s market value interest in the shareholder company.
When subsection (8) applies Subsection (8) applies if,— (a) (b) in the case of a company (the ﬁrst company), no direct market value circumstance exists; but it is necessary to determine the direct market value inter- est of a person in the ﬁrst company in order to apply sub- section (5) in relation to an issuing company, whether that issuing company is the ﬁrst company or any other 3157 Part Y s YC 5 Income Tax Act 2007 Reprinted as at 2 September 2013 (8) company, because a direct market value circumstance exists for some other relevant company.
Direct market value interest equal to direct voting interest The direct market value interest of the person in the ﬁrst com- pany is equal to the direct voting interest of the person in the ﬁrst company.
Deﬁned in this Act: company, direct market value circumstance, direct market value interest, direct voting interest, director, market value interest, voting in- terest Compare: 2004 No 35 ss OD 3(3)(d), OD 4(3)(d), (4) Section YC 4 compare note: amended (with effect on 1 April 2008), on 6 Octo- ber 2009, by section 567 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
YC 5 Treatment of special corporate entities When this section applies This section applies for the purposes of sections YC 2 to YC 6 to a company that is a special corporate entity.

Company treated as issuing shares If no shares have been issued by the special corporate entity, it is treated as having issued shares that carry all shareholder decision-making rights and all other rights of ownership in relation to the special corporate entity.

Who is treated as shareholder?


The shares are treated as held by— (a) (b) (c) the members for the time being of the special corporate entity, if any: the directors for the time being of the special corporate entity, if no members exist: in the case of a public authority or state enterprise that has neither members nor directors, the Minister of the Crown for the time being who performs a director’s functions.
Persons also treated as holding related rights The persons treated under subsection (3) as holding the shares are also treated as holding— (a) (b) any options over the shares; and any rights derived from the shares and options, includ- ing any interests treated as held under section YC 4.
(1) (2) (3) (4) 3158 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YC 6 (5) Shareholders treated as notional single person existing with entity The members, directors, or Ministers are treated as holding their shares and related rights— (a) in their capacity as members, directors, or Ministers; and as a notional single person that— (i) (b) exists as long as the special corporate entity exists; and holds nothing other than shares and related rights concerning the entity.
(ii) Deﬁned in this Act: company, director, public authority, share, special corpo- rate entity, state enterprise Compare: 2004 No 35 ss OD 3(3)(a), OD 4(3)(a) YC 5B Treatment of mixed-ownership enterprises (1) Section YC 5 applies to the Crown’s interest in a mixed-own- ership enterprise in the same way as it does to the Crown’s interest in a special corporate entity to determine— (a) who is treated as holding those shares and related rights that represent the Crown’s interest in the enterprise: how those shares and related rights are treated as being held.
(b) (2) Transitional provision for changes in status If a special corporate entity changes its status to become a mixed-ownership enterprise, no breach of shareholding arises in relation to the Crown’s interest.

Deﬁned in this Act: mixed-ownership enterprise, share, special corporate entity Section YC 5B: inserted, on 30 June 2012, by section 11 of the Public Finance (Mixed Ownership Model) Amendment Act 2012 (2012 No 45).
YC 6 Disregarding certain securities (1) When this section applies This section applies for the purposes of sections YC 2 to YC 5 if— (a) (b) a company has issued an excluded ﬁxed rate security: an excluded option has been granted in relation to a share in a company: a company has issued a pre-1991 budget security.
(c) 3159 Part Y s YC 7 Income Tax Act 2007 Reprinted as at 2 September 2013 (2) (3) (4) Security treated as not issued or granted The excluded ﬁxed rate security, excluded option, or pre-1991 budget security is treated as never having been issued or granted.

Holder treated as not holding security The holder of the excluded ﬁxed rate security, excluded option, or pre-1991 budget security is treated as never having held it.
Credit account continuity provisions: excluded ﬁxed return securities counted This section is overridden by section YC 20.

Deﬁned in this Act: company, excluded ﬁxed rate security, excluded option, pre-1991 budget security, share Compare: 2004 No 35 ss OD 3(3)(c), OD 4(3)(c) Section YC 6(4): amended (with effect on 1 April 2008), on 6 October 2009, by section 568(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Voting and market value interests: modiﬁcations for continuity provisions YC 7 When sections YC 8 to YC 19B apply Sections YC 8 to YC 19B apply to modify sections YC 2 to YC 6 when the continuity provisions are applied.

Deﬁned in this Act: continuity provisions Compare: 2004 No 35 s OD 5(1) Section YC 7 heading: amended (with effect on 1 January 2011), on 2 Novem- ber 2012, by section 155 of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Section YC 7: amended (with effect on 1 January 2011), on 2 November 2012, by section 155 of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
YC 8 Death of share or option holder If a person acquires a share or option over a share on the death of a person (the deceased person), as a beneﬁciary or trustee under the will or intestacy, the person is treated as— (a) having acquired the share or option on the date the de- ceased person acquired it; and having held it until the person in fact acquired it.
(b) Deﬁned in this Act: company, share, trustee Compare: 2004 No 35 s OD 5(2) 3160 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YC 9 YC 9 Shares or options held by trustees Trustees treated as notional single person (1) All the trustees of a trust holding a share or an option over a share in a company under the trust are treated as the same notional single person that is— not a company; and (a) separate and distinct from the trustees in their capacities (b) other than as trustees of the trust.
(2) (3) Exception to subsection (1) Subsection (1) does not apply if any of the following has a purpose or effect of defeating the intent and application of a continuity provision: (a) (b) (c) the establishment of the trust: the termination of the trust: a change in the trustees of the trust.
Change in ownership of corporate trustee Subsection (4) applies if— (a) (b) (c) (d) any share in a company (the ﬁrst company) or option over a share in the ﬁrst company is held by a trustee; and the trustee is a company other than— (i) (ii) Public Trust: any company in which Public Trust holds all vot- ing and market value interests: a statutory trustee company; and (iii) any share in the trustee or option over a share in the trustee is disposed of, issued, or granted; and to the extent to which the disposal, issue, or grant changes the beneﬁcial ownership of the share or option over a share in the ﬁrst company, unless it can be shown not to have a purpose or effect of defeating the intent and application of any of the continuity provisions.
(4) Trustee treated as disposing of share or option The trustee is treated as having disposed of the share or option in the ﬁrst company, at the time of the disposal, issue, or grant, to an unrelated person and having immediately reacquired the share or option.
3161 Part Y s YC 10 Income Tax Act 2007 Reprinted as at 2 September 2013 (5) Avoidance Section GB 5 (Arrangements involving trust beneﬁciaries) may apply to treat a share or option held by a trustee as being disposed of at the time of a change in trust beneﬁciaries.
Deﬁned in this Act: company, continuity provision, market value interest, share, statutory trustee company, trustee, voting interest Compare: 2004 No 35 s OD 5(3), (4) YC 10 Shareholders holding less than 10% direct interests (1) (2) (3) When this section applies This section applies when— (a) a person has a direct voting interest or direct market value interest of less than 10% in a company (the issu- ing company), calculated before section YC 4, as modi- ﬁed by section YC 11, is applied: the person is not a company that is associated with the issuing company.
(b) Person’s interest treated as held by notional single person The person’s direct voting or market value interest is treated as held by a notional single person that— (a) (b) (c) is not a company; and exists as long as the issuing company exists; and holds all interests in the issuing company to which this section applies; and holds nothing other than voting or market value interests in the company.

(d) Overriding look-through rule for corporate shareholders This section overrides section YC 4.
Deﬁned in this Act: associated person, company, direct market value interest, direct voting interest, market value interest, shareholder, voting interest Compare: 2004 No 35 s OD 5(5) YC 11 No look-through rule for companies in certain cases When this section applies This section applies when a company (the shareholder com- pany) has, before section YC 4 is applied to that interest, a vot- ing interest or market value interest in another company (the issuing company) and either subsection (2) or (3) applies.
(1) 3162 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YC 12 (2) First case: limited attribution company holding less than 50% The shareholder company— (a) (b) is a limited attribution company; and the voting interest or market value interest, when added to any interests which the shareholder company is treated as having under section YC 4, as modiﬁed by this section and section YC 10, is less than 50%.
Second case: shareholder not associated and would be attributed less than 10% (3) A person (the shareholder), who holds a voting or market value interest in the shareholder company, to whom the rele- vant portion of the voting interest or market value interest in the issuing company would be attributed under section YC 4, assuming section YC 10 does not then apply to the portion,— is not associated with the issuing company; and (a) the relevant portion, before adding any other voting or (b) market value interest which the shareholder has or is treated as having, is less than 10%.
(4) Overriding look-through rule Section YC 4 does not apply to the voting or market value interest of the shareholder company.
Deﬁned in this Act: associated person, company, co-operative company, double tax agreement, limited attribution company, market value interest, shareholder, voting interest Compare: 2004 No 35 s OD 5(6) Section YC 11(3): amended (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 131(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
YC 12 Public unit trusts (1) (2) When this section applies This section applies in relation to a public unit trust if the pub- lic unit trust chooses to apply it.

Unit holders treated as notional single person The unit holders’ shares in the unit trust are treated as held by a notional single person that— (a) (b) (c) is not a company; and exists as long as the unit trust exists; and holds nothing other than the shares in the unit trust.
3163 Part Y s YC 13 Income Tax Act 2007 Reprinted as at 2 September 2013 (3) (4) Treatment of balances carried forward into 2001–02 tax year Subsection (4) applies if— (a) a public unit trust exists on the ﬁrst day of the 2001–02 tax year; and the public unit trust chose to apply section OD 5(5B) of the Income Tax Act 1994 from the ﬁrst day of the tax year.
(b) Notional single person treated as always existing The notional single person is treated as having accumulated and as having always existed in relation to the balances, at the start of the 2001–02 tax year, of the unit trust’s— (a) (b) (c) Deﬁned in this Act: company, FDP account, imputation credit account, loss balance, public unit trust, share, shareholder, tax year, unit trust Compare: 2004 No 35 s OD 4(5A)–(5C) imputation credit account: foreign dividend payment (FDP) account: loss balances.
YC 13 Corporate spin-outs When this section applies This section applies if— (a) a share in a company (the spun-out company) is trans- ferred or issued to a shareholder in another company (the original parent); and before the transfer or issue, the original parent is treated, under section YC 11(3), as holding a voting interest or market value interest in another company (the spun-out subsidiary); and before the transfer or issue, the original parent is treated as holding an interest in the spun-out company that is a voting interest of more than 50% or, if a market value circumstance exists, a market value interest of more than 50%, both calculated as if section YC 4 did not apply to treat the original parent’s interests in the spun-out company as being held by others; and at the time of the transfer or issue, the original parent is a limited attribution company; and after the transfer or issue, the spun-out company is treated under section YC 11(3) as holding the voting (1) 3164 (b) (c) (d) (e) Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YC 13 (f) interest or market value interest in the spun-out sub- sidiary; and after the transfer or issue, the spun-out company is, at all times during the relevant period described in subsection (3), a limited attribution company.
(2) (3) (4) Overriding look-through rule for spun-out company Section YC 4 is overridden and the spun-out company is treated as holding the voting interest or market value interest in the spun-out subsidiary— (a) for the period before the transfer or issue that the ori- ginal parent was treated as holding the interest; and for the purposes of applying the continuity provisions from the date of the transfer or issue; and to the extent to which, immediately after the transfer or issue, a group of persons exists who hold common interests in the original parent and the spun-out com- pany, calculated on the assumption that the only voting interests and market value interests in those companies are those treated as held by those companies under sec- tion YC 11(3).
(b) (c) Meaning of relevant period In subsection (1)(f), relevant period means— (a) in relation to the offset of a loss under Part I (Treatment of tax losses), the period from the date of the transfer or issue until the last day of the period in which the loss is offset: in relation to a credit subject to a continuity provision, the period from the date of the transfer or issue until the date the credit is cancelled by a subsequent debit.
Meaning of common interest In subsection (2)(c), common interest means— (a) if a market value circumstance does not exist for the original parent or the spun-out company, the common voting interest described in subsection (5): if a market value circumstance exists for the original parent but not the spun-out company, the lower of— (i) the common voting interest described in subsec- tion (5); and (b) (b) 3165 Part Y s YC 13 Income Tax Act 2007 Reprinted as at 2 September 2013 (c) (d) the market value interest in the original parent: (ii) if a market value circumstance exists for the spun-out company but not the original parent, the lower of— (i) the common voting interest described in subsec- tion (5); and the market value interest in the spun-out com- pany: (ii) if a market value circumstance exists for the original parent and the spun-out company, the lower of the com- mon voting interest described in subsection (5) and the common market value interest described in subsection (6).
Meaning of common voting interest In subsection (4), common voting interest, for a person in relation to the original parent and the spun-out company, means— (a) the percentage voting interest of the person in each com- pany, if the percentages are the same: the lower of the percentage voting interests of the person in the companies, if the percentages differ.
(b) Meaning of common market value interest In subsection (4), common market value interest, for a per- son in relation to the original parent and the spun-out company, means— (a) the percentage market value interest of the person in each company, if the percentages are the same: the lower of the percentage market value interests of the person in the companies, if the percentages differ.
(b) Common interests: look-through rules partially overridden For the purposes of measuring common interests, neither sec- tion YB 21 (Transparency of nominees) nor YC 4 apply to treat a nominee’s or company’s voting interest or market value interest in the original parent or the spun-out company to be held by another person, if the interest the other person would be treated as holding would be less than 10%.
Deﬁned in this Act: common interest, common market value interest, common voting interest, company, continuity provision, group of persons, limited at- (5) (6) (7) 3166 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YC 15 tribution company, market value circumstance, market value interest, relevant period, share, shareholder, voting interest Compare: 2004 No 35 s OD 5(6A)–(6F) Section YC 13(1)(c): substituted (with effect on 1 May 2011), on 29 August 2011, by section 132 of the Taxation (Tax Administration and Remedial Mat- ters) Act 2011 (2011 No 63).
YC 14 Disregarding concessionary rules When this section applies (1) As the provisions of sections YC 10 to YC 13 are intended to have concessionary effect, subsection (2) applies if— (a) at a time, for a company and a continuity provision, the requirements of the provision are not met; but the requirements would have been met but for the appli- cation to a particular extent of sections YC 10 to YC 13.
(b) (2) Requirements of continuity provision treated as met The requirements of the continuity provision are treated as met at the time.
Deﬁned in this Act: company, continuity provision Compare: 2004 No 35 s OD 5(7) YC 15 Directors’ knowledge of failure to meet requirements of continuity provision (1) When this section applies This section applies if— (a) (b) for a company at a time, the requirements of a continuity provision would not have been met but for the applica- tion of section YC 10, YC 11, or both; and the failure, but for that concessionary application, to meet the requirements would have occurred in the ab- sence of transactions of the following types: (i) the sale of shares in a company in the ordinary course of trading on a recognised exchange be- tween less than 10% holders: the cancellation of shares in a unit trust, that falls within paragraph (a), (b), or (c) of the deﬁnition of widely-held trust, held by less than 10% hold- ers: (ii) 3167 Part Y s YC 15 Income Tax Act 2007 Reprinted as at 2 September 2013 (iii) (iv) (v) the cancellation of shares in a unit trust, that falls within paragraph (a), (b), or (c) of the deﬁnition of widely-held trust, which were acquired from less than 10% holders by the manager or trustee of the unit trust in the ordinary course of their activities in relation to the unit trust: the transfer of shares in a company other than in the ordinary course of trading on a recognised ex- change between persons, each of which is not a company associated with the company and has a direct voting interest or direct market value in- terest of less than 5%, calculated before the ap- plication of section YC 4 as modiﬁed by section YC 11: the issue, redemption, or cancellation by a com- pany, or the transfer to or from the company, or the transfer to an employee of the company from a trustee of a trust with no beneﬁciary other than the company and the company’s employees, of shares in the company, or options over shares in the company, that in total for the company’s in- come year would be a direct voting interest or di- rect market value interest of less than 5% if held by a single person; and (c) the directors of
 the company know or could reasonably be expected to know, without making enquiries specif- ically for the purposes of applying the continuity provi- sions, that the requirements of the continuity provision would not have been met but for that concessionary ap- plication.
(2) Requirements of continuity provision treated as not met The requirements of the continuity provision are treated as not met at the time.

3168 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YC 16 (3) Meaning of less than 10% holder In this section, less than 10% holder means a person whose direct voting interest or direct market value interest is, at all relevant times, an interest to which section YC 10 applies.
Deﬁned in this Act: company, continuity provision, director, less than 10% holder, recognised exchange, share, trustee, unit trust, widely-held trust Compare: 2004 No 35 s OD 5(8) Section YC 15(1)(b): amended (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 133(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section YC 15(1)(b)(iii): amended (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 133(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section YC 15(1)(b)(iv): added (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 133(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section YC 15(1)(b)(iv): amended (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 133(3) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Section YC 15(1)(b)(v): added (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 133(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Section YC 15(1)(b)(v): substituted (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 133(4) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
YC 16 Disregarding market value changes (1) When this section applies This section applies if— (a) (b) (c) for a company at a time, the requirements of a continuity provision are not met; and the requirements would have been met but for a change in the market value interest of 1 or more persons; and the change is solely attributable to— (i) a change in the market value of the tangible and intangible assets of the company: a change in the market value of any 1 or more shares in the company that is not attributable to any change in the terms of those shares: a combination of those factors.
(ii) (iii) 3169 Part Y s YC 17 Income Tax Act 2007 Reprinted as at 2 September 2013 (2) Requirements of continuity provision treated as met The requirements of the continuity provision are treated as met at the time.
Deﬁned in this Act: company, continuity provision, market value, market value interest, share Compare: 2004 No 35 s OD 5(9) YC 17 Demutualisation of insurers (1) (2) When this section applies This section applies if an insurer stops being a special corpo- rate entity as a result of demutualisation.
Former member acquiring voting or market value interest Subsection (3) applies if— (a) a person acquires a voting interest or a market value in- terest in an insurer on the demutualisation of the insurer; and immediately before the demutualisation, the person was a member of the insurer; and the interest is acquired solely as a result of that mem- bership.
(b) (c) When person treated as holding interest (3) With effect from the date of the acquisition but subject to sec- tion YC 10, the person is treated as having held the voting interest or market value interest at all times during the period in which the insurer was a special corporate entity.
Trustee for former member acquiring voting or market value interest Subsection (5) applies if— (a) a person acquires a voting interest or a market value interest in a life insurer on the demutualisation of the life insurer; and the person is the trustee of a trust for the beneﬁt of per- sons who were members of the life insurer immediately before the demutualisation; and the trust was established before the demutualisation process— (i) as an interim holding vehicle pending distribu- tion to the members of all shares held by the trust: (b) (c) (4) 3170 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YC 17 (ii) to exercise voting rights on behalf of the mem- bers in relation to any holding company estab- lished before the demutualisation process which holds all the shares in the life insurer; and the Commissioner considers that the trust falls within paragraphs (b) and (c), and has notiﬁed the trustee.
(d) When trustee treated as holding interest (5) With effect from the date of the acquisition, the trustee is treated as having held the voting interest or market value inter- est at all times during the period in which the life insurer was a special corporate entity.
(6) Application of section YC 10 to interests of former members Subsection (7) applies if— (a) (b) subsection (5) applies; and the notional single person referred to in section YC 10 acquires a voting interest or market value interest in the life insurer on— (i) the distribution by the trustee of the shares from the trust: (ii) the issue of shares by the holding company; and the person referred to in section YC 10(1), whose direct voting interest or direct market value interest is treated under section YC 10 as that of the notional single person resulting in the notional single person’s interest in the life insurer,— (i) was a member of the life insurer immediately before the demutualisation, or is a trustee of a trust for the members; and acquired the direct voting interest or direct mar- ket value interest as a result of the membership.
(ii) (c) When notional single person treated as holding interest (7) With effect from the date of the acquisition, the notional single person is treated as having existed and having held the voting interest or market value interest at all times during— (a) the period in which the life insurer was a special corpo- rate entity; and the period of the trust before the acquisition by the no- tional single person.
(b) 3171 Part Y s YC 17 Income Tax Act 2007 Reprinted as at 2 September 2013 (8) Community trust acquiring voting or market value interest Subsection (9) applies if— (a) a person acquires a voting interest or a market value interest in an insurer on and solely as a result of the demutualisation of the insurer; and the person is the trustee of a community trust for the beneﬁt of some or all of a community which generally includes persons who were members of the insurer im- mediately before the demutualisation; and the Commissioner considers that the trust falls within paragraph (b) and has notiﬁed the trustee.
(b) (c) When trustee treated as holding interest (9) With effect from the date of the acquisition, the trustee is treated as having held the voting interest or market value in- terest at all times during the period in which the insurer was a special corporate entity.
Net losses of years before 1992–93 (10) Subsection (11) applies if— (a) (b) (c) (d) an insurer undergoes demutualisation; and the insurer, or another company that is part of the same group of companies (the loss company), had a net loss in a tax year before the 1992–93 tax year; and the loss company carried the loss forward to the 1992–93 tax year under the Income Tax Act 1976; and the loss has not been offset against net income for any period before demutualisation.
Net loss treated as for 1992–93 tax year (11) Despite section IZ 5 (Companies’ tax losses for tax years be- fore 1991–92 tax year) for the purposes of Part I (Treatment of tax losses), with effect from the date on which the insurer stops being a special corporate entity on the demutualisation, the loss is treated as having arisen on the ﬁrst day of the loss company’s 1992–93 tax year and not to have arisen in the ear- lier tax year.
Credit account credits arising before 1 April 2002 (12) Subsection (13) applies if— (a) an insurer undergoes demutualisation; and 3172 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YC 18 (b) the insurer or another company that is part of the same group of companies has, at the time of the commence- ment of the process of demutualisation, a credit that arose before 1 April 1992 in— (i) (ii) (iii) its imputation credit account: its FDP account.
[Repealed] Credit treated as arising on 1 April 1992 (13) Despite section OZ 4 (Terminating modiﬁcations to debits for loss of shareholder continuity), for the purposes of Part O (Memorandum accounts), with effect from the date on which the insurer stops being a special corporate entity on the de- mutualisation, the credit is treated as having ﬁrst arisen in the account on 1 April 1992 and not when it actually arose.
Deﬁned in this Act: branch equivalent tax account, community trust, company, direct market value interest, direct voting interest, FDP account, imputation credit account, insurer, life insurer, market value interest, net income, net loss, share, special corporate entity, tax year, trustee, voting interest Compare: 2004 No 35 s OD 5A Section YC 17(12)(b)(ii): amended, on 1 July 2012 (applying for income years beginning on or after that date), by section 133(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Section YC 17(12)(b)(iii): repealed, on 1 July 2012 (applying for income years beginning on or after that date), by section 133(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
YC 18 Reverse takeovers (1) When subsections (2) and (3) apply Subsections (2) and (3) apply if— (a) (b) (c) a limited attribution company (the initial parent) is treated under section YC 11(3) as holding all ownership interests in another company (the subsidiary); and a change in the ownership of the initial parent occurs, or the initial parent ends its existence on an amalgamation (the changeover); and immediately after the changeover, another limited attri- bution company (the new parent) is treated under sec- tion YC 11(3) as holding all ownership interests in the subsidiary; and 3173 Part Y s YC 18 Income Tax Act 2007 Reprinted as at 2 September 2013 (d) (e) immediately after the changeover, all or part of the ownership interests in the new parent are treated under section YC 11(3) as being held by persons (the ini- tial owners) who were treated as holding ownership interests in the initial parent immediately before the changeover; and in the case of each initial owner, the percentage own- ership interest in the initial parent that the initial owner holds immediately before the changeover is the same as the percentage ownership interest in the new par- ent that the initial owner holds immediately after the changeover.
(2) (3) Loss balance continuity If the initial owners hold a total of 49% or more of the ownership interests in the new parent immediately after the changeover, the new parent is treated for the purposes of Part I (Treatment of tax losses) as— (a) holding, immediately after the changeover, the owner- ship interests in the subsidiary that the initial parent held immediately before the changeover; and having held the ownership interests for the period for which the ownership interests were treated as held by the initial parent.
(b) Credit account continuity If the initial owners hold a total of 66% or more of the ownership interests in the new parent immediately after the changeover, the new parent is treated for the purposes of subparts OB, OC, and OP (which relate to imputation credit accounts and FDP credit accounts) as— (a) holding, immediately after the changeover, the owner- ship interests in the subsidiary that the initial parent held immediately before the changeover; and having held the ownership interests for the period for which the ownership interests were treated as held by the initial parent.
(b) When subsection (5) applies (4) As the provisions of this section are intended to have conces- sionary effect, subsection (5) applies if— 3174 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YC 18 (5) (6) (7) (a) (b) at a time, for a company and a continuity provision, the requirements of the provision are not met; but the requirements would have been met but for the appli- cation to a particular extent of subsections (2) and (3).
Requirements met The requirements of the continuity provision are treated as met at the time.

Meaning of ownership interest In this section and section YC 19B, ownership interest, for a company means— (a) a voting interest in the company determined by applying section YC 4(2): a market value interest in the company determined by applying section YC 4(5).
(b) Limited application to changeovers before 3 April 2006 Subsections (2) and (3) apply for a person for a changeover oc- curring before 3 April 2006 only if, before that date, the person ﬁles a return of income on the basis that the requirements of a continuity provision are satisﬁed in relation to the company and the changeover.
Deﬁned in this Act: amalgamation, company, continuity provisions, limited at- tribution company, market value interest, ownership interest, return of income, voting interest Compare: 2004 No 35 s OD 5AA Section YC 18(6): amended (with effect on 1 January 2011), on 2 November 2012, by section 156(a) of the Taxation (Annual Rates, Returns Filing, and Re- medial Matters) Act 2012 (2012 No 88).
Section YC 18(6)(a): amended (with effect on 1 January 2011), on 2 November 2012, by section 156(b) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section YC 18(6)(a): amended (with effect on 1 April 2008), on 6 October 2009, by section 569(1)(a) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YC 18(6)(b): amended (with effect on 1 January 2011), on 2 November 2012, by section 156(b) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section YC 18(6)(b): amended (with effect on 1 April 2008), on 6 October 2009, by section 569(1)(b) of the Taxation (International Taxation, Life Insur- ance, and Remedial Matters) Act 2009 (2009 No 34).
Section YC 18 list of deﬁned terms market value circumstance: repealed (with effect on 1 April 2008), on 6 October 2009, by section 569(2) of the Taxation 3175 Part Y s YC 18B Income Tax Act 2007 Reprinted as at 2 September 2013 (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
YC 18B Corporate reorganisations not affecting economic ownership When subsection (3) applies Subsection (3) applies if a company (the initial parent) enters into an arrangement described in subsection (2).
Description of arrangement The description of the arrangement for the purposes of subsec- tion (1) is as follows: (a) the initial parent is a limited attribution company that is treated under section YC 11(3) and (4) as holding own- ership interests in another company before the arrange- ment is entered into; and the ownership of the initial parent is reorganised so that another company (the new parent) is a limited attribu- tion company that is treated under section YC 11(3) and (4) as holding ownership interests in the initial parent after the arrangement is implemented; and the percentage ownership interests (the ﬁnal percent- age) that a person receives in the new parent is the same as their percentage ownership interests (the initial per- centage) in the initial parent that they cease to hold as a result of the arrangement.
For the purposes of this para- graph, a difference between the initial and ﬁnal percent- ages is ignored if the difference is caused by a transfer or non-transfer of ownership interests that— (i) facilitates the arrangement, and the relevant own- ership interests have a market value that is merely nominal relative to the value of the ownership interests in the new parent: is the direct result of impossibility or impractica- bility caused by securities law requirements; and a person holding ownership interests in the initial parent before the arrangement is entered into does not receive a dividend, gift, or other direct beneﬁt as a result of the arrangement.
For the purposes of this paragraph,— (ii) (b) (c) (d) (1) (2) 3176 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YC 18B (i) (ii) ownership interests in the initial parent for which paragraph (c)(ii) applies are excluded from a per- son’s holding of ownership interests: ownership interests in the new parent are ex- cluded from being a dividend, gift, or other direct beneﬁt.
(3) (4) (5) Loss balance and credit account continuity For the purposes of the tests of ownership and control in Part I and subparts LP, OA, OB, OC, and OP (which relate to loss balances, tax credits, and memorandum accounts), start- ing from when the initial parent is ﬁrst treated under section YC 11(3) and (4) as holding the ownership interests in another company, the new parent is treated as— (a) existing and having the shareholders it has immediately after the arrangement’s implementation: holding the ownership interests that the initial parent is treated under section YC 11(3) and (4) as holding: holding all ownership interests in the initial parent.
(b) (c) Effect of subsection (3) Subsection (3) does not prevent a change in shareholders, the holdings of ownership interests, or other circumstances, after the implementation of the arrangement from having an effect on the application of the continuity provisions and the provi- sions described in subsection (3) after the implementation of the arrangement.
Deﬁnitions In this section,— (a) (b) ownership interest has the same meaning as in section YC 18(6), except that for the purposes of this section, excluded preference shares are ignored: excluded preference share means a share that is disre- garded, under section 703–37 of the Income Tax As- sessment Act 1997 (Aust), in determining whether a company can be a subsidiary member of a consolidated group for the purposes of that Act.
Deﬁned in this Act: arrangement, company, continuity provision, dividend, ex- cluded preference share, limited attribution company, ownership interest, share, shareholder 3177 Part Y s YC 18C Income Tax Act 2007 Reprinted as at 2 September 2013 Section YC 18B: inserted (with effect on 1 April 2008), on 6 October 2009, by section 570 of the Taxation (International Taxation, Life Insurance, and Remed- ial Matters) Act 2009 (2009 No 34).
Section YC 18B(2)(c): amended, on 2 November 2012, by section 157 of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section YC 18B(3): amended, on 1 July 2012 (applying for income years be- ginning on or after that date), by section 134(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
YC 18C Railways restructure not affecting Crown economic ownership (1) (2) When this section applies This section applies for New Zealand Railways Corporation, KiwiRail Holdings Limited, and any company that, immedi- ately after the Railways vesting, is in the same wholly-owned group as KiwiRail Holdings Limited for the purposes of the tests of ownership and control in: (a) Parts I and O (which relate to losses and memorandum accounts): the consolidation rules: the amalgamation rules.
(b) (c) Loss balance, credit account, and restructuring continuity Starting from when New Zealand Railways Corporation is ﬁrst treated as having a notional single person under section YC 5, KiwiRail Holdings Limited is treated as–– (a) existing and having the same notional single person under section YC 5 that KiwiRail Holdings Limited has immediately after the Railways vesting: holding the ownership interests in other companies that New Zealand Railways Corporation held before the Railways vesting.
(b) No notice requirement for joining consolidated group (3) KiwiRail Holdings Limited may choose to join an existing consolidated group on and after 31 December 2012, despite section FM 38 (Notice requirements on forming or joining consolidated group).
3178 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YC 19 (4) (5) Effect of subsection (2) Subsection (2) does not prevent a change in shareholders, no- tional single person, the holdings of ownership interests, or other circumstances occurring after the Railways vesting.

Deﬁnitions In this section,–– ownership interest has the same meaning as in section YC 18(6) Railways vesting has the same meaning as in section EZ 68 (Deﬁnitions).
Deﬁned in this Act: amalgamation rules, consolidation rules, consolidated group, ownership interest, Railways vesting, shareholder, wholly-owned group Section YC 18C: inserted (with effect on 31 December 2012), on 17 July 2013, by section 101 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
YC 19 Legislative conversion of foreign company of proprietors (1) (2) When this section applies This section applies if— (a) a company of proprietors is established by a statute of a legislature outside New Zealand; and the company of proprietors becomes a limited liability company as a result of another statute.
(b) Proprietor acquiring voting or market value interest Subsection (3) applies if— (a) a person acquires a voting interest or a market value interest in a company on the conversion of a company of proprietors; and immediately before the conversion, the person was a proprietor of the company of proprietors and the person acquired the interest solely as a result of being a propri- etor.
(b) Company and person treated as always having held interest (3) With effect from the date of acquisition but subject to section YC 10,— (a) the company of proprietors is treated as having been a company with shareholders at all times before the con- version; and 3179 Part Y s YC 19B Income Tax Act 2007 Reprinted as at 2 September 2013 (b) the person is treated as having held the voting interest or market value interest at all times before the conversion.
Deﬁned in this Act: company, market value interest, New Zealand, shareholder, voting interest Compare: 2004 No 35 s OD 5B YC 19B Treatment when certain trusts terminated (1) (2) (3) When this section applies This section applies when— (a) a trust established for the sole beneﬁt of the New Zealand government or an overseas government is terminated; and all the ownership interests held by the trustees of the trust in a company are transferred to the government beneﬁciary.
(b) Date of acquisition of shares The government beneﬁciary is treated as acquiring the owner- ship interests transferred by the trustees on the date the trustees acquired the ownership interests.

Deﬁnition In this section, ownership interest has the meaning given in section YC 18(6).
Deﬁned in this Act: company, New Zealand, ownership interest, trustee Section YC 19B: inserted (with effect on 1 January 2011), on 2 November 2012, by section 158 of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

YC 20 Credit account continuity provisions: excluded ﬁxed rate securities When this section applies This section applies for the purposes of the credit account con- tinuity provisions.
Counting excluded ﬁxed rate securities Section YC 6 applies as if— (a) (b) section YC 6(1)(a) were omitted; and each other reference to “excluded ﬁxed rate security” were omitted.
(1) (2) 3180 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YC 20 (3) Relationship with section YA 1 Section YA 1 (Deﬁnitions) applies as if— (a) (b) paragraph (e) of the deﬁnition of excluded option were omitted; and in paragraphs (a), (b), and (f) of the deﬁnition of market value circumstance, the words “an excluded ﬁxed rate security” were replaced by “a”.
Deﬁned in this Act: credit account continuity provisions, excluded ﬁxed rate security Compare: 2004 No 35 s OD 6 Subpart YD—Residence and source in New Zealand Contents Residence YD 1 Residence of natural persons YD 2 Residence of companies YD 3 Country of residence of foreign companies YD 3B Crown Source YD 4 Classes of income treated as having New Zealand source YD 5 Apportionment of income derived partly in New Zealand YD 6 Apportionment of income from sea transport YD 7 Apportionment of ﬁlm rental income [Repealed] YD 8 Apportionment of premiums derived by non-resident general insurers Conduit tax relief companies: special residence rules [Repealed] YD 9 Residence of CTR company shareholders [Repealed] YD 10 Meaning of CTR holding company [Repealed] YD 11 Meaning of CTR group member [Repealed] Page 3182 3184 3184 3185 3186 3189 3190 3191 3191 3193 3194 3194 3181 Part Y s YD 1 Income Tax Act 2007 Reprinted as at 2 September 2013 YD 1 Residence of natural persons Residence (1) What this section does This section contains the rules for determining when a person who is not a company is a New Zealand resident for the pur- poses of this Act.
Permanent place of abode in New Zealand (2) Despite anything else in this section, a person is a New Zealand resident if they have a permanent place of abode in New Zealand, even if they also have a permanent place of abode elsewhere.

183 days in New Zealand (3) A person is a New Zealand resident if they are personally present in New Zealand for more than 183 days in total in a 12-month period.
(4) Person treated as resident from ﬁrst of 183 days If subsection (3) applies, the person is treated as resident from the ﬁrst of the 183 days until the person is treated under sub- section (5) as ceasing to be a New Zealand resident.

Ending residence: 325 days outside New Zealand (5) A person treated as a New Zealand resident only under sub- section (3) stops being a New Zealand resident if they are per- sonally absent from New Zealand for more than 325 days in total in a 12-month period.
(6) Person treated as non-resident from ﬁrst of 325 days The person is treated as not resident from the ﬁrst of the 325 days until they are treated again as resident under this section.

Government servants (7) Despite subsection (5), a person who is personally absent from New Zealand in the service, in any capacity, of the New Zealand Government is treated as a New Zealand resident during the absence.
Presence for part-days For the purposes of this section, a person personally present in New Zealand for part of a day is treated as— (a) (b) present in New Zealand for the whole day; and not absent from New Zealand for any part of the day.
(8) 3182 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YD 1 (9) (10) Special concession for transitional residents [Repealed] [Repealed] No application for preceding 12 months [Repealed] [Repealed] Treatment of non-resident seasonal workers (11) Despite subsection (3), a non-resident seasonal worker is treated for the duration of their employment under the recog- nised seasonal employment scheme as a non-resident.
Deﬁned in this Act: company, New Zealand resident, non-resident seasonal worker, recognised seasonal employment scheme Compare: 2004 No 35 s OE 1 Section YD 1(9) heading: repealed (with effect on 1 April 2008), on 6 October 2009, pursuant to section 571(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YD 1(9): repealed (with effect on 1 April 2008), on 6 October 2009, by section 571(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YD 1(10) heading: repealed (with effect on 1 April 2008), on 6 October 2009, pursuant to section 571(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YD 1(10): repealed (with effect on 1 April 2008), on 6 October 2009, by section 571(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YD 1(11) heading: added (with effect on 1 April 2009), on 6 October 2009, by section 571(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YD 1(11): added (with effect on 1 April 2009), on 6 October 2009, by section 571(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YD 1 list of deﬁned terms non-resident seasonal worker: added (with effect on 1 April 2009), on 6 October 2009, by section 571(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YD 1 list of deﬁned terms recognised seasonal employment scheme: added (with effect on 1 April 2009), on 6 October 2009, by section 571(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YD 1 list of deﬁned terms transitional resident: repealed (with ef- fect on 1 April 2008), on 6 October 2009, by section 571(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
3183 Part Y s YD 2 Income Tax Act 2007 Reprinted as at 2 September 2013 YD 2 Residence of companies Four bases for residence (1) A company is a New Zealand resident for the purposes of this Act if— (a) (b) (c) (d) it is incorporated in New Zealand: its head ofﬁce is in New Zealand: its centre of management is in New Zealand: its directors, in their capacity as directors, exercise con- trol of the company in New Zealand, even if the direct- ors’ decision-making also occurs outside New Zealand.
International tax rules (2) Despite subsection (1), for the purpose of the international tax rules, a company is treated as remaining resident in New Zealand if it becomes a foreign company but is resident in New Zealand again within 183 days afterwards.
Cook Islands National Superannuation Fund trustee (3) Despite subsection (1), the trustee of the Cook Islands Na- tional Superannuation Fund, established by the Cook Islands National Superannuation Fund Deed under the Cook Islands National Superannuation Scheme Act 2000 (Cook Islands), is not a New Zealand resident.
Deﬁned in this Act: company, director, foreign company, New Zealand resident Compare: 2004 No 35 ss GC 9(6), OE 2(1), (1B) YD 3 Country of residence of foreign companies When this section applies This section applies for the purposes of the international tax rules to determine the country in which a foreign company is treated as resident for an accounting period.
Liability to income tax The company is treated as resident in a country if, at any time during the accounting period, it is liable to income tax in the country because any of the following is located in the coun- try— (a) (b) (c) (d) its domicile: its residence: its place of management: any other criterion of a similar nature.
(1) (2) 3184 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YD 3B (3) (4) (5) (6) Further rule: ﬁrst application Subsection (4) applies if the application of subsection (2) for an accounting period means that— (a) (b) the company is resident in 2 or more countries: the company is not resident in any country.
Applying New Zealand rules The company is treated as resident in the country in which— (a) (b) (c) (d) it is incorporated: it has its head ofﬁce: it has its centre of management: its directors, in their capacity as directors, exercise con- trol of the company, even if the directors’ decision-mak- ing also occurs outside the country.
Further rule: second application The company is treated as resident in the country in which its centre of management is located for the accounting period if no 1 country of residence is identiﬁed under subsection (4).

Final rule The Commissioner must determine the country of residence if no 1 country of residence is identiﬁed under subsection (5).
Deﬁned in this Act: accounting period, Commissioner, company, director, for- eign company, international tax rules Compare: 2004 No 35 s OE 2(2)–(6) Section YD 3(4)(b): amended (with effect on 1 April 2008), on 6 October 2009, by section 572(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

YD 3B Crown For the purposes of this Act and for the avoidance of doubt, Her Majesty the Queen in right of New Zealand is regarded as resident in New Zealand.
Deﬁned in this Act: New Zealand, resident in New Zealand Section YD 3B: inserted (with effect on 1 April 2011), on 29 August 2011 (ap- plying for the 2011–12 and later income years), by section 134(1) of the Taxa- tion (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
3185 Part Y s YD 4 Income Tax Act 2007 Reprinted as at 2 September 2013 Source YD 4 Classes of income treated as having New Zealand source (1) (2) (3) What this section does This section lists the types of income that are treated as having a source in New Zealand for the purposes of this Act.
Business in New Zealand Income derived from a business has a source in New Zealand if— (a) (b) the business is wholly carried on in New Zealand: the business is partly carried on in New Zealand, to the extent to which the income is apportioned to a New Zealand source under section YD 5.
Contracts made or performed in New Zealand Income derived by a person from a contract has a source in New Zealand if the contract is— (a) made in New Zealand, except to the extent to which the person wholly or partly performs the contract outside New Zealand, and the income is apportioned to a source outside New Zealand under section YD 5: (b) made outside New Zealand but the person wholly or partly performs the contract here, to the extent to which the income is apportioned to a New Zealand source under section YD 5.
Personal services in New Zealand (4) An amount that is income under section CE 1 (Amounts de- rived in connection with employment) has a source in New Zealand if the amount is earned in New Zealand, even if the employer is not a New Zealand resident.

Accident compensation payments (5) An accident compensation payment as deﬁned in section CF 1(2) (Beneﬁts, pensions, compensation, and government grants) has a source in New Zealand.
Pensions The following amounts have a source in New Zealand: (a) a pension or annuity payable by the government of New Zealand: (6) 3186 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YD 4 (b) (c) a pension or annuity payable out of a superannuation scheme established in New Zealand: a gratuitous payment, within the deﬁnition of pension in section CF 1(2), if the services are provided in New Zealand.
Income from land owned in New Zealand Income derived by a person as the owner of land in New Zealand has a source in New Zealand.

Income from use in New Zealand of personal property Income, other than a royalty, derived as consideration for the use of, or right to use, personal property in New Zealand has a source in New Zealand if the income is— paid by a New Zealand resident: (a) paid by a non-resident, and for which the non-resident (b) is allowed a deduction.
(7) (8) Royalties (9) A royalty has a source in New Zealand if it is— (a) (b) paid by a New Zealand resident and not made in connec- tion with a business they carry on outside New Zealand through a ﬁxed establishment outside New Zealand: paid by a non-resident, and for which the non-resident is allowed a deduction.

(10) Dividends Income derived from shares in, or membership of, a company resident in New Zealand has a source in New Zealand.
Income from debt instruments (11) The following amounts have a source in New Zealand— (a) (b) interest or a redemption payment derived from money lent in New Zealand: interest or a redemption payment derived from money lent outside New Zealand— (i) to a New Zealand resident, unless the money is used by them for the purposes of a business they carry on outside New Zealand through a ﬁxed establishment outside New Zealand: to a non-resident, if the money is used by them for the purposes of a business they carry on in (ii) 3187 Part Y s YD 4 Income Tax Act 2007 Reprinted as at 2 September 2013 New Zealand through a ﬁxed establishment in New Zealand: income from securities issued by the government of New Zealand: income derived from debentures issued by a local au- thority or public authority: income derived from a mortgage of land in New Zealand.
(c) (d) (e) Income from disposal of New Zealand property Income derived from the disposal of property situated in New Zealand has a source in New Zealand.

Beneﬁciary income Income derived by a beneﬁciary from a trust has a source in New Zealand to the extent to which the income of the trust fund has a source in New Zealand.

Income from air transport Income derived from transporting people or property by air has a source in New Zealand if the transportation leaves from New Zealand.
Income from sea transport Income derived from transporting people or property by sea has a source in New Zealand if the transportation leaves from New Zealand to the extent to which the income is apportioned to a New Zealand source under section YD 6.

(12) (13) (14) (15) Non-resident general insurers (16) A premium for general insurance paid to a non-resident gen- eral insurer of the type described in section YD 8 has a source in New Zealand to the extent set out in section YD 8(2).
(17) Non-resident life insurers: policies in New Zealand Income of a non-resident life insurer calculated under section EY 48 (Non-resident life insurers with life insurance policies in New Zealand) has a source in New Zealand.

Income from New Zealand partnerships (17B) Income has a source in New Zealand if, treating all of the part- ners of a New Zealand partnership as resident in New Zealand, the income is treated as having a source in New Zealand under another provision of this section.
The application of the other 3188 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YD 5 (18) provisions of this section is unaffected if this subsection does not apply.

Any other source in New Zealand Income derived directly or indirectly from any other source in New Zealand has a source in New Zealand.
Deﬁned in this Act: accident compensation payment, amount, business, company, debentures, deduction, dispose, employer, ﬁxed establishment, general insurance, income, interest, life insurer, local authority, money lent, New Zealand, New Zealand partnership, New Zealand resident, non-resident, partner, pay, pension, public authority, redemption payment, royalty, share, source in New Zealand, superannuation scheme Compare: 2004 No 35 ss FB 2(2) Section YD 4(17B) heading: inserted, on 1 April 2008, by section 26(1) of the Taxation (Limited Partnerships) Act 2008 (2008 No 2).
Section YD 4(17B): inserted, on 1 April 2008, by section 26(1) of the Taxation (Limited Partnerships) Act 2008 (2008 No 2).

Section YD 4 list of deﬁned terms New Zealand partnership: inserted, on 1 April 2008, by section 26(2) of the Taxation (Limited Partnerships) Act 2008 (2008 No 2).

Section YD 4 list of deﬁned terms partner: inserted, on 1 April 2008, by section 26(2) of the Taxation (Limited Partnerships) Act 2008 (2008 No 2).
Section YD 4 compare note: amended (with effect on 1 April 2008), on 6 Octo- ber 2009, by section 573 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
YD 5 Apportionment of income derived partly in New Zealand (1) When this section applies This section applies when— (a) a person carries on business partly in New Zealand and partly outside New Zealand; or a contract is made in New Zealand and is performed, in whole or in part, by a person outside New Zealand; or a contract is made outside New Zealand and is per- formed, in whole or in part, by a person in New Zealand.
(b) (c) Relationship with source rules (1B) This section does not apply to limit the effect of— (a) (b) any of the source rules in section YD 4 other than those in section YD 4(2) and (3); or the source rules in section YD 4(2) and (3) to the extent to which the income referred to is also income referred 3189 Part Y s YD 6 Income Tax Act 2007 Reprinted as at 2 September 2013 (2) (3) to in any source rule other than those in section YD 4(2) and (3).
Apportionment The amount of income derived from the business or under the contract, and the amount of expenditure incurred in deriving the income, must be apportioned between New Zealand and sources outside New Zealand to the extent necessary to achieve the result in subsection (3).
Necessary effect of apportionment The result of the apportionment, to the extent consistent with subsection (2), must be that the person’s net income or net loss, in relation to the business or contract, is the same as a separ- ate and independent person would have if they were carrying out only the person’s activities in New Zealand and dealing at arm’s length.
Deﬁned in this Act: amount, business, gross, income, net loss, New Zealand Compare: 2004 No 35 s FB 2(1A) Section YD 5(1B) heading: inserted (with effect on 1 April 2008), on 6 October 2009, by section 574(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YD 5(1B): inserted (with effect on 1 April 2008), on 6 October 2009, by section 574(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YD 5(3): amended (with effect on 1 April 2008), on 6 October 2009, by section 574(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YD 5 compare note: amended (with effect on 1 April 2008), on 6 Oc- tober 2009, by section 574(3) of the Taxation (International Taxation, Life In- surance, and Remedial Matters) Act 2009 (2009 No 34).
YD 6 Apportionment of income from sea transport When this section applies This section applies when a non-resident derives an amount of income from transporting people or property by sea from New Zealand to a destination outside New Zealand.

Five percent from source in New Zealand Five percent of the amount is treated as having a source in New Zealand and the remainder of the amount is treated as not having a source in New Zealand.
(1) (2) 3190 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YD 8 Reduction by Commissioner (3) Despite subsection (2), the Commissioner may reduce the amount that is treated as having a source in New Zealand to the extent to which the country in which the non-resident is resident would treat an amount derived by a New Zealand resident from sea transport from that country as— not having a source in that country: (a) otherwise as exempt from income tax in that country.
(b) (4) (5) No deduction The non-resident is denied a deduction under section DW 3 (Non-resident general insurers and shippers) for expenditure or loss incurred.

Intervening stop in New Zealand The transport of people or property from a port in New Zealand is treated as transport to a place outside New Zealand even if the ship calls at another New Zealand port before leaving New Zealand.
Deﬁned in this Act: amount, Commissioner, income, income tax, New Zealand resident, non-resident Compare: 2004 No 35 ss FC 18, FC 19 Section YD 6(4): amended, on 2 November 2012, by section 159 of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

YD 7 Apportionment of ﬁlm rental income [Repealed] Section YD 7: repealed, on 2 November 2012, by section 160 of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
YD 8 Apportionment of premiums derived by non-resident general insurers (1) When this section applies This section applies if— (a) (b) a premium is paid under a contract of insurance; and the insurance is of 1 of the types listed in subsection (4); and when the insurer derives the premium, they are a non- resident; and (c) 3191 Part Y s YD 8 Income Tax Act 2007 Reprinted as at 2 September 2013 (d) (e) (f) the premium is not attributable to a business of the in- surer which they carry on in New Zealand through a ﬁxed establishment in New Zealand; and the premium is treated as connected with New Zealand under any of the tests of connection in subsection (5); and subsection (6) does not apply to override subsection (5).
Ten percent of premium from source in New Zealand Ten percent of the gross premium is treated as having a source in New Zealand and the remainder of the gross premium is treated as not having a source in New Zealand.
Special rules The following provisions apply in relation to taxation of the 10% amount: (a) the insurer is denied a deduction for expenditure or loss incurred, under section DW 3 (Non-resident general in- surers and shippers): sections HD 16 (Non-resident general insurers) and HD 17 (Agent paying premiums to residents of Switzer- land) apply to impose certain obligations in relation to payment of income tax and provision of tax returns and other information.
(b) Types of insurance The types of insurance referred to in subsection (1)(b) are— (a) (b) general insurance: a guarantee against risk given by an insurer to an insured person if— (i) the insured person is liable to pay a premium to the insurer for the guarantee; and the insured person is associated with the insurer: (ii) a guarantee against risk given by an insurer to an insured person if— (i) (c) the insured person is liable to pay a premium to the insurer for the guarantee; and the risk arises from money lent to the insured person; and the amounts the insured person is liable to pay for the money are signiﬁcantly less than they would (ii) (iii) (2) (3) (4) 3192 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YD 9 (iv) otherwise have been because of the guarantee; and the effect of the guarantee on the amounts payable is more than an incidental effect, or comes about as more than an incidental purpose, of the insurer’s giving the guarantee.
(5) Connection with New Zealand The premium is connected with New Zealand if— (a) (b) (c) the insurance contract from which the premium is de- rived is offered or entered into in New Zealand: the insured person is resident in New Zealand: the insured person is a non-resident but enters into the insurance contract for the purposes of a business they carry on in New Zealand through a ﬁxed establishment in New Zealand.
No connection if all risk offshore (6) Despite subsection (5), the premium is treated as not connected with New Zealand if— (a) all risk covered by the premium is located outside New Zealand; and the insurer deriving the premium is not associated with the insured person.
(b) Deﬁned in this Act: business, ﬁxed establishment, general insurance, insurance, insurance contract, insured person, insurer, pay, source in New Zealand Compare: 2004 No 35 ss FC 13, FC 14(1) Section YD 8(3)(a): amended, on 2 November 2012, by section 161 of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Conduit tax relief companies: special residence rules [Repealed] Heading: repealed (with effect on 1 July 2011), on 7 May 2012, by section 136(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
YD 9 Residence of CTR company shareholders [Repealed] Section YD 9: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 136(2) of 3193 Part Y s YD 10 Income Tax Act 2007 Reprinted as at 2 September 2013 the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
YD 10 Meaning of CTR holding company [Repealed] Section YD 10: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 136(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
YD 11 Meaning of CTR group member [Repealed] Section YD 11: repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on 7 May 2012, by section 136(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
Subpart YE—References to balance dates and years Contents YE 1 References to balance dates and years Page 3194 YE 1 References to balance dates and years (1) When this section applies This section applies for the purposes of the Act unless the con- text requires otherwise.
Tax year identiﬁed by 2 years (2) A reference to a tax year that is identiﬁed by a reference, in full or short form, to 2 years is a reference to the tax year that— starts on 1 April in the earlier of those years; and (a) ends on 31 March in the later of those years.
(b) Income year identiﬁed by 2 years (3) A reference to an income year that is identiﬁed by a reference, in full or short form, to 2 years is a reference to the correspond- ing income year for the tax year that a reference to the same 2 years would identify.
3194 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YE 1 Standard balance date or accounting years (4) A reference to a person with a standard balance date, a standard accounting year, or a standard income year is a reference to a person who ﬁles a return of income under section 33 of the Tax Administration Act 1994 for a tax year on the basis of a corresponding income year also ending on 31 March.
Non-standard balance date, accounting year, or income year (5) A reference to a person with a non-standard balance date, non- standard accounting year, or non-standard income year is a reference to a person who has approval under section 38 of the Tax Administration Act 1994 to ﬁle a return of income for a tax year on the basis of a corresponding income year ending other than 31 March.
Unless the context requires otherwise, the non-standard year is the accounting year that corresponds to the tax year for which the reference is made.

Early balance date (6) A reference to a person with an early balance date is a ref- erence to a person who has approval under section 38 of the Tax Administration Act 1994 to ﬁle a return of income for a tax year on the basis of a corresponding income year that ends in a date between 1 October and the following 31 March, both days inclusive.
Unless the context requires otherwise, the year with the early balance date is the accounting year that corres- ponds with the tax year for which the reference is made.
Late balance date (7) A reference to a person with a late balance date is a reference to a person who has approval under section 38 of the Tax Ad- ministration Act 1994 to ﬁle a return of income for a tax year on the basis of a corresponding income year that ends in a date between 1 April and the following 30 September, both days in- clusive.
Unless the context otherwise requires, the year with the late balance date is the accounting year that corresponds with the tax year in relation to which the reference is made.
Deﬁned in this Act: accounting year, corresponding income year, early balance date, income year, late balance date, non-standard accounting year, non-stand- ard balance date, non-standard income year, return of income, standard account- ing year, standard balance date, standard income year Compare: 2004 No 35 s OF 1 3195 Income Tax Act 2007 Reprinted as at 2 September 2013 Subpart YF—Currency conversion Contents YF 1 General rules for currency conversion YF 2 Other rules for currency conversion: approved alternatives Page 3196 3198 YF 1 General rules for currency conversion (1) When this section applies This section applies when— (a) (b) (c) an amount is paid or payable in a currency other than New Zealand currency; and a provision in this Act requires the amount to be taken into account in New Zealand currency, whether ex- pressly or by necessary implication; and this Act does not contain a speciﬁc currency conversion rule that requires the conversion of the amount into New Zealand currency under a method other than those in this section.
(2) Use of spot exchange rate The amount must be converted into New Zealand currency by applying the close of trading spot exchange rate on the date at which the amount is required to be measured or calculated.
Alternative use of monthly average rates (3) Despite subsection (2), the amount may be converted into New Zealand currency by applying the average of the close of trad- ing spot exchange rates for the 15th day of each complete month that falls in the relevant period if— the Commissioner allows it: (a) a provision in this Act speciﬁcally allows it.
(b) Particular cases in which monthly average rate permitted [Repealed] [Repealed] (4) General conversion rates and calculation methods approved by Commissioner (5) Despite subsection (2), the amount may be converted into New Zealand currency by applying a rate— 3196 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YF 1 (a) (b) set by the Commissioner for general use for the pur- poses of this section: calculated using a method approved by the Commis- sioner for general use for the purposes of this section.
Speciﬁc conversion rates and calculation methods approved by Commissioner (6) Despite subsection (2), a person may convert the amount into New Zealand currency by applying a rate— (a) approved by the Commissioner for use in the circum- stances of the person: calculated using a method approved by the Commis- sioner for use in the circumstances of the person.
Deﬁned in this Act: amount, close of trading spot exchange rate, Commissioner, New Zealand, pay (b) Section YF 1(1)(c): substituted (with effect on 1 April 2008), on 6 October 2009, by section 575(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YF 1(3) heading: substituted (with effect on 1 April 2008), on 6 October 2009, by section 575(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YF 1(3)(b): substituted (with effect on 1 April 2008), on 6 October 2009, by section 575(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YF 1(4) heading: repealed (with effect on 1 April 2008), on 6 October 2009, pursuant to section 575(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
Section YF 1(4): repealed (with effect on 1 April 2008), on 6 October 2009, by section 575(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Section YF 1(5) heading: added (with effect on 1 April 2008), on 7 September 2010 (applying for the 2008–09 and later income years), by section 118(1) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Section YF 1(5): added (with effect on 1 April 2008), on 7 September 2010 (applying for the 2008–09 and later income years), by section 118(1) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Re- medial Matters) Act 2010 (2010 No 109).
Section YF 1(6) heading: added (with effect on 1 April 2008), on 7 September 2010 (applying for the 2008–09 and later income years), by section 118(1) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Section YF 1(6): added (with effect on 1 April 2008), on 7 September 2010 (applying for the 2008–09 and later income years), by section 118(1) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Re- medial Matters) Act 2010 (2010 No 109).
3197 Part Y s YF 2 Income Tax Act 2007 Reprinted as at 2 September 2013 YF 2 Other rules for currency conversion: approved alternatives (1) (2) When this section applies This section applies when— (a) (b) a provision other than section YF 1 provides a rate or method for currency conversion; and for the purposes of the provision, a person is required to convert an amount expressed in a currency other than New Zealand currency.
Representative rates The Commissioner may set a representative conversion rate that the person may use, instead of the rate or method referred to in subsection (1)(a), in converting the amount into New Zealand currency.
Deﬁned in this Act: amount, Commissioner, New Zealand Section YF 2: added (with effect on 1 April 2008), on 7 September 2010 (ap- plying for the 2008–09 and later income years), by section 119(1) of the Taxa- tion (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remed- ial Matters) Act 2010 (2010 No 109).
Subpart YZ—Terminating provisions Contents YZ 1 YZ 2 YZ 3 Source rule for interest Saving of effect of section 394L(4A) of Income Tax Act 1976 Saving effect of section DF 5 of Income Tax Act 1994 Page 3198 3199 3199 YZ 1 Source rule for interest Application from 29 July 1983 Section YD 4(11)(a) and (b) (Classes of income treated as hav- ing New Zealand source) applies to— (a) interest derived from money lent under a binding con- tract entered into on or after 29 July 1983: a redemption payment made on a commercial bill if— it was issued on or after 29 July 1983; and (i) (b) (1) 3198 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Y s YZ 3 (ii) it was not issued under a binding contract entered into before that date.
(2) Meaning of issue In this section, issue has the meaning given in section 2 of the Bills of Exchange Act 1908.

Deﬁned in this Act: commercial bill, interest, money lent, redemption payment Compare: 2004 No 35 s OE 4(1A) YZ 2 Saving of effect of section 394L(4A) of Income Tax Act 1976 Section 394L(4A) of the Income Tax Act 1976 continues to apply in the same manner as it applied immediately before the repeal of that Act by the Income Tax Act 1994.
Compare: 2004 No 35 s YA 5B Section YZ 2: added (with effect on 1 April 2008), on 6 October 2009, by section 576(1) of the Taxation (International Taxation, Life Insurance, and Re- medial Matters) Act 2009 (2009 No 34).
YZ 3 Saving effect of section DF 5 of Income Tax Act 1994 (1) When this section applies This section applies when a person— (a) has made a payment to which section DC 1 (Lump sum payments on retirement) would otherwise apply in the absence of this section; and has allocated the deduction for the payment to an in- come year relying on the wording used in section DF 5 (Retiring allowances payable to employees) of the In- come Tax Act 1994; and has taken the tax position for the allocation on or before 22 February 2011.
(b) (c) Savings provision (2) Despite the express wording used in section DC 1, section DF 5 continues to apply for the person in relation to the tax position in the same manner as it applied immediately before the repeal of the Income Tax Act 1994 by the Income Tax Act 2004.
Deﬁned in this Act: deduction, income year, pay 3199 Part Y s YZ 3 Income Tax Act 2007 Reprinted as at 2 September 2013 Section YZ 3: added (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 135(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
3200 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Z s ZA 2 Part Z Repeals, amendments, and savings Contents ZA 1 Repeals ZA 2 Consequential amendments to other enactments ZA 3 Transitional provisions ZA 4 ZA 5 ZA 6 Comparative tables of old and new provisions Saving of binding rulings Saving of accrual determinations Page 3201 3201 3202 3203 3204 3205 ZA 1 Repeals (1) Schedule 48 The enactments listed in schedule 48 (Enactments repealed) are repealed.
Repeals effective only for 2008–09 income year and later (2) However, unless the context requires otherwise, the repeals listed in schedule 48 apply only in relation to the tax on income derived in the 2008–09 income year and later income years.
Deﬁned in this Act: income, income year, tax Compare: 2004 No 35 s YA 1 ZA 2 Consequential amendments to other enactments (1) Schedules 49 and 50 The enactments listed in schedules 49 (Enactments amended) and 50 (Amendments to the Tax Administration Act 1994) are amended in the manner indicated in the schedule.
Amendments effective only for 2008–09 income year and later (2) However, unless the context requires otherwise, the amend- ments to the Tax Administration Act 1994 apply only in rela- tion to the tax on income derived in the 2008–09 income year and later income years.
Deﬁned in this Act: income, income year, tax Compare: 2004 No 35 s YA 2 3201 Part Z s ZA 3 Income Tax Act 2007 Reprinted as at 2 September 2013 ZA 3 Transitional provisions When reference to this Act includes earlier Act (1) A reference in an enactment or document to this Act, or to a provision of it, is to be interpreted as a reference to the Income Tax Act 2004, or the Income Tax Act 1994, or the Income Tax Act 1976, or to the corresponding provision of the earlier Act, to the extent necessary to reﬂect sensibly the intent of the enactment or document.
When reference to earlier Act includes this Act (2) A reference in an enactment or document to the Income Tax Act 2004, or the Income Tax Act 1994, or the Income Tax Act 1976, or to a provision of that earlier Act, is to be interpreted as a reference to this Act, or to the corresponding provision in this Act, to the extent necessary to reﬂect sensibly the intent of the enactment or document.
(3) Intention of new law The provisions of this Act, including any amendments made by this Act to the Tax Administration Act 1994, are the provi- sions of the Income Tax Act 2004 in rewritten form, and are intended to have the same effect as the corresponding provi- sions of the Income Tax Act 2004.

Subsection (5) overrides this subsection.
Using old law as interpretation guide (4) Unless a limit in subsection (5) applies, in circumstances where the meaning of a taxation law that comes into force at the commencement of this Act (the new law) is unclear or gives rise to absurdity— (a) the wording of a taxation law that is repealed by section ZA 1 and that corresponds to the new law (the old law) must be used to determine the correct meaning of the new law; and it can be assumed that a corresponding old law provision exists for each new law provision.
(b) Limits to subsections (3) and (4) Subsections (3) and (4) do not apply in the case of— (a) a new law listed in schedule 51 (Identiﬁed changes in legislation); or (5) 3202 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Z s ZA 4 (b) a new law that is amended after the commencement of this Act, with effect from the date on which the amend- ment comes into force.
Deﬁned in this Act: taxation law Compare: 2004 No 35 s YA 3 ZA 4 Saving of binding rulings (1) When, and extent to which, this section applies This section applies when, and to the extent to which,— (a) either— (i) an applicant has applied for a private ruling, a product ruling, or a status ruling, before the be- ginning of the 2008–09 income year on an ar- rangement that is entered into, or that the appli- cant seriously contemplates will be entered into before the commencement of this Act; or a public ruling is issued before the beginning of the 2008–09 income year; and (b) (c) (d) the binding ruling is about— (i) a taxation law that is repealed by section ZA 1 (the old law); or a taxation law in the Income Tax Act 1994 that preceded and corresponded to the old law; and a new taxation law that corresponds to the old law (the new law) comes into force at the commencement of this Act; and in the absence of this section, the commencement of this Act would mean that the binding ruling would cease to apply because of section 91G of the Tax Administration Act 1994.
(ii) (ii) (2) (3) Ruling about new law The binding ruling is treated as if it were made about the new law, so that the effect of the ruling at the commencement of this Act is the same as its effect before the commencement.
No conﬁrmation rulings To the extent to which a binding ruling continued by subsec- tion (2) exists and applies to an arrangement, or to a person 3203 Part Z s ZA 5 Income Tax Act 2007 Reprinted as at 2 September 2013 and an arrangement, the Commissioner must not make a bind- ing ruling on how— (a) the new law applies to the arrangement or to the person and the arrangement; or this subsection applies to the arrangement or to the per- son and the arrangement.
(b) Deﬁned in this Act: arrangement, binding ruling, commencement of this Act, Commissioner, taxation law Compare: 2004 No 35 s YA 4 ZA 5 Saving of accrual determinations When, and extent to which, this section applies This section applies when— (a) a determination has been made before the beginning of the 2008–09 income year under— (i) section 90 or 90AC of the Tax Administration Act 1994; or section 64E of the Income Tax Act 1976; and (ii) the determination has not been cancelled before the be- ginning of the 2008–09 income year; and the determination is about— (i) a taxation law that is repealed by section ZA 1 (the old law); or a taxation law in the Income Tax Act 1994 or the Income Tax Act 1976 that preceded and corre- sponded to the old law; and (ii) a new taxation law that corresponds to the old law (the new law) comes into force at the commencement of this Act; and in the absence of this section, the commencement of this Act would mean that that determination would cease to apply because the taxation law to which it applied had ceased to exist.
(b) (c) (d) (e) Determination about new law The determination is treated as if it were made about the new law, so that the effect of the determination at the commence- ment of this Act is the same as its effect before the commence- ment.

(1) (2) 3204 Reprinted as at 2 September 2013 Income Tax Act 2007 Part Z s ZA 6 (3) No conﬁrmation determinations To the extent to which a determination continued by subsection (2) applies, the Commissioner must not make a determination on how the new law applies.
Deﬁned in this Act: commencement of this Act, Commissioner, taxation law Compare: 2004 No 35 s YA 5 ZA 6 Comparative tables of old and new provisions Schedule 52 Schedule 52 (Comparative tables of old and rewritten provi- sions) sets out corresponding provisions in the Income Tax Act 2004, the Income Tax Act 1994, the Tax Administration Act 1994, and this Act at the commencement of this Act.
Parts of schedule The schedule has the following 4 parts: (a) (1) (2) (ii) (iii) part A lists each provision in the Income Tax Act 2004 and— (i) indicates the corresponding provision in this Act; or indicates the corresponding provision in the Tax Administration Act 1994; or indicates the corresponding provision in the Goods and Services Tax Act 1985; or (iv) states that the provision has been omitted: part B lists each provision in this Act and the corres- ponding provision in the Income Tax Act 2004 and, as applicable, in Parts A to E of the Income Tax Act 1994, or states that the provision is new: part C lists the provisions that this Act inserts in the Tax Administration Act 1994 and— (i) indicates the corresponding provision in the Income Tax Act 2004; or states that the provision is new: (ii) part D lists each term deﬁned in this Act and its location in this Act, and— (i) indicates the source of the term in the Income Tax Act 2004; or states that the term is new.
(ii) (b) (c) (d) 3205 Part Z s ZA 6 Income Tax Act 2007 Reprinted as at 2 September 2013 (3) Purpose of schedule The schedule is provided to assist readers to identify corres- ponding provisions but must not be interpreted as a deﬁnitive guide to the correspondence of provisions.
Deﬁned in this Act: commencement of this Act Compare: 2004 No 35 s YA 6 3206 Reprinted as at 2 September 2013 Income Tax Act 2007 Schedule 1 Schedule 1 Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe beneﬁts Schedule 1 heading: amended, on 1 April 2008, by section 554(1) of the Taxa- tion (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
Part A Basic income tax rates 1 Taxable income: general To the extent to which a person does not have a basic rate under clauses 2 to 8, the basic rate of income tax for the person on each dollar of the person’s taxable income is calculated using the formula— tax under table 1 taxable income: (a) (b) tax under table 1 means the total tax, calculated for each dollar in the person’s taxable income, using table 1: taxable income means the number of dollars in the per- son’s taxable income.
Table 1 Row Range of dollar in taxable income Tax rate 1 2 3 4 $0 – $14,000 $14,001 – $48,000 $48,001 – $70,000 $70,001 upwards 0.105 0.175 0.300 0.330 How to use this table: Find the range in the second column for each dollar in the person’s taxable income, and apply the relevant rate for the dollar in the third column.
Schedule 1 part A clause 1: amended (with effect on 1 April 2011), on 2 Novem- ber 2012 (applying for the 2011–12 and later income years), by section 162(5) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Schedule 1 part A clause 1: amended (with effect on 1 April 2011), on 2 Novem- ber 2012, by section 162(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
3207 Schedule 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Part A—continued Schedule 1 part A clause 1: amended (with effect on 1 April 2008), on 2 Novem- ber 2012 (applying for the 2008–09 and later income years), by section 162(3) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Schedule 1 part A table 1: substituted, on 1 April 2011 (applying for the 2011–12 income year and later income years), by section 71(2) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Taxable income: companies To the extent to which a company does not have a basic rate under clauses 3 to 9, the basic rate of income tax for the com- pany on each dollar of the company’s taxable income is 0.28.
Schedule 1 part A clause 2: amended (with effect on 1 April 2011), on 29 August 2011 (applying for the 2011–12 and later income years), by section 136(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Schedule 1 part A clause 2: amended, on 1 April 2011 (applying for the 2011–12 and later income years), by section 97(1) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Taxable income: trustees To the extent to which a trustee does not have a basic rate under clause 4, 5 or 6, the basic rate of income tax for the trustee on each dollar of the trustee’s taxable income is 0.33.

Taxable distribution: non-complying trust The basic rate of income tax on each dollar of a taxable distri- bution made by a non-complying trust is 0.45.
Schedular taxable income: category A income The basic rate of income tax for a trustee on each dollar of the trustee’s schedular taxable income that is for category A income is 0.28.

Schedule 1 part A clause 5: amended, on 1 April 2011 (applying for the 2011–12 and later income years), by section 97(2) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
2 3 4 5 3208 Reprinted as at 2 September 2013 Income Tax Act 2007 Schedule 1 Part A—continued 6 7 8 Taxable income: trustees of certain funds To the extent to which a trustee does not have a basic rate under clause 4 or 5, the basic rate of income tax on each dollar of taxable income is 0.28 if the income is of a trustee of— (a) an approved unit trust to which the Income Tax Act (Ex- empt Unit Trusts) Order 1990 applies: a widely-held GIF: a widely-held superannuation fund.
(b) (c) Schedule 1 part A clause 6 heading: inserted, on 1 April 2008, by section 554(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Schedule 1 part A clause 6: amended, on 1 April 2011 (applying for the 2011–12 and later income years), by section 97(3) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Taxable income: Maori authorities The basic rate of income tax for a Maori authority on each dollar of the Maori authority’s taxable income is 0.175.
Schedule 1 part A clause 7: amended, on 1 April 2011, by section 136(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Schedular taxable income: schedular policyholder base income The basic rate of income tax for a person on each dollar of the person’s schedular taxable income that is for schedular policy- holder base income is 0.28.
Schedule 1 part A clause 8 heading: amended, on 1 July 2010, by section 577(1)(a) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

Schedule 1 part A clause 8: amended, on 1 April 2011 (applying for the 2011–12 and later income years), by section 97(4) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Schedule 1 part A clause 8: amended, on 1 July 2010, by section 577(1)(b) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).

3209 Schedule 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Part A—continued 9 10 Investment income from portfolio investment entities The basic rate of income tax for a person who is an investor in a PIE on each dollar of income attributed by the PIE is the rate set out in schedule 6 as notiﬁed by the person to the PIE.
Schedule 1 part A clause 9: inserted (with effect on 1 April 2008), on 2 Novem- ber 2012, by section 162(4) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Schedule 1 part A clause 9: repealed (with effect on 1 April 2011), on 2 Novem- ber 2012, by section 162(2) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
Schedule 1 part A clause 9: inserted (with effect on 1 April 2011), on 1 April 2012, by section 136(3) of the Taxation (Tax Administration and Remedial Mat- ters) Act 2011 (2011 No 63).

Taxable income: New Zealand Superannuation Fund The basic rate of income tax on each dollar of taxable income derived by the Crown through the New Zealand Superannu- ation Fund is the rate applying to companies set out in clause 2.
Schedule 1 part A clause 10: inserted (with effect on 1 April 2011), on 2 Novem- ber 2012 (applying for the 2011–12 and later income years), by section 162(6) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Part B Low income amount [Repealed] Schedule 1 part B: repealed (with effect from 1 April 2008), on 29 May 2008, by section 50(1) of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).
Part C Basic rates for attributed fringe beneﬁts Table 1 Row Range of dollar in all-inclusive pay Tax rate 1 2 $0 – $12,530 $12,531 – $40,580 0.1173 0.2121 3210 Reprinted as at 2 September 2013 Income Tax Act 2007 Schedule 1 Part C—continued Row Range of dollar in all-inclusive pay Tax rate 3 4 $40,581 – $55,980 $55,981 upwards 0.4286 0.4925 How to use this table: Find the range in the second column for each dollar in the person’s all-in- clusive pay under section RD 51, and apply the relevant rate for the dollar in the third column.
Schedule 1 part C table 1: substituted, on 1 April 2011 (applying for the 2011–12 in- come year and later income years), by section 72(2) of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Part D Basic rates for withholding Basic rates for ESCT 1 Amount of tax for section RD 67(a) For the purposes of section RD 67(a), the amount of tax is determined by applying the relevant rate given by table 1 to each dollar of an employer’s superannuation contribution.
Table 1 Row ESCT rate threshold amount Tax rate 1 2 3 4 $0 – $16,800 $16,801 – $57,600 $57,601 – $84,000 $84,001 upwards 0.105 0.175 0.300 0.330 How to use this table: Find the range in the second column for the last dollar of the ESCT rate threshold amount, and apply the relevant rate in the third column.

Schedule 1 part D clause 1 heading: amended, on 1 April 2012, by section 136(4) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Schedule 1 part D clause 1: amended, on 1 April 2012, by section 136(5) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

3211 Schedule 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Part D—continued Schedule 1 part D clause 1: amended, on 1 April 2012, by section 14(b) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).
Schedule 1 part D table 1: substituted, on 1 October 2010, by section 31 of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Schedule 1 part D table 1: amended, on 1 April 2012, by section 14(c) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).

Amount of tax for section RD 67(b) [Repealed] Schedule 1 part D clause 2: repealed, on 1 April 2012, by section 14(d) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).
Basic Rates for RWT Interest: general If clause 4 does not apply, the payment rate for a payment of resident passive income that consists of interest is set out in table 2.

2 3 Table 2 Row Conditions Payment rate 1 2 The payer of the interest has not been supplied with the tax ﬁle number of a person who is paid the inter- est.
0.330 The payer of the interest— (a) (b) (c) has been supplied with the tax ﬁle number of a person who opens a new account after 31 March 2010 and who is paid the interest; and has not received a payment rate election from the recipient of the interest: is not required to use a rate notiﬁed by the Commissioner under section 25A of the Tax Administration Act 1994.
0.330 3 The payer of the interest— (a) (b) has been supplied with the tax ﬁle number of a person who is paid the interest; and has received a payment rate election from the recipient of the interest— 3212 Reprinted as at 2 September 2013 Income Tax Act 2007 Schedule 1 Part D—continued Row Conditions (i) before 1 October 2010, choosing the 0.390 or 0.380 payment rate, and the payer is not required to use a rate no- tiﬁed by the Commissioner under sec- tion 25A of the Tax Administration Act 1994: Payment rate (ii) on or after 1 October 2010, choosing the 0.330 payment rate.
0.330 4 The payer of the interest— (a) (b) has been supplied with the tax ﬁle number of a person who is paid the interest; and has received a payment rate election from the recipient of the interest— (i) before 1 October 2010, choosing the 0.330 payment rate, and the payer is not required to use a rate notiﬁed by the Commissioner under section 25A of the Tax Administration Act 1994: (ii) on or after 1 October 2010, choosing the 0.300 payment rate.
0.300 5 The payer of the interest— (a) (b) (c) has been supplied with the tax ﬁle number of a person who has not opened a new account after 31 March 2010 and who is paid the interest; and has not received a payment rate election from the recipient of the interest; and is not required to use a rate notiﬁed by the Commissioner under section 25A of the Tax Administration Act 1994.
0.175 6 The payer of the interest— (a) (b) has been supplied with the tax ﬁle number of a person who is paid the interest; and has received a payment rate election from the recipient of the interest— 3213 Schedule 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Part D—continued Row Conditions (i) before 1 October 2010, choosing the 0.195 or 0.210 payment rate, and the payer is not required to use a rate no- tiﬁed by the Commissioner under sec- tion 25A of the Tax Administration Act 1994: Payment rate (ii) on or after 1 October 2010, choosing the 0.175 payment rate.
0.175 7 The payer of the interest— (a) (b) has been supplied with the tax ﬁle number of a person, other than a trustee, who is paid the interest; and has received a payment rate election from the recipient of the interest— (i) before 1 October 2010, choosing the 0.125 payment rate, and the payer is not required to use a rate notiﬁed by the Commissioner under section 25A of the Tax Administration Act 1994: (ii) on or after 1 October 2010, choosing the 0.105 payment rate; and (c) the recipient has a reasonable expectation at the time of the election that their income for the income year will be $14,000 or less.
0.105 8 The payer of the interest— (a) (b) has been supplied with the tax ﬁle number of a person who is paid the interest as a trustee of a testamentary trust to which section HC 37 applies; and has received a payment rate election from the recipient of the interest— (i) before 1 October 2010, choosing the 0.125 payment rate, and the payer of the interest is not required to use a rate no- tiﬁed by the Commissioner under sec- tion 25A of the Tax Administration Act 1994: (ii) on or after 1 October 2010, choosing the 0.105 payment rate.
0.105 3214 Reprinted as at 2 September 2013 Income Tax Act 2007 Schedule 1 Part D—continued How to use this table: Find the applicable condition in the second column, in order to ﬁnd the rele- vant rate to apply, in the third column.

Schedule 1 part D clause 3: amended (with effect on 1 April 2008), on 7 De- cember 2009, by section 122(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Schedule 1 part D clause 3: amended (with effect from 1 April 2008), on 29 May 2008, by section 50(3) of the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 (2008 No 36).

Schedule 1 part D table 2: substituted, on 1 October 2010, by section 32 of the Taxation (Budget Measures) Act 2010 (2010 No 27).
4 Interest: most companies The payment rate for a payment of resident passive income that consists of interest is set out in table 3 if the recipient of the payment is a company that is not a trustee or a Maori authority.

However, this restriction does not apply if the trustee is a portfolio investment entity.
Table 3 Row Conditions 1 The payer of the interest— Payment rate (a) (b) has been supplied with the tax ﬁle number of a person who is paid interest; and has not received a payment rate election from the recipient of the interest, ignoring the re- ceipt of an election for the 0.33 payment rate before 1 October 2010 (if any).
0.28 2 The payer of the interest— (a) (b) has been supplied with the tax ﬁle number of a person who is paid interest; and has received a payment rate election from the recipient of the interest, choosing the 0.28 payment rate.
0.28 3 The payer of the interest— (a) has been supplied with the tax ﬁle number of a person who is paid interest; and 3215 Schedule 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Part D—continued Row Conditions Payment rate (b) has received a payment rate election from the recipient of the interest,— (i) (ii) on or after 1 October 2010, choosing the 0.33 payment rate: before 1 October 2010, choosing the 0.39 or 0.38 payment rate.
0.33 4 The payer of the interest has not been supplied with the tax ﬁle number of a person who is paid the inter- est.

0.33 How to use this table: Find the applicable condition, in the second column, in order to ﬁnd the relevant rate to apply, in the third column.

Schedule 1 part D clause 4: substituted (with effect on 1 April 2010), on 7 Sep- tember 2010, by section 120(2) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
Schedule 1 part D table 3: substituted (with effect on 1 April 2010), on 7 Sep- tember 2010, by section 120(3) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).

Schedule 1 part D table 3 row 1: substituted, on 1 April 2011, by section 98 of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Schedule 1 part D table 3 row 2: substituted, on 1 April 2011, by section 98 of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Schedule 1 part D table 3 row 3: substituted, on 1 October 2010, by section 33 of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Schedule 1 part D table 3 row 3: amended (with effect on 1 April 2011), on 29 August 2011, by section 136(6) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Schedule 1 part D table 3 row 3: amended, on 1 April 2011 (applying for the 2011–12 and later income years), by section 122(3) of the Taxation (Conse- quential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Schedule 1 part D table 3 row 4: substituted, on 1 October 2010, by section 33 of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Schedule 1 part D table 3 row 4: amended (with effect on 1 April 2011), on 29 August 2011, by section 136(7) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).

Schedule 1 part D table 3 row 4: amended, on 1 April 2011 (applying for the 2011–12 and later income years), by section 122(3) of the Taxation (Conse- quential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
3216 Reprinted as at 2 September 2013 Income Tax Act 2007 Schedule 1 Part D—continued 5 6 Dividends and replacement payments The payment rate for a payment of resident passive income that consists of a dividend, or a replacement payment under a share-lending arrangement, is 0.33.

Schedule 1 part D clause 5: amended (with effect on 1 April 2008), on 7 De- cember 2009, by section 122(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Taxable Maori authority distributions The payment rate for a payment of resident passive income that consists of a taxable Maori authority distribution is set out in table 4.

Table 4 Row Conditions Payment rate 1 2 The Maori authority makes a taxable Maori authority distribution and does not meet the condition for the 0.33 payment rate in row 2.
0.175 The Maori authority: (a) (b) makes a taxable Maori authority distribution that is more than $200; and does not have a record of the tax ﬁle number of the member to whom the distribution is made.

0.33 How to use this table: Find the applicable condition, in the middle column, in order to ﬁnd the relevant rate to apply, in the right column.
Schedule 1 part D clause 6: amended (with effect on 1 April 2008), on 7 De- cember 2009, by section 122(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).

Schedule 1 part D table 4 row 1: amended (with effect on 1 October 2010), on 29 August 2011, by section 136(8) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
Schedule 1 part D table 4 row 1: amended, on 1 April 2011, by section 136(2) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Schedule 1 part D table 4 row 1: amended, on 1 April 2010 (applying for the 2010–11 and later income years), by section 122(5)(a) of the Taxation (Conse- quential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
3217 Schedule 1 Income Tax Act 2007 Reprinted as at 2 September 2013 Part D—continued Schedule 1 part D table 4 row 2: amended, on 1 October 2010, by section 34 of the Taxation (Budget Measures) Act 2010 (2010 No 27).

Schedule 1 part D table 4 row 2: amended, on 1 April 2010 (applying for the 2010–11 and later income years), by section 122(5)(b) of the Taxation (Conse- quential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
Basic rates for RSCT Schedule 1 part D heading: added, on 1 July 2008, by section 554(3) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

7 Retirement scheme contributions The payment rate for an amount of a retirement scheme con- tribution made by a retirement scheme contributor for a person is set out in table 5.
Table 5 Row Conditions Payment rate 1 The person responsible for withholding RSCT— (a) (b) has been notiﬁed under section 28C of the Tax Administration Act 1994 that 12.5 or 10.5 cents in the dollar is the person’s retirement scheme prescribed rate; and has been supplied with the tax ﬁle number of the person.

0.105 The person is a non-resident and a distribution of no more than $200 is made to them by a retirement scheme contributor that is a Maori authority.
0.105 The person responsible for withholding RSCT— (a) has been notiﬁed under section 28C of the Tax Administration Act 1994 that 21 or 17.5 cents in the dollar is equal to or greater than the person’s retirement scheme prescribed rate; and 2 3 (b) has been supplied with the tax ﬁle number of the person.
0.175 4 The person responsible for withholding RSCT— 3218 Reprinted as at 2 September 2013 Income Tax Act 2007 Schedule 1 Part D—continued Row Conditions (a) has been notiﬁed under section 28C of the Tax Administration Act 1994 that 33 or 30 cents in the dollar is equal to or greater than the person’s retirement scheme prescribed rate; and (b) has been supplied with the tax ﬁle number of the person.

5 When none of rows 1 to 4 apply.


Payment rate 0.300 0.330 How to use this table: Find the applicable condition in the second column, in order to ﬁnd the rele- vant rate to apply, in the third column.

Schedule 1 part D clause 7: added, on 1 July 2008, by section 554(3) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).

Schedule 1 part D table 5: substituted, on 1 October 2010, by section 35 of the Taxation (Budget Measures) Act 2010 (2010 No 27).
Part E Shoulder references The shoulder references for this schedule are the following sections: CB 28, CD 53, CS 1, EK 8, EK 12, EK 23, EX 20, EX 50, EY 43, FE 22, FM 28, HA 15, HA 24, HC 22, HC 34, HF 1, HL 29, LC 1, LC 2, LE 2, LJ 5, LP 8, LP 10, OA 18, OB 19, OB 42, OB 46, OB 69, OB 73, OB 75, OB 78, OB 80, OC 36, OC 38, OE 7, OE 8, OP 100, OP 102, RD 50, RD 51, RD 66, RD 67, RD 69, RD 70, RD 72, RE 11–RE 19, RF 9, RF 12, RM 21, YA 1.
Schedule 1 part E: amended (with effect on 30 June 2009), on 6 October 2009, by sec- tion 577(2) of the Taxation (International Taxation, Life Insurance, and Remedial Mat- ters) Act 2009 (2009 No 34).