Taxation (KiwiSaver and Company Tax Rate Amendments) Act 2007

1: Title
This Act is the Taxation (KiwiSaver and Company Tax Rate Amendments) Act 2007.
2: Commencement
1: This Act comes into force on the date on which it receives the Royal assent, except as provided in this section.
2: Section 72
3: Sections 6 39 49(2) (3) (5) (6) (7) (9) (11) 56 58 63 to 69 73
4: Sections 4 5 7 to 26 27 28 to 38 40 to 48 49(8) (10) (12) (13) (14) (15) (16) (17) 50(1)(d) 52 to 55 70
1: Amendments to Income Tax Act 2004
3: Income Tax Act 2004
This Part amends the Income Tax Act 2004
4: Disposals of certain shares by portfolio investment entity after declaration of dividend
In section CB 4B(1)(a) or New Zealand Superannuation Fund portfolio investment entities 2007-10-01 Section CB 4B(1)(a)
5: Section CP 1 replaced
Section CP 1
CP 1: Portfolio investor allocated income
The amount of portfolio investor allocated income of a person who is an investor in a portfolio tax rate entity is income of the person in the income year that includes the end of the entity's income year for which the person is allocated the amount. income income year investor portfolio investor allocated income portfolio tax rate entity . 2007-10-01 Section CP 1
6: New heading and section CX 1B
After section CX 1 KiwiSaver and complying superannuation fund tax credits
CX 1B: KiwiSaver and complying superannuation fund tax credits
A payment by the Commissioner of an amount of a tax credit under subpart KJ (KiwiSaver scheme and complying superannuation fund tax credits) is excluded income of the person deriving the payment. amount Commissioner excluded income
7: Proceeds from disposal of certain shares by portfolio investment entities
1: In the heading to section CX 44C entities entities or New Zealand Superannuation Fund 2007-10-01 Section CX 44C
2: In section CX 44C(1) paragraph (a) or the New Zealand Superannuation Fund a portfolio investment entity 2007-10-01 Section CX 44C(1)
3: In section CX 44C(2) or the New Zealand Superannuation Fund the portfolio investment entity 2007-10-01 Section CX 44C(2)
8: Portfolio investor allocated income and distributions of income by portfolio tax rate entities
1: In the heading to section CX 44D portfolio tax rate entities portfolio investment entities 2007-10-01 Section CX 44D
2: Section CX 44D(3)(a)(i)
i: is a natural person other than a trustee; and . 2007-10-01 Section CX 44D(3)(a)(i)
3: Section CX 44D(3)(b)
b: excluded income of the investor, if paragraph (a)
i: the amount of the distribution that is fully imputed, as that term is defined in section NG 2(3)
ii: the amount of the distribution that is fully dividend withholding payment credited, as that term is defined in section NG 2(4) 2007-10-01 Section CX 44D(3)(b)
9: New section CX 44E inserted
After section CX 44D
CX 44E: Rebates of certain fees by portfolio tax rate entities
A rebate of fees allocated to an investor as a member of a portfolio investor class by a portfolio tax rate entity is excluded income of the investor if the rebate is included in the calculation of the entity's portfolio entity tax liability under section HL 20 excluded income investor portfolio calculation period portfolio entity tax liability portfolio investor class portfolio tax rate entity . 2007-10-01 Section CX 44E
10: Cost of revenue account property
1: In section DB 17(1) a cost the cost 2007-10-01 Section DB 17(1)
2: In section DB 17(3)(b) or New Zealand Superannuation Fund portfolio investment entities 2007-10-01 Section DB 17(3)(b)
11: Section DB 43B replaced
Section DB 43B
DB 43B: Certain investors have deduction for portfolio investor allocated loss
When this section applies
1: This section applies to an investor in a portfolio investor class of a portfolio tax rate entity for a portfolio calculation period of the entity when—
a: the investor—
i: is a zero-rated portfolio investor for the portfolio calculation period:
ii: has all or part of a portfolio investor exit period included in the portfolio calculation period and the entity makes payments of tax under section HL 21
b: the portfolio calculation period includes a portfolio allocation period for which the person is allocated an amount of portfolio investor allocated loss under subpart HL (Portfolio investment entities). Deduction
2: The investor has a deduction for an income year for the amount of portfolio investor allocated loss if—
a: the portfolio tax rate entity makes payments of tax under section HL 21 or HL 22
b: the portfolio tax rate entity makes payments of tax under section HL 23 deduction income year investor portfolio allocation period portfolio calculation period portfolio investor allocated loss portfolio investor class portfolio tax rate entity tax tax year zero-rated portfolio entity . 2007-10-01 Section DB 43B
12: New section DB 43C inserted
After section DB 43B
DB 43C: Certain fees charged by portfolio tax rate entities to investors not allowed as deductions
When this section applies
1: This section applies to an investor in a portfolio investor class of a portfolio tax rate entity when—
a: the investor incurs fees in relation to the investor's portfolio investor interest; and
b: the amount of the fees is included in the calculation of the entity's portfolio entity tax liability under section HL 20 No deduction
2: The investor is denied a deduction for the amount of the fees. Link with subpart DA
3: This section overrides the general permission. deduction general permission investor portfolio calculation period; portfolio entity tax liability portfolio investor class portfolio investment entity. 2007-10-01 Section DB 43C
13: Meaning of trading stock
In section EB 2(3)(db) or New Zealand Superannuation Fund portfolio investment entities 2007-10-01 Section EB 2(3)(db)
14: Meaning of CFC
1: After section EX 1(1) Exception
1B: Even if 1 of the tests in subsection (1)
a: the foreign company is a foreign investment vehicle; and
b: one of the New Zealand residents is—
i: a portfolio investment entity:
ii: an entity eligible to be a portfolio investment entity:
iii: a life insurance company. 2007-10-01 Section EX 1(1B)
2: Section EX 1(2)
2: If any of the tests in subsection (1) subsection (1B) 2007-10-01 Section EX 1(2)
15: Foreign investment vehicles
1: Section HL 5(1)(b)
b: is a company, a superannuation scheme, or the trustee of a trust that would be a unit trust if there were more than 1 subscriber, purchaser, or contributor participating as beneficiaries under the trust; and . 2007-10-01 Section HL 5(1)(b)
2: In section HL 5(1)(c) section HL 6(1)(a), (b), (d), (e), (f), (g), (h), or (i) section HL 6(1)(a) to (i) 2007-10-01 Section HL 5(1)(c)
3: Section HL 5(1)(d) (e)
d: has investors who, if they are resident in New Zealand, would meet the investor interest size requirements under section HL 9
e: meets the further eligibility requirements relating to investments under section HL 10 2007-10-01 Section HL 5(1)
16: Investor membership requirement
Section HL 6(1)(a)
a: 20 persons, treating all interests held by persons associated under section OD 8(3) subsection (4) . 2007-10-01 Section HL 6(1)(a)
17: Investor return adjustment requirement: portfolio tax rate entity
1: Section HL 7(2) paragraph (a) the investor's portfolio investor rate the portfolio investor rate of an investor, as a member of a portfolio investor class, 2007-10-01 Section HL 7(2)
2: In section HL 7(2)(a) for the portfolio investor class liability 2007-10-01 Section HL 7(2)(a)
3: In section HL 7(2)(b) allocated to the investor as a member of the portfolio investor class HL 27 2007-10-01 Section HL 7(2)(b)
4: Section HL 7(3)(a) (b)
a: the investor's portfolio investor interest in the portfolio investor class or another portfolio investor class—
i: before the end of the second month after the portfolio calculation period, if the entity has made an election under section HL 21
ii: within 3 months of the end of the tax year, if the entity has made an election under section HL 22
iii: within 2 months of the end of the tax year, if the entity has made an election under section HL 23
b: the amount of each distribution to the investor as a member of the portfolio investor class or another portfolio investor class. 2007-10-01 Section HL 7(3)
18: Imputation credit distribution requirement: imputation credit account company
1: In the heading to section HL 8 imputation credit account company portfolio listed company 2007-10-01 Section HL 8
2: In section HL 8(1) imputation credit account company portfolio listed company 2007-10-01 Section HL 8(1)
3: In section HL 8 director, imputation credit, portfolio investment entity, portfolio investor class, portfolio listed company 2007-10-01 Section HL 8
19: Investor interest size requirement
Section HL 9(4)(c) 2007-10-01 Section HL 9(4)(c)
20: Further eligibility requirements relating to investments
1: In section HL 10(2) paragraph (a) allocated by an entity to a portfolio investor class derived by the entity 2007-10-01 Section HL 10(2)
2: In section HL 10(2)(b)(v) income. income:
vi: portfolio investor allocated income:
vii: distributions from superannuation funds. 2007-10-01 Section HL 10(2)(b)(v)
3: Section HL 10(3)(a) (b)
a: the investment must—
i: carry voting interests in the company equal to or less than 20%, if the company is not a unit trust; or
ii: have a market value equal to or less than 20% of the total market value of all shares in the company, if the company is a unit trust:
b: the amount that is 10% of the total market value of all the entity's investments must be greater than the total market value of all the entity's investments in—
i: shares in a company that is not a unit trust that carry voting interests of more than 20% in the company:
ii: shares in a company that is a unit trust that have a market value of more than 20% of the total market value of all shares in the company. 2007-10-01 Section HL 10(3)
4: Section HL 10(4)(d) 2007-10-01 Section HL 10(4)(d)
5: Section HL 10(5)
5: The class shareholding investment requirement is that, for each portfolio investor class and each investment referred to in subsection (3)
a: the portfolio class fraction of the investment must—
i: correspond to voting interests in the company equal to or less than 20%, if the company is not a unit trust; or
ii: have a market value equal to or less than 20% of the total market value of all shares in the company, if the company is a unit trust:
b: the amount that is 10% of the total market value of all the class's interests in the entity's investments must be greater than the total market value of all the class's interests in the entity's investments in—
i: shares in a company that is not a unit trust that carry voting interests of more than 20% in the company:
ii: shares in a company that is a unit trust that have a market value of more than 20% of the total market value of all shares in the company. 2007-10-01 Section HL 10(5)
6: In section HL 10 portfolio investor allocated income superannuation fund voting interest 2007-10-01 Section HL 10
21: New section HL 11B inserted
After section HL 11
HL 11B: Unlisted company may choose to become portfolio listed company
Election
1: A company that is not listed on a recognised exchange in New Zealand may choose under section HL 11
a: would meet the requirements of paragraph (a) qualifying unit trust
b: has resolved to become a company listed on a recognised exchange in New Zealand if it were to obtain the required consents; and
c: has applied to the Securities Commission for an exemption to disclose in a prospectus its intention to become a listed company; and
d: satisfies the Commissioner that the company would apply to become a listed company if it were to obtain the required consents. Election effective for 2 years
2: A company that makes an election under subsection (1) company portfolio investment entity portfolio listed company qualifying unit trust recognised exchange unit trust widely-held company. 2007-10-01 Section HL 11B
22: Becoming portfolio investment entity
1: Section HL 12(1)(b)
b: the entity, if treated as becoming a portfolio investment entity when the election would be effective, would cease under section HL 4 2007-10-01 Section HL 12(1)b)
2: In section HL 12(3)(a)(i) or New Zealand Superannuation Fund portfolio investment entities 2007-10-01 Section HL 12(3)(a)(i)
3: After section HL 12(3) New Zealand Superannuation Fund treated as disposing of, and reacquiring, property
4: The New Zealand Superannuation Fund is treated for the purposes of subsection (3) 2007-10-01 Section HL 12(4)
23: Ceasing to be portfolio investment entity
In section HL 14(3)(a) or New Zealand Superannuation Fund portfolio investment entities 2007-10-01 Section HL 14(3)(a)
24: Portfolio allocation period and portfolio calculation period
1: In section HL 15(2)(a) paragraph (b) or (c) paragraph (ab), (b), or (c) 2007-10-01 Section HL 15(2)(a)
2: After section HL 15(2)(a)
ab: a month, if the entity has a portfolio calculation period of a quarter and chooses the portfolio allocation period by giving a notice to the Commissioner—
i: before the tax year:
ii: when the entity chooses to become a portfolio tax rate entity; or . 2007-10-01 Section HL 15(2)(ab)
25: Treatment of income not allocated to investor, allocated but not vested in investor
1: The heading to section HL 16 Treatment of income from interest if no investor entitled or investor has conditional entitlement 2007-10-01 s HL 16
2: The heading to section HL 16(2) Treatment of income from interest if investor has conditional entitlement 2007-10-01 s HL 16(2)
3: In section HL 16(2) paragraph (a) A portfolio investment entity that is a superannuation fund may for the purposes of section HL 20 2007-10-01 s HL 16(2)
4: In section HL 16(2)(b) the interest will vest in the investor the investor will have an unconditional entitlement to the interest 2007-10-01 s HL 16(2)(b)
5: In section HL 16(2)(e)(ii) 3 years 5 years 2007-10-01 s HL 16(2)(e)(ii)
26: Portfolio class taxable income and portfolio class taxable loss for portfolio allocation period
Section HL 19(7)(a)(i)
i: the portfolio entity formation loss that is allocated to the portfolio allocation period and the portfolio investor class as allowed by section HL 28 . 2007-10-01 s HL 19(7)(a)(i)
27: Portfolio entity tax liability and rebates of portfolio tax rate entity for period
1: In section HL 20(1)(a) for the calculation period and each investor for the calculation period and each portfolio investor class and each investor in the portfolio investor class 2007-10-01 s HL 20(1)(a)
2: In section HL 20(2)(a) for the calculation period and each investor for the calculation period and each portfolio investor class and each investor in the portfolio investor class 2007-10-01 s HL 20(2)(a)
3: In section HL 20(3)
a: in the words before paragraph (a) for an investor and calculation period for an investor in a portfolio investor class and for a calculation period
b: in paragraph (b) period; and period.
c: paragraph (c) 2007-10-01 s HL 20(3)
4: In section HL 20(4) 2007-10-01 s HL 20(4)
5: In section HL 20(5) subsections (6) to (10) subsections (6) to (12) 2007-10-01 s HL 20(5)
6: In section HL 20(9)(b) 33% 30% 2007-10-01 s HL 20(9)(b)
7: After section HL 20(10) Fees
11: Fees Rebates
12: Rebates 2007-10-01 s HL 20
8: Subsection (6)
28: Payments of tax by portfolio tax rate entity making no election
Section HL 21(3)(a)
a: of an amount of income tax equal to the part of the portfolio entity tax liability of the entity for the portfolio calculation period that does not relate to a payment by the entity under section HL 23B . 2007-10-01 s HL 21(3)(a)
29: Payments of tax by portfolio tax rate entity choosing to make payments when investor leaves
In section HL 23(3)(a) subsection (2) subsection (2) or section HL 23B 2007-10-01 s HL 23(3)(a)
30: New section HL 23B inserted
After section HL 23
HL 23B: Optional payments of tax by portfolio tax rate entities
When this section applies
1: This section applies to a portfolio tax rate entity that makes payments of tax under section HL 21 or HL 23 Optional payment during tax year of income tax relating to investor
2: The entity may make a payment of income tax to the Commissioner representing an amount of the portfolio entity tax liability of the entity for the investor and the investor's portfolio investor interest for the tax year. Time of optional payment
3: A payment under this section must be made by the end of the month after—
a: the portfolio calculation period in which the reduction of the investor's portfolio investor interest occurs, if the entity makes payments of tax under section HL 21
b: the month in which the reduction of the investor's portfolio investor interest occurs, if the entity makes payments of tax under section HL 23 Commissioner income tax investor portfolio entity tax liability portfolio investor interest portfolio tax rate entity tax year. 2007-10-01 s HL 23B
31: Portfolio investor allocated income and portfolio investor allocated loss
1: Section HL 24(2) (3) Portfolio investor allocated income for period
2: The person is treated as deriving from the portfolio tax rate entity in an income year an amount of portfolio investor allocated income subsection (4) Portfolio investor allocated loss for period
3: The person is treated as having in relation to the portfolio tax rate entity in an income year an amount of portfolio investor allocated loss
a: if the portfolio tax rate entity makes payments of tax under section HL 21 or HL 23
i: the amount by which zero is more than the amount described in subsection (4)
ii: zero; or
b: if the portfolio tax rate entity makes payments of tax under section HL 22 2007-10-01 s HL 24(2) and (3)
2: In section HL 24(4)
a: in the words before paragraph (a) tax year period containing portfolio allocation periods
b: in paragraph (a) tax year period 2007-10-01 s HL 24(4)
3: In section HL 24(5) 2007-10-01 s HL 24(5)
4: In section HL 24(6)
a: in paragraph (b) class income income
b: in paragraph (c) class loss loss
c: in paragraph (d) allocation period. allocation period:
e: fees
f: rebates 2007-10-01 s HL 24(6)
32: Treatment of portfolio investor allocated loss for other investors
1: In section HL 26(1) paragraph (a) in a portfolio investor class investor 2007-10-01 s HL 26(1)
2: In section HL 26(2) as a member of a portfolio investor class an investor 2007-10-01 s HL 26(2)
3: In section HL 26(2) , or were to have chosen, were liable 2007-10-01 s HL 26(2)
33: Credits received by portfolio tax rate entity or portfolio investor proxy
1: In section HL 27(3) and a portfolio investor class allocation period 2007-10-01 s HL 27(3)
2: In section HL 27(6) paragraph (a) in a tax year 2007-10-01 s HL 27(6)
3: Section HL 27(6)(a)
a: subsections (7) and (8)
i: to the income year in which the tax year ends, if the investor is a zero-rated portfolio investor; or
ii: to the income year corresponding to the tax year, if the entity makes payments of tax under section HL 21 2007-10-01 s HL 27(6)(a)
4: In section HL 27(7) paragraph (a) corresponding to the income year tax year 2007-10-01 s HL 27(7)
5: Section HL 27(7)(a)
a: if the investor is not a portfolio tax rate entity and the credits are under subpart LC (Foreign tax), a credit against income tax payable by the investor of the amount given by subsection (8) . 2007-10-01 s HL 27(7)(a)
6: In section HL 27(7)(b) if if the investor is a portfolio tax rate entity or 2007-10-01 s HL 27(7)(b)
7: Section HL 27(8) Amount of credit for foreign tax — zero-rated portfolio investors, other than portfolio investment entities, and investors having portfolio investor exit period
8: An investor to whom subsection (7)(a)
a: the amount of the allocated credits:
b: the amount calculated by multiplying the amount of portfolio investor allocated income for the investor for the tax year by,—
i: if the investor is not a zero-rated portfolio investor, the investor's portfolio investor rate for the portfolio allocation period ending before the investor's portfolio investor exit period; or
ii: if the investor is a zero-rated portfolio investor, the basic rate of tax for the investor for the tax year under schedule 1 2007-10-01 s HL 27(8)
8: Section HL 27(10) Other investor: credit for entity for foreign tax credits
10: The entity is treated as receiving for the tax year of the portfolio calculation period, for credits under subpart LC allocated to a portfolio investor class and an investor other than a zero-rated portfolio investor as a member of the portfolio investor class, a credit of an amount given by subsection (10C) subsection (10B) Use of credit
10B: The credit is against income tax payable by the entity for—
a: the portfolio calculation period and portfolio calculation periods—
i: later in the tax year, if the entity makes payments of tax under section HL 21
ii: earlier or later in the tax year, if the entity makes payments of tax under section HL 22 or HL 23
b: the investor as a member of the portfolio investor class or another portfolio investor class. Amount of credit
10C: The amount of the credit is the lesser of the following:
a: the total of—
i: the credits allocated to the portfolio calculation period and the investor as a member of the portfolio investor class; and
ii: the credits allocated to earlier portfolio calculation periods in the tax year and the investor that are not used by the entity as a credit against income tax payable for those portfolio calculation periods and for the investor as a member of the portfolio investor class or another portfolio investor class:
b: the amount of the entity's portfolio entity tax liability—
i: for the investor as a member of the portfolio investor class or another portfolio investor class; and
ii: the portfolio calculation period and earlier portfolio calculation periods in the tax year; and
iii: not met by a credit allocated to an earlier portfolio calculation period. 2007-10-01 s HL 27(10)
9: In section HL 27(11) subsection (2) subsection (3) 2007-10-01 s HL 27(11)
10: In section HL 27(11)(a)(ii)
a: in subsection (10)(b) in subsection (10B)(b)
b: by subsection (10) by subsection (10B) 2007-10-01 s HL 27(11)(a)(ii)
34: Portfolio entity formation loss
1: Section HL 28(3) Amount of portfolio entity formation loss available for allocation to portfolio allocation period
3: The maximum amount of portfolio entity formation loss that a portfolio tax rate entity may allocate to a portfolio allocation period (the relevant period
a: the amount of the portfolio entity formation loss that has not been allocated to an earlier portfolio allocation period, if, at the time the entity becomes a portfolio investment entity, the amount of portfolio entity formation loss is less than 5% of the total market value of the entity's portfolio entity investments; or
b: the amount calculated using the formula in subsection (4) paragraph (a) Formula
4: The maximum amount of portfolio entity formation loss under subsection (3)(b) Definition of items in formula
5: In the formula in subsection (4)
a: initial loss
b: days
i: the number of days in the period beginning with the day on which the entity becomes a portfolio investment entity and ending on the last day of the relevant period, if that number is less than or equal to 1095; or
ii: 1095, if paragraph (a)
c: loss used Amount of portfolio entity formation loss available for allocation to portfolio investor class and portfolio allocation period
6: The maximum amount of portfolio entity formation loss that a portfolio tax rate entity may allocate to a portfolio investor class for a relevant period is the lesser of the following amounts:
a: the maximum amount of portfolio entity formation loss given for the relevant period by subsection (3)
b: the amount calculated using the formula— Definition of items in formula
7: In the formula in subsection (6)(b)
a: class net income
b: credits
i: imputation credits:
ii: Maori authority credits:
iii: credits for resident withholding tax:
iv: dividend withholding payment credits:
c: rate schedule 1 clause 5 2007-10-01 s HL 28(3)
2: In section HL 28 dividend withholding payment credit imputation credit Maori authority credit portfolio entity investment portfolio investor class resident withholding tax 2007-10-01 s HL 28
35: Treatment of portfolio class taxable loss and portfolio class land loss for tax year
In section HL 30(1) of an entity making payments of tax under section HL 21 or HL 23 investor class 2007-10-01 s HL 30(1)
36: Portfolio investor proxies
In section HL 31(3)(e)(ii) provide. provide; and
f: provide to each portfolio investment entity in which the portfolio investor proxy holds portfolio investor interests for investors in a portfolio investor class, information concerning the investors and the portfolio investor interests that may be relevant to whether the portfolio investment entity meets the eligibility requirements for the entity. 2007-10-01 s HL 31(3)(e)(ii)
37: Companies included in group of companies
In section IG 1(2) paragraph (a) portfolio investment entity portfolio tax rate entity 2007-10-01 s IG 1(2)
38: Rebate for portfolio tax rate entity relating to certain investors
1: In section KI 1(1) paragraph (a) as a member of a portfolio investor class an investor 2007-10-01 s KI 1(1)
2: Section KI 1(3) 2007-10-01 s KI 1(3)
39: New subpart KJ
After subpart KH
KJ: KiwiSaver scheme and complying superannuation fund tax credits
KJ 1: Tax credits relating to KiwiSaver scheme and complying superannuation fund members
Tax credit
1: The Commissioner must pay, in accordance with section KJ 4 section KJ 3 section KJ 2 Rules
2: Section KJ 5 amount Commissioner complying superannuation fund KiwiSaver scheme member credit year
KJ 2: Person's requirements
For the purposes of section KJ 1(1)
a: is a member of a complying superannuation fund or a KiwiSaver scheme for which there are member credit contributions; and
b: is 18 years or older; and
c: is not entitled to withdraw an amount from a fund or scheme under schedule 1, clause 4(3) of the KiwiSaver Act 2006
d: has their principal place of residence in New Zealand, unless they meet the requirement in paragraph (e)
e: if paragraph (d) State Sector Act 1988
i: the person works for a charitable organisation named in regulations made under the Student Loan Scheme Act 1992
ii: the work meets 1 or more of the requirements in sections 38AEA(a)(i) to (iii) of the Student Loan Scheme Act 1992
f: where they meet the requirements of paragraph (e) paragraph (e) amount complying superannuation fund fund provider KiwiSaver scheme member credit contributions member credit year
KJ 3: Tax credit amount
Amount
1: For the member credit year, the amount of the tax credit is equal to the number of dollars calculated using the following formula: Definition of items in formula
2: In the formula,—
a: base amount
i: the total amount of a person's member credit contributions to all of the person's complying superannuation funds and KiwiSaver schemes for the member credit year:
ii: $1,042.86:
b: included days section KJ 2 amount complying superannuation fund KiwiSaver scheme member credit contributions member credit year
KJ 4: Payment
No deduction: direct credit
1: The Commissioner must pay the amount of tax credit under section KJ 1 section 68C of the Tax Administration Act 1994
a: without deduction or set-off for any other amount that the person or the person's fund provider may be obliged to pay the Commissioner; and
b: by direct credit; and
c: in accordance with subsection (2) Pro-rata payment
2: Where the person has more than 1 fund provider to whom the Commissioner must pay an amount of tax credit for a member credit year, the Commissioner must pay a fund provider the proportion of the tax credit that the person's member credit contributions for the year bears to the total amount of a person's member credit contributions to all of the person's complying superannuation funds and KiwiSaver schemes for the year. amount Commissioner complying superannuation fund KiwiSaver scheme member credit contributions member credit year
KJ 5: Rules
Credit: amount
1: The fund provider is treated as being credited with the tax credit for the purposes of recovering any amount of tax credit paid in excess of that properly payable under section KJ 1 Treatment as contribution
2: Despite subsection (1) KiwiSaver Act 2006 Treatment of tax credit
3: The fund provider must credit the amount of the tax credit on a pro rata basis across the investment products to which the person has subscribed or has been allocated as a member of the relevant KiwiSaver scheme or complying superannuation fund. Vesting of tax credit
4: The tax credit must vest in the person immediately after it is paid to the fund provider, despite any provision to the contrary. Override of other rules: tax credit paid in excess
5: Despite the relevant KiwiSaver scheme rules or complying fund rules, the relevant fund provider may remove an amount from a person's account for the purposes of paying to the Commissioner an amount of tax credit paid in excess of that properly payable under this subpart. Claw-back: permanent emigration
6: When a person for whom amounts of tax credit have been paid makes an application for, or otherwise wants, after their permanent emigration, a withdrawal or transfer from their KiwiSaver scheme or complying superannuation fund under schedule 1, clause 14 of the KiwiSaver Act 2006
a: the relevant fund provider must pay to the Commissioner the lesser of—
i: the amounts of the tax credit that have been paid for the person:
ii: the amount of employee's superannuation accumulation for the person, for a complying superannuation fund:
iii: the amount of the member's accumulation KiwiSaver Act 2006
b: the payment described in paragraph (a) Recovery of claw-back
7: A fund provider has an amount of tax credit paid in excess of that properly payable to the extent to which they fail to comply with subsection (6)(b) amount complying fund rules complying superannuation fund employee's superannuation accumulation fund provider KiwiSaver scheme.
40: Credit for investor for tax paid by entity if portfolio investor allocated income not excluded income
Section LD 10(2)
2: The taxpayer is entitled to a credit of tax against the taxpayer's income tax liability for the tax year equal to the amount of income tax paid by the portfolio tax rate entity in relation to the portfolio investor allocated income referred to in subsection (1) 2007-10-01 s LD 10(2)
41: New section LD 10B inserted
After section LD 10
LD 10B: Credit for zero-rated portfolio investor for tax paid by entity in relation to portfolio investor allocated income
1: This section applies for a taxpayer and a tax year if the taxpayer is a zero-rated portfolio investor and has for the tax year portfolio investor allocated income from a portfolio tax rate entity that pays income tax in relation to the portfolio investor allocated income.
2: The taxpayer is entitled to a credit of tax against the taxpayer's income tax liability for the tax year equal to the amount of income tax paid by the portfolio tax rate entity in relation to the portfolio investor allocated income referred to in subsection (1) 2007-10-01 s LD 10B
42: Credit for investor for payment under section HL 21(5) by entity for portfolio investor exit period
Section LD 11(2)
2: The taxpayer is entitled to a credit of tax against the taxpayer's income tax liability for the tax year equal to the amount of the payment by the entity under section HL 21(5) 2007-10-01 s LD 11(2)
43: Methods for calculating provisional tax liability
Section MB 4(4) Relationship of other methods with standard method, and modification of standard method
4: Subsections (5) to (7) subsection (3) Section MZ 10 section MB 4 subsection (3) 2007-10-01 s MB 4
44: GST ratio method
The following is added to section MB 7 Relationship with other provisions
9: Section MZ 11 sections MB 7 and MB 10 2007-10-01 s MB 7(9)
45: Calculating amount of instalment under standard and estimation methods
In section MB 9(3)
a: in paragraph (a)(i) 5% 5% ( section MZ 12 section MB 9
b: in paragraph (a)(ii) 10% 10% ( section MZ 12 2007-10-01 s MB 9(3)
46: Calculating amount of instalment using GST ratio
The following is added to section MB 10 Relationship with other provisions
4: Section MZ 11 sections MB 7 and MB 10 2007-10-01 s MB 10(4)
47: New sections MZ 10 to MZ 12
1: The following is added to subpart MZ
MZ 10: Calculating provisional tax instalments: section MB 4
1: This section applies, for a person's 2008–09 and 2009–10 income years, when the person is a new tax rate person for that year.
2: For the purposes of the standard method, and for the purpose of a provisional taxpayer calculating the amount of provisional tax under section MB 4(3)
a: for the 2008–09 income year,—
i: 105% is treated as 95% in section MB 4(3)(a)
ii: 110% is treated as 100% in section MB 4(3)(b)
b: for the 2009–10 income year, 110% is treated as 100% in section MB 4(3)(b)
MZ 11: Calculating provisional tax instalments: sections MB 7 and MB 10
1: This section applies, for a person's 2008–09 and 2009–10 income years when—
a: the person is a new tax rate person for that year; and
b: in section MB 7 income tax amounts
c: the income tax amounts are for the 2007–08 or earlier income years.
2: For the purposes of a provisional taxpayer calculating the amount of an instalment under section MB 10 section MB 7
MZ 12: Calculating provisional tax instalments: section MB 9
1: This section applies, for a person's 2008–09 and 2009–10 income years, when the person is a new tax rate person for that year.
2: For the purposes of a provisional taxpayer calculating the amount of an instalment under section MB 9(2)
a: for the 2008–09 income year,—
i: section MB 9(3)(a)(i)
ii: section MB 9(3)(a)(ii)
b: for the 2009–10 income year, section MB 9(3)(a)(ii) 2007-10-01 ss MZ 10 to MZ 12
2: Subsection (1)
48: Application of NRWT rules
1: In section NG 1(2)(a) and dividends from portfolio listed companies
2: In section NG 1(2)(f) section CX 44D(3) section CX 44D(2) or (3) 2007-10-01 ss NG 1(2)(a) and NG 1(2)(f)
49: Definitions
1: This section amends section OB 1
2: In the definition of allowable rebates paragraph (a) of money) of money) and excluding tax credits allowed under subpart KJ (KiwiSaver scheme and complying superannuation fund tax credits)
3: In the definition of complying fund rules paragraph (a) 7, and 9 7, 9, and 17
4: In the definition of complying fund rules paragraph (c)
cb: require that an employee's superannuation accumulation is used to fund benefits that are calculated only by reference to the amount of that accumulation; and .
5: In the definition of complying fund rules paragraph (e)
eb: require that, for a transfer to another complying superannuation fund in accordance with paragraph (d)
i: any written evidence provided to the old fund provider by the member under section KJ 2(f)
ii: the amounts of tax credits received by the old fund provider under subpart KJ (KiwiSaver scheme and complying superannuation fund tax credits); and
iii: any information held by the old fund provider that would be relevant to the new fund provider making a claim under section 68C of the Tax Administration Act 1994 .
6: In the definition of employee's superannuation accumulation
a: in paragraph (a) completely
b: after paragraph (a)
ab: the amount of tax credit under section KJ 1 section KJ 5(2) .
7: After the definition of fully employed person fund provider
8: In the definition of income tax liability paragraph (a)
a: means, for a person,—
i: an income tax liability for the person and a tax year calculated under subpart BC (Calculating and satisfying income tax liabilities), if subparagraph (ii)
ii: income tax for the person and a tax year calculated under subpart HL (Portfolio investment entities), if the person is a portfolio tax rate entity; and . 2007-10-01 def
9: After the definition of member member credit contributions
a: specified superannuation contributions; and
b: contributions withdrawn under a mortgage diversion facility provided for in regulations made under section 229 of the KiwiSaver Act 2006 member credit year .
10: After the definition of new start grant new tax rate person
a: means a person who uses a 30% basic rate that applies for the 2008–09 and later income years:
b: includes a portfolio tax rate entity . 2007-10-01 def
11: After the definition of permit-specific asset permitted withdrawal
a: the KiwiSaver scheme rules, as defined in section 4 of the KiwiSaver Act 2006
b: the complying fund rules, as defined in this Act .
12: In the definition of portfolio investor exit period
a: in the words before paragraph (a) portfolio investor class of a investor in a
b: in paragraph (a)(ii) and the portfolio investor class and any other portfolio investor classes would
c: in paragraph (a)(ii) for the portfolio investor class and any other portfolio investor classes portfolio investor interest
d: in paragraph (a)(ii) period; or period; and
iii: the amount of the portfolio entity tax liability referred to in subparagraph (ii) section HL 23B .
e: in paragraph (b)(i) the entity the portfolio investor class
f: paragraph (b)(ii)
ii: ending on a day in the tax year on which the entity's portfolio entity tax liability under section HL 20 . 2007-10-01 def
13: In the definition of portfolio investor rate
a: in paragraph (a) 33% 30%
b: paragraphs (b)(i) (ii)
i: before the end of the portfolio calculation period, if the entity makes payments of tax under section HL 21
ii: before the end of the tax year in which the portfolio calculation period occurs, if the entity makes payments of tax under section HL 23
iii: before the entity has calculated the portfolio investor allocated income or portfolio investor allocated loss for the investor and the period; and
iv: by a notice satisfying section 28B of the Tax Administration Act 1994 . 2007-10-01 def
14: In the definition of portfolio land company paragraph (b) subparagraph (i) at the beginning of the tax year on 80% of the days in the corresponding income year on which the company has property with a market value equal to or more than $100,000 2007-10-01 def
15: The definition of portfolio listed company portfolio listed company
a: is listed on a recognised exchange in New Zealand or meets the requirements of section HL 11B
b: has become a portfolio investment entity under section HL 12
c: has not ceased to be a portfolio listed company under section HL 11B
d: has not ceased to be a portfolio investment entity under section HL 14 . 2007-10-01 def
16: In the definition of portfolio tax rate entity paragraph (d)
d: is not a portfolio defined benefit fund . 2007-10-01 def
17: In the definition of prescribed investor rate
a: in paragraph (a) 33% 30%
b: in paragraph (b)(ii) allocated income allocated income after subtraction of portfolio investor allocated loss
c: paragraph (c)(ii)
ii: is a portfolio investment entity other than a person to whom paragraph (a)(ii) .
d: paragraph (c)(iv)
iv: is a superannuation fund other than a person to whom paragraph (a)(ii) . 2007-10-01 def
18: After the definition of widely-held company widely-held GIF
a: the investor membership requirements in section HL 6(1)
b: one or more of paragraphs (a) and (c) to (e) qualifying unit trust widely-held superannuation fund
a: the investor membership requirements in section HL 6(1)
b: one or more of paragraphs (a) and (c) to (e) qualifying unit trust .
19: Subsection (4)
20: If subsection (4) subsection (19) subsection (4)
21: Subsections (13)(a) (17)(a)
a: for a portfolio tax rate entity to which section HL 21 HL 23 Income Tax Act 2004
b: for a portfolio tax rate entity to which section HL 22 Income Tax Act 2004
22: Subsection (18)
50: Schedule 1—Basic rates of income tax and specified superannuation contribution withholding tax
1: In schedule 1
a: in clause 1 33 cents 30 cents
b: in clause 4 clause 7 or 8 clause 7, 8, or 8B
c: in clause 5 33 cents 30 cents
d: clause 6 2007-10-01 sch
e: in clause 7 33 cents 30 cents
f: after clause 8
8B: To the extent to which taxable income of a trustee is not included in the provisions of clause 7 or 8
a: an approved unit trust to which the Income Tax Act (Exempt Unit Trusts) Order 1990
b: a widely-held superannuation fund:
c: a widely-held GIF.
2: Subsections (1)(a) (b) (c) (e) (f)
2: Amendments to other Acts and Regulations
Tax Administration Act 1994
51: Tax Administration Act 1994
Sections 52 to 56 Tax Administration Act 1994
52: Portfolio tax rate entity to give statement to investors and request information
1: Section 31B(1)(a) (b) for each tax year 2007-10-01 s 31B(1)(a) and (b)
2: Section 31B(2)
2: A portfolio tax rate entity must give to an investor in the entity who has a portfolio investor exit period a notice giving information that the Commissioner considers relevant for each portfolio calculation period in which the portfolio exit period falls, if the portfolio calculation period is more than a day. 2007-10-01 s 31B(2)
3: After section 31B(2)
2B: A notice required by subsection (2) 2007-10-01 s 31B(2B)
4: In section 31B(3)(a) income year tax year 2007-10-01 s 31B(3)(a)
5: In section 31B(3)(b) income year tax year 2007-10-01 s 31B(3)(b)
6: In section 31B(4) income year tax year 2007-10-01 s 31B(4)
53: Annual returns of income not required
After section 33A(1)(b)(x)
xi: portfolio investor allocated income that is not excluded income; and . 2007-10-01 s 33A(1)(b)(xi)
54: Commissioner may approve furnishing of return information by electronic means
In section 36(3)(ba) or annual reconciliation statement under section 57B employer monthly schedule 2007-10-01 s 36(3)(ba)
55: Portfolio tax rate entities and portfolio investor proxies to make returns, file annual reconciliation statement
1: Section 57B(4)(a)(ii) 2007-10-01 s 57B(4)(a)(ii)
2: Section 57B(6)(a) (b)
a: by 30 June of the calendar year in which the tax year ends, if—
i: the person has a corresponding income year that does not end after the end of the tax year; and
ii: the person is a portfolio tax rate entity or portfolio investor proxy at the end of that corresponding income year; or
b: by the end of the second month following the month in which the corresponding income year for the portfolio tax rate entity ends, if—
i: the portfolio tax rate entity has a corresponding income year that ends after the end of the tax year; and
ii: the person is a portfolio tax rate entity or portfolio investor proxy at the end of that corresponding income year; or
c: by the end of the second month following the month in which the entity ceases to be a portfolio tax rate entity or portfolio investor proxy, if the person ceases to be a portfolio tax rate entity or portfolio investor proxy in the corresponding year. 2007-10-01 s 57B(6)(a) and (b)
56: New section 68C
After section 68B
68C: Tax credit relating to KiwiSaver and complying superannuation fund members: member credit form
1: This section applies to a person's fund provider.
2: The fund provider must claim a tax credit under section KJ 1 of the Income Tax Act 2004
a: is the person's fund provider on—
i: 30 June of the member credit year; or
ii: the day in the member credit year that is before the person ceases to be a member of the fund provider's fund or scheme due to permitted withdrawals other than transfers; and
b: is reasonably satisfied of the number of days in the member credit year on which the person meets the requirements of section KJ 2(d) of that Act
c: has no knowledge that the person does not meet the requirements of section KJ 2(a) to (c), and (e) and (f) of that Act
3: The fund provider must claim a tax credit for the person for the member credit year by furnishing to the Commissioner a member credit claim in relation to the person, in the form prescribed by the Commissioner. The member credit claim must—
a: contain the person's name, address, and tax file number, the amount of the person's member credit contributions for the member credit year, and any other information that the Commissioner may require; and
b: be furnished on a date determined by the Commissioner.
4: The fund provider may claim a tax credit under section KJ 1 subsection (2)(b) and (c) subsection (3) subsection (3)(a) KiwiSaver Act 2006
57: KiwiSaver Act 2006
Sections 58 to 69 KiwiSaver Act 2006
58: Interpretation
In section 4(1) Crown contribution Crown contribution
a: the contribution made by the Crown under section 226
b: the amount of tax credit under section KJ 1 of the Income Tax Act 2004 section KJ 5(2) of that Act .
59: Application
In section 6(1)(a) who is serving outside New Zealand; and who is—
i: serving outside New Zealand; and
ii: employed on New Zealand terms and conditions; and
iii: serving in a jurisdiction where offers of KiwiSaver scheme membership are lawful; and .
60: Other situations when automatic enrolment rules do not apply
In section 14(1)(c) PAYE rules. PAYE rules:
d: if amounts are withheld for an employee under the PAYE rules solely because section OE 1(5) of the Income Tax Act 2004
61: Eligibility to be exempt employer
In section 25(3) permanent employees permanent employees
a: who are not employed in temporary employment (as described in section 12
b: to whom the automatic enrolment rules would apply, but for the application of this section.
62: Employer may choose scheme for employees
Section 46(3)
3: In this section, permanent employees
a: who are not employed in temporary employment (as described in section 12
b: to whom the automatic enrolment rules would apply, but for the application of section 14
63: Notification of transfers and requirement to transfer funds and information
In section 56(3)(c)(iii) in force. in force; and
iv: of any written evidence provided to a provider of the old scheme by the member under section KJ 2(f) of the Income Tax Act 2004
v: of the amounts of tax credits received by a provider of the old scheme under subpart KJ of that Act; and
vi: of any information held by a provider of the old scheme that would be relevant to a provider of the new scheme making a claim under section 68C of the Tax Administration Act 1994
64: Contributions from employer may be paid via Commissioner
1: In the heading to section 93 may may only
2: In section 93(1) may may only
65: Employer must give notice that employer contributions to be paid via Commissioner
Section 94
66: New section 128A
After section 128
128A: Terms relating to members' tax credits implied into trust deed
1: The terms relevant to the tax credits described in section KJ 1 of the Income Tax Act 2004
a: a KiwiSaver scheme in relation to the KiwiSaver scheme:
b: a complying superannuation fund in relation to the complying superannuation fund.
2: The law relating to the tax credits—
a: applies despite anything to the contrary in a trust deed of a scheme or fund; and
b: is enforceable by a trustee, and by a member, of the scheme or fund.
67: Application of Securities Act 1978
In section 209(2) under this Act in respect of KiwiSaver schemes and complying superannuation funds
68: New section 233
After section 232
233: Transitional provision: pre-1 July 2007 securities law documentation
1: This section applies to the following documents:
a: a prospectus that is registered under the Securities Act 1978
b: an investment statement under the Securities Act 1978
2: A document to which this section applies is as valid and effectual as it would have been if the Taxation (KiwiSaver and Company Tax Rate Amendments) Act 2007 had not been enacted and as if the relevant KiwiSaver scheme or complying superannuation fund had not changed as a result.
69: Schedule 1—KiwiSaver scheme rules
1: In clause 12(2) calculating the amount of the Crown contribution calculating the amount of the Crown contribution, and disregarding any part of that contribution arising from a tax credit under section KJ 1 of the Income Tax Act 2004
2: In clause 14(1) accumulation accumulation less the amount of the Crown contribution arising from a tax credit under section KJ 1 of the Income Tax Act 2004
3: The following is added to schedule 1
17: Crown contributions: tax credits
Despite rules 4 to 14 section KJ 1 of the Income Tax Act 2004
a: before the member gives the fund provider Income Tax Act 2004
b: to the extent to which the fund provider included days section KJ 3 of the Income Tax Act 2004 Companies Act 1993
70: Dividends
In section 53(2) Companies Act 1993 by section HL 8 as a result of section HL 7 2007-10-01 s 53 Superannuation Schemes Act 1989
71: Dealing with applications for complying superannuation funds
1: Sections 35(1)(a) (b) Superannuation Schemes Act 1989
a: the registered scheme and any relevant participation agreement evidence rules that subject the following to complying fund rules:
i: relevant contributions:
ii: returns on relevant contributions:
iii: relevant benefits; and .
2: Subsection (1)
3: If subsection (1) subsection (2) subsection (1) Taxation (Savings Investment and Miscellaneous Provisions) Act 2006
72: New section 97B inserted
After section 97 Taxation (Savings Investment and Miscellaneous Provisions) Act 2006
97B: Application under section HL 11
Despite section 2(22) section HL 11 section 97 . Goods and Services Tax (Grants and Subsidies) Order 1992
73: Schedule—Non-taxable grants and subsidies
The following is added to the schedule of the Goods and Services Tax (Grants and Subsidies) Order 1992
5: The Commissioner of Inland Revenue crediting, transferring, refunding, dealing with, or otherwise paying, a tax credit under the Income Tax Act 2004 Tax Administration Act 1994 subpart KJ of the Income Tax Act 2004