Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012

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

    (2) The definition of bonus issue is replaced by the following:

    bonus issue,—

    • (a) means the issue of shares in a company, or the giving of credit for or forgiveness of an amount unpaid on any share in a company, if the company receives no consideration for the issue, crediting, or forgiveness other than the shareholder choosing not to receive an amount as an alternative to the issue:

    • (b) includes the issue of shares under a profit distribution plan.

    (3) In the definition of capital contribution, paragraph (a)(i), that is not a contract of insurance is omitted.

    (4) In the definition of capital contribution, paragraph (a)(iv), recipient: is replaced by recipient; and and the following is inserted:

    • (v) if the agreement is a contract of insurance, indemnity, or compensation, is paid in relation to an interruption or impairment of business activities:.

    (5) In the definition of deductible foreign equity distribution, paragraph (a) is replaced by the following:

    • (a) for which a deduction is allowed in the calculation of the income tax imposed by a country or territory other than New Zealand on the income of the foreign company or on the income of a company in the same group as the foreign company:.

    (6) In the definition of deductible output tax, in paragraph (a)(iii), of that Act; and is replaced by of that Act: and the following is inserted:

    • (iv) section 21I(1) to (3) of that Act; and.

    (7) In the definition of dividend, paragraph (b) is replaced by the following:

    • (b) in the RWT rules, does not include a dividend of the kind listed in section RE 2(5) (Resident passive income) and modified by section RE 2(6), as applicable:.

    (8) The following are inserted in the appropriate alphabetical order:

    election commencement year, for an interest holder and an elective attributing CFC, or elective attributing FIF, of the interest holder for an accounting period, means the first year for which the election under section EX 73 (Election that CFC not non-attributing active CFC or FIF not non-attributing active FIF) for the accounting period was effective

    elective attributing CFC, for an interest holder and an accounting period, means a CFC for which the interest holder has made an election under section EX 73 (Election that CFC not non-attributing active CFC or FIF not non-attributing active FIF) that is effective for the accounting period

    elective attributing FIF for an interest holder and an accounting period, means a FIF for which the interest holder uses the attributable FIF income method and has made an election under section EX 73 (Election that CFC not non-attributing active CFC or FIF not non-attributing active FIF) that is effective for the accounting period.

    (9) In the definition of employee, paragraph (c)(i), (3) is replaced by (3), (3B).

    (10) In the definition of employer,––

    • (a) in paragraph (b)(iib), to the extent that paragraph (db) of the definition of employee does not apply is omitted:

    • (b) in paragraph (c)(i), (3) is replaced by (3), (3B).

    (11) In the definition of employment income, employment) is replaced by employment), and includes salary or wages or other income to which section RD 3(2) to (4) (PAYE income payments) applies.

    (12) In the definition of FDP rules, paragraph (d) is replaced by the following:

    • (d) YA 2(5) to (7) (Meaning of income tax varied).

    (13) In the definition of fixed-rate share, paragraph (a), share cancellations), GC 8 is replaced by share cancellations), CX 55(4) (Proceeds from disposal of investment shares), GC 8.

    (14) In the definition of flat-owning company, and section HA 6 (Corporate requirements) is replaced by , section HA 6 (Corporate requirements), and the definition of look-through company.

    (15) In the definition of foreign investment variable-rate PIE, (Requirements for is replaced by (Modified rules for.

    (16) In the definition of foreign investment zero-rate PIE, (Requirements for foreign investment variable-rate PIEs) is replaced by (Modified rules for foreign investment zero-rate PIEs).

    (17) The definition of forestry business is replaced by the following:

    forestry business includes forestry activities carried on by a person for the purpose of deriving income in relation to an emissions unit.

    (18) In the definition of fully imputed, paragraph (a), RF 8, and RF 10 is replaced by RF 8, RF 10, and schedule 6, table 1B.

    (19) The following is inserted in the appropriate alphabetical order:

    guarantor is defined in section HB 11(12) (Limitation on deductions by persons with interests in look-through companies) for the purposes of that section.

    (20) The definition of guarantor is replaced by the following:

    guarantor is defined in—

    • (a) section HB 11(12) (Limitation on deductions by persons with interests in look-through companies) for the purposes of that section:

    • (b) section HG 11(12) (Limitation on deductions by partners in limited partnerships) for the purposes of that section.

    (21) The definition of life insurance rules is repealed.

    (22) In the definition of local authority, after paragraph (b)(ix), the following is added:

    • (x) the Auckland Council Independent Maori Statutory Board established by section 81 of the Local Government (Auckland Council) Act 2009.

    (23) In the definition of market value interest, paragraph (a), control and ownership interests is replaced by company ownership.

    (24) In the definition of new start grant, paragraph (b) is replaced by the following:

    • (b) paid by the Government of New Zealand to a person.

    (25) In the definition of non-filing taxpayer, paragraph (a), to whom section 33A(1) of the Tax Administration Act 1994 applies is replaced by who meets the requirements of section 33AA(1) of the Tax Administration Act 1994.

    (26) In the definition of option, control and ownership interests is replaced by company ownership.

    (27) The following is inserted in the appropriate alphabetical order:

    owner's associate is defined in section HB 11(12) (Limitation on deductions by persons with interests in look-through companies) for the purposes of that section.

    (28) In the definition of ownership interest, and section YC 18B (Corporate reorganisations not affecting economic ownership) is replaced by , and in sections YC 18B and YC 19B (which relate to corporate reorganisations).

    (29) In the definition of portfolio investment entity, after paragraph (d), the following is added:

    • (e) a foreign investment PIE that is either a foreign investment zero-rate PIE or a foreign investment variable-rate PIE.

    (30) In the definition of pre-1990 forest land emissions unit, paragraph (b) is replaced by the following:

    • (b) to another person (the appointee), as a person appointed under section 73 of that Act or as a person representing iwi that are claimants under a Treaty of Waitangi settlement, and—

      • (i) transferred by the appointee to the person, as a person (the claimant) who at the time of the transfer to the appointee is a claimant under a Treaty of Waitangi settlement involving the pre-1990 forest land or as an agent for the claimant; and

      • (ii) held continuously by the person, as the agent or the claimant, from the transfer by the appointee:.

    (31) The following is inserted in the appropriate alphabetical order:

    profit distribution plan

    • (a) means a scheme comprising 1 or more steps undertaken by a company by which it—

      • (i) notifies some or all of its shareholders that shares are to be issued on a particular date; and

      • (ii) gives the notified shareholders an option to have some or all of the shares issued to them repurchased by the company:

    • (b) does not include an issue of shares under a share purchase agreement or a share purchase scheme.

    (32) The following is inserted in the appropriate alphabetical order:

    recourse property is defined in section HB 11(12) (Limitation on deductions by persons with interests in look-through companies) for the purposes of that section.

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

    recourse property is defined in—

    • (a) section HB 11(12) (Limitation on deductions by persons with interests in look-through companies) for the purposes of that section:

    • (b) section HG 11(12) (Limitation on deductions by partners in limited partnerships) for the purposes of that section.

    (34) In the definition of relative, in paragraph (a), in the words before the subparagraphs, rule), is replaced by rule) and the definition of look-through company,.

    (35) In the definition of relative, after paragraph (b), the following is inserted:

    • (bb) in the definition of look-through company, means a person connected with another person by any of the means described in paragraph (a)(i) to (iv):.

    (36) In the definition of schedular income, paragraph (h) is repealed.

    (37) In the definition of share purchase agreement, and HC 27(3B) (Who is a settlor?) and section EX 38 (Exemption for employee share purchase scheme of grey list company) is replaced by , EX 38 (Exemption for employee share purchase scheme of grey list company), HC 27B(3B) (Who is a settlor?), and the definition of profit distribution plan.

    (38) In the definition of superannuation scheme, paragraph (a)(iv), Social Security Act 1964 is replaced by New Zealand Superannuation and Retirement Income Act 2001.

    (39) In the definition of taxable bonus issue, the following is added after paragraph (d):

    • (e) a bonus issue that is a share issued under a profit distribution plan.

    (40) In the definition of taxed CFC connection, paragraph (a), countries is replaced by companies.

    (41) In the definition of voting interest, paragraph (a), control and ownership interests is replaced by company ownership.

    (42) Subsections (3) and (4) apply for the 2011–12 and later tax years, except for a tax position that is—

    • (a) inconsistent with subsections (3) and (4); and

    • (b) taken in a tax return filed before the date on which the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Bill is first considered by a committee of the whole House.

    (43) Subsections (7) and (11) apply for the 2008–09 and later income years.

    (44) Subsection (8) applies for income years beginning on or after 1 July 2009.

    (45) Subsections (34) and (35) apply for income years beginning on or after the date on which the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 receives the Royal assent.