Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021

1: Title
This Act is the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021.
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 27 35(2) and (4) 66 94 106(2) 124 125 126 127 131 135(10), (15), (21), and (45)
3: Section 87
4: Sections 53 54 135(23)
5: Section 135(16)
6: Sections 186(2) and (5) 189
7: Section 20
8: Section 135(2)
9: Sections 34 51(2) and (3) 52 55 129 135(9)
10: Section 77
11: Section 184
12: Section 63
13: Section 135(22)
14: Section 128
15: Section 186(1), (3), and (4)
16: Section 144(4)﻿(d)
17: Sections 24 36 39 41 56 57 135(11), (17), and (18)
18: Section 19
19: Section 140
20: Sections 64(3) and (5) 65 67 68 69 80 81 82 133
21: Sections 14 30 43 44 49 135(27), (33), and (34)
22: Sections 58 59 60 172 218
23: Sections 23 45 46(2) 120 135(14) 136 137 168 180(4) 192(3)
24: Section 194
25: Sections 25 74 84 135(41) and (43)
26: Sections 86 89 90
27: Section 219
28: Sections 5 15 18 22 31 32 33 35(1) and (3) 42 47 51(1) 70 72 75 76 88 91 92 95 96 97 98 99 100 101 102 103 104 105 106(1) 107 108 109 110 111 112 113 115 116 117 118 119 121 132 135(3), (12), (13), (26), (28), (30), (31), (32), (35), (38), (39), and (46) 139 144(3) 154 155 156 157 161 163 164(1) and (3) 180(3), (5), and (1D)
29: Section 114
30: Section 186(6)
31: Sections 146 147(1) 148 149 150 151 152 153
32: Section 178
33: Sections 6 7 8 9 10 13 26 28 29 46(1) 48 61 62 71 73 78 79 134 135(5), (6), (7), (20), (24), (29), (36), (37), (44), and (47) 158 159 160
34: Sections 144(4)﻿(a) to (c) 145 164(2) and (4) 169 173
35: Sections 83 135(19) and (42)
36: Section 190
37: Sections 93 182 183 185 187
38: Sections 135(4) 192(2)
a: the day that is 1 year after this Act receives the Royal assent:
b: the day specified in the relevant notes exchanged by the Governments of Australia and New Zealand, as provided by clause 17 of the Arrangement between them on trans-Tasman retirement savings portability. Section 2(38)﻿(b) 8 December 2021
1: Annual rates of income tax
3: Annual rates of income tax for 2020–21 tax year
Income tax imposed by section BB 1 schedule 1
2: Amendments to Income Tax Act 2007
4: Income Tax Act 2007
Sections 5 to 141 Income Tax Act 2007 section 142 2021-03-30 Income Tax Act 2007 for retrospective effect dates see: section 2(2), (3), (4), (5), (7), (8), (9), (10), (12), (13), (14), (17), (18), (19), (20), (21), (22), (23), (25), (26), (28), (29), (33) 2021-07-01 Income Tax Act 2007 per section 2(35) the day specified in the relevant notes exchanged by the Governments of Australia and New Zealand, as provided by clause 17 of the Arrangement between them on trans-Tasman retirement savings portability. 2021-12-08 Income Tax Act 2007 section 2(38): section 135(4) comes into force on 8 December 2021, which is the day specified in relevant diplomatic notes, per section 2(38)﻿(b), as confirmed by IRD and Alana Belin 2022-04-01 Income Tax Act 2007 per section 2(37)
5: Section BC 7 amended (Income tax liability of person with schedular income)
1: In section BC 7(5) who derives income under section CP 1 (Attributed income of investors in multi-rate PIEs) is calculated , when the rate of tax applied for the year is not equal to the investor’s prescribed investor rate for the year, is calculated
2: In section BC 7 prescribed investor rate
6: Section CB 6A replaced (Disposal within 5 years: bright-line test for residential land)
1: Replace section CB 6A
CB 6A: Disposal within 10 years: bright-line test for residential land
Disposal within 10 years
1: Subject to subsection (6)
a: the date on which the instrument to transfer the land to the person was registered—
i: under the Land Transfer Act 2017; or
ii: under foreign laws of a similar nature to the Land Transfer Act 2017, if the land is outside New Zealand; or
b: their date of acquisition of the land, if an instrument to transfer the land to the person is not registered on or before the bright-line date. Subdivision
2: Subject to subsection (6) subsection (1) undivided land
a: the date on which the instrument to transfer the undivided land to the person was registered—
i: under the Land Transfer Act 2017; or
ii: under foreign laws of a similar nature to the Land Transfer Act 2017, if the land is outside New Zealand; or
b: their date of acquisition of the undivided land, if the land is not registered as described in paragraph (a) Leases with perpetual right of renewal
3: Subject to subsection (6) subsection (1) Estate or interest acquired upon completion of land development or subdivision
4: Subject to subsection (6) subsection (1) Beginning of 10-year period for transfers by registration if trustees change
5: If the person referred to in subsection (1)﻿(a) or (2)﻿(a)
a: for subsection (1)﻿(a)
i: the earliest date (the first date
ii: the first date following the intervening transfer, if there has been an intervening transfer to a person who is not a trustee:
b: for subsection (2)﻿(a)
i: the earliest date (the undivided date
ii: the undivided date following the intervening transfer, if there has been an intervening transfer to a person who is not a trustee. Quantification
6: Despite subsections (1), (2), (3), and (4) reduced by subsection (7) Excluded adjustment formula
7: The excluded adjustment amount for the purposes of subsection (6) adjustment days ÷ total days × unadjusted amount. Definition of items in formula
8: The items in the formula in subsection (7) subsections (9) to (11) Adjustment days
9: Adjustment days Total days
10: Total days Unadjusted amount
11: Unadjusted amount subsection (1), (2), (3), or (4) Exception: disposal of land by executor, administrator, or beneficiary
12: This section does not apply to an amount that an executor or administrator described in section FC 1(1)﻿(a) (Disposals to which this subpart applies), or a beneficiary described in section FC 1(1)﻿(b), derives from disposing of residential land that was transferred to them on the death of a person. Relationship with subject matter
13: This section applies if none of sections CB 6 to CB 12 apply. Some definitions
14: In this section,—
a: date of acquisition
b: excluded day section CB 16A(2) section CB 16A(6) amount, bright-line date, bright-line period, date of acquisition, dispose, excluded day, estate, income, interest, land, mortgage person, residential land, trustee, year
2: Subsection (1) subsection (1) subsection (1)
a: a person’s disposal of a freehold estate in residential land that the person acquired as the owner of a leasehold estate with a perpetual right of renewal, if the person was granted the leasehold estate before 27 March 2021:
b: a person’s disposal of an estate or interest in residential land that the person acquired as the result of the completion of a land development or subdivision, if before 27 March 2021 the person entered into the agreement under which they acquired the estate or interest upon the completion of the land development or subdivision.
7: Section CB 13 amended (Disposal: amount from major development or division and not already in income)
In section CB 13(1)﻿(a) and CB 14 , CB 14, and CZ 39
8: Section CB 14 amended (Disposal: amount from land affected by change and not already in income)
In section CB 14(1)﻿(a) to CB 12 to CB 12 and CZ 39
9: Section CB 15B amended (When land acquired)
In section CB 15B(1) section CB 6A sections CB 6A and CZ 39
10: Section CB 16A replaced (Main home exclusion for disposal within 5 years)
1: Replace section CB 16A
CB 16A: Main home exclusion for disposal within 10 years
Main home exclusion
1: Section CB 6A person A subsection (2) Criteria
2: For the purposes of subsection (1) subsection (6)
a: person A:
b: a beneficiary of a trust, if person A is a trustee of the trust and—
i: a principal settlor of the trust does not have a main home; or
ii: if a principal settlor of the trust does have a main home, it is that main home which person A is disposing of. When this section does not apply
3: The exclusion in subsection (1)
a: the exclusion has been used by person A 2 or more times within the 2 years immediately preceding the bright-line date for the residential land:
b: person A has engaged in a regular pattern of acquiring and disposing of residential land described in subsection (2) Regular patterns undertaken by groups of persons
4: For the purposes of subsection (3)﻿(b) subsection (2) subsection (5) Meaning of group of persons
5: For the purposes of subsection (4) group of persons
a: means 2 or more persons when together all of the persons occupy, or have occupied, residential land described in subsection (2)
b: includes a person other than a natural person (the non-natural person paragraph (a) Special rule: counted days
6: For the purposes of subsection (1) excluded day section CB 6A(14)﻿(b) subsection (2) criteria
a: the residential land meets the criteria at some time in the bright-line period; and
b: there is a continuous period within the bright-line period for which the criteria are not otherwise met (a continuous period
c: the beginning or the end of the continuous period adjoins a period within the bright-line period that meets the criteria; and
d: the whole of the continuous period is 365 days or less; and
e: the day is in that continuous period, within the bright-line period. A definition
7: In this section, and in sections CZ 40 principal settlor beneficiary, bright-line date, bright-line period, dispose, dwelling, land, main home, person, principal settlor, residential land, settlement, settlor, trustee, year
2: Subsection (1) subsection (1) subsection (1)
a: a person’s disposal of a freehold estate in residential land that the person acquired as the owner of a leasehold estate with a perpetual right of renewal, if the person was granted the leasehold estate before 27 March 2021:
b: a person’s disposal of an estate or interest in residential land that the person acquired as the result of the completion of a land development or subdivision, if before 27 March 2021 the person entered into the agreement under which they acquired the estate or interest upon the completion of the land development or subdivision.
11: Section CB 16 amended (Residential exclusion from sections CB 6 to CB 11)
1: In section CB 16(1)
a: in paragraph (a), replace the person the person ( person A
b: in paragraph (b)﻿(i), (ii), and (iii), replace the person person A
c: in paragraph (b)﻿(ii), replace the person’s person A’s
2: Replace section CB 16(3) Exception
3: The exclusion does not apply when—
a: section CB 6(1) applies to the disposal; and
b: person A has engaged in a regular pattern of acquiring and disposing of land described in subsection (1) Regular patterns undertaken by groups of persons
4: For the purposes of subsection (3) subsection (1) subsection (5) Meaning of group of persons
5: For the purposes of subsection (4) group of persons
a: means 2 or more persons when together all of the persons occupy, or have occupied, land described in subsection (1)
b: includes a person other than a natural person (the non-natural person paragraph (a)
3: In section CB 16 group of persons
12: Section CB 19 amended (Business exclusion from sections CB 6 to CB 11)
1: In section CB 19(1)
a: replace a disposal of land a disposal of land by a person ( person A
b: in paragraph (b), replace the person person A
2: Replace section CB 19(2) Exception
2: The exclusion does not apply when—
a: section CB 6(1) applies to the disposal; and
b: person A has engaged in a regular pattern of acquiring and disposing of land described in subsection (1). When regular patterns undertaken by groups of persons
2B: For the purposes of subsection (2) subsection (2C) Meaning of group of persons
2C: For the purposes of subsection (2B) group of persons
a: the persons occupy premises mainly to carry on a substantial business from them as described in subsection (1)﻿(b)
b: a person, whether or not they occupy premises as described in subsection (1)﻿(b) paragraph (a) occupiers
3: In section CB 19 group of persons
13: Section CB 23B amended (Land partially disposed of or disposed of with other land)
In section CB 23B CB 23 CB 23, CZ 39, and CZ 40
14: New heading and section CC 14 inserted
1: After section CC 13 IFRS leases
CC 14: NZ IFRS 16 leases
When this section applies
1: This section applies when a person has, under section EJ 10B Amount, and timing, of income
2: The person has income quantified and allocated under section EJ 10B amount, income, person
2: Subsection (1)
15: Section CD 1 amended (Dividend)
1: After the heading to section CD 1 Income
2: In section CD 1 Timing of income: dividends other than non-cash dividends
2: The income is allocated to the income year in which the person receives the dividend if the dividend is a dividend other than a non-cash dividend.
3: In section CD 1 income year non-cash dividend
4: Subsections (1) and (2)
16: Section CD 43 amended (Available subscribed capital (ASC) amount)
In section CD 43(2)﻿(b) ignoring section HB 1 (Look-through companies are transparent) ignoring section HB 1 (Look-through companies are transparent), and including consideration for the issue of shares by the company as a result of the application of section CE 6 (Trusts are nominees)
17: Section CE 6 amended (Trusts are nominees)
1: In section CE 6 employee share scheme employee share scheme or an exempt ESS
2: In section CE 6 exempt ESS
18: New heading and section CH 13 inserted
1: After section CH 12 Feasibility expenditure clawback
CH 13: Feasibility expenditure clawback
When this section applies
1: This section applies when a person—
a: has deducted an amount under section DB 66(3)
b: subsequently completes or creates the property, or acquires the property or similar property. When this section does not apply
2: Despite subsection (1) section DB 66(3) Income
3: The person has, in the income year in which they subsequently complete, create, or acquire the property or similar property, income equal to the amount of the total deductions under section DB 66(3) amount, deduction, income, income year, person
2: Subsection (1)
19: Section CW 26C amended (Meaning of exempt ESS)
In section CW 26C(7)﻿(a)﻿(ii) employer employee
20: Section CW 55BB amended (Minors’ income, to limited extent)
1: After section CW 55BB(2)﻿(a)﻿(iii)
iiib: beneficiary income:
2: In section CW 55BB beneficiary income
3: Subsection (1) subsection (1) subsection (1)
21: Section CW 58 amended (Disposal of companies’ own shares)
1: In section CW 58 disposing of shares in the company disposing of shares in the company, including if the company disposes of the shares as the result of the application of section CE 6 (Trusts are nominees),
2: In section CW 58(a) acquired the shares acquired the shares, including if the company acquired the shares as the result of the application of section CE 6
22: Section CX 56 amended (Attributed income of certain investors in multi-rate PIEs)
1: In section CX 56(1) , other than an investor who is a natural person,
2: Repeal section CX 56(2)﻿(d)
3: After section CX 56(2) When this section also does not apply
2B: This section also does not apply for the purposes of an adjustment under section HM 36B
a: is an investor in a multi-rate PIE; and
b: derives attributed PIE income from the PIE for an income year; and
c: has a rate of tax applied to their attributed PIE income that is not equal to their prescribed investor rate for the income year; and
d: has an amount of PIE schedular income for the income year.
23: Section CX 60 amended (Intra-group transactions)
1: In section CX 60(1) FM 8(3) FM 8
2: Repeal section CX 60(1B)
3: In section CX 60(2) (Transactions between group companies: income)
4: Subsections (1) to (3)
24: New section CZ 37 inserted (Income equalisation schemes)
1: After section CZ 36
CZ 37: Income equalisation schemes
Income
1: A refund made to a person under section EZ 80 section EZ 4B EZ 81 section EZ 4B Excluded income
2: A refund under section EZ 80 or EZ 81 excluded income, income, income year, interest, pay
2: Subsection (1)
25: New section CZ 38 inserted (Disposals of trading stock to non-associates without business purpose)
After section CZ 37
CZ 38: Disposals of trading stock to non-associates without business purpose
An amount that a person is treated as deriving in an income year under section GZ 5 amount, income, income year
26: New sections CZ 39 and CZ 40 inserted
Before Part D
CZ 39: Disposal within 5 years: bright-line test for residential land: acquisition on or after 29 March 2018
When this section applies
1: This section applies to a person’s disposal of residential land, if the person first acquires an estate or interest in the residential land on or after 29 March 2018 and section CB 6A
a: a person’s disposal of a freehold estate in residential land that the person acquired as the owner of a leasehold estate with a perpetual right of renewal, if the person was granted the leasehold estate before 29 March 2018:
b: a person’s disposal of an estate or interest in residential land that the person acquired as the result of the completion of a land development or subdivision, if before 29 March 2018 the person entered into the agreement under which they acquired the estate or interest upon the completion of the land development or subdivision. Disposal within 5 years
2: An amount that a person derives from disposing of residential land is income of the person, if the bright-line date for the residential land is within 5 years of—
a: the date on which the instrument to transfer the land to the person was registered—
i: under the Land Transfer Act 2017; or
ii: under foreign laws of a similar nature to the Land Transfer Act 2017, if the land is outside New Zealand; or
b: their date of acquisition of the land, if an instrument to transfer the land to the person is not registered on or before the bright-line date. Subdivision
3: Despite subsection (2) undivided land
a: the date on which the instrument to transfer the undivided land to the person was registered—
i: under the Land Transfer Act 2017; or
ii: under foreign laws of a similar nature to the Land Transfer Act 2017, if the land is outside New Zealand; or
b: their date of acquisition of the undivided land, if the land is not registered as described in paragraph (a) Leases with perpetual right of renewal
4: Despite subsection (2) Estate or interest acquired upon completion of land development or subdivision
5: Despite subsection (2) Beginning of 5-year period for transfers by registration if trustees change
6: If the person referred to in subsection (2)﻿(a) or (3)﻿(a)
a: for subsection (2)﻿(a)
i: the earliest date (the first date
ii: the first date following the intervening transfer, if there has been an intervening transfer to a person who is not a trustee:
b: for subsection (3)﻿(a)
i: the earliest date (the undivided date
ii: the undivided date following the intervening transfer, if there has been an intervening transfer to a person who is not a trustee. Exception: disposal of land by executor, administrator, or beneficiary
7: This section does not apply to an amount that an executor or administrator described in section FC 1(1)﻿(a) (Disposals to which this subpart applies), or a beneficiary described in section FC 1(1)﻿(b), derives from disposing of residential land that was transferred to them on the death of a person. Relationship with subject matter
8: This section applies if none of sections CB 6 to CB 12 apply. A definition
9: In this section, date of acquisition amount, bright-line date, date of acquisition, dispose, estate, income, interest, land, mortgage, person, residential land, trustee, year
CZ 40: Main home exclusion for bright-line: acquisition on or after 29 March 2018
When this section applies
1: This section applies to a person’s disposal of residential land, if the person first acquires an estate or interest in the residential land on or after 29 March 2018 and section CB 16A
a: a person’s disposal of a freehold estate in residential land that the person acquired as the owner of a leasehold estate with a perpetual right of renewal, if the person was granted the leasehold estate before 29 March 2018:
b: a person’s disposal of an estate or interest in residential land that the person acquired as the result of the completion of a land development or subdivision, if before 29 March 2018 the person entered into the agreement under which they acquired the estate or interest upon the completion of the land development or subdivision. Main home exclusion
2: Section CZ 39 person A
a: person A:
b: a beneficiary of a trust, if person A is a trustee of the trust and—
i: a principal settlor of the trust does not have a main home; or
ii: if a principal settlor of the trust does have a main home, it is that main home which person A is disposing of. When this section does not apply
3: The exclusion in subsection (2)
a: the exclusion has been used by person A 2 or more times within the 2 years immediately preceding the bright-line date for the residential land:
b: person A has engaged in a regular pattern of acquiring and disposing of residential land described in subsection (2) Person may include group of persons
4: For the purposes of subsection (3)﻿(b) subsection (2) subsection (5) Meaning of group of persons
5: For the purposes of subsection (4)
a: means 2 or more persons when together all of the persons occupy, or have occupied, residential land described in subsection (2)
b: includes a person other than a natural person (the non-natural person paragraph (a) beneficiary, bright-line date, bright-line grandparented home, bright-line period, dispose, dwelling, land, person, principal settlor, residential land, settlement, settlor, trustee, year
27: Section DB 23 amended (Cost of revenue account property)
1: Replace section DB 23(3)
3: Subsection (1) supplements the general permission and overrides the capital limitation and the private limitation. Subsection (2) overrides the general permission. The other general limitations still apply.
2: In section DB 23 private limitation
28: New section DB 23C inserted (Revenue account property: cost of some residential land reduced)
1: After section DB 23B
DB 23C: Revenue account property: cost of some residential land reduced
Cost reduced
1: For the purposes of section DB 23, the cost of residential land for which income is derived under section CB 6A(6) reduced by subsection (2) Excluded adjustment formula
2: The excluded adjustment amount for the purposes of subsection (1) adjustment days ÷ total days × cost. Definition of items in formula
3: The items in the formula in subsection (2) subsections (4) to (6) Adjustment days
4: Adjustment days section CB 6A(9) Total days
5: Total days section CB 6A(10) Cost
6: Cost amount, income, residential land
2: Subsection (1) subsection (1) subsection (1)
a: a person’s disposal of a freehold estate in residential land that the person acquired as the owner of a leasehold estate with a perpetual right of renewal, if the person was granted the leasehold estate before 27 March 2021:
b: a person’s disposal of an estate or interest in residential land that the person acquired as the result of the completion of a land development or subdivision, if before 27 March 2021 the person entered into the agreement under which they acquired the estate or interest upon the completion of the land development or subdivision.
29: Section DB 29 amended (Apportionment when land acquired with other property)
In section DB 29 sections CB 6A to CB 14 any of sections CB 6A CZ 39
30: New heading and section DB 51C inserted
1: After section DB 51B IFRS leases
DB 51C: NZ IFRS 16 leases
When this section applies
1: This section applies when a person has, under section EJ 10B Amount and timing of deduction
2: The person is allowed a deduction of the amount of the deduction quantified and allocated under section EJ 10B amount, deduction, person
2: Subsection (1)
31: Section DB 53 amended (Attributed PIE losses of certain investors)
1: Replace section DB 53(1)﻿(b)
b: the investor is—
i: resident in New Zealand:
ii: a trustee who has chosen a prescribed investor rate referred to in schedule 6, table 1, row 5 or 7.
2: After section DB 53(2) When this section also applies
2B: This section also applies for the purposes of an adjustment under section HM 36B
a: is an investor in a multi-rate PIE; and
b: in relation to an amount attributed to them by the PIE, has a rate of tax applied that is not equal to their prescribed investor rate for the income year; and
c: has an amount of attributed PIE loss for the income year.
3: In section DB 53
a: delete zero-rated portfolio investor
b: insert natural person prescribed investor rate resident in New Zealand
32: New heading and sections DB 66 and DB 67 inserted
1: After section DB 65 Feasibility expenditure
DB 66: Feasibility expenditure: spread deduction
When this section applies
1: This section applies for expenditure to the extent to which a person has—
a: incurred expenditure for an income year after the 2019–20 income year in relation to making progress towards completing, creating, or acquiring property that, if it were to be completed, created, or acquired, would be—
i: depreciable property for which the depreciation rate is more than 0%:
ii: revenue account property; and
b: abandoned further progress in relation to the property, with the result that it is not completed, created, or acquired; and
c: no deduction in relation to the expenditure under any other provision. When this section does not apply
2: Despite subsection (1)
a: land, unless it is fixed life intangible property:
b: an excepted financial arrangement:
c: intangible property or intellectual property, unless it is fixed life intangible property. Deduction: spread forward
3: The person is allowed a deduction for the expenditure described in subsection (1) Link with subpart DA
4: This section overrides the capital limitation. The general permission must still be satisfied and the other general limitations still apply. amount, business, capital limitation, deduction, depreciable property, excepted financial arrangement, financial arrangement, fixed life intangible property, general limitation, general permission, income year, intellectual property, land, person
DB 67: Feasibility expenditure: immediate deduction
When this section applies
1: This section applies for expenditure to the extent to which a person has—
a: incurred expenditure for an income year after the 2019–20 income year in relation to making progress towards completing, creating, or acquiring property that, if it were to be completed, created, or acquired, would be—
i: depreciable property for which the depreciation rate is more than 0%:
ii: revenue account property; and
b: no deduction for the expenditure under any other provision. When this section does not apply
2: Despite subsection (1)
a: land, but excluding fixed life intangible property:
b: an excepted financial arrangement:
c: intangible property or intellectual property, but excluding fixed life intangible property. Deduction: immediate
3: The person is allowed a deduction for the expenditure described in subsection (1) subsection (1) Link with subpart DA
4: This section overrides the capital limitation. The general permission must still be satisfied and the other general limitations still apply. amount, business, capital limitation, deduction, depreciable property, excepted financial arrangement, financial arrangement, fixed life intangible property, general permission, general limitation, income year, intellectual property, land, person
2: Subsection (1)
33: Section DT 1A amended (Ring-fenced allocations)
In section DT 1A(4) sections IA 5 and IP 3 sections IA 5, IB 3
34: Section ED 3 amended (Part-year tax calculations for transfers: general insurance OCR)
In section ED 3(3) new life insurance rules rules for life insurers
35: Section EE 40 amended (Transfer of depreciable property on or after 24 September 1997)
1: After section EE 40(9) Statutory change: exception
9B: Subsection (9) does not apply when person A may, due to a change of annual rate by a statute, apply an annual rate that is more than the annual rate that the associated person applied.
2: In section EE 40(10) Subsection (6) Subsection (9)
3: Subsection (1)
4: Subsection (2)
36: Section EH 1 amended (Income equalisation schemes)
1: In section EH 1(2)﻿(a) EH 36 EH 36 and EZ 80
2: Subsection (1)
37: Section EH 5 amended (Main income equalisation account)
In section EH 5(5) and EH 25 EH 25, EZ 80, and EZ 81
38: Section EH 13 amended (Refund on application)
In section EH 13(1) and EH 25 EH 25, EZ 80, and EZ 81
39: Section EH 35 amended (Meaning of main maximum deposit)
1: In section EH 35(2)﻿(a) provision , other than section EZ 4B Mycoplasma bovis
2: Subsection (1)
40: Section EH 36 amended (Other definitions)
In section EH 36 deposit sections EH 6(2) to (4) and EH 10 to EH 33 sections EH 6(2) to (4), EH 10 to EH 33, and EZ 80(3) and (7)﻿(b)
41: Section EH 61 amended (Meaning of adverse event maximum deposit)
1: In section EH 61(3)﻿(a) provision , other than section EZ 4B Mycoplasma bovis
2: In section EH 61(3)﻿(b) EH 33, EH 33, EZ 4B
3: Subsections (1) and (2)
42: Section EJ 3 amended (Spreading forward of fertiliser expenditure)
1: Replace section EJ 3(5) How elections made
5: An election under this section is made as follows:
a: a person makes an election under subsection (2) by taking a tax position on that basis in their return of income for the income year to which they choose to allocate some or all of the expenditure:
b: a person makes an election under subsection (4),—
i: paragraph (a), by taking a tax position on that basis in their return of income for the income year in which the person ceases to carry on the business:
ii: paragraph (b), by notifying the Commissioner of the allocation within the time within which the person is required to file a return of income for the income year in which the person ceases to carry on the business. Extension of time: elections under subsection (4)﻿(b)
5B: The Commissioner may extend the time limit imposed under subsection (5)﻿(b)﻿(ii)
2: After section EJ 3(6) Elections under subsection (2) irrevocable
7: An election made under subsection (2) cannot be revoked.
3: In section EJ 3
a: insert notify tax position
b: delete notice
4: Subsections (1) and (2)
43: Section EJ 10 amended (Personal property lease payments)
1: After section EJ 10(1)﻿(c)
d: is not an operating lease to which section EJ 10B
2: In section EJ 10 operating lease
3: Subsections (1) and (2)
44: New section EJ 10B inserted (IFRS leases)
1: After section EJ 10
EJ 10B: IFRS leases
When this section applies
1: This section applies in relation to an operating lease of a personal property lease asset (the IFRS lease
a: the person, as lessee, uses NZ IFRS 16 in their financial statements for the IFRS lease; and
b: the lessor for the IFRS lease is not associated with the person; and
c: the person does not sublease the personal property lease asset to another person; and
d: the person irrevocably chooses to use this section for the IFRS lease, as evidenced by a return of income made in accordance with this section. Deduction: de minimis
2: If the initial right of use asset under NZ IFRS 16 is $100,000 or less and the remaining term of the IFRS lease under NZ IFRS 16 is 4 years or less initially and immediately after any extension starts, then the person, as lessee for the IFRS lease, is allowed, for an income year, a deduction for a positive amount, and has income for a negative amount, for the total amount recognised by the person through their profit and loss account for the IFRS lease for the income year, if the amount is in accordance with NZ IFRS 16. Deduction: formula
3: If subsection (2) accounting amount − add-back adjustment + impairment and revaluation adjustment − make-good and direct costs adjustment. Definition of items in formula
4: In the formula in subsection (3)
a: accounting amount
b: add-back adjustment subparagraphs (i) and (ii)
i: impairment of the lease asset described in paragraph 33 of NZ IFRS 16 arising in the income year:
ii: revaluation or impairment of the lease asset described in paragraph 35 of NZ IFRS 16 arising in the income year:
c: impairment and revaluation adjustment paragraph (b)
d: make-good and direct costs adjustment subparagraphs (i) and (ii)
i: make-good costs for the lease described in paragraph 24(d) of NZ IFRS 16:
ii: direct costs for the lease described in paragraph 24(c) of NZ IFRS 16, if the person chooses to apply this subparagraph, as evidenced by a return of income made in accordance with this subparagraph. Deduction: incurred
5: The person, as lessee, is allowed a deduction for the IFRS lease for—
a: make-good costs, described in subsection (4)﻿(d)﻿(i)
b: direct costs, described in subsection (4)﻿(d)﻿(ii) subsection (4)﻿(d)﻿(ii) Wash-up: income or deduction
6: The person, as lessee, has a deduction for a positive amount, and has income for a negative amount, for the income year in which the IFRS lease ends or does not meet a requirement in subsection (1)﻿(a), (b), or (c) IFRS deductions − IFRS income − expenditure. Definition of items in formula
7: In the formula in subsection (6)
a: IFRS deductions
b: IFRS income
c: expenditure Transitional deduction: retrospective treatment spread forward
8: If the person has applied NZ IFRS 16 retrospectively for the IFRS lease or has not applied this section for the IFRS lease while they have applied NZ IFRS 16 for it, then the person is allowed a deduction for a positive amount and has income for a negative amount, spread in equal proportions over the income year and the following 4 income years, calculated using the formula— retrospective accounting expenditure − retrospective tax adjustments − previous tax deductions. Definition of items in formula
9: In the formula in subsection (8)
a: retrospective accounting expenditure
b: retrospective tax adjustments subsections (4)﻿(b), (c), and (d) and (5) subsections (4)﻿(b), (c), and (d) and (5)
c: previous tax deductions amount, deduction, income, income year, NZ IFRS 16, operating lease, person, personal property lease asset
2: Subsection (1)
45: Section EL 2 amended (Outline of subpart: specific provisions)
1: In section EL 2(5) The following sections set out the properties to which the deduction allocation rule in section EL 4 does not apply:
2: Subsection (1)
46: Section EL 3 amended (Definitions for this subpart)
1: In section EL 3 land sales provisions CB 15 CB 15 and CZ 39
2: In section EL 3 residential rental property
a: in paragraph (b), replace residential land. residential land; and
b: after paragraph (b), insert:
c: does not include properties that are excluded from the application of section EL 4 by sections EL 9, EL 10, EL 11, EL 12, and EL 13.
3: Subsection (2)
47: Section EL 14 amended (Continuity rules for companies)
In section EL 14 sections IA 5 and IP 3 sections IA 5, IB 3
48: Section EL 20 amended (Allocation of deductions related to bright-line disposals of residential land)
1: In section EL 20(1)﻿(a) CB 6A (Disposal within 5 years: bright-line test for residential land) CB 6A or CZ 39
2: In section EL 20(3)﻿(a) CB 6A CB 6A or CZ 39
49: Section EW 15I amended (Mandatory use of yield to maturity method for some arrangements)
1: In section EW 15I(1)﻿(b)﻿(iib) NZIAS 17 NZ IFRS 16
2: In section EW 15I NZIAS 17 NZ IFRS 16
50: Section EW 48 amended (Anti-avoidance provisions)
1: In section EW 48(1)﻿(c) person). person); or
2: After section EW 48(1)﻿(c)
d: sections GC 20 and GC 21
3: Subsection (2)
51: Section EX 21 amended (Attributable CFC amount and net attributable CFC income or loss: calculation rules)
1: In section EX 21(13)﻿(j) subpart IC subparts IB
2: In section EX 21(26) the life insurance rules do not apply and
3: In section EX 21 life insurance rules
52: Section EX 28 amended (Meaning of FIF)
1: In section EX 28(c) life insurance rules rules for life insurers
2: In section EX 28 life insurance rules
53: Section EY 5 amended (Part-year tax calculations)
In section EY 5(2) in the new life insurance rules and in the rules they replace in the rules for life insurers
54: Section EY 7 amended (Meaning of claim)
1: In the heading to section EY 7(1) life insurance rules rules for life insurers
2: In section EY 7(1) life insurance rules rules for life insurers
3: In section EY 7 life insurance rules
55: Section EY 11 amended (Superannuation schemes providing life insurance)
1: In section EY 11(8) life insurance rules rules for life insurers
2: In section EY 11 life insurance rules
56: New section EZ 4B inserted (Cattle destroyed because of
Mycoplasma bovis
1: After section EZ 4
EZ 4B: Cattle destroyed because of
Mycoplasma bovis When this section applies
1: This section applies when—
a: a person who owns or carries on a business has mixed-age cows on hand at the start of an income year (the cull year
i: use for breeding in the ordinary course of carrying on the business; and
ii: valued under the national standard cost scheme or the cost price method in the previous income year; and
b: in the cull year, some or all of the person’s cattle (the destroyed cattle Mycoplasma bovis
i: a power exercised under section 121 of the Biosecurity Act 1993:
ii: a direction given under section 122 of that Act; and
c: either,—
i: if the cull year is before the 2019–20 income year, the number of mixed-age cows valued under the national standard cost scheme or the cost price method that the person has on hand at the end of the income year following the cull year is at least 75% of the number of mixed-age cows valued under the national standard cost scheme or the cost price method that the person had on hand at the start of the cull year; or
ii: in any other case, the number of mixed-age cows valued under the national standard cost scheme or the cost price method that the person expects to have on hand at the end of the income year following the cull year is at least 75% of the number of mixed-age cows valued under the national standard cost scheme or the cost price method that the person had on hand at the start of the cull year. Timing of income
2: The person may choose to allocate the amount of income calculated using the formula in subsection (5) Timing of deduction
3: When a person makes an election under subsection (2) subsection (2) Business ceasing
4: If the person stops owning or carrying on the business in an income year (the cessation year
a: the amount of income calculated using the formula in subsection (5)
b: the part of any deduction allocated under subsection (3) First formula
5: The formula referred to in subsections (2) and (4) Σ(number × (sale proceeds + compensation) ÷ culled stock). Definition of items in formula
6: The items in the formula in subsection (5) subsections (7) to (11) Σ
7: Σ
a: rising 1 year heifers:
b: rising 2 year heifers:
c: mixed-age cows:
d: breeding bulls. Number
8: Number
a: the number that is the greater of zero and the number calculated using the formula in subsection (12)
b: the number of livestock of that class that—
i: were breeding stock or stock that the person expected to be capable of, and intended to be used for, breeding upon reaching maturity; and
ii: the person valued under the national standard cost scheme or the cost price method in the income year before the cull year. Sale proceeds
9: Sale proceeds Compensation
10: Compensation
a: any excess of the value of the destroyed cattle that belong to that class used in the calculation of that compensation over the amount of income described in subsection (9)
b: any excess of the cost of replacement cattle of the same class that the person acquires and intends to be used for breeding over the amount of income that would, in the absence of this paragraph, be described in this subsection. Culled stock
11: Culled stock Second formula
12: The formula referred to in subsection (8) valuation method breeding stock + culled stock – opening stock. Definition of items in second formula
13: In the formula in subsection (12)
a: valuation method breeding stock
i: were breeding stock or stock that the person expected to be capable of, and intended be used for, breeding upon reaching maturity; and
ii: the person valued under the national standard cost scheme or the cost price method in the income year before the cull year:
b: culled stock
c: opening stock How elections made
14: A person makes an election under subsection (2)
a: if the cull year is the 2020–21 income year or an earlier income year, by the date of filing their return of income for the 2020–21 income year; or
b: in any other case, by the date of filing their return of income for the cull year. Elections irrevocable
15: An election made under subsection (2) When election treated as never having been made
16: A person who makes an election under subsection (2) Relationship with sections CG 6 and DB 49
17: This section overrides sections CG 6 (Receipts from insurance, indemnity, or compensation for trading stock) and DB 49 (Adjustment for opening values of trading stock, livestock, and excepted financial arrangements). amount, business, class, Commissioner, cost price, deduction, income, income year, national standard cost scheme, notify, return of income
2: Subsection (1)
57: New cross-heading and sections EZ 80 and EZ 81 inserted
1: After section EZ 79 Income equalisation schemes
EZ 80: Refund of excess deposit in main income equalisation account as consequence of election under section EZ 4B
When this section applies
1: This section applies when—
a: a person makes an election under section EZ 4B(2) Mycoplasma bovis
b: as a consequence of the election, the person’s deposits for an accounting year, less the amount of any refund made to the person for the accounting year under section EH 8 (Refund of excess deposit), are more than their main maximum deposit for the accounting year. Refund
2: The Commissioner must refund the excess to the person from deposits the person made for the accounting year—
a: to the extent to which, at the time the election is made, the person has sufficient deposits made for the accounting year in their main income equalisation account to enable the Commissioner to do so; and
b: as soon as practicable after the election is made. Treatment of interest
3: The amount of the refund must include any interest payable under section EH 6 (Interest on deposits in main income equalisation account) on a deposit from which the excess must be refunded. When subsection (5)
4: Subsection (5) refunded deposits Treatment of certain deposits
5: The earliest of the refunded deposits to have been refunded, to the extent necessary to make up the shortfall, are treated as—
a: not having been refunded under section EH 13 or EH 15, as applicable; and
b: having been refunded under this section. Income when refund given
6: A refund under this section is,—
a: to the extent to which the refund is interest payable under section EH 6, income under section CZ 37(1)
b: to the extent to which the refund is not interest payable under section EH 6, excluded income under section CZ 37(2) Modified application of section EH 6
7: Section EH 6 applies to a deposit that forms all or part of the excess, other than a deposit that has been refunded before the election is made, with the following modifications:
a: interest is computed with daily rests from the date of acknowledgment of the receipt of the deposit until the date the election is made:
b: interest on the deposit accrues until the earlier of—
i: 31 March in each year; and
ii: the date the election is made. Relationship with section EH 8
8: This section overrides section EH 8. accounting year, amount, Commissioner, deposit, excluded income, income, interest, main income equalisation account, main maximum deposit, pay, year
EZ 81: Refund of excess deposit in adverse event income equalisation account as consequence of election under section EZ 4B
When this section applies
1: This section applies when—
a: a person makes an election under section EZ 4B(2) Mycoplasma bovis
b: as a consequence of the election, the person’s adverse event deposits for an accounting year ignoring section EH 60 (Transfer of deposit), less the amount of any refund made to the person for the accounting year under section EH 42 (Refund of excess deposit), are more than their adverse event maximum deposit for the accounting year. Refund
2: The Commissioner must refund the excess to the person from deposits the person made for the accounting year—
a: to the extent to which, at the time the election is made, the person has sufficient deposits made for the accounting year in their main income equalisation account to enable the Commissioner to do so; and
b: as soon as practicable after the election is made. Treatment of interest
3: The amount of the refund must include any interest payable under sections EH 6 and EH 40 (which relate to interest on deposits in income equalisation accounts) on a deposit from which the excess must be refunded. When subsection (5)
4: Subsection (5) refunded deposits Treatment of certain deposits
5: The earliest of the refunded deposits to have been refunded, to the extent necessary to make up the shortfall, are treated as—
a: not having been refunded under section EH 13, EH 15, or EH 45, as applicable; and
b: having been refunded under this section. Income when refund given
6: A refund under this section is,—
a: to the extent to which the refund is interest payable under section EH 6 or EH 40, income under section CZ 37(1)
b: to the extent to which the refund is not interest payable under section EH 6 or EH 40, excluded income under section CZ 37(2) Modified application of section EH 6
7: Section EH 6 applies to a deposit that forms all or part of the excess, other than a deposit that has been refunded before the election is made, with the following modifications:
a: interest is computed with daily rests from the date on which the deposit was transferred to the main income equalisation account until the date the election is made:
b: interest on the deposit accrues until the earlier of—
i: 31 March in each year; and
ii: the date the election is made. Relationship with section EH 42
8: This section overrides section EH 42. Some definitions
9: In this section,— adverse event deposit deposit
a: means an adverse event deposit; and
b: includes an adverse event deposit that has been transferred to a main income equalisation account under section EH 60; and
c: includes, for the purposes of subsections (3) and (7)﻿(a) and (b) paragraphs (a) and (b) main income equalisation account accounting year, adverse event deposit, adverse event maximum deposit, amount, Commissioner, deposit, excluded income, income, interest, main income equalisation account, pay, year
2: Subsection (1)
58: Cross-heading above section EZ 80 repealed
Repeal the cross-heading above section EZ 80 Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019
59: Section EZ 80 renumbered (Transfers of deposits when adverse event income equalisation accounts abolished)
Renumber section EZ 80 Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 section EZ 82
60: Section EZ 81 amended (Refund of excess deposit in adverse event income equalisation account as consequence of election under section EZ 4B)
In section EZ 81(9) deposit section EH 60 section EH 60 or EZ 82
61: Section FB 3A amended (Residential land)
1: In section FB 3A(1) and CB 16A , CB 16A, CZ 39, and CZ 40
2: In section FB 3A(3) section CB 6A(1) to (4B) sections CB 6A(1) to (5) and CZ 39(2) to (6)
62: Section FC 9 amended (Residential land transferred to executor, administrator, or beneficiary on death of person)
In section FC 9(2) CB 6A (Disposal within 5 years: bright-line test for residential land) does CB 6A and CZ 39
63: Section FE 2 amended (When this subpart applies)
1: After section FE 2(1)﻿(cc)
cd: the trustee of a trust on which a non-resident makes a settlement in or before the income year and for which 50% or more of the value of settlements made on the trust in or before the income year is from settlements made by the non-resident or by a person who is associated with the non-resident in the income year:
2: Repeal section FE 2(1)﻿(d)﻿(i)
3: Replace the heading to section FE 2(4) Association between person and non-resident relative for subsection (1)
4: Repeal section FE 2(4)﻿(b)
64: Section FE 6 amended (Apportionment of interest by excess debt entity)
1: In the heading to section FE 6(2) Formula General formula
2: In section FE 6(2) The excess debt entity An excess debt entity having a worldwide group that is not given by section FE 31D
3: In section FE 6(2) (group debt percentage – threshold amount) ÷ group debt percentage group debt factor
4: In section FE 6(3) formula in subsection (2)
5: After section FE 6(3)﻿(c)
cb: group debt factor
i: 1, if the excess debt entity’s New Zealand group has a debt percentage for the income year equal to zero; or
ii: the amount calculated by subtracting from 1 the amount calculated by dividing the threshold amount in paragraph (e) for the excess debt entity by the group debt percentage in paragraph (d) for the excess debt entity:
6: Repeal section FE 6(3)﻿(e)﻿(iiib)
7: After section FE 6(3) Formula for excess debt entities with worldwide group given by section FE 31D
3B: An excess debt entity having a worldwide group that is given by section FE 31D is treated under section CH 9 as deriving in the income year an amount of income that is the greater of zero and the amount calculated for the income year using the formula— (related interest – mismatch + FRD2) × (total debt – concession) ÷ total debt × group debt comparison factor. Definition of items in formula
3C: In the formula in subsection (3B)
a: related interest
i: the total amount of deductions allowed for interest payable to a company that is a member of the entity’s New Zealand group under sections FE 3 and FE 28 and not included in the amount given by subparagraph (ii)
ii: the total amount of deductions allowed for interest payable under a financial arrangement excluded from the total group debt for the entity’s New Zealand group under section FE 15:
b: mismatch
c: FRD2
i: are issued by the entity; and
ii: are held by a person resident in New Zealand who is not a company that is a member of the entity’s New Zealand group; and
iii: would be removed under section FE 18(3B) from the measurement of total group debt of the entity’s worldwide group if that provision applied to fixed-rate foreign equity and fixed-rate shares:
d: total debt
e: concession
f: group debt comparison factor
i: 1, if the excess debt entity’s New Zealand group or the excess debt entity’s worldwide group has a debt percentage under section FE 12(3) equal to zero for the income year; or
ii: the amount calculated using the formula in subsection (3D) subparagraph (i) Formula for group debt comparison factor
3D: The group debt comparison factor under subsection (3C)﻿(f)﻿(ii) (New Zealand group debt percentage – threshold amount) ÷ (New Zealand group debt percentage – worldwide group debt percentage). Definition of item in formula
3E: In the formula in subsection (3D) threshold amount
8: In section FE 6(4) subsection (2) subsection (2) or (3B)
9: Replace section FE 6(5)
5: The amount of income for which the company may make the election under subsection (4), when added to any other income that the company chooses to treat itself as deriving under subsection (4), must not exceed—
a: the total amount of deductions that the company has for interest in the income year, except if paragraph (b)
b: the total amount of the company’s interest, incurred under financial arrangements meeting the requirements of section FE 18(3B), if the excess debt entity has a worldwide group given by section FE 31D.
10: In section FE 6 dividend resident in New Zealand total worldwide debt
11: Subsections (1), (2), (4), (6), (7), (8), (9), and (10) Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021
65: Section FE 12 amended (Calculation of debt percentages)
1: In section FE 12(2) section FE 5(1)﻿(a) or (ab)
2: Replace section FE 12(3)
3: A group has a debt percentage equal to zero, except if the amount of the item group assets given by subsection (3B)﻿(b) exceeds the amount of the item non-debt liabilities given by subsection (3B)﻿(c), when the group has a debt percentage calculated, on a consolidated basis for an income year or accounting year as applicable, using the formula— group debt ÷ (group assets – non-debt liabilities).
66: Section FE 22 amended (Notional offshore investment)
In section FE 22(3)﻿(b)﻿(ii) subparagraph (i): subparagraph (i); or
67: Section FH 3 amended (Payments under financial instruments producing deduction without income)
1: In section FH 3(2)﻿(a) outside New Zealand
2: In section FH 3(2)﻿(b) tax law taxation law
3: Subsections (1) and (2)
68: Section FH 7 amended (Payments to person outside New Zealand producing deduction without income)
1: Replace section FH 7(1)﻿(b)
b: under the taxation law of the payee jurisdiction, the amount is treated as being—
i: received by the payee in a country or territory outside the payee jurisdiction:
ii: income of a person who is not the payee; and
bb: if the amount does not meet the requirements of paragraph (b)﻿(i) paragraph (b)﻿(ii)
2: Replace section FH 7(1)﻿(e)
e: if the amount meets the requirements of paragraph (b)﻿(i)
f: if the amount meets the requirements of paragraphs (b)﻿(ii) and (bb)
3: Subsections (1) and (2)
69: Section FH 12 amended (Offset of mismatch amounts against surplus assessable income)
1: In section FH 12(3) exempt deductionless
2: In section FH 12(4)﻿(c) exempt deductionless
3: In section FH 12(4)﻿(c)﻿(i) group) or excluded income under section CX 60 (Intra-group transactions)
4: In section FH 12(10) resident in New Zealand
5: Subsections (1) to (4)
70: Section FM 18 amended (Financial arrangements: transfer from company A to company B)
1: In section FM 18(1)﻿(c) sections IA 4 and IA 5 sections IA 4, IA 5, and IB 3
2: Subsection (1)
71: Section FO 10 amended (When property passes on resident’s restricted amalgamation)
In section FO 10(6) 5-year bright-line test or the 10-year rule in any of sections CB 6A, CB 9 to CB 11, and CB 14 5-year bright-line test, the 10-year bright-line test, or the 10-year rule in any of sections CB 6A, CB 9 to CB 11, CB 14, and CZ 39
72: Section FO 12 amended (Financial arrangements: resident’s restricted amalgamation, companies in wholly-owned group)
1: In section FO 12(1)﻿(d) subpart ID subparts IB
2: Subsection (1)
73: Section FO 17 amended (Land)
1: In section FO 17(2)﻿(a) CB 6A to CB 14 CB 6A to CB 14, and CZ 39
2: In section FO 17(2)﻿(b) 5-year bright-line test or the 10-year rule in any of sections CB 6A, CB 9 to CB 11, and CB 14 5-year bright-line test, the 10-year bright-line test, or the 10-year rule in any of sections CB 6A, CB 9 to CB 11, CB 14, and CZ 39
3: In section FO 17(3)
a: replace 5-year bright-line test or the 10-year rule in any of sections CB 6A, CB 9 to CB 11, and CB 14 5-year bright-line test, the 10-year bright-line test, or the 10-year rule in any of sections CB 6A, CB 9 to CB 11, CB 14, and CZ 39
b: replace CB 6A to CB 14 CB 6A to CB 14, and CZ 39
74: New section FZ 9 inserted (Transfers of trading stock to non-associates, donee organisations, or public authorities)
After section FZ 8 Trading stock
FZ 9: Transfers of trading stock to non-associates, donee organisations, or public authorities
Section FC 2(1) (Transfer at market value) does not apply to a transfer of property if—
a: the property is trading stock of the transferor; and
b: the transferee—
i: is not associated with the transferor; or
ii: is associated with the transferor, but is a donee organisation or a public authority; and
c: the transfer is made in—
i: the period that begins on 17 March 2020 and ends on 16 March 2022; or
ii: a period specified by an Order in Council made under section 225ABA associated, donee organisation, property, public authority, trading stock
75: Section GB 3 amended (Arrangements for carrying forward loss balances: companies)
1: Replace the heading to section GB 3 Arrangements for carrying forward loss balances: companies’ ownership
2: In section GB 3(1)﻿(b) section IA 5 (Restrictions on companies’ loss balances carried forward) section IA 5(2) and (3) (Restrictions on companies’ loss balances carried forward: continuity of ownership)
3: In section GB 3(2) section IA 5 section IA 5(2) and (3)
76: New sections GB 3BA to GB 3BAC inserted
1: After section GB 3
GB 3BA: Arrangements for carrying forward loss balances: companies’ business activities
When this section applies
1: This section applies when—
a: a share in a company (the loss company
i: directly or indirectly altering rights attached to the shares:
ii: to change the nature of business activities carried on by the loss company; and
b: the arrangement is entered into within the 2 years immediately preceding a breach of the requirements for continuity of ownership of section IA 5 (Restrictions on companies’ loss balances carried forward: continuity of ownership) that, if they had been met, would have enabled a tax loss component of the loss company to be carried forward to a tax year in a loss balance; and
c: the arrangement allows the loss company to meet the requirements of section IB 3(2)
d: a purpose of the arrangement is to defeat the intent and application of section IB 3 Company treated as not meeting requirements
2: The loss company is treated as not meeting the requirements of section IB 3(2) arrangement, business, company, loss balance, share, tax loss component, tax year
GB 3BAB: Arrangements to inject income into companies carrying forward loss balances
When this section applies
1: This section applies when—
a: a person ( person A person B
b: person A and person B are associated persons at the time they enter into the arrangement; and
c: an effect of the arrangement is that a company derives an amount of assessable income for an income year that, but for the arrangement, a person other than the company—
i: would have derived; or
ii: would in all likelihood have derived; or
iii: might be expected to have derived; and
d: tax loss components of the company are carried forward under section IB 3(2)
e: the arrangement has tax avoidance as its sole or main purpose. Treatment of injected income
2: The amount is schedular income of the company for the tax year corresponding to the income year. amount, arrangement, assessable income, associated person, company, income year, schedular income, tax avoidance, tax loss component, tax year
GB 3BAC: Arrangements to shift expenditure from companies carrying forward loss balances
When this section applies
1: This section applies when—
a: tax loss components of a company are carried forward under section IB 3(2)
b: a person ( person A person B
c: person A and person B are associated persons at the time they enter into the arrangement; and
d: an effect of the arrangement is that, in the absence of this section, a person other than the company is allowed a deduction for an amount of expenditure or loss the person incurs that, but for the arrangement, the company—
i: would have incurred in the income year corresponding to the tax year; or
ii: would in all likelihood have incurred in the income year corresponding to the tax year; or
iii: might be expected to have incurred in the income year corresponding to the tax year; and
e: the arrangement has tax avoidance as its sole or main purpose. Treatment of company
2: The company is treated as having incurred the amount of expenditure or loss—
a: in the course of carrying on a business for the purpose of deriving assessable income; and
b: in the income year corresponding to the tax year. Treatment of other person
3: The person referred to in subsection (1)﻿(d) amount, arrangement, assessable income, associated person, business, company, deduction, income year, loss, tax avoidance, tax loss component, tax year
2: Subsection (1)
77: Section GB 20 amended (Arrangements involving petroleum and mineral mining)
In section GB 20(1)﻿(a)﻿(ii) expenditure expenditure
78: Section GB 52 amended (Arrangements involving residential land: companies’ shares)
1: In section GB 52(1)﻿(a)
a: replace CB 6A(1)﻿(a) or (b) (Disposal within 5 years: bright-line test for residential land) CB 6A(1)﻿(a) or (b), or CZ 39(2)﻿(a) or (b)
b: replace 5 years 10 years or 5 years, as applicable,
2: In section GB 52(1)﻿(c) CB 6A CB 6A or CZ 39
79: Section GB 53 amended (Arrangements involving residential land: trusts)
In section GB 53(1)﻿(c) CB 6A (Disposal within 5 years: bright-line test for residential land) CB 6A or CZ 39
80: Section GC 8 amended (Insufficient amount receivable by person)
1: In section GC 8(2)﻿(a) arrangement transfer pricing arrangement
2: Replace section GC 8(2)﻿(b)
b: the increase under subsection (1)
i: produces an increase in the amount that is a deduction of the other party, or would be a deduction of the other party in the absence of sections FH 5, FH 8, and FH 9 (which deny deductions arising from some mismatch situations); or
ii: if the transfer pricing arrangement is an interest-free loan, would produce an increase in the income of the borrower under subpart FE (Interest apportionment on thin capitalisation) or an increase in the amount that would be a deduction of the borrower in the absence of subpart FH (Hybrid and branch mismatches of deductions and income from multi-jurisdictional arrangements); and
81: Section GC 16 amended (Credit rating of borrower: other than insuring or lending person)
1: In section GC 16(3)﻿(c) 40% or more or has a debt percentage equal to zero
2: In section GC 16(4)﻿(b) 40% or more , or has a debt percentage equal to zero,
3: Replace section GC 16(10)﻿(ab)
ab: if no member of the borrower’s worldwide group under subpart FE has long-term senior unsecured debt, the credit rating of the member of the borrower’s worldwide group with the highest credit rating, which may be determined without considering the credit ratings of members that are reasonably considered to be unlikely to have the highest credit rating, reduced by,—
i: if the member has a credit rating lower than BBB+, 1 notch:
ii: if the member has a credit rating of BBB+ or higher, 2 notches:
82: Section GC 18 amended (Loan features disregarded by rules for transfer pricing arrangements)
1: Replace section GC 18(4)
4: A term of more than 5 years for a cross-border related borrowing (the borrowing
a: the borrower is referred to as an insuring or lending person in section GC 15(2)﻿(a), (b), or (c), or is associated with such a person, and the exception in subsection (10) does not apply:
b: the borrower is not referred to as an insuring or lending person in section GC 15(2)﻿(a), (b), or (c), and is not associated with such a person and, for the borrowing, either or both—
i: the term of the borrowing is more than the period that is the weighted average of the terms of the financial arrangements included in the total group debt of the borrower’s worldwide group under subpart FE (Interest apportionment on thin capitalisation):
ii: the amount of the borrowing is more than the amount that is 4 times the total value of the financial arrangements included in the total group debt of the borrower’s worldwide group under subpart FE.
2: In section GC 18(5)﻿(a)﻿(i) (Interest apportionment on thin capitalisation)
3: In section GC 18(5)﻿(a)﻿(ii) associated persons associated persons excluding cross-border related borrowing
4: In section GC 18(5)﻿(b)﻿(ii) associated persons associated persons excluding cross-border related borrowing
5: In section GC 18(7)﻿(c)﻿(ii) associated persons associated persons excluding cross-border related borrowing
6: In section GC 18(8)﻿(a)﻿(ii) total value of loans total value of loans that are cross-border related borrowing or are
7: In section GC 18(8)﻿(a)﻿(ii) associated persons and having associated persons, and having
8: In section GC 18(8)﻿(b) total value of loans total value of loans that are cross-border related borrowing or are
9: In section GC 18(8)﻿(b) associated persons and having associated persons, and having
10: In section GC 18(8)﻿(b)﻿(i) total value of loans total value of loans that are cross-border related borrowing or are
11: In section GC 18(8)﻿(b)﻿(iii) associated persons associated persons excluding cross-border related borrowing
12: In section GC 18(9)﻿(a)﻿(ii) associated persons associated persons excluding cross-border related borrowing
13: In section GC 18(9)﻿(b) associated persons associated persons or that are cross-border related borrowing
14: In section GC 18(9)﻿(b)﻿(iii) associated persons associated persons excluding cross-border related borrowing
15: Subsections (3) to (14)
83: New heading and sections GC 20 and GC 21 inserted
1: After section GC 19 Purchase price allocation
GC 20: Effect of purchase price allocation agreement
When this section applies
1: This section applies when—
a: for consideration, a person ( person A disposal person B purchased property classes of purchased property
i: trading stock, other than timber or a right to take timber:
ii: timber or a right to take timber:
iii: depreciable property, other than buildings:
iv: buildings that are depreciable property:
v: financial arrangements:
vi: purchased property for which the disposal does not give rise to assessable income for person A or deductions for person B; and
b: person A and person B have agreed, and recorded in a document, amounts of the total consideration allocated to any of the classes of purchased property before the earlier of—
i: the day person A files a return of income in relation to their tax position for the purchased property:
ii: the day person B files a return of income in relation to their tax position for the purchased property. Agreed amount enforced, at market
2: A class of purchased property—
a: is treated as disposed of and acquired for the relevant allocated amount; or
b: may be treated by the Commissioner as disposed of and acquired for an amount that reflects the relative market value of the class of purchased property, proportional to the other classes of purchased property, if the Commissioner considers the allocated amount does not reflect that value. Exception: low value depreciable property
3: Subsection (2)﻿(b)
a: the original cost of the item for person A is less than $10,000; and
b: the total allocated amount for the item and for any identical property is less than $1 million; and
c: the allocated amount for the item is—
i: no greater than its original cost for person A; and
ii: no less than its tax book value as described in section GC 21(13)﻿(c) adjusted tax value, Commissioner, deduction, depreciable property, depreciation loss, dispose, financial arrangement, income, return of income, revenue account property, tax position, trading stock
GC 21: Purchase price allocation required: no agreement
When this section applies
1: This section applies when—
a: for consideration, a person ( person A disposal person B purchased property classes of purchased property
i: trading stock, other than timber or a right to take timber:
ii: timber or a right to take timber:
iii: depreciable property, other than buildings:
iv: buildings that are depreciable property:
v: financial arrangements:
vi: purchased property for which the disposal does not give rise to assessable income for person A or deductions for person B; and
b: person A and person B have not agreed, and have not recorded in a document, amounts of the total consideration allocated to any of the classes of purchased property before the earlier of—
i: the day person A files a return of income in relation to their tax position for the purchased property:
ii: the day person B files a return of income in relation to their tax position for the purchased property. When this section does not apply
2: This section does not apply if—
a: the total consideration for the purchased property in the disposal is less than $1 million; or
b: the only purchased property in the disposal is residential land together with its chattels, and the total consideration for them is less than $7.5 million. Allocated amount: person A
3: If subsection (1)﻿(a) allocated amounts
a: the relative market value of the relevant class of purchased property proportional to the other classes of purchased property; and
b: person A’s tax book value for the relevant class of property described in subsection (1)﻿(a)﻿(i) to (v) Allocated amount: person A: excess allocation
4: If the total amounts that would be allocated by subsection (3)
a: first, to reduce any amount allocated to the class of property described in subsection (1)﻿(a)﻿(vi)
b: second, to reduce, pro rata, any amounts allocated to the classes of property described in subsection (1)﻿(a)﻿(i) to (v) Allocated amount: person B
5: If person A does not notify person B as provided for in subsection (3) allocated amounts Non-compliance
6: If person A and person B do not notify the relevant people in accordance with subsection (3) or (5) allocated amounts
a: the amounts allocated by person A to the classes of purchased property:
b: the amounts allocated by person B to the classes of purchased property:
c: amounts that reflect the relative market value of the relevant class of purchased property, proportional to the other classes of purchased property. Allocated amounts enforced, at market
7: A class of purchased property is treated as disposed of and acquired for the relevant allocated amount provided by subsections (3) to (6) No deduction until allocation
8: Person B’s deductions in relation to consideration for purchased property are not allocated to an income year, and are not included in person B’s annual total deductions for any tax year, except to the extent provided by this section. Allocation when allocation notice timely
9: Person B’s deductions in relation to consideration for purchased property are allocated to income years in accordance with section BD 4 (Allocation of deductions to particular income years), if allocation notification occurs in the income year that the purchased property is disposed of (the purchase year Allocation when allocation notice not timely
10: If subsections (1)﻿(a) and (5) allocation year Example: Exception: low value depreciable property
11: Subsection (6)﻿(c)
a: the original cost of the item for person A is less than $10,000; and
b: the total allocated amount for the item and for any identical property is less than $1 million; and
c: the allocated amount for the item is—
i: no greater than its original cost for person A; and
ii: no less than its tax book value. Relationship with subject matter
12: This section overrides a provision of this Act that expressly requires the use of the market value for purchased property, to the extent to which subsection (7) Definitions
13: In this section and section GC 20
a: allocation notification
i: the time when person B’s notification of person B’s allocation is provided to the Commissioner in the form prescribed by the Commissioner:
ii: the time when the Commissioner’s notification of the Commissioner’s allocation under subsection (6)
b: pre-allocation deduction
c: tax book value Example: part-year period adjusted tax value, Commissioner, deduction, diminished value, depreciable property, depreciation loss, dispose, financial arrangement, income, residential land, return of income, revenue account property, tax position, trading stock
2: Subsection (1)
84: New sections GZ 4 and GZ 5 inserted
After section GZ 3
GZ 4: Disposals of trading stock to donee organisations or public authorities
Section GC 1 (Disposals of trading stock at below market value) does not apply to a disposal of trading stock by a person—
a: to a donee organisation or a public authority; and
b: in—
i: the period that begins on 17 March 2020 and ends on 16 March 2022; or
ii: a period specified by an Order in Council made under section 225ABA donee organisation, public authority, trading stock
GZ 5: Disposals of trading stock to non-associates
When this section applies
1: This section applies when a person ( person A
a: to another person ( person B
i: is not associated with person A; and
ii: is not a donee organisation or a public authority; and
b: in—
i: the period that begins on 17 March 2020 and ends on 16 March 2022; or
ii: a period specified by an Order in Council made under section 225ABA Exclusion from section GC 1
2: Section GC 1 (Disposals of trading stock at below market value) does not apply to the disposal. When subsection (4)
3: Subsection (4)
a: person A does not have a business purpose for the disposal; and
b: the disposal is for no consideration, or an amount that is less than,—
i: for trading stock held by person A at the beginning of the income year of person A in which the disposal occurs, the value of the trading stock under section EB 3 (Valuation of trading stock) at the end of the previous income year; or
ii: otherwise, the cost of the trading stock to person A. Income
4: Person A is treated as deriving, in the income year of person A in which the disposal occurs, an amount calculated using the formula in subsection (5) Formula
5: The formula is— value – consideration received. Definition of items in formula
6: In the formula,—
a: value
i: for trading stock held by person A at the beginning of the income year of person A in which the disposal occurs, the value of the trading stock under section EB 3 at the end of the previous income year; or
ii: otherwise, the cost of the trading stock to person A:
b: consideration received amount, associated, donee organisation, income year, pay, public authority, trading stock
85: Section HC 6 amended (Beneficiary income)
1: After section HC 6(2)﻿(a)
ab: an amount of income derived by a trustee of a trust in an income year in which the trust is an approved unit trust referred to in clause 2 of the Income Tax Act (Exempt Unit Trusts) Order 1990; or
2: Subsection (1)
86: Section HC 10 amended (Complying trusts)
1: After section HC 10(1)﻿(ab)
ac: the requirements of paragraph (a) are not met and the distribution meets the requirements of section HC 30(4)﻿(ab)
2: Subsection (1)
87: Section HC 24 amended (Trustees’ obligations)
In section HC 24 cash basis person
88: Section HC 27 amended (Who is a settlor?)
1: After section HC 27(2)﻿(b)
bb: is a beneficiary of the trust who is owed money by the trustee and does not meet the requirements of subsection (6)
2: Replace the heading to section HC 27(6) Beneficiaries owed money by trustee
3: Replace section HC 27(6)﻿(a)
a: the amount owing at the end of the income year is not more than $25,000:
4: In section HC 27(6)﻿(b) the trustee pays the amount owing at the end of the income year is more than $25,000 and
5: After section HC 27(6) Determining amount owed to beneficiary
7: For the purposes of subsection (6)
a: made after the end of the income year and by the date given for the income year by section HC 6(1B); and
b: included in the financial statements of the trust for the income year.
89: Section HC 30 amended (Treatment of foreign trusts when settlor becomes resident)
1: Replace section HC 30(4)﻿(b)
ab: as a complying trust to the extent to which the distribution consists of an amount derived by the trustee that gives rise on or after the transition date to an income tax liability meeting the requirements of subsection (4B)
b: as a non-complying trust to the extent to which the distribution consists of an amount derived by the trustee that gives rise on or after the transition date to an income tax liability that is not satisfied before the distribution is made.
2: In section HC 30(4)﻿(ab) subsection (4B) or section HC 10(1)﻿(ab)
3: After section HC 30(4) Tax shortfall voluntarily disclosed
4B: An income tax liability meets the requirements of this subsection if—
a: the income tax liability is satisfied before the distribution is made, other than for the trust as a complying trust under an election under section HC 33; and
b: the income tax liability gives rise to a tax shortfall for the trustee for an income year ending before the distribution is made; and
c: where a shortfall penalty arises for the tax shortfall, the shortfall penalty is satisfied before the distribution is made.
4: Subsections (1) and (3)
5: Subsection (2) section HC 33
90: Section HC 33 amended (Choosing to satisfy income tax liability of trustee)
1: In section HC 33(5)﻿(b)
a: replace from income derived from an amount derived
b: replace when the income when the amount
2: In section HC 33(5)﻿(c) from income derived from an amount derived
3: In section HC 33(5)﻿(d)﻿(ii) the income derived the amount derived
91: Section HM 36B amended (Calculating PIE schedular tax adjustments for natural person investors)
1: Replace section HM 36B(1) to (3) When this section applies
1: This section applies for the purposes of calculating the income tax liability under section BC 7 When this section does not apply
1B: Despite subsection (1) Making PIE schedular tax adjustments
2: An adjustment must be made to the person’s income tax liability for the tax year for a tax credit or tax liability of the person that arises under section HM 47 when—
a: the person’s prescribed investor rate for the tax year has not been applied to some or all of the person’s PIE schedular income for the tax year; and
b: the Commissioner has information described in subsection (3) What must be taken into account in making adjustments
3: The PIE schedular tax adjustment must take into account—
a: an amount of a tax credit used by the PIE to satisfy the person’s income tax liability for the tax year:
b: another attributed tax credit that the person has for the tax year, including an unused tax credit under section HM 52 or HM 54, or a tax credit under section LS 4 (Tax credits for certain exiting investors):
c: an amount that has not been taken into account by the PIE in the calculation for the tax year, whether it is an amount of an adjustment for a tax credit for the person for the tax year or another identified adjustment for the person under sections HM 51 to HM 55 and subpart LS (Tax credits for multi-rate PIEs and investors), as applicable:
d: whether—
i: the person has an attributed PIE loss in relation to which the person’s prescribed investor rate for the tax year has not been applied:
ii: an adjustment has been made for the tax year under section HM 48 to the person’s investor interest, or a distribution paid to them, or a payment required from them:
iii: the PIE has a tax credit for the tax year under section LS 1 (Tax credits for multi-rate PIEs) in relation to the amount of loss attributed to the investor:
iv: a rate under section HM 60(6) applies for the investor for the tax year:
v: the person holds their investment in the PIE jointly with another person:
e: any other circumstance of which the Commissioner is aware that affects the application of the person’s prescribed investor rate to their attributed PIE income for the tax year. Adjustment items counted only once
3B: For the purposes of this section, if a component of an item described in subsection (3)
2: In section HM 36B(4) the result of the calculation in subsection (3) the adjustment
3: In section HM 36B(5) the result of the calculation in subsection (3) the adjustment
4: Replace section HM 36B(6)
6: For the purposes of this section, and sections CX 56, DB 53, and LA 6 PIE schedular income
a: means an amount of attributed PIE income that a natural person who is resident in New Zealand and is an investor in a multi-rate PIE derives under section CP 1 (Attributed income of investors in multi-rate PIEs) to which the prescribed rates of tax set out in schedule 6, clause 1 (Prescribed rates: PIE investments and retirement scheme contributions) apply; and
b: includes an amount of attributed PIE loss of the person under section DB 53
5: In section HM 36B
a: delete residual income tax
b: insert attributed PIE loss Commissioner investor interest pay
92: Section HM 52 amended (Use of foreign tax credits by zero-rated and certain exiting investors)
1: After section HM 52(2) PIE schedular tax adjustments for natural person investors
2B: Subsection (2) does not apply to an investor who is a natural person resident in New Zealand. In this case,—
a: the amount of the investor’s tax credit calculated under this section may only be used in making a PIE schedular tax adjustment under section HM 36B
b: the total amount of the tax credit that may be used is limited to the extent of the investor’s tax liability on their PIE schedular income.
2: In section HM 52 PIE schedular income
93: Section HM 56 amended (Prescribed investor rates: schedular rates)
Repeal section HM 56(2)
94: Section IA 2 amended (Tax losses)
1: In section IA 2(7) For the purposes of this subpart, a A
2: Subsection (1)
95: Section IA 3 amended (Using tax losses in tax year)
After section IA 3(5) Relationship with section IB 3
6: Section IB 3
96: Section IA 5 amended (Restrictions on companies’ loss balances carried forward)
1: Replace the heading to section IA 5 Restrictions on companies’ loss balances carried forward: continuity of ownership
2: In section IA 5(4) section IP 3 (Continuity breach: tax loss components of companies carried forward) section IB 3
3: In section IA 5(5) companies companies’ ownership
4: Subsection (2) section IA 5
97: Section IA 7 amended (Restrictions relating to ring-fenced tax losses)
1: In section IA 7(1B) IA 10, and subpart IB
2: Subsection (1)
98: Section IA 8 amended (Restrictions relating to schedular income)
1: In section IA 8(1)﻿(e) insurers. insurers; or
2: After section IA 8(1)﻿(e)
f: paragraph (k)
3: In section IA 8 loss balance
4: Subsections (1) and (2)
99: New subpart IB inserted (Carrying forward companies’ loss balances: continuity of business activities)
1: After subpart IA
IB: Carrying forward companies’ loss balances: continuity of business activities
IB 1: Purpose
The purpose of this subpart and sections GB 3BA to GB 3BAC
a: to enable companies to carry forward tax loss components in loss balances despite not meeting the requirements for continuity of ownership of section IA 5 (Restrictions on companies’ loss balances carried forward: continuity of ownership), in order to reduce impediments to—
i: innovation and economic growth:
ii: corporate reorganisations:
iii: changes in the direct or indirect ownership of companies:
iv: companies accessing new sources of share capital:
v: companies adapting their business activities in order to grow or be resilient; but
b: not to encourage tax avoidance arrangements involving the acquisition of ownership interests in companies. business, company, loss balance, ownership interest, tax avoidance arrangement, tax loss component
IB 2: Meaning of ownership continuity breach
In this subpart, an ownership continuity breach company, loss balance, ownership continuity breach, tax loss component, tax year
IB 3: When tax loss components of companies carried forward despite ownership continuity breach
When this section applies
1: This section applies when an ownership continuity breach occurs for a company. Tax loss components for earlier income years carried forward
2: Despite the ownership continuity breach, a tax loss component arising in an earlier income year is carried forward to a tax year in a loss balance under section IA 3(4) (Using tax losses in tax year) if—
a: the earlier income year is the 2013–14 income year or a later income year; and
b: the company does not cease to carry on business activities during the relevant period described in section IB 4 business continuity period
c: no major change in the nature of the business activities carried on by the company occurs during the business continuity period, other than 1 or more major changes that are permitted under subsection (5)
d: subsection (3) Tax loss components for earlier income years not carried forward
3: The tax loss component is not carried forward to the tax year if—
a: before the beginning of the business continuity period,—
i: the business activities carried on by the company have ceased; and
ii: the business activities have not been revived:
b: the earlier income year is the 2020–21 income year or a later income year and the company has had another ownership continuity breach—
i: since the beginning of the earlier income year; and
ii: in relation to which the requirements of subsection (2)﻿(b) and (c)
c: the earlier income year is before the 2020–21 income year and an ownership continuity breach occurred for the company in the period—
i: beginning on the first day of the earlier income year; and
ii: ending on the last day of the 2019–20 income year. Major change: factor that must be taken into account
4: For the purposes of subsection (2) Permitted major changes
5: A major change in the nature of the business activities carried on by the company during the business continuity period does not breach the requirement set out in subsection (2)﻿(c)
a: made to increase the efficiency of a business activity carried on by the company:
b: made to keep up to date with advances in technology:
c: caused by an increase in the scale of a business activity carried on by the company, including as a result of the company entering a new market for a product or service that it produces or provides:
d: caused by a change in the type of products or services the company produces or provides that involves the company starting to produce or provide a product or service using the same, or mainly the same, assets as, or that is otherwise closely connected with, a product or service that the company produced or provided immediately before the beginning of the business continuity period. Avoidance arrangements
6: Section GB 3BA subsection (2) A definition
7: In subsection (5) asset assessable income, asset, business, company, income year, land, loss balance, ownership continuity breach, tax loss component, tax year
IB 4: Business continuity period
Period
1: The period referred to in section IB 3(2)﻿(b)
a: for a company for which the amount calculated using the formula in subsection (2)
b: in any other case, the earlier of—
i: the last day of the income year that corresponds to the tax year in which the company uses the tax loss component; and
ii: the last day of the income year in which the fifth anniversary of the ownership continuity breach falls. Formula
2: The formula is— (bad debt deductions – bad debt repayment income) ÷ (total deductions – bad debt repayment income). Definition of items in formula
3: In the formula,—
a: bad debt deductions
b: bad debt repayment income
i: for income years between the earliest and the latest of the income years described in paragraph (a)
ii: that relates to deductions that the company has been allowed under section DB 31(3):
c: total deductions paragraph (a) amount, company, deduction, income, income year, ownership continuity breach, tax loss, tax loss component, tax year
IB 5: When group companies treated as single company
Companies that are part of the same group of companies immediately before and immediately after an ownership continuity breach occurs for each of the companies are treated as a single company for the purposes of this subpart and sections GB 3BA to GB 3BAC company, group of companies, ownership continuity breach
2: Subsection (1) section IA 5
100: Section IC 2 amended (Threshold levels for grouping tax losses in tax year)
1: In the heading to section IC 2(1) ownership or business activities
2: In section IC 2(1) section IA 5 (Restrictions on companies’ loss balances carried forward) section IA 5(2) and (3) or IB 3(2)
3: Subsections (1) and (2)
101: Section IC 5 amended (Company B using company A’s tax loss)
1: In section IC 5(1)﻿(c) ownership or business activities
2: Subsection (1)
102: Section IC 10 amended (When companies have different balance dates)
1: In section IC 10(2)﻿(a) company A , or continuity of company A’s business activities,
2: Subsection (1)
103: Section IC 12 amended (Bad debts or decline in value of shares)
1: In section IC 12(2) section IA 3(2) and IA 5 sections IA 3(2), IA 5, and IB 3
2: Subsection (1)
104: Section ID 1 amended (Treatment of tax losses by consolidated groups)
1: In section ID 1(1) and IC to IC
2: Subsection (1)
105: Section ID 2 amended (Pre-consolidation losses: general treatment)
1: In section ID 2(1) section IA 5 (Restrictions on companies’ loss balances carried forward) section IA 5(2) and (3) or IB 3(2)
2: Subsection (1)
106: Section IE 2 amended (Treatment of tax losses by amalgamating company)
1: In section IE 2(1) section IA 5 (Restrictions on companies’ loss balances carried forward) section IA 5(2) and (3) or IB 3(2)
2: In section IE 2(3) amalgamating company amalgamated company
3: Subsection (2)
4: Subsection (1)
107: Section IE 3 amended (Treatment of tax losses by amalgamated company)
1: In section IE 3(1)﻿(b) section IA 5 (Restrictions on companies’ loss balances carried forward) section IA 5(2) and (3) or IB 3(2)
2: In section IE 3(2) sections IA 5, IC 2, sections IA 5, IB 3
3: In section IE 3(3)﻿(a) section IA 5 section IA 5 or IB 3
4: Replace section IE 3(5) Relationship with sections IA 3, IA 4, IA 5, and IB 3
5: This section overrides—
a: sections IA 3 and IA 4 (which relate to the general use of tax losses); and
b: sections IA 5 and IB 3
5: Subsections (1), (2), (3), and (4)
108: Section IE 4 amended (Group companies’ treatment of tax losses on amalgamation)
1: In section IE 4(1)﻿(a) section IA 5 (Restrictions on companies’ loss balances carried forward) section IA 5(2) and (3) or IB 3(2)
2: Subsection (1)
109: Section IP 1 amended (When this subpart applies)
In section IP 1(1)﻿(b) (Restrictions on companies’ loss balances carried forward) (Restrictions on companies’ loss balances carried forward: continuity of ownership)
110: Section IP 3 amended (Continuity breach: tax loss components of companies carried forward)
In section IP 3(1) (Restrictions on companies’ loss balances carried forward) (Restrictions on companies’ loss balances carried forward: continuity of ownership)
111: Section IQ 1 amended (General treatment)
1: In section IQ 1(1)﻿(a) section IA 5 (Restrictions on companies’ loss balances carried forward) section IA 5(2) and (3) or IB 3(2)
2: Subsection (1)
112: Section IQ 1B (Losses carried forward to tax year)
1: In section IQ 1B (Restrictions on companies’ loss balances carried forward) applies and subpart IB
2: Subsection (1)
113: Section IS 2 amended (Treatment of net losses resulting from certain expenditure)
1: In section IS 2(2)
a: replace (Restrictions on companies’ loss balances carried forward) (Restrictions on companies’ loss balances carried forward: continuity of ownership)
b: replace (Arrangements for carrying forward loss balances: companies) (Arrangements for carrying forward loss balances: companies’ ownership)
2: In section IS 2(5) (Arrangements for carrying forward loss balances: companies) and IA 5 (Restrictions on companies’ loss balances carried forward) and IA 5(2) and (3)
114: Section IZ 8 amended (Election to use net loss for 2019–20 or 2020–21 year as tax loss in preceding year)
1: In section IZ 8(1) a person who has taxable income in the 2018–19 or 2019–20 income year and a person who has taxable income in the 2018–19 or 2019–20 income year, or is in a group of companies with a person who has taxable income in 1 of those years, and has
2: In section IZ 8(2) wholly-owned
3: In the heading to section IZ 8(3) wholly-owned group group of companies
4: In section IZ 8(3) wholly-owned
5: In section IZ 8(3)﻿(b) in the absence for a person who is a member of a wholly-owned group,
6: In section IZ 8(3)﻿(b) the other group members the other members of the wholly-owned group
115: Section LA 6 amended (Remaining refundable credits: PAYE, RWT, and certain other items)
Replace section LA 6(1)﻿(i)
i: section LS 4
i: has the tax credit as a beneficiary of the trust:
ii: uses the tax credit in the calculation of their PIE schedular income under section HM 36B
116: Section LK 5 amended (Companies’ credits carried forward)
In section LK 5(1) apply and subpart IB
117: Section LP 4 amended (Continuity rules for carrying credits forward)
1: After section LP 4(2) Carry forward of credits despite continuity breach
2B: Despite a breach of continuity under subsection (2), the amount is available for use under section LP 3(4) if the amount could be carried forward to the tax year following the current year under subpart IB
2: In section LP 4 tax loss component
3: Subsection (1) section LP 4(2)
118: Section LS 3 amended (Tax credits for zero-rated investors)
In section LS 3(3) (Use of foreign tax credits by zero-rated and certain exiting investors) (Use of foreign tax credits by zero-rated investors)
119: Section LS 4 amended (Tax credits for certain exiting investors)
1: Repeal section LS 4(3)
2: After section LS 4(4) Treatment of credits for individual investors
4B: Despite subsections (2) and (4), when an exiting investor who is a natural person resident in New Zealand has an available tax credit, the amount must be taken into account in an adjustment under section HM 36B
3: In section LS 4
a: delete foreign income tax
b: insert natural person resident in New Zealand
120: Section LY 5 amended (Eligible research and development expenditure)
1: Replace section LY 5(1)﻿(a)
a: means expenditure or loss, described in schedule 21B, part A, if, for the income year, the expenditure or loss—
i: directly relates to a research and development activity; and
ii: is required for a research and development activity; and
iii: is integral to a research and development activity; but
2: Subsection (1)
121: Section LY 8 amended (Carry forward for remaining research and development tax credits)
1: In section LY 8(2) met. This subsection is subject to subsections (4B)
2: After section LY 8(4) Breach of continuity
4B: If a company’s remaining tax credit cannot be carried forward and credited because the requirements of subsection (3) are not met, the company may apply subsection (4C) Carry forward of credits despite continuity breach
4C: Despite a breach of continuity under subsection (3), a company may carry forward a remaining research and development tax credit arising in a tax year to a later tax year and credit it under section LY 1(3)﻿(b) for that later tax year, if the remaining tax credit could be carried forward to that later tax year under subpart IB
3: In section LY 8(5) is may be
4: In section LY 8(6) is may be
5: In section LY 8 tax loss component
6: Subsections (1), (2), (3), and (4) section LY 8(3)
122: Section MD 12 amended (Calculation of parental tax credit)
Repeal section MD 12(4)
123: Section MF 7 amended (Orders in Council)
1: Repeal section MF 7(1)﻿(c)
2: In the heading to section MF 7(4) and parental tax credit
3: In section MF 7(4) and the parental tax credit
4: In section MF 7 parental tax credit
124: Section OB 52 replaced (ICA imputation credit of consolidated imputation group)
1: Replace section OB 52
OB 52: ICA transfer to consolidated imputation group
When this section applies
1: This section applies when the nominated company of a consolidated imputation group makes an election under section OP 22(2) Debit
2: The group company has an imputation debit for the amount of the credit balance that is transferred to the imputation credit account of the consolidated imputation group. Table reference
3: The imputation debit in subsection (2) Debit date
4: The debit date is the same as the credit date for the credit to the imputation credit account of the consolidated imputation group for the amount of the credit balance transferred. amount, consolidated imputation group, imputation credit, imputation credit account, imputation debit, nominated company
2: Subsection (1)
125: Table O2 amended (Imputation debits)
1: In table O2 The table is a small table with a single row and 4 columns. It replaces a row in an existing table. The first column gives the number of the row, the second column describes the imputation debit to which the row relates, the third column gives the debit date, and the fourth column gives the section that defines the imputation debit. 25 Amount of credit balance transferred to consolidated imputation group’s ICA credit date for group’s imputation credit section OB 52
2: Subsection (1)
126: Section OP 22 replaced (Consolidated ICA group company’s credit)
1: Replace section OP 22
OP 22: Consolidated ICA transfer from group company’s ICA
When this section applies
1: This section applies when—
a: the imputation credit account of a consolidated imputation group has an imputation debit described in a row of table O20: imputation debits of consolidated imputation groups; and
b: the imputation credit account of a group company has a credit balance; and
c: the credit balance referred to in paragraph (b) paragraph (a) Election
2: The nominated company of the consolidated imputation group may choose to transfer some or all of the credit balance in the imputation credit account of the group company to the imputation credit account of the group. Restrictions
3: The following restrictions apply to a transfer under subsection (2)
a: the consolidated imputation group and the group company must meet the requirements of section OA 8 (Shareholder continuity requirements for memorandum accounts) for the carrying forward of imputation credits until the end of the day on which the debit referred to in subsection (1)﻿(a)
b: credits in the imputation credit accounts of the group and all group companies must be used to reduce the debit referred to in subsection (1)﻿(a)
c: the total amount of the credit balances in the imputation credit accounts of companies in the group referred to in subsection (1)﻿(a) How elections made
4: The nominated company makes an election under subsection (2)
a: a debit in the group company’s imputation credit account; and
b: a credit in the group’s imputation credit account. Credit
5: When the nominated company makes an election under subsection (2) Table reference
6: The imputation credit in subsection (5) Credit date
7: The credit date is the same as the debit date for the debit referred to in subsection (1)﻿(a) amount, company, consolidated imputation group, imputation credit, imputation credit account, imputation debit, nominated company
2: Subsection (1)
127: Table O19 amended (Imputation credits of consolidated imputation groups)
1: In table O19 Group company’s credit Amount of credit balance transferred from group company’s ICA
2: Subsection (1)
128: Section RA 1 amended (What this Part does)
After section RA 1(gb)
gc: the payment of residential land withholding tax (RWLT), see
129: Section RC 5 amended (Methods for calculating provisional tax liability)
1: In section RC 5(8) life insurance rules rules for life insurers
2: In section RC 5 life insurance rules
130: Section RD 24 amended (Exemptions for non-resident contractors)
1: In section RD 24(1)﻿(a) income assessable income
2: In section RD 24 income assessable income
131: Section RE 2 amended (Resident passive income)
1: Replace section RE 2(5)﻿(b)
b: an amount—
i: of an association rebate that is excluded from being a dividend by section CB 34(5)﻿(a) (Amounts derived by members from mutual associations); or
ii: that is payable to a person by a company and is treated as being a dividend by sections GB 23 to GB 25 (which relate to excessive remuneration):
2: In section RE 2 association rebate
3: Subsection (1)
132: Section RE 10C amended (Obligations of custodial institutions in relation to certain payments of investment income)
1: In section RE 10C(3) RWT the amount of tax
2: Replace section RE 10C(6)﻿(b)
b: whose activities are supervised or regulated under the Financial Markets Conduct Act 2013, the Financial Markets Authority Act 2011, the Financial Advisers Act 2008, or the Reserve Bank of New Zealand Act 1989, or are supervised or regulated under corresponding legislation in another jurisdiction.
133: Section RF 2C amended (Meaning of non-resident financial arrangement income)
1: Replace section RF 2C(6)﻿(a)
a: the item accumulated accruals hybrid deductions
2: Subsection (1)
134: Section RL 1 amended (Residential land withholding tax)
In section RL 1(2)﻿(a) CB 6A (Disposal within 5 years: bright-line test for residential land) ignoring sections CB 6A(6) and CB 16A CB 6A or CZ 39 sections CB 6A(13), CB 16A, CZ 39(8), and CZ 40
135: Section YA 1 amended (Definitions)
1: This section amends section YA 1
2: In the definition of annual branch equivalent tax account return by a company under sections 77 and 78 under section 78
3: In the definition of asset
d: is defined in section IB 3(7) section IB 3(5)
4: Replace the definition of Australian complying superannuation scheme Australian complying superannuation scheme
a: an entity that is a complying superannuation fund for the purposes of Part 5, Division 2 of the Superannuation Industry (Supervision) Act 1993 (Aust) and that is regulated by the Australian Prudential Regulation Authority:
b: the Australian Commissioner of Tax ( ACT
5: Replace the definition of bright-line date bright-line date
a: the earliest of—
i: the date that the person enters into an agreement for the disposal:
ii: the date on which the person makes a gift of the residential land:
iii: the date on which the person’s residential land is compulsorily acquired under any Act by the Crown, a local authority, or a public authority:
iv: if there is a mortgage secured on the residential land, the date on which the land is disposed of by or for the mortgagee as a result of the mortgagor’s defaulting; or
b: if none of paragraph (a)﻿(i) to (iv)
6: Insert, in appropriate alphabetical order: bright-line grandparented home
a: that is mainly used as a residence by the person (a home
b: with which the person has the greatest connection, if they have more than 1 home
7: Insert, in appropriate alphabetical order: bright-line period
a: section CB 6A(1) to (5)
b: section CZ 39(2) to (6)
8: In the definition of business premises expenditure) and the land sales provisions
9: In the definition of claim life insurance rules rules for life insurers
10: In the definition of class and in and in section EZ 4 (Valuation of livestock bailed or leased as at 2 September 1992), and in
11: In the definition of class section EZ 4 (Valuation of livestock bailed or leased as at 2 September 1992) sections EZ 4 and EZ 4B
12: In the definition of continuity period (Restrictions on companies’ loss balances carried forward) (Restrictions on companies’ loss balances carried forward: continuity of ownership)
13: In the definition of continuity provisions
a: paragraph (a), replace (Arrangements for carrying forward loss balances: companies) (Arrangements for carrying forward loss balances: companies’ ownership)
b: paragraph (d), replace (Restrictions on companies’ loss balances carried forward) (Restrictions on companies’ loss balances carried forward: continuity of ownership)
14: Insert, in appropriate alphabetical order: contractor labour
15: In the definition of cost price subpart EC (Valuation of livestock) subpart EC (Valuation of livestock), and in sections EZ 5, EZ 6, FB 17, and HG 10 (which relate to livestock)
16: In the definition of cost price and HG 10 HB 10, and HG 10
17: In the definition of cost price EZ 5 EZ 4B
18: In the definition of deposit
d: is defined in section EZ 81 section EZ 4B
19: In the definition of dispose
i: in sections GC 20 and GC 21
20: In the definition of dispose CB 22 CB 22, CZ 39
21: In the definition of dividend
a: replace treated as a dividend under section CB 34(5), excluded from being a dividend under section CB 34(5) (Amounts derived by members from mutual associations) or treated as a dividend under section
b: replace mutual associations, family-owned businesses, family-owned businesses
22: In the definition of dwelling
a: means any place configured as a residence or abode, whether or not it is used as a place of residence or abode, including any appurtenances belonging to or enjoyed with the place:
ab: despite paragraph (a)
23: In the definition of early life regime application day the new life insurance rules, as provided in the amendments to the rules for life insurers made by
24: Insert in the appropriate alphabetical order: excluded day section CB 6A
25: Replace the definition of group of persons group of persons
a: includes 1 person:
b: is defined in section CB 16A(5)
c: is defined in section CB 16(5)
d: is defined in section CB 19(2C)
26: In the definition of initial provisional tax liability
ib: if 1 or more of the income years 2016–17, 2017–18, 2018–19, and 2019–20 (the transitional years
27: In the definition of lease EJ 10 (Personal property lease payments) EJ 10 (Personal property lease payments), EJ 10B
28: In the definition of loss balance
a: replace section IA 5 (Restrictions on companies’ loss balances carried forward) section IA 5(2) and (3) (Restrictions on companies’ loss balances carried forward: continuity of ownership)
b: after 1992), or IB 3(2)
29: In the definition of main home mainly
30: In the definition of minimum market value interest (Restrictions on companies’ loss balances carried forward) (Restrictions on companies’ loss balances carried forward: continuity of ownership)
31: In the definition of minimum voting interest (Restrictions on companies’ loss balances carried forward) (Restrictions on companies’ loss balances carried forward: continuity of ownership)
32: In the definition of non-refundable tax credit beneficiary of a trust beneficiary of a trust, but this paragraph does not apply to the extent to which the tax credit is taken into account in an adjustment under section HM 36B(2)
33: Repeal the definition of NZIAS 17
34: Insert, in appropriate alphabetical order: NZ IFRS 16
35: Insert, in appropriate alphabetical order: ownership continuity breach section IB 2 subpart IB
36: In the definition of principal settlor section EL 9 (Main home exclusion) sections CZ 40
37: Replace the definition of residential land residential land
a: means—
i: land that has a dwelling on it, unless the land is farmland, or is used predominantly as business premises:
ii: land for which the owner has an arrangement that relates to erecting a dwelling, unless the land is farmland or is used predominantly as business premises:
iii: bare land that may used for erecting a dwelling under rules in the relevant operative district plan, unless the bare land is farmland or is used predominantly as business premises; and
b: includes land that has a dwelling on it, if it is used by a person predominantly as business premises for a business of supplying accommodation and the dwelling is not a main home for the person or 1 or more other persons referred to in section CB 16A(2)
38: In the definition of residual income tax
39: In the definition of schedular income
k: income to which section GB 3BAB
40: Repeal the definition of specified living allowance
41: In the definition of trading stock (b), (b), (bb), (bc)
42: In the definition of trading stock and GC 1 to GC 3 (which relate to the disposal of trading stock for inadequate consideration) GC 1 to GC 3 (which relate to the disposal of trading stock for inadequate consideration), and GC 20 and GC 21 (which relate to purchase price allocation)
43: In the definition of trading stock
bb: in section FZ 9
i: livestock not used in a dealing business:
ii: consumable aids to be used in the process of producing trading stock:
bc: in sections GZ 4 and GZ 5
i: timber or a right to take timber:
ii: land whose disposal would produce income under any of sections CB 6A to CB 15:
44: In the definition of trading stock CB 15 CB 15 and CZ 39
45: Subsection (21)
46: Subsections (26), (28), and (39)
47: Subsection (37)
a: for purposes of the rules related to the bright-line test for residential land, if the person acquires an estate or interest in the land on or after 27 March 2021. However, subsection (37) subsection (37)
i: a person’s disposal of a freehold estate in residential land that the person acquired as the owner of a leasehold estate with a perpetual right of renewal, if the person was granted the leasehold estate before 27 March 2021:
ii: a person’s disposal of an estate or interest in residential land that the person acquired as the result of the completion of a land development or subdivision, if before 27 March 2021 the person entered into the agreement under which they acquired the estate or interest upon the completion of the land development or subdivision:
b: for other purposes, for the 2021–22 and later income years.
136: Schedule 21 amended (Excluded activities for research and development activities tax credits)
1: Repeal schedule 21, part A
2: Repeal schedule 21, part B
3: Subsections (1) and (2)
137: Schedule 21B amended (Expenditure or loss for research and development tax credits)
1: Replace schedule 21B, part B
2: Expenditure or loss incurred in acquiring property that is depreciable property or that would be depreciable in the absence of an election under section EE 8, but ignoring expenditure or loss incurred in making the property.
2: Replace schedule 21B, part B
3: Expenditure or loss, other than amounts for employees or contractor labour in relation to core research and development activities, to the extent to which the expenditure or loss contributes to the cost of tangible depreciable property, or tangible property that would be depreciable in the absence of an election under section EE 8, but ignoring expenditure or loss for property if the property is used solely in performing a research and development activity, is intended to be used in the future solely in performing a research and development activity, and the expenditure or loss is for a core research and development activity.
3: After schedule 21B, part B
3B: Expenditure or loss, other than amounts for employees or contractor labour in relation to core research and development activities, incurred by—
a: a petroleum miner:
b: a mineral miner:
c: a person that would be a mineral miner if geothermal energy and all minerals were included on the list of listed industrial minerals in section CU 8. Expenditure or loss is ignored for the purposes of this clause to the extent to which the expenditure or loss contributes to the cost of tangible depreciable property, if the property is used solely in performing a research and development activity, is intended to be used in the future solely in performing a research and development activity, and the expenditure or loss is for a core research and development activity.
4: Replace schedule 21B, part B
10: Expenditure or loss to acquire land.
5: In schedule 21B, part B Professional fees Expenditure or loss
6: After schedule 21B, part B
13B: Expenditure or loss incurred in performing corporate governance activities.
7: After schedule 21B, part B
20B: Expenditure or loss incurred in decommissioning.
20C: Expenditure or loss incurred in remediating land.
8: In schedule 21B, part B
a: replace terms of, required by, or otherwise related to terms of, or required by,
b: replace scheme. scheme. Nor does it include an amount related to a Callaghan Innovation project grant, to the extent to which the amount exceeds the estimated cost of the project specified in the contract for the Callaghan Innovation project grant.
9: Subsections (1), (2), (3), (4), (5), (6), (7), and (8)
138: Schedule 29 amended (Portfolio investment entities: listed investors)
1: In schedule 29, part A
2: In schedule 29, part A
11: A lines trust.
12: A company in which a local authority or a lines trust holds—
a: a voting interest of 100%; and
b: if a market value circumstance exists for the company, a market value interest of 100%.
139: Schedule 32 amended (Recipients of charitable or other public benefit gifts)
1: In schedule 32 Active Hearts Foundation Kiwilink Shimshal Trust
2: Subsection (1)
140: Schedule 36 amended (Government enterprises)
In schedule 36, part A Housing New Zealand Build Limited
141: Income Tax Act 2007: aligning nomenclature with Social Security Act 2018
The Income Tax Act 2007 schedule 1
142: Other enactments: consequential amendments aligning nomenclature
The enactments specified in schedule 2 2021-03-30 Accident Compensation Act 2001 Social Security Act 2018 Student Loan Scheme Act 2011 Tax Administration Act 1994 Public and Community Housing Management (Prescribed Elements of Calculation Mechanism) Regulations 2018 per section 2(1)
3: Amendments to other enactments
Tax Administration Act 1994
143: Tax Administration Act 1994
Sections 144 to 180 Tax Administration Act 1994 2021-03-30 Tax Administration Act 1994 for retrospective effect dates see: section 2(16), (22), (23), (28), (31), (32), (33) 2021-04-01 Tax Administration Act 1994 per section 2(34)
144: Section 3 amended (Interpretation)
1: This section amends section 3(1)
2: In the definition of deferrable tax
a: in paragraph (c), replace 2007 2007:
b: after paragraph (c), insert:
d: an amount of tax for which the person’s liability depends on the liability of another person (the disputant
3: Insert, in appropriate alphabetical order: New Zealand superannuation qualification age
4: In the definition of tax
a: replace paragraph (a)﻿(iii)﻿(CC) with:
CC: KiwiSaver Act 2006 employer contributions:
b: in paragraph (a)﻿(iii)﻿(CD), replace 101I(5) 141(5)
c: repeal paragraph (a)﻿(viii):
d: after paragraph (a)﻿(xiv), insert:
xv: a registration fee referred to in section 59B:
xvi: a return filing fee referred to in section 59D:
e: in paragraph (cc), replace for the purposes of sections 6, 6A, for the purposes of Part 10B, and sections 6, 6A,
5: In the definition of tax law
a: a provision of an Inland Revenue Act other than the Unclaimed Money Act 1971, or an Act that such an Inland Revenue Act replaces:
145: Section 4A amended (Construction of certain provisions)
Replace section 4A(3)﻿(bc)
bc: amounts of KiwiSaver Act 2006 employer contributions paid or to be paid to the Commissioner, including an amount of compulsory employer contributions unpaid, specified in a notice under section 141(5) of that Act; or
146: Section 17B amended (Commissioner may require information or production of documents)
1: In section 17B(2) 17, 17G, and 17H 17 and 17G to 17H
2: In section 17B(5) 17F to 17K 17F, 17G, and 17H to 17K
147: Section 17C amended (Commissioner’s powers in relation to documents)
1: In section 17C(1) 17B or 17G 17B, 17G, or 17GB
2: In section 17C(1) provided under section 17B, 17G, or 17GB, or produced under section 17H or produced under 1 or more of sections 17B, 17GB, 17H(6), and 17I
3: In section 17C(5) provided, accessed, or
148: Section 17E amended (Information or documents treated as in persons’ knowledge, possession, or control)
1: In section 17E(1) 17B(1), 17B(1), 17GB(1),
2: In section 17E(2) 17B(1) 17B(1), 17GB(1),
149: Section 17H amended (Court may make order for provision of information)
In section 17H(1) an information demand under section 17B a notice under section 17B or 17GB,
150: Section 20 amended (Privilege for confidential communications between legal practitioners and their clients)
1: In section 20(1) 17H, and 17I 17GB to 17I
2: In section 20(4) 17H, and 17I 17GB to 17I
151: Section 20B amended (No requirement to disclose tax advice document)
In section 20B(1) 17E, 17H, and 17I 17E and 17GB to 17I
152: Section 20D amended (Claim that document is tax advice document)
1: In section 20D(4)﻿(a) or 17C and 17C
2: In section 20D(4)﻿(b) 17C 17GB
153: Section 20F amended (Person must disclose tax contextual information from tax advice document)
1: In section 20F(2)﻿(a) or 17C and 17C
2: In section 20F(2)﻿(b) 17C 17GB
154: Section 25E amended (Who must provide investment income information to Commissioner)
1: In section 25E(1)﻿(f) , other than a superannuation fund or retirement savings scheme,
2: Repeal section 25E(1)﻿(g)
155: Section 25J amended (Information on attributed PIE income: non-locked-in funds
In section 25J Information on attributed PIE income
156: Section 25K repealed (Information on attributed PIE income: locked-in funds)
Repeal section 25K
157: Section 25MB amended (Information from custodial institutions)
Replace section 25MB(7)﻿(b)
b: whose activities are supervised or regulated under the Financial Markets Conduct Act 2013, the Financial Markets Authority Act 2011, the Financial Advisers Act 2008, or the Reserve Bank of New Zealand Act 1989, or are supervised or regulated under corresponding legislation in another jurisdiction.
158: Section 54C amended (Information in relation to payment of RLWT)
In section 54C(1) is within 5 years is either within 5 years if section CZ 39 section CB 6A
159: Section 54D amended (Information in relation to repayment of RLWT)
In section 54D(1)﻿(b) section CB 16A section CB 16A or CZ 40
160: Section 54E amended (RLWT certificate of exemption)
In section 54E(4) section CB 16A section CB 16A or CZ 40
161: Section 57B amended (Return requirements for multi-rate PIEs)
1: In section 57B(1) Sections 25J and 25K set out Section 25J sets out
2: In section 57B(2)﻿(a)﻿(ii) required under sections 25J and 25K, as applicable required under section 25J
162: Section 59BA amended (Annual return for trusts)
1: Replace section 59BA(1)
1: A trustee of a trust who derives assessable income for a tax year must file a return for the tax year of all income derived in the corresponding income year by the trustee as trustee of the trust.
2: In section 59BA(2) A trustee who is required to file a return for a tax year under subsection (1) and does not meet the requirements of subsection (3)
3: Replace section 59BA(3)
3: A trustee of a trust who is required to file a return for a tax year under subsection (1) is not required to file a return in the form required by subsection (2) if—
a: the trustee is excluded from the requirement to make a return by section 43B (which relates to non-active trusts):
b: the trustee is required to make a return by section 59D (which relates to foreign trusts):
c: the trustees of the trust are incorporated as a board under the Charitable Trusts Act 1957:
d: the trust is a charitable trust registered under the Charities Act 2005:
e: the trustee is eligible under section HF 2 of the Income Tax Act 2007 to choose under section HF 11 of that Act to become a Maori authority:
f: the trust is a widely-held superannuation fund, as defined in section YA 1 of the Income Tax Act 2007:
g: the trust is an employee share scheme that is an exempt ESS, as defined in section YA 1 of the Income Tax Act 2007:
h: the trustee is a debt funding special purpose vehicle, as defined in section YA 1 of the Income Tax Act 2007:
i: the trustee is a lines trust established under the Energy Companies Act 1992.
4: After section 59BA(4)
5: The Commissioner may vary the requirements set out in subsection (2) for a trustee or class of trustees.
6: A variation under subsection (5) see
163: Section 61 amended (Disclosure of interest in foreign company or foreign investment fund)
In section 61(1C) section 25J or 25K, as applicable section 25J
164: Section 68CC amended (Research and development tax credits: greater than $2 million approval)
1: In section 68CC(2)﻿(b)﻿(iv) has the person has
2: In section 68CC(3) 7th day of the 2nd month after the end of the first income year. last day of the 6th month before the end of the first income year ( application date
3: Subsection (1)
4: Subsection (2)
165: Section 89D amended (Taxpayers and others with standing may issue notices of proposed adjustment)
1: In section 89D(1) subsection (2) subsections (1B)
2: After section 89D(1)
1B: If the assessment by the Commissioner is an amended assessment, the taxpayer’s entitlement to dispute the assessment is limited to disputing—
a: a liability imposed by the assessment that was not imposed by the assessment being amended:
b: an increase imposed by the assessment in a liability that was imposed by the assessment being amended.
166: Section 89DA amended (Taxpayer may issue notice of proposed adjustment for taxpayer assessment)
After section 89DA(1)
1B: If the assessment by the taxpayer is an amended assessment, the taxpayer’s entitlement to dispute the assessment is limited to disputing—
a: a liability imposed by the assessment that was not imposed by the assessment being amended:
b: an increase imposed by the assessment in a liability that was imposed by the assessment being amended.
167: Section 91C amended (Taxation laws in respect of which binding rulings may be made)
After section 91C(1)﻿(d)
db: the Unclaimed Money Act 1971; or
168: Section 108 amended (Time bar for amendment of income tax assessment)
Replace section 108(1E)
1E: Despite subsection (1), the Commissioner may not amend an assessment so as to increase an amount of research and development tax credit if 1 year has passed from the latest date to provide a return of income for the relevant tax year, except if the increase is to take into account—
a: a notice of proposed adjustment initiated by a taxpayer in accordance with section 113E:
b: a request under section 113 initiated by a taxpayer in accordance with section 113E.
169: Section 120B amended (Persons excluded)
In section 120B
bb: an employer in relation to amounts of compulsory employer contributions unpaid and specified in a notice under section 141(5) of the KiwiSaver Act 2006:
170: Section 120KBB amended (Interest for most standard method and some estimation method provisional taxpayers)
In the heading to section 120KBB and some estimation method
171: Section 139A amended (Late filing penalty for certain returns)
1: In section 139A(1) the reconciliation statement required to be provided under regulation 3 of the Accident Rehabilitation and Compensation Insurance (Earnings Definitions) Regulations 1992 or regulation 15 of the Accident Insurance (Premium Payment Procedures) Regulations 1999 or any successor to that regulation made under the Accident Compensation Act 2001,
2: Repeal section 139A(2)﻿(a)﻿(iii)
172: Section 139AB amended (Penalty for member of large multinational group failing to provide information)
In section 139AB(1)﻿(a) section 17(1CB) section 17E(2)
173: Section 157 amended (Deduction of tax from payments due to defaulters)
1: In section 157(10) income tax 101I(5) 141(5)
2: After section 157(10) income tax
l: KiwiSaver Act 2006 employer contributions
174: New section 173V inserted (Transfer of unclaimed money on request)
After section 173U
173V: Transfer of unclaimed money on request
If a taxpayer is entitled to a payment from the Commissioner of unclaimed money under the Unclaimed Money Act 1971, the taxpayer or their agent may request the Commissioner to transfer all or part of the unclaimed money to a tax type and period of the taxpayer as if the amount were excess tax.
175: Section 184A amended (Refund of tax paid in excess made by direct credit to bank account)
After section 184A(5)﻿(i)
j: an amount of the problem gambling levy payable under—
i: Part 4, subpart 4 of the Gambling Act 2003 and regulations made under section 319 of that Act:
ii: section 101 of the Racing Industry Act 2020.
176: New section 225ABA inserted (Orders in Council: periods for purposes of certain provisions of Income Tax Act 2007 relating to disposals of trading stock)
After section 225A
225ABA: Orders in Council: periods for purposes of certain provisions of Income Tax Act 2007 relating to disposals of trading stock
1: This section provides a power to extend the period, or specify another later period, during which certain provisions of the Income Tax Act 2007 apply in relation to certain disposals of trading stock.
2: The Governor-General may, by Order in Council made on the recommendation of the Minister of Revenue,—
a: replace the date on which the period specified in 1 or more of sections FZ 9(c)﻿(i), GZ 4(b)﻿(i), and GZ 5(1)﻿(b)﻿(i)
b: specify a period for the purposes of 1 or more of sections FZ 9(c)﻿(ii), GZ 4(b)﻿(ii), and GZ 5(1)﻿(b)﻿(ii)
3: An Order in Council under subsection (2)﻿(a)
4: The Minister of Revenue may recommend the making of an Order in Council under subsection (2)﻿(a)
5: The period specified by an Order in Council made under subsection (2)﻿(b)
6: The Minister of Revenue may recommend the making of an Order in Council under subsection (2)﻿(b)
a: an event has occurred that meets the requirements of paragraphs (a) and (b) of the definition of emergency in section 4 of the Civil Defence Emergency Management Act 2002; and
b: people in New Zealand were being significantly adversely affected as a consequence of the event at the beginning of the period that is to be recommended is specified; and
c: people in New Zealand—
i: were being significantly adversely affected as a consequence of the event at the end of the period that is to be recommended is specified; or
ii: are likely to continue to be significantly adversely affected as a consequence of the event at least until the end of the period that is to be recommended is specified.
7: An Order in Council made under this section is secondary legislation ( see
177: New section 227H inserted (Transitional provision relating to annual return for trusts)
After section 227G
227H: Transitional provision relating to annual return for trusts
A variation under section 59BA(5)
178: Schedule 1 amended (Inland Revenue Acts)
In schedule 1 Taxation Review Authorities Act 1994 Unclaimed Money Act 1971
179: Schedule 7 amended (Disclosure rules)
After schedule 7, part A, clause 13B
13C: Unclaimed money
Section 18 does not prevent the Commissioner publishing information that relates to unclaimed money held by the Commissioner under the Unclaimed Money Act 1971 and is intended to enable the owner of the unclaimed money to make a claim of ownership, including—
a: the name of the holder that transferred the unclaimed money to the Commissioner:
b: the location of the business of the holder:
c: the name and other details provided by the holder that associate the owner with the unclaimed money.
180: Schedule 8 amended (Reporting of income information by individuals and treatment of certain amounts)
1: In schedule 8, part B $50 $200
2: In schedule 8, part B $200 $50
3: After schedule 8, part B
ab: an amount of tax that—
i: relates to reportable income derived for a tax year by an individual who uses a tailored tax code; and
ii: is derived solely from a payment of New Zealand superannuation or a veteran’s pension; and
iii: is equal to or less than $50:
ac: an amount of tax that, for a tax year in which an individual who uses a tailored tax code reaches the New Zealand superannuation qualification age,—
i: relates to income derived from 1 or more of the amounts described in paragraph (b); and
ii: is equal to or less than $50:
4: In schedule 8, part B an amount of tax subject to paragraphs (ab) and (ac)
5: Subsection (1)
6: Subsections (2), (3), and (4) Goods and Services Tax Act 1985
181: Goods and Services Tax Act 1985
Sections 182 to 187 Goods and Services Tax Act 1985 2021-03-30 Goods and Services Tax Act 1985 see section 2(6), (11), (15), (30) for retrospective effect dates 2022-04-01 Goods and Services Tax Act 1985 per section 2(37)
182: Section 2 amended (Interpretation)
Insert in section 2(1) mobile roaming services
a: means mobile telecommunications services supplied to the mobile device of a person who is outside the country of their usual mobile network as determined by the country code of the subscriber identity module for the person’s mobile device; and
b: includes services supplied to enable a person to receive mobile telecommunications services when the person is outside the country of their usual mobile network determined as described in paragraph (a)
c: are services that are classified as—
i: inbound mobile roaming services when the services are received by a person who is in New Zealand and whose usual mobile network determined as described in paragraph (a)
ii: outbound mobile roaming services when the services are received by a person whose usual mobile network determined as described in paragraph (a)
183: Section 8 amended (Imposition of goods and services tax on supply)
1: Replace section 8(7)
7: Subsection (6) does not apply to—
a: supplies made between telecommunications suppliers:
b: inbound mobile roaming services supplied to a non-resident person.
2: After section 8(8)
8B: Despite subsection (6) but subject to subsection (8), a supply of telecommunications services is treated as being supplied in New Zealand if—
a: the services are outbound mobile roaming services supplied by a non–resident; and
b: the recipient of the supply is outside New Zealand when the services are supplied.
184: Section 11 amended (Zero-rating of goods)
1: In section 11(8D)﻿(a)
a: replace a supply that is a supply that wholly or partly consists of
b: delete and paragraph (b) does not apply
2: In section 11(8D)﻿(ab) a supply that is a supply that wholly or partly consists of
3: In section 11(8D)﻿(b) a supply of an interest a supply that is wholly or partly of an interest
4: In section 11(8D)﻿(c)﻿(ii)
a: replace an arrangement that involves an arrangement that wholly or partly consists of
b: after to the lessor , or the lessor’s cancellation of the supply of the interest in land to the lessee,
5: Subsections (1) to (4)
a: in the period beginning with 30 June 2014 and ending before the date in which this Act receives the Royal assent; and
b: that is inconsistent with the amendments made by subsections (1) to (4)
185: Section 11AB amended (Zero-rating of telecommunications services)
1: In section 11AB(b) under section 8(9). under section 8(9); or
c: the services are inbound mobile roaming services supplied to a non-resident.
2: After section 11AB(c)
2: Subsection (1)﻿(b) does not apply to outbound mobile roaming services.
186: Section 25 amended (Credit and debit notes)
1: Repeal section 25(1)﻿(aab)
2: Replace section 25(1)﻿(ab)
ab: this Act was incorrectly applied to the treatment of the supply, so that the supply was charged with tax at an incorrect rate, or charged with tax when it should not have been, or not charged with tax when it should have been; or
3: Replace section 25(1)﻿(ab)
ab: the supplier—
i: incorrectly applied this Act to the treatment of the supply, so that the supply was charged with tax at an incorrect rate, or charged with tax when it should not have been, or not charged with tax when it should have been; and
ii: did not subsequently make an election under section 24(5B) for the supply; or
4: Repeal section 25(1)﻿(abb)
5: Replace section 25(3)﻿(f)
f: in the case of a supply to which section 11(1)﻿(mb) was incorrectly applied to the treatment of, so that the supply was not zero-rated when it should have been, a credit note may not be issued after 7 years from the date of settlement of the transaction relating to the supply.
6: Replace section 25(3)﻿(f)
f: a credit note in relation to a supply may not be issued after the earlier of the following, as applicable:
i: in the case of a supply to which section 11(1)﻿(mb) was incorrectly applied to the treatment of, so that the supply was not zero-rated when it should have been, 7 years from the date of settlement of the transaction relating to the supply:
ii: 4 years from the end of the 4-year period referred to in the relevant subsection of section 45, in the case of a supply that results in an overpayment of tax that is—
A: referred to in section 45(1), (2), or (3); and
B: the result of a clear mistake or simple oversight of the supplier:
iii: in the case of a supply other than a supply described in subparagraph (ii)
187: Section 51 amended (Persons making supplies in course of taxable activity to be registered)
Repeal section 51(1)﻿(e) Student Loan Scheme Act 2011
188: Student Loan Scheme Act 2011
Sections 189 190 Student Loan Scheme Act 2011 2021-03-30 Student Loan Scheme Act 2011 see section 2(6) for retrospective effect date 2021-10-01 Student Loan Scheme Act 2011 per section 2(36)
189: Section 34 amended (Repayment codes for New Zealand-based borrowers who derive salary or wages)
In section 34(2) STC TTC
190: Section 208 amended (Disclosure of information between Inland Revenue Department and New Zealand Customs Service for information-matching purposes)
After section 208(2)﻿(c)
d: a borrower’s passport number. KiwiSaver Act 2006
191: KiwiSaver Act 2006
Sections 192 193 KiwiSaver Act 2006 2021-03-30 KiwiSaver Act 2006 per section 2(1), and see section 2(23) for retrospective effect date the day specified in the relevant notes exchanged by the Governments of Australia and New Zealand, as provided by clause 17 of the Arrangement between them on trans-Tasman retirement savings portability. 2021-12-08 KiwiSaver Act 2006 per section 2(38): section 192(2) comes into force on 8 December 2021, which is the day specified in relevant diplomatic notes, per section 2(38)﻿(b), as confirmed by IRD and Alana Belin
192: Section 4 amended (Interpretation)
1: This section amends section 4(1)
2: Replace the definition of Australian complying superannuation scheme Australian complying superannuation scheme
a: an entity that is a complying superannuation fund for the purposes of Part 5, Division 2 of the Superannuation Industry (Supervision) Act 1993 (Aust) and that is regulated by the Australian Prudential Regulation Authority:
b: the Australian Commissioner of Tax ( ACT
3: In the definition of KiwiSaver status contribution holiday savings suspension
193: Section 83 amended (Unclaimed money held by Commissioner)
1: In section 83(1)﻿(a) 6 years 5 years
2: After section 83(3)﻿(a)
ab: for money relating to an employer deduction or employer contribution to which subsection (1)﻿(b) applies, as if the date on which the Commissioner becomes the holder is the last day of the month to which the employment income information for the money relates; and
3: In section 83(3)﻿(c) subparagraph (i) of the proviso to section 4(1) of the Unclaimed Money Act 1971 section 4(2)﻿(e) Companies Act 1993
194: Section 53 amended (Dividends)
In section 53(2)﻿(a) for a portfolio tax rate entity, as a result of section HL 7 of the Income Tax Act 2004 for a multi-rate PIE, as a result of section HM 48 of the Income Tax Act 2007 2021-03-30 Companies Act 1993 see section 2(24) for retrospective effect date Land Transfer Act 2017
195: Land Transfer Act 2017
Sections 196 to 203 Land Transfer Act 2017 2021-03-30 Land Transfer Act 2017 per section 2(1)
196: Section 77 amended (Interpretation)
1: In section 77(1) tax information
2: In section 77(1) IRD number tax information section 79(1)﻿(a)
197: Section 79 replaced (Content of tax statement)
Replace section 79
79: Content of tax statement
1: A tax statement must—
a: contain the prescribed information; and
b: be completed by or on behalf of the transferor or transferee; and
c: be signed by the transferor or transferee.
2: If the prescribed information includes the transferor’s or transferee’s IRD number and they do not have one, they must request an IRD number for the purpose of providing that information.
198: New section 82A inserted (Chief executive must supply tax information to Statistician)
After section 82
82A: Chief executive must supply tax information to Statistician
1: The chief executive must supply to the Statistician (as defined in section 2 of the Statistics Act 1975) tax information and details about the transfer or transfers to which the tax information relates that are held by Land Information New Zealand, if the Statistician requests the information for the purposes of the Statistics Act 1975.
2: Subsection (1)
199: Section 83 amended (Other provisions concerning use of tax information)
1: In section 83 the information specified in section 79(1)﻿(d), (e), (f), and (g), (2)﻿(b), and (c)﻿(i) and (ii) tax information, other than identifying information,
2: In section 83
2: In this section, identifying information
a: a person’s name:
b: a person’s IRD number:
c: a person’s number in another jurisdiction that is equivalent to an IRD number:
d: any other tax information declared to be identifying information by regulations made under this Act.
200: Section 85 amended (Status of tax information)
In section 85(1) 82, 82A
201: Section 86 amended (Disclosure of information between authorised persons)
1: In section 86(1)﻿(a) 82, 82A
2: In section 86(2) authorised person
aa: the Statistician or an employee of the department (as those terms are defined in section 2 of the Statistics Act 1975) who is authorised by the Statistician to disclose and receive information under this section; or
202: Section 227 amended (Regulations)
1: In section 227(1)﻿(3) record, statement,
2: After section 227(1)﻿(27)
(27A): declaring tax information to be identifying information for the purposes of section 83:
203: Schedule 1 amended (Transitional, savings, and related provisions)
In schedule 1, after clause 14
3: Provision relating to Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021
15: Content of tax statements before regulations are made prescribing content
1: This clause applies from the 2021 commencement date until the first regulations prescribing information for the purposes of new section 79(1)﻿(a)
2: The information required by section 79 (as in force before the 2021 commencement date) to be included in a tax statement is taken to be the information required to be included in a tax statement under new section 79(1)﻿(a) section 79(1)﻿(a)
3: In this clause,— 2021 commencement date new section 79(1)﻿(a) section 79(1)﻿(a) Unclaimed Money Act 1971
204: Unclaimed Money Act 1971
Sections 205 to 217 Unclaimed Money Act 1971 2021-03-30 Unclaimed Money Act 1971 per section 2(1)
205: Section 2 amended (Interpretation)
1: In section 2 document
a: a thing that is used to hold, in or on the thing and in any form, items of information:
b: an item of information held in or on a thing referred to in paragraph (a)
c: a device associated with a thing referred to in paragraph (a)
2: In section 2 mutual association
3: In section 2 quarter
206: Section 4 replaced (Unclaimed money)
Section 4
4: Meaning of unclaimed money
1: Unclaimed money
a: is payable by a person who is a holder under section 5 to the person who is entitled to the money (the owner
b: meets the requirements of subsection (2) or (7)
c: is held by a person who—
i: is not the Commissioner; or
ii: is the Commissioner and has not delisted the money under section 11(6)
2: Money meets the requirements of this subsection if—
a: the obligation of the holder to pay the money to the owner arises under an agreement, arrangement, or situation described in subsection (4)
b: the money is not excluded from meeting the requirements of this subsection by subsection (5)
c: the requirements of subsection (3)
3: The requirements of this subsection are met if—
a: the amount of money payable to an individual owner is more than $100, and—
i: for money to which a single-term arrangement described in subsection (6)﻿(a)
ii: for money to which a renewing-term arrangement described in subsection (6)﻿(b)
b: the holder chooses to pay the money to the Commissioner as unclaimed money and satisfies the requirements of section 5B
4: For the purposes of subsection (2)
a: an arrangement under which the holder receives money from the owner in consideration for the holder’s providing money to the owner at a future time or on the occurrence or non-occurrence of a future event, whether or not the event occurs because notice is given or not given:
b: a policy of life assurance that matures—
i: otherwise than by death; or
ii: by death, in which case the due date for payment is treated for the purposes of subsection (2)
c: an agreement, arrangement, or situation that gives rise to an obligation under law or equity of the holder to make a payment to the owner.
5: Money payable by a holder to an owner does not meet the requirements of subsection (2)
a: as a dividend by the holder as a company to the owner as a shareholder, unless the payment is made by the holder as a mutual association in relation to money deposited with the holder by the owner as a member:
b: as a rebate by the holder as a mutual association to the owner as a member in relation to the trading transactions of the member with the association, unless the payment is made in relation to money deposited with the holder by the owner:
c: as a benefit from a pension fund or superannuation fund.
6: For the purposes of subsection (3)﻿(a)
a: an arrangement that applies to money is a single-term arrangement
b: an arrangement that applies to money is a renewing-term arrangement
i: becomes due for payment after a fixed period if the owner near the end of the fixed period requests repayment; and
ii: is treated as being paid by the holder to the owner and then by the owner to the holder for a further fixed period if the owner does not request repayment as described in subparagraph (i)
7: Money meets the requirements of this subsection if—
a: the money is payable to an owner by a holder who ceases to carry on business, or by the personal representative of a holder who dies; and
b: the obligation of the holder to make the payment arises from the holder’s business; and
c: the money is held by the holder or the personal representative of the holder after a period of 6 months from the cessation or death; and
d: the money would meet the requirements of subsection (2) subsection (4)
e: the holder or the personal representative of the holder chooses to pay the money to the Commissioner and satisfies the requirements of section 5B
207: Section 5 amended (Holder)
1: Replace section 5(2)
2: A person, firm, body, or institution (the elective holder
a: the money is not unclaimed money under section 4(2) or (7) subsection (1)
b: if the money is excluded from being unclaimed money by section 4(5) section 4(7)
c: the elective holder chooses to be treated as the holder of the money.
2: After section 5(2)
3: A department or office of Parliament or Crown entity, as defined in the Public Finance Act 1989, or an organisation or company listed in Schedule 4 or 4A of that Act, is excluded from being a holder under this Act.
208: New section 5B inserted (Obligations of holders)
After section 5
5B: Obligations of holders
1: A holder must make reasonable efforts to locate the owner of money that is, or will soon become, unclaimed money and to communicate with the owner concerning the money.
2: A holder of money that pays the money to the Commissioner as unclaimed money must provide to the Commissioner, with or before the payment and in a form acceptable to the Commissioner, the information relating to the owner and the money that is in the possession or control of the holder and is readily available to the holder, including—
a: the source, and history of the accrual, of the amount:
b: the identity and whereabouts of the owner:
c: the source of the owner’s entitlement to payment of the money.
209: Sections 6 and 7 repealed
Repeal sections 6 7
210: Section 8 amended (Payment of unclaimed money to Commissioner)
1: Replace section 8(1)
1: If money becomes unclaimed money under section 4(2) subsection (5)
a: meet the requirements of section 5B
b: pay the money to the Commissioner.
2: In section 8(2) his the Commissioner’s
3: After section 8(4)
5: The period (the reporting period subsection (1)
a: a quarter, except if paragraph (b) or (c)
b: a period consisting of 2 consecutive quarters and starting and ending on calendar dates approved by the Commissioner, if the Commissioner approves the use of a 6-monthly reporting period by the holder and paragraph (c)
c: for a period that is the first reporting period of the holder ending after the date on which this Act receives the Royal assent, and for which the Commissioner approves a different length from that of the later reporting periods, the period that ends on a date that is —
i: approved by the Commissioner; and
ii: less than 2 years after the date on which the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 receives the Royal assent; and
iii: consistent with the later reporting periods under paragraph (a) or (b)
4: Subsection (1) section 4
5: Subsection (1) subsection (6) or (7)
6: A holder and an amount meet the requirements of this subsection if—
a: the holder and the money do not meet the requirements under section 4, as they were immediately before the amendments made by this Act, for the amount to become unclaimed money on or before the date on which this Act receives the Royal assent; and
b: the holder and the money would have met the requirements under section 4
c: the amount is not paid to the Commissioner as unclaimed money on or before the date on which this Act receives the Royal assent.
7: A holder and an amount meet the requirements of this subsection if the money becomes unclaimed money under section 4 before the date on which this Act receives the Royal assent and is not paid to the Commissioner before that date.
211: Section 9 amended (Special arrangements may be made by Commissioner)
In section 9 section 6, section 7, or subsection (1) of section 8 section 8(1)
212: Section 10 amended (Examination of accounts)
1: In section 10(1)
a: replace by him by the Commissioner
b: replace register kept by a holder pursuant to section 6 records
c: delete the second sentence.
2: In section 10(2) by him by the Commissioner
3: In section 10(3)
a: replace by him by the Commissioner
b: replace in his knowledge, or his possession in the person’s knowledge, or the person’s possession
213: Section 11 amended (Commissioner may make payment to claimant)
1: In section 11(1)
a: replace demanded by him demanded by the claimant
b: replace made by him made by the Commissioner
2: In section 11(5)
a: replace by him by the claimant
b: replace to him to the claimant
3: After section 11(5)
6: The Commissioner may remove an amount of unclaimed money from the list of amounts that are available for the owner to claim from the Commissioner, and the amount then ceases to be unclaimed money, if the money—
a: has been unclaimed money for 25 years or more:
b: is money for which the Commissioner holds no information relating to the owner:
c: is an amount of $100 or less.
7: No person shall have a right of action against the Commissioner for the investment or non-investment of an amount of unclaimed money held by the Commissioner.
8: No person shall have a right of action against the Commissioner for an amount of money that—
a: has been delisted by the Commissioner under subsection (6)
b: is unclaimed money meeting the requirements of subsection (6)
214: New section 11B inserted (Capacity of trustees)
After section 11
11B: Capacity of trustees
1: For the purposes of this Act, a person who is acting as a trustee of a trust is acting in a capacity that is separate from their other capacities.
2: The other capacities of the person referred to in subsection (1)
a: a personal capacity:
b: a capacity as a body corporate that is a legal person:
c: a capacity as a trustee of another trust.
215: Section 12 repealed (Officers to maintain secrecy)
Repeal section 12
216: Section 13 amended (Offences)
In section 13(a) section 6, section 7, subsection (1) of section 8, section 8(1)
217: Schedule repealed
Repeal the Schedule Taxation (Disclosure of Information to Approved Credit Reporting Agencies) Regulations 2017
218: Regulation 3 amended (Reportable unpaid tax threshold)
In regulation 3 section 85N(2)﻿(d)﻿(i) clause 33(3)﻿(d)﻿(i) of schedule 7 2021-03-30 Taxation (Disclosure of Information to Approved Credit Reporting Agencies) Regulations 2017 see section 2(22) for retrospective effect date COVID-19 Response (Taxation and Social Assistance Urgent Measures) Act 2020
219: Section 4 amended (Section DB 65 repealed)
In section 4
2: This section applies for the 2020–21 and later income years. 2021-03-30 COVID-19 Response (Taxation and Social Assistance Urgent Measures) Act 2020 see section 2(27) for retrospective effect date Taxation (Income Tax Rate and Other Amendments) Act 2020
220: Section 19 amended (Schedule 1, part D, table 2 amended)
In section 19 0.390 0.330 2021-03-30 Taxation (Income Tax Rate and Other Amendments) Act 2020 per section 2(1)