Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009

Crest

Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009

Public Act2009 No 63
Date of assent7 December 2009
Commencementsee section 2

Contents

Amendment to Income Tax Act 1994

Amendment to Maori Trustee Amendment Act 2009

Amendments to Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009

Amendment to Student Loan Scheme Act 1992


The Parliament of New Zealand enacts as follows:

1 Title
  • This Act is the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009.

2 Commencement

Part 1
Amendments to Income Tax Act 2007

3 Income Tax Act 2007
4 Flowchart B2: Calculating and satisfying income tax liabilities
  • In flowchart B2: Calculating and satisfying income tax liabilities, Part 1 is replaced by Part I.

5 Double tax agreements
  • After section BH 1(6), the following is added:

    Reference to unrelated persons
    • (7) A reference in a double tax agreement to 2 persons being unrelated is to be read, if possible, as a reference to 2 persons being not associated.

6 Available capital distribution amount
  • In section CD 44(11), subsection (12) is replaced by subsections (7)(c) and (12).

7 Benefits, pensions, compensation, and government grants
8 Attributed income of certain investors in multi-rate PIEs
  • (1) In section CX 56(2)(b), an investor rate of 19.5% under section HM 58 (Optional investor rates for trustees: 30%, 19.5%) is replaced by a prescribed investor rate referred to in schedule 6, table 1, row 5 or 7 (Prescribed rates: PIE investments and retirement scheme contributions), as applicable.

    (2) Subsection (1) applies for income years beginning on or after 1 April 2010.

9 Available capital distribution amount: 1988 to 2010
  • (1) After section CZ 9B(5), the following is added:

    Relationship with section CD 44
    • (6) Section CD 44(7)(c) (Available capital distribution amount) overrides this section.

    (2) Subsection (1) applies for the 2010–11 and later income years.

10 Goods and services tax
  • In section DB 2(2), section 21 or 21I(1) to 21I(3) is replaced by section 21 or 21I(1) to (3).

11 Research or development
  • (1) Section DB 34(2), other than the heading, is replaced by the following:

    • (2) Subsection (1) applies to a person who recognises the expenditure as an expense for financial reporting purposes—

      • (a) under paragraph 5.1 or 5.2 of the old reporting standard or because paragraph 5.4 of that standard applies; or

      • (b) under paragraph 68(a) of the new reporting standard applying, for the purposes of that paragraph, paragraphs 54 to 67 of that standard.

    (2) Section DB 34(4)(b) is replaced by the following:

    • (b) would be required, if the expenditure were material, to recognise it for financial reporting purposes—

      • (i) under paragraph 5.1 or 5.2 of the old reporting standard or because paragraph 5.4 of that standard applies; or

      • (ii) under paragraph 68(a) of the new reporting standard applying, for the purposes of that paragraph, paragraphs 54 to 67 of that standard.

    (3) Subsections (1) and (2) apply for the 2008–09 and later income years.

12 Some definitions
  • In section DB 35(1), the definition of reporting standard is replaced by the following:

    new reporting standard means the New Zealand Equivalent to International Accounting Standard 38, approved by the Accounting Standards Review Board, and as amended from time to time or an equivalent standard issued in its place

    old reporting standard means Financial Reporting Standard No 13 1995 (Accounting for Research and Development Activities) being the standard approved under the Financial Reporting Act 1993, or an equivalent standard issued in its place, that applies in the tax year in which the expenditure is incurred.

13 Criteria for approval of share purchase schemes: when period of restriction ends
  • In section DC 14(4), other than one described is replaced by other than a reason described.

14 Cost of acquiring timber or right to take timber: other cases
  • (1) In section DP 10(5), acquired the timber of the total of is replaced by acquired the timber for the total of.

    (2) Subsection (1) applies for the 2008–09 and later income years.

15 Section DP 11 replaced
  • (1) Section DP 11 is replaced by the following:

    DP 11 Cost of timber
    • When this section applies

      (1) This section applies when a person—

      • (a) derives an amount on the disposal of timber and the amount is income of the person under section CB 24 (Disposal of timber or right to take timber) or CB 25 (Disposal of land with standing timber); and

      • (b) has incurred expenditure in relation to the timber that is a cost of timber.

      Deduction

      (2) The person is allowed a deduction for the amount that is a cost of timber.

      Timing of deduction

      (3) The deduction is allocated—

      • (a) for timber harvested from the land before the time of disposal, to the income year in which the timber first becomes trading stock of the person; or

      • (b) otherwise, by section EA 2 (Other revenue account property).

      Meaning of timber

      (4) In this section, timber includes—

      • (a) the creation or grant of a right to take timber:

      • (b) the grant of a licence or an easement in relation to timber:

      • (c) the creation of a forestry right as defined in section 2 of the Forestry Rights Registration Act 1983, other than a right in favour of the proprietor in relation to establishing, maintaining, and harvesting timber.

      Link with subpart DA

      (5) This section supplements the general permission and overrides the capital limitation. The other general limitations still apply.

      Defined in this Act: amount, capital limitation, cost of timber, deduction, dispose, general permission, income year, timber, trading stock.

    (2) Subsection (1) applies for the 2008–09 and later income years.

16 Acquiring film rights
  • (1) Section DS 1(2), other than the heading, is replaced by the following:

    • (2) This section does not apply to expenditure that a person incurs in acquiring a film right if—

      • (a) the person operates a television station, a television network, or a cable television system, and the film right is acquired mainly to enable the film to be broadcast in New Zealand; or

      • (b) the film is intended to be shown as an advertisement; or

      • (c) the expenditure is film production expenditure; or

      • (d) section DS 2B applies to the expenditure.

    (2) Subsection (1) applies for the 2008–09 and later income years.

17 Mining exploration expenditure or mining development expenditure on acquisition of asset
  • (1) In section DU 2(2)(a), other than one described is replaced by other than a case described.

    (2) Subsection (1) applies for the 2008–09 and later income years.

18 Meaning of income from forestry
  • (1) Section EH 34(1), other than the heading, is replaced by the following:

    • (1) Income from forestry

      • (a) means income derived from either or both of the sales described in subsection (2) in the circumstances described in subsection (3):

      • (b) includes PFSI forestry income.

    (2) Subsection (1) applies for the 2008–09 and later income years.

19 Determination alternatives
  • (1) In section EW 15E(2)(e), paragraphs (a) to (d) is replaced by paragraphs (aa) to (d) in each place where it appears.

    (2) Subsection (1) applies for the 2009–10 and later income years.

20 Consistency of use of IFRS method
  • In section EW 25B(3), the last sentence is replaced by the following:

    However, those sections do not apply if the change—

    • (a) is from the fair value method; and

    • (b) relates to a financial arrangement that is not subject to a creditor workout.

21 Consideration when debt sold at discount to associate of debtor
22 Income and deduction when debt sold at discount to associate of debtor
23 Attributable CFC amount
  • (1) In section EX 20B(4), the subsection heading is replaced by Arrangement.

    (2) In section EX 20B(4)(b)(iii), to the extent that the income is replaced by to the extent to which the income.

    (3) Section EX 20B(11)(b) is replaced by the following:

    • (b) the CFC is a network operator under the Telecommunications (Interception Capability) Act 2004 (a network operator), or—

      • (i) a group of persons has, for the whole of the CFC's accounting period, voting interests and, if a market circumstance exists, market value interests, of more than 50% in the CFC; and

      • (ii) the group of persons also has, for the whole of the CFC's accounting period, voting interests and, if a market value circumstance exists, market value interests, of more than 50% in a network operator; and.

    (4) Subsections (1) to (3) apply for all income years beginning on or after 1 July 2009.

24 Net attributable CFC income or loss
  • (1) In section EX 20C(6)(c)(ii), arrangement income is replaced by arrangement.

    (2) Subsection (1) applies for all income years beginning on or after 1 July 2009.

25 Adjustment of fraction for excessively debt funded CFC
  • (1) In section EX 20D(7)(b)(ii), arrangement income is replaced by arrangement.

    (2) Subsection (1) applies for all income years beginning on or after 1 July 2009.

26 Attributable CFC amount and net attributable CFC income or loss
  • (1) In section EX 21(26), the amount actuarially determined to be the part of the CFC's net income or loss is replaced by the amount actuarially determined to be part of the CFC's profit or loss.

    (2) Subsection (1) applies for the 2008–09 and later income years.

27 Non-attributing active CFC: default test
  • (1) In section EX 21D(7)(b), not exceeding the included amount, that is replaced by not exceeding the included amount, to which.

    (2) Subsection (1) applies for all income years beginning on or after 1 July 2009.

28 Non-attributing active CFC: test based on accounting standard
  • (1) In section EX 21E(7)(g)(iii), to the extent that the income is replaced by to the extent to which the income.

    (2) In section EX 21E(9)(d), not exceeding the included amount, that is replaced by not exceeding the included amount, to which.

    (3) In section EX 21E(10)(d)(iii), to the extent that the gain is replaced by to the extent to which the gain.

    (4) Subsections (1) to (3) apply for all income years beginning on or after 1 July 2009.

29 Exemption for Australian unit trusts with adequate turnover or distributions
  • (1) In section EX 32(1)(f), section 15T is replaced by section 15N.

    (2) Subsection (1) applies for the 2008–09 and later income years.

30 Limits on choice of calculation methods
31 Accounting profits method
  • (1) Section EX 49(6), other than the heading, is replaced by the following:

    • (6) For an income interest that the person has held for more than 12 months, the person may follow a simplified calculation process by choosing to be treated as holding, at all times in the income year, the same interest, including zero interest, that they held at the end of the income year. The person makes the election by completing their return of income accordingly for the relevant income year.

    (2) Subsection (1) applies for the 2008–09 and later income years. However, subsection (1) does not apply to a person in relation to a tax position taken by the person in a return of income filed before the date of Royal assent of this Act in relation to the calculation of an income interest in a FIF, relying on section EX 49(6) before the amendment made by this section.

32 Policyholder base income: non-participation policies
  • (1) In section EY 15(5), in respect of a policy is replaced by relating to a policy.

    (2) Subsection (1) applies for income years beginning on or after 1 July 2010.

33 Policyholder base income: profit participation policies
  • (1) In section EY 17(2)(b)(i), shareholders is replaced by shareholder's retained earnings.

    (2) In section EY 17(2)(b)(ii), shareholders is replaced by shareholder's retained earnings.

    (3) In section EY 17(2)(d), in respect of participation policies is replaced by in relation to profit participation policies.

    (4) In section EY 17(3)(a), policyholder unvested liabilities is replaced by the value of assets supporting the life insurer's policyholder unvested liabilities.

    (5) Subsections (1) to (4) apply––

    • (a) on and after 1 July 2010, unless paragraph (b) applies:

34 Policyholder base allowable deductions: profit participation policies
  • (1) In section EY 18(b), base. is replaced by base; and, and the following is added:

    • (c) the item net transfers is ignored.

    (2) Subsection (1) applies––

    • (a) on and after 1 July 2010, unless paragraph (b) applies:

35 Shareholder base income: non-participation policies
  • (1) In section EY 19(2), in respect of a policy is replaced by relating to a policy.

    (2) Subsection (1) applies for all income years beginning on or after 1 July 2010.

36 Shareholder base income: profit participation policies
  • (1) In section EY 21(2)(b)(i), shareholders is replaced by shareholder's retained earnings.

    (2) In section EY 21(2)(b)(ii), shareholders is replaced by shareholder's retained earnings.

    (3) In section EY 21(2)(d), in respect of profit participation policies is replaced by in relation to profit participation policies.

    (4) Subsections (1) to (3) apply––

    • (a) on and after 1 July 2010, unless paragraph (b) applies:

37 Shareholder base allowable deductions: profit participation policies
  • (1) In section EY 22(b), base. is replaced by base; and, and the following is added:

    • (c) the item net transfers is ignored.

    (2) Subsection (1) applies––

    • (a) on and after 1 July 2010, unless paragraph (b) applies:

38 Transitional adjustments: life risk
  • (1) In section EY 30(2), in the words before the paragraphs, employer sponsored is replaced by workplace.

    (2) In section EY 30(3)(b), requirements of is replaced by requirements for the period described in.

    (3) In the heading to section EY 30(4), employer sponsored is replaced by workplace.

    (4) In section EY 30(4), in the words before the paragraphs, employer sponsored is replaced by workplace.

    (5) Section EY 30(4)(b) and (c) are replaced by the following:

    • (b) the policy, if it is a credit card repayment insurance, meets the requirements for the period described in subsection (5)(c), or, if it is a workplace group policy, meets the requirements for the period described in subsection (5)(d); and.

    (6) In section EY 30(5), in the words before the paragraphs, For the purposes of subsections (2)(b), (3)(b), and (4)(b), this section applies to a policy to the extent to which, for the following relevant period, it is described by the following relevant requirements is replaced by The following are the requirements and periods for the purposes of subsections (2)(b), (3)(b), and (4)(b), for a policy.

    (7) In section EY 30(5)(c)(ii), day. is replaced by day:, and the following is added:

    • (d) for a life insurance policy for which the premium may vary each year, the period that starts on the grandparenting start day and ends on the earlier of the following:

      • (i) the day that the policy expires:

      • (ii) the day that is before the 3 years anniversary of the grandparenting start day.

    (8) Section EY 30(11) is replaced by the following:

    Meaning of credit card repayment insurance
    • (11) Credit card repayment insurance means a life insurance policy, if the benefits of the cover are for the repayment of an outstanding debt balance of a credit card.

    (9) Section EY 30(12) is repealed.

    (10) In section EY 30(14), employer sponsored is replaced by workplace.

    (11) After section EY 30(14), the following is added:

    Meaning of workplace group policy
    • (15) Workplace group policy means a life insurance policy with multiple individual's life insurance cover grouped under it, if––

      • (a) the group of individuals is a class of employees of an employer, and the employer is the sponsor of the policy, or are members of a union registered under the Employment Relations Act 2000, and the trade union is the sponsor of the policy; and

      • (b) the general public is excluded; and

      • (c) where the sponsor is the employer, joining the life insurance policy is compulsory for the relevant class of employees, and the employer must pay the premiums.

    (12) Subsections (1) to (11) apply––

    • (a) on and after 1 July 2010, unless paragraph (b) applies:

39 Policyholder income formula: PILF adjustment
  • (1) In section EY 43C(2), in the subsection heading, invested directly is replaced by invested indirectly.

    (2) In section EY 43C(2), treated as investing directly in a multi-rate PIE is replaced by treated as investing indirectly in a multi-rate PIE.

    (3) Subsections (1) and (2) apply for the 2010–11 and later income years.

40 Consistency of use of IFRS method: Determination G3 change allowed
41 Attribution rule for income from personal services
  • (1) After section GB 27(4), the following is added:

    Cancellation of notional imputation credits
    • (5) For the purposes of subsection (4), to the extent to which the dividend paid by the company would have had an imputation credit attached that arose under section OB 16 (ICA attribution for personal services) in the absence of the election made under subsection (4)(c), the credit is treated as cancelled immediately before it would have been attached under sections HA 14 to HA 19 (which relate to dividends paid by qualifying companies).

    (2) Subsection (1) applies for the 2008–09 and later income years.

42 Loss balances not carried forward
  • In section HA 21, subparts IA and IQ (which relate to the treatment of foreign losses) is replaced by subparts IA (General rules for tax losses) and IQ (Attributed controlled foreign company net losses and foreign investment fund net losses).

43 Beneficiary income
  • (1) Section HC 6(1)(b) is replaced by the following:

    • (b) it is paid to a beneficiary of the trust in the income year or by the date after the end of the income year referred to in subsection (1B).

    (2) After section HC 6(1), the following is inserted:

    Date by which income must be allocated
    • (1B) The date referred to in subsection (1)(b) is the later of the following:

      • (a) a date that falls within 6 months of the end of the income year; or

      • (b) the earlier of—

        • (i) the date on which the trustee files the return of income for the income year; or

        • (ii) the date by which the trustee must file a return for the income year under section 37 of the Tax Administration Act 1994.

    (3) Section HC 6(3) and (4) are replaced by the following:

    Deriving beneficiary income in same year
    • (3) When an amount derived by a trustee in an income year is also beneficiary income, the beneficiary is treated as having derived the income in the same tax year as that corresponding to the trustee's income year.

    (4) Subsections (1) to (3) apply for income years corresponding to the 2009–10 and later tax years.

44 Who is a settlor?
  • (1) After section HC 27(3), the following is inserted:

    Employee share purchase agreements
    • (3B) Despite subsection (2), an employer is not a settlor for the purposes of the trust rules in relation to a payment made by them to the trustee of an employee share purchase agreement if—

      • (a) some or all of the payment is used by the trustee to acquire shares under the terms of the employee share purchase agreement; and

      • (b) an amount that is less than or equal to the payment used by the trustee would be income of an employee under section CE 1(d).

    (2) Subsection (1) applies for the 2008–09 and later income years. However, subsection (1) does not apply to a person in relation to a tax position taken by the person—

    • (a) in the period that starts on the first day of the 2008–09 income year and ends on the date of Royal assent of this Act; and

    • (b) in relation to a payment to an employee share purchase agreement in consideration of a valid salary sacrifice made by the employee; and

    • (c) relying upon paragraph (a)(i) of the definition of settlor in the Income Tax Act 2004, that the term settlor in the trust rules, and in the definitions of corpus, foreign trust, and settlement, for a trust other than a unit trust, means a person who makes, or has made at any time, a disposition of property to or for the benefit of the trust or on terms of the trust for less than market value.

45 Unlisted company choosing to become portfolio listed company
  • (1) After section HL 12(2), the following is added:

    Extension in certain cases
    • (3) Despite subsection (2), a company that makes an election under subsection (1) does not stop being a portfolio listed company from the last day of the period of 2 years from the date on which the election takes effect if—

      • (a) the company has met the requirements of subsection (1)(b) and (c) before 2 July 2009; and

      • (b) a period of 4 years from the date on which the election takes effect has not expired.

    Further extension granted by Commissioner
    • (4) Despite subsections (2) and (3), the Commissioner may grant a further extension of time if it is reasonable in the circumstances.

    (2) Subsection (1) applies for the 2008–09 and later income years.

46 Minimum number of investors
  • (1) In section HM 14(3), Subsection (4) and sections is replaced by Sections.

    (2) Subsection (1) applies for the 2010–11 and later income years.

47 Maximum investors' interests
  • (1) In section HM 15(2), Sections HM 21(2) to (4), HM 22, and HM 22B is replaced by Sections HM 21(2) to (4) and HM 22.

    (2) Subsection (1) applies for the 2010–11 and later income years.

48 Requirements for listed PIEs: unlisted companies
  • (1) After section HM 18(2), the following is added:

    Extension of period for listing
    • (3) Despite subsection (2), a company does not lose PIE status at the end of the 2-year period if—

      • (a) the company has met the requirements of subsection (1)(b) and (c) before 2 July 2009; and

      • (b) a period of 4 years from the date on which the election takes effect has not expired.

    Further extension granted by Commissioner
    • (4) Despite subsections (2) and (3), the Commissioner may grant a further extension of time if it is reasonable in the circumstances.

    (2) Subsection (1) applies for the 2010–11 and later income years.

49 Sections HM 56 to HM 59 replaced
  • (1) Sections HM 56 to HM 59 are replaced by the following:

    HM 56 Prescribed investor rates: schedular rates
    • The prescribed investor rate of an investor in a multi-rate PIE is determined under schedule 6, table 1 (Prescribed rates: PIE investments and retirement scheme contributions).

      Defined in this Act: investor, multi-rate PIE, prescribed investor rate

    HM 57 Prescribed investor rates for certain investors: 0%
    • An investor (a zero-rated investor) in a multi-rate PIE has a prescribed investor rate of 0% if they are resident in New Zealand and are—

      • (a) a company:

      • (b) an organisation or trust with income that is exempt income under section CW 41 or CW 42 (which relate to charities):

      • (c) a proxy acting under section HM 33:

      • (d) an exiting investor referred to in section HM 61:

      • (e) a PIE or superannuation fund, other than a trustee who chooses a rate under schedule 6, table 1, row 3 or 5 (Prescribed rates: PIE investments and retirement scheme contributions):

      • (f) a person who derives income as a trustee and does not choose a rate under schedule 6, table 1, row 3, 5, or 7.

      Defined in this Act: company, exempt income, investor, multi-rate PIE, PIE, prescribed investor rate, resident in New Zealand, superannuation fund, trustee

    HM 58 Transitional rate for certain investors
    • When this section applies

      (1) This section applies to a multi-rate PIE in relation to an income year that starts on or after 1 April 2010 and a person who—

      • (a) is an investor in the PIE; and

      • (b) has a notified investor rate of 19.5% on the last day of the preceding income year.

      Rate applying

      (2) The person's notified investor rate for income years that start on or after 1 April 2010 is treated as 21%.

      Exception: new notified rate

      (3) Subsection (2) does not apply if the person advises the PIE of a different notified investor rate for an income year.

      Defined in this Act: income year, multi-rate PIE, notified investor rate, notify.

    (2) Subsection (1) applies for the 2010–11 and later income years.

50 Notified rates
  • (1) In section HM 60, the section heading is replaced by Notified investor rates.

    (2) In section HM 60(1),––

    • (a) HM 56 to HM 59 is replaced by HM 56 to HM 58:

    • (b) for a period is replaced by for a period (the notified investor rate).

    (3) In section HM 60(4),––

    • (a) in the heading, HM 56 to HM 59 is replaced by HM 56 to HM 58:

    • (b) notifies an investor rate is replaced by advises a notified investor rate:

    • (c)  HM 56 to HM 59 is replaced by HM 56 to HM 58.

    (4) Section HM 60(5), other than the heading, is replaced by the following:

    • (5) The Commissioner may notify a PIE to disregard an investor's notified investor rate if the Commissioner considers the rate is incorrect. The notification must include a rate for the investor that the Commissioner considers appropriate.

    (5) In section HM 60(6), not notify a multi-rate PIE of their investor rate is replaced by not advise a multi-rate PIE of their notified investor rate.

    (6) Subsections (1) to (5) apply for the 2010–11 and later income years.

51 Certain exiting investors zero-rated
  • (1) In section HM 61, applying to an investor is replaced by applying to an investor for a quarter.

    (2) Subsection (1) applies for the 2010–11 and later income years.

52 When elections take effect
  • (1) Section HM 72(2)(b) is replaced by the following:

    • (b) an event or situation arises that means the entity would lose PIE status under any of sections HM 24 to HM 28 because the requirements of sections HM 11 to HM 16 were not met in each quarter of the 12-month period.

    (2) Subsection (1) applies for income years beginning on or after 1 April 2010.

53 New section HZ 7 added
  • After section HZ 6, the following is added:

    HZ 7 Saving of binding rulings relating to settlements on trusts
    • When, and extent to which, this section applies

      (1) This section applies when, and to the extent to which,—

      • (a) before the commencement of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009—

        • (i) an applicant has applied for a binding ruling on an arrangement that is entered into, or that the applicant seriously contemplates will be entered into, before the commencement of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009:

        • (ii) a binding ruling is issued; and

      • (b) the binding ruling is about a provision of the Income Tax Act 2004 on the question of whether an amount is a settlement on a trust; and

      • (c) the binding ruling—

        • (i) is made before or after the commencement of this Act and continues to exist at the commencement of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009; and

        • (ii) is made in relation to a provision of the Income Tax Act 2004 to which section ZA 4 (Saving of binding rulings) of this Act would have applied but for the intended change listed in schedule 51 (Identified changes in legislation) for section HC 27(2) (Who is a settlor?); and

      • (d) in the absence of this section, the commencement of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 would mean that the binding ruling would cease to apply because of section 91G of the Tax Administration Act 1994.

      Ruling about new law

      (2) The binding ruling continues to exist despite the intended change referred to in subsection (1)(c)(ii) from the commencement of this Act to the date on which the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 receives the Royal assent.

      No confirmation rulings

      (3) To the extent to which a binding ruling continued by subsection (2) exists and applies to an arrangement, or to a person and an arrangement, the Commissioner must not make a binding ruling in the period that starts on the date of the commencement of this Act and ends on the date on which the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 receives the Royal assent on how—

      • (a) the new law applies to the arrangement or to the person and the arrangement; or

      • (b) this subsection applies to the arrangement or to the person and the arrangement.

      Defined in this Act: arrangement, binding ruling, Commissioner, settlement.

54 Tax losses
  • (1) In section IA 2(2),—

    • (a) carried forward to is replaced by carried forward under section IA 3(4) to:

    • (b) subtracted is replaced by subtracted under section IA 4(1)(a).

    (2) Section IA 2(4)(b) is replaced by the following:

    • (b) a person whose imputation credits are included in their annual gross income for the tax year: the amount of converted imputation credits arising under section LE 2 (Use of remaining credits by companies and trustees) for the tax year:.

    (3) In section IA 2(4)(c), section LP 10 is replaced by section LP 10(3).

    (4) In section IA 2(4)(d), treated as a tax loss component of company A: the payment referred to in section OB 69(5) is replaced by converted into a tax loss component of company A: the amount calculated under section OB 69(7).

    (5) In section IA 2(4)(e) and (f), corresponding income year is replaced by tax year in each place where it appears.

    (6) In section IA 2(4)(f), IQ 3 is replaced by IQ 3(3).

    (7) In section IA 2(4)(g), corresponding income year is replaced by tax year.

    (8) Section IA 2(6) is repealed.

    (9) Section IA 2(7), other than the heading, is replaced by the following:

    • (7) For the purposes of this subpart, a tax loss component, for a tax year,—

      • (a) means an amount included in a tax loss for the tax year under subsection (3) or (4):

      • (b) includes—

        • (i) an unused amount of a net loss or an amount treated as a net loss or as an available net loss of a person arising before the 2008–09 tax year which the person was entitled to have carried forward under section IE 1 (Net losses may be offset against future net income) of the Income Tax Act 2004 to that tax year:

        • (ii) an amount included in a company's loss balance at the end of the tax year to which sections IZ 4 to IZ 6 (which relate to tax losses for tax years before 1992) apply, or other amounts in relation to which modified continuity rules apply.

    (10) Subsections (1) to (9) apply for the 2008–09 and later income years.

55 Using tax losses in tax year
  • (1) The heading to section IA 3(5) is replaced by Relationship with other provisions in this subpart.

    (2) In section IA 3(5), Sections IA 5 to IA 8 is replaced by Sections IA 5, IA 8, and IA 10.

    (3) Subsections (1) and (2) apply for the 2008–09 and later income years.

56 Using loss balances carried forward to tax year
  • (1) In section IA 4(1)(b), remaining loss balance is replaced by remaining loss balance carried forward under section IA 2(2).

    (2) Section IA 4(2) is replaced by the following:

    Relationship with other provisions in this subpart

    (3) Subsections (1) and (2) apply for the 2008–09 and later income years.

57 Restrictions on companies' loss balances carried forward
  • (1) Section IA 5(1), other than the heading, is replaced by the following:

    • (1) A company's tax loss component is carried forward in a loss balance only if the minimum continuity requirements of subsections (2) and (3) are met. The tax loss component includes an unused tax loss component carried forward from an earlier income year.

    (2) Section IA 5(4), other than the heading, is replaced by the following:

    • (4) If a tax loss component cannot be carried forward because the requirements of subsections (2) and (3) are not met, the company may apply section IP 3 (Continuity breach: tax loss components of companies carried forward) to determine whether some or all of the tax loss component is carried forward in a loss balance.

    (3) In section IA 5(6),—

    • (a) in the definition of minimum market value interest, for a person and a period is replaced by for a person and a continuity period:

    • (b) in the definition of minimum voting interest, for a person and a period is replaced by for a person and a continuity period.

    (4) Subsections (1) to (3) apply for the 2008–09 and later income years.

58 Restrictions on companies grouping tax losses
  • (1) In section IA 6(1), may use is replaced by may use under section IA 3(2).

    (2) Subsection (1) applies for the 2008–09 and later income years.

59 Restrictions relating to ring-fenced losses
  • (1) After section IA 7(1), the following is inserted:

    Treatment as tax loss component
    • (1B) For the purposes of the application of sections IA 5, IA 6, IA 9, and IA 10, a ring-fenced tax loss under this section is treated as if it were a tax loss component.

    (2) Section IA 7(2), other than the heading, is replaced by the following:

    • (2) The general rules do not apply in relation to a loss-attributing qualifying company (LAQC) to an amount that would have been a loss balance carried forward under section IA 3(4) in the absence of sections HA 21 and HA 24(5) (which relate to the treatment of losses by LAQCs). The provisions that deal with these losses are sections HA 24 to HA 27.

    (3) In section IA 7(6), surplus is replaced by surplus amount.

    (4) Subsections (1) to (3) apply for the 2008–09 and later income years.

60 General treatment
  • (1) In section IQ 1(1), subpart IA (General rules for tax losses) is replaced by sections IA 5, IA 9, and IA 10 (which relate to the continuity rules, the use of losses, and adjustments).

    (2) Subsection (1) applies for the 2008–09 and later income years.

61 New section IQ 1B inserted
  • (1) After section IQ 1, the following is inserted:

    IQ 1B Losses carried forward to tax year
    • An attributed CFC net loss or a FIF net loss or both may be carried forward to a tax year. Section IA 5 (Restrictions on companies' loss balances carried forward) applies for the purposes of this subpart as if the net loss were a tax loss component.

      Defined in this Act: attributed CFC net loss, FIF net loss, tax loss component, tax year.

    (2) Subsection (1) applies for the 2008–09 and later income years.

62 Ring-fencing cap on attributed CFC net losses
  • (1) In section IQ 2(1)(a), in relation to a CFC resident in the country in which the loss arose is replaced by in relation to a CFC resident in the same country in which the CFC that had the loss was resident at the time the loss arose.

    (2) In section IQ 2(1)(b), in relation to a FIF resident in the country in which the loss arose is replaced by in relation to a FIF resident in the same country in which the CFC that had the loss was resident at the time the loss arose.

    (3) In section IQ 2(2)(b), the tax loss is replaced by the attributed CFC net loss carried forward.

    (4) Subsections (1) to (3) apply for the 2008–09 and later income years.

63 Ring-fencing cap on FIF net losses
  • (1) In section IQ 3(1)(a), in relation to a CFC resident in the country in which the loss arose is replaced by in relation to a CFC resident in the same country in which the CFC that had the loss was resident at the time the loss arose.

    (2) In section IQ 3(1)(b), in relation to a FIF resident in the country in which the loss arose is replaced by in relation to a CFC resident in the same country in which the CFC that had the loss was resident at the time the loss arose.

    (3) Subsections (1) and (2) apply for the 2008–09 and later income years.

64 Group companies using attributed CFC net losses
  • (1) In section IQ 4(1)(a), sections IA 4, IA 5, and IA 7 (which relate to the general use of tax losses) is replaced by section IQ 1B.

    (2) In section IQ 4(1)(b), section IC 5 (Company B using company A's tax loss) is replaced by section IQ 2.

    (3) In section IQ 4(2), net loss. is replaced by net loss, and the part-year grouping rules in subpart IP (Meeting requirements for part-years) do not apply.

    (4) In section IQ 4(3),—

    • (a) Section IQ 2 applies to the attributed CFC net loss, but is supplemented as follows: is replaced by If company A cannot use the maximum amount referred to in section IQ 2 before the excess is converted into a tax loss component under section IQ 2(3), company A may use the amount in the following way::

    • (b) in paragraph (a), the tax loss is replaced by the attributed CFC net loss together with any amount carried forward:

    • (c) in paragraph (b)(ii), IQ 2 is replaced by this section.

    (5) Subsections (1) to (4) apply for the 2008–09 and later income years.

65 Pre-consolidation losses: general treatment
  • (1) In section IQ 6(1), section ID 2 (Pre-consolidation losses: general treatment) is replaced by section IQ 1B.

    (2) Subsection (1) applies for the 2008–09 and later income years.

66 When group membership lacking in loss period
  • (1) In section IQ 7(1),—

    • (a) in paragraph (a), section ID 2(2) (Pre-consolidation losses: general treatment) is replaced by section IQ 6:

    • (b) in paragraph (b), the earlier tax year is replaced by the earlier tax year in which the net loss arose.

    (2) In section IQ 7(2)

    • (a) in paragraph (a),—

      • (i) ring-fenced tax loss is replaced by ring-fenced tax loss referred to in subsection (1):

      • (ii) sections IA 3 to IA 5 (which relate to the general use of tax losses), and is omitted:

    • (b) in paragraph (b),—

      • (i) ring-fenced tax loss is replaced by ring-fenced tax loss referred to in subsection (1):

      • (ii) section IC 5, and is omitted.

    (3) Subsections (1) and (2) apply for the 2008–09 and later income years.

67 When group membership lacking in tax year of use
  • (1) In section IQ 8(1), section ID 2(2) (Pre-consolidation losses: general treatment) is replaced by section IQ 6.

    (2) In section IQ 8(2)(a), ring-fenced tax loss is replaced by ring-fenced tax loss referred to in section IQ 7(1).

    (3) Subsections (1) and (2) apply for the 2008–09 and later income years.

68 General treatment of mining companies' tax losses
  • (1) In section IS 1, the section heading is replaced by General treatment of mining companies' net losses.

    (2) In section IS 1(2), tax loss is replaced by net mining loss.

    (3) After section IS 1(2), the following is added:

    Meaning of net mining loss
    • (3) For the purposes of this subpart, a net mining loss means that part of a net loss of a mining company, a resident mining operator, or a non-resident mining operator that is described in section IA 7(7) (Restrictions relating to ring-fenced tax losses).

    (4) Subsections (1) to (3) apply for the 2008–09 and later income years.

69 Treatment of tax losses resulting from certain expenditure
  • (1) In section IS 2, the section heading is replaced by Treatment of net losses resulting from certain expenditure.

    (2) In section IS 2(1)(a), tax loss is replaced by net mining loss.

    (3) In section IS 2(1)(b), a loss balance is replaced by an amount of net mining loss.

    (4) In section IS 2(2), loss balance is replaced by net mining loss.

    (5) In section IS 2(4), loss balance is replaced by net mining loss.

    (6) After section IS 2(4), the following is added:

    Use against other income
    • (5) The company may subtract the amount of the net mining loss from its net income that is not attributable to the mining permit area but only after meeting for the whole of the continuity period the requirements set out in sections GB 3 (Arrangements for carrying forward loss balances: companies) and IA 5 (Restrictions on companies' loss balances carried forward). For the purposes of applying section IA 5, the net mining loss is treated as if it were a tax loss component.

    (7) Subsections (1) to (6) apply for the 2008–09 and later income years.

70 Holding companies' tax losses
  • (1) In section IS 3(1)(a), loss balance is replaced by net mining loss.

    (2) Subsection (1) applies for the 2008–09 and later income years.

71 Petroleum miners' tax losses
  • (1) Section IS 5(2), other than the heading, is replaced by the following:

    • (2) The petroleum miner's tax loss is reduced by the amount of the deduction, but only to the extent of the amount of the tax loss. For the reduction in their tax loss, the petroleum miner is allowed a deduction in an earlier tax year for an amount that is equal to the amount of the reduction. The deduction is allocated under section EJ 14 (Spreading deduction backwards).

    (2) Subsection (1) applies for the 2008–09 and later income years.

72 Life insurers' policyholder net losses
  • (1) Section IT 1(1) is replaced by the following:

    Amounts available
    • (1) In calculating their policyholder base income tax liability for a tax year, a life insurer may use an amount of a policyholder net loss carried forward from an earlier tax year. The policyholder net loss includes an unused policyholder net loss determined under the Income Tax Act 2004 or the Income Tax Act 1994.

    Loss carried forward
    • (1B) If a life insurer has a balance of a policyholder net loss remaining for a tax year after the uses described in this section, the balance, including all unused amounts from earlier tax years, is carried forward to the next tax year as a policyholder net loss carried forward.

    Treatment as tax loss component
    • (1C) For the purposes of the application of section IA 10 (Amended assessments), a policyholder net loss under this section is treated as if it were a tax loss component.

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

    Restrictions on use
    • (2B) A life insurer must not use a policyholder net loss to reduce a net loss of another life insurer in a tax year except as described in subsection (3).

    (3) Subsections (1) and (2) apply for the 2008–09 and later income years.

73 Subpart IV repealed
  • (1) Subpart IV is repealed.

    (2) Subsection (1) applies for the 2013–14 and later tax years.

74 Tax credits for payroll donations
  • Section LD 4(7)(c) is repealed.

75 When donation is paid to ineligible recipient
  • In section LD 6(3)(a), the credit is included in is replaced by the credit is removed from.

76 When donation returned to person
  • In section LD 7(3)(a), the credit is included in is replaced by the credit is removed from.

77 What this subpart does
78 Tax credits for supplementary dividends
  • (1) Section LP 2(1)(a) is replaced by the following:

    • (a) a non-resident, if––

      • (i) the non-resident has less than a 10% direct voting interest in the company; and

      • (ii) the post-treaty tax rate for the dividend and the related supplementary dividend is 15% or more; or.

    (2) Section LP 2(1)(b) is repealed.

    (3) In section LP 2(2), For the year of payment is replaced by For the tax year corresponding to the income year in which the company pays the dividend.

    (4) Section LP 2(4) is repealed.

    (5) Section LP 2(5) and (6) are repealed.

    (6) Subsection (4) applies for the 2013–14 and later income years.

79 Section LP 7 repealed
  • (1) Section LP 7 is repealed.

    (2) Subsection (1) applies for the 2013–14 and later income years.

80 Relationship with exempt income rules
  • (1) In section LP 8(2), the formula is replaced by the following:

      attached credit + dividend  
     tax rate.

    (2) Section LP 8 is repealed.

    (3) Subsection (2) applies for the 2013–14 and later income years.

81 Section LP 9 repealed
  • (1) Section LP 9 is repealed.

    (2) Subsection (1) applies for the 2013–14 and later income years.

82 Section LP 10 repealed
  • (1) Section LP 10 is repealed.

    (2) Subsection (1) applies for the 2013–14 and later income years.

83 Tax credits for investors in multi-rate PIEs
  • (1) In section LS 2(1)(b)(ii), 19.5% is replaced by the rate set out in schedule 6, table 1, row 5 or 7 (Prescribed rates: PIE investments and retirement scheme contributions), as applicable.

    (2) Subsection (1) applies for income years beginning on or after 1 April 2010.

84 Adjustments for calculation of family scheme income
  • (1) After section MB 1(5B), the following is inserted:

    Amounts of depreciation loss on sale of building
    • (5C) For the purposes of subsection (1), in relation to a building from the sale of which the person derives assessable income, an amount of depreciation loss allowed in the 2002–03 or earlier income year is not included in family scheme income. However, this subsection does not apply to an amount of depreciation loss of a business that under section MB 4 is treated as having no net income for the purposes of calculating family scheme income.

    (2) Subsection (1) applies for the 2008–09 and later income years.

85 Calculation of maximum permitted ratios
  • (1) Section OA 18(3), other than the heading, is replaced by the following:

    • (3) In the formula, tax rate is—

      • (a) for subsection (1)(a) to (e), the basic rate of income tax set out in schedule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RSCT, RWT and attributed fringe benefits) for the income year in which the dividend is paid:

      • (b) for subsection (1)(f), the basic rate of income tax set out in schedule 1, part A, clause 7 for the income year in which the distribution is paid.

    (2) Subsection (1) applies for the 2008–09 and later income years.

86 ICA payment of tax
  • Section OB 4(3)(c) is replaced by the following:

    • (c) income tax paid by a life insurer to satisfy its policyholder base income tax liability; or.

87 ICA debit for loss of shareholder continuity
  • (1) In section OB 41(1), before the date on is replaced by at the time at.

    (2) Section OB 41(3) is replaced by the following:

    When debit arises
    • (3) The debit arises at the time shareholder continuity is lost.

    (3) Subsections (1) and (2) apply for the 2008–09 and later income years.

88 Table O2: imputation debits
  • In table O2, row 14, column 3, day is replaced by time.

89 FDPA debit for loss of shareholder continuity
  • (1) In section OC 24(1), before the date on is replaced by at the time at.

    (2) Section OC 24(3) is replaced by the following:

    When debit arises
    • (3) The debit arises at the time shareholder continuity is lost.

    (3) Subsections (1) and (2) apply for the 2008–09 and later income years.

90 Table O4: FDP debits
  • In table O4, row 13, column 3, day is replaced by time.

91 BETA credit for loss of shareholder continuity
  • (1) In section OE 10(1), before the date on is replaced by at the time at.

    (2) Section OE 10(3) is replaced by the following:

    When credit arises
    • (3) The credit arises at the time shareholder continuity is lost.

    (3) Subsections (1) and (2) apply for the 2008–09 and later income years.

92 Table O7: branch equivalent tax credits
  • In table O7, row 5, column 3, day is replaced by time.

93 MACA debit for loss of shareholder continuity
  • (1) In section OK 15(1), before the date on is replaced by at the time at.

    (2) Section OK 15(3) is replaced by the following:

    When debit arises
    • (3) The debit arises at the time shareholder continuity is lost.

    (3) Subsections (1) and (2) apply for the 2008–09 and later income years.

94 Table O18: Maori authority debits
  • In table O18, row 7, column 3, day is replaced by time.

95 Consolidated ICA debit for loss of shareholder continuity
  • (1) In section OP 42(1), before the date on is replaced by at the time at.

    (2) Section OP 42(3) is replaced by the following:

    When debit arises
    • (3) The debit arises at the time shareholder continuity is lost.

    (3) Subsections (1) and (2) apply for the 2008–09 and later income years.

96 Table O20: imputation debits of consolidated imputation groups
  • In table O20, row 16, column 3, day is replaced by time.

97 Consolidated FDPA debit for loss of shareholder continuity
  • (1) In section OP 73(1), before the date on is replaced by at the time at.

    (2) Section OP 73(3) is replaced by the following:

    When debit arises
    • (3) The debit arises at the time shareholder continuity is lost.

    (3) Subsections (1) and (2) apply for the 2008–09 and later income years.

98 Table O22: FDP debits of consolidated FDP groups
  • In table O22, row 11, column 3, day is replaced by time.

99 Consolidated BETA credit for loss of shareholder continuity
  • (1) In section OP 104(1), before the date on is replaced by at the time at.

    (2) Section OP 104(3) is replaced by the following:

    When credit arises
    • (3) The credit arises at the time shareholder continuity is lost.

    (3) Subsections (1) and (2) apply for the 2008–09 and later income years.

100 Table O25: branch equivalent tax credits of consolidated BETA groups
  • In table O25, row 5, column 3, day is replaced by time.

101 Amounts treated as income tax
  • (1) In section RA 2, in the compare note, NC 2(1) is replaced by NC 20(1).

    (2) Subsection (1) applies for the 2008–09 and later income years.

102 Salary or wages
  • Section RD 5(6)(b) is replaced by the following:

    • (b) an income-tested benefit:

    • (bb) a veteran's pension, other than a veteran's pension paid under section 74J(2)(b) of the War Pensions Act 1954:

    • (bc) New Zealand superannuation, other than New Zealand superannuation paid under section 26(2)(b) of the New Zealand Superannuation and Retirement Income Act 2001:

    • (bd) a living alone payment:.

103 Amounts of tax for PAYE income payments
  • (1) Section RD 10(2)(a) and (b) are replaced by the following:

    • (a) for an employee whose taxable income for the income year is expected to be not more than $48,000, the rate set out in schedule 2, part B, table 1, row 2; or

    • (b) for an employee whose taxable income for the income year is expected to be not more than $70,000, the rate set out in schedule 2, part B, table 1, row 3; or

    • (c) for other employees, the rate set out in schedule 2, part B, table 1, row 4.

    (2) After section RD 10(2), the following is inserted:

    Relationship with section RD 17
    • (2B) Despite subsection (2), a person must not choose a rate set out in schedule 2, part B, table 1 that is lower than the rate that would apply to the amount of extra pay under section RD 17.

    (3) Subsections (1) and (2) apply for the 2010–11 and later income years.

104 Payment of extra pay with other PAYE income payments
  • (1) Section RD 17(1) is replaced by the following:

    When this section applies
    • (1) This section applies when a person pays an amount of extra pay to an employee who also receives a PAYE income payment from the person, regardless of whether the extra pay is paid with or separately from a PAYE income payment. The amount of tax for the extra pay is based on the sum of—

      • (a) the amount of the extra pay; and

      • (b) the annualised value of all PAYE income payments made to the employee in the period that starts 4 weeks before the date of the payment of the extra pay and ends on the date of that payment.

    Calculating annualised value
    • (1B) For the purposes of calculating the amount that is the annualised value referred to in subsection (1)(b), the amount of the extra pay referred to in subsection (1)(a) is excluded.

    (2) Section RD 17(2) and (3) are replaced by the following:

    Rates applying
    • (2) For the sum of the amounts referred to in subsection (1) listed in the following paragraphs, the amount of tax for the extra pay that must be withheld is the amount determined using the basic amounts of tax for PAYE income payments set out in the relevant row of schedule 2, part B, table 1 (Basic tax rates for PAYE income payments):

      • (a) if the sum of the amounts is $14,000 or less, the amount determined by applying row 1:

      • (b) if the sum of the amounts is more than $14,000 but not more than $48,000, the amount determined by applying row 2:

      • (c) if the sum of the amounts is more than $48,000 but not more than $70,000, the amount determined by applying row 3:

      • (d) if the sum of the amounts is more than $70,000, the amount determined by applying row 4.

    When secondary tax codes apply
    • (3) Despite subsection (2), if the person pays an amount of extra pay to an employee in relation to which the employee has notified the person that a secondary code under section 24B(3)(bb), (c), (d), or (e) of the Tax Administration Act 1994 applies, the rate under schedule 2, part B, table 1 applying to the extra pay is determined using the formula—

      extra pay + annualised amount + low threshold amount. 
    Definition of items in formula
    • (4) In the formula,—

      • (a) extra pay is the amount of the employee's extra pay:

      • (b) annualised amount is the amount given by subsections (1)(b) and (1B):

      • (c) low threshold amount is, as applicable,—

        • (i) for secondary code SB, $0:

        • (ii) for secondary code S, $14,001:

        • (iii) for secondary code SH, $48,001:

        • (iv) for secondary code ST, $70,001.

    (3) Subsection (1) applies for the 2008–09 and later income years.

    (4) Subsection (2) applies for the 2010–11 and later income years.

105 RWT rules and their application
  • (1) In section RE 1(1)(c), sections 15T is replaced by sections 15N.

    (2) Subsection (1) applies for the 2008–09 and later income years.

106 Resident passive income
  • (1) After section RE 2(5)(i), the following is added:

    • (j) a dividend treated as derived by a person under section GB 1(3) (Arrangements involving dividend stripping).

    (2) Subsection (1) applies for the 2008–09 and later income years.

107 New section RE 10B inserted
  • (1) After section RE 10, the following is inserted:

    RE 10B Amounts withheld from distributions to holders of FIF attributing interests
    • When this section applies

      (1) This section applies when—

      • (a) a distribution is made to a holder of an attributing interest in a FIF; and

      • (b) section CD 36 (Foreign investment fund income) or EX 59(2) (Codes: comparative value method, deemed rate of return method, fair dividend rate method, and cost method) applies to the distribution; and

      • (c) an amount is withheld by the payer from the distribution because the payer has treated the distribution as resident passive income subject to the RWT rules.

      Treatment of amount

      (2) The amount withheld is treated as—

      • (a) RWT for the purposes of this subpart and subpart LA (General rules for tax credits), and sections LB 3 (Tax credits for resident withholding tax), and RM 1 to RM 10 (which relate to refunds); and

      • (b) tax paid in excess for the purposes of Part 10B of the Tax Administration Act 1994.

      Treatment of distribution

      (3) The distribution is treated as resident passive income for the purposes of the sections listed in subsection (2).

      Refunds

      (4) Subsection (2) does not apply if the payer or the holder applies under section RM 8(4) or (5) (Overpaid RWT or NRWT), as applicable, for a refund in relation to the amount withheld before the next 31 March after the date on which the amount of tax was withheld.

      Defined in this Act: amount of tax, attributing interest, FIF, pay, resident passive income, RWT, tax.

    (2) Subsection (1) applies for the 2008–09 and later income years.

108 Interest
  • (1) After section RE 12(4) the following is added:

    Modification for companies and portfolio investment entities for 2010–11 income year
    • (5) Despite subsection (3)(a), the amount of tax that the person must withhold and pay may, if the person chooses, be calculated under subsection (3) using a tax rate of 0.30 if—

      • (a) the payment of resident passive income that consists of interest is made to a company or a portfolio investment entity in the 2010–11 income year; and

      • (b) the tax rate under subsection (3)(a) would be 0.33 in the absence of this subsection.

    (2) Subsection (1) applies for the 2010–11 income year.

109 Choosing higher rates
  • (1) The heading to section RE 19 is replaced by Choosing other rates.

    (2) Subsection (1) applies for the 2010–11 and later income years.

110 When payment treated as non-resident passive income
  • (1) Section RE 22(1)(a) is replaced by the following:

    • (a) a person (person A) is required to pay an amount that would be treated as resident passive income in the absence of this section to another person (person B); and.

    (2) Subsection (1) applies for the 2008–09 and later income years.

111 NRWT rules and their application
  • (1) After section RF 1(2), the following is added:

    What this section does not apply to
    • (3) This section does not apply to an amount referred to in section CC 1(2)(a) to (d) (Land) to which section CC 9 (Royalties) applies.

    Exception: certain income from land
    • (4) Despite subsection (3), this section does apply to non-resident passive income that is an amount paid for—

      • (a) the exploitation of, or right to exploit, plant material or a naturally occurring material or mineral arising in or on the land:

      • (b) the removal of, or right to remove, plant material or a naturally occurring material or mineral arising in or on the land.

    (2) Subsection (1) applies for the 2008–09 and later income years.

112 Obligation to withhold amounts of tax for non-resident passive income
  • (1) In section RF 3, the following is inserted after the section heading as a subsection heading:

    Withholding amount of tax.

    (2) In section RF 3, the following is inserted as subsection (2):

    Exclusion
    • (2) Despite subsection (1), no obligation to withhold NRWT arises in relation to an amount treated as a dividend under section GB 1(3) (Arrangements involving dividend stripping).

    (3) Subsections (1) and (2) apply for the 2008–09 and later income years.

113 When amounts of tax not withheld or partly withheld
  • (1) After section RF 6(1), the following is inserted:

    When amount treated as dividend
    • (1B) A person who derives non-resident passive income that is a dividend under section GB 1(3) (Arrangements involving dividend stripping) is treated as a filing taxpayer.

    (2) Subsection (1) applies for the 2008–09 and later income years.

114 When dividends fully imputed or fully credited
  • In section RF 9(1), and RF 10 is replaced by , RF 10, and RF 11B.

115 New section RF 11B
  • After section RF 11, the following is inserted:

    RF 11B Certain dividends paid to certain non-residents
    • The rate of NRWT payable on a payment of non-resident passive income is 0% to the extent to which the payment is a fully imputed dividend paid to a non-resident by a company, if––

      • (a) the non-resident has a 10% or more direct voting interest in the company:

      • (b) the non-resident has less than a 10% direct voting interest in the company and, but for this section, the post-treaty tax rate for the dividend is less than 15%.

      Defined in this Act: company, direct voting interest, dividend, non-resident, non-resident passive income, NRWT, pay, post-treaty tax rate.

116 Interest paid by approved issuers or transitional residents
  • In section RF 12(3), in respect of a registered security is replaced by in relation to a registered security.

117 Overpaid RWT or NRWT
  • (1) After section RM 8(2), the following is added:

    When subsections (4) and (5) apply
    • (3) Subsections (4) and (5) apply when—

      • (a) a holder of an attributing interest in a FIF receives a distribution from which an amount of tax for resident passive income has been withheld; and

      • (b) section CD 36 (Foreign investment fund income) applies to the distribution.

    Certain FIF income: application by holder
    • (4) The holder may apply for a refund if—

      • (a) they apply before the next 31 March after the date on which the amount was withheld, with supporting information to show that the threshold referred to in section CQ 5(1)(d) (When FIF income arises) has been exceeded for their corresponding income year; and

      • (b) the person making the distribution has not—

        • (i) paid them a refund of the amount; or

        • (ii) applied themselves under subsection (5) for a refund in relation to the amount; and

      • (c) they notify the person making the distribution of their application under this subsection.

    Certain FIF income: application by payer
    • (5) The person making the distribution may apply for a refund if—

      • (a) they apply before the next 31 March after the date on which the amount was withheld, with supporting information to show the payment has been made to the holder without any subtraction permitted by section RA 12(5) and (6) (Adjustment to correct errors: certain excess amounts); and

      • (b) the holder has not applied for a refund under subsection (4) in relation to the amount; and

      • (c) they provide, in relation to the amount,—

        • (i) a statement that they will not include particulars in an RWT withholding reconciliation statement made under section 51 of the Tax Administration Act 1994; and

        • (ii) the disclosure information required by section 52 of that Act.

    Use of refund
    • (6) An amount of a refund paid under subsection (4) or (5) may be used under section RM 10 to satisfy a liability under the Inland Revenue Acts.

    (2) Subsection (1) applies for the 2008–09 and later income years.

118 Definitions
  • (1) This section amends section YA 1.

    (2) The definition of cost of timber is replaced by the following:

    cost of timber, in sections DP 11, EJ 1, EW 2, EZ 44, FB 6, and FB 7 (which relate to the disposal of timber),—

    • (a) means the amount of expenditure incurred by a person in relation to timber—

      • (i) before harvest, for a disposal of harvested timber:

      • (ii) before the disposal of the timber or the relevant right, for a disposal of standing timber or a disposal of a right to take timber, or another right referred to in section DP 11(4) (Cost of timber); and

    • (b) includes, for section DP 11,—

      • (i) expenditure on planning, planting, and growing the timber:

      • (ii) expenditure incurred in relation to the rights listed in section DP 11(4); and

    • (c) excludes—

      • (i) expenditure for which a deduction is allowed under a provision of this Act other than section DP 11:

      • (ii) expenditure to which section DB 46 (Avoiding, remedying, or mitigating effects of discharge of contaminant) applies:

      • (iii) an amount allowed as a deduction under section DQ 4 (Environmental restoration accounts scheme).

    (3) The definition of creditor workout is replaced by the following:

    creditor workout, in relation to a financial arrangement, means––

    • (a) a compromise, as that term is defined in section 227 of the Companies Act 1993, in writing that, for the parties to the financial arrangement, is binding under Part 14, 15, or 15A of that Act, or is otherwise legally binding, to the extent to which the compromise does not cancel all of a debt:

    • (b) a suspension in part of the repayment of any deposit, the payment of any debt, or the discharge of any obligation, under section 44 of the Corporations (Investigation and Management) Act 1989.

    (4) In the definition of dividend, the following is added after paragraph (e):

    • (f) in sections FM 30, GB 38, OP 58, and OP 64 to OP 68 (which relate to consolidated groups), subpart OE (Branch equivalent tax accounts (BETA)), subpart OJ (Policyholder credit accounts (PCA)), in the FDP rules and the imputation rules, and in the definitions of benchmark dividend, combined imputation and FDP ratio, company dividend statement, excess credit amount, FDP credit, FDP ratio, imputation credit, imputation ratio, pay, and shareholder dividend statement, does not include an amount treated as a dividend under section GB 1(3) (Arrangements involving dividend stripping).

    (5) In the definition of employer monthly schedule, in paragraph (k), row 2 is replaced by row 3.

    (6) The definition of employer sponsored group policy is omitted.

    (7) In the definition of fixed-rate share, paragraphs (f) and (g) are replaced by the following:

    • (f) in section FA 2B (Stapled debt securities), and the definitions of proportional-stapling company and stapled debt security, means—

      • (i) a share described in paragraph (a):

      • (ii) a share that would be a share described in paragraph (a) but for a dividend or a variation in the rate of dividend that may occur when the share is converted into another share (the other share) if the gain is attributable solely to a cause set out in paragraph (g):

      • (iii) a share for which the dividend payable is the equivalent of the payment of interest for money lent, having regard to the factors set out in paragraph (h):

    • (g) for the purposes of paragraph (f)(ii), the causes are—

      • (i) a change in value of the other share occurs in a period that starts no more than 30 days before the share is converted and ends when the share is converted, and the period was a term or condition of the share when the share was first issued:

      • (ii) a term or condition of the share that existed when the share was first issued, and the term or condition sets the gain at a fixed percentage equal to 5% or a lesser percentage of the amount subscribed for the share:

    • (h) for the purposes of paragraph (f)(iii), the factors are—

      • (i) whether or not the share is redeemable:

      • (ii) any security provided to the shareholder, including put or call options over the share or any amount payable determined by reference to the amount of dividend payable:

      • (iii) the variability or lack of variability of the dividend payable.

    (8) After the definition of forestry assets, the following is inserted:

    forestry business includes a PFSI forestry business.

    (9) In the definition of lease, in paragraph (d)(vi) and (d)(vii), paragraph (e) is replaced by paragraph (f) in each place where it appears.

    (10) In the definition of lease, in paragraph (f)(ii), paragraph (c) is replaced by paragraph (d).

    (11) In the definition of lessee,—

    • (a) in paragraph (a), paragraph (b) is replaced by paragraph (c):

    • (b) in paragraph (b), paragraph (c) is replaced by paragraph (d).

    (12) In the definition of lessor,—

    • (a) in paragraph (a), paragraph (b) is replaced by paragraph (c):

    • (b) in paragraph (b), paragraph (c) is replaced by paragraph (d).

    (13) The definition of loss balance is replaced by the following:

    loss balance, for a tax year,—

    • (a) means the sum of all tax loss components—

      • (i) arising in the tax year and included in the tax loss for the tax year under section IA 2(3) and (4) (Tax losses), to the extent not used under section IA 3(1) to (3) or IA 4(1)(a) (which relate to the first use and to particular losses):

      • (ii) arising in an earlier tax year and carried forward under section IA 3(4) to the tax year, to the extent not used under section IA 3(1) to (3) or IA 4(1)(a):

    • (b) does not include a tax loss component included in a company's loss balance at the end of the tax year if the requirements of section IA 5 (Restrictions on companies' loss balances carried forward), as modified by sections IZ 4 to IZ 6 (which relate to tax losses for tax years before 1992), have not been met.

    (14) After the definition of net loss, the following is inserted:

    net mining loss is defined in section IS 1(3) (General treatment of mining companies' net losses) for the purposes of subpart IS (Mining companies' and petroleum miners' tax losses).

    (15) After the definition of new personal tax rate person, the following is inserted:

    new reporting standard is defined in section DB 35 (Some definitions) for the purposes of section DB 34 (Research or development).

    (16) After the definition of old financial arrangements rules, the following is inserted:

    old reporting standard is defined in section DB 35 (Some definitions) for the purposes of section DB 34 (Research or development).

    (17) After the definition of petroleum-related depreciable property, the following is inserted:

    PFSI forestry business means the forestry activities carried on by a person who, as landowner, is subject to obligations under a forest sink covenant referred to in section 67X of the Forests Act 1949 in relation to the land specified in the covenant

    PFSI forestry income, for a person, means the income from a PFSI forestry business—

    • (a) relating to a forest sink covenant entered into by the person; and

    • (b) derived by the person from—

      • (i) receiving an emissions unit under the covenant; or

      • (ii) entering into a transaction in relation to an emissions unit received under the covenant.

    (18) In the definition of PIE rules, paragraph (a)(vii), ring-fenced losses is replaced by ring-fenced tax losses.

    (19) After the definition of policyholder base income, the following is inserted:

    policyholder unvested liabilities means benefits that are allocated to policyholders of profit participation policies but are not vested in a specific policyholder.

    (20) The definitions of portable New Zealand superannuation and portable veteran's pension are replaced by the following:

    portable New Zealand superannuation means New Zealand superannuation paid or payable overseas under—

    • (a) section 26(2)(a) of the New Zealand Superannuation and Retirement Income Act 2001, or under section 26(2)(b) where the superannuitant is residing in a country to which section 26(1)(a) of that Act applies; or

    • (b) section 31 of the New Zealand Superannuation and Retirement Income Act 2001; or

    • (c) section 19 of the Social Welfare (Transitional Provisions) Act 1990

    portable veteran's pension means a veteran's pension paid or payable overseas under—

    • (a) section 74J(2)(a) of the War Pensions Act 1954, or under section 74J(2)(b) where the pensioner is residing in a country to which section 74J(1)(a) of that Act applies; or

    • (b) section 74O of the War Pensions Act 1954; or

    • (c) section 19 of the Social Welfare (Transitional Provisions) Act 1990.

    (21) After the definition of post-1989 forest land emissions unit the following is inserted:

    post-treaty tax rate means the rate of tax, after taking into account the overriding effect of a relevant double tax agreement, if there is one, as provided by section BH 1 (Double tax agreements).

    (22) In the definition of prescribed investor rate, under sections HM 56 to HM 59 (which relate to the default and other tax rates for investors) is replaced by set out in schedule 6, table 1 (Prescribed rates: PIE investments and retirement scheme contributions).

    (23) In the definition of relative,––

    • (a) in paragraph (a), in the words before the subparagraphs, except in section HC 36 (Trusts and minor beneficiary rule) is replaced by for the purposes of only this Act, other than in section HC 36 (Trusts and minor beneficiary rule):

    • (b) in paragraph (b), that section is replaced by only that section:

    • (c) after paragraph (b), the following is added:

      • (c) for the purposes of the definition of relative in section 2 of the Securities Act 1978, means a person connected with another person by––

        • (i) being within the fourth degree of blood relationship to the other:

        • (ii) being in a marriage, civil union, or de facto relationship with the other:

        • (iii) being in a marriage, civil union, or de facto relationship with a person who is within the fourth degree of blood relationship to the other:

        • (iv) being adopted as a child of the other or as a child of a person who is within the third degree of relationship to the other:

        • (v) being the trustee of a trust under which a relative of the other person has benefited or is eligible to benefit.

    (24) The definition of reporting standard is repealed.

    (25) The definition of retirement scheme prescribed rate is replaced by the following:

    retirement scheme prescribed rate, for a person and a retirement scheme contribution made for the person at a time in an income year, means a rate set out in schedule 6, table 2 (Prescribed rates: PIE investments and retirement scheme contributions).

    (26) In the definition of RMBS special purpose vehicle,—

    • (a) in the introductory words, HR 9 is replaced by HR 9 (RMBS special purpose vehicles are transparent):

    • (b) in paragraph (c), is in respect of is replaced by relates to.

    (27) In the definition of RWT proxy, section 15T is replaced by section 15N.

    (28) The definition of savings product policy is replaced by the following:

    savings product policy means a life insurance policy, other than an annuity, that may or may not have a life risk component and that has or will have a surrender value which––

    • (a) is greater than zero; and

    • (b) does not arise wholly from the payback of a portion of a policyholder's premiums.

    (29) In the definition of share purchase agreement, employment income) is replaced by employment income) and HC 27(3B) (Who is a settlor?).

    (30) The definition of supplementary dividend holding company is omitted.

    (31) The definition of tax loss is replaced by the following:

    tax loss means an amount described in section IA 2(1) (Tax losses) and includes unused tax loss components arising in the current tax year or in an earlier tax year.

    (32) In the definition of taxable distribution, section HC 15(2) is replaced by section HC 15.

    (33) The definition of timber is replaced by the following:

    timber

    • (a) is defined in section DP 11(4) (Cost of timber) for the purposes of that section:

    • (b) includes standing timber in—

      • (i) section DP 11:

      • (ii) section EB 24 (Apportionment on disposal of business assets that include trading stock):

      • (iii) section FB 6 (Timber or right to take timber):

      • (iv) section GC 1 (Disposals of trading stock at below market value):

      • (v) the definition of dispose, paragraph (b):

      • (vi) the definition of right to take timber:

      • (vii) the definition of trading stock, paragraph (b)(iv).

    (34) After the definition of working day, the following is inserted:

    workplace group policy is defined in section EY 30 (Transitional adjustments: life risk).

    (35) The definition of year of payment is omitted.

    (36) In the definition of zero-rated investor, HM 59 is replaced by HM 57.

    (37) Subsections (2), (3), (4), (7), (8), (9), (10), (11), (12), (13), (14), (17), (27), (29), (31), (32), and (33) apply for the 2008–09 and later income years.

    (38) Subsections (5), (18), (22), (25), and (36) apply for the 2010–11 and later income years.

    (39) Subsections (6), (19), (28), and (34) apply––

    • (a) on and after 1 July 2010, unless paragraph (b) applies:

    • (b) for an income year that includes 1 July 2010 and later income years, if the life insurer chooses to apply the new life insurance rules in the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 in a return of income for the tax year corresponding to the first relevant income year.

    (40) Subsection (30) applies for the 2013–14 and later income years.

119 What this subpart does
120 Tripartite relationship
  • In section YB 14(1), YB 13 is replaced by YB 12 in each place where it appears.

121 Transparency of nominees
  • (1) After section YB 21(2), the following is added:

    Nominal settlements
    • (3) A person making a nominal settlement at the request of another person is treated for the purposes of this Act as a nominee in relation to the settlement.

    (2) Subsection (1) applies for the 2008–09 and later income years.

122 Schedule 1—Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe benefits
  • (1) In schedule 1, part D, clauses 3 to 6, passive resident income is replaced by resident passive income in each place where it appears.

    (2) Schedule 1, part D, table 2 is replaced by the following:

    Table 2
    RowConditionsPayment rate
    1The payer of the interest has not been supplied with the tax file number of the person who is paid the interest. 0.380
     
    2For a person who opens a new account after 31 March 2010 the payer of the interest— 
     (a)  has been supplied with the tax file number of the person; and 
     (b) has not received a payment rate election from the person.0.380
    3For a person who chooses the payment rate of 0.380, the payer of the interest— 
     (a)  has been supplied with the tax file number of the person; and  
     (b) has received a payment rate election from the person.0.380
    4 For a person who chooses the payment rate of 0.330, the payer of the interest— 
     (a) has been supplied with the tax file number of the person; and  
     (b) has received a payment rate election from the person.0.330
    5For a person in relation to whom RWT is withheld at the payment rate of 0.195 before 1 April 2010, the payer of the interest— 
     (a)  has been supplied with the tax file number of the person; and  
     (b) has not received a payment rate election from the person.0.210
    6 For a person who chooses the payment rate of 0.210, the payer of the interest— 
     (a) has been supplied with the tax file number of the person; and  
     (b) has received a payment rate election from the person.0.210
    7 For a person other than a trustee who chooses the payment rate of 0.125 and has a reasonable expectation at the time of the election that their income for the income year will be $14,000 or less, the payer of the interest— 
     (a) has been supplied with the tax file number of the person; and  
     (b)  has received a payment rate election from the person.0.125
    8For a person— 
     (a)who— 
      (i)receives interest as a trustee of a testamentary trust to which section HC 37 applies; and 
      (ii)chooses the payment rate of 0.125; and 
     (b) in relation to whom, the payer of the interest— 
      (i)has been supplied with the tax file number of the person; and 
      (ii)has received a payment rate election from the person.0.125
    How to use this table
    Find the applicable condition in the second column, in order to find the relevant rate to apply, in the third column.
     

    (3) In schedule 1, part D, table 3, 0.33 is replaced by 0.30 in each place where it appears.

    (4) In schedule 1, part D, table 3, 0.39 is replaced by 0.38 in each place where it appears.

    (5) In schedule 1, part D, table 4,—

    • (a) in row 1, 0.39 is replaced by 0.38:

    • (b) in row 2, 0.390 is replaced by 0.380.

    (6) Schedule 1, part D, table 5 is replaced by the following:

    Table 5
    RowConditionsPayment rate
    1The person responsible for withholding RSCT— 
     (a) has been notified under section 28C of the Tax Administration Act 1994 that 12.5 cents in the dollar is the person's retirement scheme prescribed rate; and 
     (b)has been supplied with the tax file number of the person.0.125
    2 The person is a non-resident and a distribution of no more than $200 is made to them by a retirement scheme contributor that is a Maori authority.0.125
    3The person responsible for withholding RSCT— 
     (a)has been notified under section 28C of the Tax Administration Act 1994 that 21 cents in the dollar is equal to or greater than the person's retirement scheme prescribed rate; and 
     (b)has been supplied with the tax file number of the person.0.210
    4 The person responsible for withholding RSCT— 
     (a) has been notified under section 28C of the Tax Administration Act 1994 that 33 cents in the dollar is equal to or greater than the person's retirement scheme prescribed rate; and 
     (b)has been supplied with the tax file number of the person.0.330
    5When none of rows 1 to 4 apply.0.380
    How to use this table
    Find the applicable condition in the second column, in order to find the relevant rate to apply, in the third column.

    (7) Subsection (1) applies for the 2008–09 and later income years.

    (8) Subsections (2), (4), (5), and (6) apply for the 2010–11 and later income years.

    (9) Subsection (3) applies for the 2011–12 and later income years.

123 Schedule 2—Basic tax rates for PAYE income payments
  • (1) In schedule 2, part A, clause 2, the formula is replaced by the following:

    .
    total payment
    .
    ×weekly PAYE table amount.
    weekly portion of the payment

    (2) After schedule 2, part A, clause 8, the following is added:

    “9 “SB” tax code
    If an employee has notified their employer that the employee's tax code is “SB” under section 24B(3)(bb) of the Tax Administration Act 1994, the basic tax rate amount for a payment of secondary employment earnings is set by applying the rate of 0.125 for each dollar of the payment.”

    (3) Schedule 2, part B, table 1 is replaced by the following:

    Table 1
    RowConditionPayment rate
    1Section RD 17(2)(a) applies and the sum is $14,000 or less.0.125
    2Section RD 10(2)(a) or RD 17(2)(b) applies.0.210
    3Section RD 10(2)(b) or RD 17(2)(c) applies.0.330
    4Section RD 10(2)(c) or RD 17(2)(d) applies.0.380
    How to use this table
    Find the applicable condition in the second column, in order to find the relevant rate to apply, in the third column.

    (4) Subsection (1) applies for the 2008–09 and later income years.

    (5) Subsections (2) and (3) apply for the 2010–11 and later income years.

124 New schedule 6 inserted
  • (1) After schedule 5, the following is inserted:

    “Schedule 6
    Prescribed rates: PIE investments and retirement scheme contributions

    ss CX 50B, HM 56

    1 PIE investments
    • The prescribed investor rate for a person who is an investor in a multi-rate PIE is set out in table 1.

    Table 1  
    RowConditions Prescribed rate
    1For a natural person who is resident in New Zealand and who, in each of the 2 income years before the relevant tax year, derives— 
     (a)$48,000 or more in taxable income: 
     (b)$70,000 or more in the sum of their taxable income and attributed PIE income after subtracting any attributed PIE loss.0.300
    2For a non-resident person who notifies this rate for the relevant tax year.0.300
    3For a person who— 
     (a)is resident in New Zealand and who derives income for the relevant tax year as a trustee of a trust other than a trust with income that is exempt income under section CW 41 or CW 42; and 
     (b)notifies this rate for the relevant tax year.0.300
    4For a natural person who is resident in New Zealand and is not a person described in row 1 and who, in either of the 2 income years before the relevant tax year, derives— 
     (a)between $14,000 and $48,000 in taxable income; and 
     (b) $70,000 or less in the sum of their taxable income and attributed PIE income after subtracting any attributable PIE loss.0.210
    5For a person who— 
     (a)is resident in New Zealand and derives income for the relevant tax year as a trustee of a trust other than a trust with income that is exempt income under section CW 41 or CW 42; and 
     (b)notifies this rate for the relevant tax year.0.210
    6For a natural person who is resident in New Zealand and is not a person described in row 1 or 4 and who, in either of the 2 income years before the relevant tax year, derives— 
     (a)$14,000 or less in taxable income; and 
     (b)$48,000 or less in the sum of the taxable income and attributed PIE income after subtracting any attributable PIE loss.0.125
    7For a person who— 
     (a)is resident in New Zealand and derives income for the relevant tax year as a trustee of a testamentary trust to which section HC 37 applies other than a trust with income that is exempt income under section CW 41 or CW 42; and 
     (b)notifies this rate for the relevant tax year.0.125
    8For a person who is a zero-rated investor.0.000
         
    How to use this table
    Find the applicable condition in the second column, in order to find the relevant rate to apply, in the third column.
    2 Retirement scheme contributions
    • The retirement scheme prescribed rate for a person in relation to a retirement scheme contribution made for them is set out in table 2.

    Table 2   
    RowConditionsPrescribed rate
    1For a person other than a person described in any of rows 2 to 7.0.380
    2For a person who, in either of the 2 income years before the income year in which the contribution is made, derives more than $48,000 but not more than $70,000 in taxable income.0.330
    3For a person who is not a person described in row 2 and who, in either of the 2 income years before the income year in which the contribution is made, derives more than $14,000 but not more than $48,000 in taxable income.0.210
    4For a person who is not a person described in row 2 or 3 and who, in either of the 2 income years before the income year in which the contribution is made, derives taxable income of $14,000 or less.0.125
    5For a non-resident person to whom a distribution of no more than $200 is made by a retirement scheme contributor that is a Maori authority.0.125
    6For a non-resident person who supplies a retirement scheme contributor that is a Maori authority with a notice under section 28C of the Tax Administration Act 1994.0.125
    7For a non-resident person in relation to a contribution that consists of non-resident passive income.0.000
    How to use this table
    Find the applicable condition in the second column, in order to find the relevant rate to apply, in the third column.
         

    (2) Subsection (1) applies to income years beginning on or after 1 April 2010.

125 Schedule 51—Identified changes in legislation
  • (1) In schedule 51, after the entry for FC 2 to FC 6, the following is inserted:

    GB 1Section GB 1(3) is clarified to confirm that the amount of the dividend derived is part of the consideration for the shares.

    (2) In schedule 51, after the entry for GB 42(2)(d), the following is inserted:

    HC 27(2)The definition of settlor is clarified so that any transfer to a trust that increases the net assets of the trust is a settlement on the trust and any deductible payments settled on a trust are included in trustee income.

    (3) Subsections (1) and (2) apply for the 2008–09 and later income years.

126 Lists of defined terms in Income Tax Act 2007
  • The lists of defined terms in the sections of the Income Tax Act 2007 listed in schedule 1 are amended in the way indicated by the schedule.

Part 2
Amendments to Tax Administration Act 1994

127 Tax Administration Act 1994
128 Interpretation
  • In section 3(1), the definition of contested tax is repealed.

129 Giving of notices by Commissioner
  • Section 14(7) is replaced by the following:

    • (7) The Commissioner may give the notice to the addressee by an electronic means of communication unless there are reasonable grounds to suppose that the notice will not be received by the addressee. This subsection overrides the consent provisions of the Electronic Transactions Act 2002.

130 PAYE tax codes
  • (1) After section 24B(3)(b), the following is inserted:

    • (bb) “SB” for secondary employment earnings for an employee whose annual income is not more than $14,000:.

    (2) Subsection (1) applies for the 2010–11 and later income years.

131 Section 24C replaced
  • (1) Section 24C is replaced by the following:

    24C Tax code for payment that includes income-tested benefits
    • An employee who receives a PAYE income payment of an income-tested benefit and a PAYE income payment that does not consist of an income-tested benefit may choose, for their non-benefit income, a tax code set out in section 24B(3)(bb), (c), (d), or (e) that is relevant to their circumstances.

    (2) Subsection (1) applies for the 2010–11 and later income years.

132 New heading and new section 25A
  • (1) Before section 25, the following is inserted:

    RWT rates, certificates, and records

    25A Use of inconsistent RWT rates
    • (1) This section applies when the Commissioner considers that a person who receives a payment of resident passive income consisting of interest has chosen in relation to the payment an RWT rate that is inconsistent with their marginal tax rate.

      (2) The Commissioner may notify the payer of the interest of the inconsistent rate and provide the payer with the RWT rate for the person.

      (3) The payer must use the RWT rate provided by the Commissioner in relation to the person as soon as reasonably practicable after the date of notification. However, if the person subsequently notifies the payer of a different RWT rate, the payer must apply the rate notified by the person.

    (2) Subsection (1) applies for the 2010–11 and later income years.

133 Person advising retirement savings scheme of retirement scheme prescribed rate
  • (1) In section 28C, 39% is replaced by 38%.

    (2) Subsection (1) applies for the 2010–11 and later income years.

134 Annual returns of income not required
  • (1) In section 33A(1)(b)(iv), the following is inserted before subsubparagraph (A):

    • (AAA) schedule 1, part D, table 2, row 5 or 6 of the Income Tax Act 2007 if that person's annual gross income is more than $14,000 but not more than $48,000; or.

    (2) In section 33A(1)(b)(iv)(A), row 3 is replaced by row 4.

    (3) In section 33A(1)(b)(iv)(B), row 4 or 5 is replaced by row 1, 2, or 3.

    (4) In section 33A(1)(b)(v), the following is inserted before subsubparagraph (A):

    • (AAA) schedule 2, part B, row 2 of the Income Tax Act 2007 if that person's annual gross income is more than $14,000 but not more than $48,000; or.

    (5) In section 33A(1)(b)(v)(A), row 2 is replaced by row 3.

    (6) In section 33A(1)(b)(v)(B), row 3 is replaced by row 4.

    (7) In section 33A(1)(b)(vi), the following is inserted before subsubparagraph (A):

    • (AAA) schedule 2, part A, clause 4 of the Income Tax Act 2007 if that person's annual gross income is more than $14,000 but not more than $48,000; or.

    (8) In section 33A(5), must is replaced by may.

    (9) Subsections (1), (2), (3), (4), (5), (6), and (7) apply for the 2010–11 and later income years.

    (10) Subsection (8) applies for the 2009–10 and later income years.

135 Certificates about trees
  • (1) In section 44C(3), schedule 20, part A, item 8 is replaced by schedule 20, part A, item 9.

    (2) Subsection (1) applies for the 2008–09 and later income years.

136 Section 80C replaced
  • (1) Section 80C is replaced by the following:

    80C Requests for income statements
    • A person to whom section 33A(1) applies may, at any time after the end of the person's tax year, request the issue of an income statement relating to that year.

    (2) Subsection (1) applies for the 2009–10 and later income years.

137 Commissioner must issue income statement
  • (1) Section 80D(1)(c)(i) is repealed.

    (2) In section 80D(2), to a person at any time is replaced by to a person, or require a person to apply for an income statement, at any time.

    (3) Subsection (1) applies for the 2009–10 and later income years.

138 Statement of family scheme income
  • (1) Section 80KV(2) is replaced by the following:

    • (2) The person must, in the time within which they are required to file their return of income for the tax year, give the Commissioner a complete statement of their family scheme income for the tax year, including the family scheme income of their spouse, civil union partner, or de facto partner, as applicable.

    (2) Subsection (1) applies for the 2009–10 and later income years.

139 Taxation laws in respect of which binding rulings may be made
  • (1) In section 91C(1)(e), on an application to which section YA 4(1)(a)(i) of the Income Tax Act 2004 applies, is omitted.

    (2) In section 91C(1)(eb), on an application to which section ZA 4(1)(a)(i) of the Income Tax Act 2007 applies, is omitted.

140 New section 113A inserted
  • After section 113, the following is inserted:

    113A Correction of minor errors in subsequent returns
    • (1) This section applies for the purposes of this Act and the Goods and Services Tax Act 1985 when—

      • (a) a person has provided a return in which the assessment of their liability for income tax, fringe benefit tax, or goods and services tax contains 1 or more minor errors; and

      • (b) the error was caused by a clear mistake, simple oversight, or mistaken understanding on the person's part; and

      • (c) for a single return, the total discrepancy in the assessment that is caused by the error is $500 or less.

      (2) The Commissioner may allow the person to correct the error in the next return that is due after the discovery of the error.

      (3) For the purposes of subsection (1)(c), the liability the person has for income tax, fringe benefit tax, or goods and services tax is treated separately.

141 Certain rights of challenge not conferred
142 Definitions
  • In section 173B, the definition of contested tax is repealed.

143 Limitations on assistance in recovery
  • Section 173G(1) is replaced by the following:

    • (1) The Commissioner may assist in recovering an amount of unpaid tax only if—

      • (a) payment of the amount is enforceable under the laws of the state of the applicant requesting assistance under a tax recovery agreement; and

      • (b) the amount is owed by a person who cannot, under the laws of the state of the applicant, prevent collection of the amount.

    • (1B) The circumstances in which the Commissioner may provide assistance under this section include the following in relation to the amount of unpaid tax:

      • (a) the period within which the person may exercise a right to contest the assessment has expired:

      • (b) the person has withdrawn an objection in relation to the amount:

      • (c) the person has waived a right to contest the assessment:

      • (d) the person is required to pay some or all of the amount, regardless of any right to contest the assessment:

      • (e) the person is otherwise unable, under the laws of the state of the applicant, to prevent collection of the amount.

    • (1C) For the purposes of this section and section 173E(2)(a), the amount referred to in subsection (1) is an uncontested amount.

Part 3
Amendments to Goods and Services Tax Act 1985

144 Goods and Services Tax Act 1985
145 Meaning of associated persons
  • (1) Section 2A(1)(f) is replaced by the following:

    • (f) a trustee of a trust and a person who has benefited or is eligible to benefit under the trust, except if, in relation to a supply of goods and services,—

      • (i) the trustee is a charitable or non-profit body with wholly or principally charitable, benevolent, philanthropic, or cultural purposes and the supply is made in carrying out these purposes; or

      • (ii) the person is a charitable or non-profit body with wholly or principally charitable, benevolent, philanthropic, or cultural purposes and the supply enables them to carry out these purposes:.

    (2) Section 2A(1)(h) is replaced by the following:

    • (h) a trustee of a trust and a trustee of another trust if the same person is a settlor of both trusts, except if, in relation to a supply of goods and services,—

      • (i) either trustee is a charitable or non-profit body with wholly or principally charitable, benevolent, philanthropic, or cultural purposes; and

      • (ii) the supply is made in, or enables, the carrying out of the charitable, benevolent, philanthropic, or cultural purposes:.

146 Imposition of goods and services tax on supply
  • After section 8(2), the following is inserted:

    • (2B) To the extent to which a supply of services consists of the facilitation of inbound tour operations, the supply is chargeable with tax under subsection (1), and section 11A does not apply to that part of the supply.

    • (2C) Despite subsection (2B), the part of the supply that consists of the facilitation of inbound tour operations is charged at the rate of 0% if—

      • (a) a registered person supplies the services in the period from 1 July 2007 to 30 June 2008 (the transitional period); and

      • (b) the consideration for the supply is an amount quantified—

        • (i) on the basis of the person's gross margin attributable to the facilitation of inbound tour operations; or

        • (ii) by other means that the Commissioner is able to verify.

    • (2D) For the purposes of subsection (2C)(b), the amount of the consideration must be—

      • (a) calculated for each of the person's taxable periods that fall in the transitional period:

      • (b) for any days in the person's taxable period that fall outside the transitional period, apportioned on a pro rata basis.

    • (2E) If a registered person has supplied services in the transitional period by way of the facilitation of inbound tour operations and tax was paid under this section in relation to the services, the person is entitled to a refund of the amount of tax paid. They must apply for the refund in writing within the period that starts on the date of Royal assent of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 and ends 6 months after that date.

    • (2F) For the purposes of subsections (2B) and (2C), services that consist of the facilitation of inbound tour operations means the services that a registered person provides in packaging 1 or more domestic tourism products and services in New Zealand and selling them outside New Zealand to a non-resident person. The tourism products and services may include accommodation, meals, transport, and other activities.

147 Meaning of term supply
  • After section 5(6AB), the following is inserted:

    • (6AC) For the purposes of this Act, a levy that is paid under the Waste Minimisation Act 2008 is treated as being consideration for a supply of services in the course or furtherance of a taxable activity. For the purposes of this subsection, the payment of the levy includes, and is for, the following transactions:

      • (a) a payment made by a waste disposal facility user to a waste disposal facility operator; and

      • (b) a payment made by a waste disposal facility operator to the Secretary for the Ministry for the Environment; and

      • (c) a payment made by the Secretary to a funding recipient or territorial authority to fund waste minimisation activities in the community as described in section 30 of the Waste Minimisation Act 2008.

Part 4
Amendments to Income Tax Act 2004

148 Income Tax Act 2004
149 Available capital distribution amount
  • In section CD 33(11), subsection (12) is replaced by subsections (7)(c) and (12).

150 Meaning of expenditure on account of an employee
151 Expenditure on account, and reimbursement, of employees
  • In section CW 13(4), section CW 13B (Relocation payments) or section CW 13C (Payments for overtime meals) is replaced by section CW 13B or CW 13C.

152 Research or development
  • (1) Section DB 26(2), other than the heading, is replaced by the following:

    • (2) Subsection (1) applies to a person who recognises the expenditure as an expense for financial reporting purposes,—

      • (a) under paragraph 5.1 or 5.2 of the old reporting standard or because paragraph 5.4 of that standard applies; or

      • (b) under paragraph 68(a) of the new reporting standard applying, for the purposes of that paragraph, paragraphs 54 to 67 of that standard.

    (2) Section DB 26(4)(b) is replaced by the following:

    • (b) would be required, if the expenditure were material, to recognise it for financial reporting purposes—

      • (i) under paragraph 5.1 or 5.2 of the old reporting standard or because paragraph 5.4 of that standard applies; or

      • (ii) under paragraph 68(a) of the new reporting standard applying, for the purposes of that paragraph, paragraphs 54 to 67 of that standard.

    (3) Subsections (1) and (2) apply for the 2007–08 income year, or if the person has chosen to adopt IFRSs for financial reporting purposes for an earlier income year, from that earlier income year.

153 Some definitions
  • In section DB 27(1), the definition of reporting standard is replaced by the following:

    new reporting standard means the New Zealand Equivalent to International Accounting Standard 38, approved by the Accounting Standards Review Board, and as amended from time to time or an equivalent standard issued in its place

    old reporting standard means Financial Reporting Standard No 13 1995 (Accounting for Research and Development Activities) being the standard approved under the Financial Reporting Act 1993, or an equivalent standard issued in its place, that applies in the tax year in which the expenditure is incurred.

154 Gifts of money by company
  • Section DB 32(3), other than the heading, is replaced by the following:

    • (3) The deduction for the total of all gifts made in an income year is limited to 5% of the amount that would be the company's net income in the corresponding tax year in the absence of this section.

155 Section DP 10 replaced
  • (1) Section DP 10 is replaced by the following:

    DP 10 Cost of timber
    • When this section applies

      (1) This section applies when a person—

      • (a) derives an amount on the disposal of timber and the amount is income of the person under section CB 22 (Disposal of timber or right to take timber) or CB 23 (Disposal of land with standing timber); and

      • (b) has incurred expenditure in relation to the timber that is a cost of timber.

      Deduction

      (2) The person is allowed a deduction for the amount that is a cost of timber.

      Timing of deduction

      (3) The deduction is allocated—

      • (a) for timber harvested from the land before the time of disposal, to the income year in which the timber first becomes trading stock of the person; or

      • (b) otherwise, by section EA 2 (Other revenue account property).

      Meaning of timber

      (4) In this section, timber includes—

      • (a) the creation or grant of a right to take timber:

      • (b) the grant of a licence or an easement in relation to timber:

      • (c) the creation of a forestry right as defined in section 2 of the Forestry Rights Registration Act 1983, other than a right in favour of the proprietor in relation to establishing, maintaining, and harvesting timber.

      Link with subpart DA

      (5) This section supplements the general permission and overrides the capital limitation. The other general limitations still apply.

      Defined in this Act: amount, business, capital limitation, cost of timber, deduction, dispose, general permission, income year, timber, trading stock.

    (2) Subsection (1) applies for the 2007–08 income year, or if the person has chosen to adopt IFRSs for financial reporting purposes for an earlier income year, from that earlier income year.

156 Ring-fenced allocations
  • In section DT 1A(4), in respect of the excess is replaced by for the excess.

157 Branch equivalent income or loss: calculation rules
  • (1) In section EX 21(26), the amount actuarially determined to be the part of the CFC's net income or loss is replaced by the amount actuarially determined to be part of the CFC's profit or loss.

    (2) Subsection (1) applies for the 2005–06 and later income years.

158 Accounting profits method
  • (1) Section EX 42(5), other than the heading, is replaced by the following:

    • (5) For an income interest that the person has held for more than 12 months, the person may follow a simplified calculation process by choosing to be treated as holding, at all times in the income year, the same interest, including zero interest, that they held at the end of the income year. The person makes the election by completing their return of income accordingly for the relevant income year.

    (2) Subsection (1) applies for the 2005–06 and later income years. However, subsection (1) does not apply to a person in relation to a tax position taken by the person in a return of income filed before the date of Royal assent of this Act in relation to the calculation of an income interest in a FIF, relying on section EX 42(5) before the amendment made by this section.

159 Unlisted company may choose to become portfolio listed company
  • After section HL 11B(2), the following is added:

    Extension in certain cases
    • (3) Despite subsection (2), a company that makes an election under subsection (1) does not stop being a portfolio listed company from the last day of the period of 2 years from the date on which the election takes effect if—

      • (a) the company has met the requirements of subsection (1)(b) and (c) before 2 July 2009; and

      • (b) a period of 4 years from the date on which the election takes effect has not expired.

    Further extension granted by Commissioner
    • (4) Despite subsections (2) and (3), the Commissioner may grant a further extension of time if it is reasonable in the circumstances.

160 Credits arising to imputation credit account
161 New section NF 2E inserted
  • (1) After section NF 2D, the following is inserted:

    NF 2E Amounts withheld from distributions to holders of FIF attributing interests
    • (1) This section applies when—

      • (a) a distribution is made to a holder of an attributing interest in a FIF; and

      • (b) section CD 26 or EX 47(2) applies to the distribution; and

      • (c) an amount is deducted from the distribution because the payer has treated the distribution as resident withholding income subject to the RWT rules.

      (2) The amount deducted is treated as—

      • (a) RWT for the purposes of this subpart and subpart MD and section LD 3; and

      • (b) tax paid in excess for the purposes of Part 10B of the Tax Administration Act 1994.

      (3) The distribution is treated as resident withholding income for the purposes of the provisions listed in subsection (2).

      (4) Subsection (2) does not apply if the person making the distribution or the holder of the interest applies under section NF 7 for a refund in relation to the amount withheld before the next 31 March after the date on which the amount of tax was withheld.

    (2) Subsection (1) applies for the 2005–06 and later income years.

162 Definitions
  • (1) This section amends section OB 1.

    (2) The definition of cost of timber is replaced by the following:

    cost of timber, in sections DP 10, EJ 1, EW 2, and EZ 41 (which relate to the disposal of timber)—

    • (a) means the amount of expenditure incurred by a person in relation to timber—

      • (i) before harvest, for a disposal of harvested timber:

      • (ii) before the disposal of the timber or the relevant right, for a disposal of standing timber or a disposal of a right to take timber, or another right referred to in section DP 10(4) (Cost of timber); and

    • (b) includes, for section DP 10,—

      • (i) expenditure on planning, planting, and growing the timber:

      • (ii) expenditure incurred in relation to the rights listed in section DP 10(4); and

    • (c) excludes—

      • (i) expenditure for which a deduction is allowed under a provision of this Act other than section DP 10:

      • (ii) expenditure to which section DB 37 (Avoiding, remedying, or mitigating effects of discharge of contaminant) applies:

      • (iii) an amount allowed as a deduction under section DQ 4 (Environmental restoration accounts scheme).

    (3) In the definition of creditable membership, paragraph (b) is replaced by the following:

    • (b) includes, for a person,—

      • (i) the period described in paragraph (c):

      • (ii) the days in the month in which securities are first allotted by the KiwiSaver scheme or complying superannuation fund in relation to the person:

      • (iii) for the period beginning on 1 July 2007 and ending on the day on which securities are first allotted by the KiwiSaver scheme for the person, the days in the month that the KiwiSaver scheme receives a valid application for membership from the person and any remaining days in that period, if the person makes contributions in relation to the KiwiSaver scheme before 1 November 2007:

    • (c) the period referred to in paragraph (b)(i) is the period ending on the day on which securities are first allotted by the KiwiSaver scheme for the person and beginning on the earliest of—

      • (i) the first day of the month in which contributions are first received by the Commissioner for the person:

      • (ii) the first day of the month in which KiwiSaver contributions are first deducted for the person:

      • (iii) the day that the Commissioner nominates following a request by the person when, due to matters beyond the control of the person, the first deduction of KiwiSaver contributions was delayed.

    (4) In the definition of fixed rate share, paragraphs (f) and (g) are replaced by the following:

    • (f) in section FC 2B (Stapled debt securities), and the definitions of proportional-stapling company and stapled debt security, means—

      • (i) a share described in paragraph (a):

      • (ii) a share that would be a share described in paragraph (a) but for a dividend or a variation in the rate of dividend that may occur when the share is converted into another share (the other share) if the gain is attributable solely to a cause set out in paragraph (g):

      • (iii) a share for which the dividend payable is the equivalent of the payment of interest for money lent, having regard to the factors set out in paragraph (h):

    • (g) for the purposes of paragraph (f)(ii), the causes are—

      • (i) a change in value of the other share occurs in a period that starts no more than 30 days before the share is converted and ends when the share is converted, and the period was a term or condition of the share when the share was first issued:

      • (ii) a term or condition of the share that existed when the share was first issued, and the term or condition sets the gain at a fixed percentage equal to 5% or a lesser percentage of the amount subscribed for the share:

    • (h) for the purposes of paragraph (f)(iii), the factors are—

      • (i) whether or not the share is redeemable:

      • (ii) any security provided to the shareholder, including put or call options over the share or any amount payable determined by reference to the amount of dividend payable:

      • (iii) the variability or lack of variability of the dividend payable.

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

    forestry business includes the forestry activities carried on by a person who, as landowner, is subject to obligations under a forest sink covenant referred to in section 67X of the Forests Act 1949 in relation to the land specified in the covenant.

    (6) After the definition of new provisional taxpayer, the following is inserted:

    new reporting standard is defined in section DB 27 (Some definitions) for the purposes of section DB 26 (Research or development).

    (7) After the definition of old financial arrangements rules, the following is inserted:

    old reporting standard is defined in section DB 27 (Some definitions) for the purposes of section DB 26 (Research or development).

    (8) The definition of overtime is replaced by the following:

    overtime is defined in section CW 13C(6) (Payments for overtime meals and certain other allowances) for the purposes of that section.

    (9) The definition of timber is replaced by the following:

    timber

    • (a) is defined in section DP 10(4) (Cost of timber) for the purposes of that section:

    • (b) includes standing timber in—

      • (i) section DP 10:

      • (ii) section FB 4 (Income derived from disposal of trading stock together with other assets of business):

      • (iii) section FF 7 (Disposal of timber under relationship agreement):

      • (iv) section GD 1 (Sale or other disposal of trading stock for inadequate consideration):

      • (v) section GD 2 (Distribution of trading stock to shareholders of company):

      • (vi) the definition of dispose, paragraph (b):

      • (vii) the definition of right to take timber:

      • (viii) the definition of trading stock, paragraph (b)(iv).

    (10) Subsections (2), (5), and (9) apply for the 2005–06 and later income years.

163 Lists of defined terms in Income Tax Act 2004
  • The lists of defined terms in the sections of the Income Tax Act 2004 listed in schedule 2 are amended in the way indicated by the schedule.

Part 5
Amendments to other Acts

Amendment to Income Tax Act 1994

164 Credits arising to imputation credit account
  • In section ME 4(1)(a)(ii) of the Income Tax Act 1994, to which section CM 16 applies is omitted.

Amendment to Maori Trustee Amendment Act 2009

165 Taxes and duties
  • In section 29(3) of the Maori Trustee Amendment Act 2009, section 31(1) of the Tax Administration Act 1994 is replaced by section 3(1) of the Tax Administration Act 1994.

Amendments to Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009

166 Section CX 55 replaced
  • In section 63(2)(b)(i) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009, paragraph (b) is replaced by subparagraph (ii).

167 Gifts of money by company

Amendment to Student Loan Scheme Act 1992

168 Commissioner to assess borrower's repayment obligation
  • (1) Section 15(1) of the Student Loan Scheme Act 1992 is replaced by the following:

    • (1) The Commissioner must make an assessment of the amount, if any, of a borrower's repayment obligation for a tax year as soon as practicable after the end of the tax year.

    (2) Subsection (1) applies for the 2009–10 and later income years.


Schedule 1
Consequential amendments to lists of defined terms in Income Tax Act 2007

s 126

RowSectionDefined term omittedDefined term inserted
1BH 1 associated
2CC 9 natural resource
3CD 34foreign-sourced amount 
4CS 2KiwiSaver scheme 
5DB 23portfolio investment-linked life fund 
6DB 34reporting standardnew reporting standard, old reporting standard
7DB 35reporting standardnew reporting standard, old reporting standard
8DP 1 forestry business
9DP 2 forestry business
10DP 3 forestry business
11DP 4 forestry business
12DP 8 forestry business
13DP 9 forestry business
14EH 34 PFSI forestry income
15EH 63 forestry business
16EH 73 forestry business
17EH 78 forestry business
18EX 20B group of persons, market value circumstance, market value interest, voting interest
19EY 30employer sponsored group policyworkplace group policy
20GB 27 imputation credit, pay
21HC 6non-standard income yearreturn of income
22HC 27 amount, assessable income, Commissioner, income, share, share purchase agreement, trustee
23HL 12 Commissioner
24HM 48prescribed investor rate 
25HM 61 quarter
26HM 72 quarter
27IA 2corresponding income year, schedular income, schedular income tax liabilitytrustee
28IA 7 loss balance, ring-fenced tax loss
29IQ 2tax loss 
30IQ 4tax loss 
31IS 1tax lossnet mining loss
32IS 2loss balance, tax lossnet mining loss, tax loss component
33IS 3loss balancenet mining loss
34IT 1 tax loss component
35LP 2 direct voting interest, post-treaty tax rate
36LP 2supplementary dividend holding company 
37LP 2year of payment 
38MB 1 business, depreciation loss
39OA 18 pay
40RE 12 company, income year, portfolio investment entity
41RE 22resident in New Zealand 
42RF 1 amount
43RF 3 amount, dividend, NRWT
44RM 8 attributing interest, corresponding income year, FIF, Inland Revenue Acts, notify, resident passive income.

Schedule 2
Consequential amendments to lists of defined terms in Income Tax Act 2004

s 163

RowSectionDefined term omittedDefined term inserted
1CD 24Bforeign-sourced amount 
2DB 17portfolio investment-linked fund 
3DB 26reporting standardnew reporting standard, old reporting standard
4DB 27reporting standardnew reporting standard, old reporting standard
5DP 1 forestry business
6DP 2 forestry business
7DP 3 forestry business
8DP 3B forestry business
9DP 7 forestry business
10DP 8 forestry business
11EH 65 forestry business
12EH 75 forestry business
13EH 80 forestry business.

Legislative history

21 July 2009Introduction (Bill 55–1)
28 July 2009First reading and referral to Finance and Expenditure Committee
5 November 2009Reported from Finance and Expenditure Committee (Bill 55–2)
19 November 2009Second reading
24 November 2009Committee of the whole House, third reading
7 December 2009Royal assent

This Act is administered by the Inland Revenue Department.