Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016

1: Title
This Act is the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016.
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: Part 1
a: sections 5 15 23 28(2) 54(1) and (2) 55(1) and (3) to (8)
b: sections 31(2) 40(3) and (4) 41(2) 45 to 48
c: sections 57 61 62
d: sections 4(3) and (4) 55(10) 70
3: Sections 273(2) 274(1) 281(1)
4: Sections 295 296
5: Sections 291(1) and (3) 293(1) and (3)
6: Sections 291(2) and (4) 292 293(2) and (4)
7: Section 274(3)
8: Section 290
9: Sections 285 286 287 288
10: Section 265
11: Section 284
12: Sections 95(4) and (7) 109 110 112 113 115 120 131 156 161 162 165 166 167 169 175(1), (2), and (3) 177 178 185 187 188 193 194 201 211 214 217 218 219 221 224 227 235(37), (44), (45), (58), (66), (68), (69), and (70) 246 247 267 270
13: Sections 84 86 235(63) and (72)
14: Section 189
15: Section 175(4), (5), (6), and (7)
16: Sections 140 141
17: Section 168
18: Section 235(16) and (17)
19: Sections 88 190 191 192
20: Section 91
21: Section 240(3) and (4)
22: Sections 93 94 99 117 121(2), (3), and (5) 134 163 206 207 208 209 210 235(29), (30), (48), and (59) 278
23: Section 273(3)
24: Sections 146 152(3) and (8)
25: Section 235(46)
26: Sections 276 279
27: Section 75
28: Section 237
29: Sections 101 102 103 104 105 106 107
30: Sections 90 95(1), (2), (3), (5), and (6)
31: Sections 92 235(13) and (32)
32: Section 300
33: Sections 78(1), (3), (5), (6), (9), (10), (11), (12), (13), (14), (15), (16), and (17) 82(1) 108(1) 132(1) and (2) 145 148 152(1), (4), (7), and (9) 157 186 204 235(21), (23), (31), and (43) 249 253 275(1)
34: Sections 85 241 271 299
35: Section 240(1)
36: Sections 226 298
37: Sections 229 230 231 232 233 234
38: Sections 273(1) 274(2) 275(2) 277
39: Sections 76 77 78(2), (4), (7), and (8) 79 80 83 96 97 98 100 111 114 116 118 119 121(1), (4), and (6) 122 123 124 125 126 127 128 132(3) and (4) 158 170 171 172 173 174 176 198 199 200 202 205 213 215 216 228 235(2), (5), (6), (7), (8), (9), (10), (11), (12), (15), (22), (24), (26), (28), (33), (34), (35), (40), (41), (42), (47), (50), (51), (52), (53), (54), (55), (57), (64), and (65) 238 239 240(2), (5), and (6) 242 251 252 260 261
40: Sections 129 130 138 149 150 151 159 183 212 222 223 235(38) and (67) 248 255 263 266 302
1: Child support remedial matters
Amendments to Child Support Act 1991
3: Child Support Act 1991 amended
Sections 4 to 55 2016-02-25 Child Support Act 1991 Part 1 comes into force day after Assent except for those sections as stated in s 2(b) and (d). 2016-03-01 Child Support Act 1991 refer to section 2(d) 2016-04-01 Child Support Act 1991 refer to section 2(b)
4: Section 2 amended (Interpretation)
1: In section 2(1) last relevant tax year and has no adjustments of the sort referred to in section 35(1),
2: In section 2(1) receiving carer receiving carer
a: a carer of a qualifying child who the Commissioner determines under section 17 is a receiving carer of the child; or
b: a person who is entitled to receive child support under section 58(1) or 68(1)
3: In section 2(1) social security benefit
iii: subject to subsection (1A)
4: After section 2(1)
1A: The reference to jobseeker support in paragraph (c)﻿(iii)
5: Section 3A amended (Transitional and savings provisions relating to amendments to this Act)
1: In the heading to section 3A Transitional Application, transitional,
2: In section 3A transitional application, transitional,
6: Section 4A amended (Overview of child support payable under formula assessment)
In section 4A(1) by a liable parent
7: Section 8 amended (Who may apply for formula assessment)
Replace section 8(1)
1: Any parent or carer of a qualifying child may apply to the Commissioner for a formula assessment of child support payable in respect of the child.
8: Section 13 amended (Notification by Commissioner of application)
1: In section 13(2) , in order to ascertain the matters listed in subsection (1),
2: After section 13(3)
4: The Commissioner’s duty to ascertain the matters listed in subsection (1) is subject to section 13A
9: New section 13A inserted (Cases where formula assessment to be refused)
After section 13
13A: Cases where formula assessment to be refused
1: The Commissioner must refuse to make a formula assessment in respect of a qualifying child if subsection (2) or (4)
2: This subsection applies if the applicant is living with a parent of the child in a marriage, civil union, or de facto relationship.
3: However, subsection (2)
a: the applicant is a parent of the child; and
b: the child has—
i: a parent with whom the applicant is not living in a marriage, civil union, or de facto relationship; or
ii: a non-parent carer with whom the applicant is not living in a marriage, civil union, or de facto relationship and who the Commissioner determines is a receiving carer.
4: This subsection applies if the applicant is a non-parent carer of the child who the Commissioner determines is not a receiving carer.
5: If the Commissioner refuses to make a formula assessment under this section, the Commissioner must notify the applicant of the refusal (and withdraw any notices given under section 13).
10: Section 25 amended (When liability to pay child support ceases)
1: Repeal section 25(3)﻿(e)
2: After section 25(3)
4: Subsection (5) section 27
5: A liable parent ceases to be liable to pay child support in respect of the qualifying child under the formula assessment on—
a: the day on which the Commissioner received the notice of election; or
b: if the notice of election specified a later day on which the formula assessment as it applies in respect of the qualifying child is to end, that later day.
11: Section 27 replaced (Election by receiving carer to end formula assessment)
Replace section 27
27: Election by receiving carer to end formula assessment
1: Where a formula assessment applies in respect of a qualifying child ( child C
2: If a person ( person P see section 25(4) and (5)
3: The election qualifies for acceptance if—
a: person P is a recognised carer of child C by virtue of subsection (6)﻿(a)
b: every other recognised carer of child C (if any) agrees to the election.
4: However, the election does not qualify for acceptance if a recognised carer of child C is, or is expected to be, on the day referred to in section 25(5)﻿(a) or (b)
a: a social security beneficiary by virtue of paragraph (a), (c), or (d) of the definition of social security benefit in section 2(1); or
b: a social security beneficiary by virtue of paragraph (b) of that definition where the unsupported child’s benefit is granted in respect of child C.
5: In determining whether to accept the election, the Commissioner—
a: may act on the basis of any information accompanying the notice of election and any other information in the Commissioner’s possession; and
b: is not required to conduct any enquiries or investigations into the matter.
6: For the purposes of this section, a recognised carer of child C
a: a receiving carer of child C under the formula assessment:
b: a parent of child C who is not a receiving carer of child C under the formula assessment but who provides at least 28% of ongoing daily care to child C.
7: The Commissioner’s acceptance of the election is final, unless overturned in accordance with subsection (8) or (9)
8: The acceptance may be overturned, wholly on the basis of information in the Commissioner’s possession at the time of the acceptance,—
a: under Part 6, on an objection to the acceptance made under section 90(1)﻿(bb)
b: under Part 7, on an appeal against the Commissioner’s disallowance of an objection to the acceptance made under section 90(1)﻿(bb)
9: The Commissioner may overturn the acceptance if a person whom the Commissioner regarded as being a recognised carer of child C when accepting the election is a social security beneficiary of the kind referred to in subsection (4)﻿(a) or (b) section 25(5)﻿(a) or (b)
10: Without affecting the acceptance, subsequent changes may be made to the receiving carers or liable parents, or to their entitlements or liabilities, under the formula assessment in respect of times before the day referred to in section 25(5)﻿(a) or (b)
11: A notice of election must be given using an approved form or given in another way approved by the Commissioner.
12: Section 32 amended (Minimum annual rate of child support)
1: In section 32 child support payable under a formula assessment
2: In section 32(b) qualifying children of the liable parent that each the liable parent’s qualifying children in respect of whom a formula assessment applies that each receiving
13: Section 34 amended (Child support income amount)
In section 34(1) relevant tax child support
14: Section 35 amended (Adjusted taxable income)
1: Replace section 35(1) to (5)
1: A person’s adjusted taxable income
a: the person’s income from employment for the calendar year immediately preceding the start of the child support year if, in the most recent tax year, the person’s taxable income was derived solely from withholding income; or
b: if paragraph (a)
2: Replace section 35(7)
7: This section is subject to—
a: sections 38 to 39A (which relate to ascertaining taxable income, etc); and
b: sections 40AA to 44A (which permit elections for adjusted taxable income to be assessed using estimated taxable income).
15: Section 35A amended (Living allowance)
Replace section 35A(2)﻿(a) to (c)
a: for every person other than a person identified in paragraph (b)
b: for a person granted a supported living payment under section 40B or 40D of the Social Security Act 1964 who is, for the purposes of that benefit, a single beneficiary with 1 or more dependent children, the rate set out in clause 1(c) of Schedule 6 of that Act (ignoring the reference to Income Test 1).
16: Section 39A amended (Commissioner may take overseas income into account)
1: Replace section 39A(3)﻿(b)
b: references to “tax year” and “relevant tax year” are references to—
i: income periods of the relevant country that most appropriately correspond to the equivalent New Zealand periods; or
ii: such other periods as the Commissioner considers appropriate in the circumstances:
2: In section 39A(3)﻿(d) to (g), delete taxable
17: Section 40AA amended (Interpretation for purposes of sections 40 to 45)
1: In section 40AA election original taxable income income referred to in section 35(1)﻿(a) or (b)
2: In section 40AA original taxable income
18: Section 40 amended (Estimated taxable income)
1: In section 40(1) the taxable income the income
2: In section 40(2) and (4)﻿(e) original taxable income original adjusted taxable income
19: Section 41 amended (Effect of election)
Replace section 41(1)
1: If the Commissioner accepts an election made by a person, the Commissioner must determine the person's adjusted taxable income by calculating the person’s annualised estimated taxable income.
20: Section 42 amended (Revocation of election and subsequent elections)
In section 42(2)﻿(b) original taxable income original adjusted taxable income
21: Section 44 amended (End-of-year reconciliation)
1: In section 44(1) based on the income amount determined under subsection (2) treating the amount determined under subsection (2) as the person’s adjusted taxable income
2: In section 44(2) income amount to be used for amount to be treated as the person’s adjusted taxable income for the purposes of
3: In section 44(2)﻿(a) the value of any adjustments made under section 41(1)﻿(b) nil
4: In section 44(2)﻿(b)﻿(i) , and adjusted in accordance with section 41(1)﻿(b)
22: Section 44A amended (Determining income amount if no tax return filed)
In section 44A(2) used treated as the person’s adjusted taxable income
23: Section 45 repealed (Penalty if estimated income less than 80% of actual income)
Repeal section 45
24: Section 51 amended (Exception in respect of child support voluntary agreement where formula assessment in force)
1: In the heading to section 51 in force applies
2: In section 51(a) is in force requiring one party to the agreement to pay child support to the other applies
3: Replace section 51(b)
b: the Commissioner has not accepted an election under section 27
25: Section 88 amended (Notice of assessment of formula assessment of child support)
Replace section 88(2)
2: As a minimum, the notice of assessment must set out, in relation to each qualifying child to whom the notice relates, the matters identified in section 88A so far as they are relevant to the assessment as it applies in respect of the child.
2A: However, in no case may a notice of assessment reveal any more detail about another person who is a parent or carer than the person’s name (subject to subsection (5)) and, in relation to a qualifying child, the person’s proportion of care and care cost percentage.
26: Section 88A amended (Details in notices of assessments)
1: In section 88A(1) A notice of assessment given to a liable parent must set out all of the following that are applicable in relation to each qualifying child to whom the notice relates The matters referred to in section 88(2)
2: In section 88A(1)﻿(f) income or such other details as the Commissioner considers appropriate of any income of the liable parent taken into account in making the assessment
3: In section 88A(1)﻿(g) amount of the dependent child allowance for each dependent child sum of any dependent child allowances to which the liable parent is entitled
4: In section 88A(2) A notice of assessment given to a parent of a child who is a receiving carer must set out all of the following that are applicable in relation to each qualifying child to whom the notice relates The matters referred to in section 88(2)
5: In section 88A(2)﻿(f) income or such other details as the Commissioner considers appropriate of any income of the parent taken into account in making the assessment
6: In section 88A(2)﻿(g) amount of the dependent child allowance for each dependent child sum of any dependent child allowances to which the parent is entitled
7: In section 88A(3) A notice of assessment given under this section to a non-parent receiving carer of a child must set out all of the following that are applicable in relation to each qualifying child to whom the notice relates The matters referred to in section 88(2)
27: Section 89L amended (Application for determination)
After section 89L(3)
4: The determinations that the Commissioner may make under this subpart are not limited by the terms of the application.
28: Section 90 amended (Objections to appealable decisions)
1: After section 90(1)﻿(ba)
bb: a decision to accept an election under section 27
bc: a decision not to accept an election under section 27 section 27(9)
2: In section 90(1)﻿(d) 45 or
29: Section 91 amended (Objections to assessments)
1: In section 91(1) an assessment , other than an amended assessment,
2: After section 91(1)
1A: An objection to an amended assessment may be made on any or all of the grounds listed in subsection (1)﻿(b) to (d), but—
a: on no other ground; and
b: only if the matters covered by the objection are attributable to the amendment of the assessment.
3: In section 91(2) who is affected by the assessment to whom the Commissioner is required to give notice of the assessment under section 88 or 89
4: Repeal section 91(3)
30: Section 96C amended (Matters as to which Commissioner must be satisfied before making determination)
1: In section 96C(2)﻿(b) 105(3) ; and
2: After section 96C(2)﻿(b)
c: section 105(2)﻿(d) section 105(3D)
3: In section 96C(3) Subsections (3C)
31: Section 96D amended (Determinations that may be made)
1: After section 96D(1)﻿(b)
ba: section 106A
2: After section 96D(1)﻿(ba) subsection (1)
bb: section 106B
3: After section 96D(1)
1A: The determinations that the Commissioner may make under subsection (1) are not limited by the terms of the application under section 96B.
32: Section 96X amended (Commissioner to notify receiving carers and liable parent who is not subject parent)
1: In the heading to section 96X who is not subject parent with rights of election under section 96Y
2: In section 96X the receiving carers and any liable parent who is not the subject parent any receiving carer or liable parent who has rights of election under section 96Y
33: Section 96Y amended (Election by receiving carer or by liable parent who is not subject parent to become party or discontinue proceedings)
1: In the heading to section 96Y who is not subject parent
2: In section 96Y(1) receiving carer, or any liable parent who is not the subject parent, relevant person ( see subsection (8)
3: In section 96Y(2) receiving carer, or a liable parent who is not a subject parent, relevant person
4: In section 96Y(3) receiving carer or liable parent relevant person
5: In section 96Y(4) receiving carer or by a liable parent who is not the subject parent relevant person
6: In section 96Y(5) receiving carer or liable parent who is not the subject parent relevant person
7: In section 96Y(6) receiving carer or liable parent who is not the subject parent relevant person
8: After section 96Y(6)
7: However, if there is more than 1 relevant person, the Commissioner must not discontinue the proceedings unless each relevant person has elected under subsection (2) to discontinue them.
8: In this section and sections 96Z and 96ZA, relevant person
a: a receiving carer who is not the subject parent; or
b: a liable parent who is not the subject parent.
34: Section 96Z amended (Written representations by parties)
1: Replace section 96Z(2)﻿(b)﻿(ii)
ii: in the case of a relevant person ( see section 96Y(8)
2: In section 96Z(3) the receiving carer or liable parent who is not the subject parent a relevant person
3: In section 96Z(4) receiving carer or liable parent who is not the subject parent relevant person
4: In section 96Z(5) receiving carer or liable parent who is not the subject parent relevant person
35: Section 96ZA amended (Procedure for making determination)
In section 96ZA(4) receiving carer or liable parent who is not the subject parent relevant person ( see section 96Y(8)
36: Section 98 amended (Minimum liability in respect of child support)
In section 98(2A) qualifying children of the liable parent the liable parent’s qualifying children in respect of whom a formula assessment applies
37: Section 99 amended (Declarations in respect of step-parents)
1: In section 99(1) receiving
2: Replace section 99(3)
3: Subject to section 125, the parties to the proceeding are—
a: the applicant for the declaration under this section; and
b: the person whom the application seeks to be declared to be a step-parent of the child (if that person is not the applicant); and
c: any other person who is a parent or carer of the child when the application is made.
38: Section 102 amended (Appeals against decisions of Commissioner)
Replace section 102(3)
3: Subject to section 125, the parties to the appeal are the objector and the Commissioner.
39: Section 103 amended (Appeals against assessments)
1: In section 103(1) any person affected by the assessment the objector
2: Replace section 103(3)
3: Subject to section 125, the parties to the appeal are the objector and the Commissioner.
3: In section 103(6) the persons concerned, a person affected by the assessment that was objected to,
40: Section 105 amended (Matters as to which court must be satisfied before making order)
1: In section 105(2)﻿(c)﻿(iii) interest. interest; or
2: After section 105(2)﻿(c) Re-establishment costs situation if income increases
d: that the application in relation to the child of the provisions of this Act relating to formula assessment of child support would result in an unjust and inequitable determination of the level of child support to be provided by the liable parent for the child in respect of a child support year because—
i: the adjusted taxable income of a parent of the child for the child support year includes income from relevant additional work ( see subsections (3A) to (3C)
ii: some or all of the income from relevant additional work has been used, or will be used, by the parent to meet, wholly or partly, actual and reasonable costs incurred to re-establish himself or herself, and any child or other person that he or she has a duty to maintain, after the child's parents ceased to live together in a marriage, civil union, or de facto relationship.
3: In section 105(2)﻿(d)﻿(ii) subsection (2) relationship. relationship; or
4: After section 105(2)﻿(d) subsection (2) Offsetting of liabilities situation
e: that it would be just and equitable to offset one liability against another, if 2 persons are each liable to pay in respect of the other an amount of child support under a formula assessment (whether or not those amounts have become due and payable).
5: After section 105(3)
3A: In subsection (2)﻿(d) relevant additional work
3B: In subsection (3A) the relevant 3-year period
3C: For the purpose of calculating that 3-year period, the court may exclude a period or periods of resumed cohabitation with, or each with, the sole or main motive of reconciliation if that period does not exceed, or those periods in aggregate do not exceed, 3 months.
3D: The ground in subsection (2)﻿(d)
41: New sections 106A and 106B inserted
1: After section 106
106A: Further provision on orders for re-establishment costs situations if income increases
The amount that an order under section 106 on the ground in section 105(2)﻿(d)
a: so much of the income from relevant additional work as has been used, or will be used, by the parent as referred to in section 105(2)﻿(d)﻿(ii)
b: 30% of the parent’s adjusted taxable income.
2: After section 106A subsection (1)
106B: Further provision on orders for offsetting of liabilities situations
1: An order under section 106 on the ground in section 105(2)﻿(e) may provide for the offsetting of liabilities in cases involving all or any of the following:
a: liabilities in respect of the 2 persons caring at different times for the same child:
b: liabilities in respect of the 2 persons caring at the same time for 2 or more different children:
c: liabilities in respect of different child support years:
d: liabilities in respect of child support years ending before 1 April 2016 (that is, the date of commencement of this section and section 105(2)﻿(e)):
e: liabilities under different formula assessments.
2: Subsection (1) does not limit section 105(2)﻿(e).
3: An order under section 106 on the ground in section 105(2)﻿(e) may not apply in respect of—
a: any liability of a person in respect of a period if during that period the other person is expected to be, or (as the case requires) was, a social security beneficiary; or
b: a penalty payable under section 134.
4: Subsection (5) section 105(2)﻿(e) relevant liability
a: has been offset to any extent under section 152B; or
b: has been reduced to any extent by virtue of section 34 or 35 as in force before 1 April 2015 (including as applied on and after that date by clause 1A
5: The order may not apply in respect of the relevant liability to any extent.
6: In relation to a liability in respect of a child support year ending before 1 April 2015, any order on the ground in section 105(2)﻿(e) clause 1A
7: An order under section 106 on the ground in section 105(2)﻿(e) may be made only on an application made on or after 1 April 2016.
42: Section 107 amended (Implementation of orders)
After section 107(3)
4: Without limiting subsections (1) to (3), the Commissioner may, in taking action under any of those subsections, apply some or all of the provisions of this Act relating to the amount of child support payable in relation to a receiving carer under a formula assessment (for example, sections 36A to 36C) with the modifications the Commissioner considers necessary to achieve fully the intention of the court’s order.
43: Section 129 replaced (Right to choose payment method)
Replace section 129
129: Right to choose voluntary automatic deductions or other payment method
1: Subject to sections 130 and 131, any person who is liable to pay financial support under this Act must pay the money so payable to the Commissioner—
a: by way of automatic deduction under Part 10 from source deduction payments paid by an employer of the person, if the conditions in subsection (2) are met; or
b: if those conditions are not met, by any other payment method acceptable to the Commissioner.
2: The conditions are that—
a: the person is, or will be, the recipient of source deduction payments from the employer; and
b: the person chooses, in a way acceptable to the Commissioner, for deductions in respect of future payments of financial support to be made from source deduction payments paid by the employer; and
c: the Commissioner does not consider automatic deductions inappropriate in the person’s case.
44: Section 130 amended (Defaulters to pay child support by automatic deduction)
Replace section 130(b)
b: that payment, and those further payments, of financial support are to be paid—
i: by way of automatic deduction under Part 10; or
ii: if the Commissioner considers automatic deduction inappropriate in the person’s case, by another payment method acceptable to the Commissioner.
45: Section 135G amended (Discretionary relief for residual incremental penalty debt)
1: Replace section 135G(1)﻿(b)
b: the Commissioner is satisfied—
i: that recovery of the incremental penalties would place the liable person in serious hardship; or
ii: that it would be fair and reasonable to grant relief.
2: In section 135G(2) (1)﻿(b) (1)﻿(b)﻿(i)
46: Section 135GA amended (Discretionary relief for residual penalty-only debt)
1: Replace section 135GA(1)﻿(b) with:
b: the Commissioner is satisfied—
i: that recovery of those penalties would place the liable person in serious hardship (as defined in section 135G(3)); or
ii: that it would be fair and reasonable to grant relief.
2: Replace section 135GA(2)﻿(b) with:
b: the Commissioner is satisfied that those penalties relate to, or arise from, some or all of that written-off benefit component; and
c: the Commissioner is satisfied—
i: that recovery of those penalties would place the liable person in serious hardship (as defined in section 135G(3)); or
ii: that it would be fair and reasonable to grant relief.
3: In section 135GA(3), replace (1)﻿(b) or (2)﻿(b) (1)﻿(b)﻿(i) or (2)﻿(c)﻿(i)
47: New section 135JA inserted (Relief from incremental penalties unpaid before deduction plan made on or after 1 April 2016)
After section 135J
135JA: Relief from incremental penalties unpaid before deduction plan made on or after 1 April 2016
1: For the purposes of this section,— deduction plan
a: that is a plan for the collection, by way of automatic deduction under Part 10 from relevant payments, of—
i: the amount of the initial debt; and
ii: the amount of financial support (if any) that the liable person will become liable to pay during the term of the plan; and
b: that is not made with the agreement of the liable person initial debt relevant deduction notice relevant payments
a: income specified in paragraph (a) of the definition of withholding income in section 2(1); or
b: earnings related compensation (as defined in section 82(9) of the Tax Administration Act 1994); or
c: a benefit of the kind referred to in section 131; or
d: a basic grant or an independent circumstances grant under the Student Allowances Regulations 1998 review date
a: the day that is 26 weeks after the date on which the deduction plan is made; and
b: each of the days on which there expire periods of 26 weeks that consecutively succeed the first period of 26 weeks described in paragraph (a); and
c: the day on which the deduction plan expires.
2: If a deduction plan has been made and the deduction plan has been complied with up until a particular review date in accordance with subsection (3), the Commissioner must, on that review date,—
a: review the incremental penalties in relation to the initial debt of the liable person that were unpaid at the time the deduction plan was made; and
b: write off those penalties proportionally in accordance with subsection (4).
3: For the purposes of subsection (2), a deduction plan has been complied with up until a particular review date if all of the deductions and payments required to be made under relevant deduction notices by that date have been made in accordance with those notices.
4: For the purposes of subsection (2), the proportion of incremental penalties that must be written off must be calculated in accordance with the following formula: r = [(a × c) ÷ b] − d where— r is the amount of incremental penalty that is to be written off a is the total amount of the initial debt that has been paid since the deduction plan was made b is the initial debt c is the total amount of incremental penalties related to the initial debt of the liable person that were unpaid at the time the deduction plan was made d is the total amount of incremental penalties related to the initial debt of the liable person that have already been written off in accordance with this section since the deduction plan was made.
5: If an incremental penalty that is written off under this section has been paid in whole or in part, the Commissioner must refund to the liable person the whole or part of the incremental penalty that has been paid.
48: Section 135L amended (Writing-off of incremental penalties if non-compliance with arrangement)
After section 135L(2)
2A: Subsection (2B) applies if,—
a: at the time of a review date in relation to a deduction plan under section 135JA, there has been a failure to make any deduction and payment in accordance with a relevant deduction notice (as defined in section 135JA); and
b: the Commissioner is satisfied, in respect of each failure to make a deduction and payment in accordance with a relevant deduction notice (as defined in section 135JA), that the circumstances in relation to the failure would, if they were related to the payment of a debt to which a penalty relates, entitle the Commissioner to grant relief under any of the provisions of sections 135B to 135E.
2B: The Commissioner may disregard a failure to make a deduction and payment for the purpose of applying section 135JA.
49: Section 152B amended (Offsetting child support payments)
In section 152B(2) the parent the other parent
50: Section 154 amended (Deduction notice)
In section 154(1) Where, in accordance with section 130 or section 131, financial support is payable by way of automatic deduction, the Commissioner may, for the purpose of collecting that financial support, give a notice to any person The Commissioner may, for the purpose of collecting financial support by way of automatic deduction in accordance with any of sections 129
51: Section 158 amended (Life of deduction notices)
After section 158(2)
3: A person who has chosen under section 129 to pay financial support by way of automatic deduction under this Part may at any time choose, in a way acceptable to the Commissioner, to stop automatic deduction.
4: In that case, the Commissioner must revoke any relevant deduction notice under subsection (2)﻿(a) unless section 130 or 131 applies.
52: Section 180 amended (Payee may uplift financial support debt)
Replace section 180(2)﻿(b)
b: under subsection (1)﻿(b), if the payee is not a social security beneficiary at the time the child support is payable unless, at the time of the making of the election,—
i: the Commissioner has accepted an election under section 27
ii: the payee elects that the liability of the liable parent to pay child support is to end under section 64 or 70.
53: Section 240 amended (Secrecy)
In section 240(2)﻿(a)﻿(ii) parent spouse or partner
54: Section 276 amended (Transitional and savings provisions relating to amendments to Act)
1: In the heading to section 276 Transitional Application, transitional,
2: In section 276 transitional application, transitional,
3: In section 276
2: The application, transitional, and savings provisions are set out in the following Parts of Schedule 1: The following table is small in size and has 2 columns. Column 1 is headed Part heading. Column 2 is headed Part of Schedule 1. This table is an amendment to section 276 of the Child Support Act 1991 and should be read with that section to provide understanding of the context. Part heading Part of Schedule 1 Child Support Amendment Act 2013, etc: provisions relating to amendments effective on 1 April 2015 1 Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 1A
55: Schedule 1 amended
1: In the heading to Schedule 1 Transitional Application, transitional
2: In Schedule 1 clause 1
1: Child Support Amendment Act 2013, etc: provisions relating to amendments effective on 1 April 2015
3: In Schedule 1, clause 1 commencement date Part 1 (except sections 6, 18, 19, 19A, 31, and 32) of the Child Support Amendment Act 2013 comes the enactments listed in clause 1A(2)
4: In Schedule 1, clause 1 new assessment and applying after the commencement date to the child support year ending on 31 March 2016
5: In Schedule 1, clause 1 new provisions Part 1 of the Child Support Amendment Act 2013 the enactments listed in clause 1A(2)
6: In Schedule 1, clause 1 old provisions Part 1 of the Child Support Amendment Act 2013 comes the enactments listed in clause 1A(2)
7: In Schedule 1, after clause 1
1A: Application of Act to financial support for child support years ending before 1 April 2015
1: This Act applies on and after 1 April 2015 in relation to financial support in respect of a child support year ending before that date as if the amendments made by the enactments listed in subclause (2)
2: The enactments are:
a: Part 1 of the Child Support Amendment Act 2013, except sections 6, 18, 19, 19A, 31, and 32:
b: sections 206 to 215 of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014:
c: sections 15, 23, and 28(2)
3: Subclause (1)
a: section 179A(3) from applying in relation to child support payments in respect of a child support year ending before 1 April 2015; or
b: where section 179A(3) applies in relation to any such payments, relief being given under section 135F(a)﻿(i) in respect of any related penalties.
4: Subclause (1)
5: In this clause, references to financial support in respect of a child support year ending before 1 April 2015 include a reference to a penalty imposed under this Act (whether before, on, or after that date) that is treated as being of the same nature as an amount of such financial support.
8: In Schedule 1, after clause 2
2A: Reconciliation of estimation made under old provisions
Without limiting clause 1A
9: In Schedule 1, after clause 8
1A: Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016
8A: Amendment of sections 4A, 8, and 13 and insertion of new section 13A (applications for formula assessments)
The amendments made by sections 6 to 9
8B: Amendment of sections 2(1), 34, 35, 40AA, 40, 41, 42, 44, and 44A (adjusted taxable income)
The amendments made by sections 4(1), 13, 14, and 17 to 22
8C: Amendment of sections 25, 51, 90(1), and 180 and replacement of section 27 (election by receiving carer to end formula assessment, etc)
The amendments made by sections 10, 11, 24, 28(1), 52, and 65
a: apply only in relation to child support in respect of the child support year commencing on 1 April 2015 or a later child support year; but
b: do not apply in relation to a formula assessment as it applies in respect of a qualifying child if, on or before the date on which the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 receives the Royal assent, a receiving carer of the child makes an election under section 27 of this Act that the liability of every liable parent to pay child support to the receiving carer in respect of the child under the formula assessment is to end.
8D: Amendment of sections 88, 88A, 91, and 103 (notices of, and objections to, assessments)
1: The amendments made by sections 25, 26, 29, and 39 subclause (2)
2: The amendments made by section 29(1), (2), and (4)
3: The Commissioner must, despite section 92(1) and (2), accept for consideration an objection to an amended assessment in relation to which the amendments referred to in subclause (2)
a: the Commissioner gave notice of the amended assessment before the date on which the Act referred to in subclause (2)
b: the objection could not have been made on or before that date because of section 91(3) (as in force on and before that date); and
c: the objection is delivered or posted to the Commissioner after that date within a period that the Commissioner considers to be reasonable; and
d: the objection is otherwise properly made.
8E: Amendment of sections 89L and 96D (determinations that may be made by Commissioner under subpart 3 of Part 5A or Part 6A)
The amendments made by sections 27 and 31(3)
8F: Amendment of sections 96X, 96Y, 96Z, and 96ZA (proceedings under Part 6B)
The amendments made by sections 32 to 35
8G: Amendment of section 99 (declarations in respect of step-parents)
The amendment made by section 37(2)
8H: Amendment of section 102 (appeals against Commissioner’s disallowance of objections)
The amendment made by section 38
8I: Amendment of section 107 (implementation of orders)
The amendment made by section 42
8J: Amendment of sections 130, 154, and 158 and replacement of section 129 (payment of financial support)
The amendments made by sections 43, 44, 50, and 51
10: In Schedule 1 Part 1A subsection (9) clause 8A
8AA: Amendment of definition of social security benefit in section 2
1: The amendments made by section 4(3) and (4) 2016 Act section 2(2)﻿(d)
2: In relation to times before that day, this Act applies on and after that day as if those amendments had not been made. Amendments to Child Support Amendment Act 2013
56: Child Support Amendment Act 2013 amended
Sections 57 to 69 Child Support Amendment Act 2013 2016-02-24 Child Support Amendment Act 2013 refer section 2(c): sections 57, 61 and 62 come into force on the date on which this Act received Assent. 2016-02-25 Child Support Amendment Act 2013 refer section 2(2):
57: Section 2 amended (Commencement)
Replace section 2(4)
4: Sections 40(1), 41, 42, 44, and 45 come into force on the day after the date on which the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 receives the Royal assent.
5: The rest of Part 2 comes into force on 1 April 2016.
58: Section 37 and cross-heading above section 37 repealed
Repeal section 37
59: Section 38 and cross-heading above section 38 repealed
Repeal section 38
60: Section 43 amended (New section 135FA inserted)
1: In section 43 section 135FA(2)
2: The Commissioner may grant relief to the liable person in the manner prescribed by section 135A in respect of the incremental penalties of the liable person that were unpaid at the time a payment agreement was entered into if the Commissioner is satisfied—
a: that recovery of those incremental penalties would place the liable person in serious hardship (as defined in section 135G(3)); or
b: that it would be fair and reasonable to grant relief.
2: In section 43 section 135FA(3) (2)﻿(b) (2)﻿(a)
61: Section 44 amended (Discretionary relief for residual incremental penalty debt)
In section 44(3) 135GA(2)﻿(b)﻿(i) 135GA
62: Section 45 amended (New section 135GA inserted)
1: In section 45 section 135GA(1)﻿(b)
b: the Commissioner is satisfied that recovery of those penalties would do either or both of the following:
i: place the liable person in serious hardship (as defined in section 135G(3)):
ii: involve an inefficient use of the Commissioner’s resources.
2: In section 45 section 135GA(2)﻿(a) and (b) all some or
3: In section 45 section 135GA(2)﻿(b)﻿(i) parent person
63: Section 57 repealed (New section 152B inserted)
Repeal section 57
64: Section 58 and cross-heading above section 58 repealed
Repeal section 58
65: Section 59 amended (Payee may uplift financial support debt)
In section 59
b: under subsection (1)﻿(b), if the payee is a social security beneficiary (as so defined) at the time of the making of the election; or
c: under subsection (1)﻿(b), if the payee is not a social security beneficiary (as so defined) at the time of the making of the election, unless, at that time,—
i: the Commissioner has accepted an election under section 27
ii: the payee elects that the liability of the liable parent to pay child support is to end under section 64 or 70.
66: Section 60 amended (New sections 180A to 180C inserted)
1: In the heading to section 60 180C 180D
2: In section 60 section 180A(2)
2: The benefit component
3: In section 60 section 180C
180D: Sections 180B and 180C to cover child support penalties
In sections 180B and 180C, child support debt
a: an initial late payment penalty (as defined in section 135) imposed in relation to child support:
b: an incremental penalty (as defined in section 135) imposed in relation to child support:
c: a penalty imposed under section 45 as in force before 1 April 2015 (including as applied on and after that date by clauses 1A and 2A
67: Section 61 repealed (Direct payment to payee)
Repeal section 61
68: Section 62 replaced (New section 276 substituted)
Replace section 62
62: Section 276 amended
In section 276(2) (as inserted by section 54(3) Child Support Amendment Act 2013: Provisions relating to amendments effective on 1 April 2016 2
69: Section 63 amended (Schedule 1 amended)
1: Repeal section 63(1)
2: In section 63(2) this Act and amended by section 55
3: In section 63(2)
4: In section 63(2)
11: Insertion of sections 180A and 180C (Writing off of child support debt)
1: In relation to child support in respect of a child support year ending before 1 April 2015, section 180A(1)﻿(a) applies as if the reference to the receiving carer were to the qualifying custodian.
2: In relation to child support in respect of a child support year ending before 1 April 2015 (including any penalty referred to in section 180D(a) to (c) Amendment to Social Security Act 1964
70: Section 70A of Social Security Act 1964 amended (Rates of benefits for sole parents may be reduced)
Replace section 70A(1)﻿(b)﻿(v)
v: jobseeker support, except where granted under section 88C(2) or (3); or 2016-03-01 Social Security Act 1964 Refer section 2(2)﻿(d)
2: Annual rates of income tax
71: Annual rates of income tax for 2015–16 tax year
Income tax imposed by section BB 1 schedule 1
3: Amendments to Income Tax Act 2007
72: Income Tax Act 2007
This Part amends the Income Tax Act 2007. 2016-02-24 Income Tax Act 2007 2016-04-01 Income Tax Act 2007 Ref section 2(40): Sections 129, 130, 138, 149, 150, 151, 159, 183, 212, 222, 223, 235(38) and (67) come into force on 1 April 2016.
73: Section CD 18 amended (Dividend reduced if foreign tax paid on company’s income)
In section CD 18(3) total tax paid the country the country or territory
74: Section CD 39 amended (Calculation of amount of dividend when property made available)
1: Repeal section CD 39(13)
2: Repeal section CD 39(14)
3: In section CD 39 attributed repatriation New Zealand repatriation amount
75: Section CD 44 amended (Available capital distribution amount)
1: After section CD 44(7)﻿(d)
db: an amount is derived by the company that is attributable to the difference between the consideration for disposal or acquisition of livestock and the value of that livestock under section EC 4C (Value and timing of transfers); or
2: After section CD 44(9) Capital losses amount: herd scheme
9B: For the purposes of this section, a company incurs a capital loss if it incurs a loss that is attributable to the difference between the consideration for disposal or acquisition of livestock and the value of that livestock under section EC 4C.
76: Section CE 1C amended (Exception: overseas accommodation)
1: In section CE 1C(1) section CE 1B(1) section CE 1B
2: After section CE 1C(1) Inclusion of allowances or payments
1B: For the purposes of subsection (1), the provision of accommodation at or near an overseas work location includes an accommodation allowance or an amount paid for or towards the provision of the accommodation when the amount of the allowance or payment is—
a: the actual cost to the employee for the accommodation; or
b: a reasonable estimate of the expenditure that is likely to be incurred by the employee, or group of employees, for whom the amount is payable.
77: Section CE 1E amended (Exception: accommodation provided to ministers of religion)
After section CE 1E(3) Calculation of remuneration for purposes of section
3B: For the purposes of subsection (3)﻿(a), the calculation of the amount of the item remuneration
78: Section CF 3 amended (Withdrawals from foreign superannuation scheme)
1: Replace section CF 3(1)
1: This section applies when a New Zealand resident derives a benefit (a foreign superannuation withdrawal scheme
a: is not a FIF superannuation interest; and
b: is acquired—
i: when the person is a non-resident or is treated under a double tax agreement as being resident in a foreign country or territory:
ii: in a transaction referred to in subsection (21)﻿(b) or (d) from a person who acquired the interest in the scheme when being a non-resident or when treated under a double tax agreement as being resident in a foreign country or territory.
2: Replace section CF 3(1)
1: This section applies when a New Zealand resident derives a benefit (a foreign superannuation withdrawal scheme
a: is not a FIF superannuation interest and is acquired—
i: when the person is a non-resident or is treated under a double tax agreement as being resident in a foreign country or territory:
ii: in a transaction referred to in subsection (21)﻿(b) or (d) from a person who acquired the interest in the scheme when being a non-resident or when treated under a double tax agreement as being resident in a foreign country or territory:
b: is a FIF superannuation interest (a low-value FIF superannuation interest
3: Replace section CF 3(3)
3: A foreign superannuation withdrawal is not income of the person under subsection (2)﻿(d) if—
a: the benefit is an interest of the person in the scheme that is withdrawn on the death of the person or under a relationship agreement arising from an event (the relationship cessation
i: for a marriage or civil union of the person, the marriage or civil union is dissolved or the person and the person’s spouse or civil union partner separate or begin to live apart (whether or not they continue to live in the same residence):
ii: for a de facto relationship of the person, the de facto relationship ends; and
b: immediately before the death or the relationship cessation, the person is a New Zealand resident who is treated under no double tax agreement as being resident in a foreign country or territory; and
c: the interest withdrawn is immediately reinvested as an interest, in a foreign superannuation scheme outside Australia, of another person who is—
i: a spouse, civil union partner, or de facto partner of the person immediately before the death or the relationship cessation; and
ii: a New Zealand resident who is treated under no double tax agreement as being resident in a foreign country or territory.
4: In section CF 3(5) interest in the scheme interest in the scheme, other than a low-value FIF superannuation interest,
5: In section CF 3(8)﻿(a) begins if the person is a non-resident when they acquire the interest, begins
6: After section CF 3(8)﻿(a)
ab: if the person is a resident who is treated under a double tax agreement as being resident in a foreign country or territory when they acquire the interest in the scheme, begins on the date when the person becomes, for the first time after acquiring the interest, a New Zealand resident who is treated under no double tax agreement as being resident in a foreign country or territory and who owns the interest in the scheme:
7: After section CF 3(8)﻿(ab)
ac: if the person is a resident when they acquire the interest and paragraph (ab) does not apply, begins when they acquire the interest:
8: After section CF 3(9)﻿(b)﻿(i)
ib: the interest is not a low-value FIF superannuation interest; and
9: Replace section CF 3(20)
20: For the purposes of this section, if a person acquires, under an arrangement with a foreign superannuation scheme that provides for contributions to the superannuation scheme by or for the person, rights ( benefit rights
10: Replace the heading to section CF 3(21) When person acquires rights
11: In section CF 3(21) In determining when a person who acquires rights in a foreign superannuation scheme acquires an interest in the foreign superannuation scheme,—
12: In section CF 3(21)﻿(a) the interest the rights
13: In section CF 3(21)﻿(b) the interest the corresponding rights
14: In section CF 3(21)﻿(c) the interest the existing rights
15: Replace section CF 3(21)﻿(d)﻿(i)
i: having owned the existing rights from the time the former owner acquired the existing rights; and
16: Replace section CF 3(21)﻿(d)﻿(iv)
iv: having been a New Zealand resident who is treated under no double tax agreement as being resident in a foreign country or territory and as having owned the existing rights during the assessable period of the former owner, at the time of the transfer, for the interest consisting of the rights; and
17: In section CF 3(21)﻿(d)﻿(v) the interest the existing rights
79: Section CG 7B amended (Disposals or applications after earlier deductions)
1: In section CG 7B(1)﻿(c) in the lodging of a patent application with a complete specification or a design registration application,
2: In section CG 7B(2)﻿(b) in the lodging of a patent application with a complete specification or a design registration application,
3: In section CG 7B design registration application
4: Subsections (1) and (2) apply for the 2015–16 and later income years.
80: New section CG 7C inserted (Disposal or rerecognition of derecognised non-depreciable assets)
1: After section CG 7B
CG 7C: Disposal or rerecognition of derecognised non-depreciable assets
When this section applies
1: This section applies when, for a non-depreciable intangible asset, a person has been allowed a deduction under section DB 34
a: the intangible asset is disposed of in an income year for consideration that is not income under another provision of this Act:
b: the intangible asset is rerecognised for financial reporting purposes in an income year. Disposal for consideration
2: If subsection (1)﻿(a) applies, an amount equal to the deduction described in subsection (1) is income of the person for the income year, unless subsection (3) applies. Special case: disposal for consideration less than deduction
3: If subsection (1)﻿(a) applies and the consideration is less than the deduction described in subsection (1), then, despite subsection (2), an amount equal to the consideration is income of the person for the income year. Rerecognition
4: If subsection (1)﻿(b) applies, an amount equal to the deduction described in subsection (1) is income of the person for the income year. Relationship with subpart EE
5: For the purposes of subpart EE (Depreciation), the person is treated as never having the deduction described in subsection (1). deduction, dispose, income, income year
2: Subsection (1) applies for the 2015–16 and later income years.
81: Section CQ 2 amended (When attributed CFC income arises)
1: In section CQ 2(2) Special rule: taxable distributions under the attributable FIF income method
2: In section CQ 2 attributed repatriation
82: Section CQ 5 amended (When FIF income arises)
1: After section CQ 5(1)﻿(c)﻿(ii)
iii: the exemption for Australian regulated superannuation savings in section EX 33 (Exemption for Australian regulated superannuation savings):
2: In section CQ 5(1)﻿(c)﻿(xiv) non-resident’s annuity annuity
3: In section CQ 5(3) whether or not the CFC is a non-attributing Australian CFC under section EX 22 (Non-attributing Australian CFCs) regardless of whether the CFC is a non-attributing active CFC under section EX 21B (Non-attributing active CFCs) or a non-attributing Australian CFC under section EX 22 (Non-attributing Australian CFCs)
83: Section CW 16B amended (Accommodation expenditure: out-of-town secondments and projects)
In section CW 16B(5) project of limited duration
b: which is carried out under a contract between an employer (the contractor
c: in relation to which the engagement of an employee of the contractor at the distant workplace—
i: has, at the outset, clear start and end dates; and
ii: involves work that, apart from incidental activities, is undertaken solely for the purposes of the project; and
iii: in the contractor’s expectation at the start of the project, will last for a period of no more than 3 years
84: Section CW 42 amended (Charities: business income)
1: Replace section CW 42(1)﻿(c)
c: no person with some control over the business is able to direct or divert an amount derived from the business to the benefit or advantage of,—
i: if subparagraph (ii)
ii: if a trust, society, or institution (the operating entity controlling entity
2: In section CW 42(5) to their own benefit or advantage
85: Section CW 42B amended (Community housing trusts and companies)
1: In section CW 42B(2) a trust and its trustees, or a company (as applicable, the entity a trustee or company (the entity
2: Replace section CW 42B(2)﻿(c)
c: no person with some control over the activities is able to direct or divert an amount derived from the activities to the benefit or advantage of,—
i: if subparagraph (ii)
ii: if the entity (the operating entity controlling entity
3: In section CW 42B(3) a trust and its trustees, or a company (as applicable, the entity a trustee or company (the entity
4: Replace section CW 42B(3)﻿(a) and (b)
a: more than 15% of the people who become beneficiaries or clients of the entity on a date that is or is after 14 April 2014 have, on that date, income or assets exceeding a value (the entry threshold schedule 34
b: the provision of housing or housing assistance to a beneficiary or client who has income and assets not exceeding the entry thresholds is substantially different from the provision of housing or housing assistance to a beneficiary or client who has income or assets exceeding an entry threshold.
5: In section CW 42B(4) delete to their own benefit or advantage
86: Section CW 55BA replaced (Tertiary education institutions)
1: Replace section CW 55BA
CW 55BA: Tertiary education institutions and subsidiaries
Exempt income
1: An amount of income derived by a tertiary education institution or a tertiary education subsidiary is exempt income. Tertiary education subsidiary
2: In this section, a tertiary education subsidiary
a: in which the tertiary education institution, alone or together with other tertiary education institutions, holds—
i: voting interests in the company adding up to 100%; or
ii: market value interests in the company adding up to 100%, when a market value circumstance exists; and
b: where no person, other than a tertiary education institution, with some control over the company is able to direct or divert, to their own benefit or advantage, an amount derived from the company. Control over company
3: For the purposes of subsection (2)﻿(b) No control over company
4: For the purposes of subsection (2)﻿(b) Benefit or advantage
5: For the purposes of subsection (2)﻿(b) amount, company, exempt income, income, market value circumstance, market value interest, tertiary education institution, tertiary education subsidiary, voting interest
2: Subsection (1)
87: Section CX 48 repealed (Amounts remitted as condition of new start grant)
Repeal section CX 48
88: Section CX 56C amended (Distributions to investors by listed PIEs)
1: In section CX 56C(1)﻿(a) resident resident in New Zealand
2: In section CX 56C resident resident in New Zealand
89: Section CZ 10 repealed (Transitional relief for calculation of attributed repatriation dividends: 2 July 1992)
Repeal section CZ 10
90: Section CZ 27 amended (Prior bad debt deductions clawback)
In section CZ 27(2) section DB 31(4B) section DB 31 (3B), (4B)
91: Section CZ 29 amended (Accommodation expenditure: Canterbury earthquake relief)
In section CZ 29(3) Modified definition of project of limited duration
92: New section CZ 33 inserted (Transitional exception for accommodation provided to ministers of religion)
After section CZ 32
CZ 33: Transitional exception for accommodation provided to ministers of religion
When this section applies
1: This section applies for the period that starts on 1 July 2013 and ends on 31 March 2015 when accommodation is provided to a person who is a minister of religion and the property in which the accommodation is provided is supplied by the religious society or organisation of which they are a minister. Income
2: Despite section CE 1 (Amounts derived in connection with employment), the value of the accommodation is income of the person but is limited to the extent described in subsection (3). Limited amount
3: The amount of income for an income year is calculated using the formula— remuneration × (1 − adjustment). Definition of items in formula
4: In the formula,—
a: remuneration
b: adjustment Calculation of remuneration for purposes of section
5: For the purposes of subsection (4)﻿(a), the calculation of the amount of the item remuneration Adjustments
6: An adjustment referred to in subsection (4)﻿(b) is as follows:
a: if the person to whom the accommodation is provided uses part of the accommodation wholly or mainly for work purposes related to their duties as a minister, the amount is apportioned between that business use and private use:
b: if more than 1 person referred to in subsection (1) shares in the accommodation provided, the amount is apportioned equally between them. Part years
7: For the purposes of this section, if accommodation is provided for part of an income year, the references to income year are read as references to the relevant parts of the income year. Meaning of minister of religion
8: For the purposes of this section, minister of religion
a: means a person—
i: who is ordained, commissioned, appointed, or otherwise holds an office or position, regardless of their title or designation, as a minister of a religious denomination or community that meets the charitable purpose of the advancement of religion; and
ii: whose duties are related mainly to the practice, study, teaching, or advancement of religious beliefs; and
iii: whose accommodation is used as an integral part of performing their duties; and
b: does not include a member of a religious society or order referred to in section CW 25 (Value of board for religious society members). accommodation, amount, business, income, income year, minister of religion
93: Section DA 5 repealed (Treatment of expenditure for commercial fit-out)
1: Repeal section DA 5
2: Subsection (1) applies for the 2011–12 and later income years.
94: New section DB 22B inserted (Amounts paid for commercial fit-out for building)
1: After section DB 22
DB 22B: Amounts paid for commercial fit-out for building
When this section applies
1: This section applies when a person incurs expenditure relating to a building. Determining whether expenditure of capital nature
2: For the purpose of determining whether the expenditure is capital in nature, expenditure relating to an item of commercial fit-out for the building is treated as not relating to the building. commercial fit-out
2: Subsection (1) applies for the 2011–12 and later income years.
95: Section DB 31 amended (Bad debts)
1: Replace section DB 31(3) Deduction: financial arrangement debt: dealers and holders
3: A person is allowed a deduction, quantified in subsection (3B)
a: the person carries on a business for the purpose of deriving assessable income; and
b: the business includes dealing in or holding financial arrangements that are the same as, or similar to, the financial arrangement; and
c: a requirement of subsection (1)﻿(a) is met for the bad debt; and
d: the person is not associated with the person owing the amount written off. Amount of deduction under subsection (3)
3B: For the purposes of subsection (3), the amount of the deduction for the amount owing under the financial arrangement is the lesser of—
a: the amount provided by subsection (4B); and
b: the amount provided by subsection (5).
2: Replace section DB 31(4B), (4C), (4D), and (4E) Amount for purposes of subsections (3) and (3B)
4B: For the purposes of subsections (3) and (3B), the amount is the least of—
a: the amount of consideration that the person pays for acquiring the financial arrangement:
b: the amount owing under the financial arrangement:
c: the amount calculated using the following formula, treating the calculation of a negative amount as zero: amount owing − limited recourse consideration. Definition of items in formula
4C: In the formula in subsection (4B)﻿(c)
a: amount owing
i: the amount of consideration that the person pays for acquiring the financial arrangement:
ii: the amount owing under the financial arrangement:
b: limited recourse consideration Limited recourse: base price adjustment
4D: If subsection (4B)﻿(c) applies for an amount owing under a financial arrangement, then the person is allowed a deduction, at the time the person performs a base price adjustment for the related limited-recourse arrangement, of an amount equal to the amount owing under the financial arrangement minus the total amount of deductions for the financial arrangement under subsections (2) and (3)
3: In section DB 31(5B) a debt (the debt an amount owing under a financial arrangement (the debt
4: Replace section DB 31(6)﻿(b)﻿(iii)
iii: the general limitations still apply, except that subsection (3)
5: In section DB 31(6)﻿(b)﻿(iii) subsection (3) overrides subsections (3) and (4D)
6: Subsections (1), (2), (3), and (5)
7: Subsection (4) applies for the 2008–09 and later income years.
96: Section DB 34 amended (Research or development)
1: After section DB 34(2) Expenditure on derecognised non-depreciable assets
3: Subsection (1) applies to a person who—
a: incurs expenditure, on the development of an intangible asset that is not depreciable intangible property,—
i: on or after 7 November 2013; and
ii: before the intangible asset is derecognised or written off by the person as described in paragraph (b)
b: derecognises or writes off the intangible asset for financial reporting purposes under—
i: paragraph 112(b) of the new reporting standard; or
ii: paragraph 5.14 of the old reporting standard.
2: In section DB 34(7) that is not interest that is not interest and is described in subsection (2), (4), or (5)
3: After section DB 34(7) Allocation of deduction for derecognised non-depreciable assets
7B: A person who is allowed a deduction as provided by subsection (3) must allocate the deduction to the income year in which the relevant intangible asset is derecognised or written off by the person for financial reporting purposes under—
a: paragraph 112(b) of the new reporting standard; or
b: paragraph 5.14 of the old reporting standard.
4: Subsections (1), (2), and (3) apply for the 2015–16 and later income years.
97: Section DB 35 amended (Some definitions)
1: In section DB 35(1) development reporting standard new reporting standard
2: In section DB 35(1) research reporting standard new reporting standard
98: Section DB 37 amended (Expenses in application for patent)
1: Replace the heading to section DB 37 Expenses in application for patent or design registration
2: In section DB 37(1) the grant of a patent the grant of a patent or of a design registration
3: In section DB 37 design registration
4: Subsection (2) applies for the 2015–16 and later income years.
99: Section DB 40B amended (Expenditure in unsuccessful development of software)
1: In section DB 40B(1)﻿(a) when the software is not depreciable property when the copyright in the software is not depreciable property
2: In section DB 40B(1)﻿(b) the software would have been depreciable property the copyright in the software would have been depreciable property
3: Subsections (1) and (2)
100: Section DF 1 amended (Government grants to businesses)
1: After section DF 1(1) When this section does not apply
1BA: This section does not apply to the extent to which a payment described in subsection (1) is the payment of an R&D loss tax credit and the person’s expenditure is attributable to that payment.
2: In section DF 1 R&D loss tax credit
3: Subsections (1) and (2)
101: Section DG 4 amended (Meaning of private use for this subpart)
1: Replace section DG 4(2)
2: The person referred to in subsection (1)﻿(a) is a natural person who—
a: owns, leases, licenses, or otherwise has the asset:
b: is associated with a person who owns, leases, licenses, or otherwise has the asset.
2: Replace section DG 4(3)
3: The use of an asset is not private use if—
a: the asset is used to derive income for a particular period; and
b: during the period, use of the asset by the person is limited to:
i: use in the ordinary course of business:
ii: deriving the person’s employment income.
3: Subsections (1) and (2) apply,—
a: for the 2013–14 and later income years, for an item of property referred to in section DG 3(2)﻿(a)﻿(i)
b: for the 2014–15 and later income years, for an item of property referred to in section DG 3(2)﻿(a)﻿(ii) and (iii)
102: Section DG 9 amended (Apportionment formula)
1: In section DG 9(1) for use where it is referred to
2: Replace section DG 9(3)﻿(a)﻿(iii)
iii: a use of the asset for which the expenditure is of a capital nature:
3: Subsection (2)
a: for the 2013–14 and later income years, for an item of property referred to in section DG 3(2)﻿(a)﻿(i)
b: for the 2014–15 and later income years, for an item of property referred to in section DG 3(2)﻿(a)﻿(ii) and (iii)
103: Section DG 11 amended (Interest expenditure: close companies)
1: Replace section DG 11(3)
3: If the debt value for the income year is equal to or less than the asset value for the income year, the company is allowed a deduction for interest expenditure incurred for the income year of an amount calculated using the formula in subsection (3B)
2: After section DG 11(3) Formula
3B: The formula is— interest expenditure × (income-earning days + capital-use days) Definition of items in formula
3C: In the formula in subsection (3B)
a: interest expenditure
b: income-earning days
i: the use of the asset is described in section DG 4(3) to (5):
ii: the asset has become unavailable for use because another person who had earlier reserved the asset for their own use, subsequently did not take advantage of that reservation:
iii: a fringe benefit tax liability arises:
c: capital-use days
d: counted days paragraph (b)
3: In section DG 11(5) the formula the formula in subsection (4)
4: In section DG 11(6)﻿(a) section DG 9(2) subsection (3B)
5: In section DG 11(6)﻿(b) item expenditure item interest expenditure
6: After section DG 11(6) Deductions for interest expenditure in excess of reduced amounts
6B: The company is allowed a deduction for the amount of interest expenditure calculated under subsection (6C) Formula
6C: The formula is— interest expenditure − reduced amount. Definition of items in formula
6D: In the formula in subsection (6C)
a: interest expenditure
b: reduced amount
7: In section DG 11 Example
Holiday Home Ltd holds a holiday home with a rateable value of $200,000. The company has debt of $40,000, with associated interest expenditure of $4,000. Since the debt value is less than the asset value, all the interest expenditure must be apportioned (section DG 11(3)–(3C)). Boat Ltd has a charter boat whose adjusted tax value is $60,000. The company has debt of $100,000, with associated interest expenditure of $10,000. Since the debt value is more than the asset value, the company must apportion the interest expenditure of $6,000 (section DG 11(4)–(6)). The formula is $10,000 x ($60,000/$100,000) = $6,000. The remaining interest expenditure of $4,000 is not subject to apportionment under subpart DG and is allowed as a deduction under section DB 7 (section DG 11(6B)–(6D)). The formula is $10,000–$6,000 = $4,000.
8: Subsections (1), (2), (3), (4), (5), (6), and (7) apply,—
a: for the 2013–14 and later income years, for an item of property referred to in section DG 3(2)﻿(a)﻿(i)
b: for the 2014–15 and later income years, for an item of property referred to in section DG 3(2)﻿(a)﻿(ii)
104: Section DG 12 amended (Interest expenditure: group companies)
1: In section DG 12(3)﻿(a) section DG 9(2) section DG 11(3B)
2: In section DG 12(3)﻿(b) item expenditure item interest expenditure
3: In section DG 12(6) the formula the formula in subsection (5)
4: In section DG 12(7)﻿(a) section DG 9(2) section DG 11(3B)
5: In section DG 12(7)﻿(b) item expenditure item interest expenditure
6: After section DG 12(7) Deductions for interest expenditure in excess of reduced amounts
7B: Company B is allowed a deduction for the amount of interest expenditure calculated under subsection (7C) Formula
7C: The amount of interest expenditure is calculated using the formula— interest expenditure − reduced amount. Definition of items in formula
7D: In the formula in subsection (7C)
a: interest expenditure
b: reduced amount
7: Subsections (1), (2), (4), (5), and (6) apply,—
a: for the 2013–14 and later income years, for an item of property referred to in section DG 3(2)﻿(a)﻿(i)
b: for the 2014–15 and later income years, for an item of property referred to in section DG 3(2)﻿(a)﻿(ii) and (iii)
105: Section DG 13 amended (Interest expenditure: corporate shareholders)
1: In section DG 13(1) This section applies to a company that is not in the same group of companies as another company ( company A
2: In section DG 13(1)﻿(b) the company is 1 or more of—
3: In section DG 13(5)﻿(a) section DG 9(2) section DG 11(3B)
4: In section DG 13(5)﻿(b) item expenditure item interest expenditure
5: In section DG 13(9)﻿(a) section DG 9(2) section DG 11(3B)
6: In section DG 13(9)﻿(b) item expenditure item interest expenditure
7: After section DG 13(9) Deductions for interest expenditure in excess of reduced amounts
9B: The company is allowed a deduction for the amount of interest expenditure calculated under subsection (9C) Formula
9C: The formula is— interest expenditure − reduced amount. Definition of items in formula
9D: In the formula in subsection (9C)
a: interest expenditure
b: reduced amount
8: Subsections (1), (2), (3), (4), (5), (6), and (7) apply,—
a: for the 2013–14 and later income years, for an item of property referred to in section DG 3(2)﻿(a)﻿(i)
b: for the 2014–15 and later income years, for an item of property referred to in section DG 3(2)﻿(a)﻿(ii) and (iii)
106: Section DG 14 amended (Interest expenditure: non-corporate shareholders)
1: In section DG 14(1) This section applies for a person, for an income year and a company ( company A
2: In section DG 14(1)﻿(b) the person—
3: Subsections (1) and (2) apply,—
a: for the 2013–14 and later income years, for an item of property referred to in section DG 3(2)﻿(a)﻿(i)
b: for the 2014–15 and later income years, for an item of property referred to in section DG 3(2)﻿(a)﻿(ii) and (iii)
107: Section DG 16 amended (Quarantined expenditure when asset activity negative)
1: In section DG 16(1)﻿(a) expenditure expenditure or loss
2: Subsection (1) applies—
a: for the 2013–14 and later income years, for an item of property referred to in section DG 3(2)﻿(a)﻿(i)
b: for the 2014–15 and later income years, for an item of property referred to in section DG 3(2)﻿(a)﻿(ii) and (iii)
108: Section DN 6 amended (When FIF loss arises)
1: After section DN 6(1)﻿(c)﻿(ii)
iii: the exemption for Australian regulated superannuation savings in section EX 33 (Exemption for Australian regulated superannuation savings):
2: In section DN 6(1)﻿(c)﻿(iv) regime rules
3: In section DN 6(3) whether or not the CFC is a non-attributing Australian CFC under section EX 22 (Non-attributing Australian CFCs) regardless of whether the CFC is a non-attributing active CFC under section EX 21B (Non-attributing active CFCs) or a non-attributing Australian CFC under section EX 22 (Non-attributing Australian CFCs)
109: Section DT 3 replaced (Acquisition of privileges and permits)
1: Replace section DT 3
DT 3: Acquisition of privileges and permits
When expenditure for privileges or permits incurred
1: The consideration that a person pays to acquire a privilege or permit referred to in subsection (2) Privileges and permits
2: Subsection (1)
a: the consideration that the person pays to acquire the privilege or permit is petroleum exploration expenditure; and
b: the privilege or permit is—
i: an existing privilege that is a prospecting licence granted under Part 1 of the Petroleum Act 1937:
ii: a prospecting permit for petroleum:
iii: an exploration permit for petroleum. dispose, existing privilege, exploration permit, income year, pay, petroleum, petroleum miner, prospecting permit
2: Subsection (1) subsection (1)
a: for an arrangement entered into before the date of introduction of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Bill; and
b: relying upon the definition of petroleum exploration expenditure section 235(44)
110: Section DT 8 replaced (Acquisition of certain petroleum mining assets)
1: Replace section DT 8
DT 8: Acquisition of certain petroleum mining assets
When expenditure for petroleum mining assets incurred
1: The consideration that a person pays to acquire a petroleum mining asset, excluding a privilege or permit referred to in subsection (2) Privileges and permits
2: For the purposes of subsection (1)
a: the consideration that the person pays to acquire the privilege or permit is petroleum exploration expenditure; and
b: the privilege or permit is—
i: an existing privilege that is a prospecting licence granted under Part 1 of the Petroleum Act 1937:
ii: a prospecting permit for petroleum:
iii: an exploration permit for petroleum. dispose, existing privilege, exploration permit, income year, pay, petroleum, petroleum development expenditure, petroleum miner, petroleum mining asset, prospecting permit
2: Subsection (1) subsection (1)
a: for an arrangement entered into before the date of introduction of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Bill; and
b: relying upon the definition of petroleum exploration expenditure section 235(44)
111: New heading and section DV 26 inserted (Deduction for reinstatement of R&D tax losses)
1: After section DV 25 Reinstatement of R&D tax losses
DV 26: Deduction for reinstatement of R&D tax losses
Deduction
1: A person is allowed a deduction for the amount given by section MX 7(7) Allocation of deduction
2: The deduction is allocated to the income year in which the person incurs the expenditure of the R&D repayment tax. Link with subpart DA
3: This section overrides the general permission and the general limitations. deduction, general limitation, general permission, income year, R&D repayment tax
2: Subsection (1)
112: Section DZ 4 amended (Expenditure on abandoned exploratory well before 16 December 1991)
1: In section DZ 4(2)﻿(b) existing privilege that is a mining licence under Part 1 of the Petroleum Act 1937
2: Subsection (1)
113: Section DZ 5 amended (Farm-out arrangements for petroleum mining before 16 December 1991)
1: In section DZ 5(5) subsection (3)
2: In section DZ 5(5)﻿(b) existing privilege or existing privilege that is a prospecting licence under Part 1 of the Petroleum Act 1937 or a
3: Subsections (1) and (2)
114: Section EC 31 amended (Enhanced production)
1: Replace section EC 31(1)﻿(b)
b: as a result, in an income year or over the following 3 income years, acquires more non-specified livestock that—
i: is not replacement livestock; and
ii: is not homebred livestock; and
iii: is valued at its standard value.
2: In section EC 31(2) bought acquired
3: In section EC 31(2)﻿(a) bought acquired
4: Subsections (1), (2), and (3) apply for the 2015–16 and later income years.
115: Section EC 41 amended (Reduction: bloodstock not previously used for breeding in New Zealand other than as shuttle stallions)
1: In section EC 41(1B)﻿(a) matrimonial agreement relationship agreement
2: In section EC 41
a: delete matrimonial agreement
b: insert relationship agreement
3: Subsection (1)
116: Section EE 16 amended (Amount resulting from standard calculation)
1: In section EE 16(4)﻿(b)﻿(i) patent or patent, design registration, or
2: After section EE 16(4)﻿(b)﻿(i)
ib: for a design registration to which subparagraph (i) does not apply, for a design registration application, or for industrial artistic copyright, its cost to the person, but excluding expenditure that the person incurred before 7 November 2013 or for which they are allowed a deduction under a provision of this Act outside this subpart:
3: In section EE 16(4)﻿(c) and EE 19 to EE 19
4: In section EE 16(7) patent
5: In section EE 16(7) patent application patent application and a design registration application
6: In section EE 16 design registration design registration application industrial artistic copyright
7: Subsections (1), (2), (3), and (5) apply for the 2015–16 and later income years.
117: New section EE 18B inserted (Cost: some depreciable intangible property)
1: After section EE 18
EE 18B: Cost: some depreciable intangible property
For the purposes of section EE 16 amortising item underlying item
a: the underlying item gives rise to, supports, or is an item in which the person holds, the amortising item; and
b: the amortising item is none of—
i: a patent:
ii: a patent application with a complete specification lodged on or after 1 April 2005:
iii: plant variety rights; and
c: the person is denied a deduction for the expenditure under a provision outside this subpart. deduction, depreciable intangible property, plant variety rights
2: Subsection (1) applies for the 2011–12 and later income years.
118: Section EE 18B amended (Cost: some depreciable intangible property)
1: In section EE 18B item of depreciable intangible property item of depreciable intangible property or a plant variety rights application
2: Replace section EE 18B(b)
b: the amount of expenditure is incurred by the person on or after 7 November 2013, if the amortising item is 1 of—
i: a patent or a patent application with a complete specification lodged on or after 1 April 2005:
ii: plant variety rights:
iii: a plant variety rights application:
iv: a design registration:
v: a design registration application:
vi: industrial artistic copyright; and
3: In section EE 18B design registration design registration application industrial artistic copyright
4: Subsections (1) and (2) apply for the 2015–16 and later income years.
119: Section EE 19 amended (Cost: fixed life intangible property)
1: After section EE 19(1) When this section does not apply
1B: This section does not apply for additional costs incurred before 7 November 2013 for—
a: a design registration:
b: a design registration application:
c: industrial artistic copyright.
2: In section EE 19 design registration design registration application industrial artistic copyright
3: Subsection (1) applies for the 2015–16 and later income years.
120: Section EE 32 amended (Election in relation to certain depreciable property acquired on or after 1 April 2005)
1: In section EE 32(2) economic depreciation rate economic rate
2: In section EE 32 economic depreciation rate economic rate
3: Subsection (1)
121: Section EE 33 amended (Annual rate for fixed life intangible property)
1: After section EE 33(1)﻿(a)
ab: a design registration for which a rate is set in section EE 34B:
2: Replace section EE 33(3)﻿(a)
a: if section EE 18B or EE 19 apply, the item’s remaining legal life from the start of the income year in which the relevant costs are recognised under the section:
3: In section EE 33(3)﻿(b) section EE 19 does not apply sections EE 18B and EE 19 do not apply
4: In section EE 33 design registration
5: Subsections (2) and (3) apply for the 2011–12 and later income years.
6: Subsection (1) applies for the 2015–16 and later income years.
122: Section EE 34 amended (Annual rate for patent granted in 2005–06 or later income year)
1: Replace section EE 34(4)
4: If the patent is an item of fixed life intangible property to which section EE 18B legal life
2: In section EE 34(5) section EE 19 does not sections EE 18B and EE 19 do not
3: In section EE 34(6) section EE 19 does not apply to the patent, and has not sections EE 18B and EE 19 do not apply to the patent, and have not
4: In the heading to section EE 34(7) section EE 19 section EE 18B or EE 19
5: In section EE 34(7) section EE 19 does not apply to the patent, but has sections EE 18B and EE 19 do not to the patent, but have
6: Subsections (1), (2), (3), and (5) apply for the 2015–16 and later income years.
123: New section EE 34B inserted (Annual rate for design registrations)
1: After section EE 34
EE 34B: Annual rate for design registrations
When this section applies
1: This section applies to an item that is a design registration (the design Rate
2: The rate is the rate calculated using the formula— 1 ÷ legal life. Definition of item in formula
3: In the formula, legal life When section EE 18B or EE 19 applies to design
4: If the design is an item to which section EE 18B or EE 19 applies, legal life When no depreciation loss for design application
5: If sections EE 18B and EE 19 do not apply to the design and the person has been denied a deduction for an amount of depreciation loss for the design’s design registration application (the design application legal life When depreciation loss for design application
6: If sections EE 18B and EE 19 do not apply to the design, and have not applied to the design application while the person has owned it, and the person has been allowed a deduction for an amount of depreciation loss for the design application, legal life When section EE 18B or EE 19 applied to design application
7: If sections EE 18B and EE 19 do not apply to the design, but have applied to the design application while the person has owned it, and the person has been allowed a deduction for an amount of depreciation loss for the design application, legal life How rate expressed
8: The rate calculated using the formula is expressed as a decimal and rounded to 2 decimal places, with numbers at the midpoint or greater being rounded up and other numbers being rounded down. deduction, depreciation loss, design registration, design registration application, income, legal life, own
2: Subsection (1) applies for the 2015–16 and later income years.
124: Section EE 44 amended (Application of sections EE 48 to EE 52)
1: After section EE 44(2)﻿(b)
bb: a person’s design registration application has concluded because a design registration is granted to the person in relation to the application:
2: In section EE 44 design registration design registration application
3: Subsection (1) applies for the 2015–16 and later income years.
125: Section EE 57 amended (Base value in section EE 56 when none of sections EE 58, EE 59, and EZ 22(1) applies)
1: In section EE 57(3)﻿(cb) a patent application, a patent a patent application, a patent, a design registration, a design registration application
2: In section EE 57 design registration design registration application
3: Subsection (1) applies for the 2015–16 and later income years.
126: Section EE 60 amended (Total deductions in section EE 56)
1: After section EE 60(3)﻿(a)﻿(i)
ib: if the item is a design registration, for the design registration application in relation to which the item was granted:
2: In section EE 60(5)﻿(a)﻿(i) subparagraph (ii) or (iii) subparagraph (ii), (iii), or (iv)
3: After section EE 60(5)﻿(a)﻿(iii)
iv: if the item is a design registration and the person acquired the design registration application in relation to which the design registration was granted, the date on which the person acquired the design registration application; or
4: In section EE 60(5)﻿(b)﻿(i) subparagraph (ii) subparagraph (ii) or (iii)
5: After section EE 60(5)﻿(b)﻿(ii)
iii: if the item is a design registration and the person acquired the design registration application in relation to which the design registration was granted, the beginning of the month in which the person acquired the design registration application; or
6: In section EE 60 design registration design registration application
7: Subsections (1), (2), (3), (4), and (5) apply for the 2015–16 and later income years.
127: Section EE 61 amended (Meaning of annual rate)
1: In section EE 61(1) subsections (2) to (5) subsections (2) to (5B)
2: After section EE 61(5) Design registrations, applications
5B: The rate is the rate set by section EE 34B if the item is a design registration and section EE 34B applies to the item and the person.
3: In section EE 61 design registration
4: Subsections (1) and (2) apply for the 2015–16 and later income years.
128: Section EE 67 amended (Other definitions)
1: In section EE 67 legal life
b: for an item that is a patent application, a design registration application, a patent, or a design registration, means the legal life under paragraph (a) that a patent or design registration would have if granted when the relevant application is first lodged:
bb: for an item that is industrial artistic copyright, means the number of years, months, and days for which protection against copyright infringement is available as a result of section 75(1)﻿(c) to (e) of the Copyright Act 1994:
2: In section EE 67 design registration design registration application industrial artistic copyright
3: Subsection (1) applies for the 2015–16 and later income years.
129: Section EM 1 amended (Australian non-attributing shares and attributing FDR method interests)
Replace section EM 1(1)﻿(b)﻿(ii)
ii: uses section EX 53 (Fair dividend rate periodic method).
130: Section EM 6 amended (Income and expenditure for fair dividend rate hedge portions)
Replace section EM 6(3)﻿(b)﻿(ii)
ii: the unit valuation period described in section EX 53 (Fair dividend rate periodic method):
131: Section EW 9 amended (Persons to whom financial arrangements rules apply)
1: Replace section EW 9(2)
2: Subsection (1) does not apply to a person who is not resident in New Zealand unless the person is described in subsection (3) or (4).
2: Replace section EW 9(4)﻿(b)
b: the person as trustee—
i: meets the requirements of section HC 25(2)﻿(a) (Foreign-sourced amounts: non-resident trustees) for the derivation of assessable income from a foreign-sourced amount; and
ii: meets the requirements of neither of the exceptions, to section HC 25(2), in section HC 25(3) and (4).
3: Subsections (1) and (2) apply for the 2008–09 and later income years.
132: Section EW 15D amended (IFRS financial reporting method)
1: In section EW 15D(2)﻿(ac) to equity or to profit or loss to equity, equity reserves, other comprehensive income, or profit or loss
2: In section EW 15D(2)﻿(ad) to equity or to profit or loss to equity, equity reserves, other comprehensive income, or profit or loss
3: In section EW 15D(2)﻿(b) arising from the use of the fair value method may be allocated to equity reserves may be allocated to equity, equity reserves, or other comprehensive income
4: Subsection (3)
133: Section EW 15G amended (Modified fair value method)
1: In section EW 15G(2)﻿(a) to equity reserves to equity, equity reserves, or other comprehensive income
2: In section EW 15G(2)﻿(b) to equity reserves to equity, equity reserves, or other comprehensive income
3: In section EW 15G(2)﻿(b)﻿(v) to equity reserves to equity, equity reserves, or other comprehensive income
4: In section EW 15G(3)﻿(a) to equity reserves to equity, equity reserves, or other comprehensive income
134: Section EW 33C amended (Consideration in foreign currency: some agreements for sale and purchase)
In section EW 33C(3) Spot rates unavailable
135: Section EW 46 repealed (Consideration when debtor released as condition of new start grant)
Repeal section EW 46
136: Section EX 16 amended (Income interests for certain purposes)
1: Repeal section EX 16(3)﻿(a)
2: In section EX 16 attributed repatriation
137: Section EX 20B amended (Attributable CFC amount)
1: In section EX 20B(9)﻿(e) performed in the accounting period. performed in the accounting period; and
2: In section EX 20B(9)
f: a person who holds an attributing interest in the CFC files, after the date on which the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 receives the Royal assent, a return of income in which the amount attributed to the working person is determined under this section.
138: Section EX 20C amended (Net attributable CFC income or loss)
1: Replace section EX 20C(13)﻿(a)﻿(iii)
iii: correspond to amounts that would be deductions of the CFC after the adjustments that would be made under sections CH 2 and DB 50 (which relate to adjustments for prepayments) if the CFC were a resident:
2: Subsection (1) applies for the 2016–17 and later income years.
139: Section EX 21 amended (Attributable CFC amount and net attributable CFC income or loss: calculation rules)
1: Replace section EX 21(13)﻿(c)
c: subpart CQ (Attributed income from foreign equity) or DN (Attributed losses from foreign equity) or this subpart to the extent to which any of the subparts would result in attributed CFC income or attributed CFC loss for the CFC:
2: In section EX 21 attributed repatriation
140: Section EX 21D amended (Non-attributing active CFC: default test)
1: After section EX 21D(1) CFC as part of test group for part of accounting period
1B: An interest holder who acquires, or disposes of, an interest in a CFC (the first CFC
a: the CFCs in the test group are all acquired, or all disposed of, in the accounting period by the interest holder or by members (the wholly-owned members
b: for the period in the accounting period in which the interest holder holds the interest in the first CFC, the interest holder or the wholly-owned members hold an income interest under section EX 17 of more than 50% in the first CFC and in each other CFC in the test group; and
c: the interest holder, or the wholly-owned members, own the first CFC and each other CFC in the test group—
i: at the beginning of the accounting period; or
ii: at the end of the accounting period; and
d: the requirements of subsection (1)﻿(a), (c), and (d) are met.
2: Subsection (1) applies for income years beginning on or after 1 July 2009.
141: Section EX 21E amended (Non-attributing active CFC: test based on accounting standard)
1: After section EX 21E(2) CFC as part of test group for part of accounting period
2B: An interest holder who acquires, or disposes of, an interest in a CFC (the first CFC
a: the CFCs in the test group are all acquired, or all disposed of, in the accounting period by the interest holder or by members (the wholly-owned members
b: for the period in the accounting period in which the interest holder holds the interest in the first CFC, the interest holder or the wholly-owned members hold an income interest under section EX 17 of more than 50% in the first CFC and in each other CFC in the test group; and
c: the interest holder, or the wholly-owned members, own the first CFC and each other CFC in the test group—
i: at the beginning of the accounting period; or
ii: at the end of the accounting period; and
d: the requirements of subsection (2)﻿(a), (b), (d), and (e) are met.
2: Subsection (1) applies for income years beginning on or after 1 July 2009.
142: Section EX 24 amended (Companies moving to or from New Zealand)
1: In section EX 24(3) branch equivalent income or loss CFC attributable income or loss
2: In section EX 24(4) branch equivalent income or loss CFC attributable income or loss
3: In section EX 24(4) branch equivalent income or loss CFC attributable income or loss
4: In section EX 24 branch equivalent income
143: Section EX 25 amended (Change of CFC’s balance date)
1: In section EX 25(1)﻿(b) attributed CFC income or loss or attributed repatriation attributed CFC income or loss
2: In section EX 25(3)﻿(d) attributed CFC income or on attributed repatriation attributed CFC income
3: In section EX 25(4) attributed CFC income or attributed repatriation attributed CFC income
4: In section EX 25 attributed repatriation
144: Section EX 31 amended (Exemption for ASX-listed Australian companies)
Replace section EX 31(2)﻿(c)﻿(ii)
ii: at the earliest date in the income year on which the person owns shares in the company, if the person does not own shares in the company at the beginning of the income year; or
145: New section EX 33 inserted (Exemption for Australian regulated superannuation savings)
After section EX 32
EX 33: Exemption for Australian regulated superannuation savings
A person’s rights in a FIF are not an attributing interest if—
a: the person is a natural person; and
b: the FIF is a foreign superannuation scheme that is—
i: an Australian approved deposit fund:
ii: an Australian exempt public sector superannuation scheme:
iii: an Australian regulated superannuation fund:
iv: an Australian retirement savings account. attributing interest, Australian approved deposit fund, Australian exempt public sector superannuation scheme, Australian regulated superannuation fund, Australian retirement savings account, FIF, foreign superannuation scheme
146: Section EX 35 amended (Exemption for interest in FIF resident in Australia)
1: Replace section EX 35(a)
a: for the total period in the year for which the person has rights in the FIF, the item income interest
2: In section EX 35 direct income interest
3: Subsection (1) applies for income years beginning on or after 1 July 2011.
147: Section EX 44 amended (Five calculation methods)
1: In section EX 44(1) FIF income or loss FIF income or loss from an attributing interest
2: In section EX 44
a: delete fair dividend rate
b: insert attributing interest fair dividend rate method
148: Section EX 50 amended (Attributable FIF income method)
1: In section EX 50(6) an indirect income interest (an indirect attributing interest an indirect attributing interest in the foreign company
2: In section EX 50
a: delete taxed FIF relationship
b: insert indirect attributing interest taxed FIF connection
3: Subsection (1) applies for the 2014–15 and later income years.
149: New section EX 52A inserted (Fair dividend rate method: use of different forms)
1: After section EX 51
EX 52A: Fair dividend rate method: use of different forms
When this section applies
1: This section applies when a person calculates FIF income from an attributing interest in a FIF for an income year (the current year When person must use fair dividend rate periodic method
2: A person must use the fair dividend rate periodic method under section EX 53 for the attributing interest for the current year if the person—
a: is a unit trust or other entity that—
i: makes investments for the benefit of other persons (the investors
ii: assigns each investor an interest in a proportion of the net returns from the investments; and
iii: determines the value of each investor’s interests for each of a number of periods making up the income year:
b: for the attributing interest, uses the fair dividend rate periodic method for the income year ending before the beginning of the current year and uses the fair dividend rate annual method under section EX 52 for an income year included in the period that is the shortest of—
i: the 4-year period ending before the beginning of the current year:
ii: the period from the beginning of the income year in which the person acquired the attributing interest and ending before the beginning of the current year:
iii: the period from the beginning of the 2015–16 income year and ending before the beginning of the current year. When person must use fair dividend rate annual method
3: A person must use the fair dividend rate annual method for the attributing interest for the current year if the person uses for the attributing interest—
a: the fair dividend rate annual method for the income year ending before the beginning of the current year; and
b: the fair dividend rate periodic method for an income year included in the period that is the shortest of—
i: the 4-year period ending before the beginning of the current year:
ii: the period from the beginning of the income year in which the person acquired the attributing interest and ending before the beginning of the current year:
iii: the period from the beginning of the 2015–16 income year and ending before the beginning of the current year. attributing interest, fair dividend rate annual method, fair dividend rate method, fair dividend rate periodic method, FIF, FIF income, income year, unit trust
2: Subsection (1) applies for the 2016–17 and later income years.
150: Section EX 52 amended (Fair dividend rate method: usual method)
1: Replace the heading to section EX 52 Fair dividend rate annual method
2: Replace section EX 52(1)﻿(b)
b: is not required under section EX 52A to use the fair dividend rate periodic method; and
c: does not choose under section EX 53 to use the fair dividend rate periodic method.
3: In section EX 52(2) the fair dividend rate method the fair dividend rate annual method
4: In section EX 52(7)﻿(a) FDR interest from the shareholding for the FDR interest
5: In section EX 52(7)﻿(b) FDR interest from the shareholding for the FDR interest
6: In section EX 52(10)﻿(a) reorganisation reorganisation affecting the shareholding for the FDR interest
7: In section EX 52(10)﻿(b) reorganisation reorganisation affecting the shareholding for the FDR interest
8: In section EX 52(14C) the fair dividend rate method the fair dividend rate annual method
9: In section EX 52 fair dividend rate annual method fair dividend rate periodic method
10: Subsections (1), (2), (3), (4), (5), (6), (7), and (8) apply for the 2016–17 and later income years.
151: Section EX 53 amended (Fair dividend rate method for unit-valuing funds and others by choice)
1: In section EX 53 Fair dividend rate periodic method
2: Replace section EX 53(1) and (1B) When this section applies
1: This section applies when a person (the interest holder
a: is required under section EX 52A to use the fair dividend rate periodic method:
b: determines the market value of the attributing interest for each period of a day (the unit valuation period
i: is not required to use the fair dividend rate periodic method; and
ii: chooses to use the fair dividend rate periodic method.
3: In section EX 53 fair dividend rate periodic method
4: Subsection (2) applies for the 2016–17 and later income years.
152: Section EX 58 amended (Additional FIF income or loss if CFC owns FIF)
1: Replace section EX 58(1)﻿(ab)
ab: as a result of an income interest of the CFC in a FIF, the person has an indirect attributing interest in the FIF for the accounting period; and
2: In section EX 58(1)﻿(b) because section EX 21(33) applies,
3: Replace section EX 58(4)﻿(b)
b: otherwise apply the calculation rules in sections EX 44 to EX 61, for the period when the person held the income interest in the CFC, as if the person directly held the attributing interest in the FIF; and
4: Replace section EX 58(4)﻿(b)
b: otherwise apply the calculation rules in sections EX 44 to EX 61 to the CFC and the CFC’s interest in the FIF, for the period when the person held the indirect attributing interest; and
5: In section EX 58(6) Non-attributing Australian CFCs and non-attributing active CFCs
6: In section EX 58(6) whether or not the CFC is a non-attributing Australian CFC under section EX 22 regardless of whether the CFC is a non-attributing active CFC under section EX 21B or a non-attributing Australian CFC under section EX 22
7: In section EX 58 indirect attributing interest
8: Subsection (3) applies for income years beginning on or after 1 July 2011.
9: Subsections (1) and (4) apply for the 2014–15 and later income years.
153: Section EX 62 amended (Limits on changes of method)
1: Repeal section EX 62(2)﻿(a)
2: Repeal section EX 62(6)﻿(a)
3: In section EX 62(6)﻿(b) other than under paragraph (a) other than a change from the branch equivalent method
4: In section EX 62
a: delete settlor
b: insert branch equivalent method gifting settlor
154: Section EX 63 amended (Consequences of changes in method)
1: In section EX 63(1)﻿(b) , the accounting profits method, or the branch equivalent method or the accounting profits method
2: In section EX 63 branch equivalent method
155: Section EX 72 amended (Commissioner’s default assessment power)
In section EX 72(2) , FIF income or loss, or attributed repatriation or FIF income or loss
156: Section EZ 5 amended (Reduction: bloodstock not previously used for breeding in New Zealand: pre-1 August 2006)
1: In section EZ 5(1)﻿(b)﻿(i) matrimonial agreement relationship agreement
2: In section EZ 5
a: delete matrimonial agreement
b: insert relationship agreement
157: New section EZ 32G inserted (Person deriving pension from foreign superannuation scheme and returning as income before 1 April 2014)
After section EZ 32F
EZ 32G: Person deriving pension from foreign superannuation scheme and returning as income before 1 April 2014
When this section applies
1: This section applies when a person has, before 1 April 2014, an interest in a foreign superannuation scheme and—
a: the interest would be an attributing interest in the absence of this provision; and
b: on and after 1 April 2014, the interest is not a FIF superannuation interest; and
c: the person—
i: does not, before 1 April 2014, derive from the foreign superannuation scheme a payment that is a withdrawal:
ii: derives payments, each of which is a pension, from the foreign superannuation scheme before 1 April 2014 and includes each payment in a return of income, for the income year of the payment, that is received by the Commissioner by the due date for the return of income. No FIF income or loss from interest
2: The person is treated as having no FIF income or loss from the interest for the period before 1 April 2014. attributing interest, Commissioner, FIF income, FIF superannuation interest, foreign superannuation scheme, income year, loss, return of income
158: New section EZ 69B inserted (IFRS financial reporting method: equity or other comprehensive income)
1: After section EZ 69
EZ 69B: IFRS financial reporting method: equity or other comprehensive income
When this section applies
1: This section applies when—
a: section EW 15D(2)﻿(b) (IFRS financial reporting method) modifies an IFRS rule so that the person must allocate an amount of equity or other comprehensive income for a financial arrangement to the 2015–16 income year for tax purposes; and
b: the person does not allocate, for the financial arrangement, an amount of equity or other comprehensive income to the 2014–15 income year that the person would be required to allocate if the requirement referred to in paragraph (a) Change of spreading method
2: The change from the non-allocation treatment described in subsection (1)﻿(b) subsection (1)﻿(a) financial arrangement, IFRS, income year
2: Subsection (1) applies for the 2015–16 and later income years.
159: Section EZ 70 amended (Insurance for Canterbury earthquake damage of property: deemed sale and purchase)
1: In section EZ 70 deemed sale and purchase treatment as disposal and reacquisition
2: In section EZ 70(2) Deemed sale and repurchase Treatment as disposal and reacquisition
160: Section EZ 76 amended (Consideration for property or services: non-IFRS foreign ASAPs before 2014–15 income year)
In section EZ 76(1)﻿(a) which section EW 32 which section EW 32 (Consideration for agreement for sale and purchase (ASAP) of property or services, hire purchase agreement, specified option, or finance lease)
161: Section FB 1 replaced (What this subpart does)
1: Replace section FB 1
FB 1: When this subpart applies
This subpart applies when property is transferred on a settlement of relationship property. property, settlement of relationship property
2: Subsection (1)
162: New section FB 1B inserted (Meaning of settlement of relationship property)
1: After section FB 1
FB 1B: Meaning of settlement of relationship property
In this subpart, settlement of relationship property relationship agreement, settlement of relationship property
2: Subsection (1)
163: Section FB 1B replaced (Meaning of settlement of relationship property)
1: Replace section FB 1B
FB 1B: Meaning of settlement of relationship property and property
In this subpart,—
a: settlement of relationship property
b: property look-through company, look-through interest, property, relationship agreement, settlement of relationship property
2: Subsection (1)
164: Section FB 1B amended (Meaning of settlement of relationship property and property)
Replace section FB 1B(a)
a: settlement of relationship property
i: a person who is a party to the relationship agreement or is associated with a party to the agreement:
ii: another person who is a party to the relationship agreement or is associated with a party to the agreement:
165: New section FB 1C inserted (Obligations for periods before and from transfer of property)
1: After section FB 1B
FB 1C: Obligations for periods before and from transfer of property
Obligations relating to period before transfer
1: A transferor of property on a settlement of relationship property remains responsible for all tax obligations relating to the property and the period ending immediately before the transfer. Obligations relating to period from transfer
2: In determining the tax obligations relating to property transferred on a settlement of relationship property and the period beginning with the transfer,—
a: the transferee is treated as—
i: acquiring the property at the cost of the property to the transferor; and
ii: acquiring the property on the date on which the transferor acquired the property; and
iii: acquiring and holding the property with the status, intention, and purpose of the transferor in relation to the property:
b: the transferor is treated as having not owned the property. Relationship with sections FB 2 to FB 21
3: Sections FB 2 to FB 21 override this section. property, settlement of relationship property, tax
2: Subsection (1)
166: Section FC 1 amended (What this subpart does)
1: In section FC 1 Disposals to which this subpart applies
2: Replace section FC 1(1)﻿(c)
c: the transfer of property on a distribution by a trustee of a trust to a beneficiary of the trust, unless the distribution is part of an arrangement under which the beneficiary pays an amount for the property that would reasonably be expected to be paid on a disposal at arm’s length:
3: In section FC 1 property
4: Subsection (2)
167: Section FC 4 replaced (Property transferred to charities or to close relatives and others)
1: Replace section FC 4
FC 4: Property transferred to charities or to close relatives and others
When this section applies
1: This section applies in the circumstances described in section FC 1(1)﻿(a) or (b) when tax-base property is transferred on a person’s death if—
a: each beneficiary of the deceased person is described in subsection (2)
b: no life interest in the property is created; and
c: no trust over the property is created, other than a trust to execute the will and administer the estate; and
d: the net income of the estate is distributed as described in subsection (3) Beneficiaries of deceased
2: A beneficiary of the deceased person must be—
a: a close relative of the deceased person:
b: a person exempt under section CW 41, CW 42, or  CW 43 (which relate to exempt income of charities). Income from estate must be distributed
3: While the administration of the estate is continuing, the net income of the estate is distributed to the extent allowed—
a: under the will or the rules governing intestacy; and
b: by the trustee’s legal obligations. Transfer subject to subpart FB
4: The transfer, including any intervening transfer to an executor or administrator, is treated as a transfer of property on a settlement of relationship property under subpart FB (Transfers of relationship property). close relative, net income, property, settlement of relationship property, tax-base property, trustee
2: Subsection (1)
168: Section FC 4 amended (Property transferred to charities or to close relatives and others)
1: In section FC 4(1) FC 1(1)﻿(a) or (b) FC 1(1)﻿(b)
2: In section FC 4(4) , including any intervening transfer to an executor or administrator,
169: Section FC 6 amended (Forestry assets transferred to close relatives)
1: Replace section FC 6(2)
2: A transfer of a forestry asset, including any intervening transfer to an executor or administrator, is treated as a transfer of property on a settlement of relationship property—
a: under section FB 6 (Timber or right to take timber), when the forestry asset is timber or a right to take timber:
b: under section FB 7 (Land with standing timber), when the forestry asset is standing timber.
2: Subsection (1)
170: Section FE 1 amended (What this subpart does)
1: Replace section FE 1(1)﻿(a)﻿(iii)
iii: is controlled by a trustee of a trust, if 50% or more by value of settlements on the trust are from persons who are, or are controlled by, non-residents or non-resident owning bodies and who act in concert:
2: Subsection (1)
171: Section FE 2 amended (When this subpart applies)
1: Replace section FE 2(1)﻿(cb)﻿(i)
i: holding total ownership interests in the company of 50% or more, after adjustment to the extent necessary to avoid multiple counting if ownership interests in the company would otherwise be counted more than once:
2: Subsection (1)
172: Section FE 4 amended (Some definitions)
In section FE 4 control interest
173: Section FE 12 amended (Calculation of debt percentages)
1: In section FE 12(5)﻿(a) FE 31 FE 31, FE 31D,
2: In section FE 12(5)﻿(b) FE 31B to FE 32 FE 31B, FE 31C, and FE 32
3: Subsections (1) and (2) apply for the 2015–16 and later income years.
174: Section FE 18 amended (Measurement of debts and assets of worldwide group)
1: In section FE 18(3B)﻿(b)﻿(ii) section FE 3(e) section FE 3(1)﻿(d)
2: Subsection (1) applies for the 2015–16 and later income years.
175: Section FE 28 amended (Identifying members of New Zealand group)
1: In section FE 28(2)﻿(b) company that is resident company that is not a member of the New Zealand banking group of a registered bank and is resident
2: In section FE 28(2)﻿(b)﻿(iii) parent; or parent; and
3: Delete section FE 28(2)﻿(b)﻿(iv)
4: In section FE 28(2)﻿(b) company that company that is not a member of the New Zealand banking group of a registered bank and
5: In section FE 28(2)﻿(b)﻿(iii) parent; or parent.
6: Delete section FE 28(2)﻿(b)﻿(iv)
7: Subsections (4), (5), and (6) apply for income years beginning on or after 1 July 2009.
176: Section FE 31D replaced (Worldwide group for entity with New Zealand parent depending on non-resident owning body)
1: Replace section FE 31D
FE 31D: Worldwide group for entity controlled by non-resident owning body or trustee
A worldwide group for an excess debt entity is made up of the entity itself and the entity’s New Zealand group if—
a: the entity would not meet the requirements of section FE 2 in the absence of section FE 2(1)﻿(cb):
b: the entity’s New Zealand parent is identified to be the trustee of the entity by section FE 26(4D). excess debt entity, trustee
2: Subsection (1) applies for the 2015–16 and later income years.
177: Section FO 12 amended (Financial arrangements: resident’s restricted amalgamation, companies in wholly-owned group)
1: In section FO 12(1)﻿(d) unless section IE 2 (Treatment of tax losses by amalgamating company) applies when the tax losses are those of the consolidated group except to the extent to which the loss balance is attributed to the amalgamated company under section IE 2 (Treatment of tax losses by amalgamating company)
2: Subsection (1) applies for the 2008–09 and later income years.
178: Section FO 13 amended (Financial arrangements: resident’s restricted amalgamation, calculation method unchanged)
1: Replace section FO 13(2) Disposal and acquisition
2: The amalgamating company is treated as having disposed of the financial arrangement for consideration, and the amalgamated company is treated as having acquired the financial arrangement for that consideration. Base price adjustment and income or expenditure
3: For the income year of the amalgamation,—
a: the amalgamating company must calculate a base price adjustment under section EW 31 (Base price adjustment formula) as modified by subsection (4)
b: the amalgamated company has an amount of income or expenditure determined under subsection (5) Base price adjustment for amalgamating company
4: For the income year of the amalgamation, the consideration for the disposal and acquisition of the financial arrangement is an amount that results in the base price adjustment for the amalgamating company under section EW 31 representing for the amalgamating company an allocation that is fair and reasonable, as between the amalgamating company and the amalgamated company, of the income or expenditure relating to the financial arrangement that the amalgamating company would have derived or incurred in the income year if the amalgamation had not taken place. Income or expenditure of amalgamated company
5: For the income year of the amalgamation, the amalgamated company has an amount of income or expenditure that represents for the amalgamated company an allocation that is fair and reasonable, as between the amalgamating company and the amalgamated company, of the income or expenditure relating to the financial arrangement that the amalgamating company would have derived or incurred in the income year if the amalgamation had not taken place.
2: Subsection (1) subsection (3)
3: Subsection (1)
a: relying on section FO 13 subsection (1)
b: for the 2008–09 or a later income year; and
c: in a tax return filed before the date on which the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Bill is introduced.
179: Section GB 8 repealed (Arrangements involving attributed repatriation from CFCs)
Repeal section GB 8
180: Section GB 9 amended (Temporary disposals of direct control or income interests)
1: In section GB 9(1)﻿(b) attributed CFC income or attributed repatriation attributed CFC income
2: In section GB 9(1)﻿(d) attributed CFC income or attributed repatriation attributed CFC income
3: In section GB 9 attributed repatriation
181: Section GB 11 amended (Temporary increases in totals for control interest categories)
1: In section GB 11(1)﻿(d) attributed CFC income or attributed repatriation attributed CFC income
2: In section GB 11 attributed repatriation
182: Section GB 13 amended (When combination of changes reduces income)
1: In section GB 13(1)﻿(b) attributed CFC income or attributed repatriation attributed CFC income
2: In section GB 13(1)﻿(e) attributed CFC income or attributed repatriation attributed CFC income
3: In section GB 13 attributed repatriation
183: New section GB 15BA inserted (CFC income or loss: arrangements for inclusion of CFC in test group)
1: After section GB 15
GB 15BA: CFC income or loss: arrangements for inclusion of CFC in test group
When this section applies
1: This section applies when—
a: for a person and 2 or more accounting periods, a CFC is not a non-attributing active CFC unless the person chooses to test the CFC together with other CFCs as a group (the test group
i: section EX 21D (Non-attributing active CFC: default test); or
ii: section EX 21E (Non-attributing active CFC: test based on accounting standard); and
b: the person enters into an arrangement to—
i: choose to include the CFC in the test group for 1 of the accounting periods; and
ii: not choose to include the CFC in the test group for another of the accounting periods; and
c: the effect of the arrangement in the absence of this section would be that the person had less net attributable CFC income when the CFC was in the test group and greater net attributable CFC losses when the CFC was not in the test group. Treatment of election
2: The Commissioner may treat an election as having been made or not made, as appropriate to prevent the arrangement having the effect referred to in subsection (1)﻿(c) accounting period, arrangement, CFC, Commissioner, net attributable CFC income, net attributable CFC loss, non-attributing active CFC
2: Subsection (1) applies for the 2016–17 and later income years.
184: Section GB 27 amended (Attribution rule for income from personal services)
Replace section GB 27(3)﻿(d) and (e)
d: if the total amount to be attributed to the working person, for the associated entity and the income year, is less than $5,000, unless—
i: the application of this paragraph would prevent income being attributed to the working person for the income year in relation to another associated entity:
ii: the associated entity is a CFC and a person who holds an attributing interest in the CFC files, after the date (the Royal assent date
e: if the associated entity is a CFC and—
i: the amount gives rise to attributed CFC income under section CQ 2(2B) (When attributed CFC income arises) or attributed CFC loss under section DN 2(2) (When attributed CFC loss arises) for a person who holds an attributing interest in the CFC; and
ii: the person who holds the attributing interest in the CFC files, after the Royal assent date, a return of income in which the amount attributed to the working person is determined under section EX 20B (Attributable CFC amount).
185: Section HC 10 amended (Complying trusts)
1: After section HC 10(1)﻿(a)
ab: the following requirements are met:
i: a person makes an election under section HC 33; and
ii: for the life of the trust up to the time of distribution, the tax obligations relating to the trustee’s income tax liability for the trustee income are satisfied for each tax year; or
2: In section HC 10(3) subsection (1)﻿(a) and (ab)
3: Replace section HC 10(4)
4: For the purposes of subsection (1)﻿(a) and (ab)
4: Subsections (1), (2), and (3)
186: Section HC 27 amended (Who is a settlor?)
1: Repeal section HC 27(1).
2: In section HC 27 consolidation rules
187: Section HC 29 amended (Settlors’ liability to income tax)
1: In section HC 29(7) HC 10(1)﻿(a)﻿(ii) HC 10(1)﻿(a) and (ab)
2: Subsection (1)
188: Section HC 33 amended (Choosing to satisfy income tax liability of trustee)
1: In section HC 33(1) trust as described in subsection (2)
2: After section HC 33(1) Trustee treated as making election
1B: A trustee is treated as making an election under subsection (1), ignoring the requirement in subsection (4), if—
a: for the period beginning at the start of the income year in which a settlement is first made on the trust and ending before the date on which the trust ceases to be a complying trust as described in paragraph (b)
b: the trust ceases to be a complying trust under section HC 10(1)﻿(a) because the trust does not meet the requirement in section HC 10(1)﻿(a)﻿(i); and
c: the trustee indicates that the trust is a complying trust in the return of income for each income year ending after the trust ceases to be a complying trust, as described in paragraph (b)
3: Replace section HC 33(2)
2: The person making the election—
a: must satisfy the income tax liability that the trustee would have if the trust had a New Zealand resident as settlor and the trustee were a New Zealand resident; and
b: is not required to satisfy the income tax liability of the beneficiary that the trustee must satisfy as agent under section HC 32.
4: Replace section HC 33(3)
3: The election under subsection (1) applies—
a: for the purposes of section HC 30(3), from the date that it is made:
b: for the purposes of sections HC 10(1)﻿(ab) subsection (1B) subsection (1B)﻿(b)
5: In section HC 33 complying trust distribution New Zealand resident
6: Subsections (1), (2), (3), and (4)
189: Section HG 10 amended (Disposal of livestock)
1: In section HG 10(1) a person a person (the exiting partner
2: In section HG 10 entering partner
190: Section HM 42 amended (Exit calculation option)
1: In section HM 42(1) section 31B section 31C
2: Subsection (1) applies for the 2010–11 and later income years.
191: Section HM 43 amended (Quarterly calculation option)
1: In section HM 43(1) section 31B section 31C
2: Subsection (1) applies for the 2010–11 and later income years.
192: Section HM 44 amended (Provisional tax calculation option)
1: In section HM 44(1) section 31B section 31C
2: Subsection (1) applies for the 2010–11 and later income years.
193: Section HR 3 amended (Definitions for section HR 2: group investment funds)
1: In section HR 3(5) designated sources individual individual, and
2: Subsection (1) applies for the 2008–09 and later income years.
194: Section HR 8 amended (Transitional residents)
1: Replace section HR 8(2) to (4) Meaning of transitional resident
2: A person is a transitional resident
a: they are a natural person; and
b: they are resident in New Zealand through acquiring a permanent place of abode as described in section YD 1(2) or through the 183-day rule set out in section YD 1(3); and
c: for a continuous period (the non-residence period
i: did not meet the requirements of that section:
ii: were not resident in New Zealand; and
d: they were not a transitional resident before the non-residence period; and
e: the period described in subsection (3) Period of transitional residence
3: The period for a person—
a: begins on the first day of the residence required by subsection (2)﻿(b)
b: ends on the earliest of—
i: the day they nominate under subsection (4)
ii: the day before the person stops being a New Zealand resident:
iii: the last day of the 48th month after the month in which the non-residence period ends. Choosing not to be transitional resident
4: A person who would otherwise be a transitional resident in an income year may choose by notice to the Commissioner or by notice under subsection (5) not to be a transitional resident on and after a date nominated by the person, which may be on or after the start of the income year.
2: Subsection (1)
195: Section HZ 4B amended (Qualifying companies: transition into partnership)
1: In section HZ 4B(3)﻿(b) tax position tax situation
2: In section HZ 4B(3)﻿(b) historical tax positions historical tax situations
3: In section HZ 4B(3)﻿(c)﻿(i) historical tax positions historical tax situations
4: In section HZ 4B(3)﻿(c)﻿(ii) tax position tax situation
5: In section HZ 4B(3)﻿(c)﻿(ii) historical tax positions historical tax situations
6: In section HZ 4B(3)﻿(d) tax position tax situation
196: Section HZ 4D amended (Qualifying companies: transition into sole traderships)
1: In section HZ 4D(3)﻿(b) tax position tax situation
2: In section HZ 4D(3)﻿(b) historical tax position historical tax situation
3: In section HZ 4D(3)﻿(c)﻿(i) historical tax position historical tax situation
4: In section HZ 4D(3)﻿(c)﻿(ii) tax position tax situation
5: In section HZ 4D(3)﻿(d) tax position tax situation
197: Section IQ 1A amended (When this subpart applies)
1: In section IQ 1A(b) attributed FIF income method attributable FIF income method
2: In section IQ 1A
a: delete attributed CFC net income attributed FIF income method group
b: insert attributed CFC income attributable FIF income method
198: Section LA 7 amended (Remaining refundable credits: tax credits under social policy schemes)
1: In section LA 7 under social policy schemes for social policy and other initiatives
2: After section LA 7(1)﻿(a)
ab: section LB 4B
3: Subsections (1) and (2)
199: New section LB 4B inserted (Tax credit for R&D tax losses)
1: After section LB 4
LB 4B: Tax credit for R&D tax losses
A person has a tax credit for a tax year equal to their R&D loss tax credit under subpart MX R&D loss tax credit, tax credit, tax year
2: Subsection (1)
200: Section LD 1 amended (Tax credits for charitable or other public benefit gifts)
In section LD 1(5) under social policy schemes for social policy and other initiatives
201: Section LD 3 amended (Meaning of charitable or other public benefit gift)
1: In section LD 3(1)﻿(a) gifts): gifts) (the entity
2: In section LD 3(1)﻿(b)
a: replace a subscription paid to a society, institution, association, organisation, trust, or fund, a subscription of $5 or more paid to an entity
b: replace that that entity
3: In section LD 3(2) subsection (1)﻿(a) subsection (1)﻿(a) and (b)
4: Replace section LD 3(2)﻿(bc)
bc: a tertiary education institution:
5: In section LD 3 tertiary education institution
6: Subsections (1), (2), (3), and (4)
202: Subpart LH repealed (Tax credits for expenditure on research and development)
1: Repeal subpart LH
2: Subsection (1)
203: Heading after section LP 6 deleted (Supplementary dividend holding companies)
Repeal the heading after section LP 6
204: Section LU 1 amended (Tax credits for mineral miners)
1: In section LU 1(4)﻿(b) net mining income net income
2: In section LU 1
a: delete net mining income
b: insert net income
205: Section MA 1 amended (What this Part does)
1: After section MA 1(b)
bb: for R&D tax losses for an income year beginning on or after 1 April 2015, see subpart MX
2: Subsection (1)
206: Section MB 1 amended (Adjustments for calculation of family scheme income)
1: Replace section MB 1(5D) Deposits in main income equalisation accounts
5D: For the purposes of subsection (1), the person’s family scheme income is increased by the amount of a main income equalisation deposit the person makes for the income year. Refunds from main income equalisation accounts
5E: For the purposes of subsection (1), the person’s family scheme income does not include the amount of a main income equalisation refund the person receives for the income year.
2: In section MB 1 main income equalisation deposit main income equalisation refund
207: Section MB 4 amended (Family scheme income of major shareholders in close companies)
1: Replace section MB 4(2)
2: The amount included in the person’s family scheme income is the greater of—
a: zero; and
b: the amount calculated using the formula in subsection (3), adjusted, if applicable, by subsections (7) and (8)
2: After section MB 4(6) Main income equalisation deposits
7: For the purposes of subsection (2)﻿(b) income Main income equalisation refunds
8: For the purposes of subsection (2)﻿(b), if the company receives a main income equalisation refund for the company’s income year, the amount of the refund is subtracted from the item income
3: In section MB 4 main income equalisation account main income equalisation deposit main income equalisation refund
208: Section MB 7 amended (Family scheme income of settlor of trust)
1: After section MB 7(2) Income amount
2B: The amount included in the person’s family scheme income is the amount calculated using the formulas in subsections (3) and (5), adjusted, if applicable, by subsections (7) and (8)
2: In section MB 7(3) The person’s family scheme income for the income year includes the amount For the purposes of subsection (2B)
3: After section MB 7(6) Main income equalisation deposits
7: For the purposes of subsection (2B), if the trustee or a company described in subsection (4)﻿(b) makes a main income equalisation deposit for an income year, the amount of the deposit is added to—
a: the item trustee income
b: the item income Main income equalisation refunds
8: For the purposes of subsection (2B)
a: the item trustee income
b: the item income
4: In section MB 7 main income equalisation account main income equalisation deposit main income equalisation refund
209: Section MB 9 repealed (Family scheme income from deposits in main income equalisation accounts)
Repeal section MB 9
210: Section MB 13 amended (Family scheme income from other payments)
1: Replace section MB 13(2)﻿(f)
f: an educational scholarship or educational bursary:
2: Subsection (1)
211: Section MC 5 amended (Third requirement: residence)
1: In section MC 5(2)﻿(b) , and has not made an election under section HR 8(4) (Transitional residents),
2: Subsection (1) applies for the 2008–09 and later income years.
212: Section MF 6 amended (Overpayment or underpayment of tax credit)
In section MF 6(3) under social policy schemes for social policy and other initiatives
213: New subpart MX inserted (Tax credits for R&D tax losses)
1: Before subpart MZ
MX: Tax credits for R&D tax losses
MX 1: When subpart applies
1: This subpart applies to a person for an income year when—
a: the person chooses that the subpart apply to the person for the income year; and
b: the corporate eligibility criteria in section MX 2
c: ignoring this subpart, the person has a net loss for the corresponding tax year; and
d: if the person is a member of a group of entities meeting the requirements of subsection (2)
e: the person incurs R&D expenditure in the income year; and
f: the wage intensity criteria in section MX 3
g: intellectual property and know-how that results from the research or development vests in the person, solely or jointly. Meaning of R&D group
2: R&D group
a: each member of the group is a company, look-through company, or limited partnership; and
b: all the members of the group that are companies are members of the same group of companies (the company group
c: each member of the group that is a look-through company would be a member of the company group if the look-through company were treated as being a company; and
d: each member of the group that is a limited partnership would be a member of the company group if the partnership were treated as being a company and each partner were treated as holding a proportion of the total shares in the company equal to the proportion of the total capital contributions, as defined in section HG 11 (Limitation on deductions by partners in limited partnerships), to the partnership that is capital contributions made by the partner to the partnership. capital contribution, company, group of companies, income year, intellectual property, know-how, limited partnership, look-through company, net loss, partner, partnership share, R&D expenditure, R&D group, tax year
MX 2: Corporate eligibility criteria
For the purposes of section MX 1(1)﻿(b)
a: the person is a company that is resident in New Zealand; and
b: there is no double tax agreement under which the person is treated as being resident in a foreign country or territory; and
c: the person is not an entity established by or subject to—
i: the Education Act 1989:
ii: the New Zealand Public Health and Disability Act 2000:
iii: the Crown Entities Act 2004; and
d: a total of less than 50% of the shares in the person are held by entities that are each—
i: a public authority:
ii: a local authority:
iii: a Crown Research Institute:
iv: a State enterprise; and
e: the person is not a listed company or otherwise listed on a recognised exchange. company, Crown Research Institute, double tax agreement, income year, listed company, local authority, public authority, recognised exchange, resident in New Zealand, State enterprise
MX 3: Wage intensity criteria
Wage intensity criteria
1: For the purposes of section MX 1(1)﻿(f) part-year
a: the amount calculated for the person using the formula in subsection (2)
b: if the person is a member of an R&D group, the amount calculated for the R&D group in aggregate using the formula in subsection (2) Formula
2: The formula is— total R&D labour expenditure ÷ total labour expenditure. Definition of items in formula
3: In the formula,—
a: total R&D labour expenditure
i: the total amount of contractor R&D consideration multiplied by 0.66:
ii: the amount of salary or wages paid to employees for providing R&D material:
iii: if the person chooses to include the amount referred to in subsection (4)
iv: the amount paid to shareholder-employees, to which section RD 3(3) or (4) (PAYE income payments) apply, for providing R&D material:
b: total labour expenditure
i: the total amount of contractor R&D consideration multiplied by 0.66:
ii: the amount of salary or wages paid to employees:
iii: if the person makes the election referred to in paragraph (a)﻿(iii) subsection (4)
iv: the amount paid to shareholder-employees to which section RD 3(3) or (4) apply. Amount for optional inclusion in total R&D labour expenditure and total labour expenditure
4: For the purposes of subsection (3)﻿(a)﻿(iii) and (b)﻿(iii)
a: the employer’s superannuation cash contributions for the employee that are not salary or wages:
b: tax on the employer’s superannuation cash contributions for the employee:
c: fringe benefits provided by the employer and attributed to the employee:
d: the employer’s FBT liability in relation to the employee and fringe benefits attributed to the employee. Meaning of contractor R&D consideration
5: In this Act, contractor R&D consideration
a: for a person, an amount, excluding GST, paid by the person to another person (the contractor
b: for an R&D group, an amount, excluding GST, paid by a member of the R&D group to a person (the contractor contractor R&D consideration, employee, income year, R&D group, R&D material, salary or wages, shareholder-employee
MX 4: R&D loss tax credits
1: For a tax year, the person has a tax credit equal to the least of the following:
a: $500,000 multiplied by the basic tax rate for a company, if the tax year is the 2015–16 tax year:
b: $800,000 multiplied by the basic tax rate for a company, if the tax year is the 2016–17 tax year:
c: $1,100,000 multiplied by the basic tax rate for a company, if the tax year is the 2017–18 tax year:
d: $1,400,000 multiplied by the basic tax rate for a company, if the tax year is the 2018–19 tax year:
e: $1,700,000 multiplied by the basic tax rate for a company, if the tax year is the 2019–20 tax year:
f: $2,000,000 multiplied by the basic tax rate for a company, if the tax year is the 2020–21 or later tax year:
g: the person’s net loss for the tax year multiplied by the basic tax rate for a company:
h: the person’s total R&D expenditure, incurred in the income year corresponding to the tax year, multiplied by the basic tax rate for a company:
i: 1.5 multiplied by the person’s total R&D labour expenditure, incurred in the income year corresponding to the tax year and described in section MX 3(3)﻿(a) Related provision in Tax Administration Act 1994
2: Section 70C basic tax rate, company, net loss, R&D expenditure, R&D labour expenditure, R&D loss tax credit, tax year
MX 5: Cancellation of R&D tax losses
The Commissioner must extinguish the person’s tax loss for a tax year to the extent of the amount calculated by dividing the amount of the R&D loss tax credits for the tax year by the basic tax rate for a company. basic tax rate, Commissioner, company, R&D loss tax credit, tax loss, tax year
MX 6: Deduction if increase in basic tax rate for company
When this section applies
1: This section applies for a person who has an R&D loss tax credit for a tax year (the credit year current year rate increase
a: the latest tax year, before the current year, corresponding to an income year for which the person received a deduction under this section relating to the R&D loss tax credit; or
b: the credit year, if the person has not received a deduction under this section relating to the R&D loss tax credit for an income year corresponding to a tax year before the current year. Deduction
2: The person has a deduction, for the current year, of an amount calculated for each credit year using the formula— tax credits × (new rate – old rate) ÷ (new rate × old rate). Definition of items in formula
3: In the formula,—
a: tax credits
i: the company’s terminal tax, plus tax credits giving rise to imputation credits, minus refundable tax credits giving rise to imputation debits, for the period beginning with the earliest credit year and ending with the tax year before the current year:
ii: earlier payments of R&D repayment tax relating to the R&D loss tax credits for credit years before the current year:
b: new rate
c: old rate
i: the basic tax rate for a company before the rate increase:
ii: the basic tax rate for a company for the latest tax year, before the current year, corresponding to an income year for which the person received a deduction under this section relating to the credit year, if there is such a tax year:
iii: the basic tax rate for a company for the credit year. basic tax rate, company, income year, R&D loss tax credit, R&D repayment tax, tax year
MX 7: Reinstatement of R&D tax losses and R&D repayment tax
When this section applies
1: This section applies when a person (the company credit year reinstatement year
a: the company—
i: disposes of or transfers intangible property, core technology, intellectual property, or know-how, other than to the amalgamated company as part of an amalgamation and other than for consideration that is assessable income of the company and has a value no less than the market value of the property transferred:
ii: fails to meet a corporate eligibility requirement in section MX 2(a) or (b)
iii: has a liquidator appointed:
b: there is no group of persons that has, for the period (the ownership period
i: lowest voting interests in the company of each person for the ownership period that add up to 10% or more; and
ii: when a market value circumstance exists for the company in the ownership period, lowest market value interests in the company of each person for the ownership period that add up to 10% or more. R&D repayment tax: transfer of intellectual property
2: If subsection (1)﻿(a)﻿(i) subsection (1)﻿(a)﻿(ii) and (iii) and (b)
a: the total of the company’s R&D loss tax credits for the tax year corresponding to the reinstatement year and earlier tax years minus the total amount of—
i: the company’s terminal tax, plus tax credits giving rise to imputation credits, minus refundable tax credits giving rise to imputation debits, for tax years in the period beginning with the earliest credit year and ending with the tax year corresponding to the reinstatement year:
ii: earlier payments of R&D repayment tax relating to R&D loss tax credits for the tax year corresponding to the reinstatement year or for an earlier tax year:
b: the amount calculated using the formula— intangibles’ market value × basic tax rate for a company. Definition of item in formula
3: In the formula, intangibles’ market value R&D repayment tax: loss of continuity
4: If subsection (1)﻿(b)
a: the total of the company’s R&D loss tax credits for the tax year corresponding to the reinstatement year and earlier tax years minus the total amount of—
i: the company’s terminal tax, plus tax credits giving rise to imputation credits, minus refundable tax credits giving rise to imputation debits, for tax years in the period beginning with the earliest credit year and ending with the tax year corresponding to the reinstatement year:
ii: earlier payments of R&D repayment tax relating to R&D loss tax credits for the tax year corresponding to the reinstatement year or for an earlier tax year:
b: the amount calculated using the formula— shares’ market value × basic tax rate for a company. Definition of item in formula
5: In the formula, shares’ market value R&D repayment tax: eligibility loss or liquidation
6: If subsection (1)﻿(a)﻿(ii) or (iii)
a: the company’s terminal tax, plus tax credits giving rise to imputation credits, minus refundable tax credits giving rise to imputation debits, for tax years in the period beginning with the earliest credit year and ending with the tax year corresponding to the reinstatement year:
b: earlier payments of R&D repayment tax relating to R&D loss tax credits for the tax year corresponding to the reinstatement year or for an earlier tax year. Reinstatement of R&D tax losses
7: The company is allowed a deduction under section DV 26 Related provisions in Tax Administration Act 1994
8: Sections 70C and 97C amalgamated company, amalgamation, assessable income, basic tax rate, company, core technology, deduction, imputation credit, imputation debit, income tax, income year, intellectual property, know-how, liquidation, market value, market value circumstance, market value interest, R&D loss tax credit, R&D repayment tax, refundable tax credit, tax credit, terminal tax, voting interest
2: Subsection (1)
214: Section OB 1 amended (General rules for companies with imputation credit accounts)
1: Replace section OB 1(2)﻿(a)﻿(ii)
ii: is acting in the capacity of trustee, other than a trustee of a group investment fund described in paragraph (c) of the definition of company
2: Subsection (1)
215: New section OB 47B inserted (Tax paid by recipients of R&D loss tax credits)
1: After section OB 47
OB 47B: Tax paid by recipients of R&D loss tax credits
When this section applies
1: This section applies for an ICA company and a tax year (the current year section MX 4 Debit
2: The ICA company has an imputation debit for the current year equal to the lesser of the following:
a: the imputation credit that the company has for the current year under section OB 4:
b: the total amount of the company’s R&D loss tax credits, for the period that begins with the earliest tax year to which the tax credits relate and ends with the current year, minus the total amount of imputation debits under this section for tax years that are in that period and end before the current year. Table reference
3: The imputation debit in subsection (2) table O2: imputation debits, row 20B Debit date
4: The debit date is the last day of the current year. amount, ICA company, imputation credit, imputation debit, R&D loss tax credit, tax year
2: Subsection (1)
216: Table O2 amended (Imputation debits)
1: In table O2, after row 20, insert: The following table is small in size and has 4 columns. It is being inserted into Table O2 as a row. The first column in Table O2 is headed Row. The second column is headed Imputation debit. The third column is headed Debit date. The fourth column is headed Further defined. 20B Recipient of R&D loss tax credits section OB 47B
2: Subsection (1)
217: Section OP 27 amended (Consolidated ICA payment of schedular income tax)
1: In section OP 27 schedular income tax schedular income tax liability
2: In section OP 27(1) schedular income tax schedular income tax liability
3: In section OP 27(2) schedular income tax schedular income tax liability
4: In section OP 27(3) schedular income tax schedular income tax liability
5: In section OP 27
a: delete schedular income tax
b: insert schedular income tax liability
6: Subsections (2), (3), and (4)
218: Section OP 50 amended (Consolidated ICA refund of schedular income tax)
1: In section OP 50 of schedular income tax relating to schedular income tax liability
2: In section OP 50(1) of schedular income tax relating to a schedular income tax liability
3: In section OP 50(2)
a: replace refund of schedular income tax refund relating to schedular income tax liability
b: replace payment of schedular income tax payment of schedular income tax liability
4: In section OP 50
a: delete schedular income tax
b: insert schedular income tax liability
5: Subsections (2) and (3)
219: Table O19 amended (Imputation credits of consolidated imputation groups)
1: In table O19, row 22, second column, replace Schedular income tax Schedular income tax liability
2: Subsection (1)
220: Table O20 amended (Imputation debits of consolidated imputation groups)
1: In table O20, row 24, second column, replace of schedular income tax to relating to schedular income tax liability of
2: Subsection (1)
221: Section RC 7 amended (Estimation method)
1: Replace section RC 7(3)
3: On or before an instalment date, the person may choose to revise an estimate made under subsection (2). The amount last estimated is the amount taken into account under section RC 5(5).
2: Subsection (1) applies for the 2008–09 and later income years.
222: Section RC 17 amended (When GST ratio must not be used)
1: After section RC 17(1)﻿(b)
bb: their residual income tax, as disclosed in a return of income filed in the tax year, means they no longer meet the requirements of section RC 16(2); or
2: In section RC 17 residual income tax return of income
3: Subsection (1) applies for the 2016–17 and later income years.
223: Section RC 18 amended (Changing calculation method)
1: After section RC 18(3)﻿(b)
bb: the date the person’s return of income referred to in section RC 17(1)﻿(bb) is received by the Commissioner; or
2: In section RC 18(4) instalment A, and section RC 3(3) does not apply,
3: In section RC 18(5) instalment date, and section RC 3(3) does not apply,
4: In section RC 18(6) subsection (4) or (5), and the change is not required by section RC 17(1)﻿(bb)
5: In section RC 18 return of income
6: Subsections (1), (2), (3), and (4) apply for the 2016–17 and later income years.
224: Section RD 27 amended (Determining fringe benefit values)
1: Replace section RD 27(3)
3: In subsection (2), market value
a: in the open market; and
b: freely offered; and
c: made on ordinary trade terms; and
d: to a member of the public at arm’s length.
2: Subsection (1) applies for the 2008–09 and later income years.
225: Section RD 35 amended (Employment-related loans: value using market interest rates)
1: Replace section RD 35(1)
1: An employer may choose to value a benefit provided to their employee in an employment-related loan using the market interest on the loan if—
a: the employer is in the business of lending money to the public:
b: the employer is in a group of companies that has a member which is in the business of lending money to the public.
2: After section RD 35(4) Effectiveness of election in some cases
4B: Despite subsections (3) and (4), the method chosen by an employer described in subsection (1)﻿(b)
a: is not in the business of lending money; and
b: does not pay FBT on an income year basis under section RD 60; and
c: does not pay FBT on an annual basis under section RD 61; and
d: notifies the Commissioner of the proposed change before 1 April 2016. Minimum period of use for method in some cases
4C: Despite subsections (3) and (4), if subsection (4B) subsection (4B)
3: In section RD 35 group of companies year
226: Section RE 18B amended (Capital value increase under inflation-indexed instruments: RWT cap)
In section RE 18B(1) Calculation of amount of tax
227: Section RF 2 amended (Non-resident passive income)
In section RF 2(8) Sections 50, 55, 100, Section 100
228: Section RM 10 amended (Using refund to satisfy tax liability)
In section RM 10(4) under social policy schemes for social policy and other initiatives
229: Section RP 17 amended (Tax pooling intermediaries)
Replace section RP 17(1)
1: A person ( person A
a: provisional tax:
b: terminal tax:
c: an increased amount of tax described in section RP 17B(3):
d: interest under Part 7 of the Tax Administration Act 1994 on an increased amount of tax described in section RP 17B(3).
230: Section RP 17B amended (Tax pooling accounts and their use)
1: Replace section RP 17B(2)
2: An amount held in a tax pooling account on behalf of a person may be refunded, transferred, sold, or used to satisfy a person’s liability for—
a: provisional tax:
b: terminal tax:
c: an increased amount of tax described in subsection (3):
d: interest under Part 7 of the Tax Administration Act 1994 on an increased amount of tax described in subsection (3).
2: After section RP 17B(3)﻿(b)
bb: includes an amount of tax (the agreed delay tax
i: the facts and questions of law in the dispute closely resemble the facts and questions of law for an assessment that is at the time the subject of proceedings in a court or Taxation Review Authority; and
ii: the Commissioner and the person have agreed that the dispute will be determined by the final outcome of the proceedings; and
iii: the Commissioner and the person enter the agreement on or after the date on which the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016
3: In section RP 17B(5) Transfer within 60 days for increased amounts and use of money interest
4: In section RP 17B(5) subsection (3)﻿(a) to (ac) subsection (3)﻿(a) to (ac), or for interest under Part 7 of the Tax Administration Act 1994 on the increased amount of tax
5: In section RP 17B(6) Transfer within 60 days for deferrable tax, agreed delay tax, and use of money interest
6: In section RP 17B(6) subsection (3)﻿(b) subsection (3)﻿(b), for agreed delay tax referred to in subsection (3)﻿(bb)
7: Replace section RP 17B(7)﻿(c)
c: for a transfer under subsection (5), the total of—
i: the increased amount of tax payable:
ii: interest payable under Part 7 of the Tax Administration Act 1994 on the increased amount of tax:
8: Replace section RP 17B(7)﻿(d)
d: for a transfer under subsection (6), the total of—
i: the amount of deferrable tax or agreed delay tax payable:
ii: interest payable under Part 7 of the Tax Administration Act 1994 on the amount of deferrable tax or agreed delay tax.
9: Replace section RP 17B(10)
10: On application by the person, the Commissioner may agree in writing that the person may use funds in a tax pooling account for the increased amount of tax, or for interest under Part 7 of the Tax Administration Act 1994 on that increased amount of tax, if the Commissioner is satisfied that—
a: the increased amount of tax arises as a result of an event or circumstance beyond the person’s control; and
b: the person has a reasonable justification or excuse for not filing the return by the required date; and
c: 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.
231: Section RP 19 amended (Transfers from tax pooling accounts)
In section RP 19(1B) person person for provisional tax or terminal tax
232: Section RP 19B amended (Transfers for certain expected tax liabilities)
Replace section RP 19B(5)
5: If an overpayment arises as a result of a transfer under this section, the amount of the overpayment is treated as follows:
a: first, the amount is transferred to meet a liability of the person for—
i: provisional tax and terminal tax referred to in section RP 17B(4)﻿(a) or (b):
ii: an amount referred to in section RP 17B(5) consisting of an increased amount of tax and interest payable under Part 7 of the Tax Administration Act 1994 on the increased amount of tax:
iii: an amount referred to in section RP 17B(6) consisting of deferrable tax, or agreed delay tax, and interest payable under Part 7 of the Tax Administration Act 1994 on the deferrable tax or agreed delay tax:
b: secondly, the amount is transferred with an effective date that is no earlier than the date on which the Commissioner received the later request:
c: thirdly, the amount is refunded to the person.
233: New cross-heading inserted (Refunds for life insurers)
After section RZ 10 Refunds for life insurers
234: New cross-heading (Tax pooling intermediaries) and section RZ 12 inserted (Adjustments to interest in requests made after commencement)
After section RZ 11 Tax pooling intermediaries
RZ 12: Adjustments to interest in requests made after commencement
When this section applies
1: This section applies when a tax pooling intermediary makes a request (the original request Amendment request
2: The tax pooling intermediary, if authorised by the person, may make a request (the amendment request Permitted changes
3: The amendments to the original request are limited to changes in—
a: the details required by section RP 19(4)﻿(a) (Transfers from tax pooling accounts):
b: the details required by section RP 19(4)﻿(b). Maximum amount unchanged
4: The original request as amended must not request the transfer of an amount exceeding the maximum amount specified in section RP 17B(7). Time limit for amendment request
5: The amendment request must be received by the Commissioner within 60 days from the date on which the Commissioner notifies the person of the amount of interest payable under Part 7 of the Tax Administration Act 1994. Timing of effect
6: The original request as amended is treated as being made on the date on which the original request was made. Commissioner, interest, tax pooling intermediary
235: Section YA 1 amended (Definitions)
1: This section amends section YA 1
2: In the definition of acquire
a: replace paragraph (b) with:
b: be granted, for a patent, design registration, or plant variety rights:
bb: apply an artistic work industrially, as provided by section 75 of the Copyright Act 1994, for industrial artistic copyright:
b: in paragraph (c), replace patent application patent application, design registration application,
3: Repeal the definition of attributed repatriation
4: Repeal the definition of conduit company
5: In the definition of continuity provisions
fb: section MX 7
6: Insert, in appropriate alphabetical order: contractor R&D consideration section MX 3(5)
7: Insert, in appropriate alphabetical order: core technology
8: Insert, in appropriate alphabetical order: design registration
9: Insert, in appropriate alphabetical order: design registration application
10: In the definition of development and section DB 34 (Research or development) , section DB 34, and subpart MX
11: In the definition of dispose
ib: for a design registration application, conclude the design registration application because a design registration is granted in relation to the design registration application:
12: In the definition of distant workplace the definition of distant workplace
13: In the definition of distinctive work clothing that section sections CX 30 and CW 17CC (Payments for distinctive work clothing)
14: Repeal the definition of emergency event
15: In the definition of employee CW 17 and CW 17B to CW 18B CW 17, CW 17B, CW 17C, CW 17CB, CW 17CC, and CW 18
16: In the definition of employee (6)﻿(b) and (c) (6)﻿(b), (bb), (bc), and (c)
17: In the definition of employer (6)﻿(b) and (c) (6)﻿(b), (bb), (bc), and (c)
18: Insert, in appropriate alphabetical order: fair dividend rate annual method
19: Replace the definition of fair dividend rate method fair dividend rate method
a: section EX 52 (Fair dividend rate annual method); or
b: section EX 53 (Fair dividend rate periodic method)
20: Insert, in appropriate alphabetical order: fair dividend rate periodic method
21: Replace the definition of FIF superannuation interest FIF superannuation interest current year
a: the person enters the arrangement—
i: when the person is a resident of New Zealand and is treated under no double tax agreement as being resident in a foreign country or territory; and
ii: other than by a transaction described in section CF 3(21)﻿(b) or (d) (Withdrawals from foreign superannuation scheme) and from a person who acquired the rights when being a non-resident or treated under a double tax agreement as being resident in a foreign country or territory; or
b: the person enters the arrangement when the person is a non-resident, or is treated under a double tax agreement as being resident in a foreign country or territory, and—
i: the rights held by the person in an income year (the qualifying year
ii: the rights held by the person for the period (the qualifying period
22: In the definition of goods
a: replace in sections in subpart MX
b: replace in the definition in the definitions of R&D expenditure R&D material
23: Insert, in appropriate alphabetical order: indirect attributing interest
a: the FIF has an income interest in the second FIF; and
b: the income interest in the second FIF would be an attributing interest for the person if the person held the income interest directly
24: Insert, in appropriate alphabetical order: industrial artistic copyright
a: the artistic work has been applied industrially, as provided by section 75 of the Copyright Act 1994; and
b: section 75 of the Copyright Act 1994 provides for a special exception from copyright protection for the copyright in the artistic work; and
c: the relevant period for the special exception, in section 75(1)﻿(c) to (e) of the Copyright Act 1994, has not started
25: In the definition of insurance section YD 8(4)﻿(a) section YD 8(4)
26: Insert, in appropriate alphabetical order: intellectual property
a: anything that results from research or development (for example, a prototype):
b: rights related to intellectual property (for example, a right to distribute an item for which there is a patent):
c: intellectual property of a category that is set out in Part 2 of the Agreement on Trade-Related Aspects of Intellectual Property Rights TRIPS Agreement
27: In the definition of international tax rules
28: Insert, in appropriate alphabetical order: know-how
29: Insert, in appropriate alphabetical order: main income equalisation deposit
30: Insert, in appropriate alphabetical order: main income equalisation refund
a: relates to a deposit made on or after 1 April 2011; and
b: is not interest payable under section EH 6 (Interest on deposits in main income equalisation account)
31: Insert, in appropriate alphabetical order: mineral miner
32: Replace the definition of minister of religion minister of religion
33: Replace the definition of minister of religion minister of religion
a: section CE 1E(6) (Exception: accommodation provided to ministers of religion) for the purposes of that section:
b: section CZ 33(8)
34: In the definition of net loss section 177C(5) section MX 5
35: Repeal the definition of new start grant
36: Repeal the definition of New Zealand repatriation amount
37: In the definition of non-filing taxpayer section 33A(1) section 33A(1) or (1B)
38: In the definition of non-filing taxpayer section 33AA(1) section 33AA(1) or 33D
39: In the definition of non-IFRS designated FX hedge (2E) (2E) (Consideration for agreement for sale and purchase (ASAP) of property or services, hire purchase agreement, specified option, or finance lease)
40: In the definition of old reporting standard section DB 34 (Research or development) section DB 34 and subpart MX
41: In the definition of out-of-town secondment and CZ 29 CZ 29, and CZ 30
42: In the definition of period of continuous work and CZ 29 CZ 29, and CZ 30
43: In the definition of permit area section 106 section 2(1)
44: In the definition of petroleum exploration expenditure existing privilege that is a prospecting licence granted under Part 1 of the Petroleum Act 1937
45: Replace the definition of petroleum permit petroleum permit
a: an exploration permit for petroleum:
b: a prospecting permit for petroleum:
c: a petroleum mining permit:
d: an existing privilege that is a prospecting licence or mining licence granted under Part 1 of the Petroleum Act 1937
46: In the definition of prescribed investor rate table 1 tables 1 and 1B
47: In the definition of project of limited duration and CZ 29 , CZ 29, and CZ 30
48: In the definition of property
ab: in subpart FB (Transfers of relationship property), is defined in section FB 1B(b)
ac: in subpart FC (Distribution, transmission, and gifts of property), is defined in section FC 1(2) (Disposals to which this subpart applies):
49: In the definition of public unit trust
a: in paragraph (a), delete in respect of which regulated offers are made under the Financial Markets Conduct Act 2013 and
b: replace paragraphs (b)﻿(vi) and (vii) with:
vi: a person with an interest of 5% or less in the unit trust, treating all associated persons as 1 person:
vii: a person with an interest of 5% or more in the unit trust, treating all associated persons as 1 person, if their interest is 5% 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); or
50: In the definition of research and section DB 34 (Research or development) , section DB 34, and subpart MX
51: Insert, in appropriate alphabetical order: R&D expenditure
a: expenditure for goods and services to the extent to which they relate to an activity described in schedule 22
b: expenditure for goods and services used by the person to—
i: provide a service of research or development to a person who is in the business of providing services of research or development:
ii: further another person’s research or development activities:
c: expenditure for which no deduction is available for the income year:
d: expenditure for or under a financial arrangement:
e: expenditure for the acquisition or transfer of intangible property, core technology, intellectual property, or know-how
52: Insert, in appropriate alphabetical order: R&D group section MX 1(2)
53: Insert, in appropriate alphabetical order: R&D loss tax credit subpart MX
54: Insert, in appropriate alphabetical order: R&D material
a: relate to activity described in schedule 22
b: are used by the person to—
i: provide a service of research or development:
ii: further another person’s research or development activities
55: Insert, in appropriate alphabetical order: R&D repayment tax section MX 7
56: In the definition of right agreement for sale and purchase agreement for sale and purchase (ASAP)
57: In the definition of services
a: in paragraph (a), replace EA 3 (Prepayments) EA 3 (Prepayments), and subpart MX
b: in paragraph (b), replace and DB 2 (Goods and services tax) , DB 2 (Goods and services tax), subpart MX R&D expenditure R&D material
58: Insert, in appropriate alphabetical order: settlement of relationship property section FB 1B
59: Insert, in appropriate alphabetical order: settlement of relationship property section FB 1B(a)
60: Insert, in appropriate alphabetical order: shareholding
a: section EX 52(15) (Fair dividend rate annual method) for the purposes of that section:
b: section EX 53(17) (Fair dividend rate periodic method) for the purposes of that section:
c: section EX 56(19) (Cost method) for the purposes of that section
61: Replace the definition of tax position tax position
62: Insert, in appropriate alphabetical order: tax situation
63: Insert, in appropriate alphabetical order: tertiary education institution
a: established under Part 14 of the Education Act 1989 and has not been disestablished under that Act; and
b: not carried on for the private pecuniary profit of any individual tertiary education subsidiary section CW 55BA(2)
64: Insert, in appropriate alphabetical order: time of the disposal
65: Repeal the definition of time of the sale
66: Subsection (37) applies for the 2008–09 and later income years.
67: Subsection (38) applies for income years beginning on or after 1 April 2016.
68: Subsection (44) subsection (44)
a: for an arrangement entered into before the date of introduction of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Bill; and
b: relying upon the definition of petroleum exploration expenditure subsection (44)
69: Subsection (45)
a: to which the exception in subsection (68) petroleum exploration expenditure
b: for which the Commissioner has not issued to the person a binding ruling that is consistent with the definition of petroleum permit subsection (45)
70: Subsection (58)
71: Subsections (48) and (59)
72: Subsection (63)
236: Section YC 10 amended (Shareholders holding less than 10% direct interests)
In section YC 10(1)﻿(a) applied: applied; and
237: Schedule 6 amended (Prescribed rates: PIE investments and retirement scheme contributions)
1: In schedule 6 double tax agreement double tax agreement that provides a rate for withholding an amount of NRWT for dividends that is less than that provided by section RF 8(2)
2: In schedule 6 double tax agreement double tax agreement that provides a rate for withholding an amount of NRWT for dividends that is less than that provided by section RF 8(2)
3: Subsections (1) and (2)
4: Subsections (1) and (2)
238: Schedule 14 amended (Depreciable intangible property)
1: In schedule 14 The following table is small in size and has 2 columns. It is to be inserted into Schedule 14 as 3 additional rows. In Schedule 14, the first column gives the number of the row. The second column describes the item of depreciable intangible property. 14 a design registration 15 a design registration application 16 industrial artistic copyright
2: Subsection (1)
239: New schedule 22 inserted (Proscribed R&D activities)
1: Before schedule 24 schedule 22 schedule 1
2: Subsection (1)
240: Schedule 32 amended (Recipients of charitable or other public benefit gifts)
1: In schedule 32 ADC Incorporated (Aotearoa Development Cooperative)
2: In schedule 32 Aotearoa Development Cooperative
3: In schedule 32 Children on the Edge (NZ) Trust
4: In schedule 32 SpinningTop Trust
5: In schedule 32 Adullam Humanitarian Aid Trust Bicycles for Humanity, Auckland Face Nepal Charitable Trust Board New Zealand Hagar Humanitarian Aid Trust Himalayan Trust International Needs Humanitarian Aid Trust Mercy Ships New Zealand Orphans Aid International Charitable Trust ShelterBox New Zealand Charitable Trust So They Can
6: Subsection (5)
241: New schedule 34 inserted (Community housing trusts and companies: income and assets of beneficiaries and clients)
After schedule 33 schedule 34 schedule 2
242: Amendments to certain sale-related terms and definitions
1: Amendments are made at the locations specified in schedule 3 schedule 3
2: Subsection (1)
243: Amendments to lists of defined terms
The amendments specified in schedule 4 schedule 4
4: Amendments to other enactments
Amendments to Tax Administration Act 1994
244: Tax Administration Act 1994 amended
Sections 245 to 271 Tax Administration Act 1994 2016-02-24 Tax Administration Act 1994 2016-04-01 Tax Administration Act 1994 ref section 2(40): sections 248, 255, 263, 266 come into force on 1 April 2016.
245: Section 3 amended (Interpretation)
1: In section 3(1) deferrable tax deferrable tax
a: an amount of tax, assessed under a tax law as payable by the person, in relation to which the person makes a competent objection under Part 8 or that the person challenges under Part 8A:
b: goods and services tax, payable (as defined in section 20A(1) of the Goods and Services Tax Act 1985) by the person on a due date, in relation to which the person makes a competent objection under Part 8 or that the person challenges under Part 8A:
c: an amount of tax assessed under a tax law as payable by the person and described in section RP 17B(3)﻿(bb)
2: In section 3(1) IR5 taxpayer
3: In section 3(1) late payment penalty
246: Section 15E amended (Revocation of approval)
In section 15E(2) subsection (1)﻿(b) subsection (1)
247: Section 24O repealed (Certain information required from agricultural, horticultural, or viticultural employers)
1: Repeal section 24O
2: Subsection (1)
248: Section 33AA amended (Exceptions to requirement for return of income)
1: Replace new section 33AA(1)﻿(a) with:
a: derives no assessable income other than income meeting the requirements of subsection (2); and
2: In section 33AA(1)﻿(c), replace has total income of $200 or less or derives no schedular payment other than derives from schedular payments a total amount of $200 or less, not including
3: Replace section 33AA(1)﻿(d) with:
d: derives no beneficiary income or has assessable income of $200 or less; and
4: After section 33AA(1)﻿(n), insert:
o: is not issued a family notice of entitlement for any part of the tax year; and
p: is not living in a marriage, civil union, or de facto relationship, with a person who—
i: is issued with a family notice of entitlement for any part of the tax year:
ii: is paid by the chief executive of the administering department a family assistance credit for which the amount of family credit abatement under section MD 13 of the Income Tax Act 2007 is greater than zero.
5: Replace section 33AA(2) with:
2: A person’s assessable income meets the requirements of this subsection if the assessable income,—
a: except for a total of $200 or less, consists of—
i: income from employment that is subject to the PAYE rules:
ii: interest or a dividend that is subject to the RWT rules:
iii: interest or a dividend that does not have a New Zealand source:
iv: a taxable Maori authority distribution:
v: a schedular payment; and
b: includes a total of $200 or less of amounts referred to in subsection (3).
6: In section 33AA(3), before paragraph (a), replace subsection (1)﻿(a)﻿(i) subsection (2)﻿(b)
7: Replace section 33AA(3)﻿(a) with:
a: an amount of income for which the obligations under the PAYE rules of the person are not met:
8: Repeal section 33AA(4) to (6).
9: Subsections (1), (2), (3), (4), (5), (6), (7), and (8) apply for the 2016–17 and later tax years.
249: Section 33A amended (Annual returns of income not required)
1: Replace section 33A(1)﻿(a)﻿(iiic)
iiic: a schedular payment; or
2: Replace section 33A(2)﻿(d)
d: derives from schedular payments a total amount of more than $200 that is not—
i: an amount or proportion of a schedular payment for which the Commissioner has made a determination under section RD 8(3) of the Income Tax Act 2007:
ii: income that is a personal service rehabilitation payment for a claimant under the Accident Compensation Act 2001; or
dba: derives assessable income of more than $200 that includes beneficiary income; or
250: Section 41 amended (Annual returns by persons who receive family assistance credit)
Repeal section 41(4)﻿(a)
251: Sections 68D, 68E, and 68F repealed
Repeal sections 68D 68E 68F
252: New section 70C inserted (Statements in relation to R&D loss tax credits and R&D repayment tax)
After section 70B
70C: Statements in relation to R&D loss tax credits and R&D repayment tax
1: A person must file by electronic means, in the form and electronic format prescribed by the Commissioner, a statement in relation to—
a: R&D loss tax credits under the Income Tax Act 2007 that they claim for a tax year:
b: R&D repayment tax that they must pay for a tax year.
2: The statement described in subsection (1)
a: the day on which the person files a return of income for the relevant tax year:
b: the last day for filing a return of income for the relevant tax year under section 37.
3: R&D repayment tax is due on the terminal tax date for the relevant tax year.
253: Section 80D amended (Commissioner must issue income statement)
In section 80D(1)﻿(c)﻿(iii) who is required who, because the person’s employer is not required to withhold an amount of tax for a PAYE income payment to the person, is required
254: Section 80KV replaced (Statement of family scheme income)
Replace section 80KV
80KV: Statement of family scheme income
1: This section applies for a notice of entitlement that the Commissioner has given to a person for a tax year.
2: The person must, in the time within which the person is required to file the person’s return of income for the tax year, give the Commissioner a complete statement of the person’s family scheme income for the tax year.
3: The person must include in the statement described in subsection (2) subsection (4)
4: The person’s spouse, civil union partner, or de facto partner, as applicable, may give a separate complete statement of their own family scheme income, in the time within which the person is required to file the person’s return of income.
255: Section 81 amended (Officers to maintain secrecy)
1: In section 81(4)﻿(u) section. section:
2: After section 81(4)﻿(u)
v: communicating to an officer, employee, or agent of Callaghan Innovation, information for the purpose of administering subpart MX
w: communicating to an officer, employee, or agent of the department that is, with the authority of the Prime Minister, for the time being responsible for the administration of the Research, Science, and Technology Act 2010, information for the purpose of administering subpart MX
256: Section 81A amended (Disclosure of information under approved information sharing agreement)
In section 81A
a: section 81 any other enactment in the Inland Revenue Acts
b: this Act an Inland Revenue Act
257: Section 89AB amended (Response periods)
1: In section 89AB(2) issue of the notice , unless section 89AC applies
2: In section 89AB(5) issue of the initiating notice , unless section 89AC applies
258: New section 89AC inserted (Response period when initiating notice filed late)
After section 89AB
89AC: Response period when initiating notice filed late
When the initiating notice is a notice of proposed adjustment referred to in section 89AB(2) or a statement of position referred to in section 89AB(5), and the disputant issues the initiating notice outside the applicable response period but the notice is treated as being issued within that period, the response period for the response to the initiating notice is a 2–month period beginning on the earlier of—
a: the day on which the Commissioner issues a notice in favour of the disputant in accordance with section 89K(1):
b: the day on which a challenge to the Commissioner’s refusal under section 89K(4) is finally judged successful by the Taxation Review Authority or by a court, or the day on which the Commissioner concedes.
259: Section 89M amended (Disclosure notices)
Replace section 89M(6BA)
6BA: The Commissioner must issue a statement of position, described in subsection (4), in response to the disputant’s statement of position, unless—
a: the Commissioner issued a statement of position when issuing a disclosure notice:
b: on or before the date on which the Commissioner is required to issue the statement of position—
i: section 89N(1)﻿(c)﻿(viii) applies:
ii: any of section 89N(1)﻿(c)﻿(i) to (vi) and (ix) apply.
260: Section 92AAA repealed (Determination on cost of timber)
1: Repeal section 92AAA
2: Subsection (1)
261: New section 97C inserted (Assessment of R&D repayment tax)
After section 97B
97C: Assessment of R&D repayment tax
1: The Commissioner may, for a company chargeable with R&D repayment tax, make an assessment of R&D repayment tax that the Commissioner considers should be imposed on the company.
2: The company is liable to pay the R&D repayment tax assessed except to the extent to which the company establishes in proceedings challenging the assessment that the assessment is excessive or that the company is not chargeable with the R&D repayment tax.
3: Sections 109, 111, and 113 apply to an assessment made under this section as if—
a: the references to taxpayer
b: the references to tax already assessed
4: An assessment made under this section is subject to challenge in the same manner as an assessment of income tax imposed under section BB 1 of the Income Tax Act 2007, and Part 7 of this Act applies accordingly.
262: Section 113C repealed (Amended assessments for attributed repatriation dividends)
Repeal section 113C
263: Section 120B amended (Persons excluded)
Repeal section 120B(aa)
264: Section 138G amended (Effect of disclosure notice)
1: In section 138G(1) (2) applies (1B)
2: After section 138G(1)
1B: If the Commissioner did not issue a statement of position in response to the disputant’s statement of position on or before the required date, and did not issue a statement of position when issuing a disclosure notice, subsection (1) does not apply to limit the issues or propositions of law that may be raised by—
a: the Commissioner, if section 89M(6BA)﻿(b)﻿(i)
b: the Commissioner or the disputant, if section 89M(6BA)﻿(b)﻿(ii)
265: Section 139AA amended (Non-electronic filing penalty)
After section 139AA(1)﻿(ab)
ac: a portfolio investor proxy; and
266: Section 139B amended (Late payment penalty)
In section 139B(1) This section applies to a taxpayer if and to the extent to which the taxpayer does not pay by the due date (the default date unpaid tax
267: Section 141A amended (Not taking reasonable care)
Repeal section 141A(5)
268: Section 177D repealed (Relief to taxpayers to whom new start grants payable)
Repeal section 177D
269: Section 183ABA amended (Remission in circumstances of emergency event)
In section 183ABA(1)﻿(a) emergency event emergency event, declared in an Order in Council under this section,
270: Section 185 amended (Payment out of Crown Bank Account)
1: In section 185(1)﻿(c) this Act this Act or the Income Tax Act 2007
2: Subsection (1) applies for the 2008–09 and later income years.
271: Section 225D amended (Regulations: community housing trusts and companies)
1: Replace section 225D(1)
1: The Governor-General may, from time to time, by Order in Council make regulations, on the combined recommendation of the Minister of Revenue and the Minister for Housing, amending threshold values set out in schedule 34
2: Repeal section 225D(2) Amendments to Goods and Services Tax Act 1985
272: Goods and Services Tax Act 1985 amended
Sections 273 to 282 Goods and Services Tax Act 1985 2016-02-24 Goods and Services Tax Act 1985
273: Section 2 amended (Interpretation)
1: In section 2 common property
2: In section 2 unit title body corporate
3: In section 2 unit title body corporate unit title body corporate
274: Section 5 amended (Meaning of term supply)
1: Before section 5(8)
8A: For the purposes of this Act, a levy or other amount paid to a unit title body corporate by a member of the body corporate is treated as being consideration received for services supplied by the body corporate to the member.
2: After section 5(8A)
8AB: For the purposes of this Act, a unit title body corporate is treated as receiving, on the day when the body corporate becomes a registered person (the registration day
3: In section 5(11GA) subsection (11G)﻿(b) subsection (11G)﻿(a)
275: Section 10 amended (Value of supply of goods and services)
1: In section 10(7A) 5(3) and (3B) 5(3) or (3B)
2: In section 10(7A) value of the supply value of the supply. A supply of common property by a unit title body corporate has a zero value
276: Section 20 amended (Calculation of tax payable)
After section 20(3)﻿(hb)
hc: an amount calculated in accordance with section 21HC
277: Section 21B amended (Adjustments when person or partnership becomes registered after acquiring goods and services)
In section 21B(1)﻿(a) before becoming a registered person, a person that is not a unit title body corporate acquires
278: Section 21HB amended (Transitional rules related to treatment of dwellings)
Replace section 21HB(4) and (5)
4: A person may choose that a supply of accommodation in premises not be a taxable supply if the premises—
a: met the requirements of the definition of dwelling commercial dwelling dwelling
b: do not meet the requirements of the definition of dwelling paragraph (a)
5: Subsection (4)
279: New section 21HC inserted (Transitional rules relating to members of unit title bodies corporate)
After section 21HB
21HC: Transitional rules relating to members of unit title bodies corporate
1: A member of a unit title body corporate that acquires a supply of goods or services (the corporate supply section 20(3)﻿(hc)
a: at the time of the corporate supply, the unit title body corporate is not a registered person and the member is a registered person; and
b: the unit title body corporate acquires the corporate supply for the purpose of making a supply (the membership supply
c: before 3 November 2015, the member makes a return for the taxable period that treats part of the corporate supply as being acquired by the member for use in making taxable supplies; and
d: the member maintains sufficient records to enable the Commissioner to ascertain—
i: the nature of the corporate supply and the membership supply; and
ii: the amount that the member pays to the unit title body corporate for the membership supply; and
iii: that the corporate supply is a taxable supply; and
iv: that the membership supply is used by the member in making taxable supplies.
2: If the corporate supply is acquired for the purpose of making a membership supply for which the unit title body corporate charges the member on a basis other than the member’s ownership interest or utility interest, as defined in section 5 of the Unit Titles Act 2010, the amount that the member may deduct is the tax fraction of the amount charged to the member for the membership supply.
3: For a corporate supply to which subsection (2)
280: Section 48A repealed (Relief from tax where new start grant made)
Repeal section 48A
281: Section 51 amended (Persons making supplies in course of taxable activity to be registered)
1: After section 51(1)
1B: For the purposes of determining under subsection (1) the liability of a unit title body corporate to be registered, the value of a supply of a service made by the body corporate to a member is not included in the total value of supplies made in New Zealand by the body corporate.
2: After section 51(5)
5B: A unit title body corporate that is registered under this Act as a result of an application under subsection (3) made on a date (the application date
282: Section 52 amended (Cancellation of registration)
After section 52(7)
8: If a unit title body corporate is a registered person on the date of introduction of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Bill and the registration is later cancelled after an application under subsection (2), the cancellation must take effect on or after the date on which the unit title body corporate applies for cancellation of the registration.
9: If a unit title body corporate is registered under this Act with effect from a date (the registration date
a: the date on which the unit title body corporate applies for cancellation of the registration:
b: the day that is 4 years after the registration date. Amendments to Income Tax Act 2004
283: Income Tax Act 2004 amended
Sections 284 to 288 Income Tax Act 2004 2016-02-24 Income Tax Act 2004
284: New section CF 4 inserted (Person deriving pension from foreign superannuation scheme and returning as income before 1 April 2014)
After section CF 3
CF 4: Person deriving pension from foreign superannuation scheme and returning as income before 1 April 2014
When this section applies
1: This section applies when a person has, before 1 April 2014, an interest in a foreign superannuation scheme and—
a: the interest would, in the absence of this provision, be an attributing interest; and
b: on and after 1 April 2014 the interest is not an attributing interest; and
c: the person—
i: does not derive from the foreign superannuation scheme, in the period beginning with 1 January 2000 and ending before 1 April 2014, a payment that is a withdrawal:
ii: derives payments, each of which is a pension, from the foreign superannuation scheme in the period beginning with 1 January 2000 and ending before 1 April 2014 and includes each payment in a return of income, for the income year of the payment, that is received by the Commissioner by the due date for the return of income. No FIF income or FIF loss from interest
2: The person is treated as having no FIF income or FIF loss from the interest for the period beginning with the start of the 2005–06 income year and ending with the finish of the 2007–08 income year. attributing interest, Commissioner, FIF income, FIF loss, foreign superannuation scheme, income year, pension, return of income
285: Section DB 23 amended (Bad debts)
1: Replace section DB 23(6)﻿(b)﻿(iii)
iii: the general limitations still apply, except that subsection (3) overrides the capital limitation for a financial arrangement held as part of a business that includes dealing in or holding financial arrangements.
2: Subsection (1) applies for the 2005–06 and later income years.
286: Section HH 4 amended (Trustee income)
1: After section HH 4(7)
7B: In relation to any trust and a distribution, a trustee is treated as electing to satisfy the income tax liability (other than income tax payable in the capacity of agent) of the trustee, determined as if the trustee were a New Zealand resident and the trust had a settlor who is a New Zealand resident, if—
a: the trust is a qualifying trust for the period beginning at the start of the income year in which a settlement is first made to, for the benefit of, or on the terms of, the trust and ending before the date on which the trust ceases to be a qualifying trust as described in paragraph (b)
b: the trust ceases to be a qualifying trust because the trust does not meet the requirements in paragraph (a)﻿(i) and (ii) qualifying trust
c: the trustee indicates that the trust is a qualifying trust in the return of income for each income year ending after the trust ceases to be a complying trust, as described in paragraph (b)
7C: A trustee who is treated under subsection (7B) subsection (7B)﻿(b)
2: Subsection (1) applies for the 2005–06 and later income years.
287: Section NG 1 amended (Application of NRWT rules)
In section NG 1(4)﻿(b) sections 50, 55, and 100, and Part 9 section 100 and Part 9
288: Section OB 1 amended (Definitions)
1: In section OB 1 qualifying trust qualifying trust
a: that is not a superannuation fund and, for the period starting with the tax year in which a settlement was first made to, for the benefit of, or on the terms of, the trust and ending with the tax year in which the distribution is made,—
i: the tax obligations at the time, relating to the trustee’s income tax liability for each tax year, have been satisfied at the time; and
ii: no trustee income derived before or at the time includes an amount of non-resident withholding income, or non-residents’ foreign-sourced income, or exempt income under section HH 4(3B) (Trustee income):
b: that is not a superannuation fund and, for the period starting with the tax year in which a settlement was first made to, for the benefit of, or on the terms of, the trust and ending with the tax year in which the distribution is made, at the time—
i: for each tax year, the trust has met the requirements of paragraph (a) section HH 4(7B)
ii: the tax obligations at the time, relating to the trustee’s income tax liability for each tax year, have been satisfied:
c: that is a superannuation fund
2: Subsection (1) applies for the 2005–06 and later income years. Amendments to Income Tax Act 1994
289: Income Tax Act 1994 amended
Sections 290 291 292 293 Income Tax Act 1994 2016-02-24 Income Tax Act 1994
290: New section CC 5 inserted (Person deriving pension from foreign superannuation scheme and returning as income before 1 April 2014)
After section CC 4, insert:
CC 5: Person deriving pension from foreign superannuation scheme and returning as income before 1 April 2014
1: This section applies when a person has, before 1 April 2014, an interest in a foreign superannuation scheme and—
a: the interest would, in the absence of this provision, be an attributing interest; and
b: on and after 1 April 2014, the interest is not an attributing interest; and
c: the person—
i: does not derive from the foreign superannuation scheme, in the period beginning with 1 January 2000 and ending before 1 April 2014, a payment that is a withdrawal:
ii: derives payments, each of which is a pension, from the foreign superannuation scheme in the period beginning with 1 January 2000 and ending before 1 April 2014 and includes each payment in a return of income, for the income year of the payment, that is received by the Commissioner by the due date for the return of income.
2: The person is treated as having no FIF income or FIF loss from the interest for the period beginning with 1 January 2000 and ending with the finish of the 2004–05 income year.
291: Section HH 4 amended (Trustee income)
1: After section HH 4(7), insert:
7B: In relation to any trust and a distribution, a trustee is treated as choosing to satisfy the income tax liability (other than income tax payable in the capacity of agent) of the trustee, determined as if the trustee were a New Zealand resident and the trust had a settlor who is a New Zealand resident, if—
a: the trust is a qualifying trust for the period beginning at the start of the income year in which a settlement is first made to, for the benefit of, or on the terms of, the trust and ending before the date on which the trust ceases to be a qualifying trust as described in paragraph (b)
b: the trust ceases to be a qualifying trust because the trust does not meet the requirements in paragraph (a)﻿(i) and (ii) qualifying trust
c: the trustee indicates that the trust is a qualifying trust in the return of income for each income year ending after the trust ceases to be a complying trust, as described in paragraph (b)
7C: A trustee who is treated under subsection (7B) subsection (7B)﻿(b)
2: Replace section HH 4(7B) and (7C)
7B: In relation to any trust and a distribution, a trustee is treated as choosing to satisfy the income tax liability (other than income tax payable in the capacity of agent) of the trustee, determined as if the trustee were a New Zealand resident and the trust had a settlor who is a New Zealand resident, if—
a: the trust is a qualifying trust for the period beginning at the start of the income year in which a settlement is first made to, for the benefit of, or on the terms of, the trust and ending before the date on which the trust ceases to be a qualifying trust as described in paragraph (b)
b: the trust ceases to be a qualifying trust because the trust does not meet the requirements in paragraph (a)﻿(i) and (ii) qualifying trust
c: the trustee indicates that the trust is a qualifying trust in the return of income for each income year ending after the trust ceases to be a complying trust, as described in paragraph (b)
7C: A trustee who is treated under subsection (7B) subsection (7B)﻿(b)
3: Subsection (1) applies for the 1995–96 and later income years.
4: Subsection (2) applies for the 1997–98 and later income years.
292: Section NG 1 amended (Application of NRWT rules)
In section NG 1(4)﻿(b), replace sections 50, 55, and 100, and Part 9 section 100 and Part 9
293: Section OB 1 amended (Definitions)
1: In section OB 1, replace the definition of qualifying trust qualifying trust
a: that is not a superannuation fund and, for the period starting with the tax year in which a settlement was first made to, for the benefit of, or on the terms of, the trust and ending with the tax year in which the distribution is made,—
i: the tax obligations at the time, relating to the trustee’s income tax liability for each tax year, have been satisfied at the time; and
ii: no trustee income derived before or at the time includes an amount of non-resident withholding income, or non-residents’ foreign-sourced income, or exempt income under section HH 4(3B):
b: that is not a superannuation fund and, for the period starting with the tax year in which a settlement was first made to, for the benefit of, or on the terms of, the trust and ending with the tax year in which the distribution is made, at the time—
i: for each tax year, the trust has met the requirements of paragraph (a) section HH 4(7B)
ii: the tax obligations at the time, relating to the trustee’s income tax liability for each tax year, have been satisfied:
c: that is a superannuation fund
2: In section OB 1, replace the definition of qualifying trust qualifying trust
a: that is not a superannuation fund and, for the period starting with the tax year in which a settlement was first made to, for the benefit of, or on the terms of, the trust and ending with the tax year in which the distribution is made,—
i: the tax obligations at the time, relating to the trustee’s income tax liability for each tax year, have been satisfied at the time; and
ii: no trustee income derived before or at the time includes an amount of non-resident withholding income, or non-residents’ foreign-sourced income, or exempt income under section HH 4(3B):
b: that is not a superannuation fund and, for the period starting with the tax year in which a settlement was first made to, for the benefit of, or on the terms of, the trust and ending with the tax year in which the distribution is made, at the time—
i: for each tax year, the trust has met the requirements of paragraph (a) section HH 4(7B)
ii: the tax obligations at the time, relating to the trustee’s income tax liability for each tax year, have been satisfied:
c: that is a superannuation fund
3: Subsection (1) applies for the 1995–96 and later income years.
4: Subsection (2) applies for the 1997–98 and later income years. Amendments to Income Tax Act 1976
294: Income Tax Act 1976 amended
Sections 295 296 Income Tax Act 1976 2016-02-24 Income Tax Act 1976
295: Section 226 amended (Interpretation)
1: In section 226(1), replace the definition of qualifying trust qualifying trust
a: that is not a superannuation fund and, for the income years commencing with the income year in which a settlement was first made to, for the benefit of, or on the terms of, the trust until the income year in which the distribution is made,—
i: the tax obligations at the time, relating to the trustee’s income tax liability for each tax year, have been satisfied at the time; and
ii: no trustee income derived before or at the time includes an amount of non-resident withholding income:
b: that is not a superannuation fund and, for the period starting with the tax year in which a settlement was first made to, for the benefit of, or on the terms of, the trust and ending with the tax year in which the distribution is made, at the time—
i: for each tax year, the trust has met the requirements of paragraph (a) section 228(8)
ii: the tax obligations at the time, relating to the trustee’s income tax liability for each tax year, have been satisfied:
2: In section 226(1), definition of qualifying trust paragraph (b)
c: that is a superannuation fund:
3: Subsection (1) applies for the income year commencing 1 April 1988 and later income years.
4: Subsection (2) applies for the income year commencing 1 April 1990 and later income years.
296: Section 228 amended (Trustee income)
1: After section 228(7), insert:
8: In relation to any trust and a distribution, a trustee is treated as choosing to satisfy the income tax liability (other than income tax payable in the capacity of agent) of the trustee, determined as if the trustee were a New Zealand resident and the trust had a settlor who was a New Zealand resident, if—
a: the trust is a qualifying trust for the period beginning at the start of the income year in which a settlement is first made to, for the benefit of, or on the terms of, the trust and ending before the date on which the trust ceases to be a qualifying trust as described in paragraph (b)
b: the trust ceases to be a qualifying trust because the trust does not meet the requirements in paragraph (a)﻿(i) and (ii) qualifying trust
c: the trustee indicates that the trust is a qualifying trust in the return of income for each income year ending after the trust ceases to be a complying trust, as described in paragraph (b)
9: A trustee who is treated under subsection (8) subsection (8)﻿(b)
2: Subsection (1) applies for the income year commencing 1 April 1988 and later income years. Amendments to Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014
297: Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 amended
Sections 298 299 Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 2016-02-24 Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 Compiler: take note that the amendment to section 298 still needs to be done, but the section has already been incorporated into the Income Tax Act 2007 and Harry will incorporate that amendment into it. (Doreen 29 February 2016). I have spoken to Michelle about this.
298: Section 32 amended (New section CW 42B inserted)
In section 32(2) the trust and its trustee or the company, as the case may be, are the entity is
299: Section 129 amended (New section HR 12 inserted)
Replace section 129(2)
2: Subsection (1) applies—
a: on and after 1 April 2015, unless paragraph (b) or (c)
b: on and after 14 April 2014, if the person is removed from the register of charitable entities before 1 April 2015 because section 32(1)﻿(f) of the Charities Act 2005 applies:
c: on and after 1 April 2017, if the person’s activities involve the provision of housing as part of achieving the person’s objectives and purposes and paragraph (b) Amendment to Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013
300: Section 104 amended (Schedule 20 amended)
Replace section 104(2)
2: Subsection (1) applies for an improvement made on or after the first day of the 2013–14 income year. 2016-02-24 Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 Amendment to Finance Act (No 2) 1990
301: Section 3 of the Finance Act (No 2) 1990 amended (Meaning of approved unit trust)
In section 3(1) (within the meaning of section YA 1 of the Income Tax Act 2007) (within the meaning of section YA 1 of the Income Tax Act 2007, but ignoring paragraph (b)﻿(x) of the definition of unit trust 2016-02-24 Finance Act (No 2) 1990 Amendment to Goods and Services Tax (Grants and Subsidies) Order 1992
302: Schedule to Goods and Services Tax (Grants and Subsidies) Order 1992 amended (Non-taxable grants and subsidies)
In the schedule The following table is small in size and has 2 columns. It is to be inserted into the schedule as an additional row. In the schedule, the first column gives the number of the row. The second column describes the non-taxable grant or subsidy. 8 The Commissioner of Inland Revenue crediting, transferring, refunding, dealing with, or otherwise paying, a person's tax credit under the Income Tax Act 2007 or the Tax Administration Act 1994, if that tax credit is one which the person has under section MX 4 2016-04-01 Goods and Services Tax (Grants and Subsidies) Order 1992