Taxation (Maori Organisations, Taxpayer Compliance and Miscellaneous Provisions) Act 2003

Taxation (Maori Organisations, Taxpayer Compliance and Miscellaneous Provisions) Act 2003

Public Act2003 No 5
Date of assent26 March 2003

Contents

10 Reassessments [Repealed]

12 Cash basis holder [Repealed]

24 Exceptions [Repealed]

25 Trustee income [Repealed]

27 Part HI replaced [Repealed]

33 Low income rebate [Repealed]

42 Part MC replaced [Repealed]

75 Definitions [Repealed]

Amendments to Goods and Services Tax Act 1985

Amendments to Income Tax Act 1976

Amendments to Injury Prevention, Rehabilitation, and Compensation Act 2001

Amendments to Taxation (Relief, Refunds and Miscellaneous Provisions) Act 2002


The Parliament of New Zealand enacts as follows:

1 Title
  • This Act is the Taxation (Maori Organisations, Taxpayer Compliance and Miscellaneous Provisions) Act 2003.

2 Commencement

Part 1
Amendments to Income Tax Act 1994

  • Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

3 Income Tax Act 1994
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

4 Double tax agreements
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

5 Exempt income—interest
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

6 Non-residents' exempt income
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

7 Non-profit bodies' and charities' exempt income
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

8 Section DI 2 replaced
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

9 Section DJ 4 replaced
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

10 Reassessments
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

11 Transfer of depreciable property between associated persons
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

12 Cash basis holder
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

13 Cash basis person rules for trustees
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

14 Refunds from adverse event income equalisation accounts
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

15 Cost of producing films
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

16 Transfer of property or obligations under financial arrangements deemed to be at market value
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

17 New section FE 6B inserted
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

18 Rules for determining New Zealand foreign attributed income group debt percentage
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

19 Income assessable to beneficiaries
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

20 New section GC 27B inserted
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

21 Group investment funds
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

22 Payment of qualifying company election tax
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

23 Gross income assessable to beneficiaries
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

24 Exceptions
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

25 Trustee income
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

26 Commissioner may determine amount of trustee income
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

27 Part HI replaced
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

28 Section HK 14 repealed
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

29 Specified activity net losses
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

30 Attributed foreign net losses
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

31 Foreign investment fund net losses
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

32 Policyholder net losses
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

33 Low income rebate
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

34 Rebate for gifts of money
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

35 Rebate for interest on home vendor mortgages
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

36 Determination of amount of credit in certain cases
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

37 Credit of tax for imputation credit
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

38 Foreign tax credits—controlled foreign companies
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

39 Tax deductions to be credited against tax assessed
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

40 New section LD 3B inserted
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

41 New Part MBB inserted
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

42 Part MC replaced
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

43 Refund of excess tax
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

44 New section MD 2B inserted
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

45 Companies required to maintain imputation credit account
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

46 Credits arising to imputation credit account
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

47 Debits arising to imputation credit account
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

48 Amount of imputation credit to be attached to cash distribution
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

49 Notional distribution deemed to be dividend
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

50 Credits and debits arising to branch equivalent tax account of company
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

51 Debits and credits arising to group branch equivalent tax account
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

52 Use of consolidated group credit to reduce dividend withholding payment, or use of group or individual debit to satisfy income tax liability
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

53 New Part MK inserted
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

54 New Part NBB inserted
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

55 Part NC heading replaced
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

56 Tax deductions to be made by employers
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

57 Payment to be made by employee where tax deduction exceeds source deduction payment
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

58 Applications of tax codes specified in tax code declarations or tax code certificates
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

59 Employee using incorrect tax code
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

60 Cross heading amended
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

61 Payment of tax deductions to Commissioner
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

62 Cross heading repealed
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

63 Section NC 17 repealed
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

64 Bond, etc in lieu of tax deductions in case of certain non-resident employees
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

65 Amount of tax deductions deemed to be received by employee
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

66 Application of other provisions to amounts payable under PAYE rules
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

67 Employer's liability for fringe benefit tax
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

68 Application of RWT rules
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

69 Deduction of resident withholding tax
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

70 Companies to notify interest payer
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

71 Payment of deductions of resident withholding tax to Commissioner
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

72 Resident withholding tax deductions varied to correct errors
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

73 New section NF 8B inserted
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

74 Amount of dividend withholding payment to be deducted
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

75 Definitions
  • [Repealed]

    Subsection (24) was repealed, as from 26 March 2003, by section 172 Taxation (GST, Trans-Tasman Imputation and Miscellaneous Provisions) Act 2003 (2003 No 122) with application as from the 2003-04 income year.

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

76 New section OB 3B inserted
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

77 References to particular regimes in former Act, etc
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

78 Schedule 1—Basic rates of income tax and specified superannuation contribution withholding tax
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

79 Schedule 13—Months for payment of provisional tax and terminal tax
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

80 Schedule 14—Rate of resident withholding tax deductions
  • [Repealed]

    Part 1 (sections 3 to 80) was repealed, as from 1 April 2005, by section YA 2 Income Tax Act 2004 (2004 No 35).

Part 2
Amendments to Tax Administration Act 1994

82 Interpretation
  • (1) This section amends section 3(1).

    (2) The definition of acceptable interpretation is repealed.

    (3) Before the definition of accounting period, the following is inserted:

    acceptable tax position means a tax position that is not an unacceptable tax position.

    (4) The definition of arrangement is replaced by:

    arrangement

    • (a) means a contract, agreement, plan or understanding, whether enforceable or unenforceable, including all steps and transactions by which it is carried into effect:

    • (b) for the purpose of Part 5A, includes facts that the Commissioner considers are material or relevant as background or context to a private or a product ruling.

    (5) After the definition of arrangement, the following is inserted:

    assessment means—

    • (a) an assessment of tax made under a tax law by a taxpayer or by the Commissioner:

    • (b) an assessment of a net loss for the purposes of the Income Tax Act 1994:

    • (c) an assessment of terminal tax or a refund for the purposes of the Income Tax Act 1994:

    • (d) an assessment of a refund due under the Goods and Services Tax Act 1985:

    • (e) an amendment by the Commissioner of an assessment.

    (6) In the definition of civil penalty, after paragraph (c), the following is inserted:

    • (cb) a promoter penalty; or.

    (7) In the definition of deferrable tax

    • (a) 50% of is omitted:

    • (b) ; and non-deferrable tax, for the purposes of either Part, means the other 50% of that tax is omitted.

    (8) The definition of Maori is repealed.

    (9) In the definition of tax position

    • (a) possible is omitted; and

    • (b) a position or approach with regard to is inserted after limitation.

    (10) After the definition of trustee income, the following is inserted:

    unacceptable tax position is defined in section 141B.

    (11) Subsections (2), (3), (9) and (10) apply to a tax position taken by a taxpayer on or after 1 April 2003.

    (12) Subsection (5) applies for the 2002-03 and subsequent income years.

    (13) Subsection (8) applies for the 2004-05 and subsequent income years.

83 Commissioner to have power to inspect books and documents
  • (1) In section 16, the section heading is replaced by:

    Commissioner may access premises to obtain information

    (2) Section 16(2) is replaced by:

    • (2) The occupier of land, or a building or place, that is entered or proposed to be entered by the Commissioner, or by an authorised officer, must—

      • (a) provide the Commissioner or the officer with all reasonable facilities and assistance for the effective exercise of powers under this section; and

      • (b) answer all proper questions relating to the effective exercise of powers under this section, orally or, if required by the Commissioner or the officer, in writing, or by statutory declaration.

    • (2A) A person whom the Commissioner or an authorised officer considers necessary for the effective exercise of powers under this section may accompany the Commissioner or the authorised officer to a place.

    (3) In section 16(3), or an authorised officer is replaced by , an authorised officer, or a person accompanying the Commissioner or the authorised officer,.

    (4) In section 16(4), authorised officer named in the application is replaced by an authorised officer.

    (5) Section 16(5)(b) is replaced by:

    • (b) shall specify an authorised officer of the Department, whether by name or in general, who may act under the warrant; and

    • (ba) shall specify whether other persons may accompany the officer acting under the warrant; and.

    (6) Subsection (5) applies to a warrant issued on or after a date to be appointed by Order in Council.

84 New section 16B inserted
  • After section 16, the following is inserted:

    16B Power to remove and copy documents
    • (1) The Commissioner, or an officer of the Department authorised by the Commissioner, may remove books or documents accessed under section 16 to make copies.

      (2) Any copies of the books or documents removed must be made, and the books or documents returned, as soon as practicable.

      (3) A copy of a book or document certified by or on behalf of the Commissioner is admissible in evidence in court as if it were the original.

      (4) The owner of a book or document that is removed under this section is entitled to inspect, and obtain a copy of, the book or document at the premises to which the book or document is removed—

      • (a) at the time the book or document is removed to the premises:

      • (b) at reasonable times subsequently.

85 Information to be furnished on request of Commissioner
  • After section 17(1), the following is inserted:

    • (1B) For the purpose of subsection (1), information and books or documents that are held by a non-resident that is controlled, directly or indirectly, by a New Zealand resident, are treated as being held by the New Zealand resident.

    • (1C) For the purpose of subsection (1B)—

      • (a) in determining whether a non-resident is controlled by a New Zealand resident—

        • (i) anything held by a person who is resident in New Zealand, or is a controlled foreign company, and is associated with the New Zealand resident is treated as being held by the New Zealand resident; and

        • (ii) a person is treated as being associated with the New Zealand resident if the person and the New Zealand resident are associated under section OD 7, interpreted as if relative had the meaning set out in paragraph (b) of the definition in section OB 1, or OD 8(3) of the Income Tax Act 1994; and

      • (b) a law of a foreign country that relates to the secrecy of information must be ignored.

    • (1D) If information in writing is required, or books and documents must be produced, the Commissioner may require that the information be furnished, or the books and documents be produced, to a particular office of the Department.

86 Keeping of business records
  • (1) After section 22(2)(k), the following is inserted:

    • (kb) Every credit and debit to the Maori authority credit account of the person and the amount of the Maori authority credit attached to taxable Maori authority distributions and dividends paid by the person; and.

    (2) Subsection (1) applies for the 2004-05 and subsequent income years.

87 Records to be kept by employer
  • (1) In section 24, in the section heading or PAYE intermediary is inserted after employer.

    (2) After section 24(1), the following is inserted:

    • (1B) For a pay period in which a person acts as a PAYE intermediary for an employer in relation to an employee—

      • (a) the person must keep a proper record of the person's actions as a PAYE intermediary in respect of the employee; and

      • (b) the employer must keep a proper record of the employer's payments to the person of salary or wages in respect of the employee.

    (3) In section 24(2), or PAYE intermediary is inserted after Every employer.

    (4) In section 24(2), including the proviso, or the PAYE intermediary is inserted after the employer in each place where it occurs.

    (5) Subsections (1) to (4) apply for pay periods beginning on and after 1 April 2004.

88 Section 31 replaced
  • (1) Section 31 is replaced by:

    31 Maori authority to give notice of amounts distributed
    • (1) A Maori authority that makes a taxable Maori authority distribution to a member must, at the time the distribution is made, give to the member a notice that contains the following details:

      • “‘(a) the name of the Maori authority:

      • “‘(b) the date the distribution is made:

      • “‘(c) the name and address, and the tax file number if the number is known by the Maori authority, of the member to whom the distribution is made:

      • “‘(d) the amount of the distribution made to the member, including what portion is a taxable distribution and what portion is a non-taxable distribution:

      • “‘(e) the amount of a Maori authority credit attached to the distribution or treated as being attached to the distribution under section NF 8B:

      • “‘(f) such other information as the Commissioner may require.

      (2) A notice is treated as having been given to a member if the notice is—

      • (a) given to the member personally; or

      • (b) is sent by post to the member's usual or last known place of abode or business; or

      • (c) is given personally to a person authorised to act on behalf of the member; or

      • (d) is sent by post to the person at their last known place of abode or business.

    (2) Subsection (1) applies for the 2004-05 and subsequent income years.

89 Annual returns of income by taxpayers
  • (1) In section 33, in the section heading, by taxpayers is omitted.

    (2) After section 33(1), the following is inserted:

    • (1B) In an income year, a trust, society or institution to which section CB 4(1)(c) or section CB 4(1)(e) of the Income Tax Act 1994 applies, may furnish to the Commissioner a return of income in the prescribed form for the preceding income year, together with such other particulars as may be prescribed if the trust, society or institution receives a taxable Maori authority distribution.

    (3) After section 33(2), the following is added:

    • (3) Subsection (2) does not apply if subsection (1B) applies.

    (4) Subsections (1) to (3) apply for the 2004-05 and subsequent income years.

90 Annual returns of income not required
  • (1) After section 33A(1)(a)(iii), the following is inserted:

    • (iv) a taxable Maori authority distribution; and

    (2) After section 33A(1)(b)(via), the following is inserted:

    • (vib) taxable Maori authority distributions if the person's annual gross income is more than $38,000; and.

    (3) In section 33A(1)(b)(vii) and 33A(1)(b)(viii), interest or dividends is replaced by interest, dividends, or taxable Maori authority distributions.

    (4) Subsections (2) and (3) apply for the 2004-05 and subsequent income years.

91 Electronic format of employer monthly schedule and remittance certificate
  • (1) In section 36A(1), or a PAYE intermediary is inserted after an employer in the second place where it occurs.

    (2) In section 36A(2), or a PAYE intermediary is inserted after an employer.

    (3) In section 36A(3), or to a class of employer is replaced by , a class of employers, a PAYE intermediary, or a class of PAYE intermediaries.

    (4) Subsections (1) to (3) apply for pay periods beginning on and after 1 April 2004.

92 New section 36BB inserted
  • After section 36B, the following is inserted:

    36BB Electronic format for details required under Part MBB of Income Tax Act 1994
    • The Commissioner may prescribe one or more electronic formats in which details that must be provided under Part MBB of the Income Tax Act 1994 may be provided by electronic means.

93 Particulars furnished in electronic format
  • (1) In section 36C(1), or 36B is replaced by 36B or 36BB.

    (2) Subsection (1) applies for the 2003-04 and subsequent income years.

94 Consequential adjustments on change in return date
  • (1) In section 39(4), any year or years of assessment, make all such assessments is replaced by an income year, make an assessment.

    (2) Subsection (1) applies for the 2002-03 and subsequent income years.

95 Returns by person claiming housekeeper or charitable rebates
  • (1) In section 41A(8), , HK 14, is omitted.

    (2) Subsection (1) applies for the 2004-05 and subsequent income years.

96 Special arrangements for supply of information by employer to Commissioner
  • (1) In section 48, in the section heading, or PAYE intermediary is inserted after employer.

    (2) In section 48(1), or a PAYE intermediary is inserted after an employer.

    (3) In section 48(2), or PAYE intermediary is inserted after employer.

    (4) Subsections (1) to (3) apply for pay periods beginning on and after 1 April 2004.

97 Section 57 replaced
  • (1) Section 57 is replaced by:

    57 Maori authority to make returns of income
    • (1) Every year a Maori authority must furnish a return in the prescribed form that is a complete statement of the Maori authority's taxable income for the preceding year.

      (2) The return must be furnished to the Commissioner on or before the date by which returns of income are required under this Act.

    (2) Subsection (1) applies for the 2004-05 and subsequent income years.

98 New section 68B inserted
  • (1) After section 68A, the following is inserted:

    68B Distribution statement required when Maori authority makes‘distribution
    • (1) A Maori authority that makes a distribution to a member must, at the time it makes the distribution, complete and retain a distribution statement that contains the following:

      • (a) the date on which the distribution is made:

      • (b) the total amount of distributions made:

      • (c) the total amount of Maori authority credits attached to the distributions (to be shown as a nil amount if Maori authority credits are not attached):

      • (d) the base ratio of the distribution:

      • (e) such further information as the Commissioner may require.

      (2) A Maori authority must, no later than the time allowed by section 37 for furnishing a return of income for an income year, furnish to the Commissioner the distribution statement for the imputation year that corresponds with the income year.

    (2) Subsection (1) applies for the 2004-05 and subsequent income years.

99 Annual imputation return
  • (1) Section 69 of the principal Act is amended by repealing subsections (2), (3) and (4).

    (2) Subsection (1) applies for the 2002-03 and subsequent imputation years.

100 New section 69B inserted
  • (1) After section 69, the following is inserted:

    69B Annual Maori authority credit account return required by Maori‘authority
    • (1) A Maori authority must, no later than the time allowed by section 37 for furnishing a return of income for an income year, furnish to the Commissioner an annual Maori authority credit account return in the prescribed form for the imputation year that corresponds with the income year.

      (2) The annual Maori authority credit account return must show—

      • (a) the opening and closing balances of the Maori authority credit account for the imputation year:

      • (b) the amount and sources of all credits and debits that have arisen during the imputation year in accordance with sections MK 4 and MK 5 of the Income Tax Act 1994:

      • (c) the amount of any further income tax payable for the imputation year under section MK 8 of the Income Tax Act 1994:

      • (d) the amount of any Maori authority distribution penalty tax payable for the imputation year:

      • (e) such further information as the Commissioner may prescribe or require.

    (2) Subsection (1) applies for the 2004-05 and subsequent income years.

101 New section 70B inserted
  • (1) After section 70, the following is inserted:

    70B Annual Maori authority credit account return to be furnished in particular cases
    • (1) The Commissioner may require a Maori authority to furnish, within the time allowed by the Commissioner, a Maori authority credit account return for a period specified by the Commissioner.

      (2) A Maori authority that ceases to be a Maori authority in an imputation year must furnish to the Commissioner, no later than 2 calendar months after the last day on which it is still a Maori authority, a Maori authority credit account return for the period beginning on the first day of the imputation year and ending on the last day on which the Maori authority is a Maori authority.

      (3) A Maori authority may furnish to the Commissioner, at any time, a Maori authority credit account return for a period beginning on the first day of an imputation year and ending on a day specified by the Maori authority within the imputation year, being a day that is not more than 7 days earlier than the date on which the Maori authority credit account return is furnished to the Commissioner.

      (4) A Maori authority credit account return furnished under this section must, except if the Commissioner otherwise specifies, contain the matters referred to in section 69B as if the references in that section to an imputation year were—

      • (a) in the case of a return required to be furnished under subsection (1), references to the period specified by the Commissioner; and

      • (b) in the case of a return required to be furnished under subsection (2) or subsection (3), references to the period referred to in subsection (2) or subsection (3) respectively.

    (2) Subsection (1) applies for the 2004-05 and subsequent income years.

102 Notification required that taxpayer not subject to this Part
  • (1) Section 80B(2) and 80B(3) is replaced by:

    • (2) The information required must be received by the Commissioner no later than the person's terminal tax date for the income year to which the income statement relates.

    (2) Subsection (1) applies for the 2002-03 and subsequent income years.

103 Natural person to request income statement
  • (1) Section 80C(2) and 80C(3) is replaced by:

    • (2) The request must be received by the Commissioner no later than the person's terminal tax date for the income year to which the income statement relates.

    (2) Subsection (1) applies for the 2002-03 and subsequent income years.

104 Taxpayer obligations and assessment on receipt of income statement
  • (1) In section 80F(1), or (3) is omitted.

    (2) Section 80F(2) and 80F(3) is replaced by:

    • (2) A person must inform the Commissioner by the later of—

      • (a) the person's terminal tax date for the income year to which the income statement relates; and

      • (b) the date that occurs 2 months after the date the income statement is issued.

    (3) Subsections (1) and (2) apply for the 2002-03 and subsequent income years.

105 Income statement deemed assessment
  • (1) Section 80H(3)(a) and 80H(3)(ab) is repealed.

    (2) Section 80H(4) and 80H(5) is replaced by:

    • (4) An assessment under subsection (1) is treated as being made on the date that is 2 months after the date an income statement is issued if the income statement is issued not more than 2 months before the person's terminal tax date.

    (3) In section 80H(6), or the date their income tax is payable under section NC 17(3) is omitted.

    (4) Subsections (1) to (3) apply for the 2002-03 and subsequent income years.

106 Officers to maintain secrecy
  • After section 81(4)(l), the following is inserted:

    • (lb) communicating, to a person who is named under section MBB 5 of the Income Tax Act 1994 by an intermediary as being associated with a deposit to a tax pooling account, the details of the deposit that are associated with the person in the Commissioner's records:

107 Further secrecy requirements
  • In section 87

    • (a) in subsection (5), subsection (3). is replaced by subsection (3); or:

    • (b) after subsection (5), the following is added:

      • (c) accompanies the Commissioner or an authorised officer, as permitted by section 16(2A), to a place where the person may or is likely to have access to restricted information.

108 New section 97B inserted
  • (1) After section 97, the following is inserted:

    97B Assessment of Maori authority distribution penalty tax
    • (1) The Commissioner may, in respect of a Maori authority chargeable with Maori authority distribution penalty tax, make an assessment of the amount of Maori authority distribution penalty tax that the Commissioner considers should be imposed on the Maori authority.

      (2) The Maori authority is liable to pay the Maori authority distribution penalty tax assessed except to the extent that the Maori authority establishes in proceedings challenging the assessment that the assessment is excessive or that the Maori authority is not chargeable with the Maori authority distribution penalty tax.

      (3) Sections 109, 111 and 113 apply to an assessment made under this section as if—

      • (a) the references to taxpayer in those sections included a Maori authority chargeable with Maori authority distribution penalty tax; and

      • (b) the reference to tax already assessed in section 113 included Maori authority distribution penalty tax already assessed under this section.

      (4) An assessment made under this section is subject to challenge in the same manner as an assessment of income tax imposed under section BB 1 of the Income Tax Act 1994, and Part 7 of this Act applies accordingly.

    (2) Subsection (1) applies for the 2004-05 and subsequent income years.

109 Definitions
  • (1) This section amends section 120C.

    (2) In the definition of date interest starts, at the end of paragraph (d), filed. is replaced by filed; and, and the following is added:

    • (e) for tax paid, being a deposit to a tax pooling account in accordance with Part MBB of the Income Tax Act 1994, means the date on which the deposit is made, unless the Commissioner refunds the deposit as required by section MBB 5(3), in which case there is not a date on which interest starts.

    (3) The definition of tax paid is replaced by:

    tax paid means—

    • (a) at any time, the amount of tax—

      • (i) paid or credited by that time in respect of a tax liability; and

      • (ii) that has not been refunded or applied by the Commissioner in meeting another tax liability:

    • (b) an amount credited to an intermediary's tax pooling account in accordance with Part MBB of the Income Tax Act 1994:

    • (c) an amount credited or transferred to a taxpayer's account from a tax pooling account in accordance with Part MBB of the Income Tax Act 1994.

    (4) In section 120C(3), paragraph (a) is replaced by paragraph (a)(i).

    (5) Subsection (4) applies for the income years beginning with the 1997-98 income year and ending with the 2001-02 income year.

110 New sections 120OB and 120OC inserted
  • (1) After section 120O, the following is inserted:

    120OB Variation to definitions for determining interest chargeable or payable to PAYE intermediaries
    • (1) Despite section 120C, this section sets out the definitions that apply for the purpose of determining interest chargeable or payable to a person acting as a PAYE intermediary for an employer, if the employer has—

      • (a) paid to the person the salary or wages relating to an employee as required by section NBB 4(1)(b) of the Income Tax Act 1994; and

      • (b) provided to the person the information requested by the person, as required by section NBB 4(1)(d) of the Income Tax Act 1994.

      (2) In this Part—

      Commissioner's paying rate means the rate of interest established and notified as the Commissioner's paying rate by an Order in Council made under section 120H

      date interest starts

      • (a) for unpaid tax means—

        • (i) if a PAYE intermediary pays too little tax by a due date—

          • (A) the day after the due date for payment of the tax; or

          • (B) where the due date is a new due date, the day after the original due date for payment of the tax:

        • (ii) if the Commissioner refunds tax which should be kept and taken into account in satisfying tax payable by a PAYE intermediary on a due date, the day after the day the Commissioner refunds the tax; and

      • (b) for overpaid tax, if a PAYE intermediary pays too much tax by or after a due date—

        • (i) the day after the later of the due date for payment of the tax and the date the payment is made; or

        • (ii) where the due date is a new due date, the day after the later of the original due date for payment of the tax and the date on which the payment is made

      interest paid to a taxpayer means interest credited to the PAYE intermediary; and interest paid and paid have corresponding meanings

      interest period

      • (a) for unpaid tax, means the period beginning on the date interest starts and ending on the date the tax is paid or credited as paid (both dates inclusive):

      • (b) for overpaid tax, means the period beginning on the date interest starts and ending on the date the tax is refunded by the Commissioner (both dates inclusive); and

      tax paid, at any time, means the amount of tax that at the time—

      • (a) has been paid or credited as paid in respect of a deduction of tax that must be made under a tax law; and

      • (b) has not been refunded by the Commissioner

      tax payable, at any time, means a deduction of tax that at the time is due to be made under a tax law and paid to the Commissioner

      taxpayer's paying rate means the rate of interest established and notified as the taxpayer's paying rate by an Order in Council made under section 120H.

      (3) For the purposes of this Part, where, at any time—

      • (a) the tax paid by a PAYE intermediary exceeds the tax payable, the excess is overpaid tax; and

      • (b) the tax payable by a PAYE intermediary exceeds the tax paid, the excess is unpaid tax.

    120OC Application of sections 120A, 120AA and 120D to 120I to PAYE intermediaries
    • (1) Sections 120A, 120AA and 120D to 120I apply to a PAYE intermediary in their capacity as a PAYE intermediary as if references to a taxpayer were read as references to a PAYE intermediary.

      (2) Despite subsection (1), sections 120EA, 120F(2) and 120F(3) do not apply to a PAYE intermediary.

    (2) Subsection (1) applies for pay periods beginning on and after 1 April 2004.

111 New section 120OD inserted
  • After section 120OC, as inserted by section 110, the following is inserted:

    120OD Application of sections 120A, 120AA and 120C to 120I to intermediaries who operate tax pooling accounts
    • (1) Sections 120A, 120AA and 120C to 120I apply to an intermediary who operates a tax pooling account in accordance with Part MBB of the Income Tax Act 1994 in their capacity as an intermediary as if references to a taxpayer were read as references to an intermediary.

      (2) Despite subsection (1), sections 120EA, 120F(2) and 120F(3) do not apply to an intermediary.

112 Interest on deferrable tax
  • (1) Section 120T(2) is repealed.

    (2) Subsection (1) applies on and after 1 April 2003.

113 Certain rights of objection not conferred
  • (1) In section 125(j)(i), (except section NC 17) is omitted.

    (2) In section 125(j)(iv), 128A, is omitted.

    (3) Subsection (1) applies for the 2002-03 and subsequent income years.

114 Obligation to pay tax where competent objection lodged
  • (1) In section 128, the section heading is replaced by: Payment of disputed tax where competent objection lodged.

    (2) Section 128(1) is repealed.

    (3) After section 128(2), the following is inserted:

    • (2B) Despite subsection (2), the Commissioner may require a taxpayer to pay all tax in dispute if the Commissioner considers that there is a significant risk that the tax in dispute will not be paid should the taxpayer not succeed in objection proceedings.

    (4) Section 128(3)(a) and 128(3)(b) is replaced by:

    • (a) the tax in dispute paid in accordance with subsection (2B); and

    • (b) interest accrued on the tax in dispute under Part 7.

    (5) In section 128(5), and non-deferrable is omitted.

    (6) In section 128(6), or non-deferrable is omitted.

115 Section 128A repealed
  • Section 128A is repealed.

116 Certain rights of challenge not conferred
  • (1) In section 138E(1)(e)(i), (except section NC 17) is omitted.

    (2) In section 138E(1)(e)(iv), 128A, is omitted.

    (3) Subsection (1) applies for the 2002-03 and subsequent income years.

117 Obligation to pay tax during challenge
  • (1) In section 138I, the section heading is replaced by: Payment of disputed tax.

    (2) Section 138I(1) is repealed.

    (3) After section 138I(2), the following is inserted:

    • (2B) Despite subsection (2), the Commissioner may require a disputant to pay all tax in dispute that is the subject of the challenge if the Commissioner considers that there is a significant risk that the tax in dispute will not be paid should the disputant's challenge not be successful.

    (4) Section 138I(3)(a) and 138I(3)(b) is replaced by:

    • (a) the tax in dispute paid in accordance with subsection (2B); and

    • (b) interest accrued on the tax in dispute under Part 7.

    (5) In section 138I(4), and non-deferrable is omitted.

    (6) In section 138I(5), or non-deferrable is omitted.

118 Section 138J repealed
  • Section 138J is repealed.

119 Powers of hearing authority
  • (1) After section 138P(1), the following is inserted:

    • (1B) If a taxpayer brings a challenge and proves, on the balance of probabilities, that the amount of an assessment is excessive by a specific amount, a hearing authority must reduce the taxpayer's assessment by the specific amount.

    (2) In section 138P(5)(a), or subsection (1B) is inserted after subsection (1)(a).

    (3) Subsections (1) and (2) apply to a challenge that is brought on or after the date on which this Act receives the Royal assent.

120 Non-electronic filing penalty
  • (1) Section 139AA(1) is replaced by:

    • (1) This section applies to—

      • (a) an employer who must comply, in a prescribed electronic format, with section NC 15(1)(a) and NC 15(1)(b) of the Income Tax Act 1994; and

      • (b) a PAYE intermediary.

    (2) In section 139AA(2)

    • (a) or a PAYE intermediary is inserted after An employer:

    • (b) or the PAYE intermediary is inserted after if the employer.

    (3) Subsections (1) and (2) apply for pay periods beginning on and after 1 April 2004.

121 New section 140CB inserted
  • (1) After section 140C, the following is inserted:

    140CB Maori authority distribution penalty tax payable where end of year debit balance
    • (1) A Maori authority that is liable to pay further income tax under section MK 8 of the Income Tax Act 1994 for an end of year debit balance is also liable to pay a special tax known as Maori authority distribution penalty tax.

      (2) The amount of the Maori authority distribution penalty tax is 10% of the amount of further income tax that gives rise to the liability for the Maori authority distribution penalty tax.

    (2) Subsection (1) applies for the 2004-05 and subsequent income years.

122 New section 140DB inserted
  • (1) After section 140D, the following is inserted:

    140DB Application of other provisions of Act to Maori authority distribution penalty tax
    • (1) Subject to the Maori authority rules, the other provisions of this Act and the Income Tax Act 1994, so far as they apply and with any necessary modifications, apply to Maori authority distribution penalty tax as if it were income tax imposed under section BB 1 of the Income Tax Act 1994.

      (2) Despite subsection (1), Maori authority distribution penalty tax is not included within the meaning of income tax or tax for the purpose of—

      • (a) Parts HI or MK of the Income Tax Act 1994; or

      • (b) calculating a taxpayer's residual income tax liability for the purpose of section 120K of this Act.

    (2) Subsection (1) applies for the 2004-05 and subsequent income years.

123 Tax shortfalls
  • (1) In section 141(12A), 141E is replaced by 141EB.

    (2) Subsection (1) applies to an arrangement that a taxpayer enters into on or after the date on which this Act receives the Royal assent.

124 Not taking reasonable care
  • (1) In section 141A(3), , in taking a taxpayer's tax position, has used an acceptable interpretation of the tax law is replaced by takes an acceptable tax position

    (2) After section 141A(3), the following is inserted:

    • (4) Subsection (3) and section 141B(1B) do not exclude a taxpayer who makes a mistake in the calculation or recording of numbers in a return from being liable for a penalty for not taking reasonable care.

    (3) Subsections (1) and (2) apply to a tax position that a taxpayer takes on or after 1 April 2003.

125 Unacceptable interpretation
  • (1) In section 141B, the section heading is replaced by: Unacceptable tax position.

    (2) Section 141B(1) is replaced by:

    • (1) A taxpayer takes an unacceptable tax position if, viewed objectively, the tax position fails to meet the standard of being about as likely as not to be correct.

    (3) After section 141B(1), the following is inserted:

    • (1B) A taxpayer does not take an unacceptable tax position merely by making a mistake in the calculation or recording of numbers in a return.

    (4) Section 141B(2) is replaced by:

    • (2) A taxpayer is liable to pay a shortfall penalty if the taxpayer takes an unacceptable tax position and the tax shortfall arising from the taxpayer's tax position is more than both—

      • (a) $20,000; and

      • (b) the lesser of $250,000 and 1% of the taxpayer's total tax figure for the relevant return period.

    (5) In section 141B(7), the portion before paragraph (a) is replaced by:

    • (7) The matters that must be considered in determining whether the taxpayer has taken an unacceptable tax position include—.

    (6) Subsections (1) to (5) apply to a tax position that a taxpayer takes on or after 1 April 2003.

126 Gross carelessness
  • (1) In section 141C(4), , in taking a taxpayer's tax position, has used an acceptable interpretation of tax law is replaced by takes an acceptable tax position.

    (2) Subsection (1) applies to a tax position that a taxpayer takes on or after 1 April 2003.

127 Abusive tax position
  • (1) In section 141D(1), having applied an unacceptable interpretation to a tax law is replaced by having taken an unacceptable tax position.

    (2) After section 141D(3), the following is inserted:

    • (3B) The penalty payable for taking an abusive tax position is reduced to 20% of the resulting tax shortfall if—

      • (a) the taxpayer is a party to an arrangement to which section 141EB applies and becomes liable to a shortfall penalty for an abusive tax position as a result of that arrangement, irrespective of whether a promoter penalty has been imposed in respect of the arrangement; and

      • (b) the sum of the tax shortfall from the arrangement for the taxpayer and the tax shortfalls from the arrangement for persons with whom the taxpayer is associated under section OD 7 of the Income Tax Act 1994 is less than $50,000; and

      • (c) the taxpayer has independent advice stating that the taxpayer's tax position is not an abusive tax position.

    (3) Section 141D(4) is replaced by:

    • (4) This section applies to a taxpayer if the taxpayer has taken an unacceptable tax position and the tax shortfall from the tax position is more than $20,000.

    (4) Section 141D(7)(a) is replaced by:

    • (a) is an unacceptable tax position at the time at which the tax position is taken; and.

    (5) Subsections (1), (3) and (4) apply to a tax position that a taxpayer takes on or after 1 April 2003.

    (6) Subsection (2) applies to arrangements entered into on or after the date on which this Act receives the Royal assent.

128 New sections 141EB and 141EC inserted
  • (1) After section 141E, the following is inserted:

    141EB Promoter penalties
    • (1) The promoter of an arrangement is liable to a promoter penalty if—

      • (a) a taxpayer becomes a party to the arrangement and a shortfall penalty for an abusive tax position is imposed on the taxpayer as a result of the arrangement; and

      • (b) the arrangement is offered, sold, issued or promoted to 10 or more persons in an income year.

      (2) For the purpose of subsection (1)(b), an arrangement is treated as being offered, sold, issued or promoted to 10 or more persons if 10 or more persons claim tax-related benefits as a result of the arrangement.

      (3) An arrangement is treated as being offered, sold, issued or promoted to all shareholders of a loss attributing qualifying company and partners of a partnership if the arrangement is offered, sold, issued or promoted to the loss attributing qualifying company or partnership respectively.

      (4) The amount of the promoter penalty is the greater of nil and the sum of tax shortfalls resulting from taking an abusive tax position on the arrangement, for which the promoter would have been liable if the promoter had—

      • (a) been a party to the arrangement in the place of each party to the arrangement to whom the arrangement was offered, sold, issued or promoted; and

      • (b) taken the tax position that the arrangement produced for the promoter the taxation-related benefits that were intended by the parties to the arrangement; and

      • (c) had the taxation-related characteristics that would, under the tax position referred to in paragraph (b), produce for the promoter the maximum taxation-related benefits from the arrangement.

      (5) A promoter who satisfies paragraph (a) of the definition of promoter in section 141EC is liable for the promoter penalty associated with the arrangement—

      • (a) jointly and severally with the other such promoters of the arrangement, for the whole promoter penalty:

      • (b) jointly and severally with each promoter of the arrangement who is liable for part of the promoter penalty under subsection (6), for the part of the promoter penalty for which the other promoter is liable.

      (6) A promoter who does not satisfy paragraph (a) of the definition of promoter in section 141EC is jointly and severally liable, with the other promoters of the arrangement, for the portion of the promoter penalty that is associated with the arrangement entered into by taxpayers to whom the promoter offered, sold, issued or promoted the arrangement.

    141EC Definition of promoter
    • (1) In section 141EB, promoter of an arrangement means—

      • (a) a person who is a party to, or is significantly involved in formulating, a plan or programme from which an arrangement is offered; or

      • (b) a person who is aware of material and relevant aspects of the arrangement and who sells, issues or promotes the selling or issuing of, the arrangement, whether or not for remuneration.

      (2) For the purpose of subsection (1), promoter does not include a person whose involvement with the arrangement is limited to providing legal, accounting, clerical or secretarial services to a promoter.

    (2) Subsection (1) applies to arrangements entered into on and after the date on which this Act receives the Royal assent.

129 New section 141FB inserted
  • (1) After section 141F, the following is inserted:

    141FB Reduction of penalties for previous behaviour
    • (1) A shortfall penalty, payable by a taxpayer, under section 141E, for evasion or a similar act is reduced to 50% of the penalty that would otherwise be payable under that section if the taxpayer has not previously been liable to a shortfall penalty that—

      • (a) related to the same type of tax as does the current penalty; and

      • (b) was for evasion or a similar act; and

      • (c) was not reduced for voluntary disclosure by the taxpayer; and

      • (d) was eligible for a reduction under this subsection.

      (2) A shortfall penalty payable by a taxpayer under any of sections 141A to 141D (called in this section the current penalty) is reduced to 50% of the penalty that would otherwise be payable under those sections if, after the date specified in subsection (3) and before the date on which the taxpayer becomes liable for the current penalty, the taxpayer has not been liable to pay a shortfall penalty that—

      • (a) related to the same type of tax as does the current penalty; and

      • (b) if the current penalty is for—

        • (i) evasion or a similar act, was for evasion or a similar act:

        • (ii) gross carelessness or taking an abusive tax position, was for evasion or a similar act or for gross carelessness or for taking an abusive tax position:

        • (iii) not taking reasonable care or taking an unacceptable tax position, was a shortfall penalty; and

      • (c) was not reduced for voluntary disclosure by the taxpayer; and

      • (d) was eligible for a reduction under this subsection.

      (3) The date referred to in subsection (2) precedes the date on which the taxpayer becomes liable for the current penalty by—

      • (a) 2 years, if the current penalty relates to the taxpayer's application of the PAYE rules, to fringe benefit tax, to goods and services tax, to resident withholding tax; or

      • (b) 4 years, if the current penalty relates to any other type of tax.

      (4) For the purpose of subsection (2), if a taxpayer is liable for shortfall penalties that relate to tax shortfalls of which the Commissioner becomes aware as a consequence of a single investigation or voluntary disclosure, all the shortfall penalties are treated as a single combined penalty.

    (2) Subsection (1) applies to a tax position that a taxpayer takes on or after 1 April 2000 unless the taxpayer is liable, before the date on which this Act receives the Royal assent, to pay a shortfall penalty for taking the tax position.

130 Reduction in penalty for voluntary disclosure of tax shortfall
  • (1) In section 141G(1), 141E is replaced by 141EB.

    (2) Subsection (1) applies to an arrangement that a taxpayer enters into on or after the date on which this Act receives the Royal assent.

131 Reduction for disclosure of unacceptable interpretation
  • (1) In the section heading to section 141H, interpretation is replaced by tax position.

    (2) Subsection (1) applies to a tax position that a taxpayer takes on or after 1 April 2003.

132 Reduction where temporary shortfall
  • (1) In section 141I(1), 141E is replaced by 141EB.

    (2) Subsection (1) applies to an arrangement that a taxpayer enters into on or after the date on which this Act receives the Royal assent.

133 New section 141JAA inserted
  • (1) After section 141J, the following is inserted:

    141JAA Shortfall penalty for not taking reasonable care or for taking unacceptable tax position may not be more than $50,000
    • (1) Despite section 141J, a shortfall penalty payable by a taxpayer for not taking reasonable care, or for taking an unacceptable tax position, may not be more than $50,000 if the taxpayer voluntarily discloses the shortfall, or the Commissioner determines the shortfall, no later than the date that is the later of—

      • (a) the date that is 3 months after the due date of the return to which the shortfall relates; and

      • (b) the date that follows the due date of the return to which the shortfall relates by the lesser of—

        • (i) 1 return period; and

        • (ii) 6 months.

      (2) This section does not apply if section 141K applies.

    (2) Subsection (1) applies to a tax position that a taxpayer takes on or after 1 April 2003.

134 New section 141JB inserted
  • (1) After section 141JA, the following is inserted:

    141JB Application of Part 9 to PAYE intermediaries
    • (1) The provisions relating to the late filing penalty, the late payment penalty and shortfall penalties apply to a person acting as a PAYE intermediary for an employer in relation to an employee and a pay period as if the person were the employer, unless the employer has failed for the pay period to—

      • (a) pay to the person the salary or wages relating to the employee as required by section NBB 4(1)(b) of the Income Tax Act 1994:

      • (b) provide the information required by the person as required by section NBB 4(1)(d) of the Income Tax Act 1994.

      (2) The provisions relating to the late filing penalty, the late payment penalty and shortfall penalties do not apply to a PAYE intermediary but continue to apply to the employer if an employer has not paid gross salary or wages to the intermediary or has not supplied the information required by the intermediary within the agreed time.

    (2) Subsection (1) applies for pay periods beginning on and after 1 April 2004.

135 Increased penalty for obstruction
  • (1) In section 141K(1), 141E is replaced by 141EB.

    (2) Subsection (1) applies to an arrangement that a taxpayer enters into on or after the date on which this Act receives the Royal assent.

136 Duty of Commissioner to report on application of penalties
  • (1) In section 141L(1), 141E is replaced by 141EB.

    (2) Subsection (1) applies to an arrangement that a taxpayer enters into on or after the date on which this Act receives the Royal assent.

137 Due date for payment of late filing penalty
  • (1) Section 142(1)(a) and 142(1)(b) is replaced by:

    • (a) the terminal tax date for the income year to which the annual tax return relates; or.

    (2) Subsection (1) applies for the 2002-03 and subsequent income years.

138 New date for payment of tax that is not a penalty
  • (1) Section 142A(1) is replaced by:

    • (1) If a taxpayer has been assessed with tax and the Commissioner increases the amount of the assessment after the due date for payment of the assessed tax, the Commissioner must fix a new date for the payment of the increase in the tax and give notice of the new date to the taxpayer in the notice of the increase of assessment.

    • (1B) If a taxpayer has made a return that quantifies an amount of tax that is payable by a due date and, after the due date, the Commissioner assesses an increased amount of tax as being payable by the taxpayer, the Commissioner must fix a new date for the payment of the increase in the tax and give notice of the new date to the taxpayer in the notice of assessment.

    (2) Subsection (1) applies for the 2002-03 and subsequent income years.

139 Recovery of civil penalties
  • (1) After section 156A(3), the following is added:

    • (4) Subsection (3) applies to a person acting as a PAYE intermediary if section 141JB(1) applies, and references to a taxpayer are to be read as references to a PAYE intermediary.

    (2) Subsection (1) applies for pay periods beginning on and after 1 April 2004.

140 Deduction of tax from payments due to defaulters
  • (1) In section 157(10), in the definition of income tax, after paragraph (b), the following is inserted:

    • (bb) amounts paid to an intermediary in accordance with Part MBB of the Income Tax Act 1994:

    (2) In section 157(10), the definition of taxpayer is replaced by:

    taxpayer

    • (a) in relation to income tax within the meaning of paragraphs (b) and (d) of the definition of income tax in this subsection, includes an employer and a PAYE intermediary; and

    • (b) in relation to income tax within the meaning of paragraph (e) of the definition of income tax in this subsection, includes an employer.

    (3) Subsection (2) applies for pay periods beginning on and after 1 April 2004.

141 New section 165A inserted
  • (1) After section 165AA, the following is inserted:

    165A Recovery of excess tax credits allowed
    • (1) If the Commissioner is satisfied that a credit of tax allowed or credited to a person under a tax law exceeded the amount properly allowable or able to be credited to the person under that tax law, the Commissioner may recover the amount of the excess from the person in the same manner, with any necessary modifications, as if the excess were income tax payable under the Income Tax Act 1994.

      (2) Subsection (1) is subject to sections LC 3, LC 4(11) and LD 1(6).

    (2) Subsection (1) applies for the 2002-03 and subsequent income years.

142 Recovery of tax deductions from employers
  • (1) In section 167, in the section heading, or PAYE intermediaries is inserted after employers.

    (2) After section 167(2), the following is inserted:

    • (3) This section applies to a person instead of an employer if the person is acting as a PAYE intermediary for the employer in relation to an employee and a pay period, and the employer, for the pay period, has—

      • (a) paid to the person the salary or wages relating to the employee as required by section NBB 4(1)(b) of the Income Tax Act 1994:

      • (b) provided the information required by the person as required by section NBB 4(1)(d) of the Income Tax Act 1994.

    • (4) For the purpose of applying this section to a person acting as a PAYE intermediary, a reference to an employer is to be read as a reference to a person acting as a PAYE intermediary.

    (3) Subsections (1) and (2) apply for pay periods beginning on and after 1 April 2004.

143 Employer failing to make tax deductions
  • (1) In section 168, in the section heading, or PAYE intermediary is inserted after Employer.

    (2) After section 168(3), the following is added:

    • (4) This section applies to a person instead of an employer if the person is acting as a PAYE intermediary for the employer in relation to an employee and a pay period, and the employer, for the pay period, has—

      • (a) paid to the person the salary or wages relating to the employee as required by section NBB 4(1)(b) of the Income Tax Act 1994:

      • (b) provided the information required by the person as required by section NBB 4(1)(d) of the Income Tax Act 1994.

    • (5) For the purpose of applying this section to a person acting as a PAYE intermediary, references to an employer are to be read as references to a person acting as a PAYE intermediary.

    (3) Subsections (1) and (2) apply for pay periods beginning on and after 1 April 2004.

144 Unpaid tax deductions, etc to constitute charge on employer's property
  • (1) In section 169, in the section heading, or PAYE intermediary's is inserted after employer's.

    (2) After section 169(1), the following is inserted:

    • (1B) This section applies to a person instead of an employer if the person is acting as a PAYE intermediary for the employer in relation to an employee and a pay period, and the employer, for the pay period, has—

      • (a) paid to the person the salary or wages relating to the employee as required by section NBB 4(1)(b) of the Income Tax Act 1994:

      • (b) provided the information required by the person as required by section NBB 4(1)(d) of the Income Tax Act 1994.

    • (1C) For the purpose of applying this section to a person acting as a PAYE intermediary, references to an employer are to be read as references to a person acting as a PAYE intermediary.

    (3) Subsections (1) and (2) apply for pay periods beginning on and after 1 April 2004.

145 New section 173MB inserted
  • (1) After section 173M, the following is inserted:

    173MB Limitation on transfer by PAYE intermediary
    • Despite sections 173L and 173M, and section NBB 6(4) of the Income Tax Act 1994, interest on a payment made by a person to the Commissioner in acting as a PAYE intermediary for an employer—

      • (a) may not be treated as tax overpaid by the person other than as a PAYE intermediary for the employer; and

      • (b) may not be transferred to the person in another capacity or to another taxpayer.

    (2) Subsection (1) applies for pay periods beginning on and after 1 April 2004.

146 Power of Commissioner in respect of small amounts of refunds or tax payable
  • In section 174AA, refrain from either making an assessment, collecting, or is replaced by write off tax, refrain from making an assessment of tax, refrain from collecting tax or refrain from.

147 New section 181B inserted
  • (1) After section 181, the following is inserted:

    181B Remissions and refunds of Maori authority distribution penalty tax
    • (1) The Commissioner must remit any Maori authority distribution penalty tax imposed under section 140CB to the extent that the Commissioner is satisfied that—

      • (a) liability for the penalty tax arose because of a debit arising to the Maori authority credit account under section MK 5(1)(h) of the Income Tax Act 1994 in relation to an arrangement to obtain a tax advantage, and it is established subsequently that, in relation to the debit, a credit arises to the Maori authority credit account in accordance with section MK 4(1)(g) of the Income Tax Act 1994; or

      • (b) liability for the penalty tax arose because of a refund of a Maori authority distribution having been sent but not having been received by the Maori authority, or not having been known by the Maori authority to have been received, before the end of the imputation year; or

      • (c) liability for the penalty tax arose because of a debit arising to the Maori authority credit account under section MK 5(1)(j) of the Income Tax Act 1994, and the Maori authority did not become aware of the arising of the debit in sufficient time to allow it to remove the debit balance before the end of the year.

      (2) If the Commissioner remits any Maori authority distribution penalty tax under this section, the Commissioner must also remit any late payment penalty imposed under section 139B to the extent that the Commissioner is satisfied that the penalty was imposed in respect of the Maori authority distribution penalty tax so remitted.

      (3) If the Commissioner remits any Maori authority distribution penalty tax under subsection (1)(a), the Commissioner must also remit any late payment penalty imposed under section 139B to the extent that the Commissioner is satisfied that the penalty was imposed in respect of the amount of further income tax that gave rise to the Maori authority distribution penalty tax so remitted.

    (2) Subsection (1) applies for the 2004-05 and subsequent income years.

148 Remission for reasonable cause
  • (1) In section 183A(1), , and a dividend withholding payment penalty tax imposed by section 140C is replaced by , a dividend withholding payment penalty tax imposed by section 140C, and a Maori authority distribution penalty tax imposed by section 140CB.

    (2) Subsection (1) applies for the 2004-05 and subsequent income years.

149 Cancellation of interest
150 New section 185B inserted
  • (1) After section 185, the following is added:

    185B Application of particular provisions in this Part to PAYE‘intermediaries
    • (1) Section 183A applies to a PAYE intermediary as if the references to a taxpayer in subsections (1A) and (3) were references to a PAYE intermediary.

      (2) Sections 183C, 183D to 183F, 183H, 183I, 184A and 184B apply to a PAYE intermediary as if the references to a taxpayer were read as references to a PAYE intermediary.

      (3) Section 183G applies to a PAYE intermediary as if—

      • (a) the references to a taxpayer were read as references to a PAYE intermediary; and

      • (b) paragraph (d) had not been enacted.

    (2) Subsection (1) applies for pay periods beginning on and after 1 April 2004.

Part 3
Amendments to other Acts

Amendments to Goods and Services Tax Act 1985

152 Interpretation
  • (1) This section amends section 2.

    (2) After the definition of consideration in money, the following is inserted:

    content means the signals, writing, images, sounds or information of any kind that are transmitted, emitted or received by a telecommunications service.

    (3) In the definition of taxable supply, , 11AB is inserted after 11A.

    (4) After the definition of Taxation Review Authority, the following is inserted:

    telecommunications services means the transmission, emission or reception, and the transfer or assignment of the right to use capacity for the transmission, emission or reception, of signals, writing, images, sounds or information of any kind by wire, cable, radio, optical or other electromagnetic system, or by a similar technical system, and includes access to global information networks but does not include the content of the telecommunication

    telecommunications supplier means a person whose principal activity is the supply of telecommunications services.

153 Meaning of term supply
  • In section 5(14), , 11AB is inserted after 11A.

154 Imposition of goods and services tax on supply
  • The proviso to section 8(2) is replaced by:

    • (3) Despite subsection (2), goods and services are treated as being supplied in New Zealand if the supplier is not resident in New Zealand and either—

      • (a) the goods are in New Zealand at the time of the supply; or

      • (b) the services are physically performed in New Zealand by a person who is in New Zealand at the time the services are performed.

    • (4) Despite subsection (3), if a supplier who is not resident in New Zealand supplies goods and services, to which subsection (3) would apply but for this subsection, to a registered person for the purposes of carrying on the registered person's taxable activity, the goods and services are treated as being supplied outside New Zealand unless the supplier and the recipient of the supply agree that this subsection will not apply to the supply.

    • (5) Subsections (3) and (4) do not apply to supplies of telecommunications services.

    • (6) Despite subsection (2), telecommunications services are treated as being supplied in New Zealand if the supplier is not resident in New Zealand and a person, physically in New Zealand, initiates the supply from a telecommunications supplier, whether or not the person initiates the supply on behalf of another person.

    • (7) Subsection (6) does not apply to supplies made between telecommunications suppliers.

    • (8) Despite subsection (6) and section 8A, telecommunications services supplied by a telecommunications supplier who is not resident in New Zealand to a registered person for the purposes of carrying on the registered person's taxable activity are treated as being supplied outside New Zealand unless the supplier and the recipient of the services agree that this subsection will not apply to the supply.

    • (9) For the purpose of subsection (6) and section 11AB, the person who initiates a supply of telecommunications services is determined taking into account the following factors:

      • (a) the person who pays for the services:

      • (b) the person who controls the commencement of the supply:

      • (c) the person who controls the termination of the supply:

      • (d) the person who contracts for the supply.

155 New section 8A inserted
  • After section 8, the following is inserted:

    8A Certain supplies of telecommunications services
    • (1) Despite section 8(2), if a telecommunications supplier cannot apply section 8(6) because it is impractical for the supplier to determine the physical location of a person due to the type of service or to the class of customer to which the person belongs, the supplier must treat a supply of telecommunications services as being supplied in New Zealand if the person's address for receiving invoices from the supplier is in New Zealand.

      (2) Subsection (1) does not apply to supplies made between telecommunications suppliers.

      (3) If subsection (1) applies, the telecommunications supplier must satisfy subsection (1) for all supplies of telecommunications services made for the type of service or the class of customer.

      (4) In this section, address means the physical residential or business address of a person to which invoices are sent, and does not include a post office box number.

156 Zero-rating of services
  • (1) After section 11A(1)(b), the following is inserted:

    • (bb) the services are the transport of passengers from a place in New Zealand to another place in New Zealand by sea as part of an international cruise if either the first place of departure, or the final place of destination, of the cruise is outside New Zealand; or.

    (2) After section 11A(4), the following is added:

    • (5) This section does not apply to supplies of telecommunications services.

157 New section 11AB inserted
  • After section 11A, the following is inserted:

    11AB Zero-rating of telecommunications services
    • A supply of services that is chargeable with tax under section 8 must be charged at the rate of 0% if—

      • (a) the services are the supply of telecommunications services to an overseas telecommunications supplier by a telecommunications supplier resident in New Zealand; or

      • (b) the services are the supply of telecommunications services to a person outside New Zealand, not being an overseas telecommunications supplier, for a telecommunications service that is initiated outside New Zealand under section 8(9).

158 Fringe benefits and entertainment expenses
  • In section 21I(2)(c), 11AB is inserted after 11A,.

159 Tax invoices
  • In the proviso to section 24(4), , 11AB is inserted after 11A.

160 Persons making supplies in course of taxable activity to be registered
  • At the end of section 51(1)(d), person. is replaced by person; or and the following is added:

    • (e) the supply, to persons who are not resident in New Zealand but are physically present in New Zealand, of telecommunications services that are treated as being supplied in New Zealand under sections 8(6) and 8A.

161 Agents and auctioneers
  • In section 60(6), , 11AB is inserted after 11A.

Amendments to Income Tax Act 1976

162 Income Tax Act 1976
  • Section 163 amends the Income Tax Act 1976.

163 New section 191WF inserted
  • (1) After section 191WE, the following is inserted:

    191WF Deduction to amalgamating company for depreciable property transferred
    • Despite section 108, in respect of a qualifying amalgamation, an amalgamating company is allowed a depreciation deduction for property transferred to the amalgamated company for the period beginning on the first day of the income year in which the amalgamation takes place and ending on the day before the date of the amalgamation.

    (2) Subsection (1) applies to a taxpayer and an amalgamation that occurs on and after 1 July 1994.

    (3) Despite subsection (2), subsection (1) does not apply to a taxpayer and an amalgamation if the taxpayer has not claimed a deduction for depreciation for the income year in which the amalgamation occurs in a return of income filed before 14 May 2002.

Amendments to Injury Prevention, Rehabilitation, and Compensation Act 2001

165 Interpretation
  • (1) Section 6 of the principal Act is amended by inserting, in paragraph (a) of the definition of employer, after the words a person, the words , other than a person acting for an employer as a PAYE intermediary as defined in section OB 1 of the Income Tax Act 1994,.

    (2) Subsection (1) applies to obligations under the principal Act that arise on and after 1 April 2004.

166 Liability to pay Residual Claims levy
  • (1) Section 193(5)(b) of the principal Act is amended by omitting the words or section MC 2.

    (2) Subsection (1) applies for the 2002-03 and subsequent income years.

167 Collection of levies by deduction from employee earnings
  • (1) Section 221(1)(a) of the principal Act is amended by—

    • (a) inserting after the words an employer, the words or a PAYE intermediary for an employer:

    • (b) inserting after the words employer, the employer, the words or person.

    (2) Section 221 of the principal Act is amended by adding the following subsection:

    • (3) In this section, PAYE intermediary means a PAYE intermediary as defined in section OB 1 of the Income Tax Act 1994.

    (3) Subsections (1) and (2) apply to obligations under the principal Act that arise on and after 1 April 2004.

168 Offences in relation to deductions
  • (1) Section 316(1)(a) of the principal Act is amended by inserting, after the words an employer, the words , or a PAYE intermediary.

    (2) Section 316(1)(d) of the principal Act is amended by inserting, after the words any employer, the words , any PAYE intermediary.

    (3) Section 316 of the principal Act is amended by adding the following subsection:

    (6) In this section, PAYE intermediary means a PAYE intermediary as defined in section OB 1 of the Income Tax Act 1994.

    (4) Subsections (1) to (3) apply to obligations under the principal Act that arise on and after 1 April 2004.

169 Schedule 4 amended
  • (1) Schedule 4 of the principal Act is amended by inserting after clause (1)(d) the following paragraph:

    • (db) a PAYE intermediary as defined in section OB 1 of the Income Tax Act 1994; and.

    (2) Schedule 4 of the principal Act is amended by inserting, in clause 1, after the words every employer, the words , PAYE intermediary,.

    (3) Schedule 4 of the principal Act is amended by—

    • (a) inserting in clause 4, after the words an employer, the words or a PAYE intermediary:

    • (b) inserting in clause 4, after the words the employer in all places where the words occur, the words or the PAYE intermediary.

    (4) Schedule 4 of the principal Act is amended by omitting from clause 5 the words the employer of that employee is not, and substituting the words neither the employer of that employee nor a PAYE intermediary is.

    (5) Schedule 4 of the principal Act is amended by omitting from clause 7(b) the words or section MC 2.

    (6) Schedule 4 of the principal Act is amended by—

    • (a) inserting in clause 8, before the words An employer, the word Neither ; and

    • (b) omitting from clause 8 the words is not, and substituting the words nor a PAYE intermediary is ; and

    • (c) inserting in clause 8, after the words unless the employer, the words or the PAYE intermediary.

    (7) Schedule 4 of the principal Act is amended by omitting from clause 9 the expression NC 14, and NC 17, and substituting the expression and NC 14.

    (8) Schedule 4 of the principal Act is amended by inserting in clause 17, after the words an employer of the employee, the words or by a PAYE intermediary.

    (9) Schedule 4 of the principal Act is amended by—

    • (a) omitting from clause 18 the words made by 1 or more employers:

    • (b) inserting in clause 18 after the words the Corporation, the words or its agent.

    (10) Schedule 4 of the principal Act is amended by inserting in clause 19(a), after the words the person's employer, the words or by a PAYE intermediary.

    (11) Schedule 4 of the principal Act is amended by inserting in clause 22, after the words income tax, the words PAYE intermediary,.

    (12) Subsections (1) to (4), (6), and (8) to (11) apply to obligations under the principal Act that arise on and after 1 April 2004.

    (13) Subsections (5) and (7) apply for the 2002-03 and subsequent income years.

Amendments to Taxation (Relief, Refunds and Miscellaneous Provisions) Act 2002

171 Definitions
  • In section 66(30), section 10(3) is replaced by section 13(3).

172 Interpretation
  • In sections 73(8) and (10), in both places where it appears, 1 July 2002 is replaced by 1 December 2002.

173 Certain rights of objection not conferred
  • In section 86(4), 1 July 2002 is replaced by 1 December 2002.

174 Certain rights of challenge not conferred
  • In section 87(4), 1 July 2002 is replaced by 1 December 2002.

175 Late payment penalty
  • In section 88(10), 1 July 2002 is replaced by 1 December 2002.

176 Sections replaced
  • In section 92(4), in both places where it appears, 1 July 2002 is replaced by 1 December 2002.


Legislative history

19 March 2003Divided from Taxation (Annual Rates, Maori Organisations, Taxpayer Compliance and Miscellaneous Provisions) Bill as (Bill 213-3A)
25 March 2003Third reading