1 Title

2 Commencement

3 Income Tax Act 2007

4 Income tax liability of person with schedular income

5 Withholding liabilities

6 Other obligations

7 Disposal: land used for landfill, if notice of election

8 Section CB 26 replaced

9 New heading and section CB 36 added

10 Transfers of value generally

11 When is a transfer caused by a shareholding relationship?

12 Returns of capital: off-market share cancellations

13 Property made available intra-group

14 Employee benefits

15 Foreign investment fund income

16 New section CD 36B inserted

17 Available subscribed capital (ASC) amount

18 Available capital distribution amount

19 Prevention of double taxation of share cancellation dividends

20 Amounts derived in connection with employment

21 Meaning of expenditure on account of an employee

22 Benefits, pensions, compensation, and government grants

23 New subpart CO inserted

24 Section CP 1 replaced

25 When attributed CFC income arises

26 When FIF income arises

27 Heading to subpart CR replaced

28 Section CR 1 and CR 2 replaced

29 New section CR 4 added

30 Section CV 10 repealed

31 New section CW 3B inserted

32 Section CW 9 replaced

33 Proceeds of share disposal by qualifying foreign equity investor

34 Expenditure on account, and reimbursement, of employees

35 New sections CW 17B and CW 17C inserted

36 Section CW 37 repealed

37 Local and regional promotion bodies

38 Charities: business income

39 New section CW 62B inserted

40 Meaning of fringe benefit

41 Section CX 18 replaced

42 Benefits provided instead of allowances

43 Section CX 28 replaced

44 Section CX 39 repealed

45 Government grants to businesses

46 New heading and section CX 48B inserted

47 New heading and section CX 48C inserted

48 New heading and section CX 51B inserted

49 Proceeds from certain disposals by portfolio investment entities or New Zealand Superannuation Fund

50 Section CX 55 replaced

51 Section CX 56 replaced

52 Section CX 57 replaced

53 Interest: not capital expenditure

54 Interest: most companies need no nexus with income

55 Interest: money borrowed to acquire shares in group companies

56 Cost of revenue account property

57 Property misappropriated by employees or service providers

58 Section DB 53 replaced

59 Section DB 54 replaced

60 Expenditure incurred in deriving exempt dividend

61 New heading and section DB 60 added

62 Heading to subpart DF

63 Government grants to businesses

64 Payments for social rehabilitation

65 New section DF 5 added

66 When attributed CFC loss arises

67 When FIF loss arises

68 Sections DR 1 to DR 3 replaced

69 Film production expenditure

70 Meaning of film reimbursement scheme

71 New section DT 1A inserted

72 Arrangement for petroleum exploration expenditure and sale of property

73 Petroleum development expenditure

74 Disposal of petroleum mining asset to associate

75 Amount written off by holding company

76 Transfer of expenditure to master fund

77 Carry forward of expenditure

78 Investment funds: transfer of expenditure to master funds

79 New section DW 4 added

80 Section DX 2 repealed

81 Meaning of trading stock

82 Low-turnover valuation

83 Valuing closing stock under $5000

84 Valuation of excepted financial arrangements

85 New section ED 1B inserted

86 Economic rate for plant, equipment, or building, with high residual value

87 Annual rate for item acquired in person's 1995–96 or later income year

88 Section EG 3 repealed

89 Expenditure incurred in acquiring film rights in feature films

90 Expenditure incurred in acquiring film rights in films other than feature films

91 Film production expenditure for New Zealand films having no large budget screen production grant

92 Film production expenditure for other films having no large budget screen production grant

93 Section EJ 12 replaced

94 Relinquishing petroleum mining permit

95 New sections EJ 13B and EJ 13C inserted

96 Disposal of petroleum mining asset

97 Sections EJ 19 and EJ 20 replaced

98 What is an excepted financial arrangement?

99 When use of spreading method not required

100 IFRS financial reporting method

101 Determination alternatives

102 Expected value method

103 Modified fair value method

104 Mandatory use of yield to maturity method for some arrangements

105 Straight-line method

106 Consistency of use of straight-line method and market valuation method

107 Change of spreading method

108 When calculation of base price adjustment required

109 Section EW 54 replaced

110 Section EW 56 repealed

111 Thresholds

112 Financial arrangements, income, and expenditure relevant to criteria

113 Section EW 59 replaced

114 Trustee of deceased's estate

115 Meaning of controlled foreign company

116 Associates and 10% threshold

117 Formula for calculating attributed CFC income or loss

118 Taxable distribution from non-complying trust

119 New heading and sections EX 20B to EX 20D inserted

120 Attributable CFC amount

121 Heading repealed

122 Branch equivalent income or loss: calculation rules

123 New heading and sections EX 21B to EX 21E inserted

124 Heading and section EX 22 replaced

125 Section EX 23 repealed

126 Change of CFC's balance date

127 Attributing interests in FIFs

128 Exemption for ASX-listed Australian companies

129 CFC rules exemption

130 Grey list company owning New Zealand venture capital company: 10-year exemption

131 Exemption for employee share purchase scheme of grey list company

132 Limits on choice of calculation methods

133 Section EX 47 replaced

134 Comparative value method

135 Fair dividend rate method: usual method

136 Fair dividend rate method for unit-valuing funds and others by choice

137 Cost method

138 Additional FIF income or loss if CFC owns FIF

139 Codes: comparative value method, deemed rate of return method, fair dividend rate method, and cost method

140 Sections EY 1 to EY 5 replaced

141 Section EY 6 replaced

142 Meaning of life reinsurance

143 Section EY 15 to EY 47 replaced

144 Policyholder income formula: FDR adjustment

145 Policyholder income formula: PILF adjustment

146 Non-resident life insurers with life insurance policies in New Zealand

147 Section EZ 31 repealed

148 Section EZ 32B repealed

149 New headings and sections EZ 53 to EZ 60 added

150 New heading and sections EZ 61 to EZ 63 added

151 Recharacterisation of certain debentures

152 What this subpart does

153 Transfer at market value

154 What this subpart does

155 When this subpart applies

156 Section FE 3 replaced

157 Some definitions

158 Thresholds for application of interest apportionment rules

159 Apportionment of interest by excess debt entity

160 Calculation of debt percentages

161 Financial arrangements entered into with persons outside group

162 Consolidation of debts and assets

163 Total group debt

164 Total group assets

165 Measurement of debts and assets of worldwide group

166 Banking group's New Zealand net equity

167 New Zealand group for excess debt entity that is a company

168 Identifying New Zealand parent

169 Section FE 28 replaced

170 Section FE 29 replaced

171 Ownership interests in companies outside New Zealand group

172 Worldwide group for corporate excess debt entity

173 New sections FE 31B and FE 31C inserted

174 Section FE 32 replaced

175 Subpart FF repealed

176 Consolidation rules

177 Some general rules for treatment of consolidated groups

178 Heading and sections FM 24 to FM 26 repealed

179 Imputation rules

180 Treatment of interest payable under debentures issued before certain date

181 Attribution rule for income from personal services

182 Interpretation of terms used in section GB 27

183 Benefits provided to employee's associates

184 Section GB 39 repealed

185 Arrangements involving money not at risk

186 Defined terms for sections GB 45 and GB 46

187 New section GC 4B inserted

188 Leases for inadequate rent

189 Insufficient amount receivable by person

190 Compensating arrangement: person receiving more than arm's length amount

191 Requests for matching treatment

192 Section GC 12 replaced

193 New section GZ 2 inserted

194 Shareholding requirements

195 New section HA 8B inserted

196 Fully imputed distributions

197 Section HA 16 replaced

198 Credit accounts and dividend statements

199 Calculating qualifying company election tax

200 Corpus of trust

201 Taxable distributions from non-complying and foreign trusts

202 Who is a settlor?

203 Trusts and minor beneficiary rule

204 Limitation on deductions by partners in limited partnerships

205 Eligibility requirements for entities

206 Effect of failure to meet eligibility requirements for entities

207 Investor membership requirement

208 Investor interest size requirement

209 Further eligibility requirements relating to investments

210 Unlisted company choosing to become portfolio listed company

211 Becoming portfolio investment entity

212 Portfolio class taxable income and portfolio class taxable loss for portfolio allocation period

213 Credits received by portfolio tax rate entity or portfolio investor proxy

214 Subpart HL replaced by subpart HM

215 Tax losses

216 Restrictions relating to ring-fenced tax losses

217 Restrictions relating to schedular income

218 Common ownership: group of companies

219 New section IC 13 added

220 Ring-fencing cap on attributed CFC net losses

221 Group companies using attributed CFC net losses

222 Subpart IT replaced

223 Remaining refundable credits: PAYE, RWT, and certain other items

224 Remaining refundable credits: tax credits for families

225 New section LA 8B

226 Use of credits

227 Section LB 1 replaced

228 Tax credits for resident withholding tax

229 Tax credits related to personal service rehabilitation payments: providers

230 Tax credits related to personal service rehabilitation payments: payers

231 Tax credits for housekeeping

232 Subpart LD heading replaced

233 New heading inserted

234 Tax credits for charitable or other public benefit gifts

235 Exclusions

236 New heading and sections LD 4 to LD 7 added

237 Tax credits for imputation credits

238 Use of remaining credits by companies and trustees

239 New section LE 2B inserted

240 Use of remaining credits by others

241 Tax credits for FDP credits

242 Subpart LH–Tax credits for expenditure on research and development

243 Who this subpart applies to

244 Tax credits relating to expenditure on research and development

245 Requirements

246 New sections LH 5B and LH 5C inserted

247 New section LH 14B inserted

248 What this subpart does

249 Tax credits for foreign income tax

250 Repaid foreign tax

251 Tax credits relating to attributed CFC income

252 Calculation of amount of credit

253 New section LK 5B inserted

254 Subpart LL repealed

255 Sections LQ 1 to LQ 4 repealed

256 Subpart LS replaced

257 Adjustments for calculation of family scheme income

258 Tax credits for superannuation contributions

259 Eligibility requirements

260 New sections MK 12B to MK 12D inserted

261 Employees opting out

262 What this subpart does

263 Section ML 2 replaced

264 Memorandum accounts

265 Credits

266 Debits

267 Opening balances of memorandum accounts

268 Shareholder continuity requirements for memorandum accounts

269 Section OA 12 repealed

270 Calculation of maximum permitted ratios

271 General rules for companies with imputation credit accounts

272 New section OB 3B

273 ICA payment of tax

274 ICA resident withholding tax withheld

275 New section OB 9B inserted

276 Section OB 9B replaced

277 Section OB 11 repealed

278 Section OB 17 repealed

279 ICA refund of income tax

280 ICA amount applied to pay other taxes

281 ICA refund from tax pooling account

282 ICA transfer within tax pooling account

283 New section OB 35B

284 ICA refund of tax credit

285 Section OB 47 replaced

286 Table O1: imputation credits

287 Table O2: imputation debits

288 General rules for companies with FDP accounts

289 New section OC 2B

290 When company chooses to stop being FDPA company

291 When company emigrates

292 Section OC 6 repealed

293 Section OC 8 repealed

294 Section OC 9 repealed

295 Section OC 10 repealed

296 FDPA refund of tax credit

297 Section OC 20 replaced

298 Section OC 23 repealed

299 Heading before section OC 30 replaced

300 Payment of further FDP for closing debit balance

301 Payment of further FDP when company no longer New Zealand resident

302 Reduction of further FDP

303 Section OC 33 replaced

304 Section OC 34 replaced

305 Heading and sections OC 35 to OC 39 repealed

306 Table O3: FDP credits

307 Table O4: FDP debits

308 General rules for companies with CTR accounts

309 Section OD 5 repealed

310 Section OD 8 repealed

311 Section OD 11 repealed

312 Section OD 23 repealed

313 Section OD 24 repealed

314 Table O5: conduit tax relief credits

315 Table O6: conduit tax relief debits

316 Branch equivalent tax accounts of companies

317 Section OE 6 repealed

318 BETA payment of income tax

319 Heading and sections OE 12 to OE 16 repealed

320 New heading and section OE 16B inserted

321 Table O7: branch equivalent tax credits

322 Table O8 repealed

323 General rules for companies with ASC accounts

324 Subpart OJ repealed

325 MACA payment of tax

326 MACA refund of income tax

327 MACA payment of other taxes

328 New section OK 14B inserted

329 Table O18: Maori authority debits

330 When credits and debits arise only in consolidated imputation group accounts

331 Consolidated ICA payment of tax

332 Section OP 14 repealed

333 Consolidated ICA resident withholding tax withheld

334 Section OP 20 repealed

335 Section OP 21 repealed

336 Consolidated ICA refund of income tax

337 Consolidated ICA amount applied to pay other taxes

338 New section OP 33B

339 Consolidated ICA refund of tax credit

340 Section OP 38 repealed

341 Section OP 44 replaced

342 Table O19: imputation credits of consolidated imputation groups

343 Table O20: imputation debits of consolidated imputation groups

344 When credits and debits arise only in consolidated FDP group accounts

345 Section OP 56 repealed

346 Section OP 57 repealed

347 Section OP 61 repealed

348 Section OP 62 repealed

349 Consolidated FDPA refund of tax credit

350 Section OP 70 repealed

351 Section OP 74 replaced

352 Table O21: FDP credits of consolidated FDP groups

353 Table O22: FDP debits of consolidated FDP groups

354 When credits and debits arise only in CTR group accounts

355 Sections OP 81 repealed

356 Sections OP 82 repealed

357 Section OP 88 repealed

358 Section OP 95 repealed

359 Table O23: conduit tax relief credits of consolidated groups

360 Table O24: conduit tax relief debits of consolidated groups

361 Section OP 99 repealed

362 Section OP 100 repealed

363 Consolidated BETA payment of income tax

364 Heading and sections OP 105 to OP 108 repealed

365 New heading and section OP 108B inserted

366 Table O25: branch equivalent tax credits of consolidated BETA groups

367 Table O26 repealed

368 Headings and sections OP 109 to OP 116 repealed

369 Tables O27 and O28 repealed

370 ASCA lost excess available subscribed capital

371 Modifying ratios for imputation credits and FDP credits

372 New section OZ 18

373 What this Part does

374 Withholding and payment obligations for passive income

375 When obligations not met

376 Payment dates for interim and other tax payments

377 Application of other provisions for purposes of ESCT rules and NRWT rules

378 Who is required to pay provisional tax?

379 PAYE rules and their application

380 Salary or wages

381 Certain benefits and payments

382 Schedular payments

383 Multiple payments of salary or wages

384 New section RD 13B inserted

385 Schedular payments without notification

386 Schedular payments to non-resident entertainers

387 PAYE income payment forms for amounts of tax paid to Commissioner

388 Calculation of all-inclusive pay

389 Close company option

390 Small business option

391 Persons who have withholding obligations

392 Agents' or trustees' obligations in relation to certain dividends

393 Non-resident passive income

394 Non-cash dividends

395 Dividends paid to companies under control of non-residents

396 Subpart RG repealed

397 Retirement scheme contributors

398 What this subpart does

399 Refunds for overpaid tax

400 Overpayment on income statements

401 Using refund to satisfy tax liability

402 Information required from employers

403 Collection, payment, and information requirements

404 Tax pooling intermediaries

405 New section RP 17B inserted

406 Deposits in tax pooling accounts

407 Transfers from tax pooling accounts

408 Definitions

409 Meaning of income tax varied

410 Treatment of qualifying company election tax, FBT, FDP penalty tax, imputation penalty tax, and withdrawal tax

411 Two companies with common control

412 Two companies with common control: 1988 version provisions

413 Some definitions

414 Table, heading, and sections YB 1 to YB 20 replaced

415 Section YC 1 repealed

416 New section YC 18B inserted

417 Residence of natural persons

418 Classes of income treated as having New Zealand source

419 Apportionment of income derived partly in New Zealand

420 General rules for currency conversion

421 Schedule 1—Basic tax rates: income tax, ESCT, RWT, and attributed fringe benefits

422 Schedule 2—Basic tax rates for PAYE income payments

423 Schedule 13—Depreciable land improvements

424 Schedule 21—Expenditure and activities related to research and development

425 Schedule 24—International tax rules: grey list countries

426 Schedule 27—Countries and types of income with unrecognised tax

427 Schedule 32—Recipients of charitable or other public benefit gifts

428 Schedule 49—Enactments amended

429 Schedule 50—Amendments to Tax Administration Act 1994

430 Schedule 52—Comparative tables of old and rewritten provisions

431 Consequential amendments: associated person and list of defined terms

432 Tax Administration Act 1994

433 Interpretation

434 Construction of certain provisions

435 New Part 2B

436 Information to be furnished on request of Commissioner

437 No requirement to disclose tax advice document

438 Treatment of book or document

439 Claim that book or document is tax advice document

440 Person must disclose tax contextual information from tax advice document

441 Challenge to claim that book or document is tax advice document

442 Keeping of business and other records

443 Records to be kept by employer or PAYE intermediary

444 PAYE tax codes

445 Special tax code certificates

446 Variation of requirements

447 New heading and section 24Q inserted

448 Section 28B replaced

449 Portfolio tax rate entity to give statement to investors and request information

450 Section 31B replaced

451 Applications for RWT exemption certificates

452 Section 32N repealed

453 Returns of income

454 Annual returns of income not required

455 Electronic format of employer monthly schedule and PAYE income payment form

456 Section 36AB replaced

457 Returns to annual balance date

458 Returns by persons with tax credits for housekeeping payments and charitable or other public benefit gifts

459 Return by person claiming rebate on redundancy payment

460 Portfolio tax rate entities and portfolio investor proxies to make returns, file annual reconciliation statement

461 Section 57B replaced

462 Disclosure of trust particulars

463 Disclosure of interest in foreign company or foreign investment fund

464 Section 66 repealed

465 Tax credit relating to KiwiSaver and complying superannuation fund members: member credit form

466 Statements in relation to research and development tax credits: single persons

467 Section 68E replaced

468 Section 78E repealed

469 Section 78F repealed

470 Officers to maintain secrecy

471 Disclosure of information for verification of large budget screen production grant entitlement

472 Disclosure of information in relation to Working for Families tax credits

473 Further secrecy requirements

474 New section 89AB inserted

475 Taxpayers and others with standing may issue notices of proposed adjustment

476 Taxpayer may issue notice of proposed adjustment for taxpayer assessment

477 Completing the disputes process

478 Determination on economic rate

479 Determination on special rates and provisional rates

480 Commissioner may decline to issue special rate or provisional rate

481 Notice of setting of economic rate

482 Applications for determinations

483 Determination on type of interest in FIF and use of fair dividend rate method

484 New heading and section 91AAQ inserted

485 New heading and section 91AAR inserted

486 Section 102 repealed

487 Section 103 repealed

488 Section 103A repealed

489 Section 104 repealed

490 Time bar for amendment of income tax assessment

491 Amended assessments for research and development tax credits

492 Definitions

493 Section 120EA repealed

494 Instalments of and due dates for provisional tax

495 Where provisional tax paid by company does not count as overpaid tax

496 Variation to definition of date interest starts

497 Section 120R repealed

498 Certain rights of objection not conferred

499 Imposition of late payment penalties when financial relief sought

500 Section 140C repealed

501 Section 140CA repealed

502 Tax shortfalls

503 Abusive tax position

504 Evasion or similar act

505 Due dates for payment of imputation penalty tax, FDP penalty tax, and underestimation penalty tax

506 Knowledge offences

507 Evasion or similar offence

508 Taxes that may be recovered

509 Transfer of excess tax within taxpayer's accounts

510 Transfer of excess tax to another taxpayer

511 Instalment arrangements

512 Section 181 repealed

513 Section 183 repealed

514 Remission for reasonable cause

515 Remission on application

516 Payments into, and out of, Listed PAYE Intermediary Bank Account

517 Power to make interim payments of WFF tax credit

518 Goods and Services Tax Act 1985

519 Interpretation

520 Meaning of term supply

521 Time of supply

522 Value of supply of goods and services

523 Zero-rating of goods

524 Zero-rating of services

525 New section 11C inserted

526 Taxable periods

527 Persons making supplies in course of taxable activity to be registered

528 Group of companies

529 KiwiSaver Act 2006

530 Interpretation

531 Section 13 repealed

532 Eligibility to be exempt employer

533 What happens when initial back-dated validation ends, with no confirmed back-dated validation?

534 How and when interest is paid on refunds

535 Refunds of employer contribution by Commissioner if employee opts out

536 General

537 Compulsory employer contribution amount: general rule

538 New sections 101FB and 101FC inserted

539 Rules: providers

540 Crown contribution

541 Regulations relating to mortgage diversion facility

542 Income Tax Act 2004

543 Foreign investment fund income

544 Amounts derived in connection with employment

545 Meaning of expenditure on account of an employee

546 New section CR 3 added

547 Expenditure on account, and reimbursement, of employees

548 New sections CW 13B and CW 13C inserted

549 Benefits provided instead of allowances

550 Gifts of money by company

551 New section DT 1A inserted

552 Arrangement for petroleum exploration expenditure and sale of property

553 Petroleum development expenditure

554 Disposal of petroleum mining asset to associate

555 New section DW 3 added

556 Economic rate for plant, equipment, or building, with high residual value

557 Annual rate for item acquired in parson's 1995–96 or later income year

558 Section EJ 11 replaced

559 Relinquishing petroleum permit

560 New sections EJ 12B and EJ 12C inserted

561 Disposal of petroleum mining asset

562 Sections EJ 17 and EJ 18 replaced

563 IFRS taxpayer method

564 IFRS method

565 Determination alternatives to IFRS

566 Expected value method and equity-free fair value method

567 Change of spreading method

568 When calculation of base price adjustment required

569 Exemptions: direct income interests in FIF in grey list country

570 Use of particular calculation methods required

571 Comparative value method

572 Fair dividend rate method: usual method

573 Fair dividend rate method: method for unit valuers and persons valuing interests daily

574 Cost method

575 Codes: comparative value method, deemed rate of return method, fair dividend rate method, and cost method

576 Measurement of cost

577 Transitional rule for IFRS financial reporting method

578 New sections EZ 51 and EZ 52 added

579 Section GC 14EB repealed

580 Dividends from qualifying company

581 Effect of failure to meet eligibility requirements for entities

582 Investor membership requirement

583 Investor interest size requirement

584 Further eligibility requirements relating to investments

585 Unlisted company may choose to become portfolio listed company

586 Becoming portfolio investment entity

587 Credits received by portfolio tax rate entity or portfolio investor proxy

588 Determination of amount of credit in certain cases

589 Credit of tax for imputation credit

590 Credit of tax for dividend withholding payment credit in hands of shareholder

591 Credits in respect of dividends to non-resident investors

592 Special rules for holding companies

593 Allocation rules for imputation credits

594 Amount of imputation credit to be attached to cash distribution

595 Notional distribution deemed to be dividend

596 Amount of imputation credit to be attached to cash distribution

597 Notional distribution deemed to be dividend or taxable Maori authority distribution

598 Branch equivalent tax account of company

599 Credits and debits arising to branch equivalent tax account of company

600 Debits and credits arising to group branch equivalent tax account

601 Use of consolidated group credit to reduce dividend withholding payment, or use of group or individual debit to satisfy income tax liability

602 Allocation rules for dividend withholding credits

603 Dividend with both imputation credit and dividend withholding payment credit attached

604 Conduit tax relief account

605 Credits arising to conduit tax relief account

606 Debits arising to conduit tax relief account

607 Consolidated group conduit tax relief account

608 Credits arising to group conduit tax relief account

609 Debits arising to group conduit tax relief account

610 Retirement scheme contributors

611 Application of RWT rules

612 Resident withholding tax deductions from dividends deemed to be dividend withholding payment credits

613 Definitions

614 Schedule 16—Depreciable land improvements

615 Income Tax Act 1994 amended

616 Exempt income—Employee allowances and expenditure on account of employee

617 Meaning of “fringe benefit”

618 Special and provisional economic rates

619 Definitions

620 Schedule 16—Depreciable land improvements

621 Special and provisional economic rates

622 Schedule 21–Depreciable land improvements

623 Use of consolidated group credit to reduce dividend withholding payment or use of group or individual debit to satisfy income tax liability

624 Consequential amendments to other Acts: associated person

625 Income Tax (Depreciation Determinations) Regulations 1993

626 Schedule—Non-taxable grants and subsidies