Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Act 2019

1: Title
This Act is the Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Act 2019.
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: Sections 53 76 78
3: Sections 48 54
4: Section 65
5: Section 99
6: Sections 24 45
7: Sections 116 117
8: Section 22
9: Section 66
10: Sections 16(1) 28(1)
11: Section 23
12: Sections 104 105
13: Section 128
14: Sections 49 50 55 56 63 64 68
15: Section 89
16: Sections 61 88 90 91 100 101 106 126 127 129
17: Sections 44 52 57 58 62 74 75(1) 79(2), (4), (5), (6), (7), (8), and (9) 95 96
18: Sections 108 109 110 111 112 113
19: Sections 47 70
20: Sections 5 7 8 9 10 11 12 13 14 15 16(2) 17 18 20 21 25 26 27 28(2), (3), and (4) 29 30 31 32 33 34 35 36 37 38 39 40(2) 41 42 102
21: Sections 51 130 131 132 133
22: Sections 67 75(2) 98 115 118 119 120 121 122 123 124 125
1: Annual rates of income tax
3: Annual rates of income tax for 2019–20 tax year
Income tax imposed by section BB 1 schedule 1
2: Amendments to Goods and Services Tax Act 1985
4: Goods and Services Tax Act 1985
This Part amends the Goods and Services Tax Act 1985 2019-06-26 Goods and Services Tax Act 1985 re section 2(1) 2019-12-01 Goods and Services Tax Act 1985 re section 2(20)
5: Section 2 amended (Interpretation)
1: In section 2(1) electronic marketplace supply of remote services by electronic means supply of goods, or of remote services by electronic means,
2: In section 2(1) entry value threshold estimated customs value
3: In section 2(1) marketplace remote services distantly taxable goods or remote services
4: In section 2(1) quarter
5: In section 2(1) redeliverer
a: provides the use of an address outside New Zealand to which the goods are delivered:
b: arranges or assists the use of an address outside New Zealand to which the goods are delivered:
c: purchases the goods outside New Zealand as an agent of the recipient:
d: arranges or assists the purchase of the goods outside New Zealand
6: In section 2(1) underlying supplier
6: Section 2A amended (Meaning of associated persons)
1: Repeal section 2A(1)﻿(e)
2: In section 2A(1)﻿(i) paragraphs (a) to (h) paragraphs (a) to (hb)
7: New section 4B inserted (Meaning of distantly taxable goods)
After section 4
4B: Meaning of distantly taxable goods
1: Distantly taxable goods
a: are moveable personal property, other than choses in action; and
b: are not alcoholic beverages, or tobacco or tobacco products, that are exempt from regulations made under section 406(1) of the Customs and Excise Act 2018; and
c: are supplied by—
i: a non-resident, and the goods are outside New Zealand at the time of the supply:
ii: a person who is the supplier under section 60C or 60D, as an operator of a marketplace, and the underlying supplier of the goods is a non-resident:
iii: a person who is the supplier of the goods under section 60E, as a redeliverer; and
d: are delivered at a place in New Zealand and the supplier or an underlying supplier makes, or arranges, or assists, the delivery; and
e: each have—
i: an estimated customs value under section 10B equal to or less than the entry value threshold:
ii: a supplier that has made an election under section 10C that is effective at the time of the supply.
2: If distantly taxable goods are part of a supply that also includes items of goods that do not meet the requirements of subsection (1)﻿(a) to (e)
8: Section 5 amended (Meaning of term supply)
1: In section 5(11G) a supply of goods and services by the redeemer of the token, stamp, or voucher
2: Replace section 5(11G)﻿(a) and (b)
a: if the supply is a supply of remote services or of distantly taxable goods; or
b: when a supply does not meet the requirements of paragraph (a), if—
i: it is not practical to treat the issue or sale as a supply of goods and services; and
ii: the supplier of the goods and services and the issuer or seller of the token, stamp, or voucher are, or could be, different persons, the issuer and the supplier, or the seller and the supplier, agree, or are parties to an agreement.
3: In section 5(27)
27: The Commissioner may treat a person resident in New Zealand who receives a supply as if they were making a supply of goods or services that is chargeable with tax under section 8(1) if—
aa: the supply is—
i: a supply of distantly taxable goods to which section 8(3)﻿(ab) applies, or that is supplied by a resident:
ii: a supply of remote services to which section 8(3)﻿(c) applies, or that is supplied by an agent under section 60(1AB) or by an operator of a marketplace under section 60C or 60D; and
4: In section 5(27)﻿(a)
a: after payment of tax or of an amount on account of tax
b: delete under section 8B(6)
5: In section 5(27)﻿(b) the services the supply of the goods is made or
6: In section 5(27)﻿(b)﻿(ii) a service supplied in New Zealand; and goods, or a service, supplied in New Zealand; or
7: After section 5(27)﻿(b)﻿(ii)
iii: a supply of distantly taxable goods having a value that is less than the cost of the goods, if the supplier meets the requirements of section 60G(1)
8: After section 5(27)
28: The Commissioner may treat a person who is a non-resident, and is the underlying supplier for a supply of distantly taxable goods made by the operator of a marketplace, as the supplier of the goods if—
a: the person has knowingly notified a fact or provided information that is altered, false, or misleading; and
b: after the date on which the supply of the goods is made, it is found that the notification or provision of information has caused the operator of the marketplace to return a deficient amount of output tax on the supply; and
c: the person’s behaviour described in paragraph (a)
9: Section 5B amended (Supply of certain imported services)
1: In the heading to section 5B imported goods and
2: In section 5B services goods or services
10: Section 8 amended (Imposition of goods and services tax on supply)
1: In section 8(3)
a: the goods are in New Zealand at the time of the supply and are not distantly taxable goods to which paragraph (ab)
ab: the goods are distantly taxable goods to which subsection (4E)
2: In section 8(4B)
a: replace services goods or services
b: replace or (4D) , (4D), or (4E)
3: In section 8(4B)﻿(a) the services the goods or services
4: In section 8(4B)﻿(b)﻿(i) the services the goods or services
5: In section 8(4B)﻿(b)﻿(ii) the services the goods or services
6: Before section 8(5)
4E: Despite subsection (3), if a non-resident is the supplier of distantly taxable goods, to which subsection (3)﻿(ab) subsection (4F)
4F: Subsection (4E)
a: the non-resident supplier chooses that this subsection apply to the supply of the goods; and
b: at the time of the election, the non-resident supplier reasonably expects that more than 50% of the value of the supplies made by the non-resident supplier to persons in New Zealand during the period of 12 months from the election will be made to persons who are not registered persons; and
c: the value of the supply is less than or equal to $1,000.
11: Section 8B amended (Remote services: determining residence and status of recipients)
1: In section 8B and status
2: In section 8B(1) 11A(1)﻿(j) , 60(1AB)
3: In section 8B(5) Subsection (6) Section 8BB(1)
4: Repeal section 8B(6) to (8)
12: New section 8BB inserted (Certain supplies by non-residents: determining whether recipient is registered person)
After section 8B
8BB: Certain supplies by non-residents: determining whether recipient is registered person
1: A non-resident registered person (the supplier recipient section 8(3)﻿(ab)
2: A recipient meets the requirements of this section if the recipient notifies the supplier that the recipient is a registered person or provides the supplier with the recipient’s registration number or New Zealand Business Number.
3: The Commissioner may prescribe, as an alternative to the method in subsection (2), a method that a supplier may use to determine whether the supply is made to a registered person for use in the course or furtherance of the registered person’s taxable activity, or may agree with the supplier on the use of another method to determine whether the supply is made to a registered person for use in the course or furtherance of the registered person’s taxable activity.
4: In prescribing or agreeing to the use of an alternative method under subsection (3), the Commissioner may take into account—
a: the nature of the supply, including, for example, whether the supply is of goods and services that are purchased only by a registered person in the course or furtherance of the registered person’s taxable activity:
b: the value of the supply, including, for example, whether the supply is of a value that would be expected to be received only by a registered person in the course or furtherance of the registered person’s taxable activity:
c: the terms and conditions related to the provision of the goods and services, including, for example, whether the supply is of goods and services that may be leased, licensed, or otherwise made available, for use by a registered person in the course or furtherance of the registered person’s taxable activity.
13: Section 10 amended (Value of supply of goods and services)
1: In section 10(3E) services goods or services
2: After section 10(7B)
7C: Where a redeliverer makes a supply of distantly taxable goods to a recipient under section 60E
7D: Where an operator of a marketplace makes a supply of remote services or distantly taxable goods under section 60C or 60D
7E: Where a person makes a supply of services to the recipient of a supply of goods that include distantly taxable goods, and the supply of services includes services (the related services
a: the consideration for the supply of the related services is determined by reference to the items included in the supply of distantly taxable goods; and
b: the supply of services is made or arranged or facilitated by the supplier or underlying supplier of the distantly taxable goods; and
c: the supply of related services is directly in connection with the distantly taxable goods or is of insurance of the goods; and
d: the supply of related services would be chargeable with tax at the rate of 0% in the absence of this subsection; and
e: the supply of related services and the supply of distantly taxable goods do not form a single supply.
14: New sections 10B and 10C inserted
After section 10
10B: Estimating value of goods in supply for treatment as distantly taxable goods
1: The value of an item of goods is determined under this section for the purposes of determining, when a supply of the goods is made, whether the goods are distantly taxable goods.
2: The value of an item of goods under this section is the consideration for the supply of the item reduced by the total amount included in that consideration for—
a: the cost of transport and insurance charges,—
i: for goods that are imported into New Zealand, for the period beginning when the item leaves the country or territory from which the goods are supplied and ending when the item is delivered in New Zealand:
ii: for goods that are not imported into New Zealand, for the period beginning when the item leaves its place of origin and ending when the item is delivered in New Zealand:
b: tax charged on the item under section 8:
c: duty payable on the item under the Customs and Excise Act 2018.
3: The supplier of an item of goods may use a reasonable estimate of the amount referred to in subsection (2), based on the information available to the supplier at the time of the supply.
10C: Election by supplier that supplies of higher-value goods be supplies of distantly taxable goods
1: A person (the electing supplier initial period
a: the Commissioner has not, before the election, cancelled under subsection (5)﻿(b)
b: the electing supplier notifies the Commissioner of the election before the initial period.
2: The Commissioner may agree with an election under subsection (1)
a: at the time of the election, there are reasonable grounds for believing that 75% or more of the total value of distantly taxable goods supplied by the electing supplier to places in New Zealand in the 12-month period beginning with the first day of the initial period will consist of items having an estimated customs value equal to or less than the entry value threshold:
b: for an electing supplier who does not meet the requirements of paragraph (a)
i: whether the electing supplier and associated persons have a good history of previous compliance with the requirements of taxation laws and the taxation laws of countries and territories outside New Zealand; and
ii: the total value of items of goods, each having an estimated customs value greater than the entry value threshold, that the electing supplier sells in a period and are delivered at places in New Zealand; and
iii: other considerations that the Commissioner considers to be relevant.
3: An election under this section to which the Commissioner agrees is effective for—
a: goods that meet the requirements of section 4B(1)﻿(a) to (d)
b: the initial period; and
c: later taxable periods beginning before a cancellation of the election under subsection (5)
4: For a taxable period for which the election is effective under subsection (3)
5: The Commissioner may cancel an election from a date after which the election would otherwise be effective—
a: by notifying the electing supplier of the date on which the election ends, if the electing supplier requests the cancellation:
b: if paragraph (a) does not apply, by—
i: notifying the electing supplier of the date of the proposed cancellation and the reasons for the proposed cancellation; and
ii: considering any arguments against the proposed cancellation that are provided by the electing supplier within 30 days from the date of notification, or within a shorter or longer period if the Commissioner considers that the period is appropriate in the circumstances; and
iii: notifying the electing supplier of the date on which the election is cancelled.
15: Section 11 amended (Zero-rating of goods)
1: In section 11(1)﻿(j)﻿(ii) the recipient the goods are not distantly taxable goods and
2: After section 11(1)﻿(j)
jb: the supply is of distantly taxable goods to which section 60(1C)﻿(a) applies, being a supply from an underlying supplier to an operator of a marketplace; or
16: Section 11A amended (Zero-rating of services)
1: After section 11A(1)﻿(jb)
jbb: the services are the arranging of underlying services that are supplied directly in connection with moveable personal property, other than choses in action, situated outside New Zealand when the services are performed; or
2: After section 11A(1C)
1D: Subsection (1)﻿(a), (c), (cb), (d), and (f) do not apply to a supply, by a registered person who is a redeliverer and supplier under section 60E, of services in relation to a supply of distantly taxable goods that is charged with tax under section 8 at a rate of more than zero.
17: Section 12 amended (Imposition of goods and services tax on imports)
After section 12(1A)
1B: For the purposes of subsection (1), the value of distantly taxable goods does not include the amounts referred to in subsection (2)﻿(a), (c), and (d) if a registered person before the importation includes tax under section 8 at a rate of more than zero in the price of a supply of the goods.
1C: For the purposes of determining whether an item of goods in a consignment is goods to which subsection (1B)
a: sufficiently identifies the item and the registered person who includes the tax in the price of the supply of the item:
b: is information relating to the item that is acceptable to the Commissioner for the purposes of this subsection.
18: New section 12B inserted (Reimbursement of tax by supplier if recipient charged tax on both supply and importation)
After section 12
12B: Reimbursement of tax by supplier if recipient charged tax on both supply and importation
1: This section applies if a registered person makes a supply of goods, that involves the importation of the goods into New Zealand and is treated as being a supply of distantly taxable goods charged with tax at a rate of more than zero, and receives consideration for the supply that includes an amount as tax charged under section 8 on the supply.
2: The registered person must reimburse the recipient of the supply for the amount received as tax charged under section 8 if the supplier receives a request from the recipient and a declaration from the recipient, or other confirmation, that the amount of tax charged under section 12 on the importation was paid when the goods were imported.
19: Section 14 amended (Exempt supplies)
In section 14(1)﻿(d) or paragraph (ca) , (ca), or (cb)
20: Section 15 amended (Taxable periods)
1: In section 15(6) remote services distantly taxable goods or remote services
2: After section 15(6)
7: Despite subsection (6), a non-resident supplier of distantly taxable goods that becomes a registered person in the period beginning on 1 December 2019 and ending on 31 December 2019 has a first taxable period of 1 December 2019 to 31 March 2020.
21: Section 20 amended (Calculation of tax payable)
1: In section 20(2)﻿(d) services goods or services
2: After section 20(3)﻿(dc)
dd: an amount of output tax charged on a supply of distantly taxable goods to the extent that the supplier has, in relation to the supply, incurred liability for, returned, and paid, a consumption tax in another country or territory when the goods are supplied to a person in New Zealand who is not a registered person; and
3: In section 20(3L) section 54B or is a supplier of distantly taxable goods or remote services to which section 8(3)﻿(ab)
4: In section 20(3LB) section 54B , or is a supplier of distantly taxable goods or remote services to which section 8(3)﻿(ab)
5: In section 20(4C) supply of remote services supply of distantly taxable goods by a non-resident to which section 8(3)﻿(ab)
6: In section 20(4C) section 24(5B) or (5BB)
7: In section 20(4D)
a: replace supply of remote services supply of distantly taxable goods to which section 8(3)﻿(ab) applies or of remote services,
b: replace recipient and recipient, if
22: Section 20G amended (Treatment of supplies of certain assets)
In section 20G(2)﻿(a)
i: related solely to the taxable use of the asset; or
ii: related solely to the non-taxable use of the asset:
23: Section 20H amended (Goods and services tax incurred in making financial services for raising funds)
1: Replace section 20H(1)
1: A registered person who makes supplies of financial services referred to in paragraph (a)
a: the supplies of the financial services (the funding support services group company
b: the funding support services are not referred to in section 11A(1)﻿(q) and (r); and
c: the supplies used in making the supplies of funding support services do not give rise to a deduction under section 20(3) for the registered person or the group company in the absence of this section; and
d: the funding support services are the issue or allotment of a debt security or equity security, the renewal of a debt security or equity security, the payment of an amount of interest, principal, or dividend for a debt security or equity security, or the provision or variation of a guarantee of the performance of obligations in the issue, allotment, or renewal of a debt security or equity security; and
e: the funding support services fail to raise the funds or do raise funds that are used, or that replace funds that are used, by the registered person or the group company for expenditure in the taxable activity; and
f: the supplies used in making the supplies of funding support services would give rise to a deduction under section 20(3) if used in the taxable activity in which the funds are intended to be used.
1B: If a registered person makes supplies of financial services in the course of raising funds that are or would have been used by the registered person or a group company in both a taxable activity and an activity that is not a taxable activity (the funded activities
2: Subsection (1) subsection (1)
24: Section 21HB amended (Transitional rules related to treatment of dwellings)
In section 21HB(4)
aa: were acquired by the person before 1 April 2011; and
25: Section 24 amended (Tax invoices)
1: After section 24(5)﻿(b)
c: the supplier is a non-resident supplier making a supply of distantly taxable goods to which section 8(3)﻿(ab)
2: In section 24(5B)﻿(a) a non-resident supplier of remote services a non-resident making a supply of distantly taxable goods to which section 8(3)﻿(ab)
3: In section 24(5B)﻿(a)﻿(i) section 8(4D) or (4E)
4: In section 24(5B)﻿(a)﻿(i) so that the services so that the goods or services
5: In section 24(5B)﻿(b) the consideration in money for the supply the value of the supply
6: After section 24(5B)
5BB: Despite subsection (5), a supplier is required to provide a tax invoice if section 8(4F)
7: In section 24(5D) section 8(4D) or (4E)
26: New sections 24BAB and 24BAC inserted
After section 24BA
24BAB: Receipts for supplies
1: A registered person who makes a supply of distantly taxable goods at a price that includes tax under section 8(1) at a rate of more than zero must provide to the recipient of the supply, at the time of the supply, a receipt for the goods in the supply and for other goods imported with the supply containing the particulars given by subsection (2) or alternative particulars acceptable to the Commissioner.
2: The particulars required by this subsection to be included in a receipt are—
a: the name and registration number of the supplier:
b: the date of the supply:
c: the date upon which the receipt is issued:
d: a description of the goods supplied and the other goods imported:
e: the consideration for the goods, and the amount of tax included, which may be expressed in the currency of the consideration received by the supplier:
f: information indicating the items for which the amount of tax included is more than zero:
g: information indicating the items for which the amount of tax included is zero.
3: A registered person who omits to issue a receipt for a supply as required by subsection (1) and is requested by the recipient of the supply to provide a receipt for the supply must provide the receipt within 10 working days after the request.
24BAC: Information for importation of goods including distantly taxable goods
A registered person who makes a supply of distantly taxable goods must take reasonable steps to ensure that the New Zealand Customs Service has available, by the time of the importation of the goods,—
a: the name and registration number of the registered person:
b: information indicating the items included in the supply, or imported with the supply, for which the amount of tax included in the price of the supply is more than zero:
c: information indicating the items included in the supply, or imported with the supply, for which the amount of tax included in the price of the supply is zero:
d: information that is acceptable to the Commissioner in substitution for information referred to in paragraphs (a) to (c)
27: Section 24B amended (Records to be kept by recipient of imported services)
1: In the heading to section 24B services goods and services
2: In section 24B services goods or services
3: In section 24B(c) services goods or services
28: Section 25 amended (Credit and debit notes)
1: In section 25(1)﻿(aab) section 8(4) section 8(4D)
2: In section 25(1)﻿(aab)
a: after section 8(4D) or (4E)
b: replace services goods or services
3: In section 25(1)﻿(aab)﻿(i) supplier of goods to which section 8(3)﻿(ab)
4: After section 25(1)﻿(b)
bb: the supply of goods is treated as being a supply of distantly taxable goods that is made in New Zealand and charged with tax at a rate of more than zero, and—
i: the supplier receives a declaration from the recipient, or other confirmation, that the amount of tax charged under section 12 on the importation into New Zealand of the goods was paid when the goods were imported; and
ii: the supplier reimburses the recipient for the amount of tax included in the consideration for the supply; or
29: Section 25AA amended (Consequences of change in contract for imported services)
1: In the heading to section 25AA services goods and services
2: In section 25AA(1) services goods or services
3: In section 25AA(1)﻿(a) services goods or services
4: In section 25AA(1)﻿(a)﻿(v) section 24(5B) or (5BB)
30: Section 25A amended (Commissioner may approve use of symbols, etc, on electronically transmitted invoices and credit and debit notes)
1: In the heading to section 25A invoices and invoices, receipts, and
2: In section 25A(1)
a: replace tax invoices and tax invoices, receipts, and
b: replace section 24 or 25 section 24, 24BAB, or 25
c: replace tax invoice or tax invoice, a receipt, or
31: Section 26 amended (Bad debts)
After section 26(4)
5: This section does not apply when the taxable supply is made by a marketplace operator and section 26AA
32: New section 26AA inserted (Marketplace operators: bad debts for amounts of tax)
After section 26
26AA: Marketplace operators: bad debts for amounts of tax
1: This section applies to a marketplace operator who is the supplier under section 60C or 60D of distantly taxable goods or remote services provided by a person who is not an associated person and—
a: charges the underlying supplier a fee for making the taxable supply; and
b: furnishes a return in relation to the taxable period during which the output tax on the supply is attributable; and
c: accounts for the output tax on the supply; and
d: has an agreement with the underlying supplier under which the underlying supplier is required to pay to the marketplace operator, from consideration received by the underlying supplier from the supply, an amount (the debt
e: the marketplace operator writes off as a bad debt the total amount consisting of the fee and debt referred to in paragraphs (a) and (d) (the write-off
2: The marketplace operator shall make a deduction under section 20(3), or account for a reduction in output tax, equal to the tax charged on the taxable supply.
3: If the marketplace operator recovers in a later taxable period an amount of a bad debt that gave rise to a deduction or reduction under subsection (2), the marketplace operator shall account for an amount of output tax that is a fraction of the amount of the deduction or reduction, where the fraction is calculated by dividing the amount of the recovery by the amount of the write-off.
33: Section 51 amended (Persons making supplies in course of taxable activity to be registered)
In section 51(1C) of remote services making a supply of distantly taxable goods to which section 8(3)﻿(ab)
34: Section 51B amended (Persons treated as registered)
1: In section 51B(1) registered persons making supplies in the course or furtherance of a taxable activity
2: Replace section 51B(7)
7: For the purposes of this Act, if a recipient is treated as a supplier under section 5(27) of—
a: a supply of distantly taxable goods to which section 8(3)﻿(ab) applies, or that is supplied by a resident, the recipient is treated as registered from the date on which the supply of the goods is made:
b: a supply of remote services to which section 8(3)﻿(c) applies, or that is supplied by an agent under section 60(1AB) or by an operator of a marketplace under section 60C or 60D, the recipient is treated as registered from the date on which the services are physically performed.
3: After section 51B(7)
8: For the purposes of this Act, in relation to a supply of goods by a non-resident through a marketplace, a person who is treated as a supplier under section 5(28)
35: Section 56B amended (Branches and divisions in relation to certain imported services)
1: In the heading to section 56B services goods and services
2: In section 56B(1) services goods or services
36: Section 60 amended (Agents and auctioneers)
1: In section 60(1A)﻿(b) remote services distantly taxable goods or remote services
2: In section 60(1C) and a resident supplier who makes supplies of services or a supplier who makes supplies of goods or services
3: In section 60(1C)﻿(a) services goods and services
4: In section 60(1C)﻿(b) services goods and services
37: Section 60C amended (Electronic marketplaces)
1: In section 60C(1)﻿(a) supply of remote services supply of goods or a supply of remote services
2: Delete section 60C(1)﻿(b)
3: Replace section 60C(1)﻿(c)
c: the supply is of services made to a person resident in New Zealand or of goods made to a person involving delivery at a place in New Zealand.
4: Replace section 60C(2)
2: The operator of the marketplace is treated as making, in the course of furtherance of a taxable activity, a supply to a person (the recipient
a: remote services if the recipient is resident in New Zealand:
b: items of goods, meeting the requirements of section 4B(1)﻿(a) to (d) for distantly taxable goods, for which—
i: the underlying supplier of the goods is a non-resident; and
ii: the operator or the underlying supplier makes or arranges or assists the delivery of the supply to the recipient at a place in New Zealand; and
iii: each item has an estimated customs value under section 10B equal to or less than the entry value threshold, if the operator has not made an election under section 10C
2B: Subsection (2) does not apply to a supply if—
a: the documentation provided to the recipient identifies the supply as made by the underlying supplier and not the marketplace; and
b: the underlying supplier and the operator of the marketplace have agreed that the supplier is liable for the payment of tax; and
c: the marketplace does not—
i: authorise the charge for the supply to the recipient:
ii: make or authorise the delivery of the supply to the recipient:
iii: directly or indirectly set a term or condition under which the supply is made.
2C: Subsection (2) does not apply to a supply of goods if—
a: the underlying supplier of the goods is a non-resident that has a branch in New Zealand; and
b: the operator of the marketplace treats the underlying supplier as a New Zealand resident in relation to the supply; and
c: in treating the underlying supplier as a New Zealand resident, the operator of the marketplace meets the requirements of section 60G(1)
5: In section 60C(3) supply of remote services supply of goods or supply of remote services
38: Section 60D amended (Approved marketplaces)
1: In section 60D(1)﻿(a) supply of remote services supply of goods by a non-resident person or a supply of remote services,
2: Delete section 60D(1)﻿(b)
3: Replace section 60D(1)﻿(c)
c: the supply is of services made to a person resident in New Zealand or of goods made to a person involving delivery at a place in New Zealand.
4: Replace section 60D(2)
2: The operator of the marketplace is treated as making, in the course of furtherance of a taxable activity, a supply to a person (the recipient
a: the Commissioner, in the exercise of a discretion, approves an application under this subsection by the operator of the marketplace; and
b: for a supply of remote services, the recipient is resident in New Zealand; and
c: for a supply of goods meeting the requirements of section 4B(1)﻿(a) to (d) for distantly taxable goods,—
i: the underlying supplier of the goods is a non-resident; and
ii: the operator or the underlying supplier makes or arranges or assists the delivery of the goods to the recipient at a place in New Zealand; and
iii: the supply is of items of goods for which each item has an estimated customs value under section 10B equal to or less than the entry value threshold, if the operator has not made an election under section 10C that is effective at the time of the supply.
5: In section 60D(3)﻿(a) recipient of the supply of goods or
39: New sections 60E, 60F, and 60G inserted
After section 60D
60E: When redeliverer is supplier of distantly taxable goods
1: For a supply of goods to a recipient, a redeliverer of the goods is the supplier of the goods if—
a: no operator of an electronic marketplace is the supplier under section 60C(2) and (3); and
b: no operator of a marketplace is the supplier under section 60D(2) and (3); and
c: no seller or underlying supplier of the goods makes or arranges or assists the delivery of the supply to the recipient at a place in New Zealand; and
d: the supply meets the requirements for being a supply of distantly taxable goods when treated as being made by the redeliverer.
2: If, in relation to a single supply of distantly taxable goods to a recipient, more than 1 redeliverer is liable to account for tax on the supply, the person treated as making the supply is the redeliverer that first enters into an arrangement relating to the supply with the recipient, or, in the absence of such an arrangement, first enters into an arrangement relating to the supply with a person acting on behalf of the recipient.
60F: Operator of marketplace or redeliverer making return based on faulty information
1: This section applies to a registered person who is an operator of an electronic marketplace, or a redeliverer, and makes a return of a deficient amount for the total output tax allocated to a taxable period (the return period
a: relating to a supply of goods made through the marketplace or by the registered person as operator of the marketplace, or by the registered person as a redeliverer; and
b: provided by a seller or underlying supplier of the goods or by a recipient of the supply of goods.
2: An amount equal to the deficiency in the total amount of output tax returned that arises from the inaccurate, incomplete, insufficient, or misleading information is treated as being a reduction in the total output tax allocated to the return period, if the registered person meets the requirements of section 60G.
60G: Requirements for treatment of information by operator of marketplace or redeliverer
1: A registered person that is an operator of an electronic marketplace or a redeliverer and makes a return of a deficient amount of output tax as described in section 60F
a: the amount of the deficiency arises from inaccurate, incomplete, insufficient, or misleading information, which may relate to the matters described in subsection (2)
b: for information relating to the matters described in subsection (2)﻿(a) to (c)
i: the applicable requirements of subsections (3) to (6)
ii: applicable requirements that are alternative to the requirements referred to in subparagraph (i) subsection (7)
c: the registered person relies on the information referred to in paragraph (a)
2: Inaccurate, incomplete, insufficient, or misleading information referred to in subsection (1)﻿(a)
a: the residency of the underlying supplier of the goods:
b: the place to which the goods are delivered:
c: the amount of consideration paid for the supply by the recipient of the supply:
d: whether the registered person is the supplier of the goods:
e: the amount of tax charged under section 8 on the supply for which the registered person is required to account.
3: This subsection requires a registered person that is an operator of an electronic marketplace and does not know the residency of an underlying supplier of goods in a supply, to—
a: treat the underlying supplier of the goods as a non-resident, if paragraph (b) does not require a different treatment; or
b: treat the underlying supplier of the goods as a resident if the registered person has—
i: information that the underlying supplier is a company that is incorporated in New Zealand or has its centre of management in New Zealand:
ii: a New Zealand business number for the underlying supplier:
iii: 2 or more items of information listed in subsection (6) that are non-contradictory and support the conclusion that the underlying supplier is resident in New Zealand and are more reliable than items of information listed in subsection (6)
4: This subsection requires a registered person that is an operator of an electronic marketplace and does not know the address to which the goods in a supply are to be delivered to—
a: treat the supply of goods as being made to the recipient at a place in New Zealand if the registered person—
i: has 2 items of information listed in subsection (6) that are non-contradictory and support the conclusion that the recipient is located in New Zealand; and
ii: does not have 2 items of information listed in subsection (6) that are non-contradictory, and support the conclusion that the recipient is located in a country or territory other than New Zealand, and are more reliable for determining the location of the recipient than are the items referred to in subparagraph (i); or
b: treat the supply of goods as being made to the recipient at a place outside New Zealand if a conclusion under paragraph (a) that the person is located at a place in New Zealand is not supported by items of information that are held by the registered person and meet the requirements of more than 1 paragraph of subsection (6).
5: This subsection requires a registered person that is a redeliverer for a supply of distantly taxable goods to a recipient, and is not responsible for the purchase of the goods in the supply, to—
a: require the recipient of the supply to disclose the value of the consideration before the delivery of the supply; and
b: obtain a receipt issued by the seller of the goods or other confirmation by the seller of the value of the consideration for the supply.
6: The items of information referred to in subsections (3)﻿(b)﻿(iii) and (4)﻿(a) and (b) for a person and a supply of goods are—
a: an address of a physical location for the person such as a mailing or billing address:
b: if the person is the underlying supplier for the supply, a New Zealand GST registration number for the person:
c: bank details (including the account the person uses for making payments, or the billing address held by the bank, or the account to which the registered person makes payments of amounts owed to the person):
d: the internet protocol address of the device used by the person or another geolocation method:
e: the mobile country code of the international mobile subscriber identity stored on the subscriber identity module card used by the person:
f: the location of the person’s fixed land line:
g: if the person is the underlying supplier, the location from where the goods are being shipped:
h: other commercially relevant information.
7: The Commissioner may—
a: prescribe requirements that are alternative to those listed in 1 or more of subsections (3) to (6):
b: agree with a person who is a marketplace operator or redeliverer on requirements that are alternative to those listed in 1 or more of subsections (3) to (6), including requirements for the amount of information to be obtained by the person that is relevant to a subsection and for the use and content of methods for checking the accuracy of the information and the conclusions drawn from the information.
8: In prescribing or agreeing to alternative requirements for a person under subsection (7), the Commissioner may take into account—
a: commercially relevant information that is available to the person and the reliability of this information:
b: the cost for the person of complying with the requirements:
c: the existing methods available to the person for preventing and remedying situations where incorrect information is provided.
40: Section 75 amended (Keeping of records)
1: In section 75(3BA)﻿(a) English or te reo Maori
2: In section 75(3F) supplies of distantly taxable goods to which section 8(3)﻿(ab)
3: In section 75(3F)﻿(a) English or te reo Maori
4: In section 75(6)﻿(a)﻿(i) English or te reo Maori
5: After section 75(7)
8: A registered person who is required under this section to keep and maintain records that are in a language other than English must comply with the requirements of sections 24, 24BA, and 25 relating to English words that must appear on a tax invoice, or a debit note or credit note, provided by the registered person.
41: Section 77 amended (New Zealand or foreign currency)
1: In section 77(2) supplier of distantly taxable goods to which section 8(3)﻿(ab)
2: After section 77(4)
5: A supplier of distantly taxable goods who is required to determine under section 10B
a: the spot exchange rate for the foreign currency applying at the time of the supply; or
b: a currency conversion method, and a time for which the method is applied for the supply, that are approved by the Commissioner for the purpose.
42: New section 85C inserted (Certain contracts entered into before 1 December 2019)
After section 85B
85C: Certain contracts entered into before 1 December 2019
1: This section applies to a supply of distantly taxable goods when—
a: the contract under which the supply is made is for a fixed term that starts before 1 December 2019 and ends after that date; and
b: the contract provides for periodic payments that are treated under section 9(3)﻿(a) as successive supplies; and
c: under the contract, the consideration for the supply is set or reviewed for periods of 396 days or less during the term of the contract; and
d: section 8(3)﻿(ab)
2: Despite section 9(3)﻿(a), for the period described in subsection (3)
3: The period starts on 1 December 2019 and ends on the earlier of—
a: the date on which the term of the contract ends:
b: the date that is 396 days after the date of the contract.
3: Amendments to other enactments
Amendments to Income Tax Act 2007
43: Income Tax Act 2007 amended
Sections 44 to 80 Income Tax Act 2007 2019-06-26 Income Tax Act 2007 re section 2(1) 2019-07-01 Income Tax Act 2007 re section 2(19) 2020-01-01 Income Tax Act 2007 re section 2(21) 2020-04-01 Income Tax Act 2007 re section 2(22)
44: Section CB 16A amended (Main home exclusion for disposal within 5 years)
In section CB 16A(3) section section and section EL 9
45: Section CG 5B amended (Receipts from insurance, indemnity, or compensation for interruption or impairment of business activities)
1: Replace section CG 5B(2)
2: The amount is income of the person to the extent to which it is attributable to income (the replaced income
a: the person would have derived if not for the event:
b: another person, who assigned the right to receive the amount to the person, would have derived if not for the event.
2: Subsection (1) applies for the 2011–12 and later income years. However, subsection (1) does not apply to a person in relation to a tax position taken by the person—
a: in the period that starts on the first day of the 2011–12 income year and ends on the date of Royal assent of this Act; and
b: in relation to an amount of insurance, indemnity, or compensation for an interruption or impairment of business activities resulting from an event received by the person; and
c: relying on section CG 5B
46: Section CV 9 repealed (Supplementary dividend holding companies)
Repeal section CV 9
47: Section CW 33 amended (Allowances and benefits)
Replace section CW 33(1)﻿(ba)
ba: a payment under section 363, 386AAG, or 386B of the Oranga Tamariki Act 1989:
48: Section CW 35 amended (Personal service rehabilitation payments)
In section CW 35(2) sections CZ 35 sections CZ 36
49: Heading after section CX 53 amended (Share-lending arrangements)
In the heading after section CX 53 arrangements and excepted financial arrangements
50: New section CX 54B inserted (Transfers of emissions units under certain excepted financial arrangements)
After section CX 54
CX 54B: Transfers of emissions units under certain excepted financial arrangements
An amount that relates to the market value of an emissions unit and is derived by a person in a transfer of the emissions unit under an arrangement that is an excepted financial arrangement under section EW 5(11C) (What is an excepted financial arrangement?) is excluded income of the person. amount, arrangement, emissions unit, excepted financial arrangement, excluded income
51: Section CW 57 amended (Non-resident company involved in exploration and development activities)
In section CW 57(1)
a: starts on 1 January 2020; and
b: ends on 31 December 2024.
52: Section CX 60 amended (Intra-group transactions)
1: Replace section CX 60(2)
2: The amount, except to the extent to which it is described in section FM 8(3) (Transactions between group companies: income), is excluded income of the company.
2: Subsection (1)
53: Section CZ 35 repealed (Treatment of backdated payments for social rehabilitation: 2008–09 to 2017–18 income years)
Repeal section CZ 35
54: New section CZ 36 inserted (Treatment of backdated payments for social rehabilitation: 2008–09 to 2017–18 income years)
After section CZ 35
CZ 36: Treatment of backdated payments for social rehabilitation: 2008–09 to 2017–18 income years
When this section applies
1: This section applies for income years from the 2008–09 income year to the 2017–18 income year when—
a: a person is paid an amount as a personal service rehabilitation payment; and
b: the person pays an amount to another person for providing them with a key aspect of social rehabilitation, referred to in the definition of personal service rehabilitation payment
c: the payment referred to in paragraph (a) paragraph (b) Treatment of payment
2: If the Commissioner is satisfied that the tax obligations relating to the personal service rehabilitation payment have been met, the payment is treated as exempt income for the income year in which the person derives the payment. amount, Commissioner, exempt income, income year, pay, personal service rehabilitation payment
55: Heading after section DB 15 amended (Share-lending arrangements)
In the heading after section DB 15 arrangements and excepted financial arrangements
56: New section DB 17B inserted (Transfers of emissions units under certain excepted financial arrangements)
After section DB 17
DB 17B: Transfers of emissions units under certain excepted financial arrangements
A person is denied a deduction for an amount of expenditure that relates to the market value of an emissions unit and is incurred by a person in a transfer of the emissions unit under an arrangement that is an excepted financial arrangement under section EW 5(11C) (What is an excepted financial arrangement?). amount, arrangement, emissions unit, excepted financial arrangement, excluded income
57: Section DB 18A repealed (Ring-fenced allocations: disposal of residential land within 5 years)
Repeal section DB 18A
58: Section DB 18AB repealed (Deduction cap: disposal of residential land within 5 years to associated persons)
Repeal section DB 18AB
59: Section DE 4 amended (Default method for calculating proportion of business use)
1: In section DE 4(1)﻿(a) ; or ; and
2: In section DE 4(1)﻿(b) ; or ; and
60: Section DV 18 amended (Statutory producer boards and co-operative companies)
In section DV 18(1) sections OB 73 and OB 78 sections OB 73, OB 78, and OB 78B
61: Section EH 1 amended (Income equalisation schemes)
In section EH 1(2) 3 2
62: New subpart EL (Allocation of deductions for excess residential land expenditure)
1: After section EK 23
EL: Allocation of deductions for excess residential land expenditure
Introductory provisions
EL 1: Outline of subpart: general
General outline
1: The provisions in this subpart, in general,—
a: limit a person’s deductions for expenditure incurred in relation to residential land to income derived from the land; and
b: suspend deductions for the excess expenditure for the income year in which the expenditure is incurred; and
c: provide that the excess amounts are carried forward to later income years in which the person derives residential income; and
d: release the excess amounts on fully-taxed disposals of land. Allocation rules
2: Separate allocation rules apply for—
a: residential rental property, see the outline in section EL 2(1) to (6)
b: bright-line disposals of residential land, see the outline in section EL 2(7) amount, deduction, dispose, income, income year, residential land, residential rental property
EL 2: Outline of subpart: specific provisions
Residential rental property
1: Sections EL 4 to EL 8 Application by portfolio or on property-by-property basis
2: The rules in sections EL 4 to EL 8
a: to a person’s residential portfolio:
b: by election, on a property-by-property basis. Portfolios plus particular properties
3: A person may choose to apply the rules on a property-by-property basis for an income year to 1 or more properties while applying the rules on a portfolio basis in relation to other properties owned by them. Use of amounts
4: If a person has excess expenditure under section EL 4 Exclusions
5: The following sections set out the properties that are excluded from the definition of residential rental property
a: section EL 9
b: section EL 10
c: section EL 11
d: section EL 12
e: section EL 13 Rules for certain entities
6: The following sections modify the general rules in this subpart:
a: section EL 14
b: section EL 15
c: sections EL 16 to EL 19 Bright-line disposals of residential land
7: Section EL 20 amount, associated person, company, deduction, employee, income year, interest, loss, own, residential income, residential land, residential land-rich entity, residential portfolio, residential rental property, revenue account property, wholly-owned group of companies
EL 3: Definitions for this subpart
In this subpart,— land sales provisions residential income
a: rental income which is the amount of income the person derives under sections CC 1 to CC 2 (which relate to amounts derived from the use of land) for the income year in relation to their residential portfolio:
b: depreciation recovery income which is the amount that the person derives under section CG 1 (Amount of depreciation recovery income) for the income year in relation to their residential portfolio:
c: an amount of net income that the person would have for the corresponding tax year if their only income were income under the land sales provisions from a disposal of property in their residential portfolio:
d: an amount of net income that the person would have for the corresponding tax year if their only income were income referred to in paragraphs (a) and (b) section EL 4 section EL 10 residential land-rich entity
a: a close company, partnership, or look-through company if more than 50% of its assets by value are residential land, whether the land is owned directly or indirectly, see section EL 19
b: a trustee of a trust whose property includes residential rental property if more than 50% of the trust’s assets by value are residential land, whether the land is owned directly or indirectly, see section EL 19 residential portfolio
a: means 1 or more residential rental properties that a person holds in a portfolio for an income year; and
b: includes a residential rental property that the person has included in their portfolio, whether or not they retain ownership of the property, in the period that—
i: starts at the beginning of the income year in which they first acquire a residential rental property that is included in their portfolio; and
ii: ends on the last day of the income year in which they dispose of the last of the residential rental properties included in their portfolio; and
c: does not include a residential rental property in relation to which a person is applying the rules on a property-by-property basis under section EL 6 residential rental property
a: means residential land for which a person who owns the land is allowed a deduction relating to the use or disposal of the land; and
b: includes land that, for a time in an income year, is residential land. acquire, amount, close company, deduction, depreciation recovery income, dispose, income, income year, land sales provisions, look-through company, net income, own, partnership, residential income, residential land, residential land-rich entity, residential portfolio, residential rental property, tax year, trustee Allocation rules for residential rental property
EL 4: Allocation of deductions for loss-making residential rental properties
When this section applies
1: This section applies for an income year when a person is allowed a deduction for expenditure or loss incurred in relation to 1 or more properties in their residential portfolio, excluding any amount of a deduction under section DB 23 (Cost of revenue account property). Limited allocation
2: The amount of the deduction that may be allocated to the income year must be no more than the amount of the person’s residential income for the income year. Excess amounts carried forward
3: To the extent to which the amount of the person’s deduction is more than their residential income, the excess amount is—
a: suspended as a deduction for the income year; and
b: carried forward to a later income year in which the person derives residential income; and
c: added to the amount of the deduction for expenditure or loss referred to in subsection (1) Relationship with sections EL 5, EL 6, and EL 7
4: The application is modified by—
a: section EL 6
b: sections EL 5 and EL 7 amount, deduction, dispose, income year, loss, residential income, residential portfolio, residential rental property
EL 5: When residential portfolios sold
When this section applies
1: This section applies for an income year (the current income year
a: disposes of the last of the properties in their residential portfolio; and
b: has an unused excess amount under section EL 4(3) Disposal of fully-taxed portfolio: excess amounts released
2: If the person derives income under the land sales provisions for the current income year or for an earlier income year from the disposal of each of the properties in their residential portfolio, any unused excess amount relating to the portfolio is released from the application of the limited allocation rule in section EL 4(2) see section EL 8 Disposal of incompletely-taxed portfolios: excess amounts carried forward
3: If the person does not derive income under the land sales provisions for the current income year or for an earlier income year from the disposal of each of the properties in their residential portfolio, any unused excess amount relating to the portfolio—
a: is an amount to which section EL 4(3)
b: is treated as a deduction referred to in section EL 4(1) Basis of allocation
4: For the purposes of subsection (3)﻿(b) amount, deduction, dispose, income, income year, land sales provisions, residential income, residential portfolio, residential rental property
EL 6: Choosing to apply rules on property-by-property basis
Choosing other basis for calculation
1: For the purposes of section EL 4 residential income section EL 3 section EL 4(2) property A
a: they own residential rental properties other than property A:
b: those other properties are included in a residential portfolio. Property A: income and expenditure
2: For the purposes of section EL 4(3) Property A: excess amounts carried forward
3: An excess amount arising under section EL 4(3)
a: suspended as a deduction for the income year; and
b: carried forward to a later income year in which the person derives residential income from property A; and
c: added to the amount of the deduction for expenditure or loss referred to in section EL 4(1) Election requirements
4: A person makes an election under subsection (1) Effect of changes in tax positions
5: The election remains in effect for income years in which the person continues to take the tax position but if the person changes their tax position, property A becomes a property included in a residential portfolio. Transitional rule for property acquired before 2019–20 income year
6: For the purposes of subsection (4) subsection (1) amount, deduction, income, income year, loss, residential income, residential portfolio, residential rental property, return of income, tax position
EL 7: When property A sold
When this section applies
1: This section applies for an income year when a person—
a: has chosen to apply the rules in this subpart on a property-by-property basis under section EL 6 property A)
b: disposes of property A, whether or not it is residential rental property for the person at the time of the disposal; and
c: has an unused excess amount under section EL 4(3) Taxed disposal of property A: excess amounts released
2: If the person derives income under the land sales provisions from the disposal of property A, any unused excess amount relating to property A is released from the application of the limited allocation rule in section EL 4(3) see section EL 8 Non-taxed disposal of property A: excess amounts carried forward
3: If the person disposes of property A but does not derive income under the land sales provisions from the disposal, any unused excess amount relating to property A—
a: is an amount to which section EL 4(3)
b: is treated as a deduction referred to in section EL 4(1) Basis of allocation
4: For the purposes of subsection (3)﻿(b) amount, deduction, dispose, income, income year, land sales provisions, residential income, residential rental property
EL 8: Treatment of previously transferred amounts on fully-taxed disposals
When this section applies: transfers to portfolio properties
1: This section applies when—
a: an unused excess amount relating to a residential rental property or residential portfolio is treated as transferred under section EL 5(3)﻿(b) or EL 7(3)﻿(b)
b: the person disposes of the last of the properties in their portfolio, having derived income from each disposal. When this section also applies: transfers to properties
2: This section also applies when—
a: an unused excess amount relating to a residential rental property or residential portfolio is treated as transferred under section EL 5(3)﻿(b) or EL 7(3)﻿(b) property B section EL 6
b: the person disposes of property B, whether or not it is residential rental property for the person at the time of the disposal, and derives income for the income year from its disposal. Treatment of transferred excess amounts
3: The amount that would otherwise be released under section EL 5(2) or EL 7(2) amount, dispose, income, income year, residential portfolio, residential rental property Exclusions from rules
EL 9: Main home exclusion
General rule
1: Section EL 4 Beneficiaries
2: Subsection (1)
a: more than 50% of the land is used for most of the income year by a beneficiary of the trust as their main home; and
b: a principal settlor of the trust does not have a separate main home. income year, principal settlor, residential land
EL 10: Exclusion for land held on revenue account
Land acquired for purposes of business relating to land
1: Section EL 4 Income under land sales rules
2: Section EL 4 Notification
3: In order for land to be excluded under subsection (2)
a: notify the Commissioner that the land is held on revenue account by the date for filing their return of income for the later of—
i: the income year in which they acquire the land:
ii: the income year in which the land becomes land that, when disposed of, will give rise to income under the land sales provisions:
iii: for land that is held at the start of the 2019–20 income year and is land that, when disposed of, will give rise to income under the land sales provisions, the 2019–20 income year:
b: be able to identify separately the deductions relating to the land. When separate identification not required
4: Subsection (3)﻿(b) subsection (1) and sections EL 9, EL 12, and EL 13
a: has given rise to income of the person under the land sales provisions:
b: will give rise to income under the land sales provisions, regardless of when the disposal occurs, and they have notified the Commissioner as described in subsection (3)﻿(a) acquire, Commissioner, deduction, dispose, income, income year, land sales provisions, notify, residential land
EL 11: Exclusion for property held by certain persons and entities
Section EL 4
a: a company other than a close company:
b: a person or entity listed in schedule 36 (Government enterprises). close company, company, residential land
EL 12: Exclusion for mixed-use assets
Section EL 4 asset, income year, residential land
EL 13: Exclusion for property provided as employee accommodation
Accommodation connected with employment or service
1: Section EL 4 Associated employees or workers
2: Subsection (1) associated person, business, employee, employment, residential land Application of rules by certain entities
EL 14: Continuity rules for companies
Despite sections EL 4, EL 5, EL 7, and EL 16 amount, company, income year, tax loss component
EL 15: Transfers between companies in wholly-owned groups
Transferring unused amounts
1: If a company ( company A section EL 4(3), EL 5(3), or EL 7(3) company B Company B’s deduction
2: The amount transferred is treated as a deduction for expenditure or loss referred to in section EL 4(1) When transfers made
3: The transfer of an excess amount is treated as made when both company A and company B take tax positions on that basis in their returns of income for the relevant income year. amount, company, deduction, income year, residential income, residential rental property, return of income, wholly-owned group of companies Interposed entities
EL 16: Interests in residential land-rich entities
When this section applies
1: This section applies when a person—
a: has borrowed money and used it to acquire an interest in an entity that is, for an income year, a residential land-rich entity; and
b: has interest expenditure for the income year in relation to the amount borrowed for which they are allowed a deduction. Excess amounts carried forward
2: To the extent to which the portion of the person’s interest expenditure calculated under section EL 17(1) section EL 17(3)
a: suspended as a deduction for the income year; and
b: carried forward to a later income year in which the person derives income that is—
i: residential income:
ii: a distribution from the entity to the extent to which the distribution relates to residential land; and
c: added to the amount of the interest expenditure referred to in subsection (1)﻿(b) Modifications
3: The application of this section and section EL 17 section EL 18 acquire, amount, deduction, income, income year, interest, look-through company, partnership, residential income, residential land, residential land-rich entity
EL 17: Calculations for section EL 16
Calculation of interest expenditure
1: For the purposes of section EL 16(2) applied capital percentage × interest on borrowings. Definition of items
2: In the formula in subsection (1)
a: applied capital percentage
b: interest on borrowings Calculation of share of net residential income
3: For the purposes of section EL 16(2) person’s interest × entity’s net residential income. Definition of items
4: In the formula in subsection (3)
a: person’s interest
i: when the entity is a company, the person’s voting interest in the company measured at the end of the income year:
ii: when the entity is the trustee of a trust, the value of the person’s interest in residential rental property that is trust property as a percentage of the trust’s assets, measured at the end of the income year:
b: entity’s net residential income section EL 4 acquire, amount, company, income, income year, interest, net income, residential income, residential rental property, tax year, trustee, voting interest
EL 18: Modifications when entities transparent
For the purposes of sections EL 16 and EL 17
a: the person’s residential income for the income year is treated as their share of net residential income under section EL 17(3) paragraph (b)﻿(ii)
b: when the entity has chosen under section EL 6 property A section EL 17
i: the item applied capital percentage section EL 17(2)﻿(a)
ii: the residential income derived by the person for the income year from property A is treated as their share of net residential income under section EL 17(3) income year, look-through company, partnership, residential income, residential rental property
EL 19: Valuation of assets
Methods of valuation
1: For the purposes of section EL 17 residential land-rich entity section EL 3
a: for land, including an improvement to land, the amount set out in subsection (2)
b: for property with an adjusted tax value, its adjusted tax value:
c: for other property, its market value. Valuation of land
2: For the purposes of subsection (1)﻿(a)
a: the amount established by the later of—
i: the land’s most recent capital value or annual value as set by a local authority; or
ii: either the cost of the land on acquisition or, if the transaction involves an associated person, its market value:
b: for a leasehold estate in land, the market value of the land which the person may establish through a valuation made by a registered valuer no more than 3 years before the end of the income year. adjusted tax value, amount, associated person, income year, land, leasehold estate, local authority, residential land-rich entity Allocation rules for bright-line disposals of land
EL 20: Allocation of deductions related to bright-line disposals of residential land
When this section applies
1: This section applies for an income year when a person—
a: derives income under section CB 6A (Disposal within 5 years: bright-line test for residential land); and
b: is allowed a deduction under section DB 23 (Cost of revenue account property) in relation to the land. Limited allocation
2: The amount of the deduction that may be allocated to the income year must be no more than the amount calculated using the formula— bright-line income + net income from land. Definition of items in formula
3: In the formula,—
a: bright-line income
b: net income from land Excess amounts carried forward
4: To the extent to which the amount of the person’s deduction is more than the amount calculated under subsection (2)
a: suspended as a deduction for the income year; and
b: carried forward to a later income year in which the person derives—
i: income referred to in subsection (1)﻿(a)
ii: income under sections CB 6 to CB 14; and
c: added to the amount of the deduction referred to in subsection (1)﻿(b) Disposals to associated persons
5: Subsections (6) and (7) subsection (1)﻿(a) Limited allocation for associated disposals
6: Despite subsection (2) subsection (3)﻿(a) Expenditure of associated persons
7: To the extent to which the amount of the person’s deduction under subsection (6) amount, associated person, deduction, dispose, income, income year, net income, residential land, tax year
2: Subsection (1)
3: Section EL 20 subsection (1)
a: for a disposal within 2 years to which section CB 6A(1) section 6
b: for a disposal within 5 years to which section CB 6A
63: Section EW 5 amended (What is an excepted financial arrangement?)
1: After section EW 5(11B) Assignment and return of emissions units as part of loan
11C: An arrangement for the assignment of a pre-1990 forest land emissions unit by the holder to a person who is not an associated person (the lender
2: Subsection (1) applies for arrangements entered on or after the beginning of the 2018–19 income year.
64: New section EW 52B inserted (Excepted financial arrangements involving pre-1990 forest land emissions units)
1: After section EW 52
EW 52B: Excepted financial arrangements involving pre-1990 forest land emissions units
When this section applies
1: This section applies to an arrangement that is an excepted financial arrangement under section EW 5(11C) and under which—
a: the holder (the unit holder original unit security assignment lender
b: the lender is required to make a later assignment (the security return returned unit Unit holder treated as continuing to hold pre-1990 forest land emissions unit
2: The unit holder is treated as continuing to hold a pre-1990 forest land emissions unit for the period beginning with the day on which the arrangement begins and ending with the day given by subsection (3) for the security assignment, subject to subsections (4) and (5). Timely security return
3: Subsection (4) applies if the security return occurs on or before the day that is the earlier of—
a: the day on which the security return is required under the arrangement:
b: the day on which the arrangement comes to an end. Effect of timely security return
4: If the unit holder receives a returned unit under the arrangement on or before the day given by subsection (3),—
a: the returned unit is treated as being the original unit; and
b: the unit holder is treated as continuing to hold the original unit for the period beginning with the day on which the arrangement begins and ending with the day of the security return; and
c: the original unit and the returned unit are treated as having a value for the unit holder equal to the cost of the original unit for the unit holder immediately before the arrangement begins; and
d: the original unit and the returned unit are treated as having a value for the lender of—
i: the cost of the original unit for the unit holder immediately before the arrangement begins, for the security assignment and the security return:
ii: zero, for an assignment of the original unit other than the security return. Effect of failure to make timely security return
5: If the unit holder does not receive a returned unit under the arrangement on or before the day given by subsection (3),—
a: the original unit is treated as being assigned to the lender on the day of the security assignment; and
b: the unit holder is treated as ceasing to hold the original unit from the day of the security assignment; and
c: the original unit is treated as having a value for the unit holder and the lender at the time of the security assignment equal to the market value of the original unit for the unit holder immediately before the arrangement begins. Relationship with section ED 1
6: Subsections (4)﻿(c) and (d) and (5)﻿(c) override sections EA 1(4)﻿(c) and ED 1 (which relate to the valuation of excepted financial arrangements). arrangement, associated person, emissions unit, excepted financial arrangement, New Zealand emissions unit, pre-1990 forest land emissions unit
2: Subsection (1) applies for arrangements entered on or after the beginning of the 2018–19 income year.
65: Section EY 30 amended (Transitional adjustments: life risk)
1: Replace section EY 30(5)﻿(b)
b: for a life insurance policy for which the premium is set for a continuous period (the continuous rate period
i: starts on the grandparenting start day; and
ii: ends on the later of the day that is the last day of the continuous rate period and whichever day described in paragraph (c)﻿(i) and (ii) is earlier:
2: After section EY 30(5) Requirements under subsection (5)﻿(b) for premium increase
5BA: The requirements referred to in subsection (5)﻿(b) for an increase in the premium under a life insurance policy in a year in the continuous rate period are that—
a: the increase is made under an agreement entered into before the grandparenting start day; and
b: the increase arises from a policy benefit that produces an increase, under a formula in the agreement, in the sum assured under the policy; and
c: the increase in the sum assured under the policy during the year does not exceed the greater of 3% and the percentage change in the consumer price index during the period consisting of the last 4 quarters preceding the year.
3: In section EY 30 life insurance policy premium quarter year
4: Subsections (1) and (2) apply for a person for the income year that includes 1 July 2010 and later income years, except for an income year for which the person notifies the Commissioner on or after 26 June 2019 that the person chooses to rely on a tax position that is inconsistent with the amendments made by subsections (1) and (2). Section 65(4) replaced 23 March 2020 section 273 Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020
66: Section FE 4 amended (Some definitions)
In section FE 4 excess debt outbound company section FE 2(1)﻿(a) to (d) section FE 2(1)﻿(a) to (db)
67: Section HC 27 amended (Who is a settlor?)
1: After section HC 27(5) Beneficiary lending to trustee
6: When a trustee of a trust owes an amount to a beneficiary of the trust, the beneficiary does not become a settlor of the trust under subsection (2)﻿(a) in an income year of the trustee solely as a result of being owed the amount if—
a: the trustee pays to the beneficiary in the income year interest on the amount owing at a rate equal to or greater than the prescribed rate of interest:
b: the amount owing at the end of the income year is not more than $25,000.
2: In section HC 27 income year interest prescribed rate of interest
68: Section LB 7 amended (Tax credits related to person service rehabilitation payments: providers)
Replace section LB 7(2)
2: For the tax year corresponding to the income year in which the payment falls,—
a: the provider has a tax credit if the payment is not a reimbursement payment referred to in subsection (5):
b: the recipient of the payment has a tax credit if the payment is a reimbursement payment referred to in subsection (5).
69: New section MB 12B inserted (Family scheme income from trusts, not being beneficiary income, and where recipient not settlor)
After section MB 12
MB 12B: Family scheme income from trusts, not being beneficiary income, and where recipient not settlor
When this section applies
1: This section applies for the purpose of determining the amount that represents the family scheme income of a person for an income year when—
a: the person receives a payment from a trust in the income year; and
b: the payment is not beneficiary income of the person; and
c: the person is not the settlor of the trust. Amounts included in family scheme income
2: The amount of the payment is included in the family scheme income of the person for the income year. Exclusion
3: Despite subsection (2), the Commissioner may determine the circumstances in which a payment from a trust should be excluded for the purposes of calculating family scheme income. If a person receives a payment from a trust in circumstances in which the Commissioner has determined that a payment should be excluded for the purposes of calculating family scheme income, the amount of the payment is not included in the family scheme income of the person for the income year. amount, beneficiary income, Commissioner, family scheme income, income year, pay, settlor
70: Section MB 13 amended (Family scheme income from other payments)
After section MB 13(2)﻿(kb)
kc: a payment under section 386AAG or 386B of the Oranga Tamariki Act 1989:
71: New section OB 78B inserted (Co-operative companies attaching imputation credits to cash distributions to groups)
After section OB 78
OB 78B: Co-operative companies attaching imputation credits to cash distributions to groups
Election
1: On meeting the requirements of subsection (2), a co-operative company that is an ICA company may choose, for an income year, to attach an imputation credit to a cash distribution paid to the members of a group of the company’s shareholders and be denied a deduction for the payment by section DV 18 (Statutory producer boards and co-operative companies). Requirements
2: A co-operative company may make an election under subsection (1) if—
a: the company is registered under the Co-operative Companies Act 1996; and
b: the distribution is made to all the persons who are members of a group of shareholders at a time during the income year; and
c: the company’s constitution permits a distribution to be made to the members of the group; and
d: the amount of the distribution to a member of the group is based on the payments for the income year to or by the member for produce transactions as a proportion of the total amount of payments for the income year to or by the members of the group for all produce transactions; and
e: the company would, in the absence of this section, have a deduction for some or all of the distribution under subpart HE and section DV 19 (which relate to mutual associations) or another provision of the Act; and
f: no other election for a cash distribution is made in the income year; and
g: the company notifies the Commissioner of the election as required by section OB 82(3). Total credit attached
3: The total amount of imputation credit attached to the distribution is calculated using the formula— total net dividend × tax rate ÷ (1 − tax rate). Definition of items in formula
4: In the formula in subsection (3),—
a: total net dividend
b: tax rate Shareholder’s credit
5: The amount of a shareholder’s share of the imputation credit attached as described in subsection (3) is calculated using the formula— shareholder’s distribution ÷ total distribution × total imputation credit attached. Definition of items in formula
6: In the formula in subsection (5),—
a: shareholder’s distribution
b: total distribution
c: total imputation credit attached Relationship with section OZ 15
7: Section OZ 15 (Attaching imputation credits and notional distributions: modifying amounts) may apply to modify subsection (3). amount, Commissioner, co-operative company, deduction, dividend, ICA company, imputation credit, income tax, income year, notify, pay, produce transactions, shareholder
72: Section OB 82 amended (When and how co-operative company makes election)
1: In section OB 82(1) section OB 78 or OB 79 section OB 78, OB 78B, or OB 79
2: In section OB 82(3) subsection (1)﻿(a) or (b)
73: Section OZ 15 amended (Attaching imputation credits and notional distributions: modifying amounts)
In section OZ 15(4) section OB 78(3) (Co-operative companies attaching imputation credits to cash distributions) sections OB 78(3) and OB 78B(3) (which relate to co-operative companies making cash distributions)
74: Section RD 7B replaced (Treatment of certain benefits under employee share schemes)
1: Replace section RD 7B
RD 7B: Treatment of employee share schemes
When this section applies
1: This section applies for employees or a former employee in relation to benefits under an employee share scheme, if—
a: an employer has irrevocably chosen to withhold and pay tax for a benefit for an employee under the scheme in accordance with subsection (3)
b: an employer chooses to withhold and pay tax for a benefit for an employee under the scheme in accordance with subsection (4) Irrevocable obligation
2: An employer who has made an irrevocable election described in subsections (1)﻿(a) and (3) subsection (4)﻿(a) to (c)
a: the relevant benefit and employee under the scheme:
b: benefits offered or provided to the employee in replacement of the relevant benefit. Irrevocable obligation: form
3: For the purposes of subsection (1)﻿(a) Withholding and paying
4: For the purposes of subsection (1)﻿(b)
a: calculating the amounts of tax that must be withheld for the relevant benefits and employees, and paying the amounts to the Commissioner as described in section RD 4(1); and
b: including the amounts in the employer’s employment income information under subpart 3C of the Tax Administration Act 1994, treating the relevant ESS deferral date as the relevant payday; and
c: making the disclosure referred to in paragraph (b) amount, amount of tax, Commissioner, employee, employee share scheme, employment income information, ESS deferral date, pay, payday, tax
2: Subsection (1)
75: Section RD 64 amended (ESCT rules and their application)
1: Replace section RD 64(1)﻿(c)
c: subparts 3C and 3D, sections 22AA, 47, 124H to 124R, Part 9, and schedules 4 and 5 of the Tax Administration Act 1994.
2: In section RD 64(1)﻿(c) 124H to 124R 124H to 124K, 124O to 124Q
76: Section RE 21 amended (Basis for payment of RWT)
1: In the heading to section RE 21(2) Interest of more than $500 RWT of $500 or more
2: In section RE 21(2) more than $500 $500 or more
3: In the heading to section RE 21(3) Interest RWT
77: Section RF 2C amended (Meaning of non-resident financial arrangement income)
In section RF 2C approved issuer
78: Section RM 2 amended (Refunds for overpaid tax)
1: In section RM 2(1A)﻿(b) original assessment or an amended assessment referred to in subsection (3)
2: In section RM 2(1)﻿(ab) amended assessment other than an amended assessment referred to in subsection (3)
3: After section RM 2(1B) Amounts arising on treatment of some backdated payments as exempt income
3: Subsection (1A) section CZ 36
79: Section YA 1 amended (Definitions)
1: This section amends section YA 1
2: In the definition of dispose and CB 22 CB 22, and subpart EL
3: In the definition of hire purchase agreement
d: does not include an agreement of a kind described in paragraph (a)﻿(i) or (ii) under which property in the goods passes absolutely, to the person who agrees to purchase the goods, at the time of the agreement or at the time of delivery of the goods or at any time before delivery of the goods; and
4: Insert, in appropriate alphabetical order: land sales provisions section EL 3 subpart EL
5: In the definition of principal settlor that section that section and section EL 9 (Main home exclusion)
6: Insert, in appropriate alphabetical order: residential income section EL 3 subpart EL
7: Insert, in appropriate alphabetical order: residential land-rich entity
8: Insert, in appropriate alphabetical order: residential portfolio section EL 3 subpart EL
9: Insert, in appropriate alphabetical order: residential rental property section EL 3 subpart EL
80: Minor nomenclature-related amendments to Income Tax Act 2007
The Income Tax Act 2007 schedule 1 Amendments to Tax Administration Act 1994
81: Tax Administration Act 1994 amended
Sections 82 to 106 Tax Administration Act 1994 2019-06-26 Tax Administration Act 1994 re section 2(1) 2019-12-01 Tax Administration Act 1994 re section 2(20) 2020-04-01 Tax Administration Act 1994 re section 2(22)
82: Section 3 amended (Interpretation)
1: This section amends section 3(1)
2: Insert, in appropriate alphabetical order: integrity of the tax system section 6(2)
3: Insert, in appropriate alphabetical order: obvious error
83: New subpart heading inserted (Subpart 2A—Commissioner and department)
Before section 5 Subpart 2A—Commissioner and department
84: New section 5B inserted (Commissioner of Inland Revenue)
After section 5
5B: Commissioner of Inland Revenue
The person appointed as chief executive of the department under the State Sector Act 1988 is designated the Commissioner of Inland Revenue.
85: Sections 6, 6A, and 6B replaced
Replace sections 6 6A 6B
2B: Care and management of tax system
Responsibilities and duties
6: Responsibility of Ministers and officials to protect integrity of tax system
Best endeavours to protect integrity of tax system
1: Every Minister and every officer of any government agency having responsibilities under this Act or any other Act in relation to the collection of tax and for the other functions under the Inland Revenue Acts must at all times use their best endeavours to protect the integrity of the tax system. Meaning of integrity of tax system
2: Without limiting its meaning, the integrity of the tax system
a: the public perception of that integrity; and
b: the rights of persons to have their liability determined fairly, impartially, and according to law; and
c: the rights of persons to have their individual affairs kept confidential and treated with no greater or lesser favour than the tax affairs of other persons; and
d: the responsibilities of persons to comply with the law; and
e: the responsibilities of those administering the law to maintain the confidentiality of the affairs of persons; and
f: the responsibilities of those administering the law to do so fairly, impartially, and according to law.
6A: Commissioner’s duty of care and management
Care and management
1: The Commissioner is charged with the care and management of the taxes covered by the Inland Revenue Acts and with such other functions as may be conferred on the Commissioner. Highest net revenue practicable within the law
2: In collecting the taxes committed to the Commissioner’s charge, and despite anything in the Inland Revenue Acts, it is the duty of the Commissioner to collect over time the highest net revenue that is practicable within the law having regard to—
a: the resources available to the Commissioner; and
b: the importance of promoting compliance, especially voluntary compliance, by all persons with the Inland Revenue Acts; and
c: the compliance costs incurred by persons.
6B: Directions to Commissioner
Order for directions
1: The Governor-General may, by Order in Council and with due regard to this subpart and the provisions of the State Sector Act 1988 and the Public Finance Act 1989, issue directions to the Commissioner in relation to the administration of the Inland Revenue Acts. Limitations
2: Subsection (1) does not authorise the giving of directions concerning the tax affairs of individual persons or the interpretation of tax law. Order published
3: Every order made under subsection (1) must, as soon as practicable after it is made,—
a: be published in a publication chosen by the Commissioner; and
b: be laid before the House of Representatives together with any accompanying statement of the reasons for the order and any advice of the Commissioner in relation to it. Binding after 7 days
4: An order made under subsection (1) becomes binding on the Commissioner on the 7th day after the date on which it is made. Remedial powers
6C: Powers to modify provisions of Inland Revenue Acts
Nature of remedial powers
1: Sections 6D to 6G set out remedial powers that provide for modifications to, and exemptions from, provisions of the Inland Revenue Acts to apply in certain circumstances and for a limited time. The powers are in addition to sections 6 and 6A. Purpose of remedial powers
2: The purpose of sections 6D to 6G is to provide flexibility to temporarily remedy or mitigate the effect of a provision of the Inland Revenue Acts by making a modification or granting an exemption when it is reasonably necessary—
a: due to an obvious error in the provision:
b: to give effect to the intended purpose or object of the provision, to resolve ambiguity, or to reconcile inconsistencies. General application
3: A modification or exemption applies generally unless it is expressly stated that it applies only to a particular class of persons or circumstances. Optional application
4: Despite subsection (3), a person to whom a modification or exemption is available may choose whether or not to apply the modification or exemption by the means set out in the modification or exemption under section 6D or 6E Effect of not applying modification or exemption
5: If a person chooses not to apply a modification or exemption, the law applies as if the modification or exemption did not exist in relation to the person.
6D: Modifications made by Order in Council
Orders in Council
1: The Governor-General may, by Order in Council made on the recommendation of the Minister of Revenue, modify the application of the Inland Revenue Acts by providing that a provision of the Inland Revenue Acts does not apply or applies with conditions. Content of modifications
2: A modification made under subsection (1)—
a: must specify a period for which the modification applies; and
b: must, despite section 6C(3), allow a person to whom the modification is available to choose whether or not to apply the modification by means set out in the modification; and
c: may—
i: be subject to terms and conditions:
ii: state whether the modification applies generally or is limited to a particular class of persons or circumstances:
iii: provide for transitional, savings, and related matters; and
d: may be made by—
i: stating an alternative means of complying with the provision:
ii: substituting a discretionary power to be exercised by the Commissioner. Application periods for modifications
3: For the purposes of subsection (2)﻿(a), a period for which a modification applies—
a: must end no later than the end of the second income year after the income year corresponding to the tax year in which the modification comes into force; and
b: may include a period before the date on which the modification comes into force, but any period of retrospective application must not extend back more than 5 income years before the income year corresponding to the tax year in which the modification comes into force; and
c: subject to paragraph (b) Opt-out or opt-in modifications permitted
4: For the purposes of subsection (2)﻿(b)
a: unless the person chooses not to apply it; or
b: only if the person chooses to apply it. Minister’s recommendations
5: Before making a recommendation referred to in subsection (1), the Minister of Revenue must be satisfied that—
a: the modification is reasonably necessary to do 1 or more of the following:
i: to remedy or mitigate the effect of an obvious error in a provision of the Inland Revenue Acts:
ii: to give effect to the intended purpose or object of a provision of the Inland Revenue Acts, or to resolve ambiguity:
iii: to reconcile an inconsistency between certain provisions of the Inland Revenue Acts, or between the relevant provision and an administrative practice of the Commissioner; and
b: the modification does not materially affect the intended scope or effect of the provisions to which it applies; and
c: the modification is not inconsistent with the intended purpose or object of the relevant provision; and
d: the modification is the most appropriate way of addressing or resolving the issue at the time; and
e: the extent of the modification is not broader than is reasonably necessary to address or resolve the issue that gave rise to it; and
f: for a modification that applies to a person unless they choose not to apply it, the person has a reasonable opportunity to choose not to apply it; and
g: a consultative process has been undertaken as described in section 6F, unless the Minister has dispensed with the consultative process under section 6F(3)
h: making the modification will not, in substance, have the effect of extending the period for which a modification previously made under this section, or an exemption previously granted under section 6E Publication of modifications
6: The Minister’s reasons for recommending a modification, and an explanation of the way in which the modification complies with this section, must be published together with the modification.
6E: Exemptions granted by Commissioner
Exemptions
1: Subject to subsection (2), the Commissioner may grant an exemption from a provision of the Inland Revenue Acts if the Commissioner is satisfied that the exemption is reasonably necessary to do 1 or more of the following:
a: to remedy or mitigate the effect of an obvious error in a provision of the Inland Revenue Acts:
b: to give effect to the intended purpose or object of a provision of the Inland Revenue Acts, or to resolve ambiguity:
c: to reconcile an inconsistency between certain provisions of the Inland Revenue Acts, or between the relevant provision and an administrative practice of the Commissioner. Limitations
2: The Commissioner may grant the exemption only if the Commissioner is satisfied that—
a: the exemption—
i: does not materially affect the intended scope or effect of the provisions to which it applies; and
ii: is not inconsistent with the intended purpose or object of the relevant provision; and
iii: has no, or has only negligible, fiscal implications for the Crown; and
iv: is the most appropriate way of addressing or resolving the issue at the time; and
b: the extent of the exemption is not broader than is reasonably necessary to address or resolve the issue that gave rise to it; and
c: for an exemption that applies to a person unless they choose not to apply it, the person has a reasonable opportunity to choose not to apply it; and
d: a consultative process has been undertaken as described in section 6F, unless the Commissioner has dispensed with the consultative process under section 6F(3); and
e: granting the exemption will not, in substance, have the effect of extending the period for which a modification previously made under section 6D Content of exemptions
3: An exemption made under subsection (1)—
a: must specify a period for which the exemption applies; and
b: must, despite section 6C(3)
c: may—
i: include terms and conditions as the Commissioner thinks fit:
ii: state whether the exemption applies generally or is limited to a particular class of persons or circumstances:
iii: provide for transitional, savings, and related matters. Application periods for exemptions
4: For the purposes of subsection (3)﻿(a), a period for which an exemption applies—
a: must end no later than the end of the second income year after the income year corresponding to the tax year in which the exemption comes into force; and
b: may include a period before the date on which the exemption comes into force, but any period of retrospective application must not extend back further than the start of the income year corresponding to the tax year in which the exemption comes into force; and
c: subject to paragraph (b), may include a period before the date on which this section comes into force. Opt-out or opt-in exemptions permitted
5: For the purposes of subsection (3)﻿(b), an exemption may provide that it applies to a person to whom it is available—
a: unless the person chooses not to apply it; or
b: only if the person chooses to apply it. Publication of exemptions
6: The Commissioner’s reasons for granting an exemption, and an explanation of the way in which the exemption complies with this section, must be published together with the exemption. Status of exemptions
7: An exemption is a legislative instrument and a disallowable instrument for the purposes of the Legislation Act 2012, and must be presented to the House of Representatives under section 41 of that Act.
6F: Consultation on proposed modifications and exemptions
Consultative process
1: Before the Minister of Revenue recommends that a modification be made under section 6D, or the Commissioner grants an exemption under section 6E, a consultative process must be undertaken that includes the distribution, to persons or representatives of persons that it is considered reasonable to consult for the particular purpose, of—
a: the proposed modification or exemption, as applicable; and
b: an explanation of the way in which, as applicable,—
i: the modification would comply with the requirements of section 6D(5):
ii: the exemption would comply with the requirements of section 6E(2). Period of consultation
2: The consultative process must provide a period of consultation of at least 6 weeks. Cases of urgency
3: Despite subsections (1) and (2), the Minister or Commissioner, as applicable, may, if satisfied that a case of urgency exists, either reduce the period of consultation or dispense with the consultative process in relation to a modification or an exemption.
6G: Meaning of obvious error
For the purposes of this subpart, obvious error
a: the intended purpose or object of the relevant provision is clear; and
b: the intended purpose or object cannot be carried into effect by the relevant provision; and
c: the substance of the provision that Parliament would have made, had the error become known or had the circumstances been allowed for, is clear.
86: New subpart heading inserted (Subpart 2C—Functions and powers of Commissioner)
Before section 7 Subpart 2C—Functions and powers of Commissioner
87: New subpart heading inserted (Subpart 2D—Modes of communication)
Before section 14 Subpart 2D—Modes of communication
88: Section 16C amended (Key terms)
In section 16C(3)﻿(a)﻿(iii) a person to whom or to which it relates a person to whom, or an entity to which, it relates
89: Section 17 amended (Information to be furnished on request of Commissioner)
In section 17(1CB) sections 139AB, 143(2) and 143A(2) section 139AB
90: Section 17D amended (Warrants)
In section 17D(5) in section 17(3) of sections 17 and 17C(1)﻿(d), (3), (5), and (6)
91: Section 17E amended (Information or documents treated as in persons’ knowledge, possession, or control)
In section 17E(2) sections 17B(1), 139AB, 143(2), and 143A(2) sections 17B(1) and 139AB
92: Section 22 amended (Keeping of business and other records)
1: In section 22(2BA)﻿(a) English or te reo Maori
2: In section 22(8)﻿(a)﻿(i) English or te reo Maori
93: Section 22A amended (Records required under subpart EW of Income Tax Act 2007)
1: In section 22A(1) English or te reo Maori
2: In section 22A(2) English or te reo Maori
94: Section 22B amended (Further records required)
In section 22B(1) English or te reo Maori
95: Section 23C amended (Meaning of employment income information)
1: In section 23C(4)﻿(a) between the 1st and 15th days of the month in the period that starts on the 1st day of the month and ends on the 15th day of the month
2: In section 23C(4)﻿(b) between the 16th and last day of the month in the period that starts on the 16th day of the month and ends on the last day of the month
96: Section 23F amended (Non-electronic group of employers)
1: In section 23F(3)﻿(b)﻿(i) between the 1st and 15th days of a month in the period that starts on the 1st day of a month and ends on the 15th day of the month
2: In section 23F(3)﻿(b)﻿(ii) between the 16th and last day of the month in the period that starts on the 16th day of the month and ends on the last day of the month
97: Section 26 amended (Records to be kept for RWT purposes)
1: In section 26(1) English or te reo Maori
2: In section 26(2) English or te reo Maori
3: In section 26(4) English or te reo Maori
4: In section 26(6) English or te reo Maori
98: Section 32E amended (Applications for RWT exemption certificates)
Before section 32E(1)
1A: A person who is registered as a charitable trust under the Charitable Trusts Act 1957 is treated as having RWT-exempt status for the duration of the registration.
99: Section 48B amended (Reconciliation statement for retirement scheme contribution withholding tax)
In section 48B(2)﻿(m) 39% 33%
100: Section 91CB amended (Binding rulings on certain matters)
1: In section 91CB(2)﻿(a) section YA 1 of that Act section YA 1 of the Income Tax Act 2007
2: In section 91CB(3)﻿(a) section CB 4 of that Act section CB 4 of the Income Tax Act 2007
3: Repeal section 91CB(3)﻿(c)
101: Section 91EB amended (Application of a private ruling)
After section 91EB(2)﻿(a)
ab: the circumstances are materially different from the circumstances described in the ruling; or
102: Section 143A amended (Knowledge offences)
After section 143A(1)﻿(f)
fb: knowingly does not issue a receipt relating to a supply of distantly taxable goods as required by section 24BAB(3) of the Goods and Services Tax Act 1985; or
fc: knowingly does not provide information relating to a supply of distantly taxable goods as required by section 24BAC of the Goods and Services Tax Act 1985; or
103: Section 143C amended (Offences related to disclosure of sensitive revenue information by revenue officers)
1: Replace section 143C(1)
1: A revenue officer commits an offence against this Act if they—
a: knowingly act in contravention of section 18(1):
b: disclose revenue information knowing that it may adversely affect the integrity of the tax system or prejudice the maintenance of the law.
2: In section 143C(2) person revenue officer
104: Section 185O amended (Application of Common Reporting Standard)
1: In section 185O(2) schedule 2 , part 1
2: In section 185O(3)﻿(b) as amended at the time and as modified and clarified in the ways specified in schedule 2, part 2
105: Schedule 2 amended (Application of CRS standard)
1: In schedule 2 Part 1
2: In schedule 2
2: Items modifying and clarifying Commentary on the CRS standard
1: In the application of the Commentary on the CRS standard Commentary the Entity’s gross income attributable to [certain activities of the Entity]
106: Schedule 7 amended (Disclosure rules)
1: In schedule 7, part A, clause 2
a: for the purpose of carrying into effect a revenue law:
b: to a person or entity specified in clauses 3 to 13 for the purpose and about the matter described in the provision, subject to any conditions set out in the provision.
2: In schedule 7, part C, clause 31 section 156J of the Land Transfer Act 1952 section 86 of the Land Transfer Act 2017 Amendments to Child Support Act 1991
107: Child Support Act 1991 amended
Sections 108 to 113 Child Support Act 1991 2019-06-27 Child Support Act 1991 re section 2(18)
108: Section 89Y amended (Application for exemption on grounds relating to sex offence)
1: Replace section 89Y(1)﻿(a)
a: any of the following apply:
i: another person has been convicted of a sex offence:
ii: another person has been proved before the Youth Court to have committed a sex offence:
iii: the liable parent believes that another person has committed a sex offence; and
2: After section 89Y(1)
1A: A liable parent may apply under subsection (1)﻿(a)﻿(iii)
109: Section 89Z amended (Grant of exemption to victim of sex offence)
1: Replace section 89Z(1)﻿(b) and (c)
b: any of the following apply:
i: the Commissioner is satisfied that another person has been convicted of a sex offence:
ii: the Commissioner is satisfied that another person has been proved before the Youth Court to have committed a sex offence:
iii: in the opinion of the Commissioner, it is likely that another person has committed a sex offence; and
c: the Commissioner is satisfied that the liable parent is a victim of that sex offence; and
2: After section 89Z(1)
1A: The Commissioner may act under subsection (1)﻿(b)﻿(iii)
3: Replace section 89Z(3)
3: However, the period of exemption may commence on a day determined by the Commissioner that is earlier than the day on which the Commissioner received the application for exemption if the Commissioner is satisfied that it is—
a: just and equitable as regards the child, the receiving carer, the liable parent, and any other child, carer, or parent that may be affected by the Commissioner’s decision; and
b: otherwise proper.
110: Section 89ZA amended (Exemption is void if conviction quashed or finding is reversed or set aside)
1: In the heading to section 89ZA if conviction quashed or finding is reversed or set aside in certain circumstances
2: In section 89ZA(1)﻿(b) aside. aside; or
3: After section 89ZA(1)﻿(b)
c: in the case where the Commissioner relies on section 89Z(1)﻿(b)﻿(iii)
4: Replace section 89ZA(2) and (3)
2: Subsection (1) does not prevent a liable parent from making a new application under section 89Y.
3: If, following a new application, an exemption is granted under section 89Z(1), the exemption commences on—
a: the date on which the Commissioner received the new application for the exemption; or
b: an earlier date under section 89Z(3)
111: Section 89ZB amended (Commissioner must give effect to exemption and may take changes into account)
In section 89ZB(2) becoming aware , or deciding,
112: Section 152A amended (Relief in case of exemption granted to liable person)
In section 152A(1)﻿(b) subpart 2 or 4
113: Schedule 1 amended (Application, transitional, and savings provisions relating to amendments to Act made on or after 1 April 2015)
In Schedule 1, after Part 2
3: Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Act 2019
12: Exemption for victim of sex offence may take effect on or after 26 September 2006
1: An application may be made, and an exemption may be granted, under subpart 4 of Part 5A (as in force after commencement) in respect of—
a: a sex offence that was committed (or is alleged to have been committed) before or after commencement:
b: periods before or after commencement.
2: However, a day determined under section 89Z(3)
3: In this clause, commencement section 113 Amendments to Student Loan Scheme Act 2011
114: Student Loan Scheme Act 2011 amended
Sections 115 to 125 Student Loan Scheme Act 2011 2019-06-26 Student Loan Scheme Act 2011 re section 2(1) 2020-04-01 Student Loan Scheme Act 2011 re section 2(22)
115: Section 4 amended (Interpretation)
Section 115 repealed 31 March 2020 section 274 Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020
116: Section 22 amended (Meaning of New Zealand-based)
Replace section 22(1)
1: A borrower is New Zealand-based
a: the borrower is physically in New Zealand for a period of 183 consecutive days; or
b: the borrower is treated as being physically in New Zealand for a period of 183 consecutive days because—
i: the borrower is physically absent from New Zealand for a period, or aggregated periods, of no more than 31 days during a period of 183 consecutive days; and
ii: the borrower is physically in New Zealand for the first day of that 183-day period.
1A: A day on which a borrower is treated as being physically in New Zealand under section 24 or 25 counts in the same way as a day on which the borrower is actually physically in New Zealand.
117: Section 23 amended (Meaning of overseas-based)
Replace section 23(1)
1: The following persons are overseas-based
a: a borrower who is not New Zealand-based under section 22:
b: a New Zealand-based borrower who is physically absent from New Zealand for a period of 184 consecutive days:
c: a New Zealand-based borrower who is treated as physically absent from New Zealand for a period of 184 consecutive days because—
i: the borrower is physically in New Zealand for a period, or aggregated periods, of 31 days or less during a period of 184 consecutive days; and
ii: the borrower is physically absent from New Zealand for the first day of that 184-day period.
1A: A borrower must not be treated as being physically absent from New Zealand for any day on which that borrower is treated as being physically in New Zealand under section 22(1)﻿(b)
1B: A day on which a borrower is treated as being physically in New Zealand under section 24 or 25 counts in the same way as a day on which the borrower is actually physically in New Zealand.
118: Section 73 amended (Meaning of adjusted net income, Schedule 3 adjustments, and related terms)
Section 118 repealed 31 March 2020 section 274 Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020
119: Cross-heading above section 134 replaced
Replace the cross-heading above section 134 Loan interest charged for all overseas-based borrowers
120: Section 134 amended (Loan interest charged for all borrowers)
1: Replace the heading to section 134 Loan interest charged for all overseas-based borrowers
2: Replace section 134(1)
1: A borrower is liable to pay loan interest on his or her loan balance for each day—
a: that the borrower has a loan balance; and
b: that the borrower is overseas-based.
121: Section 135 amended (Loan interest calculated daily and charged and compounded annually)
Replace section 135(1)
1: Loan interest is calculated and accrues each day—
a: that a borrower has a loan balance; and
b: that a borrower is overseas-based.
122: Section 137 repealed (Full interest write-off for New Zealand-based borrowers)
Repeal section 137
123: New section 202A inserted (Treatment of schedular payments)
Section 123 repealed 31 March 2020 section 274 Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020
124: Schedule 2 amended (Application of PAYE rules for purposes of section 70)
Section 124 repealed 31 March 2020 section 274 Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020
125: Schedule 3 amended (Adjustments to net income for purposes of section 73, applying from 1 April 2014 for 2014–2015 and later tax years)
Excluded income
1: In Schedule 3, after clause 5
5A: Excluded income
1: The following amounts are not included in adjusted net income of the borrower: Retirement scheme contributions
a: an amount of retirement scheme contribution that is not excluded income of the borrower and would be their excluded income in the absence of section CX 50B(2) of the Act (Contributions to retirement savings schemes): Amounts of depreciation loss on disposal of building
b: in relation to a building from the disposal of which the borrower derives assessable income, an amount of depreciation loss allowed in the 2002–03 or earlier income year.
2: However, subclause (1)﻿(b) 2007 No 97 s MB 1(5B), (5C) Borrowers who are major shareholders in close companies
2: In Schedule 3, replace clause 8(2) to (5)
2: Section MB 4 of the Act applies as if the references in that section to family scheme income adjusted net income Amendments to Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019
126: Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019
Sections 127 128 Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 2019-06-26 Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 re section 2(1)
127: Section 2 amended (Commencement)
In section 2(31) 194,
128: Section 244 amended (Section OP 22 amended (Consolidated ICA group company’s credit))
Replace section 244(4)
4: If the amendments made by subsections (1) and (2), together with the effect of subsection (3), give rise to a debit balance, or an increase in a debit balance, (the adjustment debit amount adjustment year
a: the company is not liable for further income tax arising under section OB 65, or imputation additional tax arising under section OB 72, or imputation penalty tax arising under section 140B of the Tax Administration Act 1994, for an adjustment debit amount and an adjustment year before the 2018–19 tax year:
b: a company that has an adjustment debit amount and has a debit balance (the resulting debit balance
i: liable for further income tax arising under section OB 65 for the resulting debit balance, to the extent that the resulting debit balance arises from adjustment debit amounts, with a due date for payment that is 7 March 2020, despite section OB 65(3):
ii: not liable for imputation additional tax arising under section OB 72, or imputation penalty tax arising under section 140B of the Tax Administration Act 1994, for the resulting debit balance to the extent that the resulting debit balance arises from the adjustment debit amounts. Amendments to Search and Surveillance Act 2012
129: Schedule to Search and Surveillance Act 2012 amended (Powers in other enactments to which all or part of Part 4 of Search and Surveillance Act 2012 applies)
In the Schedule Tax Administration Act 1994
a: in column 2, replace 16 17 section 16 section 17
b: in column 2, replace 16C(2) 17D(2) and (3) section 16 sections 17 and 17D 2019-06-26 Search and Surveillance Act 2012 re section 2(1) Amendments to Land Transfer Act 2017
130: Land Transfer Act 2017
Sections 131 to 133 Land Transfer Act 2017 2020-01-01 Land Transfer Act 2017 see section 2(21)
131: Section 77 amended (Interpretation)
1: In section 77(1) main home offshore person
2: In section 77(1) non-notifiable transfer
3: Repeal section 77(2)
132: Section 79 amended (Content of tax statement)
1: After section 79(1)﻿(d)
da: if the land has a home on it, state whether the transfer is a main home transfer in relation to the transferor or transferee; and
2: Replace section 79(5) and (6)
5: In this section,— home IRD number section 3(1) main home transfer
a: in relation to a transferor, a transfer of land that has a home on it if the transferor—
i: is a natural person, is not acting in the capacity of the trustee of a trust, and has resided in the home for more than 50% of the period during which the transferor has been an owner of the land; or
ii: is a trustee of a trust a beneficiary of which is a natural person who has resided in the home for more than 50% of the period during which the land has been the property of that trust:
b: in relation to a transferee, a transfer of land that has a home on it if the transferee—
i: is a natural person, is not acting in the capacity of the trustee of a trust, and intends to reside in the home; or
ii: is a trustee of a trust a beneficiary of which is a natural person who intends to reside in the home.
133: Schedule 1 amended (Transitional, savings, and related provisions)
In Schedule 1, after clause 13
2: Provision relating to the Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Act 2019
14: Six-month transitional period for existing agreements
1: The old regime continues to apply in relation to a transfer of land if—
a: an agreement for the transfer of the land was entered into before 1 January 2020; and
b: the instrument of transfer is lodged for registration on or before 1 July 2020.
2: In this section, old regime sections 130 to 133 of the Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Act 2019