Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Bill

Hon Stuart Nash

Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Bill

Government Bill

72—1

Contents

Explanatory note
1Title
2Commencement
3Annual rates of income tax for 2018–19 tax year
4Tax Administration Act 1994
5Section 3 amended (Interpretation)
6Section 4A amended (Construction of certain provisions)
7New subpart heading inserted (Subpart 2A—Commissioner and department)
8New section 5B inserted (Commissioner of Inland Revenue)
5BCommissioner of Inland Revenue
9Sections 6, 6A, and 6B replaced
6Responsibility of Ministers and officials to protect integrity of tax system
6ACommissioner’s duty of care and management
6BDirections to Commissioner
6CPower to remedy legislative anomalies
6DRestrictions on modifications
6EConsultation on modifications
6FRequirements for modifications
6GStatus and publication of modifications
6HApplication of modifications
10New subpart heading inserted (Subpart 2C—Functions and powers of Commissioner)
11New subpart heading inserted (Subpart 2D—Modes of communication)
12Section 15 amended (Annual report)
13Section 15B amended (Taxpayer’s tax obligations)
14Part heading and sections 15C to 15Z renumbered
15New subpart 3A inserted (Collection, use, and disclosure of revenue information)
16Purposes of subpart
16BPrinciples on which subpart based
16CKey terms
17Commissioner may obtain information by accessing property or documents
17BCommissioner may require information or production of documents
17CCommissioner’s powers in relation to documents
17DWarrants
17EInformation or documents treated as in persons’ knowledge, possession, or control
17FCommissioner may require information about offshore payments
17GCommissioner may require information from large multinational groups (BEPS)
17HCourt may make order for provision of information
17ICommissioner may conduct inquiries
17JCommissioner may apply for District Court Judge to conduct inquiries
17KQuestions and statements made in inquiries
17LRegulations providing for regular collection of bulk data
17MUse of information
18Confidentiality of sensitive revenue information
18BRequirements for revenue officers and other persons
18CPermitted disclosures
18DDisclosures made in carrying into effect revenue laws
18EDisclosures made under information-sharing arrangements
18FRegulations for information-sharing for public services purposes
18GDisclosures to persons and their representatives
18HDisclosures to other agencies for certain specified purposes
18IDisclosures for international purposes
18JDisclosures for risk of harm purposes
16New subpart heading inserted (Subpart 3AB—Tax advice documents)
17Subpart heading amended (Subpart 3AC—Taxpayers’ obligations to keep records)
18Section 21 repealed (Information requisitions in relation to offshore payments)
19Section 21BA repealed (Information required to be provided by large multinational group)
20Section 22 amended (Keeping of business and other records)
21New subpart inserted (Subpart 3B—Reporting of income information by individuals)
22COutline of subpart
22DKey terms
22EInformation included in pre-populated accounts
22FInformation requirements
22GConfirming accounts
22HAmending accounts for incorrect information
22IReturns and assessments
22JNo obligation to provide information: de minimis and certain other amounts
22KInformation particulars
22LSetting electronic and non-electronic requirements
22Section 23 amended (Keeping of returns where information transmitted electronically)
23Subparts 3C and 3D amended
24Section 23C amended (Meaning of employment income information)
25Section 23D amended (Employers’ groups for delivery of information)
26Section 24B amended (PAYE tax codes)
27Section 24D amended (Tax codes provided by the Commissioner)
28New section 24DB inserted (Use of unsuitable tax codes)
24DBUse of unsuitable tax codes
29Section 24Q amended (Transfer of payroll donations by employers)
30Section 25A replaced (Use of inconsistent RWT rates)
25AUse of unsuitable RWT rates
31Subpart 3E amended (Subpart 3E—Investment income information)
32Section 31C amended (Notification requirements for multi-rate PIEs)
33Section 32E amended (Applications for RWT exemption certificates)
34Section 33 amended (Returns of income)
35Sections 33AA, 33C, and 33D repealed
36Section 34B repealed (Commissioner to list tax agents)
37Section 36BB amended (Electronic format for details required for tax pooling intermediaries)
38Section 36BD amended (Electronic filing requirements for registered persons)
39Section 37 amended (Dates by which annual returns to be furnished)
40Section 38 amended (Returns to annual balance date)
41Section 41 amended (Annual returns by persons who receive family assistance credit)
42Section 41A amended (Returns by persons with tax credits for charitable or other public benefit gifts)
43Section 42C amended (Income tax returns by undischarged bankrupt)
44Section 43 amended (Income tax returns and assessments by executors or administrators)
45Section 47 amended (ESCT statements provided by employers and others)
46Section 55B amended (Information relating to offshore persons and tax file numbers)
47Part 3A repealed (Part 3A—Income statements)
48Section 80KM amended (Summary of instalments paid)
49Heading and sections 81 to 88 repealed
50Section 89 amended (Commissioner to notify Minister where funds of gift-exempt body applied for non-charitable purpose, etc)
51Section 89C amended (Notices of proposed adjustment required to be issued by Commissioner)
52Section 89D amended (Taxpayers and others with standing may issue notices of proposed adjustment)
53New heading and new section 91AAZB inserted
91AAZBDetermination on Commissioner’s approach to interpretation of certain provisions or application of administrative practices
54Section 91C amended (Taxation laws in respect of which binding rulings may be made)
55New sections 91CB and 91CC inserted
91CBBinding rulings on certain matters
91CCBinding rulings on certain determination matters
56Section 91E amended (Commissioner to make private rulings on application)
57Section 91EA amended (Effect of a private ruling)
58Section 91EB amended (Application of a private ruling)
59Section 91EF amended (Assumptions in making a private ruling)
60Section 91EH amended (Content and notification of a private ruling)
61New heading and new sections 91EK to 91ET inserted
91EKCommissioner may make short-process rulings
91ELApplying for short-process ruling
91EMEffect of short-process ruling
91ENApplication of short-process ruling
91EODisclosure requirements
91EPCommissioner may request further information
91EQConditions on which short-process ruling based
91ERRight to consultation
91ESContent and notification of short-process ruling
91ETTreatment of information
62Section 91F amended (Commissioner may make product rulings)
63Section 91FB amended (Application of a product ruling)
64Section 91FC amended (Applying for a product ruling)
65Section 91FF amended (Assumptions in making a product ruling)
66Section 91FH amended (Content and notification of a product ruling)
67Section 91GB amended (Commissioner to make status rulings on application)
68Section 92 amended (Taxpayer assessment of income tax)
69Section 106 amended (Assessment where default made in furnishing returns)
70Section 108 amended (Time bar for amendment of income tax assessment)
71Section 110 amended (Evidence of returns and assessments)
72Section 111 amended (Commissioner to give notice of assessment to taxpayer)
73Section 113A replaced (Correction of minor errors in subsequent returns)
113ACorrection of certain errors in subsequent returns
74Section 120C amended (Definitions)
75Section 120F amended (Interest priority and rights of Commissioner)
76Section 120KB amended (Provisional tax instalments and due dates generally)
77New section 120VD inserted (Interest on tax credits for charitable or other public benefit gifts)
120VDInterest on tax credits for charitable or other public benefit gifts
78Section 124A renumbered (Application of Part 8)
79New Part 7B inserted (Part 7B—Third-party providers)
124BWhat this Part does
124CTax agents
124DRepresentatives
124EInformation requirements for tax agents and representatives
124FNominated persons
124GRefusal, removal, or disallowance of status of tax agents, representatives, and nominated persons
80Section 124H amended (PAYE intermediaries and listed PAYE intermediaries)
81Sections 124L, 124M, and 124N repealed
82Section 124O amended (Employers’ arrangements with PAYE intermediaries)
83Section 124R repealed (Subsidy claim forms)
84Section 125 amended (Certain rights of objection not conferred)
85Section 135 amended (Powers of Taxation Review Authority on determination of objection or case stated)
86Section 136 amended (When objection may be referred directly to High Court)
87Section 138A amended (Application of this Part)
88Section 138E amended (Certain rights of challenge not conferred)
89Section 139A amended (Late filing penalty for certain returns)
90Section 141B amended (Unacceptable tax position)
91Section 141B amended (Unacceptable tax position)
92Section 141JA amended (Application of Part 9 to non-filing taxpayers)
93Section 143 amended (Absolute liability offences)
94Section 143A amended (Knowledge offences)
95Section 143C amended (Offence for failure of officers of department to maintain secrecy)
96Sections 143D and 143E replaced
143DOffences related to disclosure of certain information by persons other than revenue officers
143EOffences related to disclosure of certain information to employees
143EBOffences related to disclosure of certain information by employers and directors
97Section 174AA amended (Power of Commissioner in respect of small amounts of refunds or tax payable)
98Section 184A amended (Refund of tax paid in excess made by direct credit to bank account)
99New section 227F inserted (Transitional provisions related to information disclosures)
227FTransitional provisions related to information disclosures
100Schedule 4 amended (Reporting of employment income information)
101Schedule 5 amended (Certain tax codes and rates)
102New schedules inserted
103Consequential amendments
104Income Tax Act 2007
105Section CB 9 amended (Disposal within 10 years: land dealing business)
106Section CB 10 amended (Disposal within 10 years: land development or subdivision business)
107Section CB 11 amended (Disposal within 10 years of improvement: building business)
108Section CB 15 amended (Transactions between associated persons)
109New heading and new section CB 15D inserted
CB 15DHousing New Zealand Corporation and wholly-owned group
110Section CB 16A amended (Main home exclusion for disposal within 5 years)
111Section CB 16 amended (Residential exclusion from sections CB 6 to CB 11)
112Section CB 17 amended (Residential exclusion from sections CB 12 and CB 13)
113Section CB 18 amended (Residential exclusion from section CB 14)
114Section CB 27 amended (Income equalisation schemes)
115Section CB 28 amended (Environmental restoration accounts)
116Section CD 3 amended (Meaning of dividend)
117Section CD 5 amended (What is a transfer of value)
118Section CD 6 amended (When is a transfer caused by a shareholding relationship?)
119Section CE 1 amended (Amounts derived in connection with employment)
120Section CV 1 amended (Group companies)
121Section CV 2 amended (Consolidated groups: income of company in group)
122Section CW 9 amended (Dividend derived from foreign company)
123Section CW 19 amended (Amounts derived during short-term visits)
124New section CW 38B inserted (Public purpose Crown-controlled companies)
CW 38BPublic purpose Crown-controlled companies
125Section CW 42 amended (Charities: business income)
126Section CX 10 amended (Employment-related loans)
127Section CX 27 amended (Assistance with tax returns)
128Section CX 51 amended (Income equalisation schemes)
129Section DB 41 amended (Charitable or other public benefit gifts by company)
130Section DB 46 amended (Avoiding, remedying, or mitigating effects of discharge of contaminant)
131Section DQ 2 repealed (Adverse event income equalisation scheme)
132Section DV 12 amended (Maori authorities: donations)
133Section DV 19 amended (Association rebates)
134Section EE 47 amended (Events for purposes of section EE 44)
135Section EH 1 amended (Income equalisation schemes)
136Section EH 4 amended (Main deposit)
137Section EH 35 amended (Meaning of main maximum deposit)
138Headings and sections EH 37 to EH 62 repealed
139Section EK 2 amended (Persons who may make payment to environmental restoration account)
140Section EK 11 amended (Application for refund)
141Section EK 12 amended (Refund if application or excess balance)
142Section EK 20 amended (Environmental restoration account of consolidated group company)
143Section EK 23 amended (Other definitions)
144Section EW 6 amended (Relationship between financial arrangements and excepted financial arrangements)
145Section EW 14 amended (What spreading methods do)
146Section EW 15E amended (Determination alternatives)
147Section EW 15I amended (Mandatory use of yield to maturity method for some arrangements)
148Section EW 32 amended (Consideration for agreement for sale and purchase (ASAP) of property or services, hire purchase agreement, specified option, or finance lease)
149New section EW 33D inserted (Foreign ASAPs: contingencies)
EW 33DForeign ASAPs: contingencies
150Section EW 46C amended (Consideration when debt forgiven within economic group)
151Section EX 56 amended (Cost method)
152New heading and new section EZ 80 inserted
EZ 80Transfers of deposits when adverse event income equalisation accounts abolished
153Section FC 2 amended (Transfer at market value)
154Section FM 9 amended (Amounts that are company’s income)
155Section FM 15 amended (Amortising property and revenue account property)
156Section FM 40 amended (Losing eligibility to be part of consolidated group)
157New heading and new section GB 54 inserted
GB 54Arrangements involving tax credits for charitable or other public benefit gifts
158Section HC 10 amended (Complying trusts)
159Section HC 15 amended (Taxable distributions from non-complying and foreign trusts)
160Section HC 16 amended (Ordering rule for distributions from non-complying and foreign trusts)
161Section HC 27 amended (Who is a settlor?)
162Section HC 30 amended (Treatment of foreign trusts when settlor becomes resident)
163Section HC 36 amended (Trusts and minor beneficiary rule)
164Section HC 37 amended (Testamentary trusts and minor beneficiary rule)
165Section HE 3 amended (Association rebates)
166Section HM 2 amended (What is a portfolio investment entity?)
167Section HM 28 replaced (When listed PIE no longer meets crediting requirement)
HM 28When listed PIE no longer meets requirements
168Section HR 8 inserted (Transitional residents)
169Cross-heading amended (Financial institution special purposes vehicles)
170Section HR 9 replaced (Financial institution special purpose vehicles are transparent)
HR 9Debt funding special purpose vehicles are transparent if election made under section HR 9BA
171New section HR 9BA inserted (Elections to treat debt funding special purpose vehicles as transparent)
HR 9BAElections to treat debt funding special purpose vehicles as transparent
172Section HR 9B replaced (Bankruptcy-remote property during application of section HR 9)
HR 9BBankruptcy-remote property during application of section HR 9
173Section HR 10 replaced (What happens when vehicle stops being financial institution special purpose vehicle?)
HR 10What happens when vehicle stops being transparent debt funding special purpose vehicle?
174Section HR 12 amended (Non-exempt charities: treatment of tax-exempt accumulations)
175Section LD 1 amended (Tax credits for charitable or other public benefit gifts)
176Section LD 3 amended (Meaning of charitable or other public benefit gift)
177Section LD 4 amended (Tax credits for payroll donations)
178Section MC 6 amended (When person does not qualify)
179Section MD 3 amended (Calculation of family tax credit)
180Section MD 11 amended (Entitlement to parental tax credit)
181Section MD 11 amended (Entitlement to parental tax credit)
182Section MD 11 amended (Entitlement to parental tax credit)
183Section MD 13 amended (Calculation of family credit abatement)
184Section MF 7 amended (Orders in Council)
185Section MZ 3 amended (Exclusions from determination of family scheme income)
186Section OP 22 amended (Consolidated ICA group company’s credit)
187Section RA 13 amended (Payment dates for terminal tax)
188Section RB 3 amended (Schedular income tax liability for filing taxpayers for non-resident passive income)
189Section RC 3 amended (Who is required to pay provisional tax?)
190Section RC 5 amended (Methods for calculating provisional tax liability)
191Section RC 9 amended (Provisional tax payable in instalments)
192Section RC 10B amended (Calculating amount of instalment for periods using AIM method)
193Section RD 2 amended (PAYE rules and their application)
194Section RD 3 amended (PAYE income payments)
195Section RD 5 amended (Salary or wages)
196Section RD 7 amended (Extra pay)
197Section RD 8 amended (Schedular payments)
198New section RD 8B inserted (Treatment of PAYE-related overpayments)
RD 8BTreatment of PAYE-related overpayments
199Section RD 17 amended ( Payment of extra pay with other PAYE income payments)
200Section RD 22 amended (Providing employment income information to Commissioner)
201Section RD 35 amended (Employment-related loans: value using market interest rates)
202Section RD 64 amended (ESCT rules and their application)
203Section RE 1 amended (RWT rules and their application)
204Section RF 2B amended (Non-residential financial arrangement income: outline and concepts)
205Section RF 2C amended (Meaning of non-residential financial arrangement income)
206Section RM 5 repealed (Overpayments on income statements)
207Section RM 16 amended (Treatment of amounts not refunded)
208Section RM 22 amended (Limits on refunds for Maori authorities)
209Section RM 25 amended (Treatment of amounts not refunded)
210Section RM 31 amended (Treatment of amounts not refunded)
211Section RP 14 amended (Collection, payment, and information requirements)
212Section RZ 14 amended (Listed PAYE intermediaries: transitional provision)
213Section YA 1 amended (Definitions)
214Section YC 12 amended (Public unit trusts)
215Schedule 19 amended (Expenditure in avoiding, remedying, or mitigating detrimental effects of discharge of contaminant)
216Schedule 28 amended (Requirements for complying fund rules)
217Schedule 29 amended (Portfolio investment entities: listed investors)
218Schedule 32 amended (Recipients of charitable or other public benefit gifts)
219New schedule 35 inserted (Public purpose Crown-controlled companies)
220Consequential amendments
221Goods and Services Tax Act 1985
222Section 2 amended (Interpretation)
223Section 2A amended (Meaning of associated persons)
224Section 6 amended (Meaning of term taxable activity)
225Section 10 amended (Value of supply of goods and services)
226Section 21 amended (Adjustments for apportioned supplies)
227Section 53 amended (Registered person to notify change of status)
228Section 55 amended (Group of companies)
229KiwiSaver Act 2006
230Section 4 amended (Interpretation)
231Section 33 amended (Certain persons may opt in)
232Section 59A amended (When this subpart applies)
233Section 59B amended (Initial back-dated validation)
234Section 64 amended (Contribution rate)
235Section 104 amended (Granting of contributions holiday)
236Schedule 1 amended (KiwiSaver scheme rules)
4Withdrawal age
237Amendments to KiwiSaver Act 2006 related to nomenclature changes
238Child Support Act 1991
239Section 35 amended (Adjusted taxable income)
240Section 81 amended (Notification requirement of parents)
241Section 163 amended (Payment of deductions to Commissioner)
242Consequential amendments
243Student Loan Scheme Act 2011
244Section 34 amended (Repayment codes for New Zealand-based borrowers who derive salary or wages)
245Section 35 amended (Borrowers with “SL” repayment code must notify employers)
246Section 36 amended (Employer or PAYE intermediary must make standard deductions from salary or wages)
247Section 57 amended (Consequences of exemption from standard deductions)
248Section 60 amended (When exemption from standard deductions ceases to apply)
249Schedule 2 amended (Application of PAYE rules for purposes of section 70)
250Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018
251Section 158 amended
252Sections 186, 215, 263, 265, 266, 268, 271, and 283 repealed
253Section 240 amended
254Section 243 amended
255Section 261 amended
256Section 267 amended
257Section 285 amended
258Schedule 2 amended
259Families Package (Income Tax and Benefits) Act 2017
260Section 2 amended (Commencement)
261Sections 48 to 51 and 57 repealed
262Income Tax Act 2004
263Section KD 2AB amended (Parental tax credit)
264Section KD 2AB amended (Parental tax credit)
265Schedule 4 amended (Deductions on account of earner levies)
266Section 135 amended (Meaning of restricted information)
267Section 5 amended (Interpretation)
268Section 4 amended (Interpretation)
269Section KD 2AB amended (Parental tax credit)
270Section 12 amended (Officers to maintain secrecy)
271Regulation 36 amended (Reports of decisions)
272Tax Administration (Binding Rulings) Regulations 1999
273Regulation 2 amended (Interpretation)
274Regulation 3 amended (Fees)
275Regulation 5 amended (Indication of time for issue of ruling in certain cases)
276Regulation 6 amended (Waiver of fees)

The Parliament of New Zealand enacts as follows: