Taxation (Urgent Measures and Annual Rates) Act 2008

1: Title
This Act is the Taxation (Urgent Measures and Annual Rates) Act 2008.
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: In Part 1 sections 3 4 15
a: the subsections (1)
b: the subsections (2)
c: the subsections (3)
3: In Part 2
a: sections 24 27 28
b: section 19(1)(a)
c: sections 19(1)(c) 21 25 26
d: sections 19(1)(d) 20(2) to (7) 22
4: In Part 3
a: sections 33(1) 40
b: section 41
c: sections 34 35
d: sections 29 31 33(2) 36(2) 37 39
e: section 32
5: In Part 4 sections 43 44 45 46 48 50 52 53 54 55 56(2) and (3) 57 58
1: Personal tax cuts
3: Application
In this Part sections 6 7 8 9 10 11 17
a: the subsections (1)
b: the subsections (2)
c: the subsections (3) Amendments to Income Tax Act 2007
4: Income Tax Act 2007
Sections 5 to 14 2009-04-01 Income Tax Act 2007
5: Payment of extra pay with other PAYE income payments
1: Section RD 17(2) Between $48,000 and $70,000
2: If the sum of the amounts referred to in subsection (1) is more than $48,000 but no more than $70,000, the amount of tax for the extra pay that must be withheld is the amount determined using the basic amounts of tax for PAYE income payments set out in schedule 2, part B, table 1, row 2 (Basic tax rates for PAYE income payments).
2: Section 5(2) repealed 29 May 2009 section 3 Taxation (Budget Tax Measures) Act 2009
6: Single rate option
1: In section RD 58(1) 64% 61%
2: Section 6(2) repealed 29 May 2009 section 3 Taxation (Budget Tax Measures) Act 2009
7: Alternate rate option
1: In section RD 59(3) 64% 61%
2: Section 7(2) repealed 29 May 2009 section 3 Taxation (Budget Tax Measures) Act 2009
8: Close company option
1: In section RD 60(3)(a) 64% 61%
2: Section 8(2) repealed 29 May 2009 section 3 Taxation (Budget Tax Measures) Act 2009
9: Small business option
1: In section RD 61(3)(a) 64% 61%
2: Section 9(2) repealed 29 May 2009 section 3 Taxation (Budget Tax Measures) Act 2009
10: Schedule 1—Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe benefits: part A
1: Schedule 1 Table 1 Row Range of dollar in taxable income Tax rate 1 $0 – $14,000 0.125 2 $14,001 – $48,000 0.210 3 $48,001 – $70,000 0.330 4 $70,001 upwards 0.380 How to use this table:Find the range in the second column for each dollar in the person's taxable income, and apply the relevant rate for the dollar in the third column.
2:
3: Section 10(2) repealed 29 May 2009 section 3 Taxation (Budget Tax Measures) Act 2009 Section 10(3) repealed 29 May 2009 section 3 Taxation (Budget Tax Measures) Act 2009
11: Schedule 1—Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe benefits: part C
1: Schedule 1 Table 1 Row Range of dollar in all-inclusive pay Tax rate 1 $0 – $12,250 0.1429 2 $12,251 – $39,110 0.2658 3 $39,111 – $53,850 0.4925 4 $53,851 upwards 0.6129 How to use this table:Find the range in the second column for each dollar in the person's all-inclusive pay under section RD 51, and apply the relevant rate for the dollar in the third column.
2:
3: Section 11(2) repealed 29 May 2009 section 3 Taxation (Budget Tax Measures) Act 2009 Section 12(3) repealed 29 May 2009 section 3 Taxation (Budget Tax Measures) Act 2009
12: Schedule 1—Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe benefits: part D
1: Schedule 1 Table 1 Row ESCT rate threshold amount Tax rate 1 $0 – $16,800 0.125 2 $16,801 – $57,600 0.210 3 $57,601 upwards 0.330 How to use this table:Find the range in the second column for the last dollar of the amount of salary or wages under section RD 69(1), and apply the relevant rate in the third column.
2:
3: Section 12(2) repealed 29 May 2009 section 3 Taxation (Budget Tax Measures) Act 2009 Section 13(3) repealed 29 May 2009 section 3 Taxation (Budget Tax Measures) Act 2009
13: Schedule 2—Basic tax rates for PAYE income payments: part A
1: In schedule 2 0.39 0.38
2:
3: Section 13(2) repealed 29 May 2009 section 3 Taxation (Budget Tax Measures) Act 2009 Section 13(3) repealed 29 May 2009 section 3 Taxation (Budget Tax Measures) Act 2009
14: Schedule 2—Basic tax rates for PAYE income payments: part B
1: In schedule 2 0.39 0.38
2:
3: Section 14(2) repealed 29 May 2009 section 3 Taxation (Budget Tax Measures) Act 2009 Section 14(3) repealed 29 May 2009 section 3 Taxation (Budget Tax Measures) Act 2009 Amendments to Tax Administration Act 1994
15: Tax Administration Act 1994
Sections 16 17 Tax Administration Act 1994 2009-04-01 Tax Administration Act 1994
16: PAYE tax codes
1: Section 24B(3)(c)
c: S
d: SH .
2: Section 16(2) repealed 29 May 2009 section 3 Taxation (Budget Tax Measures) Act 2009
17: Annual returns of income not required
1: In section 33A(1)(b)
a: subparagraph (iv)(AA) is repealed:
b: in subparagraph (iv)(A), more than $40,000 but not more than $60,000 more than $48,000 but not more than $70,000
c: subparagraph (iv)(BA) is repealed:
d: subparagraph (v)(AA) is repealed:
e: in subparagraph (v)(A), more than $40,000 but not more than $60,000 more than $48,000 but not more than $70,000
f: subparagraph (v)(BA) is repealed:
g: subparagraph (vi)(AA) is repealed:
h: in subparagraph (vi)(A), more than $40,000 but not more than $60,000 more than $48,000 but not more than $70,000
i: subparagraph (vi)(BA) is repealed:
j: in subparagraph (vib), more than $40,000 more than $48,000
2: Section 17(2) repealed 29 May 2009 section 3 Taxation (Budget Tax Measures) Act 2009
2: Research and development tax credits repeal
Amendments to Income Tax Act 2007
18: Income Tax Act 2007
Sections 19 to 22 Income Tax Act 2007 2008-04-01 Income Tax Act 2007 2009-04-01 Income Tax Act 2007 2009-10-01 Income Tax Act 2007
19: Subpart LH—Tax credits for expenditure on research and development
1: In subpart LH
a: in section LH 2
i: in subsection (1)(b), or a later income year
ii: in subsection (5), paragraphs (c) and (d) are repealed:
b: in section LH 6(5)
i: in paragraph (b), or a later income year
ii: in paragraph (c),––
A: or before
B: or a later income year
c: sections LH 1 to LH 6 LH 8 to LH 14 LH 16
d: section LH 15
2: Subsection (1)(a) and (b)
3: Subsection (1)(c)
20: Definitions
1: This section amends section YA 1
2: The definition of district health board
3: The definition of industry research co-operative
4: The definition of listed research provider
5: The definition of overseas eligible expenditure
6: The definition of research and development project
7: The definition of tertiary institution
21: Some definitions
1: Section YB 20(2)(ob)
2: Subsection (1)
22: Schedule 21 repealed––Expenditure and activities related to research and development
Schedule 21 Amendments to Tax Administration Act 1994
23: Tax Administration Act 1994
Sections 24 to 27 Tax Administration Act 1994 2007-12-19 Tax Administration Act 1994 2009-04-01 Tax Administration Act 1994
24: Interpretation
In section 3(1) response period
a: in subparagraph (i), 1–year period 2-year period
b: in subparagraph (ii), 1–year period 2-year period
25: Annual returns of income not required
1: Section 33A(2)(db)
2: Subsection (1)
26: Non-active companies may be excused from filing returns
1: Section 43A(2)(d)(iib)
2: Subsection (1)
27: Time bar for amendment of income tax assessment
In section 108(1B)(b) 1 year has 2 years have Amendments to Taxation (Business Taxation and Remedial Matters) Act 2007
28: Sections repealed
Sections 188(5) 229 232 (2) 2007-12-19 Taxation (Business Taxation and Remedial Matters) Act 2007
3: Annual rates, independent earner tax credit, and consequential personal tax cuts amendments
Annual rates of income tax for 2009–10 tax year
29: Rates of income tax for 2009–10 tax year
1: Income tax imposed by section BB 1 schedule 1
2: Section 61 2009-04-01 Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008 Amendments to Income Tax Act 2007
30: Income Tax Act 2007
Sections 31 to 37 Income Tax Act 2007 2008-04-01 Income Tax Act 2007 2008-10-01 Income Tax Act 2007 2009-04-01 Income Tax Act 2007
31: New heading and section LC 13
After section LC 12 Tax credits for independent earners
LC 13: Tax credits for independent earners
When this section applies
1: This section applies for a natural person, for a period (the credit period
a: is not receiving an income-tested benefit; and
b: is not receiving a veteran's pension; and
c: is not receiving New Zealand superannuation; and
d: is not entitled to a WFF tax credit; and
e: is not the spouse, civil union partner, or de facto partner of a person who is entitled to a WFF tax credit; and
f: is not receiving an amount that is—
i: granted outside New Zealand; and
ii: in the nature of, and paid for similar purposes as, a benefit, pension, superannuation payment, or tax credit described in paragraphs (a) to (d)
g: is not the spouse, civil union partner, or de facto partner of a person who receives an amount that is—
i: granted outside New Zealand; and
ii: in the nature of, and paid for similar purposes as, a tax credit described in paragraph (d)
h: is resident in New Zealand. Amount of credit
2: For the credit period, the person has a tax credit equal to the positive amount calculated using the formula–– (person's credit − full year abatement) × credit period months / 12. Definition of items in formula
3: The items in the formula are defined in subsections (4) to (6) Person's credit
4: Person's credit Full year abatement
5: Full year abatement Credit period months
6: Credit period months Defined in this Act: amount, civil union partner, de facto partner, income-tested benefit, net income, New Zealand superannuation, resident in New Zealand, tax credit, tax year, veteran's pension, WFF tax credit .
32: Tax credits for independent earners
Section 32 repealed 29 May 2009 section 3 Taxation (Budget Tax Measures) Act 2009
33: Interest
1: In section RE 12(3)(a) clause 4 or 5 clause 3 or 4
2: In section RE 12 Modification for 2009–10
4: Despite subsection (3)(a), the amount of tax that the person must withhold and pay may, if the person chooses, be calculated, under subsection (3), using a tax rate
a: the payment of resident passive income is made in the 2009–10 tax year; and
b: the tax rate under subsection (3)(a) would be 0.39 in the absence of this subsection.
34: Standard method: new personal tax rate persons from 1 October 2008 to end 2012–13 income year
1: In the heading to section RZ 5B 2012–13 2009–10
2: Section RZ 5B(4) to (6) is repealed.
35: GST ratio method: new personal tax rate persons from 1 October 2008 to end 2013–14 income year
1: In the heading to section RZ 5C, 2013–14 2009–10
2: Section RZ 5C(4) to (7) is repealed.
36: Definitions
1: This section amends section YA 1
2: In the definition of civil union partner and section LC 4 (Tax credits for transitional circumstances) and in sections LC 4 and LC 13
37: Schedule 2—Basic tax rates for PAYE income payments: part A
1: In the heading to schedule 2 M ML M ME ML
2: In schedule 2 M ML M ME ML
3: In the heading to schedule 2 M ML M ME ML
4: In schedule 2 M ML M ME ML Amendments to Tax Administration Act 1994
38: Tax Administration Act 1994
Sections 39 40 Tax Administration Act 1994 2008-04-01 Tax Administration Act 1994 2009-04-01 Tax Administration Act 1994
39: PAYE tax codes
In section 24B(3)
a: in paragraph (a), section LC 4 section LC 4 or LC 13
b: after paragraph (a), the following is inserted:
ab: ME section LC 13 .
40: Write-off of tax by Commissioner
After section 177C(1)
1B: The Commissioner may write off an amount of outstanding tax to the extent to which the amount––
a: is outstanding from the 2008–09 tax year; and
b: is tax payable under section MF 5(2) or MF 6(2) of the Income Tax Act 2007, or is otherwise the result of WFF tax credit overpayment or overcrediting; and
c: is outstanding due to amendments to the family scheme made by the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008.
1C: The Commissioner must write off an amount, not exceeding $100, of outstanding tax to the extent to which the amount––
a: is outstanding from the 2008–09 tax year; and
b: is tax payable under section MF 5(2) or MF 6(2) of the Income Tax Act 2007, or is otherwise the result of WFF tax credit overpayment or overcrediting. Amendments to Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008
41: Sections repealed
Sections 7(2) to (4) 8(2) to (4) 10(2) to (4) 11(3) and (4) 13(2) and (3) 14(2) and (3) 15(2) and (3) 16(2) and (3) 18(2) and (3) 2008-05-29 Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008
4: KiwiSaver: 2% employee and employer contribution rates, and repeal of employer tax credits
Amendments to KiwiSaver Act 2006
42: KiwiSaver Act 2006
Sections 43 to 50 KiwiSaver Act 2006 2008-12-15 KiwiSaver Act 2006 2009-04-01 KiwiSaver Act 2006
43: Contribution rate
1: Section 64(1)(a)
a: 2% of the employee's gross salary or wages, if––
i: section 60(1)(a), (b) or (c) first applied in respect of the employee on or after 1 April 2009 and the employee has not given his or her employer a notice under subsection (2)
ii: section 66A applied in respect of the employee immediately before 1 April 2009; or
ab: 4% of the employee's gross salary or wages, if section 60(1)(a), (b) or (c) first applied in respect of the employee before 1 April 2009 and the employee has not given his or her employer a notice under paragraph (b); or .
2: Section 64(2)
2: Despite subsection (1) subsection (1) new rate
44: Contribution rates may be changed by Order in Council
In section 65(1)(a) either or both of the rates a rate
45: Obligation to make deductions: general rule
In section 66 , unless section 66A applies
46: Section 66A repealed
Section 66A
47: Compulsory contributions must be paid on top of gross salary or wages except to the extent that parties otherwise agree after 13 December 2007
Subsection 101B(4)
4: However, on and after 13 December 2007, parties to an employment relationship are free to agree contractual terms and conditions that disregard the purpose of this section described in subsection (1), and, to the extent of such agreement, subsections (1) to (3) do not apply, unless, in respect of the employer and employee,––
a: section 60(1)(a), (b) or (c) first applies on or after the day of assent for the Taxation (Urgent Measures and Annual Rates) Act 2008; and
b: the contractual terms and conditions do not account for the amount of compulsory contributions the employer is required to pay.
4A: In the circumstances described in subsection (4)(a) and (b) subsection (4)
a: compulsory contributions must be paid in addition to an employee's gross salary or wages described in section 101D(3), in accordance with the purpose of this section described in subsection (1); and
b: subsections (2) and (3) apply.
48: Compulsory employer contribution amount: general rule
Section 101D(4)(b)
b: 2%, if the payment of gross salary or wages is made for a pay period that is in a year starting on or after 1 April 2009.
49: New section 235
After section 234
235: Protection from non-compliance: Taxation (Urgent Measures and Annual Rates) Act 2008
1: If, as a result of amendments provided by the Taxation (Urgent Measures and Annual Rates) Act 2008, there is non-compliance with an Act related to securities before 14 February 2009, the non-compliance is ignored unless it continues on or after 14 February 2009.
2: Every provider of a KiwiSaver scheme or a complying superannuation fund, and every person acting on behalf of a provider is exempted in connection with the KiwiSaver scheme or complying superannuation fund from complying with regulation 7A(4) of the Securities Regulations 1983 in respect of information that must be disclosed in an investment statement because of changes to the scheme, fund, or the securities arising from any provision of the Taxation (Urgent Measures and Annual Rates) Act 2008.
3: The exemption in subsection (2)
4: The exemption in subsection (2)
a: set out in a consistent style or format; and
b: clearly identified as relating to particular questions.
5: Subsections (2) to (4)
50: Schedule 4 repealed––Transitional rates for employers and employees
Schedule 4 Amendments to Income Tax Act 2007
51: Income Tax Act 2007
Sections 52 to 57 Income Tax Act 2007 2009-04-01 Income Tax Act 2007
52: Contributions to employee's superannuation schemes
Section DC 7(1B)
53: Tax credits for superannuation contributions
Section MK 1(2)
54: Heading and sections MK 9 to MK 14 repealed
The heading before section MK 9
55: Employer's superannuation contributions
In section RD 65
a: subsection (4)(a) and (b) are replaced by the following:
a: for the employee's KiwiSaver scheme, or for their complying superannuation scheme and subject to the complying fund rules; and
b: no more than the amount of compulsory employer contributions that would be required, for the payment of salary or wages to which the current contribution relates, by subpart 3A of the KiwiSaver Act 2006 in the absence of section 101D(5)(a) of that Act. :
b: subsections (5) to (11) are repealed:
c: in subsection (13), the definitions of complying fund calculation period KiwiSaver calculation period
d: in the list of defined terms compulsory employer contribution
56: Definitions
1: This section amends section YA 1
2: The definition of complying fund calculation period
3: The definition of KiwiSaver calculation period
57: Schedule 28––Requirements for complying fund rules
In schedule 28 section 66 or 66A of the KiwiSaver Act 2006, ignoring the 8% contribution rate section 66, ignoring the 8% and 4% contribution rates Amendment to KiwiSaver Regulations 2006
58: Regulation 20 replaced
Regulation 20 of the KiwiSaver Regulations 2006 is replaced by the following:
20: Fee subsidy
1: This regulation applies for a person if––
a: the person is an employee who is a member of a KiwiSaver scheme, and is subject to the automatic enrolment rules before 1 April 2009:
b: the person is an employee who is a member of a KiwiSaver scheme, and opts in under section 34(1)(b) of the Act before 1 April 2009:
c: a KiwiSaver scheme provider receives a valid application for membership for the person before 1 April 2009.
2: The chief executive of the Department must pay a fee subsidy of $20 for the person on each of the dates for the person provided in subclause (3)
3: For the person,––
a: if 1 or 3 fee subsidy instalments have been paid before 1 April 2009, the date for the purpose of subclause (2)
b: if no fee subsidy instalment has been paid before 1 April 2009, the dates for the purpose of subclause (2)
i: the date on which the Crown contribution made under section 226 of the Act is payable in respect of the person; and
ii: 6 months after the date described in subparagraph (i)
4: Each payment of the fee subsidy must be paid to the provider of the person's KiwiSaver scheme.
5: The provider must use the contribution allocation for the person to credit each payment of the fee subsidy across the investment products of the KiwiSaver scheme to which the member has subscribed or been allocated.
6: However, if the person has subscribed or been allocated to more than 1 investment product of a KiwiSaver scheme and 1 or more of those investment products contain unvested employer contributions or any other contributions that are not fully vested in the member, the provider must, to the extent practicable, credit the fee subsidy on a pro rata basis across only the investment products that do not contain those sorts of contributions. 2009-04-01 KiwiSaver Regulations 2006