Nash Stuart: Taxation (Residential Land Withholding Tax GST on Online Services and Student Loans) Bill — In CommitteeText is incorporated into the Bound VolumeNash Stuart: Taxation (Residential Land Withholding Tax GST on Online Services and Student Loans) Bill — In Committee[Sitting date: 12 April 2016. Volume:713;Page:10376. Text is incorporated into the Bound Volume.]STUART NASH (Labour—Napier): This is a reasonably complex bill. It deals with a number of issues that the Labour Party feels quite strongly about. In Part 1 we are talking about the Student Loan Scheme Act 2011 but we are also going to be debating in other parts Income Tax Act changes Goods and Services Tax Act changes Tax Administration Act changes as well as the title and commencementclauses. As mentioned there are a number of Labour speakers who I know will take calls on this technical bill because there are quite a lot of clauses and quite a lot of concepts that do need explaining. The reason for this is there is quite a lot of relevance in this bill that impacts upon others outside the stock-standard tax practitioner bracket.What I would like to talk about first and foremost is charities. The issue we are trying to solve here in Part 1 is that often what happens with students is they head off on an OE. They have finished their studies they have a student loan but under the Student Loan Scheme Act if a student with a student loan heads overseas they must pay interest on that student loan. But what is allowed to happen is if a student is working for a registered charity for a maximum time of 24 months then they are classed as still being domiciled in New Zealand. So even though they may head off they do not have to pay interest on their student loan.The problem we are trying to solve is that under the current law charitable organisations must be approved by Cabinet for the purpose of the student loan scheme interest write-off and listed in regulations. What can happen with this is by the time that goes through the approval process the student is overseas they have already accrued a whole lot of interest on their loan and they do not get full benefit. So what this bill does is it basically removes the need for Cabinet to approve a charity. What I will say which is quite interesting is that the level of disclosure required under this bill by the commissioner for charities is quite unusual compared with other pieces of legislation on the statute book when it comes to tax law.Grant Robertson: Oh well done.STUART NASH: I know. For example when I compare new sections 27A 27B 27C 27D and 27E inserted by clause 7—this basically relates to what the commissioner’s responsibilities are with regard to listing charities what qualifies as a charity whether the commissioner can delist a charity etc. etc. The regulations are quite prescriptive and the level of disclosure is quite onerous. In fact I suspect that if we were to compare this bill with other pieces of tax legislation like for example the legislation governing overseas trusts—The CHAIRPERSON (Hon Chester Borrows): Do not go there—stick to Part 1.STUART NASH: Absolutely Mr Chair but what I am saying is that I think this is very good because what this is doing is requiring a level of disclosure that meets the expectations of the general public of New Zealand. We like to know with our tax law that there is a level of transparency that cannot be overridden or abused in any way shape or form. This is what this does. Like I said what it does is it takes the onus from Cabinet and gives it to the commissioner. For example new section 27B prescribes the primary matters in which the commissioner must be satisfied for listing a charity and that goes into quite a level of depth around charity law etc. etc. There are a whole lot of requirements that must be met before an entity is listed as a charity.New section 27C is about an application by an entity to be listed as a charity so there is a process that every entity must go through before it seeks the listing which again is very transparent. It is out there so that organisations are left in no doubt as to what they must do. But having said that there is also in clause 7 new section 27D which says the commissioner may list a charity for tax purposes even if no application has been made or if in fact the commissioner requires more information. What this means is that a student traveling overseas to work for a charitable organisation will not be disadvantaged if that organisation has at the point of registration or application met all the requirements. There are a number of clauses in here that I will talk on at a much greater level of depth but I thought that this is importantfirst and foremost because I know—