Taxation (International Investment and Remedial Matters) Act 2012

1: Title
This Act is the Taxation (International Investment and Remedial Matters) Act 2012.
2: Commencement
1: This Act comes into force on the day on which it receives the Royal assent, except as provided in this section.
2: Sections 19(4) to (7), (9), and (11) 24 26 27 39(1), (4), and (5) 49(1) and (4) 51(3), (5), and (7) 53(1), (3), (5), and (7) 54 55(1) and (4) 64 65 71 73 77(1) to (3), (6), (7), and (9) 79 104 106 108 117 119 121 132(3), (27), (29), (34), and (35) 135 143 147
3: Section 131
4: Section 148(1)
5: Sections 132(30) 148(2)
6: Section 132(16)
7: Sections 4 5 6 7 8 9 10 11 12 13 14 15 16 18 19(1) to (3), (8), and (10) 20 to 23 25 28 29 31 32 33 34 35 36 37 38 39(2), (3), and (6) 40 41 42 43 44 45 46 48 49(2), (3), and (5) 50 51(1), (2), (4), and (6) 52 53(2), (4), (6), and (8) 55(2), (3), and (5) 56 57 58 59 60 61 62 63 67 68 69 72 74 76 77(4), (5), (8), and (10) 78 80 81(1) and (3) 82(1), (3), and (5) 83(1), (3), and (5) 84(1), (3), and (5) 85(1), (3), and (4) 87(1), (3), (5), (6), and (8) 89(2), (4), and (7) 90 91 93 94 95 96 97 98 99 102 111 112 113 114 115 126 127 128 129 130 132(2), (4), (6), (7), (9), (10), (11), (15), (17), (18), (19) to (21), (23) to (26), (28), (32), (33), and (36) 136 137 140(2) and (5) 141 142 144 145(2) and (4)
8: Section 138
9: Sections 66 70 75 81(2) and (4) 82(2), (4), and (6) 83(2), (4), and (6) 84(2), (4), and (6) 85(2) and (5) 86 87(2), (4), (7), and (9) 88 89(1), (3), (5), and (6) 92 100 101 103 105 107 109 110 116 118 120 122 123 124 125 132(5), (8), (12) to (14), (22), (31), and (37) 133 134 140(1), (3), and (4) 145(1) and (3) 146
10: Section 17
1: Amendments to Income Tax Act 2007
3: Income Tax Act 2007
This Part amends the Income Tax Act 2007 2012-05-07 Income Tax Act 2007 Sections of this Part except those listed below 2012-07-01 Income Tax Act 2007 Sections 66,70, 75, 81(2) and (4), 82(2), (4), and (6), 83(2), (4), and (6), 84(2), (4), and (6), 85(2) and (5), 86, 87(2), (4), (7), and (9), 88, 89(1), (3), (5), and (6), 92, 100, 101, 103, 105, 107, 109, 110, 116, 118, 120, 122, 123, 124, 125, 132(5), (8), (12) to (14), (22), (31), and (37), 133, 134 come into force on 1 July 2012 2012-10-01 Income Tax Act 2007 Section 17 comes into force on 1 October 2012
4: Elections to make bonus issue into dividend
1: In section CD 8(1)(a)(ii) or CW 11 (Dividend of conduit tax relief holding company)
2: Subsection (1) applies for income years beginning on or after 1 July 2011.
5: Foreign investment fund income
1: Section CD 36(2) Exclusion for interests in FIFs resident in Australia
2: Subsection (1)(b)(iv) does not apply if the person's interest in the company is included, at the beginning of the income year in which the payment is made, in a direct income interest of 10% or more in a FIF that, at the beginning of the income year,—
a: meets the requirements of section EX 35(b)(i) to (iii) (Exemption for interest in FIF resident in Australia); and
b: does not have its liability for income tax reduced by an exemption, allowance, or relief referred to in section EX 35(c)(i) or (ii).
2: In section CD 36 grey list company
3: Subsection (1) applies for income years beginning on or after 1 July 2011.
6: Prevention of double taxation of share cancellation dividends
1: In section CD 53(3) to CW 11 and CW 10
2: Subsection (1) applies for income years beginning on or after 1 July 2011.
7: When attributed CFC income arises
1: After section CQ 2(1)(b)
bb: the person is not a portfolio investment entity; and .
2: In section CQ 2(2) Branch equivalent method Attributable FIF income method
3: In section CQ 2(2)(b) branch equivalent method attributable FIF income method
4: In section CQ 2
a: branch equivalent method
b: attributable FIF income method portfolio investment entity
5: Subsections (1) to (3) apply for income years beginning on or after 1 July 2011.
8: When FIF income arises
1: Section CQ 5(1)(c)(v)
v: the exemption in section EX 35 (Exemption for interest in FIF resident in Australia): .
2: In section CQ 5(1)(c)(xiv) exception); and exception):
xv: an exemption given by sections EX 50, EX 18A(2)(b)(i), and EX 21B (which relate to the attributable FIF income method and FIFs corresponding to non-attributing active CFCs); and .
3: Section CQ 5(1)(d) and (e)
d: if the person is a natural person and not acting as a trustee,—
i: the total cost, calculated under section EX 68 (Measurement of cost), of attributing interests in FIFs that the person holds at any time in the year when the person is a New Zealand resident is more than $50,000:
ii: the person includes, in a return for the year, FIF income or loss from an attributing interest in a FIF:
iii: the person has, in the return for 1 of the preceding 4 income years (the earlier year
e: if the person is acting as trustee of a trust that meets the requirements of subsection (5),—
i: the total cost, calculated under section EX 68, of attributing interests in FIFs that the person holds at any time in the year is more than $50,000:
ii: the person includes, in a return for the year, FIF income or loss from an attributing interest in a FIF:
iii: the person has, in the return for 1 of the preceding 4 income years (the earlier year .
4: In section CQ 5(2) accounting profits method or branch equivalent method attributable FIF income method
5: In section CQ 5
a: accounting profits method branch equivalent method
b: attributable FIF income method loss
6: Subsections (1) to (4) apply for income years beginning on or after 1 July 2011.
9: Dividend derived from foreign company
1: In section CW 9(2)(a) a direct income interest that meets the requirements of neither section EX 34 (CFC rules exemption) nor section EX 35 (Exemption for interest in FIF resident in Australia) and is excluded from being an attributing interest by—
2: Section CW 9(3) is replaced by the following: Non-application to certain dividends
3: This section does not apply to a dividend—
a: derived by a portfolio investment entity:
b: excluded by section CD 36(2) (Foreign investment fund income) from the effect of section CD 36(1).
3: In section CW 9
a: multi-rate PIE portfolio tax rate entity
b: portfolio investment entity
4: Subsections (1) and (2) apply for income years beginning on or after 1 July 2011.
10: Section CW 11 repealed
1: Section CW 11
2: Subsection (1) applies for income years beginning on or after 1 July 2011.
11: Dividends derived by qualifying companies
1: In section CW 14 Sections CW 10 and CW 11 do Section CW 10 does
2: Subsection (1) applies for income years beginning on or after 1 July 2011.
12: When attributed CFC loss arises
1: After section DN 2(1)(b)
bb: the person is not a portfolio investment entity; and .
2: In section DN 2 portfolio investment entity
3: Subsection (1) applies for income years beginning on or after 1 July 2011.
13: Ring-fencing cap on deduction
1: In section DN 4(1)(b) branch equivalent method attributable FIF income method
2: In section DN 4
a: branch equivalent method
b: attributable FIF income method
3: Subsection (1) applies for income years beginning on or after 1 July 2011.
14: Foreign investment fund loss
1: In section DN 5(2) branch equivalent method attributable FIF income method
2: In section DN 5
a: branch equivalent method
b: attributable FIF income method
3: Subsection (1) applies for income years beginning on or after 1 July 2011.
15: When FIF loss arises
1: Section DN 6(1)(c)(v)
v: the exemption in section EX 35 (Exemption for interest in FIF resident in Australia): .
2: In section DN 6(1)(c)(xiv) exception); and exception):
xv: an exemption given by sections EX 50, EX 18A(2)(b)(i), and EX 21B (which relate to the attributable FIF income method and FIFs corresponding to non-attributing active CFCs); and .
3: Section DN 6(1)(d) and (e)
d: if the person is a natural person and not acting as a trustee,—
i: the total cost, calculated under section EX 68 (Measurement of cost), of attributing interests in FIFs that the person holds at any time in the year when the person is a New Zealand resident is more than $50,000:
ii: the person includes, in a return for the year, FIF income or loss from an attributing interest in a FIF:
iii: the person has, in the return for 1 of the preceding 4 income years (the earlier year
e: if the person is acting as trustee of a trust that meets the requirements of subsection (4),—
i: the total cost, calculated under section EX 68, of attributing interests in FIFs that the person holds at any time in the year is more than $50,000:
ii: the person includes, in a return for the year, FIF income or loss from an attributing interest in a FIF:
iii: the person has, in a return for 1 of the preceding 4 income years (the earlier year .
4: In section DN 6(2) accounting profits method or branch equivalent method attributable FIF income method
5: In section DN 6
a: accounting profits method branch equivalent method
b: attributable FIF income method FIF income loss
6: Subsections (1) to (4) apply for income years beginning on or after 1 July 2011.
16: Ring-fencing cap on deduction: branch equivalent method
1: In the heading to section DN 8 branch equivalent method attributable FIF income method
2: In section DN 8(1) branch equivalent method attributable FIF income method
3: In section DN 8, in the list of defined terms,—
a: branch equivalent method
b: attributable FIF income method
4: Subsections (1) and (2) apply for income years beginning on or after 1 July 2011.
17: Section DX 3 repealed
1: Section DX 3
2: Subsection (1) applies for the 2013–14 and later income years.
18: Section EX 14 replaced
1: Section EX 14
EX 14: Attribution: 10% threshold, not PIE
Persons with attributed CFC income or loss
1: A person has attributed CFC income or loss from a CFC only if the person—
a: has an income interest in the CFC of 10% or more for the relevant accounting period; and
b: is not a portfolio investment entity. Portfolio investment entity
2: A portfolio investment entity that would have attributed CFC income or loss from a CFC in the absence of subsection (1)(b) has FIF income or loss from the CFC under the FIF rules. accounting period, attributed CFC income, CFC, FIF income, FIF rules, income interest, loss, PIE, portfolio investment entity .
2: Subsection (1) applies for income years beginning on or after 1 July 2011.
19: Attributable CFC amount
1: In section EX 20B(3)(a) a dividend that is paid in relation to rights that are a direct income interest in a foreign company, meet the requirements of neither section EX 34 section EX 35
2: Section EX 20B(3)(m)(ii)
ii: owned by the CFC or by a FIF that is associated with the CFC; and .
3: After section EX 20B(3)(n)
p: a dividend that is excluded by section CD 36(2) (Foreign investment fund income) from the effect of section CD 36(1).
4: Section EX 20B(5)(d)(i) to (iii)
i: paid to the CFC by a person not associated with the CFC under section YB 2, or by a CFC associated with the CFC under section YB 2 that has received a royalty payment from such a person or a royalty payment arising from such a royalty payment; and
ii: from property owned by a New Zealand resident who is resident in no other country under all applicable double tax agreements; and
iii: from property licensed to the CFC, or to a CFC associated with the CFC under section YB 2, (the licensee
5: Section EX 20B(7)(a)
a: from land in a country or territory with which the CFC has a taxed CFC connection: .
6: Section EX 20B(11)(a)
a: the service is the transmission, emission, or reception of information between New Zealand and a country or territory with which the CFC has a taxed CFC connection; and .
7: Section EX 20B(11)(c) and (d)
c: the service is performed by a person, other than the CFC, who—
i: is resident in New Zealand, and is resident in no other country under all applicable double tax agreements:
ii: has a fixed establishment in New Zealand that is a permanent establishment under all applicable double tax agreements; and
d: the service is performed by the person as part of a business in New Zealand of providing telecommunication services in New Zealand—
i: carried on through the person's fixed establishment, if the person is not resident in New Zealand; and
ii: from which the person derives assessable income of more than $5,000,000 per annum.
8: In section EX 20B attributable FIF income method
9: In section EX 20B taxed CFC connection
10: Subsections (1) to (3) apply for income years beginning on or after 1 July 2011.
11: Subsections (4) to (7) apply for income years beginning on or after 1 July 2009.
20: Net attributable CFC income or loss
1: Section EX 20C(6)(a)(ii)
ii: that are distributions relating to fixed-rate foreign equity or deductible foreign equity distributions of the CFC and are paid by the CFC to a company resident in New Zealand, to another CFC, or to a FIF for which the interest holder uses the attributable FIF income method: .
2: Section EX 20C(6)(c)(i)
i: under which the CFC provides funds to another CFC associated with the CFC under section YB 2 (Two companies) or to a FIF for which the interest holder uses the attributable FIF income method and that is associated with the CFC under section YB 2; and .
3: Section EX 20C(7)(b)(i)
i: held by a company that is a New Zealand resident, a CFC, or a FIF for which the interest holder uses the attributable FIF income method; and .
4: Subsections (1) to (3) apply for income years beginning on or after 1 July 2011.
21: Adjustment of fraction for excessively debt funded CFC
1: Section EX 20D(6)(b) and (c)
b: fixed-rate foreign equity that is issued by the CFC and held by a company that is a New Zealand resident, a CFC, or a FIF for which the interest holder uses the attributable FIF income method:
c: shares issued by the CFC in relation to which the CFC makes deductible foreign equity distributions to a company that is a New Zealand resident, a CFC, or a FIF for which the interest holder uses the attributable FIF income method.
2: Section EX 20D(7)(b)(i)
i: under which the CFC provides funds to another CFC that is associated with the CFC under section YB 2 (Two companies) or to a FIF for which the interest holder uses the attributable FIF income method and that is associated with the CFC under section YB 2; and .
3: Section EX 20D(10)
10: The formula for the CFC's fraction is— attributable foreign company assets total foreign company assets.
4: Section EX 20D(12) and (13) Attributable foreign company assets
12: Attributable foreign company assets
a: used for the purpose of deriving an attributable CFC amount or an amount that is included in net attributable FIF income or loss; and
b: not used for the purpose of deriving an amount other than an amount referred to in paragraph (a). Total foreign company assets
13: Total foreign company assets
5: In section EX 20D attributable FIF income method net attributable FIF income loss
6: Subsections (1) to (4) apply for income years beginning on or after 1 July 2011.
22: Relative debt-asset ratio for CFC
1: Section EX 20E(5)(b) and (c)
b: fixed-rate foreign equity issued by a member of the group and held by a company that is a New Zealand resident, a CFC, or a FIF for which the interest holder uses the attributable FIF income method:
c: equity interests issued by a member of the group in relation to which the member makes deductible foreign equity distributions to a company that is a New Zealand resident, a CFC, or a FIF for which the interest holder uses the attributable FIF income method.
2: In section EX 20E attributable FIF income method
3: Subsection (1) applies for income years beginning on or after 1 July 2011.
23: Attributable CFC amount and net attributable CFC income or loss: calculation rules
1: Section EX 21(31)
31: Subsection (30) does not apply if another party to the lease is a New Zealand resident, a CFC, or a FIF for which the taxpayer uses the attributable FIF income method.
2: In section EX 21 attributable FIF income method
3: Subsections (1) and (2) apply for income years beginning on or after 1 July 2011.
24: Non-attributing active CFCs
1: After section EX 21B(3) Single test for each CFC
4: In determining whether CFCs are non-attributing active CFCs for an accounting period under a test in section EX 21D or EX 21E, an interest holder must not use the result of a test applied to a test group that includes a CFC if the person uses for the period a result of the same or a different test applied to the CFC, alone or as part of a different test group.
2: Subsection (1) applies for income years beginning on or after 1 July 2009.
25: Applicable accounting standards for section EX 21E
1: Section EX 21C(9)(c)(i)
i: fraudulent activity by the interest holder, the CFC, a company in the CFC's test group, or the auditor: .
2: In section EX 21C company
3: Subsection (1) applies for income years beginning on or after 1 July 2011.
26: Non-attributing active CFC: default test
1: Section EX 21D(1)(a)
a: each subject to the laws of the same country or territory and having a taxed CFC connection with the country or territory; and .
2: In section EX 21D taxed CFC connection
3: Subsection (1) applies for income years beginning on or after 1 July 2009.
27: Non-attributing active CFC: test based on accounting standard
1: Section EX 21E(2)(b)
b: each company is subject to the laws of the same country or territory and has a taxed CFC connection with the country or territory; and .
2: After section EX 21E(9)(c)
cb: gain or loss from a financial asset that is a financial arrangement or agreement referred to in section EX 20B(12): .
3: After section EX 21E(10)(a)
ab: income from rent: .
4: In section EX 21E taxed CFC connection
5: Subsections (1) to (3) apply for income years beginning on or after 1 July 2009.
28: CFC rules exemption
1: In section EX 34(b) falls. falls; and
c: the person is not a portfolio investment entity.
2: In section EX 34 portfolio investment entity
3: Subsection (1) applies for income years beginning on or after 1 July 2011.
29: Section EX 35 replaced
1: Section EX 35
EX 35: Exemption for interest in FIF resident in Australia
A person's rights in a FIF in an income year are not an attributing interest if,—
a: at all times in the year, the rights are a direct income interest of 10% or more; and
b: at all times in the year, the FIF is—
i: resident in Australia; and
ii: under Australian law, subject to income tax on its income or treated as part of the head company of a consolidated group subject to income tax on its income; and
iii: treated as being resident in Australia under all agreements between the Government of Australia and the governments of other territories that would be a double tax agreement if between the Government of New Zealand and the government of the other country or territory; and
c: the FIF's liability for income tax for the income year is not reduced by—
i: an exemption from income tax for income derived from business activities carried on outside Australia:
ii: a special allowance, relief, or exemption with respect to offshore banking units; and
d: at all times in the year, the person is none of the following:
i: a portfolio investment entity:
ii: a superannuation scheme:
iii: a unit trust:
iv: a life insurer:
v: a group investment fund. attributing interest, direct income interest, double tax agreement, FIF, group investment fund, income tax, income year, life insurer, portfolio investment entity, resident in Australia, superannuation scheme, unit trust .
2: Subsection (1) applies for income years beginning on or after 1 July 2011.
30: New resident's accrued superannuation entitlement exemption
1: In section EX 42(1)(a) subsections (2) to (4) subsection (2)
2: Section EX 42(2) Requirements for accrual of rights
2: The rights must have accrued—
a: when the person is not a New Zealand resident:
b: during a period for which the person is a New Zealand resident that—
i: begins when the person becomes a New Zealand resident; and
ii: ends before the first day of the fifth income year following the income year in which the person becomes a New Zealand resident:
c: as a result of rights that satisfy paragraph (a) or (b).
3: Section EX 42(3) and (4)
31: Six calculation methods
1: In the heading to section EX 44 Six Five
2: Section EX 44(1)(a)
3: Section EX 44(1)(b)
b: the attributable FIF income method; or .
4: In section EX 44
a: accounting profits method branch equivalent method
b: attributable FIF income method
5: Subsections (1) to (3) apply for income years beginning on or after 1 July 2011.
32: Limits on choice of calculation methods
1: Section EX 46(2)
2: Section EX 46(3) Attributable FIF income method
3: A person may use the attributable FIF income method to calculate FIF income or loss from an attributing interest in a FIF for an accounting period only if the person can provide to the Commissioner, if requested, sufficient information to enable the Commissioner to check the calculations required by section EX 50 and,—
a: at all times in the accounting period,—
i: the FIF is a company; and
ii: the item income interest
iii: the person is not a portfolio investment entity:
b: the FIF is a CFC and the person cannot determine the market value of the attributing interest at the beginning of the accounting period except by independent valuation and neither the person nor a person who has a direct income interest of 10% or more in the FIF is—
i: a listed company:
ii: a group investment fund:
iii: a portfolio investment entity:
iv: a superannuation scheme:
v: a unit trust:
vi: a trustee of a trust with a beneficiary described in 1 or more of subparagraphs (i) to (iv).
3: Section EX 46(4)
4: Section EX 46(5) Deemed rate of return method
5: A person may use the deemed rate of return method to calculate FIF income or loss from an attributing interest in a FIF only if the person is required by section EX 47 to use the deemed rate of return method for the interest.
5: Section EX 46(6)(c)
6: Section EX 46(7)
7: In section EX 46(8) Despite subsection (7), a person A person
8: Section EX 46(9)(a)
9: In section EX 46
a: branch equivalent method
b: attributable FIF income method
10: Subsections (1) to (8) apply for income years beginning on or after 1 July 2011.
33: Default calculation method
1: Section EX 48(2) Default choice
2: The person is treated as having chosen to use, for the period,—
a: the fair dividend rate method if it is practical to use it; and
b: the cost method if it is not practical to use the fair dividend rate method.
2: In section EX 48 accounting profits method comparative value method deemed rate of return method
3: Subsection (1) applies for income years beginning on or after 1 July 2011.
34: Section EX 49 repealed
1: Section EX 49
2: Subsection (1) applies for income years beginning on or after 1 July 2011.
35: Branch equivalent method
1: The heading to section EX 50 Attributable FIF income method
2: In section EX 50(1)
a: branch equivalent method attributable FIF income method
b: in the formula, branch equivalent net attributable FIF
3: Section EX 50(3) Net attributable FIF income or loss
3: Net attributable FIF income or loss
a: sections EX 18A to EX 21E, EX 24, and EX 25, as modified by subsection (4B), as if the FIF were a CFC and the person's attributing interests in the FIF were income interests in the CFC; and
b: subsections (5) and (6).
4: After section EX 50(4) Modifications to method of calculating net attributable CFC income or loss
4B: The net attributable FIF income or loss of a FIF is calculated as if—
a: section EX 20B(5)(c)(i) required that the royalty be paid by a foreign company meeting the requirements of section EX 50(4C):
b: section EX 20B(5)(d) were omitted:
c: section EX 20B(7)(c) required that the rent be paid by a foreign company meeting the requirements of section EX 50(4C):
d: section EX 20B(12)(a) required that the financial arrangement or agreement be an agreement by the CFC to lend money to a foreign company meeting the requirements of section EX 50(4C):
e: section EX 21C(2)(a) required—
i: the interest holder or other person to have accounts that include the accounts of the CFC, including by proportionate consolidation under NZIAS 31:
ii: the interest holder or other person to have accounts that include dividends and net fair value changes in relation to the CFC under NZIAS 39, or include amounts recognised under the equity method in NZIAS 28 or NZIAS 31, and the CFC to have accounts that are prepared under United States generally accepted accounting principles and meet the requirements of section EX 21C(8) for accounts prepared under those principles in the United States of America:
f: section EX 21C(3)(a) required—
i: the interest holder or other person to have accounts that include the accounts of the members of the test group, including by proportionate consolidation under NZIAS 31:
ii: the interest holder or other person to have accounts that include dividends and net fair value changes in relation to the members under NZIAS 39, or include amounts recognised under the equity method in NZIAS 28 or NZIAS 31, and the members to have accounts that are prepared under United States generally accepted accounting principles and meet the requirements of section EX 21C(8) for accounts prepared under those principles in the United States of America:
g: section EX 21C(4)(a) required—
i: the interest holder or other person to have accounts that include the accounts of the CFC, including by proportionate consolidation under the IFRSE corresponding to NZIAS 31:
ii: the interest holder or other person to have accounts that include dividends and net fair value changes in relation to the CFC under the IFRSE corresponding to NZIAS 39, or include amounts recognised under the equity method in the IFRSE corresponding to NZIAS 28 or NZIAS 31, and the CFC to have accounts that are prepared under United States generally accepted accounting principles and meet the requirements of section EX 21C(8) for accounts prepared under those principles in the United States of America:
h: section EX 21C(5)(a) required—
i: the interest holder or other person to have accounts that include the accounts of the members of the test group, including by proportionate consolidation under the IFRSE corresponding to NZIAS 31:
ii: the interest holder or other person to have accounts that include dividends and net fair value changes in relation to the members under the IFRSE corresponding to NZIAS 39, or include amounts recognised under the equity method in the IFRSE corresponding to NZIAS 28 or NZIAS 31, and the members to have accounts that are prepared under United States generally accepted accounting principles and meet the requirements of section EX 21C(8) for accounts prepared under those principles in the United States of America:
i: section EX 21D(1)(a) required that none of the other companies in the test group be a CFC:
j: section EX 21D(1)(b) required that the CFC hold a voting interest of more than 50% in each of the other companies in the test group:
k: section EX 21D(3)(b) were omitted:
l: section EX 21E(2)(b) required that none of the other companies in the test group be a CFC:
m: section EX 21E(2)(c) required that the CFC hold a voting interest of more than 50% in each of the other companies in the test group:
n: section EX 21E(2)(d) were omitted:
o: section EX 21E(4)(c) were omitted:
p: the references in section EX 21E(7)(f) and (g) to NZIAS 39 whichever is appropriate of NZIAS 39, an equivalent IFRSE, and an equivalent standard or principle included in United States generally accepted accounting principles
q: section EX 21E(9)(a) required that an amount in the category be a dividend that is—
i: not included in the attributable CFC amount for the accounting period under section EX 20B(3)(a) to (c); and
ii: paid by a company other than 1 from which the person does not have additional FIF income or loss under subsection (6) because of the application of subsection (7B)(b):
r: the references in section EX 21E(10)(c) and (d) to NZIAS 39 whichever is appropriate of NZIAS 39, an equivalent IFRSE, and an equivalent standard or principle included in United States generally accepted accounting principles
s: the references in section EX 21E(12)(d) to NZIAS 39 whichever is appropriate of NZIAS 39, an equivalent IFRSE, and an equivalent standard or principle included in United States generally accepted accounting principles
t: the reference in section EX 21E(12)(g) to NZIAS 32 whichever is appropriate of NZIAS 32, an equivalent IFRSE, and an equivalent standard or principle included in United States generally accepted accounting principles Requirements for foreign company making payments to FIF
4C: A foreign company making payments to a FIF meets the requirements of this subsection if—
a: the person uses the attributable FIF income method for the foreign company; and
b: the foreign company, if it were a CFC, would be a non-attributing active CFC under section EX 21B(2) in the absence of section EX 20B(5)(c)(i), (7)(c), and (12)(a); and
c: a group of persons holds total voting interests of more than 50% in the FIF and in the foreign company; and
d: the FIF and the foreign company each have a taxed FIF connection with the same country or territory.
5: In section EX 50(5)(a) branch equivalent income or loss net attributable FIF income or loss
6: After section EX 50(7) Exception to subsection (6)
7B: A person does not have additional FIF income or loss under subsection (6) from a FIF with an interest in a foreign company if—
a: the foreign company meets the test for a non-attributing active CFC under section EX 21B(2) and the person—
i: would be able to use the attributable FIF income method for the foreign company if the person held the FIF's interest in the foreign company:
ii: is able to include the foreign company in the same test group as the FIF under section EX 21D or EX 21E:
b: the FIF would meet the test for a non-attributing active CFC under section EX 21B(2)(b) if the following amounts relating to the interest in the foreign company reported in the accounts of the FIF, or in the consolidated accounts of the FIF's test group under section EX 21E, were included in the items added passive and reported revenue under section EX 21E(5), (8), and (10) for the FIF or the test group:
i: amounts recognised in profit and loss under the equity method under whichever is appropriate of NZIAS 28, NZIAS 31, an equivalent IFRSE, and an equivalent standard or principle in the generally accepted accounting principles in the United States of America:
ii: amounts recognised in profit or loss under proportionate consolidation under whichever is appropriate of NZIAS 31, an equivalent IFRSE, and an equivalent standard or principle in the generally accepted accounting principles in the United States of America:
iii: dividends and net fair value changes recognised in profit or loss in relation to investments accounted for under whichever is appropriate of NZIAS 39, an equivalent IFRSE, and an equivalent standard or principle in the generally accepted accounting principles in the United States of America:
c: the interest in the foreign company would be excluded by section EX 35 from being an attributing interest if the interest were held by the person.
7: In section EX 50(9)(d) branch equivalent method attributable FIF income method
8: In section EX 50
a: branch equivalent income branch equivalent method
b: attributable FIF income method net attributable CFC income net attributable FIF income non-attributing active CFC NZIAS 28 NZIAS 31 NZIAS 39 taxed FIF relationship voting interest
9: Subsections (1) to (7) apply for income years beginning on or after 1 July 2011.
36: Comparative value method
1: Section EX 51(7)
7: Subsection (8) applies to a person who calculates under subsection (1) an amount of FIF loss for an attributing interest in a FIF (the affected interest
2: In section EX 51 direct income interest
3: Subsection (1) applies for income years beginning on or after 1 July 2011.
37: Fair dividend rate method: usual method
1: Section EX 52(5)(b)
b: are not, at the beginning of the income year, included in a direct income interest of 10% or more in a FIF that, at the beginning of the year,—
i: meets the requirements of section EX 35(b)(i) to (iii); and
ii: does not have its liability for income tax reduced by an exemption, allowance, or relief referred to in section EX 35(c)(i) or (ii).
2: In section EX 52 direct income interest
3: Subsection (1) applies for income years beginning on or after 1 July 2011.
38: Fair dividend rate method for unit-valuing funds and others by choice
1: Section EX 53(5)(b)
b: are not, at the beginning of the income year, included in a direct income interest of 10% or more in a FIF that, at the beginning of the year,—
i: meets the requirements of section EX 35(b)(i) to (iii); and
ii: does not have its liability for income tax reduced by an exemption, allowance, or relief referred to in section EX 35(c)(i) or (ii).
2: In section EX 53 direct income interest
3: Subsection (1) applies for income years beginning on or after 1 July 2011.
39: Additional FIF income or loss if CFC owns FIF
1: In section EX 58(1)(b) branch equivalent income net attributable CFC income
2: In section EX 58(4)(c) branch equivalent method attributable FIF income method
3: Section EX 58(5) Exceptions
5: Despite subsection (4), the CFC's FIF income or loss does not include—
a: any amount actuarially determined to be attributable to policyholders in the CFC or another company as a result of applying section EX 21(25) and (26) to the CFC:
b: any amount from an interest that would be excluded under section EX 35 from being an attributing interest if held by the person instead of the CFC.
4: In section EX 58 branch equivalent income
5: Subsection (1) applies for income years beginning on or after 1 July 2009.
6: Subsections (2) and (3) apply for income years beginning on or after 1 July 2011.
40: Codes: comparative value method, deemed rate of return method, fair dividend rate method, and cost method
1: Section EX 59(1B) Exclusion for interests in FIFs resident in Australia
1B: Subsection (1)(c) does not apply if the person's interest in the company is included, at the beginning of the income year in which the payment is made, in a direct income interest of 10% or more in a FIF that, at the beginning of the income year,—
a: meets the requirements of section EX 35(b)(i) to (iii); and
b: does not have its liability for income tax reduced by an exemption, allowance, or relief referred to in section EX 35(c)(i) or (ii).
2: In section EX 59 grey list company
3: Subsection (1) applies for income years beginning on or after 1 July 2011.
41: Limits on changes of method
1: Section EX 62(2)(a)
a: in the case of the accounting profits method,—
i: section EX 46(2) is repealed:
ii: before the date of the repeal of section EX 46(2), that section prevents its continued use or it is impossible to obtain enough information to continue to use it: .
2: Section EX 62(2)(b)
b: in the case of the attributable FIF income method, section EX 46(3)(a) or (b) prevents its continued use or it is impossible to obtain enough information to continue to use it: .
3: Section EX 62(2)(c)
c: in the case of the comparative value method,—
i: section EX 46(6) prevents its continued use:
ii: it is impossible to find out the end-of-year market value of the interest: .
4: Section EX 62(2)(d)
5: Section EX 62(2)(e)
e: in the case of the deemed rate of return method, the person is required by section EX 47 to use the comparative value method: .
6: Section EX 62(2)(g)
g: in the case of the cost method, section EX 46(9) prevents its continued use.
7: In section EX 62(3)(b)(ii) branch equivalent method attributable FIF income method
8: Section EX 62(6) Changing to or from the attributable FIF income method
6: A person may make an election under subsection (3) to change to or from the attributable FIF income method if—
a: they are changing from the branch equivalent method:
b: this is the first time they have chosen to change to or from the attributable FIF income method for an attributing interest in the FIF, other than under paragraph (a):
c: subsection (7) allows them to make another election.
9: In section EX 62(7) branch equivalent method attributable FIF income method
10: After section EX 62(9) Change to fair dividend rate method for first income year beginning on or after 1 July 2011
10: A person may change to the fair dividend rate method from the accounting profits method, the branch equivalent method, or the deemed rate of return method in the person's return of income for the first income year beginning on or after 1 July 2011.
11: In section EX 62
a: branch equivalent method
b: attributable FIF income method
12: Subsections (1) to (10) apply for income years beginning on or after 1 July 2011.
42: Consequences of changes in method
1: Section EX 63(1)(a) and (b)
a: from 1 of the 4 cost-based calculation methods (the comparative value method, the deemed rate of return method, the fair dividend rate method, or the cost method) to the attributable FIF income method; or
b: from a look-through calculation method (the attributable FIF income method, the accounting profits method, or the branch equivalent method) to 1 of the 4 cost-based calculation methods.
2: In section EX 63 attributable FIF income method
3: Subsection (1) applies for income years beginning on or after 1 July 2011.
43: Migration of persons holding FIF interests
1: Section EX 64(5)(c)
c: for the accounting period in which the change occurs, uses the attributable FIF income method to calculate FIF income or loss from the interest.
2: In section EX 64
a: accounting profits method branch equivalent method
b: attributable FIF income method
3: Subsection (1) applies for income years beginning on or after 1 July 2011.
44: Changes in application of FIF exemptions
1: In section EX 65(3) the accounting profits method or the branch equivalent method the attributable FIF income method
2: In section EX 65(7) the accounting profits methods or the branch equivalent method the attributable FIF income method
3: In section EX 65
a: accounting profits method branch equivalent method
b: attributable FIF income method
4: Subsections (1) and (2) apply for income years beginning on or after 1 July 2011.
45: Entities emigrating from New Zealand
1: In section EX 66(3) accounting profits method or branch equivalent method attributable FIF income method
2: In section EX 66
a: accounting profits method branch equivalent method
b: attributable FIF income method
3: Subsection (1) applies for income years beginning on or after 1 July 2011.
46: Entities ceasing to be FIFs
1: In section EX 66B(3) accounting profits method or branch equivalent method attributable FIF income method
2: In section EX 66B
a: accounting profits method branch equivalent method
b: attributable FIF income method
3: Subsection (1) applies for income years beginning on or after 1 July 2011.
47: New section EX 67B inserted
After section EX 67
EX 67B: Revaluation of inherited interests in grey list companies
When this section applies
1: This section applies when—
a: a person inherited, before 1 April 2007, an interest in a FIF that was a grey list company when the interest was inherited; and
b: the cost of the interest for the person is equal to zero. Treatment as disposal and reacquisition
2: The person is treated as having—
a: disposed of the interest immediately before this section applied to the person and the interest; and
b: reacquired the interest as soon as this section applied to the person and the interest; and
c: received for the disposal and paid for the reacquisition an amount equal to the market value of the interest at the time of the disposal. Cost of inherited interest for purposes of tax liability
3: For determining a tax liability of the person arising from the disposal, the cost of the interest for the person at the time of the inheritance is treated as being the lesser of—
a: the market value of the interest at the time of the inheritance:
b: the market value of the interest at the time of the disposal. Payment of tax liability arising from revaluation
4: A person who is liable to pay an amount of income tax (the amount of tax
a: may satisfy the liability by paying to the Commissioner—
i: at least one third of the amount of tax in the income year following the income year in which the disposal is treated as occurring; and
ii: at least one half of the balance of the amount of tax remaining owing after payment made under subparagraph (i), in the second income year following the income year in which the disposal is treated as occurring; and
iii: the balance of the amount of tax remaining owing after payments made under subparagraphs (i) and (ii), in the third income year following the income year in which the disposal is treated as occurring:
b: is not liable to pay any penalty or interest for which the person would otherwise be liable for an inaccuracy in an estimate, or shortfall in the payment, of provisional tax to the extent to which the inaccuracy or shortfall arises because of the disposals. amount, Commissioner, dispose, FIF, grey list company, income tax, income year, market value, pay, provisional tax, tax .
48: Change of FIF's balance date
1: In section EX 69(1)(b) accounting profits method or the branch equivalent method attributable FIF income method
2: In section EX 69
a: accounting profits method branch equivalent method
b: attributable FIF income method
3: Subsection (1) applies for income years beginning on or after 1 July 2011.
49: Commissioner's default assessment power
1: Section EX 72(1)(c)
c: a person cannot obtain enough information to calculate their attributed CFC income or loss or FIF income or loss for a period.
2: Section EX 72(3)(b)
b: the application of a rate of presumed increase of 10% or more, compounded annually, to the CFC's net attributable CFC income or to the FIF's net attributable FIF income, for a previous period: .
3: In section EX 72
a: attributed repatriation branch equivalent income
b: attributable FIF income method net attributable CFC income net attributable FIF income
4: Subsection (1) applies for income years beginning on or after 1 July 2009.
5: Subsection (2) applies for income years beginning on or after 1 July 2011.
50: What this subpart does
1: Section FE 1(1)(a)
a: to apportion certain interest expenditure between income having a source in New Zealand and other income for a New Zealand taxpayer who has a disproportionately high level of debt funding in relation to their worldwide interest expenditure and who—
i: is controlled by a single non-resident:
ii: is a person (an outbound entity
iii: is a New Zealand resident who controls an outbound entity; and .
2: In section FE 1 attributable FIF income method FIF
3: Subsection (1) applies for income years beginning on or after 1 July 2011.
51: When this subpart applies
1: Section FE 2(1)(e)
e: a company that is resident in New Zealand and has—
i: an income interest in a CFC:
ii: an interest in a FIF that satisfies the requirements of section EX 35 (Exemption for interest in FIF resident in Australia):
iii: an interest in a FIF for which the person uses the attributable FIF income method: .
2: After section FE 2(1)(g)(i)
ib: an interest in a FIF that satisfies the requirements of section EX 35:
ic: an interest in a FIF for which the person uses the attributable FIF income method: .
3: After section FE 2(4) New Zealand banking group of Crown-owned registered bank
5: If the members of the New Zealand banking group of a registered bank are given by section FE 36B, the interests held by a member of the group for the purposes of subsection (1)(e) and (f) do not include interests held by an associated person who is not a member of the group.
4: In section FE 2 attributable FIF income method FIF
5: In section FE 2 New Zealand banking group
6: Subsections (1) and (2) apply for income years beginning on or after 1 July 2011.
7: Subsection (3) applies for income years beginning on or after 1 July 2009.
52: Interest apportionment for individuals
1: Section FE 3(1)(a)(iii)
iii: derive income, other than non-resident passive income, that has a source in New Zealand and for which relief from New Zealand tax under a double tax agreement is unavailable: .
2: Section FE 3(2)(a)(iii)
iii: derive income, other than non-resident passive income, that has a source in New Zealand and for which relief from New Zealand tax under a double tax agreement is unavailable: .
3: In section FE 3(2)(b)(ii) interest: interest; and
iii: all FIFs in which the trustee or a member of the trustee's New Zealand group has an interest that meets the requirements of section EX 35 (Exemption for interest in FIF resident in Australia); and
iv: all FIFs in which the trustee or a member of the trustee's New Zealand group has an interest for which the person uses the attributable FIF income method: .
4: In section FE 3 attributable FIF income method FIF income New Zealand tax non-resident passive income
5: Subsections (1) to (3) apply for income years beginning on or after 1 July 2011.
53: Thresholds for application of interest apportionment rules
1: After section FE 5(1B)(a)
ab: the company or person is eligible to choose, and chooses, under subsection (1BB) to use the threshold test in subsection (1D): .
2: Section FE 5(1B)(b)
3: After section FE 5(1B) Eligibility for optional threshold, apportionment method
1BB: A company or person referred to in subsection (1B) that would otherwise be required to make an apportionment under section FE 6 may choose instead to be subject to the threshold in subsection (1D) and to the apportionment method in section FE 6B only if—
a: for each of the New Zealand group and the worldwide group, the amount (the adjusted net profit
b: for the New Zealand group, the deductions for interest allowed to the group under sections DB 6 to DB 9 (which relate to deductions for interest) exceed the income of the group that is interest; and
c: for the worldwide group, treating the members as residents for the purposes of this paragraph, the deductions for interest allowed to the group under sections DB 6 to DB 9 exceed the income of the group that is interest; and
d: for the worldwide group, the amount of the total group debt, calculated for the income year as if for the purposes of determining the group's debt percentage under section FE 12, is equal to or more than 75% of the amount of total group assets, not including goodwill; and
e: for the worldwide group, the proportion of the total group debt, calculated as for paragraph (d), for which the lender is not associated with the group under subpart YB (Associated persons) is equal to or more than 80%. Formula for adjusted net profit
1BC: The adjusted net profit for a group is the amount calculated using the formula— net – attributed + net interest + depreciation + amortisation. Definition of items in formula
1BD: In the formula in subsection (1BC),—
a: net
b: attributed
i: under generally accepted accounting practice from an interest in a FIF or CFC described in section FE 2(1)(e) to (g); and
ii: included in the calculation of the item net profit or loss and not included in the calculation of the item net interest:
c: net interest
d: depreciation
e: amortisation
4: In section FE 5(1C)(c) interest. interest:
d: all FIFs in which the natural person or a member of the natural person's New Zealand group has an interest that meets the requirements of section EX 35 (Exemption for interest in FIF resident in Australia); and
e: all FIFs in which the natural person or a member of the natural person's New Zealand group has an interest for which the natural person or member uses the attributable FIF income method.
5: After section FE 5(1C) Elective threshold for excess debt entity
1D: A company or person that chooses to be subject to the threshold test in this subsection must apportion the interest expenditure for the income year under section FE 6B except if the ratio (the interest-income ratio
a: 110% of the interest-income ratio for the company or person's worldwide group:
b: 50%. Formula for group's interest-income ratio
1E: The interest-income ratio for a group is calculated using the formula— net interest adjusted net profit. Definition of items in formula
1F: In the formula in subsection (1E),—
a: net interest
b: adjusted net profit
6: In section FE 5 attributable FIF income method non-resident passive income
7: Subsections (1), (3), and (5) apply for income years beginning on or after 1 July 2009.
8: Subsections (2) and (4) apply for income years beginning on or after 1 July 2011.
54: New section FE 6B inserted
1: After section FE 6
FE 6B: Alternative apportionment of interest by some excess debt entities
Who this section applies to
1: This section applies to a company or person that is required by section FE 5(1D) to apportion its interest expenditure for an income year under this section. Formula
2: The company or person is treated under section CH 9 (Interest apportionment: excess debt entity) as deriving from New Zealand in the income year an amount of income calculated for the income year using the formula— net interest × NZ group ratio – threshold ratio NZ group ratio. Definition of items in formula
3: In the formula,—
a: is the deductions for interest allowed to the company or person under sections DB 6 to DB 9 (which relate to deductions for interest) from a financial arrangement providing funds to the company or person, reduced by the income of the company or person from a financial arrangement on arm's-length terms providing funds to a person who meets the requirements of section FE 13(3):
b: NZ group ratio
c: threshold ratio
i: 50%:
ii: 110% of the interest-income ratio given by section FE 5(1E) for the worldwide group of the company or person. company, deduction, income, income year, interest, New Zealand .
2: Subsection (1) applies for income years beginning on or after 1 July 2009.
55: New section FE 12B inserted
1: After section FE 12
FE 12B: Calculations for group for test and apportionment using interest-income ratio
Application of rules
1: The rules in this section apply to the calculation, for an entity's New Zealand group or worldwide group, of the following amounts:
a: deductions for interest allowed to the group under sections DB 6 to DB 9 (which relate to deductions for interest), for the purposes of section FE 5(1BB):
b: the income of the group that is interest, for the purposes of section FE 5(1BB):
c: the items in the formula for adjusted net profit in section FE 5(1BC):
d: the items in the formula for interest-income ratio in section FE 5(1E). Generally accepted accounting practice for consolidation
2: An amount calculated under these rules for an entity's group must be calculated under generally accepted accounting practice for the consolidation of companies for the purposes of eliminating intra-group income, expenses, transactions, and balances. Non-resident member of New Zealand group
3: If a member of a New Zealand group is not resident in New Zealand, the amounts for the member are not included in a consolidation except to the extent that the amounts relate to—
a: the carrying on of business in New Zealand through a fixed establishment in New Zealand:
b: the derivation of income that has a source in New Zealand and for which relief from New Zealand tax under a double tax agreement is unavailable. business, deduction, double tax agreement, fixed establishment, generally accepted accounting practice, income, interest, New Zealand, New Zealand tax, resident in New Zealand, source in New Zealand .
2: Section FE 12B(3)(b)
b: the derivation of income, other than non-resident passive income, that has a source in New Zealand and for which relief from New Zealand tax under a double tax agreement is unavailable.
3: In section FE 12B, in the list of defined terms, non-resident passive income
4: Subsection (1) applies for income years beginning on or after 1 July 2009.
5: Subsection (2) applies for income years beginning on or after 1 July 2011.
56: Financial arrangements entered into with persons outside group
1: Section FE 13(3)(a)
a: a non-resident who is not carrying on business through a fixed establishment in New Zealand and derives—
i: income that does not have a source in New Zealand:
ii: income with a source in New Zealand, all of which is non-resident passive income or has relief from New Zealand tax available under a double tax agreement; or .
2: In section FE 13 non-resident passive income
3: Subsection (1) applies for income years beginning on or after 1 July 2011.
57: Consolidation of debts and assets
1: Section FE 14(3)(b)
b: derive income, other than non-resident passive income, that has a source in New Zealand and for which relief from New Zealand tax under a double tax agreement is unavailable.
2: In section FE 14 non-resident passive income tax
3: Subsection (1) applies for income years beginning on or after 1 July 2011.
58: Total group assets
1: In section FE 16(1B) income interest income interest, or an investment in a FIF in which the entity or member has an interest meeting the requirements of section EX 35 (Exemption for interest for FIF resident in Australia) or for which the person uses the attributable FIF income method
2: Section FE 16(1B)(a)(ii)
ii: the CFC or FIF derives income, other than non-resident passive income, that has a source in New Zealand and for which relief from New Zealand tax under a double tax agreement is unavailable: .
3: Section FE 16(1C)(b)
b: derive income, other than non-resident passive income, that has a source in New Zealand and for which relief from New Zealand tax under a double tax agreement is unavailable.
4: In section FE 16 attributable FIF income method FIF non-resident passive income tax
5: Subsections (1) to (3) apply for income years beginning on or after 1 July 2011.
59: Banking group's New Zealand net equity
1: Section FE 21(12)(a)
a: are held by a member or potential member of the group; and .
2: Subsection (1) applies for income years beginning on or after 1 July 2011.
60: Identifying New Zealand parent
1: Section FE 26(2)(b)(ii)
ii: no single non-resident who is carrying on business in New Zealand through a fixed establishment in New Zealand or who derives income, other than non-resident passive income, that has a source in New Zealand and for which relief from New Zealand tax under a double tax agreement is unavailable has an ownership interest in the entity of 50% or more; or .
2: Section FE 26(3)(a)(iii)
iii: not resident in New Zealand but deriving income, other than non-resident passive income, that has a source in New Zealand and for which relief from New Zealand tax under a double tax agreement is unavailable; and .
3: Section FE 26(4)(a)(iii)
iii: not resident in New Zealand but deriving income, other than non-resident passive income, that has a source in New Zealand and for which relief from New Zealand tax under a double tax agreement is unavailable; and .
4: In section FE 26 non-resident passive income tax
5: Subsections (1) to (3) apply for income years beginning on or after 1 July 2011.
61: Identifying members of New Zealand group
1: Section FE 28(1)(a)(iii)
iii: deriving income, other than non-resident passive income, that has a source in New Zealand and for which relief from New Zealand tax under a double tax agreement is unavailable; and .
2: Section FE 28(2)(a)(iii)
iii: deriving income, other than non-resident passive income, that has a source in New Zealand and for which relief from New Zealand tax under a double tax agreement is unavailable; and .
3: In section FE 28 non-resident passive income tax
4: Subsections (1) and (2) apply for income years beginning on or after 1 July 2011.
62: Ownership interests in companies outside New Zealand group
1: Section FE 30(1)(c)(iii)
iii: deriving income, other than non-resident passive income, that has a source in New Zealand and for which relief from New Zealand tax under a double tax agreement is unavailable; and .
2: Section FE 30(3)(b)(iii)
iii: deriving income, other than non-resident passive income, that has a source in New Zealand and for which relief from New Zealand tax under a double tax agreement is unavailable; and .
3: In section FE 30 non-resident passive income tax
4: Subsections (1) and (2) apply for income years beginning on or after 1 July 2011.
63: CFCs in worldwide group for natural persons or trustees described in section FE 2(1)(g)
1: Section FE 31C(1)(b)
b: an interest, in an entity not part of the worldwide group A, that is—
i: an income interest in a CFC:
ii: an interest in a FIF that meets the requirements of section EX 35 (Exemption for interest in FIF resident in Australia):
iii: an interest in a FIF for which the natural person or trustee uses the attributable FIF income method.
2: In section FE 31C attributable FIF income method FIF
3: Subsection (1) applies for income years beginning on or after 1 July 2011.
64: Identifying members of New Zealand banking group
1: In the heading to section FE 36 in usual case
2: In section FE 36(1) to which section FE 36B does not apply registered bank
3: Subsections (1) and (2) apply for income years beginning on or after 1 July 2009.
65: New section FE 36B inserted
1: After section FE 36
FE 36B: Identifying members of New Zealand banking group: Crown-owned, no interest apportionment
Entities included in group
1: The New Zealand banking group of a registered bank consists of the entities given by this section if—
a: Her Majesty the Queen in right of New Zealand has a voting interest of 100% in the registered bank; and
b: in the absence of this paragraph and sections EX 15, FE 2(5), FE 38(b) and (d), and FE 41(1), none of the entities that would be part of the banking group under this section would be a person to whom the interest apportionment rules might apply under section FE 2. Registered bank and person with direct voting interest of 100%
2: The banking group includes—
a: the registered bank:
b: a person with a direct voting interest of 100% in the registered bank. Resident member of financial reporting group under Financial Reporting Act 1993
3: A resident person is included in the banking group if the person,—
a: under the Financial Reporting Act 1993, is a member of the financial reporting group for which the registered bank is the reporting member:
b: would be a member of the financial reporting group referred to in paragraph (a) but for the relevant materiality thresholds. direct voting interest, New Zealand, New Zealand banking group, registered bank, resident .
2: Subsection (1) applies for income years beginning on or after 1 July 2009.
66: Some general rules for treatment of consolidated groups
1: Section FM 6(3)(d)
2: Subsection (1) applies for income years beginning on or after 1 July 2012.
67: Eligibility rules
1: In section FM 31(1)(c) to CW 11 and CW 10
2: Subsection (1) applies for income years beginning on or after 1 July 2011.
68: Resident's restricted amalgamations
1: In section FO 3(1)(c) to CW 11 and CW 10
2: Subsection (1) applies for income years beginning on or after 1 July 2011.
69: FIF income or loss: arrangements for measurement day concessions
1: Section GB 16(1)(b)(ii)
2: Subsection (1) applies for income years beginning on or after 1 July 2011.
70: Section GB 40 repealed
1: Section GB 40
2: Subsection (1) applies for income years beginning on or after 1 July 2012.
71: Arrangements involving cancellation of conduit tax relief credits
1: Section GZ 2(1)(b)
b: the purpose of the arrangement is to produce a benefit—
i: for a New Zealand resident that is not a CTR group member under section YD 9 (Residence of CTR company shareholders) or for a New Zealand resident that is a CTR group member under section YD 9 to the extent that it is treated under that section as resident in New Zealand; and
ii: under a taxation law; and
iii: relating to the CTR credits.
2: In section GZ 2 CTR group member resident in New Zealand
3: Subsection (1) applies for income years beginning on or after 1 July 2009.
72: Section GZ 2 repealed
1: Section GZ 2
2: Subsection (1) applies for income years beginning on or after 1 July 2011.
73: No CFC income interests or FIF direct income interests of 10% or more
1: In section HA 8B(b) attributing
2: Subsection (1) applies for income years beginning on or after 1 July 2009.
74: Dividends derived by qualifying companies
1: In section HA 17(1)(b) or CW 11 (Dividend of conduit tax relief holding company)
2: In section HA 17(2) sections CW 10 and CW 11 section CW 10
3: Subsections (1) and (2) apply for income years beginning on or after 1 July 2011.
75: Foreign-sourced amounts: non-resident trustees
1: Section HC 25(6)(c)
c: section OE 1 (General rules for persons with branch equivalent tax accounts): .
2: Subsection (1) applies for income years beginning on or after 1 July 2012.
76: Partnerships are transparent
1: Section HG 2(4)(c)
2: Subsection (1) applies for income years beginning on or after 1 July 2011.
77: Effect of attributed CFC net loss and FIF net loss from before first affected year
1: Section IQ 2B(1)
1: This section applies for a person and a country (the jurisdiction available BE loss
a: relates to a tax year (the loss year
b: relates to a CFC or FIF that is resident in the jurisdiction in the loss year; and
c: is carried forward to a tax year (the conversion year
2: Section IQ 2B(2)
2: In this section, subsection (3) gives the person an option that available BE loss for a jurisdiction not be carried forward and subsections (4) to (7) give, for whichever of the 4 possible alternative situations is relevant for the person,—
a: the amount of the available BE loss (the converted BE loss
i: treated as being converted into an amount referred to in paragraph (b) in the conversion year; and
ii: not available to the person to be carried forward as available BE loss for the jurisdiction and a later tax year:
b: the amount (the equivalent CFC loss
3: Section IQ 2B(8)(a)(i)
i: corresponding to an income year beginning on or after 1 July 2011; and .
4: In section IQ 2B(9) jurisdictional attributed income branch equivalent method attributable FIF income method
5: In section IQ 2B(9) jurisdictional BE income branch equivalent method, the FIF income or loss attributable FIF income method, the FIF income or loss calculated under the branch equivalent method
6: After section IQ 2B(10) Conversion of income from accounts into New Zealand currency
11: If a person or wholly-owned group chooses under subsection (10) to use the profit or loss before taxation of a CFC given by accounts expressed in a currency other than New Zealand currency, the person or group must convert the profit or loss into New Zealand currency—
a: by applying the close of trading spot exchange rate on the last day of the accounting period for the accounts; or
b: applying the average of the close of trading spot exchange rates for the 15th day of each complete month that falls in the accounting period.
7: In section IQ 2B accounting period close of trading spot exchange rate
8: In section IQ 2B attributable FIF income method
9: Subsections (1) to (3), and (6) apply for income years beginning on or after 1 July 2009.
10: Subsections (4) and (5) apply for income years beginning on or after 1 July 2011.
78: When attributed CFC net loss becomes FIF net loss
1: In section IQ 9(3) branch equivalent method attributable FIF income method
2: In section IQ 9
a: branch equivalent method
b: attributable FIF income method
3: Subsection (1) applies for income years beginning on or after 1 July 2011.
79: Credits from tax year before first affected year
1: Section LK 5B(1)
1: This section applies for a person and a country (the jurisdiction available BE credit
a: relates to a tax year (the credit year
b: relates to a CFC or FIF that is resident in the jurisdiction in the credit year; and
c: is carried forward to a tax year (the conversion year
2: Section LK 5B(2)
2: In this section, subsection (3) gives the person an option that an available BE credit for a jurisdiction not be carried forward and subsections (4) to (7) give, for whichever of the 4 possible alternative situations is relevant for the person,—
a: the amount of the available BE credit (the converted BE credit
i: treated as being converted into an amount referred to in paragraph (b) in the conversion year; and
ii: not available to the person to be carried forward as available BE credit for the jurisdiction and a later tax year:
b: the amount (the equivalent tax credit
3: Section LK 5B(8)
4: In section LK 5B branch equivalent income branch equivalent loss
5: Subsections (1) to (3) apply for income years beginning on or after 1 July 2009.
80: Section LQ 5 repealed
1: Section LQ 5
2: Subsection (1) applies for income years beginning on or after 1 July 2011.
81: Memorandum accounts
1: Section OA 2(1)(c)
2: In section OA 2(1)(d) subparts OE and OP subpart OE
3: Subsection (1) applies for income years beginning on or after 1 July 2011.
4: Subsection (2) applies for income years beginning on or after 1 July 2012.
82: Credits
1: Section OA 5(4)
2: Section OA 5(5)
5: A credit is a branch equivalent tax credit
a: set out in section OA 7 or OE 19:
b: described in a row of table O9: person's branch equivalent tax credits.
3: In section OA 5 CTR credit
4: In section OA 5 BETA company consolidated BETA group
5: Subsection (1) applies for income years beginning on or after 1 July 2011.
6: Subsection (2) applies for income years beginning on or after 1 July 2012.
83: Debits
1: Section OA 6(4)
2: Section OA 6(5)
5: A debit is a branch equivalent tax debit
a: set out in any of sections OA 7 and OE 20 to OE 22:
b: described in a row of table O10: person's branch equivalent tax debits.
3: In section OA 6 CTR debit
4: In section OA 6 BETA company consolidated BETA group
5: Subsection (1) applies for income years beginning on or after 1 July 2011.
6: Subsection (2) applies for income years beginning on or after 1 July 2012.
84: Opening balances of memorandum accounts
1: Section OA 7(2)(c)
2: Section OA 7(2)(d)
d: for a branch equivalent tax account of a BETA person, the first day of the income year: .
3: In section OA 7 CTR account
4: In section OA 7 BETA company consolidated BETA account
5: Subsection (1) applies for income years beginning on or after 1 July 2011.
6: Subsection (2) applies for income years beginning on or after 1 July 2012.
85: Shareholder continuity requirements for memorandum accounts
1: Section OA 8(5)
2: Section OA 8(6)(c) and (g)
3: In section OA 8 CTR account
4: Subsection (1) applies for income years beginning on or after 1 July 2011.
5: Subsection (2) applies for income years beginning on or after 1 July 2012.
86: General treatment of credits and debits on resident's restricted amalgamation
1: In section OA 9(4) GB 34, GB 40, GB 34
2: Subsection (1) applies for income years beginning on or after 1 July 2012.
87: When credits or debits due to amalgamating company but not recorded
1: Section OA 10(1)(c)
2: Section OA 10(1)(d)
3: Section OA 10(3)(b)
4: Section OA 10(3)
3: Subsection (2) does not apply to a debit for loss of shareholder continuity in an imputation credit account arising under section OB 41 (ICA debit for loss of shareholder continuity) and described in table O2: imputation debits, row 14 (debit for loss of shareholder continuity).
5: In section OA 10(4) subsection (1)(b), (c), and (e) subsection (1)(b) and (e)
6: In section OA 10 CTR account
7: In section OA 10 branch equivalent tax account
8: Subsections (1), (3), and (5) apply for income years beginning on or after 1 July 2011.
9: Subsections (2) and (4) apply for income years beginning on or after 1 July 2012.
88: Continuity of shareholding when group companies amalgamate
1: In section OA 14(6) GB 34, GB 40, GB 34
2: Subsection (1) applies for income years beginning on or after 1 July 2012.
89: When credits or debits due to consolidated group but not recorded
1: Section OA 15(1)(c)
2: Section OA 15(3)(b)
3: Section OA 15(3)
3: Subsection (2) does not apply to a debit for loss of shareholder continuity in an imputation credit account arising under section OP 42 (Consolidated ICA debit for loss of shareholder continuity) and described in table O20: imputation debits of consolidated imputation groups, row 16 (debit for loss of shareholder continuity).
4: In section OA 15 CTR account
5: In section OA 15 branch equivalent tax account
6: Subsections (1) and (3) apply for income years beginning on or after 1 July 2012.
7: Subsection (2) applies for income years beginning on or after 1 July 2011.
90: Calculation of maximum permitted ratios
1: In section OA 18(1) a CTR credit,
2: Section OA 18(1)(d) and (e)
3: In section OA 18 CTR credit
4: Subsections (1) and (2) apply for income years beginning on or after 1 July 2011.
91: General rules for companies with imputation credit accounts
1: In section OB 1(2)(iv) to CW 11 and CW 10
2: Subsection (1) applies for income years beginning on or after 1 July 2011.
92: ICA payment of tax
1: Section OB 4(3)(h)
2: In section OB 4 branch equivalent tax account
3: Subsection (1) applies for income years beginning on or after 1 July 2012.
93: ICA credit on resident's restricted amalgamation
1: Section OB 24(3)(c)
2: In section OB 24 CTR account CTR credit
3: Subsection (1) applies for income years beginning on or after 1 July 2011.
94: ICA debit on resident's restricted amalgamation
1: Section OB 53(3)(c)
2: In section OB 53 CTR account CTR debit
3: Subsection (1) applies for income years beginning on or after 1 July 2011.
95: FDPA refund of FDP
1: Section OC 14(3)
3: The company does not have a debit for the amount of a refund to the extent to which it refunds FDP paid before a debit arises under section OC 24 (table O4: FDP debits, row 13 (debit for loss of shareholder continuity)).
2: Subsection (1) applies for income years beginning on or after 1 July 2011.
96: FDPA transfer to imputation credit account
1: Section OC 18(5)
2: In section OC 18 CTR company
3: Subsection (1) applies for income years beginning on or after 1 July 2011.
97: Section OC 19 repealed
1: Section OC 19
2: Subsection (1) applies for income years beginning on or after 1 July 2011.
98: FDP credits attached to dividends
1: Section OC 27(2)
2: In section OC 27 CTR company
3: Subsection (1) applies for income years beginning on or after 1 July 2011.
99: Subpart OD repealed
1: Subpart OD
2: Subsection (1) applies for income years beginning on or after 1 July 2011.
100: General rules for companies and other persons with branch equivalent tax accounts
1: In the heading to section OE 1 companies and other
2: Section OE 1(1) and (3)
3: In section OE 1(4) (which relate to the treatment of memorandum accounts) OA 3
4: In section OE 1 BETA company
5: Subsections (1) to (3) apply for income years beginning on or after 1 July 2012.
101: Headings and sections OE 2 to OE 4 repealed
1: The headings before section OE 2
2: Sections OE 2 to OE 4
3: Subsection (2) applies for income years beginning on or after 1 July 2012.
102: Treatment of attributed CFC income and FIF income in this subpart
1: Section OE 5(a)(i)
i: under the attributable FIF income method; or .
2: In section OE 5
a: accounting profits method branch equivalent method
b: attributable FIF income method
3: Subsection (1) applies for income years beginning on or after 1 July 2011.
103: Section OE 5 replaced
1: Section OE 5
OE 5: Treatment of attributed CFC income and FIF income in this subpart
For the purposes of applying this subpart to a person, other than a company, with an attributing interest in a foreign investment fund (FIF),—
a: FIF income derived from the person's interest is treated as attributed CFC income if the FIF income is calculated—
i: under the attributable FIF income method:
ii: under a method to which section EX 50(6) or EX 58 (which relate to the calculation of FIF income) applies; and
b: the FIF is treated as a CFC; and
c: the interest in the FIF is treated as an income interest. attributable FIF income method, attributing interest, CFC, company, FIF, FIF income, foreign investment fund, income interest .
2: Subsection (1) applies for income years beginning on or after 1 July 2012.
104: BETA payment of income tax on foreign income
1: In section OE 6(1) A BETA company has a branch equivalent tax credit for the lesser of the amount by which the branch equivalent tax account is in debit and the amount calculated using the formula—
2: Subsection (1) applies for income years beginning on or after 1 July 2009.
105: Heading and section OE 6 repealed
1: The heading before section OE 6
2: Section OE 6
3: Subsection (2) applies for income years beginning on or after 1 July 2012.
106: BETA payment of income tax
1: Section OE 7(3)
3: The company or company B may choose to apply under section BC 8 (Satisfaction of income tax liability) some or all of the debit balance to satisfy an income tax liability in relation to attributed CFC income that is allocated to an income year beginning before 1 July 2011. The election must be made before the end of the first income year beginning on or after 1 July 2011, for the company having the branch equivalent tax account with the debit balance, by recording a credit in that branch equivalent tax account.
2: Subsection (1) applies for income years beginning on or after 1 July 2009.
107: Section OE 7 repealed
1: Section OE 7
2: Subsection (1) applies for income years beginning on or after 1 July 2012.
108: BETA refund of FDP
1: In section OE 9(1) Subsections (2) and (3) Subsections (2) to (3B)
2: After section OE 9(3) Limit on amount
3B: The amount of the credit under subsection (1), after any reduction under subsection (3), is limited to the amount of the debit in the company's branch equivalent tax account at the time of the refund.
3: Subsections (1) and (2) apply for income years beginning on or after 1 July 2009.
109: Sections OE 9 to OE 16B repealed
1: Sections OE 9 to OE 16B
2: Subsection (1) applies for income years beginning on or after 1 July 2012.
110: Table O7 repealed
1: Table O7 is repealed.
2: Subsection (1) applies for income years beginning on or after 1 July 2012.
111: Section OP 70 repealed
1: Section OP 70
2: Subsection (1) applies for income years beginning on or after 1 July 2011.
112: Headings and sections OP 78 to OP 80 repealed
1: The headings before section OP 78
2: Sections OP 78 to OP 80
3: Subsection (2) applies for income years beginning on or after 1 July 2011.
113: Heading and sections OP 83 to OP 87 repealed
1: The heading before section OP 83
2: Sections OP 83 to OP 87
3: Subsection (2) applies for income years beginning on or after 1 July 2011.
114: Sections OP 89 to OP 94 repealed
1: Sections OP 89 to OP 94
2: Subsection (1) applies for income years beginning on or after 1 July 2011.
115: Heading, section OP 96, and tables O23 and O24 repealed
1: The heading before section OP 96
2: Section OP 96
3: Subsection (2) applies for income years beginning on or after 1 July 2011.
116: Headings and sections OP 97 and OP 98 repealed
1: The headings before section OP 97
2: Sections OP 97 OP 98
3: Subsection (2) applies for income years beginning on or after 1 July 2012.
117: Consolidated BETA payment of income tax on foreign income
1: In section OP 100(1) A consolidated BETA group has a branch equivalent tax credit for an income year for the lesser of the amount by which the group's branch equivalent tax account is in debit and the amount calculated using the formula—
2: Subsection (1) applies for income years beginning on or after 1 July 2009.
118: Heading and section OP 100 repealed
1: The heading before section OP 100
2: Section OP 100
3: Subsection (2) applies for income years beginning on or after 1 July 2012.
119: Consolidated BETA payment of income tax
1: Section OP 101(2)
2: The nominated company of the consolidated BETA group may choose to apply some or all of the debit balance to satisfy an income tax liability of the group or of group company B in relation to attributed CFC income that is allocated to an income year beginning before 1 July 2011. The election must be made before the end of the first income year beginning on or after 1 July 2011.
2: Subsection (1) applies for income years beginning on or after 1 July 2009.
120: Section OP 101 repealed
1: Section OP 101
2: Subsection (1) applies for income years beginning on or after 1 July 2012.
121: Consolidated BETA refund of FDP
1: In section OP 103(1) Subsections (2) and (3) Subsections (2) to (3B)
2: After section OP 103(3) Limit on amount
3B: The amount of the credit under subsection (1), after any reduction under subsection (3), is limited to the amount of the debit in the group's branch equivalent tax account at the time of the refund.
3: Subsections (1) and (2) apply for income years beginning on or after 1 July 2009.
122: Sections OP 103 to OP 104B repealed
1: Sections OP 103 to OP 104B
2: Subsection (1) applies for income years beginning on or after 1 July 2012.
123: Heading and section OP 108B repealed
1: The heading before section OP 108B
2: Section OP 108B
3: Subsection (2) applies for income years beginning on or after 1 July 2012.
124: Table O25 repealed
1: Table O25 is repealed.
2: Subsection (1) applies for income years beginning on or after 1 July 2012.
125: Section OZ 16 repealed
1: Section OZ 16 is repealed.
2: Subsection (1) applies for income years beginning on or after 1 July 2012.
126: Section OZ 17 repealed
1: Section OZ 17
2: Subsection (1) applies for income years beginning on or after 1 July 2011.
127: Resident passive income
1: In section RE 2(5)(a)(i) any of sections CW 9 to CW 11 either of sections CW 9 and CW 10
2: Subsection (1) applies for income years beginning on or after 1 July 2011.
128: Certain dividends
1: Section RF 8(1)(c) and (f)
2: In section RF 8 CTR additional dividend fully credited for conduit tax relief
3: Subsection (1) applies for income years beginning on or after 1 July 2011.
129: When dividends fully imputed or fully credited
1: In section RF 9(1) or conduit tax relief
2: Section RF 9(6) and (7)
3: In section RF 9 fully credited for conduit tax relief
4: Subsections (1) and (2) apply for income years beginning on or after 1 July 2011.
130: Non-cash dividends
1: Section RF 10(3)(a)
a: rate A .
2: In the formula in section RF 10(4), (amount paid + credit amount) amount paid
3: In section RF 10(5)(d) withheld: withheld.
4: Section RF 10(7)
5: In section RF 10 CTR additional dividend fully credited for conduit tax relief
6: Subsections (1) to (4) apply for income years beginning on or after 1 July 2011.
131: Interest paid by approved issuers or transitional residents
1: Section RF 12(1)(a)(ii)
ii: is derived by a person not associated with the approved issuer except by being a beneficiary of a trust established for the main purpose of protecting and enforcing beneficiaries' rights under the registered security; and .
2: Subsection (1) applies for the 2010–11 and later income years.
132: Definitions
1: This section amends section YA 1
2: The definition of accounting profits method
3: The definition of associated non-attributing active CFC associated non-attributing active CFC
a: the person is a non-attributing active CFC; and
b: the person and the CFC each have a taxed CFC connection with the same country or territory .
4: The following definition is inserted in the appropriate alphabetical order: attributable FIF income method .
5: The definition of BETA company
6: The definition of branch equivalent company
7: In the definition of branch equivalent method as that provision read immediately before being amended by section 35 of the Taxation (International Investment and Remedial Matters) Act 2012
8: The definition of branch equivalent tax account branch equivalent tax account .
9: In the definition of calculation method accounting profits method, the branch equivalent method attributable FIF income method
10: The definition of combined imputation and CTR ratio
11: In the definition of consideration
ii: section EX 21(11) (Attributable CFC amount and net attributable CFC income or loss: calculation rules): .
12: The definition of consolidated BETA group
13: In the definition of continuity provisions
14: In the definition of credit account continuity provisions continuity); and continuity)
15: The definitions of CTR CTR account CTR additional dividend CTR company CTR credit CTR debit CTR group member CTR holding company CTR ratio CTRA
16: In the definition of deductible foreign equity distribution
a: for which a deduction is allowed in the calculation of the income tax imposed by a country or territory other than New Zealand on the income of a person: .
17: The definition of excess credit amount excess credit amount .
18: In the definition of FIF net loss branch equivalent method attributable FIF income method
19: In the definition of foreign attributed income
b: FIF income calculated under the attributed FIF income method .
20: The definition of foreign attributed loss offsets
21: The definition of fully credited for conduit tax relief
22: In the definition of international tax rules
23: In the definition of lease (Branch equivalent income or loss: calculation rules) (Attributable CFC amount and net attributable CFC income or loss: calculation rules)
24: In the definition of loss
c: means a net attributable FIF loss when used in the expression net attributable FIF income or loss .
25: In the definition of maximum permitted ratio a CTR credit,
26: The following definitions are inserted in the appropriate alphabetical order: net attributable FIF income net attributable FIF loss .
27: In the definition of New Zealand banking group section FE 36 (Identifying members of New Zealand banking group) sections FE 36 and FE 36B (which identify the members of a New Zealand banking group)
28: In the definition of non-refundable tax credit
29: The following definitions are inserted in the appropriate alphabetical order: NZIAS 28 NZIAS 31 .
30: In the definition of old company tax rate
a: 30% 30% or 33%
b: 2008–09 2011–12
31: In the definition of residual income tax
32: In the definition of supplementary dividend holding company to CW 11 and CW 10
33: In the definition of taxation law GZ 2 (Arrangements involving cancellation of conduit tax relief credits),
34: The following definitions are inserted in the appropriate alphabetical order: taxed CFC connection host country
a: the CFC is resident in the host country under section YD 3 (Country of residence of foreign countries); and
b: there is no other country or territory for which the CFC is—
i: a resident under the domestic law of the country or territory:
ii: liable to income tax because of the CFC's domicile, residence, place of incorporation, or centre of management:
iii: treated as a resident under an agreement with the host country that would be a double tax agreement if it were an agreement between New Zealand and the host country; and
c: the CFC has no presence outside the host country that is—
i: a fixed establishment:
ii: a permanent establishment under an agreement, between another country or territory and the host country, that would be a double tax agreement if it were between New Zealand and the host country; and
d: the CFC is liable in the host country to tax on its income because of the CFC's domicile, residence, place of incorporation, or centre of management, or there is another foreign company (the parent company
i: wholly owns the CFC under the laws of New Zealand and the host country; and
ii: has a relationship with the host country meeting the requirements of paragraphs (a) to (c); and
iii: because of the parent company's domicile, residence, place of incorporation, or centre of management, is liable in the host country to tax on the CFC's income in the same period that the CFC would be liable on its income if it were a company liable for tax taxed FIF connection host country
a: the FIF is resident in the host country under section YD 3 (Country of residence of foreign companies); and
b: there is no other country or territory for which the FIF is—
i: a resident under the domestic law of the country or territory:
ii: liable to income tax because of the FIF's domicile, residence, place of incorporation, or centre of management:
iii: treated as a resident under an agreement with the host country that would be a double tax agreement if it were an agreement between New Zealand and the host country; and
c: the FIF has no presence outside the host country that is—
i: a fixed establishment:
ii: a permanent establishment under an agreement, between another country or territory and the host country, that would be a double tax agreement if it were between New Zealand and the host country; and
d: the FIF is liable in the host country to tax on its income because of the FIF's domicile, residence, place of incorporation, or centre of management, or there is a foreign company (the parent company
i: wholly owns the FIF under the laws of New Zealand and the host country; and
ii: has a relationship with the host country meeting the requirements of paragraphs (a) to (c); and
iii: because of the parent company's domicile, residence, place of incorporation, or centre of management, is liable in the host country to tax on the FIF's income in the same period that the FIF would be liable on its income if it were a company liable for tax .
35: Subsections (3), (27), (29), and (34) apply for income years beginning on or after 1 July 2009.
36: Subsections (2), (4), (6), (7), (9) to (11), (15), (17), (18), (19) to (21), (23) to (26), (28), (32), and (33) apply for income years beginning on or after 1 July 2011.
37: Subsections (5), (8), (12) to (14), (22), and (31) apply for income years beginning on or after 1 July 2012.
133: Demutualisation of insurers
1: In section YC 17(12)(b)(ii) account: account.
2: Subsection (1) applies for income years beginning on or after 1 July 2012.
134: Corporate reorganisations not affecting economic ownership
1: In section YC 18B(3) OE,
2: Subsection (1) applies for income years beginning on or after 1 July 2012.
135: Residence of CTR company shareholders
1: In section YD 9(1) and section GZ 2 (Arrangements involving cancellation of conduit tax credits) tax relief)
2: Subsection (1) applies for income years beginning on or after 1 July 2009.
136: Heading and sections YD 9 to YD 11 repealed
1: The heading before section YD 9
2: Sections YD 9 to YD 11
3: Subsection (2) applies for income years beginning on or after 1 July 2011.
137: Schedule 25—Foreign investment funds
1: Schedule 25
2: Subsection (1) applies for income years beginning on or after 1 July 2011.
138: Schedule 31—Annualised equivalent amount for Part M
In schedule 31 $36,827 $36,350
2: Amendments to Tax Administration Act 1994
139: Tax Administration Act 1994
Sections 140 to 148 2012-05-07 Tax Administration Act 1994 Sections of this Part except those listed below 2012-07-01 Tax Administration Act 1994 Sections 140(1), (3), and (4), 145(1) and (3), and 146 come into force on 1 July 2012
140: Keeping of business and other records
1: In section 22(2)(f) a BETA company,
2: In section 22(2)(k) a CTR account and
3: In section 22(7)(c) and sections OP 97 to OP 108
4: Subsections (1) and (3) apply for records relating to income years beginning on or after 1 July 2012.
5: Subsection (2) applies for records relating to income years beginning on or after 1 July 2011.
141: Shareholder dividend statement to be provided by company
1: In section 29(1) an FDP credit, or a CTR credit or an FDP credit
2: Section 29(1)(ia)
3: Subsections (1) and (2) apply for income years beginning on or after 1 July 2011.
142: Section 30A repealed
1: Section 30A
2: Subsection (1) applies for income years beginning on or after 1 July 2011.
143: New section 65B inserted
1: After section 65
65B: Information to be furnished with return by entity apportioning interest expenditure under section FE 6B
A company or person apportioning its interest expenditure under section FE 6B of the Income Tax Act 2007 for an income year must furnish to the Commissioner, no later than when the company or person is required to furnish a return of its income for the corresponding tax year, the following information in the form and by the means prescribed by the Commissioner:
a: notice to the Commissioner that the section has been applied; and
b: a reconciliation of adjusted net profit under section FE 5(1BC) of that Act to GAAP net profit; and
c: a reconciliation of goodwill to items presented in the GAAP balance sheet; and
d: further information that is required by the Commissioner.
2: Subsection (1) applies for income years beginning on or after 1 July 2009.
144: Section 68A repealed
1: Section 68A
2: Subsection (1) applies for income years beginning on or after 1 July 2011.
145: Annual ICA return
1: Section 69(1)(e)
2: Section 69(1)(f)
3: Subsection (1) applies for returns relating to income years beginning on or after 1 July 2012.
4: Subsection (2) applies for returns relating to income years beginning on or after 1 July 2011.
146: Section 77 repealed
1: Section 77
2: Subsection (1) applies for returns relating to income years beginning on or after 1 July 2012.
147: Determination on insurer as non-attributing active CFC
1: Section 91AAQ(4)(b)
b: produces income of the CFC or group, other than income from claims under reinsurance contracts, that is all or nearly all from—
i: premiums from insurance contracts, other than reinsurance contracts, covering risks arising in the country or territory in which the business of the CFC or group is located:
ii: proceeds from investment assets having a total value commensurate with the value of those insurance contracts.
2: After section 91AAQ(5)
5B: In a determination, the Commissioner may stipulate conditions that must be satisfied,—
a: in addition to the requirements of subsection (2), for a CFC to be a non-attributing active CFC:
b: in addition to the requirements of subsection (3), for the members of a group of CFCs to be non-attributing active CFCs.
3: Subsections (1) and (2) apply for income years beginning on or after 1 July 2009.
148: Remission for GST transitional taxable periods
1: In section 183AA(4)(b) 31 December 2010: 31 December 2010.
2: In section 183AA(4)(b) 31 December 2010. 31 December 2010:
c: a GST taxable period for which the taxpayer is required to make a return that includes an adjustment under section 78B of the Goods and Services Tax Act 1985 because of the change in the rate of goods and services tax on 1 October 2010.
3: Amendment to Stamp and Cheque Duties Act 1971
149: Section 86I replaced by new sections 86I and 86IB
Section 86I
86I: Application of approved issuer levy and zero-rating
For the purposes of the NRWT rules of the Income Tax Act 2007 and section 86J of this Act, and notwithstanding any provision of the NRWT rules of the Income Tax Act 2007, a payment of interest shall be treated as being paid by an approved issuer in respect of a registered security only where,—
a: and to the extent that, payment is made by or on behalf of the approved issuer of approved issuer levy on the leviable value of the registered security at the time of the payment of interest—
i: at the rate specified in section 86J of this Act; and
ii: by the date specified in either section 86K or 86KA, or by a later date upon the payment of any interest or penalties imposed under Part 7 or 9 of the Tax Administration Act 1994 respectively; or
b: the registered security meets the requirements of section 86IB and the approved issuer provides a statement to the Commissioner—
i: showing the details prescribed by the Commissioner under section 86K(2) for a statement relating to payments of interest under such a registered security and provided to the Commissioner within the time given by subparagraph (ii); and
ii: by the time that would be required by section 86K(1)(b) for a payment of the levy in relation to the payment of interest, or by a later date for the statement if that date is set by the Commissioner in a notice given to the approved issuer.
86IB: Zero rate of approved issuer levy—requirements for securities
1: A registered security meets the requirements of this section if—
a: the security is denominated in New Zealand dollars; and
b: the issue of the security—
i: was an offer to the public for the purposes of the Securities Act 1978; and
ii: was not a private placement; and
c: the security is not an asset-backed security; and
d: the activities of the registrar and the paying agent for the security are carried on through a fixed establishment in New Zealand; and
e: the security—
i: is listed on an exchange registered under the Securities Markets Act 1988:
ii: is 1 of a number of securities meeting the requirements of subsection (2) that are traded in a market bringing together buyers and sellers of such securities.
2: A security meets the requirements of this subsection if, at or before the time of the payment of interest referred to in section 86I in respect of the registered security,—
a: the security is 1 of a number of identical debt securities (the class of securities
b: the group of persons who each hold a security included in the class of securities consists of 100 or more persons; and
c: the issuer of the class of securities has reasonable grounds for expecting that each of 100 or more persons in the group—
i: is not associated with the issuer except by being a beneficiary of a trust established for the main purpose of protecting and enforcing beneficiaries' rights under the class of securities; and
ii: is not associated with another member of the group; and
iii: is not part of an arrangement intended to temporarily increase the number of persons in the group; and
d: no person or group of associated persons holds more than 10% by value of the class of securities. 2012-05-07 Stamp and Cheque Duties Act 1971