Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017

36 New section RC 7B inserted (AIM method)

(1)

After section RC 7, insert:

RC 7B AIM method
When this section applies

(1)

This section applies to—

(a)

a person who meets the requirements of section RC 5(5B); and

(b)

the calculation of the amount of provisional tax payable for a tax year, other than a transitional year, under the AIM method.

AIM method

(2)

A person must use an AIM-capable accounting system for the calculation of provisional tax payable for a tax year.

Meaning of AIM-capable accounting system

(3)

AIM-capable accounting system means a double-entry accounting system that is an approved AIM provider’s product, and uses a core software package from an approved AIM provider, if the system has the following features:

(a)

a core software accounting package and connected packages that provide the ability to—

(i)

generate and keep comprehensive financial accounts, including accounting income and expenditure, ledger accounts, trial balances, bank account reconciliations, and journals, on an on-demand basis, in accordance with good accounting and tax practice; and

(ii)

calculate tax liabilities for the tax year using tax adjustments for the financial accounts, in accordance with a determination under section 91AAX of the Tax Administration Act 1994 (a section 91AAX determination), and using tax rates under a section 91AAX determination; and

(iii)

for amounts for which there is no tax adjustment under a section 91AAX determination, calculate tax liabilities for the tax year using tax rates under a section 91AAX determination, and using tax adjustments for the financial accounts that result in reasonably accurate assessments of tax liabilities for a person; and

(iv)

recalculate all financial accounts and tax liabilities, if retrospective adjustments are required for the year to date; and

(v)

produce reports and other information as required by the Commissioner, in formats prescribed by the Commissioner; and

(b)

electronic communication facilities for—

(i)

giving information in the form prescribed by the Commissioner; and

(ii)

sending and receiving messages and notifications; and

(c)

help documentation for end-users and their tax agents on the use of the package, with ongoing support provided by the approved AIM provider on the use of the package.

Defined in this Act: AIM-capable accounting system, approved AIM provider, Commissioner, person, provisional tax, tax agent, tax year

(2)

This section applies for the 2018–19 and later income years.