Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Bill

Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Bill

Government Bill

273—1

Explanatory note

General policy statement

This taxation omnibus Bill introduces amendments to the following legislation:

  • Income Tax Act 2007;

  • Tax Administration Act 1994;

  • Goods and Services Tax Act 1985;

  • Student Loan Scheme Act 2011;

  • KiwiSaver Act 2006;

  • Companies Act 1993;

  • Land Transfer Act 2017;

  • Social Security Act 2018;

  • Accident Compensation Act 2001;

  • Taxation (Disclosure of Information to Approved Credit Reporting Agencies) Regulations 2017; and

  • Public and Community Housing Management (Prescribed Elements of Calculation Mechanism) Regulations 2018.

Broadly, the policy proposals in this Bill fall into 3 categories. The first category sets the annual rates of income tax for the 2020–21 tax year.

The second category comprises proposals aimed at improving current tax settings within a broad-base, low-rate framework. This framework helps ensure that taxes are fair and efficient, and that they impede economic growth as little as possible. It also helps keep compliance costs low and minimises opportunities for avoidance and evasion. The framework underpins the Government’s Revenue Strategy and helps maintain confidence that the tax system is fair, which is crucial to encouraging voluntary compliance. Proposals in this category include amendments to the income tax treatment of feasibility expenditure and land.

Although New Zealand has relatively strong tax settings, it is important to maintain the tax system and ensure that it continues to be fit for purpose. Changes in the economic environment, business practice, or interpretation of the law can mean that the tax system becomes unfair, inefficient, complex, or uncertain. The tax system needs to be responsive to accommodate these concerns.

The third category relates to proposals aimed at modernising and improving the settings for tax administration, the goods and services tax regime, KiwiSaver and social policy rules administered by Inland Revenue. As well, the third category contains remedial amendments to the Companies Act 1993 and the Taxation (Disclosure of Information to Approved Credit Reporting Agencies) Regulations 2017.

The main policy measures within this Bill have been developed in accordance with the Generic Tax Policy Process (GTPP). It is a very open and interactive engagement process between the public and private sectors, which helps ensure that tax and social policy changes are well thought through. This process is designed to ensure better, more effective policy development through early consideration of all aspects, and likely impacts, of proposals, and increased opportunities for public consultation.

The GTPP means that major tax initiatives are subject to public scrutiny at all stages of their development. As a result, Inland Revenue and Treasury officials have the opportunity to develop more practical options for reform by drawing on information provided by the private sector and the people who will be affected. Further information on the GTTP can be found at http://taxpolicy.ird.govt.nz/how-we-develop-tax-policy.

The following is a brief summary of the specific policy measures contained in this Bill. A comprehensive explanation of all the policy items is provided in a commentary on the Bill that is available at https://taxpolicy.ird.govt.nz/publications/2020-bill-commentary-arferm-bill/overview.

Setting the annual rates of income tax for the 2020–21 tax year

The Income Tax Act 2007 requires the rates of income tax to be set each year by an annual taxing Act. The Bill proposes that the annual rates of income tax for the 2020–21 tax year be set at the rates currently specified in schedule 1, part A of the Income Tax Act 2007 (that is, the rates remain unchanged).

Feasibility and other expenditure

The Bill proposes amendments to clarify when taxpayers are able to deduct expenditure incurred in considering the feasibility of making investments in assets or new business models. The change is the first of a number of tax measures the Government is implementing to support its Economic Strategy.

The Bill allows taxpayers to deduct, in equal proportion over a 5-year period, expenditure incurred in completing, creating, or acquiring property if that property is abandoned prior to completion and would have been depreciable property if it had been completed.

The rule also applies to feasibility expenditure incurred by taxpayers in creating, completing, or acquiring property that would typically be taxable if sold, such as revenue account property like trading stock.

Deductions start in the year in which the taxpayer abandons further work on the property.

A condition of deductibility is that the taxpayer is not able to deduct the expenditure under another rule in the Income Tax Act 2007.

The rule overrides the capital limitation rule, which prohibits tax deductions for expenditure on assets that have an enduring role in the taxpayer’s business.

The changes to the tax treatment of feasibility expenditure respond to private sector concerns following the decision in Trustpower Ltd v Commissioner of Inland Revenue [2016] NZSC 91, which potentially limited deductibility of expenditure incurred on assets that are subsequently abandoned. The proposed amendments are directed at ensuring tax is not a barrier for businesses seeking to invest in new assets.

Immediate deduction for feasibility expenditure

The amendments also provide, as a compliance cost savings measure for small-to-medium-sized enterprises, an immediate deduction for feasibility expenditure incurred in creating, completing, or acquiring depreciable property or revenue account property if the total of such expenditure for the income year is $10,000 or less. The deduction applies if the taxpayer is unable to deduct the expenditure elsewhere under the Act.

Integrity measure for certain property

As an integrity measure, amounts deducted for property that is later completed, created, or replaced are treated as income in the year in which the property is completed or created, or a similar asset is acquired. The amount to be returned as income equals the direct costs for that asset. The requirement to return as income amounts previously deducted does not apply to expenditure that has been immediately deducted under the $10,000 de minimis rule.

The amendments apply to qualifying expenditure incurred in the 2020–21 and later income years.

Changes to the land rules

The Bill contains proposals arising out of the first tranche of the Government’s review of the current land rules. The objective of this review is to improve the efficient use of land, and ensure that the current tax settings are fair, balanced, and support productive investment.

Habitual buying and selling of property

The Bill proposes amendments that will tighten the current rules that relate to habitual buying and selling of homes and business premises. There are concerns that the current regular pattern restrictions allow taxpayers who habitually buy and sell land to structure around existing rules. The amendments will ensure that taxpayers cannot structure around the rules by using different people or entities to carry out separate transactions, or by varying what is done to the land in each transaction so that there is no “pattern”. The proposed amendments demonstrate the Government’s commitment that the land rules capture speculators.

Deductibility of revenue account property

The Bill also proposes an amendment to clarify that the cost of revenue account property (i.e. the cost of acquisition and capital improvements) is deductible, even where it was not known at the time that the costs were incurred that the property would be subject to tax on sale, or where the property was used privately while it was held.

Changes to the Land Transfer Tax Statements

People buying and selling property are currently required to complete up to 3 forms:

  • the Land Transfer Tax Statement (LTTS);

  • the Residential Land Statement; and

  • the Residential Land Withholding Tax Declaration.

The content of the LTTS is largely prescribed within the Land Transfer Act 2017 and changes must be made by legislative amendment. Conversely, the requirements for both the Residential Land Statement and the Residential Land Withholding Tax Declaration forms may be altered without legislative amendment to primary legislation.

This Bill provides that the content of the LTTS be moved from the Land Transfer Act 2017 to regulations. This will bring the requirements for the LTTS into alignment with other information requirements in the Land Transfer Act 2017. The transitional provisions ensure the current requirements will remain in place until such time as regulations are made.

Income tax treatment of leases subject to NZ IFRS 16

New Zealand Equivalent to International Financial Reporting Standard 16 Leases (NZ IFRS 16) sets out the accounting treatment of leases by entities with IFRS reporting obligations for income years starting on or after 1 January 2019.

The Bill proposes to allow taxpayers who apply NZ IFRS 16 to more closely align their tax treatment with their accounting treatment for certain operating leases. As NZ IFRS 16 typically slightly accelerates expenditure compared with the previous treatment, the Bill proposes certain exclusions and adjustments (rather than complete alignment) to ensure that taxpayers choosing this proposed method do not obtain a significant tax timing advantage over taxpayers who continue to use the existing rules.

The amendments apply from income years starting on or after 1 January 2019 to align with the commencement date of NZ IFRS 16.

Purchase price allocation

The Bill proposes amendments to the rules governing how parties to the sale of 2 or more assets with different tax treatments (a “mixed supply”) allocate the total sale/purchase price between the various assets, for tax purposes. The objective of the amendments is to prevent an overall revenue loss when sellers and buyers adopt different price allocations that minimise their own tax liabilities.

Specifically, the Bill includes the following requirements:

  • If the parties agree an allocation, they must follow it in their tax returns.

  • If the parties cannot agree an allocation, the seller determines the allocation, and notifies both the buyer and Inland Revenue within 2 months of the change in ownership of the assets. However, the seller must allocate amounts to taxable property (depreciable property, revenue account property, financial arrangements) such that there is no further loss on the sale of that property.

  • If the seller does not make an allocation within the 2-month timeframe, the buyer must determine the allocation, and notify both the seller and Inland Revenue of it.

  • Inland Revenue may challenge an allocation if it believes it does not reflect market values.

  • The purchase price allocation rules will not apply to a transaction if the total purchase price is less than $1 million, or the buyer’s total allocation to taxable property is less than $100,000.

The amendments will apply to sales agreements entered into on or after 1 April 2021.

Research and development tax credits: capital expenditure eligibility

The Bill proposes to insert an intention test into the criteria that determine when capital account expenditure incurred to create depreciable tangible property is eligible for the research and development (R&D) tax credit. The test is aimed at excluding such expenditure where a claimant intends to use the property for a non-R&D purpose. This test will require claimants to assess not just how the asset is being used in the year a tax credit claim is made, but also how they intend to use the asset over its life.

The amendment also adds a requirement that, to be eligible, expenditure to create depreciable property must be on a core R&D activity. This requirement is aimed at preventing a claimant from circumventing the usual rules requiring assets used in R&D to be depreciated over time. For example, this requirement would prevent a person from claiming the up-front cost of constructing a machine in-house, where the machine does not involve any new technology and could be purchased elsewhere.

The proposed amendments mean that expenditure that contributes to the cost of depreciable tangible property will be eligible only if the asset is created as a result of a core R&D activity and only if the property is used, and is intended to be used, solely for R&D for the lifetime of the asset.

Granting overseas donee status to additional charities

The Bill proposes to amend the Income Tax Act 2007 by adding 3 charities to the list of donee organisations in schedule 32. New Zealand charities that support activities overseas must be listed in schedule 32 for their donors to be eligible for tax benefits (in particular, the donation tax credit). The proposed new additions to schedule 32 are Active Hearts Foundation, Kiwilink, and Shimshal Trust.

Mycoplasma bovis

The Bill proposes to allow dairy and beef cattle farmers that have derived unexpected taxable income as a result of their herd being culled (in pursuit of eradicating Mycoplasma bovis from New Zealand), to evenly spread that income forward over 6 years. This will allow the taxable income to better match the replacement cost of the farmer’s cattle herd.

This amendment supports a core principle of the Biosecurity Act 1993, that no person should be better or worse off because of the Crown’s use of its powers under that Act to eradicate an organism.

The Bill proposes that the amendment will apply retrospectively from the 2017–18 income year as the first culls began in late 2017. Standard tax rules would continue to apply to the farmers’ other income. It is anticipated that up to 50 farmers could be impacted by this proposal.

GST on outbound mobile roaming services

The Goods and Services Tax Act 1985 contains special rules for supplies of telecommunications services. Under these special rules, outbound mobile roaming services received by a New Zealand resident travelling overseas are zero-rated (subject to GST at the rate of 0%) or not subject to GST. Conversely, inbound mobile roaming services received by someone travelling in New Zealand may be standard-rated (subject to GST at the rate of 15%) but are generally not subject to GST.

The Bill proposes amendments to standard-rate outbound mobile roaming services received by New Zealanders overseas, and make inbound mobile roaming services received by non-residents in New Zealand either zero-rated or not subject to GST. The proposed amendment applies from 1 April 2021.

GST credit notes

The Bill proposes 2 amendments to ensure that a supplier that issues a GST credit note to correct a mistake in a previous GST return receives similar outcomes to a supplier that applies to the Commissioner to amend the assessment for the original GST return.

The first proposed amendment will allow a supplier to issue a credit note to provide the correct amount of GST adjustment in cases where they have incorrectly charged 15% GST on a supply of goods or services which was, in fact, a zero-rated supply (such as an export) or an exempt supply (such as a financial service). In order to align with existing commercial practices, the proposed amendment would apply retrospectively from 1 April 2012.

The second proposed amendment applies time limits for issuing a credit note for a supply made in an earlier period. The proposed time limits for issuing a credit note will align with the “time bar” that applies to GST refunds which are made through amendments to GST assessments. The proposed amendment would apply from the date that the Bill is introduced.

Portability of Australian unclaimed superannuation money

The Bill would extend the definition of “Australian complying superannuation scheme” in the KiwiSaver Act 2006 and Income Tax Act 2007 to include the Australian Commissioner of Tax in their capacity as the holder of unclaimed superannuation money. This would mean unclaimed superannuation money transferred from the Australian Taxation Office (ATO) to a KiwiSaver scheme would be covered by the existing rules applying to retirement savings transferred from an Australian superannuation scheme to a KiwiSaver scheme.

To enable the transfer of unclaimed superannuation money from the ATO, amendments are also required to Australian legislation and to the Trans-Tasman Retirement Savings Portability Arrangement between New Zealand and Australia. Therefore, the application date for the portability amendments in the Bill will be same as the date stipulated in an exchange of diplomatic notes between New Zealand and Australia to amend the Arrangement. These notes would be exchanged after amendments have been enacted in both New Zealand and Australia.

Remedial amendments and maintenance corrections

A number of remedial matters are also addressed in the Bill, including:

  • several remedial amendments to the R&D tax credit regime to align the legislation with policy intent and improve the administration of the regime;

  • clarifying that the minors’ income tax exemption does not apply to beneficiary income paid to a minor;

  • requiring cash dividends be assessed on a cash basis;

  • clarifying a taxpayer’s ability to challenge an amended assessment due to a voluntary disclosure;

  • subjecting unpaid KiwiSaver voluntary employer contributions to the penalties, recoveries, and use of money interest rules;

  • clarifying the definition of custodial institution to remove the distinction between resident and non-resident entities, and to clarify the type of tax that must be withheld; and

  • correcting minor faults of expression, reader’s aids, and incorrect cross-references.

Departmental disclosure statement

The Inland Revenue Department is required to prepare a disclosure statement to assist with the scrutiny of this Bill. The disclosure statement provides access to information about the policy development of the Bill and identifies any significant or unusual legislative features of the Bill.

Regulatory impact assessment

The Inland Revenue Department produced regulatory impact assessments on 13 September 2019, 17 October 2019, 23 October 2019, 19 November 2019, and 26 February 2020 to help inform the main policy decisions taken by the Government relating to the contents of this Bill.

Clause by clause analysis

Clause 1 gives the title of the bill.

Clause 2 gives the dates on which the clauses of the bill come into force.

Part 1Annual rates of income tax

Clause 3 sets the annual rates of income tax for the 2020–21 tax year.

Part 2Amendments to Income Tax Act 2007

Clause 4 provides that clauses 5 to 64 amend the Income Tax Act 2007 and clause 65 makes consequential amendments to other enactments.

Clause 5 amends section CB 16A by inserting new subsections (2B) and (2C), which provide that the section applies to a group of persons, as defined.

Clause 6 amends section CB 16 by replacing subsection (2) with new subsections (2) to (2C), which provide that the business exclusion in the section does not apply for a person who has engaged in a regular pattern of acquisition and disposals or for a group of persons, as defined, who have engaged in such a pattern.

Clause 7 amends section CB 19 by replacing subsection (3) with new subsections (3) to (5), which provide that the residential exclusion in the section does not apply for a person who has engaged in a regular pattern of acquisition and disposals or for a group of persons, as defined, who have engaged in such a pattern.

Clause 8 inserts a new heading and new section CC 14, which provides for the income under section EJ 10B of a person using NZ IFRS 16 for an operating lease of a personal property lease asset.

Clause 9 amends section CD 1 by inserting new subsection (2), which provides that income arising from a dividend other than a non-cash dividend is allocated to the income year in which the dividend is received.

Clause 10 amends section CE 6 to bring exempt employee share schemes within the section.

Clause 11 inserts a new heading and new section CH 13 to ensure that deductions under section DB 66 for feasibility and other expenditure on property are clawed back if the property is subsequently completed, created, acquired, or replaced.

Clause 12 amends section CW 55BB by excluding beneficiary income from the minors’ income that is exempt income under the section.

Clause 13 amends section CW 58 to bring acquisitions and disposals of shares by trustees as nominees for a company within the section.

Clause 14 amends section DB 23 by replacing subsection (3) to clarify the relationship between subsection (1) and the permissions and limitations.

Clause 15 inserts a new heading and new section DB 51C, which provides for the deductions under section EJ 10B of a person using NZ IFRS 16 for an operating lease of a personal property lease asset.

Clause 16 inserts a new heading and new sections DB 66 and DB 67 to allow deductions for unsuccessful feasibility and other expenditure that would not be otherwise deductible.

Clause 17 repeals section EB 24 and a heading consequential on the requirement that a vendor and purchaser must agree on the apportionment of the price paid for the sale of a business.

Clause 18 amends section ED 3 by a replacing a phrase that does not have a defined meaning.

Clause 19 amends section EE 40 by correcting a cross-reference.

Clause 20 repeals section EE 45(10) consequential on the requirement that a vendor and purchaser must agree on the apportionment of the price paid for the sale of a business.

Clause 21 amends section EJ 3 to clarify that certain elections to spread fertiliser expenditure can be made by taking a tax position on that basis in an income tax return and do not require separate notice to the Commissioner.

Clause 22 amends section EJ 10 consequential to implementing NZ IFRS 16 for operating leases of personal property lease assets.

Clause 23 inserts new section EJ 10B which gives income and deductions of a person using NZ IFRS 16 for operating leases of personal property lease assets.

Clause 24 amends section EL 2 to clarify the description of the relationship between section EL 4 and other sections in the subpart.

Clause 25 amends section EL 3 to clarify the definition of residential rental property.

Clause 26 amends section EW 15I by replacing a term for which the definition is being repealed.

Clause 27 amends section EW 48 by adding a cross-reference to new sections GC 20 and GC 21.

Clause 28 amends section EX 21 to remove a phrase that does not have a defined meaning.

Clause 29 amends section EX 28 by replacing a phrase that does not have a defined meaning.

Clause 30 amends section EY 5 by replacing a phrase that does not have a defined meaning.

Clause 31 amends section EY 7 by replacing a phrase that does not have a defined meaning.

Clause 32 amends section EY 11 by replacing a phrase that does not have a defined meaning.

Clause 33 inserts new section EZ 4B to effectively allow a person to spread forward their net income from cattle destroyed because of Mycoplasma bovis.

Clause 34 amends section FE 2 by inserting a new subsection (4) that limits the effects, for the association rule, of a settlement by a person on a non-resident company or trust.

Clause 35 amends section FE 6 by inserting new subsections (3B) and (3C), which insert a formula for the income under the section of an excess debt entity with a worldwide group given by section FE 31D.

Clause 36 amends section FE 12 by correcting a cross-reference.

Clause 37 amends section FE 22 by correcting the punctuation of a paragraph.

Clause 38 amends section GB 20 by correcting the punctuation of a paragraph.

Clause 39 amends section GC 18, to correct faults of expression in the restricted transfer pricing regime calculations.

Clause 40 inserts new sections GC 20 and GC 21, to implement anti-avoidance measures that prevent manipulation of purchase price allocations.

Clause 41 amends section HC 10 by inserting a cross-reference to new requirements of section HC 30(4).

Clause 42 amends section HC 24 by correcting the list of defined terms.

Clause 43 amends section HC 27 to change the criteria for determining whether a beneficiary is a settlor of the trust if the beneficiary is owed money by the trustee and is not paid interest on the debt or is paid interest at less than the market rate.

Clause 44 amends section HC 30 by amending subsection (4) and inserting new subsection (4B). The amendments provide for the treatment of parts of a distribution made by a trust after the trust ceases to be a foreign trust and the trustee: (a) fails to make an election under which the trust would be a complying trust but (b) makes a later election and, before the distribution is made, satisfies the trust’s income tax obligations arising from the situation.

Clause 45 replaces section LY 5(1)(a), to clarify the requirements of the definition of eligible research and development expenditure.

Clause 46 repeals section MD 12(4) as a consequence of repealing the power to increase the amount of the parental tax credit by Order in Council.

Clause 47 amends section MF 7. Subclause (1) repeals the power to increase the amount of the parental tax credit by Order in Council. Subclauses (2) and (3) remove the requirement to undertake a review of the parental tax credit every 3 years. Subclause (4) consequentially updates the list of defined terms.

Clause 48 replaces section OB 52 as a consequence of replacing section OP 22 to clarify when and how a credit balance in the imputation credit account of a group company may be transferred to the imputation credit account of a consolidated imputation group.

Clause 49 amends table O2 as a consequence of replacing sections OB 52 and OP 22.

Clause 50 replaces section OP 22 to clarify when and how a credit balance in the imputation credit account of a group company may be transferred to the imputation credit account of a consolidated imputation group.

Clause 51 amends table O19 as a consequence of replacing section OP 22.

Clause 52 amends section RA 1 by inserting, into the description of the scope of the subpart, a reference to residential land withholding tax.

Clause 53 amends section RC 5 by replacing a phrase that does not have a defined meaning.

Clause 54 amends section RD 24 by correcting a reference to a defined term.

Clause 55 amends section RE 2 by clarifying the definition of resident passive income in relation to rebates to members from mutual associations.

Clause 56 amends section RE 10C to clarify the type of tax to be withheld and to remove the distinction between resident entities and non-resident entities in the definition of custodial institution.

Clause 57 amends section RF 2C(6) by correcting the value of an item needed to meet the requirements of that subsection.

Clause 58 amends section YA 1. Subclause (2) corrects a cross-reference in the definition of annual branch equivalent tax account return. Subclause (3) replaces the definition of Australian complying superannuation scheme, so as to include the Australian Commissioner of Tax in a capacity relating to unclaimed money and lost members. Subclause (4) amends the definition of business premises by including a reference to the land sales provisions. Subclause (5) amends the definition of claim by replacing a phrase that does not have a defined meaning. Subclause (6) amends the definition of dispose by inserting a cross-reference to new sections GC 10 and GC 21. Subclause (7) amends the definition of dividend by clarifying the status of rebates to members from mutual associations. Subclause (8) amends the definition of early life regime application day by replacing a phrase that does not have a defined meaning. Subclause (9) replaces the definition of group of persons, including references to new definitions in sections CB 16A, CB 16, and CB 19. Subclause (10) amends the definition of lease by inserting a new cross-reference to section EJ 10B. Subclause (11) repeals the definition of NZIAS 17 as it is redundant. Subclause (12) inserts a definition of NZ IFRS 16. Subclause (13) repeals the definition of specified living allowance as it is redundant. Subclause (14) gives the application period for subclause (7).

Clause 59 amends schedule 21 to ensure that R&D tax credits are not available for mining activities.

Clause 60 amends schedule 21B by replacing part B, clause 3 so as to restrict the situations in which the cost of depreciable tangible property used in performing a research and development activity is eligible for R&D tax credits. Also the eligibility criteria for R&D tax credits in respect of land, plant, and corporate governance are refined.

Clause 61 amends schedule 29, which contains a list of entities that are exceptions to the requirement for a minimum number of investors in each investor class of a portfolio investment entity. The amendments add lines trusts and their wholly-owned subsidiaries to the list.

Clause 62 amends schedule 32 by inserting 3 more organisations that perform charitable activities outside New Zealand.

Clause 63 amends schedule 36 to add Housing New Zealand Build Limited to the list of State enterprises that are subject to income tax.

Clause 64 amends the Income Tax Act 2007 as set out in schedule 1 to align nomenclature with the Social Security Act 2018.

Clause 65 makes consequential amendments to nomenclature in other enactments as set out in schedule 2.

Part 3Amendments to other enactments

Tax Administration Act 1994

Clause 66 provides that clauses 67 to 84 amend the Tax Administration Act 1994.

Clause 67 amends section 3. Subclause (2) amends the definition of deferrable tax by inserting new paragraph (d), which describes a situation in which a person’s liability depends on the liability of another person who is in a dispute with the Commissioner. Subclause (3) inserts a definition of New Zealand superannuation qualification age. Subclause (4) amends the definition of tax by updating cross-references to the KiwiSaver Act 2006.

Clause 68 amends section 4A to update a cross-reference to the KiwiSaver Act 2006.

Clause 69 amends section 17C to correct cross-referencing errors and ensure that the Commissioner may take extracts from, make a copy of, or remove a document that a person is required to produce as part of an inquiry by the Commissioner.

Clause 70 amends section 25E by amending cross-references as a consequence of the repeal of section 25K.

Clause 71 amends section 25J so that entities formerly subject to section 25K are included.

Clause 72 repeals section 25K as a consequence of the amendments to section 25J.

Clause 73 amends section 25MB to remove the distinction between resident entities and non-resident entities in the definition of custodial institution.

Clause 74 amends section 57B by amending cross-references as a consequence of the repeal of section 25K.

Clause 75 amends section 61 by amending a cross-reference as a consequence of the repeal of section 25K.

Clause 76 amends section 68CC by changing the deadline for an application for a variation of an approval by the Commissioner relating to the method of calculating research and development tax credits.

Clause 77 amends section 89D by inserting new subsection (1B), which clarifies the aspects of an amended assessment that a taxpayer may dispute.

Clause 78 amends section 89DA by inserting new subsection (1B), which clarifies the aspects of an amended assessment by a taxpayer that the taxpayer may dispute.

Clause 79 replaces section 108(1E), which gives a time bar for an amendment by the Commissioner to an assessment that increases an amount of research and development tax credit.

Clause 80 amends section 120B to update a cross-reference to the KiwiSaver Act 2006.

Clause 81 amends section 139A to remove references to a statement that is no longer required.

Clause 82 amends section 139AB to correct a cross-reference.

Clause 83 amends section 157 to correct a cross-reference and update another cross-reference.

Clause 84 amends schedule 8 to provide for some amounts of tax for which an individual who uses a tailored tax code is liable.

Goods and Services Tax Act 1985

Clause 85 provides that clauses 86 to 91 amend the Goods and Services Tax Act 1985.

Clause 86 amends section 2 by inserting a definition of mobile roaming services.

Clause 87 amends section 8 to provide for the treatment of inbound mobile roaming services and outbound mobile roaming services.

Clause 88 amends section 11(8D) to clarify the treatment of transactions that include a transfer of an interest in land as part of a transfer of a business as a going concern.

Clause 89 amends section 11AB to provide for the treatment of mobile roaming services.

Clause 90 amends section 25. Subclause (1) adds supplies of goods that had tax incorrectly charged at the rate of 15% when they should have been zero-rated or exempt, and for which an incorrect tax invoice has been issued by the supplier, to the list of situations when suppliers are required to issue credit notes. Subclause (2) imposes a time-limit on the issue of a credit note relating to a supply for which an incorrect tax invoice was issued. Subclause (3) requires the recipient to make a corresponding adjustment to reduce the input credits they claimed after receiving a tax invoice that was incorrect as a result of the new situation applying.

Clause 91 amends section 51 so that a supplier of telecommunication services mainly to non-residents that are in New Zealand is no longer excluded from the requirement to register.

Student Loan Scheme Act 2011

Clause 92 amends section 34 of the Student Loan Scheme Act 2011.

KiwiSaver Act 2006

Clause 93 amends section 4(1) of the KiwiSaver Act 2006. Subclause (2) replaces the definition of Australian complying superannuation scheme. Subclause (3) amends the definition of KiwiSaver status to correct nomenclature.

Companies Act 1993

Clause 94 amends section 53 of the Companies Act 1993 to update a cross-reference.

Land Transfer Act 2017

Clause 95 provides that clauses 96 to 100 amend the Land Transfer Act 2017.

Clause 96 amends section 77(1) by inserting a new definition of IRD number and replacing the definition of tax information, to reflect the changes being made to section 79.

Clause 97 replaces section 79, which specifies the content of the tax statements that are required to be completed by transferors and transferees of land.

Currently, the information required to be in a tax statement is set out in section 79. New section 79 provides for the content of tax statements to be set out in regulations rather than in the Land Transfer Act 2017. This will make it easier for the required content to be updated when necessary.

Having the content of tax statements set out in regulations is consistent with the approach taken in many other provisions of the Land Transfer Act 2017 in relation to other kinds of documents (see, for example, sections 87, 91, 138, and 155).

Clause 98 consequentially amends section 83, which relates to the release of information provided in tax statements. New section 83(2) ensures that the current restriction on the disclosure of a person’s name and IRD number (and any overseas equivalent) continues.

Clause 99 consequentially amends section 227 to enable regulations to be made for the purposes of new sections 79 and 83(2).

Clause 100 inserts new Part 2 in Schedule 1, which sets out transitional provisions. New clause 14 applies from the date on which the Land Transfer Act 2017 is amended until regulations prescribing information for the purposes of new section 79(1)(a) come into force. During that period, a tax statement must continue to include the information currently set out in section 79.

Taxation (Disclosure of Information to Approved Credit Reporting Agencies) Regulations 2017

Clause 101 amends regulation 3 of the Taxation (Disclosure of Information to Approved Credit Reporting Agencies) Regulations 2017 to update a cross-reference.

Schedule 1 (Income Tax Act 2007: aligning nomenclature with Social Security Act 2018)

Schedule 1 lists amendments to the Income Tax Act 2007 that align the nomenclature used in the Act for benefits with the nomenclature used in the Social Security Act 2018.

Schedule 2 (Other enactments: consequential amendments aligning nomenclature)

Schedule 2 lists amendments to enactments other than the Income Tax Act 2007 as a consequence of the changes in Schedule 1.