Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Bill

  • enacted

Hon Peter Dunne

Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Bill

Government Bill

100—2

As reported from the Finance and Expenditure Committee

Contents

Commentary

Key

1 Title

2 Commencement

Part 1
Annual rates of income tax

3 Annual rates of income tax for 2010–11 tax year

Part 2
Amendments to Income Tax Act 2007

4 Income Tax Act 2007

4B Amounts derived by mutual associations

5 Disposal of emissions units

5B Distribution excluded from being dividend

6 Section CD 34 repealed

7 New section CD 34B inserted

7B Available subscribed capital (ASC) amount

7C Income for general insurance outstanding claims reserve

8 New section CW 29B inserted

9 Non-resident company involved in exploration and development activities

9B Voluntary activities

9C Benefits provided to employees who are shareholders or investors

9D New section CX 51C inserted

9E Available capital distribution amount

10 Acquisition of emissions units

11 Liabilities for emissions

11B Section DB 61 replaced

11C Film production expenditure

12 Distribution to member of co-operative company, excluded from being dividend

12B Association rebates

12C Deduction for general insurance outstanding claims reserve

12D Apportionment on disposal of business assets that include trading stock

13 Valuation of excepted financial arrangements

13B Valuation of emissions units issued for zero price

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

14B Total deductions in section EE 56

14C Expenditure incurred in acquiring film rights in feature films

14D Expenditure incurred in acquiring film rights in films other than feature films

14E Film production expenditure for New Zealand films having no government screen production payment

14F Film production expenditure for other films having no government screen production payment

15 Determination alternatives

16 Expected value method

17 Modified fair value method

18 Meaning of controlled foreign company

18B Attributable CFC amount

19 Non-attributing active CFC: default test

19B Part-year tax calculations

19C Outstanding claims reserving amount: non-participation policies not annuities

19D Premium smoothing reserving amount: non-participation policies not annuities

19E Unearned premium reserving amount: non-participation policies not annuities

19F Capital guarantee reserving amount: non-participation policies not annuities

19G Transitional adjustments: life risk

19H Expenditure when deduction would be denied to consolidated group

19I Close company remuneration to shareholders, directors, or relatives

20 Disposals of trading stock at below market value

20 Disposals of trading stock at below market value

20B Disposals of timber rights or standing timber

20C New section GC 3B inserted

20D What this subpart does

20E Corporate requirements

20F When requirements no longer met

20G New section HA 11B inserted

20H Treatment of tax losses other than certain foreign losses

20I Attribution when balance dates differ

21 Trustees' obligations

21B Effect of failure to meet eligibility requirements for entities

21C Investor interest size requirement

22 Treatment of portfolio class taxable loss and portfolio class land loss for tax year

22B When entity no longer meets investment or investor requirements

22C Use of tax credits other than foreign tax credits by PIEs

22D Notified investor rates

23 Use of land losses of investor classes

23B When formation losses carried forward are 5% or more of formation investment value: 3-year spread

24 Transitional provisions for PIE rules

24B Restrictions relating to ring-fenced tax losses

24C Common ownership: group of companies

24D Bad debts or decline of value of shares

24E Breach in tax year in which loss balance is grouped

25 Child's income

26 Tax credits for housekeeping

27 Limitation on deductions

27B Tax credits for certain investors in portfolio tax rate entities

27C Tax credits for investors in multi-rate PIEs

27D Tax credits for certain zero-rated portfolio investors

27E Tax credits for zero-rated investors

27F Treatment of tax credits on permanent emigration

28 ICA transfer from tax pooling account

28B ICA refund of income tax

28C ICA refund from tax pooling account

28D ICA transfer within tax pooling account

29 BETA payment of income tax

30 New heading and section OE 11B inserted

Credit if debit balance including debits from conduit relief

Treatment of debits from conduit relief

30B Heading and section OE 16B repealed

30C When credits and debits arise only in consolidated imputation group accounts

30D Consolidated ICA transfer from tax pooling account

30E Consolidated ICA refund from tax pooling account

30F Consolidated ICA transfer to tax pooling account

30G New heading and section OP 104B inserted

Treatment by consolidated BETA groups of BETA debits from conduit relief

30H Heading and section OP 108B repealed

31 Payment dates for terminal tax

31B Interest

31C Payments made by RWT proxies

32 Definitions

33 General rules for currency conversion

33B New section YF 2 added

33C Schedule 1—Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe benefits

33D Schedule 4––Rates of tax for schedular payments

33E Schedule 6—Prescribed rates: PIE investments and retirement scheme contributions

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

Part 3
Amendments to Tax Administration Act 1994

35 Tax Administration Act 1994

36 Interpretation

37 Exemption certificates for schedular payments

38 Special tax rate certificates for schedular payments

38B Use of inconsistent RWT rates

38C Portfolio tax rate entity to give statement to investors and request information

38D Particulars furnished in electronic format

38E General requirements for returns

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

39B Disclosure of interest payments when no requirement to withhold RWT

40 Determinations in relation to financial arrangements

41 Notification of determinations and notices

42 Determinations in relation to apportionment of interest costs

43 Determinations in relation to standard-cost household service

44 Determinations relating to types and diminishing values of listed horticultural plants

45 Publication and revocation of determinations relating to livestock

46 Commissioner may decline to issue special rate or provisional rate

46B Notice of setting of economic rate

47 Applications for determinations

48 Determinations on rates for diminishing value of environmental expenditure

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

49B Determination on insurer as non-attributing active CFC

49C Determination relating to eligible relocation expenses

50 Content and notification of a public ruling

51 Withdrawal of a public ruling

52 Commissioner to make private rulings on request

53 Effect of a private ruling

54 Application of a private ruling

55 Assumptions in making a private ruling

56 Content and notification of a private ruling

57 New section 91EJ inserted

58 Commissioner may make product rulings

59 Effect of a product ruling

60 Application of a product ruling

61 Applying for a product ruling

62 Disclosure requirements

63 Assumptions in making a product ruling

64 Content and notification of a product ruling

65 Withdrawal of a product ruling

66 New section 91FK inserted

67 Application of Part

68 New section 120W inserted

68B Transitional imputation penalty tax payable in some circumstances

69 Unacceptable tax position

70 Definition of promoter

Part 4
Amendments to KiwiSaver Act 2006

71 KiwiSaver Act 2006

72 Interpretation

72B Employees must give information to employers

72C Eligibility to be exempt employer

72D How to apply to be exempt employer

72E How applications to be exempt employer must be dealt with

73 How to opt in

74 Opting in by persons under 18

75 Initial back-dated validation

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

77 PAYE rules apply to deductions

78 Application of other provisions of Superannuation Schemes Act 1989

79 Regulations relating to mortgage diversion facility

80 Schedule 1––KiwiSaver scheme rules

Part 5
Amendments to other Acts and regulations

Goods and Services Tax Act 1985

81 Goods and services tax incurred in making certain supplies of financial services

Estate and Gift Duties Act 1968

82 Exemption for gifts to charities and certain bodies

Income Tax Act 2004

83A Income Tax Act 2004

83AB Foreign investment fund income

83AC Benefits provided to employees who are shareholders or investors

83AD Total deductions in section EE 47

83 Determination alternatives to IFRS

84 Expected value method and equity-free fair value method

85 Meaning of CFC

85B Codes: comparative value method, deemed rate of return method, fair dividend rate method, and cost method

85C Treatment of portfolio class taxable loss and portfolio class land loss for tax year

85D Credit for investor for tax paid by entity if portfolio investor allocated income not excluded income

85E Credit for zero-rated portfolio investor for tax paid by entity in relation to portfolio investor allocated income

86 Definitions

86B Schedule 22A—Identified policy changes

Local Government Act 2002

87 Schedule 9—Council-controlled organisations and transfer of undertakings

Tax Administration (Binding Rulings) Regulations 1999

88 Waiver of fees

89 Fees inclusive of goods and services tax

Schedule 1
Amendments to Income Tax Act 2007, schedule 1

Schedule 2
Amendments to Income Tax Act 2007, schedule 6

Legislative history


The Parliament of New Zealand enacts as follows: