Income Tax Amendment Act 1989
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Income Tax Amendment Act 1989
Public Act |
1989 No 7 |
|
Date of assent |
22 March 1989 |
|
Contents
An Act to amend the Income Tax Act 1976
BE IT ENACTED by the Parliament of New Zealand as follows:
1 Short Title
This Act may be cited as the Income Tax Amendment Act 1989, and shall be read together with and deemed part of the Income Tax Act 1976 (hereinafter referred to as the principal Act).
Part I Superannuation Schemes
2 Interpretation
(1)
Section 2 of the principal Act is hereby amended by inserting, in their appropriate alphabetical order, the following definitions:
“‘Employer superannuation contribution’ means any superannuation contribution provided by an employer for the benefit of an employee or employees of that employer:
“‘Specified superannuation contribution’ means an employer superannuation contribution (being a contribution in money) made to a superannuation fund on or after the 1st day of April 1989:
“‘Specified superannuation contribution withholding tax’ means specified superannuation contribution withholding tax payable in accordance with Part Xc of this Act:
“‘Superannuation contribution’ means any disposition of property (as defined in section 226 of this Act) to or for the benefit of any superannuation scheme to the extent to which fully adequate consideration in money or money’s worth does not pass from the superannuation scheme to any person, other than a benefit from that superannuation scheme on the terms of that scheme:
“‘Superannuation scheme’ means—
“(a)
Any trust or unit trust (as defined in section 211 of this Act) established by its trust deed principally for the purpose of providing retirement benefits to beneficiaries who are natural persons; or
“(b)
Any company (not being a unit trust) that—
“(i)
Is not resident in New Zealand; and
“(ii)
Has been established principally for the purpose of providing retirement benefits to members or relatives of members who are natural persons; or
“(c)
Any arrangement constituted under an Act of the Parliament of New Zealand, other than the Social Security Act 1964, principally for the purpose of providing retirement benefits to natural persons; or any similar arrangement constituted under the legislation of any country, territory, state, or local authority outside New Zealand;—
and where the superannuation scheme is a trust, any reference in this Act to a superannuation scheme includes a reference to the trustees of that scheme:”.
(2)
Section 2 of the principal Act is hereby further amended by adding to the definition of the term “expenditure on account of an employee”
the following paragraph:
“(e)
Any employer superannuation contribution:”.
(3)
Section 2 of the principal Act is hereby further amended by adding to the definition of the term “monetary remuneration”
(as inserted by section 34(3) of the Income Tax Amendment Act (No. 2) 1985) the words “; but does not include any employer superannuation contribution”
.
(4)
Section 2 of the principal Act is hereby further amended by inserting in the definition of the term “salary or wages”
, after paragraph (f), the following paragraph:
“(fa)
Any employer superannuation contribution:”.
(5)
Section 2 of the principal Act is hereby further amended by adding to the definition of the term “superannuation fund”
(as inserted by section 3 of the Income Tax Amendment Act (No. 3) 1983) the words “;—but does not include a superannuation scheme constituted outside New Zealand and classified by the Government Actuary under regulation 29 or regulation 30 of the Superannuation Schemes Regulations 1983:”
.
(6)
Section 2 of the principal Act is hereby further amended by inserting in the definition of the term “trustee”
(as substituted by section 10 of the Income Tax Amendment Act (No. 5) 1988), after the words “Public Trustee”
, the words “, and also, in relation to a superannuation scheme that is a trust or that is deemed by this Act to be a trust, includes a person by whom the investments of that scheme (or any part thereof) are managed or controlled;”
.
(7)
This section shall apply with respect to the tax on income derived in the income year that commenced on the 1st day of April 1988 and in every subsequent year.
3 Exclusions from term “dividends”
Section 4a(1) of the principal Act (as inserted by section 31(1) of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by adding the following paragraph:
“(n)
Any distribution by way of a benefit paid before the 1st day of April 1990 by a unit trust that is a superannuation scheme constituted outside New Zealand and that was, on the 31st day of March 1988, classified by the Government Actuary under regulation 29 or regulation 30 of the Superannuation Schemes Regulations 1983.”
4 Incomes wholly exempt from tax
(1)
Section 61(2) of the principal Act is hereby amended by adding the following subparagraph:
“(g)
Any authority to the extent to which it is a superannuation scheme:”.
(2)
Section 61(21) of the principal Act is hereby amended by inserting, after the word “derived”
, the words “before the 1st day of April 1988”
.
(3)
Section 61 of the principal Act is hereby further amended by adding the following paragraph:
“(59)
Annuities paid on or after the 1st day of April 1990 from the Life Insurance Fund of a company to which section 204 of this Act applies.”
(4)
Subsection (1) of this section shall apply with respect to the tax on income derived in the income year that commenced on the 1st day of April 1988 and in every subsequent year.
5 Interpretation
Section 64b(1) of the principal Act (as inserted by section 2 of the Income Tax Amendment Act 1987) is hereby amended by repealing the definition of the term “superannuation scheme”
.
6 Shareholder-employee and major shareholder superannuation contributions paid on or after 1 April 1988 and before 1 April 1989, or before 1 October 1989 where company in course of being wound up
The principal Act is hereby amended by inserting, after section 65, the following section:
“65a
“(1)
In this section,—
“‘Major shareholder’ has the same meaning as in section 374e(1) of this Act:
“‘Shareholder-employee’ has the same meaning as in section 150(1) of this Act.
“(2)
Notwithstanding any other provision of this Act, where any superannuation contribution to a subsidised employee superannuation scheme (as defined in section 150(1) of this Act) is paid on or after the 1st day of April 1988 and before the 1st day of April 1989 by a company in respect of any employee of the company who is a major shareholder or shareholder-employee of the company,—
“(a)
The amount of the contribution so paid shall be deemed to be remuneration paid to the employee by the company for services rendered by the employee, in the income year in which the contribution was paid; and
“(b)
The amount of the contribution shall be deemed to be assessable income derived by that employee, but shall not be a source deduction payment for the purposes of this Act; and
“(c)
No fringe benefit tax shall be payable in respect of any such contribution.
“(3)
Notwithstanding anything in subsection (7) of section 51 of the Income Tax Amendment Act (No. 5) 1988 (which exempts from the application of certain fringe benefit provisions benefits provided to major shareholders by a company that is in the course of being wound up), that subsection shall not apply to exempt from the application of subsections (1) to (5) of that section any benefit that is an employer superannuation contribution made on or after the 1st day of April 1989 and before the 1st day of October 1989”.
7 Assignments or settlements of income
Section 96 of the principal Act is hereby amended by adding the following subsection:
“(6)
This section shall not apply with respect to any transfer or settlement to or on a superannuation fund.”
8 Certain deductions not permitted
(1)
Section 106(1) of the principal Act is hereby amended by repealing paragraph (m), and substituting the following paragraphs:
“(m)
Any expenditure or loss by way of superannuation contributions made or to be made, on or after the 1st day of April 1988, for the benefit of the taxpayer or any other person:
“(ma)
Any expenditure by way of bonus, gratuity, retiring allowance, or pension that is paid or payable, on or after the 1st day of April 1988, to or for the benefit of any employee or former employee of the taxpayer, or any relative of any such employee, during or on the occasion of the retirement of the employee:”.
(2)
Section 106(2) of the principal Act is hereby amended by adding the words “;—but does not include fringe benefit tax or specified superannuation contribution withholding tax.”
9 Contributions to employees’ benefit funds
Section 149(1) of the principal Act is hereby amended—
(a)
By inserting, after the word “fund”
, the words “(not being a superannuation scheme)”
:
(b)
By omitting the words “(not being superannuation benefits whether by way of pension or otherwise)”
.
10 Contributions to employees’ superannuation schemes
(1)
Section 150(2) of the principal Act (as substituted by section 26(3) of the Income Tax Amendment Act (No. 2) 1982) is hereby amended by inserting, after the word “paid”
, the words “before the 1st day of April 1989”
.
(2)
Section 150 of the principal Act is hereby amended by inserting, after subsection (2), the following subsections:
“(2a)
In calculating the assessable income of any person for any income year a deduction shall, subject to subsections (2b) to (2f) of this section and to section 104 of this Act, be allowed in respect of any employer superannuation contribution made on or after the 1st day of April 1989 by that person in that income year; and except as provided in subsection (2f) of this section any such contribution shall be deemed to be expenditure incurred at the time when the contribution is made.
“(2b)
Except as provided in subsection (2c) of this section, no deduction shall be allowed under subsection (2a) of this section in respect of an employer superannuation contribution made to a superannuation scheme where the superannuation scheme is neither a superannuation fund nor a company.
“(2c)
For the purposes of subsection (2b) of this section, a superannuation scheme constituted outside New Zealand that was on the 31st day of March 1988 a subsidised employee superannuation scheme shall be deemed to be a superannuation fund with respect to employer superannuation contributions made to the scheme before the 1st day of April 1990.
“(2d)
Where any employer receives, on or after the 1st day of April 1989, any benefit in money or money’s worth (including a recovery of contributions) from a superannuation scheme to which the employer has made employer superannuation contributions at any time, then, notwithstanding any other provision of this Act, any deduction allowable to the employer for any such contributions made to the scheme during the period of 12 months immediately preceding the date of the receipt by the employer of the benefit shall be reduced by the amount of the benefit in money or money’s worth so received, and the Commissioner shall amend any assessment accordingly.
“(2e)
Subsection (2d) of this section shall not apply to any benefit received by the employer to the extent that the Commissioner is satisfied that the benefit is a bona fide pension or annuity or lump sum payment paid to the employer on the terms of the scheme in consideration of previous contributions made by or on behalf of the employer in a personal capacity.
“(2f)
An employer who makes an employer superannuation contribution on or after the 1st day of April 1989 (being a contribution that would otherwise be deductible under this section in the year in which it is made) may, where the contribution is made not more than 63 days after the end of the income year in respect of which—
“(a)
The contribution was required under the conditions of the scheme to be made; or
“(b)
The amount of the contribution was calculated, having regard to the amounts of the earnings paid by the employer to any employee who was during that income year a member of the scheme,—
elect, at any time before the employer files a return of income for that income year or within such further time as the Commissioner allows, that the amount of the contribution should be deducted in calculating the assessable income of the employer for that income year instead of the income year in which the contribution was made; and where an employer so elects the contribution shall accordingly be deductible for that earlier income year and not for the later income year.”
(3)
Section 150 of the principal Act is hereby further amended by repealing subsection (3) (as substituted by section 26(4) of the Income Tax Amendment Act (No. 2) 1982 and amended by section 24 of the Income Tax Amendment Act (No. 3) 1983), and substituting the following subsection:
“(3)
The deduction allowed in accordance with this section in any income year in respect of contributions paid before the 1st day of April 1989 shall not exceed the smaller of—
“(a)
The amount that the employer was required to contribute, before the 1st day of April 1989, under the conditions of the subsidised employee superannuation scheme or schemes in respect of the employer’s employees in that income year:
“(b)
An amount equal to 10 percent of the aggregate of the earnings paid by the employer, before the 1st day of April 1989, in that income year to such of the employer’s employees as are, in that income year, members of the subsidised employee superannuation scheme or schemes.”
(4)
Section 150 of the principal Act is hereby further amended by repealing subsection (4) (as substituted by section 12 of the Income Tax Amendment Act (No. 2) 1988), and substituting the following subsection:
“(4)
Notwithstanding anything in the foregoing provisions of this section, the Commissioner may, in the Commissioner’s discretion, disallow or decline to allow any deduction in respect of contributions paid before the 1st day of April 1988 in any income year by any company in respect of any employee who is a shareholder-employee of the company.”
(5)
Section 150(5) of the principal Act is hereby amended by inserting, after the word “determine”
, the words “, in respect of contributions paid before the 1st day of April 1989,”
.
(6)
Section 150(6) of the principal Act is hereby amended by omitting the words “as aforesaid”
, and substituting the words “before the 1st day of April 1989”
.
(7)
Section 150(7) of the principal Act is hereby amended by omitting the words “as aforesaid”
, and substituting the words “before the 1st day of April 1989”
.
(8)
The following enactments are hereby consequentially repealed:
(a)
Section 26(4) of the Income Tax Amendment Act (No. 2) 1982:
(b)
Section 24 of the Income Tax Amendment Act (No. 3) 1983:
(c)
Section 12 of the Income Tax Amendment Act (No. 2) 1988.
11 Life insurance and reinsurance companies
(1)
Section 204(1) of the principal Act (as substituted by section 34(1) of the Income Tax Amendment Act (No. 2) 1982) is hereby amended by repealing the definition of the term “superannuation policy”
, and substituting the following definition:
“‘Superannuation policy’ means a policy of life insurance upon human life in New Zealand—
“(a)
That is vested in the trustees of a superannuation fund that was or was deemed to be a superannuation category 1 scheme on or before the 17th day of December 1987, not being a scheme that was classified by the Government Actuary as a personal pension superannuation scheme and that admitted new members after that date; or
“(b)
That was—
“(i)
Effected for the purposes of the trustees of any such superannuation fund; or
“(ii)
Accepted by the trustees of any such superannuation fund for the purposes of the fund,—
not being in any case a policy that has ceased to be a policy for the purposes of any such superannuation fund:”.
(2)
Section 204 of the principal Act (as so substituted) is hereby further amended by inserting, after subsection (8), the following subsection:
“(8a)
For the purposes of assessing income tax in respect of any income year of a company that commences on any date after the 1st day of April 1987, every company to which this section applies shall be deemed to have derived and to derive assessable income in that income year—
“(a)
In relation to its business in respect of superannuation policies and annuities, of an amount calculated in accordance with subsection (9a) or subsection (9b) of this section, as the case may require, and the company shall be assessable and liable for income tax on that amount at the rate specified in clause 2a(b) of the First Schedule to this Act:
“(b)
In relation to its other business of life insurance, of an amount calculated in accordance with subsection (9) of this section, and the company shall be assessable and liable for income tax on that amount at the rate specified in clause 2a(a) of the First Schedule to this Act.”
(3)
Section 204 of the principal Act (as so substituted) is hereby further amended by inserting, after subsection (9), the following subsections:
“(9a)
For the purposes of subsection (8a)(a) of this section, the amount of assessable income of a company having the 31st day of March as its annual balance date for any income year commencing on or after the 1st day of April 1988 in respect of superannuation policies and annuities shall be calculated in accordance with the following formula:
where—
a
is the amount of so much of the liabilities of the company in respect of policies of life insurance, contracts of reinsurance, and annuities granted (being the liabilities at the end of the income year) as, in the opinion of the Commissioner, relates to superannuation policies included in the Life Insurance Fund of that company and annuities granted included in that Fund; and
b
is the amount of so much of the liabilities of the company as, in the opinion of the Commissioner, relates to all policies of life insurance, contracts of reinsurance, and annuities granted (being the liabilities at the end of the income year) included in that Fund; and
c
is the amount of the profits of the company for the income year, ascertained in accordance with subsection (8) of this section; and
d
is the amount of so much of the liabilities of the types referred to in item a of this formula that were liabilities of the company at the end of the income year of the company that last ended before the 1st day of April 1988; and
e
is the amount of so much of the liabilities of the types referred to in item b of this formula that were liabilities of the company at the end of the income year of the company that last ended before the 1st day of April 1988; and
f
is an amount (or, where appropriate, the aggregate of amounts) in respect of investments sold or disposed of by the company in the income year referred to in items a to c of this formula (being investments made or acquired before the 1st day of April 1988) ascertained as follows:
“(a)
In relation to any such investments made or acquired on or before the last day of the income year commencing on the 1st day of April 1982, the amount shall be the amount obtained by subtracting from the market value of that investment on the 1st day of April 1988 the greater of—
“(i)
The cost price or acquisition value of that investment; or
“(ii)
The market value of that investment on the last day of the income year commencing on the 1st day of April 1982; and
“(b)
In relation to any such investments made or acquired after the end of the income year commencing on the 1st day of April 1982, the amount shall be,—
“(i)
In the case of investments other than financial arrangements to which sections 64b to 64l of this Act apply, the amount obtained by subtracting the cost price or acquisition value of the investment from the market value of the investment on the 1st day of April 1988:
“(ii)
In the case of investments that are financial arrangements to which sections 64b to 64l of this Act apply, the amount shall be equal to the amount that would be the base price adjustment of the investment, calculated in accordance with section 64f(2) of this Act, if the investment had matured on the 1st day of April 1988.
“(9b)
Where a company to which this section applies has an income year ending on a day other than the 31st day of March, the amount of the assessable income of the company for any income year of the company that commences before the 1st day of April 1988 and ends on or after that date shall, for the purposes of subsection (8a)(a) of this section, be calculated in accordance with subsection (9a) of this section as if item f in the formula in that subsection related only to investments sold on or after the 1st day of April 1988, and as if for item c in that formula there were substituted an amount calculated in accordance with the following formula:
where—
g
is the number of days from the 1st day of April 1988 until the last day of that income year of the company (both days inclusive); and
h
is the amount of the profits of the company for that income year, determined in accordance with subsection (8) of this section; and
i
is the amount of any profit or loss on the sale or other disposal during that income year of any investments of the company, determined in accordance with subsection (7) of this section; and
j
is the amount of any profit or loss on the sale or other disposal during that income year, on or after the 1st day of April 1988, of any investment of the company, determined in accordance with subsection (7) of this section; and
k
is the number of days in that income year of the company.”
12 Trustees of superannuation category 2 and category 8 schemes
Section 225 of the principal Act is hereby amended by adding the following subsection:
“(8)
This section shall not apply to—
“(a)
The trustees of superannuation category 2 schemes in respect of the tax on income derived—
“(i)
In the income year that commenced on the 1st day of April 1988 and in subsequent years:
“(ii)
In relation to a scheme referred to in subsection (7) of this section, in any accounting year of the scheme that commences before the 1st day of April 1988 and ends on or after that date, and in subsequent years:
“(b)
The trustees of superannuation category 3 schemes in respect of the tax on income derived in the income year commencing on the 1st day of April 1989 and in subsequent years.”
13 Disposal of investments of superannuation category 2 and category 8 schemes
The principal Act is hereby amended by inserting, after section 225, the following section:
“225a
“(1)
In this section, the term ‘operative date’ means—
“(a)
In relation to a superannuation scheme that was or was deemed to be a category 2 scheme on the 1st day of April 1988, the 1st day of April 1988:
“(b)
In relation to a superannuation category 3 scheme, the beginning of the income year commencing on the 1st day of April 1989.
“(2)
Where—
“(a)
The trustees of—
“(i)
A superannuation scheme that was or was deemed to be a category 2 scheme on the 1st day of April 1988; or
“(ii)
A superannuation category 3 scheme—
on or after the operative date sell or otherwise dispose of any investment (other than a financial arrangement to which sections 64b to 64l of this Act apply) that was held on that date; and
“(b)
If the investment had been sold or otherwise disposed of before the operative date, any profit derived or loss incurred on the sale or other disposition would have been taken into account in calculating the assessable income of the trustees; and
“(c)
Any profit derived or loss incurred on the sale or other disposal of that investment on or after the operative date would not, but for this section, be taken into account in calculating the assessable income of the trustees,—
an amount determined in accordance with subsection (3) of this section in respect of investments sold or disposed of shall be deemed to be a profit or gain derived by the trustees or a loss incurred by the trustees (as the case may require) in the income year in which the investment was sold or otherwise disposed of, and shall be taken into account in calculating the assessable income derived by the trustees in that income year.
“(3)
The amount referred to in subsection (2) of this section shall be ascertained as follows:
“(a)
In the case of an investment made or acquired on or before the last day of the income year commencing on the 1st day of April 1982, that amount shall be the difference between the market value of that investment on the operative date and the greater of—
“(i)
The cost price or acquisition value of that investment; or
“(ii)
The market value of that investment on the last day of the income year commencing on the 1st day of April 1982:
“(b)
In the case of an investment acquired after the end of the income year commencing on the 1st day of April 1982, that amount shall be the difference between—
“(i)
The market value of the investment on the operative date; and
“(ii)
The cost price or acquisition value of the investment.
“(4)
Every reference in this section to an income year shall, where the trustee of a superannuation scheme furnishes a return of income under section 15 of this Act for an accounting year ending with an annual balance date other than the 31st day of March, be deemed to be a reference to the accounting year corresponding with that income year, and, in every such case this section shall, with any necessary modifications, apply accordingly.”
14 Interpretation
(1)
Section 226(1) of the principal Act (as substituted by section 11(1) of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by adding the words “;— but does not include income derived by a trustee of the trust in any income year during which the trust is a superannuation fund:”
.
(2)
Section 226(1) of the principal Act (as so substituted) is hereby further amended by inserting in the definition of the term “qualifying trust”
, after the words “in relation to any trust”
, the words “, other than a superannuation fund,”
.
(3)
Section 226(1) of the principal Act (as so substituted) is hereby further amended by adding to the definition of the term “qualifying trust”
the following proviso:
“Provided that a superannuation fund shall be a qualifying trust on and after the 1st day of April 1990:”.
(4)
Section 226(1) of the principal Act (as so substituted) is hereby further amended by omitting from the definition of the term “taxable distribution”
the words “a non-qualifying trust or a foreign trust”
, and substituting the words “a trust that is a non-qualifying trust or a foreign trust but is not a superannuation fund”
.
(5)
Section 226(10) of the principal Act (as so substituted) is hereby amended by omitting the words “, superannuation fund, or superannuation category 3 scheme”
.
(6)
This section shall apply with respect to the tax on income derived in the income year that commenced on the 1st day of April 1988 and in every subsequent year.
15 Trustee income
(1)
Section 228 of the principal Act (as substituted by section 11(1) of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by inserting, after subsection (2), the following subsections:
“(2a)
In calculating the assessable income derived in any income year by a trustee of a superannuation fund, and notwithstanding section 106(1)(a) of this Act but subject to the other provisions of this Act, a deduction shall be allowed for expenditure incurred by the superannuation fund to the extent to which it is incurred in respect of developing, marketing, selling, promoting, and advertising for members to the fund, not being expenditure incurred in acquiring any plant, machinery, equipment, land, or building, or expenditure which is not income in the hands of the recipient.
“(2b)
Notwithstanding any other provision of this Act, where any funds of a superannuation fund are invested in whole or in part in another superannuation fund or in a policy of life insurance issued in New Zealand, any income, gain, or benefit arising from that investment of those contributions shall be deemed not to be assessable income derived by the trustee of the fund.”
(2)
Section 228(3) of the principal Act (as so substituted) is hereby further amended by inserting, after paragraph (a), the following paragraph:
“(aa)
During which the trust is at any time a superannuation fund; or”.
(3)
Section 228(5) of the principal Act (as so substituted) is hereby amended by inserting, after paragraph (a), the following paragraph:
“(aa)
Any settlor of a superannuation fund; or”.
(4)
This section shall apply with respect to the tax on income derived in the income year that commenced on the 1st day of April 1988 and in every subsequent year.
16 Disclosure
(1)
Section 231 of the principal Act (as substituted by section 11(1) of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by adding the following subsections:
“(6)
Nothing in subsections (1) to (4) of this section shall apply to any trust that is a superannuation fund, or to any person in respect of a superannuation fund.
“(7)
Nothing in subsections (1) to (4) of this section shall, before the 1st day of April 1990, apply to any superannuation scheme constituted outside New Zealand and classified by the Government Actuary under regulation 29 or regulation 30 of the Superannuation Schemes Regulations 1983.”
(2)
This section shall apply with respect to the tax on income derived in the income year that commenced on the 1st day of April 1988 and in every subsequent year.
17 New sections inserted in principal Act relating to superannuation schemes
The principal Act is hereby further amended by inserting, after section 232 (as substituted by section 11(1) of the Income Tax Amendment Act (No. 5) 1988), the following sections:
“232a Value of loans provided by superannuation scheme deemed to be income of scheme
“(1)
Where any superannuation scheme in any income year has, directly or indirectly and whether by one transaction or by a series of transactions, provided to a member of that superannuation scheme in that income year any loan that would be a fringe benefit if it were provided by an employer to an employee in respect of that employee’s employment, the value of the loan so provided shall be deemed to be income derived by the superannuation scheme in that income year.
“(2)
For the purposes of subsection (1) of this section, but subject to subsection (3) of this section, the value of the loan shall be the amount, if any, by which the amount of interest that would have accrued on that loan in respect of that income year had that interest been calculated on the daily balance of that loan at the prescribed rate of interest (as defined in section 336n(1) of this Act in relation to employment related loans) exceeds the amount of interest that, whenever it accrues, arises in respect of that loan to the member during that income year.
“(3)
Where the loan is a loan that was made on or before the 31st day of March 1989, and the rate of interest payable on the loan is not subject to review, the prescribed rate of interest shall be deemed to be—
“(a)
In the case of a loan made before the 1st day of April 1985, the non-concessionary rate of interest (as defined in section 336n(1) of this Act) prescribed in relation to employment related loans for the year in which the agreement to make the loan was signed or, where the agreement was not in writing, the making of the loan was agreed to by all the parties to the loan:
“(b)
In the case of a loan made on or after the 1st day of April 1985, the prescribed rate of interest (as defined in section 336n(1) of this Act in relation to employment related loans) that applied during the quarter in which the agreement to make the loan was signed or, where the agreement was not in writing, the making of the loan was agreed to by all parties to the loan.
“(4)
Every reference in this section to an income year shall, where the trustee of a superannuation scheme furnishes a return of income under section 15 of this Act for an accounting year ending with an annual balance date other than the 31st day of March, be deemed to be a reference to the accounting year corresponding with that income year, and, in every such case this section shall, with any necessary modifications, apply accordingly.
“(5)
This section shall apply with respect to the tax on income derived—
“(a)
In the income year commencing on the 1st day of April 1989 and in every subsequent year, in the case of a scheme having the 31st day of March as its annual balance date:
“(b)
In the case of a scheme referred to in subsection (4) of this section, in the accounting year of the scheme that first commenced on or after the 1st day of April 1989 and in every subsequent year.
“232b Realisation of superannuation scheme investments made or acquired before 1 April 1988
“(1)
Where the trustees of a superannuation scheme (being a scheme that was in force on the 1st day of April 1988) sell or otherwise dispose of, on or after the 1st day of April 1988, any investment (excluding a financial arrangement to which sections 64b to 64l of this Act apply) made or acquired before that date, and any profit derived or loss incurred on that sale or other disposal is to be taken into account in calculating the assessable income of the trustees of the scheme, the amount of the profit derived or loss incurred (as the case may be) to be so taken into account shall, notwithstanding section 228a of this Act, be—
“(a)
In the case of a scheme that was or was deemed to be a category 1 scheme on the 1st day of April 1988, the amount of the difference between—
“(i)
The consideration received or receivable on the sale or other disposal of the investment; and
“(ii)
The market value of the investment on the 1st day of April 1988:
“(b)
In the case of a scheme that was or was deemed to be a category 2 or a category 3 scheme on the 1st day of April 1988, the amount of the difference between the consideration received or receivable on the sale or other disposal of the investment, and—
“(i)
Where the investment was made or acquired after the end of the income year commencing on the 1st day of April 1982, the cost price or acquisition value of the investment:
“(ii)
Where the investment was made or acquired on or before the last day of the income year commencing on the 1st day of April 1982, the greater of the cost price or acquisition value of the investment and the market value of the investment on the last day of that income year.
“(2)
Where the trustees of a superannuation scheme that was or was deemed to be a category 1 scheme on the 1st day of April 1988 are, in terms of section 64b of this Act, holders or issuers of a financial arrangement to which sections 64b to 64l of this Act apply, then, notwithstanding section 228a of this Act, any income derived or expenditure incurred in respect of that financial arrangement shall be calculated under sections 64b to 64m of this Act, except that the acquisition price of the financial arrangement shall be, at the option of any person who is liable to pay income tax on trustee income under this Act, either—
“(a)
The market value of the financial arrangement on the 1st day of April 1988; or
“(b)
The adjusted base price, being, in the case of the issuer of a financial arrangement, the acquisition price of that financial arrangement together with all accrued expenditure incurred by the issuer, less consideration paid by the issuer in relation to that financial arrangement before the 1st day of April 1988, and in the case of the holder of a financial arrangement, the acquisition price of that financial arrangement together with all accrued income derived by the holder, less consideration received by the holder in respect of that financial arrangement before the 1st day of April 1988.
“(3)
Every reference in this section to an income year shall, where the trustee of a superannuation scheme furnishes a return of income under section 15 of this Act for an accounting year ending with an annual balance date other than the 31st day of March, be deemed to be a reference to the accounting year corresponding with that income year, and, in every such case, this section shall, with any necessary modifications, apply accordingly.
“232c Mixed funds of different categories of superannuation scheme
For any income year where the trustees of a superannuation fund receive income that is treated as income of both a superannuation category 1 scheme and a superannuation category 2 scheme, the income of the trustees shall be attributed to those schemes respectively on a basis satisfactory to the Commissioner.
“232d National Provident Fund
The Board of the National Provident Fund shall be liable for income tax in the same manner in all respects as if the superannuation arrangements provided by the National Provident Fund were superannuation schemes that are trusts and the Board were the trustee of those schemes.
“232e Government Superannuation Fund
The Board of the Government Superannuation Fund shall be liable for income tax in the same manner in all respects as if the Fund were a superannuation scheme that is a trust and the Board were the trustee of that scheme.
“232f Valuation of assets of superannuation schemes previously exempt from income tax
“(1)
For the purposes of determining, in respect of the income year commencing on the 1st day of April 1988, the amount of any deduction allowable under section 108 of this Act for any superannuation category 1 scheme (being a scheme that was or was deemed to be a superannuation category 1 scheme on the 1st day of April 1988) in respect of the depreciation of any asset that—
“(a)
Was acquired by the trustees of the scheme before the 1st day of April 1988; and
“(b)
Was not used in the production of assessable income of the scheme before that date by reason of being an asset used in the tax exempt activities of the scheme,—
the Commissioner shall, subject to this section, have regard to the cost of the asset and to all amounts that the Commissioner would have allowed as a deduction under section 108 of this Act if the asset had been used in the production of assessable income of the scheme for—
“(c)
The income year in which the asset was acquired; and
“(d)
Any subsequent income year commencing on or before the 1st day of April 1987.
“(2)
Where any asset to which subsection (1) of this section applies is a building, the Commissioner shall, when determining the amount of any deduction allowable in respect of the asset under section 108 of this Act, have regard to the amount of expenditure that the scheme incurred in acquiring the asset.
“(3)
Where there is any question under this section as to—
“(a)
The cost of any asset acquired by the trustees of a superannuation category 1 scheme before the 1st day of April 1988; or
“(b)
The date on which the trustees of the scheme altered or added to any such asset,—
it shall be determined by agreement between the trustees of the scheme and the Commissioner or, in default of such agreement, by the Commissioner.”
18 Determination of “other income”
Section 336b of the principal Act (as inserted by section 17 of the Income Tax Amendment Act 1984) is hereby amended by inserting in item a of the formula, after the words “income year”
, the words “, together with any amount received in the form of a pension from a superannuation fund or an annuity from the Life Insurance Fund of a company to which section 204 of this Act applies, which amount is not otherwise included in the taxable income of the national superannuitant”
.
19 Interpretation
Section 336n(1) of the principal Act (as inserted by section 34(1) of the Income Tax Amendment Act (No. 2) 1985) is hereby amended by inserting, after paragraph (g) of the definition of the term “fringe benefit”
, the following paragraphs:
“(ga)
Any loan provided by a superannuation fund to the extent that it constitutes assessable income of the fund pursuant to section 232a of this Act:
“(gb)
Any specified superannuation contribution made on or after the 1st day of April 1989:
“(gc)
Any benefit by way of the provision of services to a superannuation fund to the extent that the Commissioner is satisfied that the expenditure incurred in providing those services would have been deductible under this Act from the income of the superannuation fund if that expenditure had been incurred by the superannuation fund:”.
20 New Part Xc inserted in principal Act
(1)
The principal Act is hereby amended by inserting, after Part Xb (as inserted by section 34(1) of the Income Tax Amendment Act (No. 2) 1985), the following Part:
“PART Xc “Specified Superannuation Contribution Withholding Tax
“336z Application
Except as otherwise provided in this Part, this Part of this Act shall apply notwithstanding anything in any other Part of this Act.
“336za Specified superannuation contribution withholding tax imposed
“(1)
A final withholding tax (in this Act called the specified superannuation contribution withholding tax) is hereby imposed on any specified superannuation contribution made to a superannuation fund on or after the 1st day of April 1989, and shall be charged at the rate specified in clause 13 of the First Schedule to this Act.
“(2)
For the purposes of this Part of this Act, unless the context otherwise requires, the amount of a specified superannuation contribution shall be deemed to be the aggregate of—
“(a)
The amount of the specified superannuation contribution received by the superannuation fund; and
“(b)
The amount of any specified superannuation contribution withholding tax payable pursuant to this Part of this Act in respect of the contribution.
“336zb Specified superannuation contribution withholding tax to be deducted
Where an employer makes a specified superannuation contribution, the employer shall, at the time of making the contribution, make a deduction of specified superannuation contribution withholding tax therefrom of an amount determined in accordance with section 336za of this Act.
“336zc Payment period
Every employer who makes a deduction of specified superannuation contribution withholding tax from a specified superannuation contribution shall, not later than the 20th day of the month next after the month in which the employer has made any such deduction, pay to the Commissioner the amount of the deduction.
“336zd Furnishing of statement
“(1)
Every employer who in any month makes any deduction of specified superannuation contribution withholding tax from any specified superannuation contribution shall, not later than the 20th day of the month next after the month in which the employer has made any such deduction, deliver to the Commissioner a statement in a form prescribed by the Commissioner showing such particulars as are prescribed in that statement of the specified superannuation contribution and of the specified superannuation contribution withholding tax relating thereto.
“(2)
The Commissioner may extend the time for delivery of the statement referred to in subsection (1) of this section in such cases and to such extent as the Commissioner thinks fit.
“336ze Specified superannuation contributions not to be assessable income of fund
Notwithstanding anything in this Act, no specified superannuation contribution shall be included in the assessable income of the trustees of the superannuation fund to whom that specified superannuation contribution is made.
“336zf Failure to deduct tax
Where an employer fails to make any deduction of specified superannuation contribution withholding tax from any specified superannuation contribution in accordance with the obligations under section 336zb of this Act—
“(a)
The amount in respect of which default has been made shall, notwithstanding any other provision of this Act, be deemed for the purposes of this Act to be an amount calculated in accordance with the following formula:
where—
a
is the rate of specified superannuation contribution withholding tax, expressed as a percentage, stated in clause 13 of the First Schedule to this Act and applying at the time the contribution was made; and
b
is the amount of the contribution (exclusive of any amount of specified superannuation contribution withholding tax) received by the superannuation fund; and
“(b)
That amount shall constitute a debt payable by the employer to the Commissioner, and shall be deemed to have become due and payable to the Commissioner on the 20th day of the month next after the month in which the specified superannuation contribution was made.
“336zg Assessment of tax
“(1)
The Commissioner may, in respect of any employer who is chargeable with specified superannuation contribution withholding tax, make an assessment of the amount of the specified superannuation contribution on which, in the Commissioner’s judgment, specified superannuation contribution withholding tax ought to be levied and an assessment of the amount of that tax, and that employer shall be liable to pay the tax so assessed except so far as the employer establishes on objection that the assessment is excessive or that the employer is not chargeable with the tax so assessed.
“(2)
Sections 23, 27, and 29 of this Act shall apply, so far as may be, with respect to every assessment made under subsection (1) of this section as if—
“(a)
In those sections, the expression ‘taxpayer’ included a person who is chargeable with specified superannuation contribution withholding tax; and
“(b)
In section 23, the expression ‘tax already assessed’ included specified superannuation contribution withholding tax already assessed under subsection (1) of this section.
“(3)
An assessment made under this section shall be subject to objection in the same manner as an assessment of income tax levied under section 38 of this Act, and Part III of this Act shall apply, so far as may be, to an objection to an assessment made under this section as if the terms ‘income tax’ and ‘tax’ used in that Part included specified superannuation contribution withholding tax.
“336zh Additional tax for failure to deduct
(1)
Where—
“(a)
Any employer, being an employer under an obligation under this Part of this Act to make a deduction of specified superannuation contribution withholding tax from a specified superannuation contribution, fails to make, wholly or in part, the deduction; or
“(b)
Any employer who has made a deduction of specified superannuation contribution withholding tax fails to pay, wholly or in part, on or before the last day of the time prescribed, the amount of the deduction to the Commissioner,—
that employer shall, unless the Commissioner is satisfied that the employer has not been guilty of wilful neglect or default, on the expiry of the day on which that failure occurs be liable, without conviction, in addition to any other penalty to which the employer may be liable, to a penalty of an amount equal to—
“(c)
Ten percent of the amount in respect of which default has been made (that amount being referred to in this subsection as ‘the amount in default’); and
“(d)
Ten percent of so much of—
“(i)
The amount in default; and
“(ii)
The amount of any penalty added in accordance with paragraph (c) of this subsection,—
as remains unpaid at the end of the day on which there expires the period of 6 months immediately following the day on which the failure to pay occurred; and
“(e)
Ten percent of so much of—
“(i)
The amount in default; and
“(ii)
The amount of any penalty added in accordance with paragraph (c) or paragraph (d) of this subsection; and
“(iii)
The amount of any penalty previously added in accordance with this paragraph,—
as remains unpaid at the expiry of any of the periods of 6 months that, consecutively, succeed the 6-month period referred to in paragraph (d) of this subsection.
“(2)
For the purposes of subsection (1)(b) of this section, a deduction of specified superannuation contribution withholding tax shall be deemed to have been made if and when payment is made of the net amount of any payment consisting of any specified superannuation contribution.
“(3)
A penalty imposed under this section shall for all purposes be deemed to be of the same nature as the amount or part thereof in respect of which it is imposed and shall be recoverable accordingly.
“(4)
Subject to this Part of this Act, the other Parts of this Act, as far as they are applicable and with any necessary modifications, shall apply with respect to the amount of every penalty imposed under this section as if it were additional tax under section 398 of this Act and as if the person liable to the penalty were the taxpayer.
“336zi Penal tax for failure to deduct
“(1)
Where—
“(a)
Any employer, being an employer under an obligation under this Part of this Act to make a deduction of specified superannuation contribution withholding tax from a payment consisting of any specified superannuation contribution, fails wholly or in part to make the deduction; or
“(b)
Any person knowingly applies or permits to be applied the amount or any specified superannuation contribution withholding tax or any part thereof for any purpose other than the payment thereof to the Commissioner,—
that employer or person shall be chargeable by way of penalty, in addition to any other penalty to which the employer or person may be liable, with an additional amount (hereinafter referred to as penal tax) not exceeding an amount equal to treble the amount in respect of which default has been made (hereinafter referred to as the deficient deduction).
“(2)
For the purposes of subsection (1)(b) of this section, a deduction of specified superannuation contribution withholding tax shall be deemed to have been made if and when payment is made of the net amount of any specified superannuation contribution, and the amount of any specified superannuation contribution withholding tax shall be deemed to have been applied for a purpose other than the payment thereof if that amount is not duly paid to the Commissioner:
“Provided that no person shall be chargeable with penal tax under subsection (1)(b) of this section if that person satisfies the Commissioner that the amount of the specified superannuation contribution withholding tax has been accounted for, and that the failure to account for it within the prescribed time was due to mistake, illness, accident, or other cause beyond that person’s control.
“(3)
Penal tax imposed by this section shall for all purposes be deemed to be of the same nature as the deficient deduction, and shall be recoverable accordingly.
“(4)
Subject to this Part of this Act, the other Parts of this Act, as far as they are applicable and with any necessary modifications, shall apply with respect to all penal tax imposed under this section as if—
“(a)
It were penal tax under section 420 of this Act; and
“(b)
The person chargeable with the penal tax imposed under this section were the taxpayer; and
“(c)
The deficient deduction were deficient tax payable for the same year of assessment as that in which the deficient deduction became due and payable to the Commissioner.
“336zj Offences
“(1)
Without limiting the application of section 416 of this Act, every person commits an offence against this Act who—
“(a)
Being a person under an obligation under this Part of this Act to make a deduction of specified superannuation contribution withholding tax from a specified superannuation contribution fails wholly or in part to make the deduction; or
“(b)
Knowingly applies or permits to be applied the amount of any specified superannuation contribution withholding tax or any part thereof for any purpose other than the payment thereof to the Commissioner.
“(2)
For the proposes of subsection (1)(b) of this section, a deduction of specified superannuation contribution withholding tax shall be deemed to have been made if and when payment is made of the net amount of any specified superannuation contribution, and the amount of any specified superannuation contribution withholding tax shall be deemed to have been applied for a purpose other than the payment thereof if that amount is not duly paid to the Commissioner:
“Provided that no person shall be convicted of an offence under subsection (1)(b) of this section if the person satisfies the court that the amount of the specified superannuation contribution withholding tax has been accounted for, and that the person’s failure to account for it within the prescribed time was due to mistake, illness, accident, or other cause beyond that person’s control.
“336zk Application of other provisions
“(1)
Subject to this Part of this Act, sections 365(1a), 365(2), 365(3), 367, and 371 of this Act, as far as they are applicable and with any necessary modifications, shall, for the purposes of this Part of this Act, apply as if—
“(a)
Every reference in those sections to a tax deduction were a reference to a deduction of specified superannuation contribution withholding tax:
“(b)
Every reference in those sections to Part XI of this Act were a reference to this Part of this Act.
“(2)
Subject to this Part of this Act, the other Parts of this Act (other than sections 365, 367, and 371), as far as they are applicable and with any necessary modifications, shall apply with respect to specified superannuation contribution withholding tax as if it were income tax levied under section 38 of this Act; but nothing in this Part of this Act shall be construed so as to include specified superannuation contribution withholding tax in the terms ‘income tax’ or ‘tax’ for the purposes of section 398a or section 413a of this Act.”
(2)
This section shall apply to specified superannuation contributions made on or after the 1st day of April 1989.
21 Determination of assessable income
Section 374b(1) of the principal Act (as inserted by section 17(1) of the Income Tax Amendment Act (No. 2) 1986) is hereby amended by adding after paragraph (h) (as added by section 11(4) of the Income Tax Amendment Act (No. 3) 1987) the expression “; and”
, and the following paragraph:
“(i)
Where any person receives, on or after the 1st day of April 1990, any distribution from a superannuation scheme, and an employer of that person (being an employer by whom the person continues to be employed one month after the date of receipt of the distribution) has made contributions to that superannuation scheme in the income year in which the distribution was received or in the immediately preceding 2 income years, the amount of that distribution shall, unless the Commissioner in the Commissioner’s discretion determines otherwise, be included in the person’s assessable income for the income year or years determined by the Commissioner as being the income year or years for which the contributions were appropriate, less an amount that the Commissioner determines is attributable to the member’s contributions for any such year:
“Provided that this paragraph shall not apply to any person who receives any distribution from a superannuation scheme as a result of and on or after the person’s retirement from employment with an employer who was a contributor to the scheme.”
22 Interpretation
Section 394a of the principal Act (as inserted by section 55 of the Income Tax Amendment Act (No. 5) 1988 is hereby amended by inserting in the definition of the term “income tax”
, after the words “excess retention tax,”
, the words “any specified superannuation contribution withholding tax,”
.
23 Payment of tax by public authorities
Section 396 of the principal Act is hereby amended by inserting, after the words “income tax”
, the words “or any other tax or amount under this Act”
.
24 Deduction of tax from payment due to defaulters
(1)
Section 400(1) of the principal Act (as substituted by section 47(1) of the Income Tax Amendment Act 1980) is hereby amended by adding to the definition of the term “income tax”
the following paragraph:
“(e)
An amount that pursuant to section 336zf of this Act constitutes a debt payable to the Commissioner:”.
(2)
Section 400(1) of the principal Act (as so substituted) is hereby further amended by inserting in the definition of the term “taxpayer”
, after the words “or paragraph (d)”
, the words “or paragraph (e)”
.
25 Publication of names of tax evaders
Section 427(1)(c) of the principal Act is hereby amended by inserting after the expression “section 323 or”
(as inserted by section 43(1) of the Income Tax Amendment Act (No. 2) 1985), the expression “section 336zi or”
.
26 Keeping of business records
(1)
Section 428(3) of the principal Act is hereby amended by inserting, after paragraph (b), the following paragraph:
“(ba)
Is a person to whom the provisions of Part Xc of this Act apply and who makes any specified superannuation contribution to a superannuation fund:”.
(2)
Section 428(3) of the principal Act is hereby further amended by inserting, after paragraph (h) (as inserted by section 59(3) of the Income Tax Amendment Act (No. 5) 1988), the expression “; and”
, and the following paragraph:
“(i)
Every specified superannuation contribution, and the taxable value thereof, made by the person to any superannuation fund, those records to include (without limiting the generality of the foregoing provisions of this paragraph) details of the recipient of the specified superannuation contribution and the occasion of making it,—”.
27 First Schedule amended
(1)
The First Schedule to the principal Act is hereby amended by repealing clause 2a (as inserted by section 42(1) of the Income Tax Amendment Act (No. 2) 1982 and amended by section 19 of the Income Tax Amendment Act 1984), and substituting the following clause:
“2a Life insurance companies
On the amount of taxable income derived by a company to which section 204 of this Act applies from life insurance business carried on by it, the basic rate of income tax shall be—
“(a)
For every $1 of the amount that is assessable under section 204(9) of this Act, 33c; and
“(b)
For every $1 of the amount that is assessable under subsection (9a) or subsection (9b) of section 204 of this Act, 25c.”
(2)
The First Schedule to the principal Act is hereby further amended by repealing clauses 9a and 9b (as inserted by section 42(2) of the Income Tax Amendment Act (No. 2) 1982), and substituting the following clauses:
“9a Trustees of superannuation category 1 and category 2 schemes
On the amount of taxable income derived by the trustees of a superannuation category 1 or category 2 scheme, the basic rate of income tax shall be,—
“(a)
In the case of a scheme that was or was deemed to be a superannuation category 1 scheme on or before the 17th day of December 1987 (not being a scheme that was classified by the Government Actuary as a personal pension scheme and that admitted new members after that date), 25c for every $1 of the amount of that taxable income; and
“(b)
In any other case, 33c for every $1 of the amount of that taxable income.
“9b Trustees of superannuation category 3 schemes
On the amount of the taxable income derived by the trustees of any superannuation category 3 scheme, the basic rate of income tax for every $1 of that amount shall be 40.5c.”
(3)
The First Schedule to the principal Act is hereby further amended by adding to Part A the following subheading and clause:
“Specified Superannuation Contribution Withholding Tax
“13 Specified superannuation contribution withholding tax
On the amount of any specified superannuation contribution (being the gross amount of that contribution before deduction or specified superannuation contribution withholding tax) by an employer to a superannuation fund, the specified superannuation contribution withholding tax for every $1 of that amount shall be 33c.”
(4)
The following enactments are hereby consequentially repealed:
(a)
Section 42(2) of the Income Tax Amendment Act (No. 2) 1982:
(b)
Section 19 of the Income Tax Amendment Act 1984:
(c)
Section 4(1)(a) of the Income Tax Amendment Act (No. 4) 1985.
(5)
Subsections (1) and (2) of this section shall apply with respect to the tax on income derived—
(a)
In the income year that commenced on the 1st day of April 1988 and in every subsequent year; and
(b)
In relation to any company or superannuation category 1 or category 2 scheme that has made an election in accordance with section 15 of the principal Act, in any income year of the company or fund that commences before the 1st day of April 1988 and ends after that date, and in every subsequent year.
(6)
Subsection (3) of this section shall apply with respect to the tax on specified superannuation contributions made on or after the 1st day of April 1989.
28 Amendments to National Provident Fund Act 1950
(1)
The National Provident Fund Act 1950 is hereby amended by repealing section 8 (as amended by section 39(2) of the Income Tax Amendment Act (No. 2) 1982).
(2)
Section 66a of the National Provident Fund Act 1950 (as so inserted) is hereby further amended by adding the following subsections:
“(2)
For the purposes of the Income Tax Act 1976, the schemes referred to in paragraphs (a) to (e) of subsection (1) of this section shall be deemed to be, and to have been as from the 31st day of March 1983, superannuation category 1 schemes.
“(3)
For the purposes of section 150 of the Income Tax Act 1976, the schemes referred to in paragraphs (d) and (e) of subsection (1) of this section shall be deemed to be, and to have been as from the 31st day of March 1983, subsidised employee superannuation schemes.”
(3)
Section 39(2) of the Income Tax Amendment Act (No. 2) 1982 is hereby consequentially repealed.
(4)
Subsection (1) of this section shall apply with respect to—
(a)
The tax on income derived in the income year that commenced on the 1st day of April 1988 and in every subsequent year:
(b)
The land tax for the year of assessment commencing on the 1st day of April 1989 and for every subsequent year.
29 Amendment to Government Superannuation Fund Act 1956
(1)
The Government Superannuation Fund Act 1956 is hereby amended by repealing section 18.
(2)
This section shall apply with respect to—
(a)
The tax on income derived in the income year that commenced on the 1st day of April 1988 and in every subsequent year:
(b)
The land tax for the year of assessment commencing on the 1st day of April 1989 and for every subsequent year.
Transitional Provisions
30 Assessable income of superannuation category 1 and category 2 schemes for non-standard accounting year in which 1 April 1988 occurs
(1)
In this section, unless the context otherwise requires,—
“First part of the income year”, in relation to an income year referred to in this section, means the period commencing with the first day of the income year and ending with the 31st day of March 1988 (both dates inclusive):
“Income year”, in relation to a taxpayer who has made an election in accordance with section 15 of the principal Act to furnish a return for the year ending with the date of the annual balance of the taxpayer’s accounts, means a year ending with the date of that annual balance:
“New law” means the provisions of the principal Act as amended by this Act, as those provisions relate to any income, expenditure, profit, or loss to be included in determining the assessable income of a taxpayer:
“Previous law” means the provisions of the principal Act as they were in force before the enactment of this Act, as those provisions relate to any income, expenditure, profit, or loss to be included in determining the assessable income of a taxpayer:
“Second part of the income year”, in relation to any income year referred to in this section, means the period commencing with the 1st day of April 1988 and ending with the last day of the income year (both dates inclusive).
(2)
The assessable income of the trustees of a superannuation category 1 scheme (being a scheme that was or was deemed to be a superannuation category 1 scheme on the 1st day of April 1988) that has an income year ending on a day other than the 31st day of March shall, for any income year of the scheme that commences before the 1st day of April 1988 and ends on or after that date, be calculated in accordance with the following formula:
where—
a
is the amount of the assessable income of the trustees of the scheme for the income year, determined as if the new law applied for the whole of the income year, but excluding the amount of any profit or loss on the sale or other disposal during the income year of any investments of the scheme; and
b
is the number of days in the second part of the income year; and
c
is the amount of any profit or loss on the sale or disposal during the second part of the income year of any investments of the scheme (including any financial arrangement), determined in accordance with the new law; and
d
is the number of days in the income year of the scheme.
(3)
The assessable income of the trustees of a superannuation category 2 scheme (being a scheme that was or was deemed to be a superannuation category 2 scheme on the 1st day of April 1988) that has an income year ending on a day other than the 31st day of March shall, for any income year of the scheme that commences before the 1st day of April 1988 and ends on or after that date, be calculated in accordance with the following formula:
where—
a
is the amount of the assessable income of the trustees of the scheme for the income year determined as if the new law applied for the whole of the income year, but excluding the amount of any profit or loss on the sale or other disposal during the income year of any investments of the scheme; and
b
is the amount of any profit or loss on the sale or other disposal during the first part of the income year of any investments of the scheme (including any financial arrangement), determined in accordance with the previous law; and
c
is the amount of any profit or loss on the sale or other disposal during the second part of the income year of any investments of the scheme (including any financial arrangement), determined in accordance with the new law; and
d
is the amount of deductible expenditure for the income year determined as if the new law applied for the whole of the income year, less the amount of deductible expenditure for the income year determined as if the previous law applied for the whole of the income year; and
e
is the number of days in the first part of the income year; and
f
is the number of days in the income year of the scheme.
31 Provisional tax and terminal tax
(1)
Notwithstanding anything in Part XII of the principal Act, no provisional tax shall be payable in respect of the income year ending on the 31st day of March 1989 by—
(a)
The trustees of any superannuation category 1 scheme (being a scheme that was or was deemed to be a superannuation category 1 scheme on the 1st day of April 1988) in respect or the assessable income of that scheme:
(b)
Any company to which section 204 of this Act applies in respect of the income of the company that is assessable under subsection (9a) or subsection (9b) of that section.
(2)
Notwithstanding anything in Part XII of the principal Act, where any provisional tax is payable in respect of the income year ending on the 31st day of March 1990 by—
(a)
The trustees of any superannuation category 1 scheme (being a scheme that was or was deemed to be a superannuation category 1 scheme on the 1st day of April 1988) with an income year ending after the 30th day of September 1989 but before the 1st day of March 1990, in respect of the assessable income of that scheme; or
(b)
Any company to which section 204 of this Act applies, being a company with an income year ending after the 30th day of September 1989 but before the 1st day of March 1990, in respect of the income of the company that is assessable under subsection (9b) of that section,—
the first instalment of provisional tax for the income year ending on the 31st day of March 1990 shall not be due until the second instalment date specified in the Eighth Schedule to the principal Act.
(3)
Notwithstanding anything in section 388 of the principal Act, where any terminal tax is due and payable under that section in respect of the income year ending on the 31st day of March 1988 by—
(a)
The trustees of any superannuation category 1 scheme (being a scheme that was or was deemed to be a superannuation category 1 scheme on the 1st day of April 1988) with an income year ending after the 31st day of March 1988 but before the 1st day of October 1988, in respect of the assessable income of that scheme; or
(b)
Any company to which section 204 of this Act applies, being a company with an income year ending after the 31st day of March 1988 but before the 1st day of October 1988, in respect of the income of the company that is assessable under subsection (9a) or subsection (9b) of that section,—
half the amount of that tax shall be payable on the 7th day of July 1989 and the other half of the amount of that tax shall be payable on the 7th day of February 1990.
(4)
Notwithstanding anything in section 388 of the principal Act, where any terminal tax is due and payable under that section in respect of the income year ending on the 31st day of March 1989 by—
(a)
The trustees of any superannuation category 1 scheme (being a scheme that was or was deemed to be a superannuation category 1 scheme on the 1st day of April 1988) with an income year ending after the 30th day of September 1988 but before the 1st day of April 1989, in respect of the assessable income of that scheme; or
(b)
Any company to which section 204 of this Act applies, being a company with an income year ending after the 30th day of September 1988 but before the 1st day of April 1989, in respect of the income of the company that is assessable under subsection (9b) of that section,—
half the amount of that tax shall be payable on the date on which it falls due and payable in accordance with section 388 of the principal Act, and the other half of the amount of that tax shall be payable on the date on which terminal tax is due and payable in accordance with that section for the income year ending on the 31st day of March 1990.
(5)
Every reference in this section to an income year shall, where the taxpayer furnishes a return of income under section 15 of this Act for an accounting year ending with an annual balance date other than the 31st day of March, be deemed to be a reference to the accounting year corresponding with that income year, and in every such case this section shall, with any necessary modifications, apply accordingly.
32 Furnishing of returns by superannuation category 1 schemes and life insurance companies with balance dates 1 April 1988 to 30 September 1988
(1)
The trustee of a superannuation scheme that was or was deemed to be a superannuation category 1 scheme on the 1st day of April 1988, being a scheme—
(a)
To which subsection (2) of section 30 of this Act applies; and
(b)
Whose authorised balance date for the income year referred to in that subsection is any date from the 1st day of April 1988 to the 30th day of September 1988 (both dates inclusive),—
shall furnish to the Commissioner, not later than the 7th day of July 1989 or such later date as the Commissioner may allow, a return in the prescribed form of income derived by the scheme in that income year.
(2)
A company that is a company—
(a)
To which subsection 204(9b) of the principal Act (as inserted by section 11(3) of this Act) applies; and
(b)
Whose authorised balance date for the income year referred to in that subsection is any date from the 1st day of April 1988 to the 30th day of September 1988 (both dates inclusive)—
shall furnish to the Commissioner, not later than the 7th day of July 1989 or such later date as the Commissioner may allow, a return in the prescribed form of income referred to in section 204(8a)(a) of the principal Act (as inserted by section 11(2) of this Act) derived by the company in that income year.
(3)
Nothing in subsection (4) or in any other provision of section 17 of this Act shall apply to require a return in respect of income referred to in this section to be furnished to the Commissioner before the 7th day of July 1989, but nothing in this section shall apply to remove any requirement under the principal Act to furnish a return in respect of any other income of the superannuation scheme or company, as the case may be.
Part II Miscellaneous Provisions
33 Interpretation
(1)
Section 2 of the principal Act is hereby amended by omitting from paragraph (c) of the definition of the term “extra emolument”
(as amended by section 2(1) of the Income Tax Amendment Act (No. 3) 1988) the words “and not being a payment, or part of a payment, that is deemed to be a dividend in terms of section 152(4)(a) of this Act”
.
(2)
This section shall apply to payments made on or after the 1st day of April 1989.
34 Meaning of term “dividends”
(1)
Section 4(3) of the principal Act (as substituted by section 31(1) of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by omitting from the definition of the term “specified payments”
the expression “4a(3)”
, and substituting the expression “4a(2)”
.
(2)
This section shall apply with respect to the tax on income derived in the income year commencing on the 1st day of April 1988 and in every subsequent year.
35 Exclusions from term “dividends”
(1)
Section 4a(1)(c) of the principal Act (as substituted by section 31(1) of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by repealing subparagraph (iv), and substituting the following subparagraph:
“(iv)
The qualifying premium returned per share is an amount calculated in accordance with the following formula:
where—
a
is the amount of the premium of the kind referred to in paragraph (e) of this subsection paid upon subscription for all shares of the company of the same class as those being redeemed, less the amount of any premiums distributed or applied before the redemption; and
b
is an amount equal to the number of shares of the company of the same class as those being redeemed on issue immediately before the redemption:”.
(2)
Section 4a(7) of the principal Act (as so substituted) is hereby amended by repealing paragraph (b), and substituting the following paragraph:
“(b)
The term ‘bonus issue’ in accordance with section 3(3) of this Act (as that provision applied from time to time before its repeal by section 31(1) of the Income Tax Amendment Act (No. 5) 1988).”
(3)
Section 4a(12)(a) of the principal Act (as so substituted) is hereby amended by omitting from subparagraph (iii) the words “voting rights”
, and substituting the words “ordinary shares”
.
(4)
This section shall apply with respect to the tax on income derived in the income year commencing on the 1st day of April 1988 and in every subsequent year.
36 Incomes wholly exempt from tax
(1)
Section 61(35) of the principal Act (as substituted by section 7(3) of the Income Tax Amendment Act (No. 2) 1986) is hereby amended by inserting, after the words “other than from”
, the words “national superannuation or”
.
(2)
Section 61 of the principal Act is hereby amended by adding the following paragraph:
“(60)
Income derived from any new start grant (as defined in section 64fb(1) of this Act).”
(3)
Subsection (1) of this section shall be deemed to have come into force on the 1st day of October 1986 and shall apply with respect to the tax on income derived on and from that date.
(4)
Subsection (2) of this section shall apply to new start grants paid on or after the 4th day of November 1988.
37 New start grants for farmers
(1)
The principal Act is hereby amended by inserting before section 64g (as inserted by section 2(1) of the Income Tax Amendment Act 1987) the following section:
“64fb
“(1)
For the purposes of this section,—
“‘Business of farming’ means business as a farmer engaged in animal husbandry (including poultry-keeping, bee-keeping, and the breeding of horses other than bloodstock), horticulture, or cropping:
“‘New start grant’ means a grant of money that is paid to a person in respect of drought relief by the Government of New Zealand with the approval of the New Zealand Rural Trust, and is designated by the Minister of Agriculture as a new start grant.
“(2)
Where—
“(a)
Any amount owing by a taxpayer under a financial arrangement is forgiven or otherwise remitted (wholly or in part) on or before the 30th day of September 1990 as a prerequisite to the payment to any person of a new start grant in respect of drought relief; and
“(b)
The amount so owing and forgiven or otherwise remitted was incurred by the taxpayer on or before the 30th day of September 1990 in the carrying on of the business of farming in respect of which the new start grant was made; and
“(c)
The amount so owing and forgiven or otherwise remitted would, but for this section, be required to be taken into account under sections 64b to 64m of this Act in calculating the taxpayer’s assessable income,—
that amount shall not be so taken into account under those sections to the extent that it cannot be set off against—
“(d)
Any loss incurred by the taxpayer in carrying on the business of farming in the income year in which the amount owing was forgiven or otherwise remitted; and
“(e)
Any loss incurred by the taxpayer in respect of that business of farming that is available to be carried forward and set off or deducted against the taxpayer’s assessable income in that income year in accordance with section 188 or section 188a of this Act; and
“(f)
Any loss of an associated person or entity to the extent (if any) specified by the Commissioner pursuant to subsection (3) of this section.
“(3)
Where—
“(a)
The taxpayer and any other person or entity are associated persons within the meaning of section 245b of this Act; and
“(b)
The other person or entity—
“(i)
“Also carries on or has carried on the business of farming in respect of which the new start grant is paid; or
“(ii)
Is or was the owner of an estate in fee simple or of a leasehold estate in respect of land used in the business of farming in respect of which the new start grant is paid; and
“(c)
The Commissioner is satisfied that the taxpayer has a substantial degree of control over the associated person or entity, or that there is a substantial identity of interests between the taxpayer and the associated person or entity; and
“(d)
The associated person or entity has incurred or has available any loss of a kind referred to in paragraphs (d) and (e) of subsection (2) of this section incurred in respect of the business of farming, or of the land used in that business, in respect of which the new start grant is paid,—
the Commissioner may, to the extent that the Commissioner considers appropriate having regard to any interests of the associated person or body (including interests of any other persons in that associated person or body) that are independent of or separate from those of the taxpayer, determine that, to the extent that the amount referred to in subsection (2) of this section cannot be set off against losses of the taxpayer, it shall be set off against those losses of the associated person or entity referred to in paragraph (d) of this subsection in such amount as the Commissioner may specify.
“(4)
Where the Commissioner makes a determination under subsection (3) of this section,—
“(a)
The Commissioner shall, as soon as conveniently may be after the determination is made, cause notice of the determination to be given to the associated person or entity the subject of the determination; and
“(b)
Except in so far as the associated person or entity establishes on objection that the amount specified by the Commissioner in the determination should not be set off against any loss of the person or entity, that amount shall, notwithstanding section 188 or section 188a or any other provision of this Act, be set off against that loss and the amount of that loss shall be reduced accordingly.”
(2)
This section shall be deemed to have come into force on the 4th day of November 1988.
38 Retiring allowances payable to employees
(1)
Section 68(5) of the principal Act is hereby amended by repealing paragraphs (b) and (c) including the provisos thereto (as amended by section 12(6) of the Income Tax Amendment Act (No. 3) 1983 and section 5(1)(i) of the Income Tax Amendment Act (No. 3) 1988).
(2)
Section 12(6) of the Income Tax Amendment Act (No. 3) 1983 and section 5(1)(i) of the Income Tax Amendment Act (No. 3) 1988 are hereby consequentially repealed.
(3)
This section shall apply to any bonus, gratuity, redundancy payment, or retiring allowance paid on or after the 1st day of April 1989.
39 Amounts remitted to be taken into account in computing income
(1)
Section 78 of the principal Act (as substituted by section 14 of the Income Tax Amendment Act (No. 3) 1983) is hereby amended by inserting at the beginning of subsection (1) the words “Subject to subsection (4) of this section,”
.
(2)
Section 78 of the principal Act (as so substituted) is hereby further amended by adding the following subsections:
“(4)
Where—
“(a)
The amount of any expenditure or loss incurred by a taxpayer on or before the 30th day of September 1990 has been taken into account in calculating the taxpayer’s assessable income from the business of farming (as defined in section 64fb(1) of this Act); and
“(b)
The liability of the taxpayer in respect of that amount is remitted or cancelled (wholly or in part) as a prerequisite to the payment to any person of a new start grant (as also so defined) in respect of drought relief; and
“(c)
The amount of the liability so remitted or cancelled would, but for this subsection, be treated as increasing the amount of the taxpayer’s assessable income pursuant to subsection (1) of this section,—
the taxpayer’s assessable income shall not be so increased by that amount to the extent that the amount cannot be set off against—
“(d)
Any loss incurred by the taxpayer in carrying on the business of farming in the income year in which liability for the amount is remitted or cancelled; and
“(e)
Any loss incurred by the taxpayer in respect of that business of farming that is available to be carried forward and set off against the taxpayer’s assessable income in that income year in accordance with section 188 or section 188a of this Act; and
“(f)
Any loss of an associated person or entity to the extent (if any) specified by the Commissioner pursuant to subsection (5) of this section.
“(5)
Where—
“(a)
The taxpayer and any other person or entity are associated persons within the meaning of section 245b of this Act; and
“(b)
The other person or entity—
“(i)
Also carries on or has carried on the business of farming in respect of which the new start grant is paid; or
“(ii)
Is or was the owner of an estate in fee simple or of a leasehold estate in respect of land used in the business of farming in respect of which the new start grant is paid; and
“(c)
The Commissioner is satisfied that the taxpayer has a substantial degree of control over the associated person or entity, or that there is a substantial identity of interests between the taxpayer and the associated person or entity; and
“(d)
The associated person or entity has incurred or has available any loss of a kind referred to in paragraphs (d) and (e) of subsection (4) of this section incurred in respect of the business of farming, or of the land used in that business, in respect of which the new start grant is paid,—
the Commissioner may, to the extent that the Commissioner considers appropriate having regard to any interests of the associated person or body (including interests of any other persons in that associated person or body) that are independent of or separate from those of the taxpayer, determine that, to the extent that the amount referred to in subsection (4) of this section cannot be set off against losses of the taxpayer, it shall be set off against those losses of the associated person or entity referred to in paragraph (d) of this subsection in such amount as the Commissioner may specify.
“(6)
Where the Commissioner makes a determination under subsection (5) of this section,—
“(a)
The Commissioner shall, as soon as conveniently may be after the determination is made, cause notice of the determination to be given to the associated person or entity the subject of the determination; and
“(b)
Except in so far as the associated person or entity establishes on objection that the amount specified by the Commissioner in the determination should not be set off against any loss of the person or entity, that amount shall, notwithstanding section 188 or section 188a or any other provision of this Act, be set off against that loss and the amount of that loss shall be reduced accordingly.”
(3)
This section shall apply with respect to the tax on income derived in the income years commencing on the 1st days of April 1988, 1989, and 1990.
40 Standard values of wine, brandy, and whisky
Section 87 of the principal Act is hereby amended by adding the following subsection:
“(4)
Subsections (1), (2), and (3) of this section shall not apply at the end of the income year ending with the 31st day of March 1989, or in any subsequent income year, with respect to any trading stock, being—
“(a)
Wine; or
“(b)
Brandy; or
“(c)
Whisky,—
that is manufactured in New Zealand and is held as reserve stock for maturity purposes.”
41 Spreading of income from the revaluation of trading stocks of wine, brandy, and whisky
The principal Act is hereby amended by inserting, after section 87, the following section:
“87a
“(1)
For the purposes of this section,—
“‘Liquor licence holder’ means any taxpayer who is a holder, or on whose behalf another person is a holder, of a grape wine licence granted under the Wine Makers Act 1981, or of a licence to distil spirits granted under Part II of the Distillation Act 1971:
“‘Liquor revaluation income’, in relation to any specified trading stock owned at the end of the income year ending with the 31st day of March 1989 by any liquor licence holder, means the amount (if a positive amount) calculated in accordance with the following formula:
a − b
where—
a
is the value at which that specified trading stock is to be taken into account by that liquor licence holder in accordance with section 85 of this Act, at the end of that income year; and
b
is the value of that specified trading stock calculated by reference to the standard value that would have applied at the beginning of that income year in terms of section 87 of this Act:
“‘Specified trading stock’ means any trading stock, being—
“(a)
Wine; or
“(b)
Brandy; or
“(c)
Whisky,—
that is manufactured in New Zealand and held as reserve stock for maturity purposes.
“(2)
Where any liquor licence holder derives liquor revaluation income from specified trading stock during the income year ending with the 31st day of March 1989, the liquor licence holder may by notice in writing to the Commissioner within the time in which the liquor licence holder is required to furnish a return of income for that income year, or within such further time as the Commissioner may allow, elect to either—
“(a)
Apportion that liquor revaluation income between that income year and all or any of the 8 income years immediately succeeding that income year, and in every such case the amount of income so apportioned shall be deemed to have been income derived by the liquor licence holder in the income year to which it is apportioned; or
“(b)
Claim a deduction in calculating the assessable income for that income year amounting to one half of the liquor revaluation income of that liquor licence holder.
“(3)
An election made under subsection (2) of this section shall be final.
“(4)
The amount of any liquor revaluation income apportioned to any income year in accordance with the provisions of subsection (2)(a) of this section shall not be less than the lesser of—
“(a)
An amount equal to 11 percent of the liquor revaluation income:
“(b)
The amount of the balance of the liquor revaluation income not included in calculating the assessable income of the liquor licence holder in any income year preceding that income year.
“(5)
Any apportionment made under subsection (2)(a) of this section may at any time be cancelled by the Commissioner, and in every such case the whole of the liquor revaluation income so apportioned shall be deemed to have been derived by the liquor licence holder in the income year immediately preceding the income year in respect of which the apportionment is cancelled, except to the extent to which the income has been apportioned to and assessed for an earlier year.
“(6)
Every reference in this section or in section 87 of this Act to an income year shall, where the taxpayer furnishes a return of income under section 15 of this Act for an accounting year ending with an annual balance date other than the 31st day of March, be deemed to be a reference to the accounting year corresponding with that income year, and in every such case this section shall, with any necessary modifications, apply accordingly.”
42 Certain deductions not permitted
(1)
Section 106(1) of the principal Act is hereby amended by inserting, after paragraph (f), the following paragraphs:
“(fa)
Additional tax for late payment of any fringe benefit tax or land tax:
“(fb)
Any penalty imposed pursuant to section 336zh of this Act for failure to deduct or to pay specified superannuation contribution withholding tax:
“(fc)
Any penalty in respect of any stamp and cheque duties imposed under the Stamp and Cheque Duties Act 1971:”.
(2)
Section 106(2)(a) of the principal Act is hereby amended by omitting the words “and fringe benefit tax”
(as inserted by section 34(9) of the Income Tax Amendment Act (No. 2) 1985).
(3)
Section 34(9) of the Income Tax Amendment Act (No. 2) 1985 is hereby consequentially repealed.
(4)
Subsections (2) and (3) of this section shall apply with respect to the fringe benefit tax on fringe benefits provided or granted on or after the 1st day of April 1989.
43 New sections inserted in principal Act
The principal Act is hereby amended by inserting, after section 140a, the following sections:
“140aa Year in which fringe benefit tax deductible
“(1)
For the purposes of calculating the assessable income derived in any income year by any taxpayer, any amount of fringe benefit tax that becomes due and payable by the taxpayer in respect of fringe benefits provided or granted in that income year shall be deemed to be expenditure incurred by the taxpayer in that income year and in no other income year, and the deduction (if any) allowable in respect thereof under section 104 of this Act shall be computed accordingly.
“(2)
This section shall apply with respect to the fringe benefit tax on fringe benefits provided or granted on or after the 1st day of April 1989.
“140ab Year in which specified superannuation contribution withholding tax deductible
For the purposes of calculating the assessable income derived in any income year by any taxpayer, any amount of specified superannuation contribution withholding tax that becomes due and payable by the taxpayer in respect of specified superannuation contributions made by the taxpayer in that income year shall be deemed to be expenditure incurred by the taxpayer in that income year and in no other income year, and the deduction (if any) allowable in respect thereof under section 104 of this Act shall be computed accordingly.”
44 Retiring allowances payable to employees
(1)
Section 152 of the principal Act is hereby amended by repealing subsections (3), (4), and (5).
(2)
This section shall apply to any bonus, gratuity, retiring allowance, or other lump sum paid on or after the 1st day of April 1989.
45 Energy trading operators
Section 197c(9)(a) of the principal Act (as inserted by section 33(1) of the Income Tax Amendment Act (No. 4) 1986) is hereby amended, as from its commencement, by omitting the expression “section 45(5)(a)”
, and substituting the expression “section 45(5a)”
.
46 Profits of mutual associations in respect of transactions with members
Section 199(3)(b) of the principal Act (as amended by section 40(3) of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by omitting the expression “section 394r(1)(a) or”
.
47 Interpretation provision relating to trusts
Section 226(1) of the principal Act (as substituted by section 11 of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by repealing paragraphs (b) and (c) of the definition of the term “corpus”
, and substituting the following paragraphs:
“(b)
Property settled on the trust by a disposition of property, whether directly or indirectly by one transaction or a series of transactions, which property would, but for that disposition,—
“(i)
Have constituted assessable income of the settlor; or
“(ii)
Have constituted assessable income of the settlor if at the time of that disposition the settlor had been a person resident in New Zealand subject to the provisions of this Act:
“(c)
Property settled on the trust by a disposition of property, whether directly or indirectly by one transaction or a series of transactions, which property would, but for that disposition, have constituted a dividend—
“(i)
In respect of which the settlor would have been liable to deduct an amount by way of dividend withholding payment pursuant to section 394zl of this Act; or
“(ii)
In respect of which the settlor would, if the settlor were at the time of the disposition a person resident in New Zealand subject to the provisions of this Act, have been liable to deduct an amount by way of dividend withholding payment pursuant to that section:
“(d)
Property settled on the trust by a disposition of property, whether directly or indirectly by one transaction or a series of transactions, in respect of which disposition the settlor claims a deduction in calculating the assessable income of the settlor for the purposes of New Zealand income tax:”.
48 Trusts settled by persons before becoming resident
(1)
Section 226a of the principal Act (as substituted by section 11 of the Income Tax Amendment Act (No. 5) 1988) is hereby amended—
(a)
By inserting in subsection (1), after the word “within 12 months of”
, the words “the later of the 31st day of May 1989 or”
:
(b)
By inserting in subsection (3)(a), after the words “12 months from”
, the words “the later of the 31st day of May 1989 or”
:
(c)
By omitting the words “income, profits, and gains”
from—
(i)
The 2 places where they occur in subsection (2); and
(ii)
The 2 places where they occur in subsection (3); and
(iii)
The 3 places where they occur in subsection (4),—
and substituting in each case the words “income, capital profits, or capital gains”
.
(2)
This section shall apply with respect to the tax on income derived in the income year commencing on the 1st day of April 1988 and in every subsequent year.
49 Trusts that may become qualifying trusts
(1)
Section 227a of the principal Act (as substituted by section 11 of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by omitting the expression “31st day of March 1989”
, and substituting the expression “31st day of May 1989”
.
(2)
Section 227a of the principal Act (as so substituted) is hereby further amended by omitting the words “trust derived from outside New Zealand”
, and substituting the following word and paragraphs:
“trust—
“(a)
Derived from outside New Zealand; or
“(b)
Derived from New Zealand only as non-resident withholding income, if the obligations of all persons to pay income tax in relation to that non-resident withholding income have been satisfied,—”.
(3)
This section shall apply with respect to the tax on income derived in the income year commencing on the 1st day of April 1988 and in every subsequent year.
50 Trustee income
(1)
Section 228(7) of the principal Act (as substituted by section 11 of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by omitting the words “Where, in relation to any trust and any income year, any trustee, settlor, or beneficiary of that trust would not otherwise be liable to tax on trustee income by virtue of this section, that trustee, settlor, or beneficiary may”
, and substituting the words “In relation to any trust and any income year, any trustee, settlor, or beneficiary of a trust may”
.
(2)
This section shall apply with respect to the tax on income derived in the income year commencing on the 1st day of April 1988 and in every subsequent year.
51 Disclosure
Section 231 of the principal Act (as substituted by section 11 of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by omitting the expression “31st day of March 1989”
, from—
(a)
The 4 places where it occurs in subsection (1); and
(b)
The 1 place where it occurs in subsection (2); and
(c)
The 1 place where it occurs in subsection (3),—
and substituting in each case the expression “31st day of May 1989”
.
52 Definition of term “associated persons”
(1)
Section 245b of the principal Act (as inserted by section 24 of the Income Tax Amendment Act (No. 5) 1988) is hereby amended—
(a)
By omitting from subparagraph (i) of the proviso to paragraph (h) the word “subsection”
, and substituting the word “section”
:
(b)
By omitting from both subparagraphs (i) and (ii) of the proviso to paragraph (h) the words “other person”
, at the 10 places where they occur, and substituting in each case the word “settlor”
.
(2)
This section shall be deemed to have come into force on the 1st day of April 1988 and shall apply with respect to income derived on and after that date.
53 Calculation of control interest
(1)
Section 245c(5)(a)(iii) of the principal Act is hereby amended by omitting the word “those”
, and substituting the word “whose”
.
(2)
This section shall be deemed to have come into force on the 1st day of April 1988 and shall apply with respect to income derived on and after that date.
54 Foreign investment fund income and losses
(1)
Section 245r(2) of the principal Act (as inserted by section 24 of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by omitting from paragraph (d) the expression “income, profits, and gains”
, and substituting the expression “the aggregate of the income, capital profits, and capital gains”
.
(2)
Section 245r(2) of the principal Act (as so inserted) is hereby further amended by repealing paragraph (f), and substituting the following paragraph:
“(f)
The aggregate of the income tax and tax on capital profits and capital gains (whether New Zealand or foreign income tax or tax) paid or payable and any withholding tax paid or payable on behalf of that foreign entity in respect of its income, capital profits, and capital gains derived during any accounting year of that foreign entity which ended on a date falling within that income year was equal in amount to not less than 20 percent of the aggregate of such income, capital profits, and capital gains measured according to generally accepted accounting principles; or”.
(3)
Section 245r(2) of the principal Act (as so inserted) is hereby further amended by inserting in paragraph (j), after the words “The foregoing paragraphs of this subsection”
, the words “, except paragraph (h),”
.
(4)
This section shall be deemed to have come into force on the 1st day of April 1988 and shall apply with respect to income derived on and after that date.
55 Transitional provision relating to income interests in companies resident in country or territory that is added to Seventeenth Schedule
(1)
Section 245y(1) of the principal Act (as inserted by section 24 of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by omitting the words “to have acquired that interest on the 1st day of April 1990 or, in any case where the person disposed of the income interest prior to the 31st day or March 1990, never to have held that income interest”
, and substituting the following paragraphs:
“(a)
Subject to paragraph (b) of this subsection,—
“(i)
To have acquired that interest on the 1st day of April 1990; or
“(ii)
Where the person disposed of the income interest before the 1st day of April 1990, never to have held that interest:
“(b)
Where the income interest is in a controlled foreign company resident in a country or territory that, pursuant to any amendment to this Act, becomes before the 1st day of April 1990 a country or territory specified in the Seventeenth Schedule to this Act,—
“(i)
To have acquired that interest on the date on which the country or territory became so specified; or
“(ii)
Where the person disposed of the income interest before the date on which the country or territory became so specified, never to have held that interest.”
(2)
Section 245y of the principal Act (as so inserted) is hereby amended by inserting, after subsection (1), the following subsection:
“(1a)
For the purposes of subsections (1) and (7) of this section, a controlled foreign company or foreign entity shall be deemed not to be resident in a country or territory specified in the Seventeenth Schedule to this Act to the extent that the company or entity—
“(a)
Is resident in a country or territory specified in Part B of that Schedule; and
“(b)
Is not a company or entity of a kind specified in the second column of that Part of that Schedule in relation to that country or territory.”
56 Interpretation of term “fringe benefit”
(1)
Section 336n(1) of the principal Act is hereby amended by omitting from paragraph (k) of the definition of the term “fringe benefit”
the words “or section 152(4)(b)”
.
(2)
This section shall apply with respect to the fringe benefit tax on fringe benefits provided or granted on or after the 1st day of April 1989.
57 Fringe benefit tax imposed
(1)
Section 336s of the principal Act (as inserted by section 34(1) of the Income Tax Amendment Act (No. 2) 1985 and amended by section 19(1) of the Income Tax Amendment Act (No. 2) 1988) is hereby amended—
(a)
By inserting, after the words “Every employer of an employee who has”
, the words “, before the 1st day of April 1989,”
:
(b)
By omitting from paragraph (a) the expression “(da) and (db)”
, and substituting the expression “(da), (db), (dc), and (dd)”
:
(c)
By omitting from the proviso the words “this section”
, in both places where they occur, and substituting in each case the words “this subsection”
.
(2)
Section 336s of the principal Act (as so substituted) is hereby further amended by adding the following subsection:
“(2)
Every employer who has, on or after the 1st day of April 1989, provided or granted a fringe benefit to an employee of the employer shall be liable to pay a special tax by way of an income tax to be known as fringe benefit tax at the rate of 49 percent of the taxable value of that fringe benefit:
“Provided that, for the purposes of this subsection, in relation to an employee and to any quarter, the value of any fringe benefit or, as the case may be, the aggregate of the values of the fringe benefits (being in every case a fringe benefit that consists of a benefit of the kind referred to in paragraph (e) of the definition of the term ‘fringe benefit’ in section 336n(1) of this Act and being in every case the value that, but for this proviso, would be the taxable value of the fringe benefit) provided or granted in the quarter to the employee by the employer of the employee shall be reduced to,—
“(a)
“Where that value or, as the case may be, that aggregate does not exceed $50, nil:
“(b)
Where that value or, as the case may be, that aggregate exceeds $50, an amount equal to the balance remaining after deducting from that value or, as the case may be, that aggregate the amount of $50;—
and the liability of the employer under this subsection (apart from this proviso) shall be reduced accordingly.”
(3)
This section shall apply to the fringe benefit tax on fringe benefits provided or granted on or after the 1st day of October 1988.
58 Determination of assessable income
(1)
Section 374b(1)(e)(ii) of the principal Act (as inserted by section 17(1) of the Income Tax Amendment Act (No. 2) 1986) is hereby amended by inserting, after the expression “86fa,”
(as inserted by section 11(2)(a) of the Income Tax Amendment Act (No. 3) 1987), the expression “87a,”
.
(2)
Section 374b(1)(e) of the principal Act (as so inserted) is hereby further amended by adding the following subparagraph:
“(iv)
Any amount of income that, under section 87a of this Act, is liquor revaluation income that is deemed to be, or has been, derived by the person in the income year that commenced on the 1st day of April 1988; and”.
(3)
This section shall apply with respect to the tax on income derived in the income year that commenced on the 1st day of April 1988 and in every subsequent year.
59 Family support credit of tax
(1)
Section 374d(2) of the principal Act (as inserted by section 17(1) of the Income Tax Amendment Act (No. 2) 1986 and amended by section 70 of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by omitting the words “the person commences or ceases to be entitled to a family benefit (whether as to the whole or a part thereof) in respect of any child,”
, and substituting the following paragraphs:
“(c)
The person commences or ceases to be entitled to a family benefit (whether as to the whole or a part thereof) in respect of any child; or
“(d)
A child in respect of whom the person is entitled to receive a family benefit attains the age of 16 years,—”.
(2)
Section 374d(3) of the principal Act (as so inserted and amended) is hereby amended by omitting the words “the eligible person commences or ceases to be entitled to a family benefit (whether as to the whole or a part thereof) in respect of any child,”
, and substituting the following paragraphs:
“(c)
The eligible person commences or ceases to be entitled to a family benefit (whether as to the whole or a part thereof) in respect of any child; or
“(d)
A child in respect of whom the eligible person is entitled to receive a family benefit attains the age of 16 years,—”.
(3)
Section 14 of the Income Tax Amendment Act (No. 3) 1988 is hereby amended by repealing subsections (1) and (2).
(4)
This section shall apply with respect to the tax on income derived in the income year commencing on the 1st day of April 1989 and in every subsequent year.
60 Guaranteed minimum family income credit of tax
(1)
Section 374e(3) of the principal Act (as inserted by section 17(1) of the Income Tax Amendment Act (No. 2) 1986 and substituted by section 15 of the Income Tax Amendment Act (No. 3) 1988) is hereby amended by omitting the words “the person commences or ceases to be entitled to a family benefit (whether as to the whole or part thereof) in respect of any child,”
, and substituting the following paragraphs:
“(c)
The person commences or ceases to be entitled to a family benefit (whether as to the whole or a part thereof) in respect of any child; or
“(d)
A child, in respect of whom the person is entitled to receive a family benefit, attains the age of 16 years,—”
(2)
Section 374e(3) of the principal Act (as so inserted and substituted) is hereby further amended by omitting item x, and substituting the following item:
“x
is an amount equal to the sum of $13,416 increased by the amount, in relation to that person and that eligible period, represented by item y in the formula contained in section 374d(2) of this Act; and”.
(3)
Section 374e(4) of the principal Act (as so inserted and substituted) is hereby amended by omitting the words “the person commences or ceases to be entitled to a family benefit (whether as to the whole or part thereof) in respect of any child, there shall be allowed to the said eligible person and the other person”
, and substituting the following paragraphs and words:
“(c)
The eligible person commences or ceases to be entitled to a family benefit (whether as to the whole or a part thereof) in respect of any child; or
“(d)
A child, in respect of whom the eligible person is entitled to receive a family benefit, attains the age of 16 years,—
there shall be allowed to each of the said eligible person and the other person”.
(4)
Section 374e(4) of the principal Act (as so inserted and substituted) is hereby further amended by omitting item x, and substituting the following item:
“x
is an amount equal to the sum of $13,416 increased by the amount, in relation to that person and the other person and that eligible period, represented by item y in the formula contained in section 374d(3) of this Act; and”.
(5)
This section shall apply with respect to the tax on income derived in the income year commencing on the 1st day of April 1989 and in every subsequent year.
61 Companies required to maintain imputation credit account
(1)
Section 394b(2) of the principal Act (as inserted by section 55(1) of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by inserting, after paragraph (a), the following paragraph:
“(aa)
A company resident in New Zealand but not subject to tax in respect of part or all of its income pursuant to a provision of arrangements to which effect is given by an Order in Council made under section 294 of this Act, where the company is, for the purposes of the arrangements, treated as not being a resident of New Zealand; or”.
(2)
This section shall come into force on the 1st day of April 1989.
62 Debits arising to imputation credit account
(1)
Section 394e(1)(b) of the principal Act (as inserted by section 55(1) of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by omitting the words “(exclusive of the amount of any refundable excess paid pursuant to section 156f(4) of this Act, or interest on overpaid tax paid pursuant to section 413a of this Act).”
(2)
Section 394e(1)(g) of the principal Act (as so inserted) is hereby amended by omitting the words “subsection (4) of”
.
(3)
Section 394e(3) of the principal Act (as so inserted) is hereby amended by adding the following paragraph:
“(f)
Subject to subsection (3a) of this section,—
“(i)
Any unit trust (as defined in section 211 of this Act) that throughout the relevant shareholding continuity period has not less than 100 unit holders:
“(ii)
Any unit trust (as so defined), for the imputation year in which the unit trust was first established, if at the end of that imputation year the unit trust has not less than 100 unit holders.”
(4)
Section 394e of the principal Act (as so inserted) is hereby amended by inserting, after subsection (3), the following subsection:
“(3a)
Subsection (3)(f) of this section shall not operate to exclude a unit trust from the provisions of subsection (1)(g) of this section if, in the opinion of the Commissioner, the units of that unit trust are not, or at the relevant time were not, genuinely available to members of the public.”
(5)
Subsection (1) of this section shall come into force on the 1st day of April 1989.
(6)
Subsections (2) to (4) of this section shall be deemed to have come into force on the 1st day of April 1988.
63 Remissions and refunds of imputation penalty tax
Section 394o(1)(b) of the principal Act (as inserted by section 55(1) of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by omitting the words “or before the company ceased to be an imputation credit account company, as the case may be”
.
64 Dividend paid before 1 February 1989
Section 394zj(3) of the principal Act (as inserted by section 55(1) of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by omitting the expression “7th day of February 1989”
, and substituting the expression “31st day of March 1989”
.
65 Payment and recovery of dividend withholding payment, etc.
Section 394zn(5) of the principal Act (as inserted by section 55(1) of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by omitting the words “or further dividend withholding payment, or by way of any additional tax for late payment of any such payment or additional tax”
.
66 Refund for overpayment and to company in loss
Section 394zo of the principal Act (as inserted by section 55(1) of the Income Tax Amendment Act (No. 5) 1988) is hereby amended—
(a)
By omitting from subsection (4)(c) the words “the most recently ending imputation year”
, and substituting the words “that income year”
:
(b)
By omitting from item (b) of subsection (5) the expression “paragraphs (c) and (e)”
, and substituting the expression “paragraph (e)”
.
67 Offences
(1)
Section 394zs(2) of the principal Act (as inserted by section 55(1) of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by omitting the expression “section 394zm”
, and substituting the expression “section 394zn”
.
(2)
This section shall be deemed to have come into force on the 1st day of April 1988.
68 Debits arising to dividend withholding payment account
(1)
Section 394zw(1)(f) of the principal Act (as inserted by section 55(1) of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by omitting the words “subsection (4) of”
.
(2)
Section 394zw(3) of the principal Act (as so inserted) is hereby amended by adding the following paragraph:
“(f)
Subject to subsection (3a) of this section,—
“(i)
Any unit trust (as defined in section 211 of this Act) that throughout the relevant shareholding continuity period has not less than 100 unit holders:
“(ii)
Any unit trust (as so defined), for the imputation year in which the unit trust was first established, if at the end of that imputation year the unit trust has not less than 100 unit holders.”
(3)
Section 394zw of the principal Act (as so inserted) is hereby amended by inserting, after subsection (3), the following subsection:
“(3a)
Subsection (3)(f) of this section shall not operate to exclude a unit trust from the provisions of subsection (1)(f) of this section if, in the opinion of the Commissioner, the units of that unit trust are not, or at the relevant time were not, genuinely available to members of the public.”
(4)
This section shall be deemed to have come into force on the 1st day of April 1988.
69 Company may attach dividend withholding payment credit to dividend
Section 394zx(2) of the principal Act (as inserted by section 55(1) of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by omitting the words “dividend withholding payment company”
, and substituting the words “dividend withholding payment account company”
.
70 Dividend withholding payment account return to be furnished where Commissioner so requires, or where company ceases to be resident in New Zealand
Section 394zzd of the principal Act (as inserted by section 55(1) of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by omitting the words “A company”
, and substituting the words “A dividend withholding payment account company”
.
71 Remissions and refunds of dividend withholding payment penalty tax
Section 394zzh(1)(b) of the principal Act (as inserted by section 55(1) of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by omitting the words “or before the company ceased to be resident in New Zealand, as the case may be”
.
72 Determinations by Commissioner as to credits and debits arising to dividend withholding payment account
Section 394zzj of the principal Act is hereby amended by omitting the words “dividend withholding payment credit account”
in each of the places where they occur in subsections (1), (2), (3), (4), and (6), and substituting in each case the words “dividend withholding payment account”
.
73 Dividend paid before 1 February 1989
Section 394zzk of the principal Act (as inserted by section 55(1) of the Income Tax Amendment Act (No. 5) 1988) is hereby amended—
(a)
By omitting from subsection (1) the words “dividend withholding payment company”
in both places where they occur, and substituting in each case the words “dividend withholding payment account company”
:
(b)
By omitting from subsection (3) the expression “subsection (1)”
in the 3 places that it occurs, and substituting in each case the expression “subsection (2)”
:
(c)
By omitting from subsection (4) the expression “7th day of February 1989”
, and substituting the expression “31st day of March 1989”
.
74 Credits and debits arising to branch equivalent tax account of company
(1)
Section 394zzp(3)(d) of the principal Act (as inserted by section 55(1) of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by omitting the words “subsection (6) of”
.
(2)
Section 394zzp(5) of the principal Act (as so inserted) is hereby amended by adding the following paragraph:
“(f)
Subject to subsection (5a) of this section,—
“(i)
Any unit trust (as defined in section 211 of this Act) that throughout the relevant shareholding continuity period has not less than 100 unit holders:
“(ii)
Any unit trust (as so defined), for the imputation year in which the unit trust was first established, if at the end of that imputation year the unit trust has not less than 100 unit holders.”
(3)
Section 394zzp of the principal Act (as so inserted) is hereby amended by inserting, after subsection (5), the following subsection:
“(5a)
Subsection (5)(f) of this section shall not operate to exclude a unit trust from the provisions of subsection (3)(d) of this section if, in the opinion of the Commissioner, the units of that unit trust are not, or at the relevant time were not, genuinely available to members of the public.”
(4)
This section shall be deemed to have come into force on the 1st day of April 1988.
75 Relief in cases of serious hardship
Section 414 of the principal Act is hereby amended by inserting, after subsection (2), the following subsection:
“(2a)
In any case where a new start grant (as defined in section 64fb(1) of this Act) in respect of drought relief is payable to a taxpayer, the Commissioner shall grant relief—
“(a)
To the taxpayer, or, if the taxpayer is deceased, the administrator or executor of the taxpayer; and
“(b)
If and to the extent that the Commissioner thinks it appropriate having regard to the matters referred to in section 64fb(3) of this Act, to a person or entity associated with the taxpayer within the meaning of that section,—
from the payment of any unpaid tax that relates to income derived from—
“(c)
The business of farming in respect of which the new start grant was paid:
“(d)
Land used in carrying on that business of farming:
“(e)
The sale of the farm.”
76 Offences
Section 416(1)(ba) of the principal Act (as inserted by section 26 of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by omitting the words “corporate body”
, and substituting the word “person”
.
77 Additions to Seventeenth Schedule
(1)
The Seventeenth Schedule to the principal Act (as added by section 29 of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by inserting, after item 3, the following item:
| “3a. Fiji | (a)Companies obtaining relief or exemption from tax under the tax free zone or tax free factory scheme.” |
(2)
The Seventeenth Schedule to the principal Act (as so added) is hereby further amended by adding the following item:
| “9. Western Samoa | (a)Companies that by virtue of section 28(a) of the Off-Shore Banking Act 1987 are exempt from income tax in respect of an off-shore banking business conducted within Western Samoa: (b)Companies that by virtue of section 28(b) of the Off-Shore Banking Act 1987 are exempt from income tax in respect of dividends or earnings or interest derived in respect of shares or securities of a licensee under that Act. |
(3)
This section shall come into force on the 1st day of April 1989 and shall apply with respect to income derived on and after that date.
78 Amendment of Income Tax Amendment Act (No. 5) 1988 in respect of application of trust provisions
(1)
Section 9 of the Income Tax Amendment Act (No. 5) 1988 is hereby amended—
(a)
By omitting from the proviso the words “income, profits, and gains”
, and substituting the words “income, capital profits, or capital gains”
:
(b)
By inserting in the proviso, after the words “on or after the 1st day of April 1988,”
, the words “that distribution”
.
(c)
By adding to the proviso the words “except to the extent to which the distribution constitutes a dividend for the purposes of the principal Act or is made from a superannuation scheme”
.
(2)
This section shall apply with respect to the tax on income derived in the income year commencing on the 1st day of April 1988 and in every subsequent year.
79 Amendment of Income Tax Amendment Act (No. 5) 1988 in respect of transitional provisions for determination of place of residence
(1)
Section 23(4) of the Income Tax Amendment Act (No. 5) 1988 is hereby amended by repealing paragraph (b), including the proviso.
(2)
Section 23 of the Income Tax Amendment Act (No. 5) 1988 is hereby amended by adding the following subsections:
“(5)
Subject to subsections (6) and (7) of this section, this section shall apply for the purposes of determining the place of residence of a person other than a company with respect to the tax on income derived in the income year commencing on the 1st day of April 1989 and in every subsequent year.
“(6)
Where a person other than a company is personally absent from New Zealand for a period or periods exceeding in the aggregate 325 days in any period of 12 months, and any day of absence within that 12-month period falls on or between the 6th day of December 1988 and the last day of the income year that commenced on the 1st day of April 1988,—
“(a)
That person may elect that, for the purposes of determining the place of residence of that person for the period commencing with the 6th day of December 1988 and ending with the last day of the income year that commenced on the 1st day of April 1988, the provisions of section 241 of the principal Act (as substituted by this section), with the exception of subsection (1), shall apply; and
“(b)
Where a person so elects,—
“(i)
The person’s place of residence for that period shall, notwithstanding subsection (5) of this section, be determined in accordance with that section as so substituted; and
“(ii)
That section shall apply for that period as if the person did not have a permanent place of abode in New Zealand.
“(7)
Where a person other than a company is personally absent from New Zealand for a period or periods exceeding in the aggregate 325 days in any period of 12 months, and any day of absence within that 12-month period falls within the income year commencing on the 1st day of April 1989,—
“(a)
That person may elect that, for the purposes of determining the place of residence of that person for that income year, the provisions of subsection (1) of section 241 of the principal Act (as substituted by this section) shall not apply; and
“(b)
Where a person so elects, the person’s place of residence for that income year shall be determined in accordance with that section (as so substituted) as if the person did not have a permanent place of abode in New Zealand.”
80 Rates of income tax for year commencing on 1 April 1988
For the year commencing on the 1st day of April 1988, income tax shall be assessed, levied, and paid pursuant to Part IV of the principal Act at the basic rates specified in the First Schedule to the principal Act (as amended by section 22(1) of the Income Tax Amendment Act (No. 2) 1988, sections 23(1) and 25(1) of the Income Tax Amendment Act (No. 3) 1988, section 14 of the Income Tax Amendment Act (No. 5) 1988, and section 27 of this Act).
81 Rate of excess retention tax for year commencing on 1 April 1988
For the year commencing on the 1st day of April 1988, excess retention tax shall be assessed, levied, and paid pursuant to Part V of the principal Act at the rate specified in clause 11 of Part A of the First Schedule to that Act.
82 Repeal
The Income Tax Amendment Act (No. 2) 1987 is hereby consequentially amended by repealing sections 2, 3, and 4.
This Act is administered in the Inland Revenue Department.
Versions
Income Tax Amendment Act 1989
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