Income Tax Amendment Act 1991
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Income Tax Amendment Act 1991
Public Act |
1991 No 10 |
|
Date of assent |
31 March 1991 |
|
Contents
An Act to amend the Income Tax Act 1976
BE IT ENACTED by the Parliament of New Zealand as follows:
1 Short Title and commencement
(1)
This Act may be cited as the Income Tax Amendment Act 1991, and shall be read together with and deemed part of the Income Tax Act 1976 (hereinafter referred to as the principal Act).
(2)
Except as otherwise provided in this Act, this Act shall come into force on the day on which it receives the Royal assent.
2 Accruals in relation to income and expenditure in respect of financial arrangements
(1)
Section 64c(6) of the principal Act (as inserted by section 2 of the Income Tax Amendment Act 1987) is hereby amended by inserting, after the words “in relation to expenditure incurred”
, the words “or income derived”
.
(2)
Section 64c(6)(a) of the principal Act (as so inserted) is hereby amended by omitting the words “expenditure regularly incurred”
, and substituting the words “expenditure incurred or income derived”
.
(3)
Section 64c(6) of the principal Act (as so inserted) is hereby amended by repealing paragraph (c), and substituting the following paragraph:
“(c)
Whether, in respect of that issuer or class of issuers and that class of financial arrangements, the difference between expenditure which is deductible or income which is assessable under the provisions of this section other than this subsection, and expenditure or income which would be deductible or assessable if the discretion given to the Commissioner under this subsection were exercised, is not a material amount.”
(4)
This section shall apply with respect to the tax on income derived in the income year commencing on the 1st day of April 1990 and in every subsequent year.
3 Income and expenditure where financial arrangement redeemed or disposed of
Section 64f(2) of the principal Act (as inserted by section 2 of the Income Tax Amendment Act 1987 and amended by section 7(1) of the Income Tax Amendment Act (No. 2) 1989) is hereby amended by adding after subparagraph (ii)(B) of item c the expression and”, and the following subparagraph:
“(C)
All amounts that are assessable income of the person under section 172(2) of this Act in respect of the financial arrangement.”
4 Interpretation—trusts
(1)
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 the definition of the term “corpus”
(as amended by section 47 of the Income Tax Amendment Act 1989), and substituting the following definition:
“‘Corpus’, in relation to any trust, means an amount equal to the market value at the date of settlement of any property settled on the trust, not being—
“(a)
A settlement of property, whether made directly or indirectly and whether by one transaction or a series of transactions, by a trustee of another trust to the extent to which, if that property were distributed at that time to a person and that person were at that time a beneficiary resident in New Zealand of that other trust, that distribution would have constituted beneficiary income of that beneficiary or a taxable distribution to that beneficiary:
“(b)
A settlement of property on the trust, whether made directly or indirectly by one transaction or a series of transactions, which property would, but for that settlement—
“(i)
Have constituted assessable income of the settlor; or
“(ii)
Have constituted assessable income of the settlor if at the time of that settlement the settlor had been a person resident in New Zealand subject to the provisions of this Act:
“(c)
A settlement of property on the trust, whether made directly or indirectly by one transaction or a series of transactions, which property would, but for the settlement, 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 settlement 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)
A settlement of property on the trust, whether made directly or indirectly by one transaction or a series of transactions, in respect of which settlement the settlor claims a deduction in calculating the assessable income of the settlor for the purposes of New Zealand income tax:”.
(2)
The definition of the term “distribution”
in section 226(1) of the principal Act (as so substituted) is hereby amended by omitting the words “and includes”
, and substituting the words “and, without limiting the generality of this definition, includes”
.
(3)
Section 226 of the principal Act (as so substituted) is hereby amended by repealing subsection (6), and substituting the following subsection:
“(6)
For the purposes of this section and sections 227 to 233 of this Act, —
“(a)
The term ‘settlement’ means any action or failure to act on the part of any person or any transaction or series of transactions entered into by any person that has the effect of making that person a settlor:
“(b)
Where a person is or is deemed to be a settlor in respect of any settlement, that person is deemed to have made that settlement.”
(4)
Section 226 of the principal Act (as so substituted) is hereby further amended by inserting, after subsection (9), the following subsection:
“(9a)
For the purposes of this section and sections 227 to 233 of this Act, where any property of the kinds described in paragraphs (a) to (d) of the definition of the term ‘corpus’ in subsection (1) of this section is settled on a trust, the property shall be deemed to be income derived by a trustee of that trust in the income year in which it was settled on that trust.”
(5)
Section 226(10) of the principal Act (as so substituted) is hereby amended by omitting the words “trust that is a”
.
(6)
Section 47 of the Income Tax Amendment Act 1989 is hereby consequentially repealed.
5 Distributions from trusts
(1)
Section 230(1) of the principal Act (as substituted by section 11 of the Income Tax Amendment Act (No. 5) 1988) is hereby amended—
(a)
By omitting from paragraph (a) the words “(whether beneficiary income when derived or not)”
, and substituting the words “(whether, as between the parties to the trust, the income is treated as derived by a beneficiary or not)”
:
(b)
By omitting from paragraph (c) the word “suffered”
, and substituting the word “incurred”
.
(2)
Section 230(2) of the principal Act (as so substituted) is hereby amended by repealing paragraph (c), and substituting the following paragraph:
“(c)
To any distribution that is a distribution only by virtue of the application of paragraph (a) or paragraph (b) of the definition of the term ‘distribution in section 226(1) of this Act and not by virtue of the application of any other part of that definition; or”.
6 Interpretation—attributed foreign income, etc.
(1)
Section 245a(1) of the principal Act (as inserted by section 24 of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by repealing paragraph (c) of the definition of the term “income interest of 10 percent or greater”
, and substituting the following paragraph:
“(c)
An income interest equal to or greater than 10 percent before the application of section 245h(1) of this Act:”.
(2)
Section 245a(2) of the principal Act (as so inserted) is hereby amended by repealing the proviso following paragraph (e)(ii), and substituting the following proviso:
“Provided that any person who has an income interest or a control interest in that foreign company may elect, in the manner prescribed by the Commissioner, for the purposes of that person’s liability to income tax in income years commencing with the income year during which the election is made, that this paragraph shall not apply for the purposes of calculating the person’s income interests and control interests in the foreign company; and thereafter the election shall be irrevocable and shall apply to both income interests and control interests, and section 245e of this Act shall not apply to those income interests or control interests:”.
7 Definition of term “associated persons”
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 both paragraph (a)(iii) and paragraph (b) the expression “section 245d”
, and substituting in each case the expression “sections 245a(2)(e), 245d, and 245e”
:
(b)
By inserting in both paragraph (a)(iii) and paragraph (b), after the expression “section 245d(4) and (6)”
, the expression “and section 245e(7)”
:
(c)
By inserting in paragraph (c), after the words “provisions of this section”
where they secondly occur, the words “other than this paragraph”
:
(d)
By inserting in paragraph (f), after the words “provisions of this section”
, the words “other than this paragraph”
:
(e)
By omitting from paragraph (i) the words “is or was a settlor, and substituting the words ”
is a settlor”.
8 Calculation of control interest
(1)
Section 245c of the principal Act (as inserted by section 24 of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by inserting, after subsection (3), the following subsection:
“(3a)
Notwithstanding anything in section 245b of this Act, for the purposes of subsection (3) of this section a person resident in New Zealand who does not hold at any time any direct or indirect control interests in a foreign company, and any non resident relative of that person, are not associated persons.”
(2)
This section shall be deemed to have come into force on the 1st day of April 1988, and shall apply with respect to the tax on income derived on or after that date.
9 Calculation of income interest
(1)
Section 245d(4) 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 “less than 10 percent”
, and substituting the words “not an income interest of 10 percent or greater”
.
(2)
Section 245d(5) of the principal Act (as so inserted) is hereby amended by omitting from item b of the formula the words “income year”
in both places where they occur, and substituting in each case the words “accounting period”
.
(3)
Section 245d of the principal Act (as so inserted) is hereby amended by repealing subsection (6), and substituting the following subsection:
“(6)
Subject to section 245a(2)(e) of this Act, where at any time after the 1st day of April 1988 any person holding an income interest in a controlled foreign company becomes or ceases to be resident in New Zealand, for the purposes of calculating any attributed foreign income or attributed foreign loss of that person, that person shall not be treated as holding that income interest on any day on which that person was not resident in New Zealand.”
10 Attribution of income and losses using branch equivalent method
Section 245g(7) of the principal Act (as inserted by section 24 of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by omitting the word “measurement”
.
11 Cases where aggregate income interests are greater than 100 percent
(1)
Section 245h(1) of the principal Act (as inserted by section 24 of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by omitting from item b of the formula the words “attributable foreign income”
, and substituting the words “attributed foreign income”
.
(2)
Section 245h of the principal Act is hereby amended by repealing subsection (2).
12 Foreign tax credits
(1)
Section 245k(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 “, but does not include withholding tax paid or payable by that controlled foreign company on amounts that are not income derived by that controlled foreign company”
.
(2)
Section 245k(2) of the principal Act (as so inserted) is hereby amended by repealing the proviso.
(3)
Section 245k(6)(b) of the principal Act (as so inserted) is hereby amended by omitting items b and c of the formula, and substituting the following items:
“b
is the amount of the taxable distribution, including the tax which qualifies for a credit pursuant to paragraph (a) of this subsection, derived by the controlled foreign company; and
“c
is the total amount of the distribution (as defined in section 226 of this Act), including the tax which qualifies for a credit pursuant to paragraph (a) of this subsection, derived by the controlled foreign company.”
(4)
Section 245k(10)(c) of the principal Act (as so inserted) is here by amended by omitting the word “foreign”
where it first appears.
(5)
Subsection (2) of this section shall apply with respect to the tax on income derived in the income year commencing on the 1st day of April 1990 and in every subsequent year.
13 Controlled foreign companies in certain countries
Section 245p(2) 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 “net income or loss of the foreign company for that income year”
, and substituting the words “net income or loss of the controlled foreign company for that accounting period”
.
14 Date for payment of non-resident withholding tax
(1)
Sections 315(1), 316 (as substituted by section 27(1) of the Income Tax Amendment Act 1986), 319, and 320 of the principal Act (as amended by section 10 of the Income Tax Amendment Act (No. 2) 1989) are hereby amended by omitting the expression “14th day”
, and substituting in each case the expression “20th day”
.
(2)
Section 10 of the Income Tax Amendment Act (No. 2) 1989 is hereby consequentially repealed.
(3)
This section shall come into force on the 1st day of July 1992, and shall apply to all non-resident withholding tax payable on or after that date.
15 Payment of deductions of resident withholding tax
(1)
Section 327e of the principal Act (as inserted by section 12 of the Income Tax Amendment Act (No. 2) 1989) is hereby amended by omitting from subsections (1), (2), (3), (4), (6), and (7) the expression “14th day”
, and substituting in each case the expression “20th day”
.
(2)
This section shall come into force on the 1st day of July 1992, and shall apply to all resident withholding tax deductions made on or after that date.
16 Interpretation
(1)
Section 336n of the principal Act (as inserted by section 34(1) of the Income Tax Amendment Act (No. 2) 1985 and as variously amended) is hereby amended by inserting after the word “quarter”
, wherever it occurs in the section (other than in the definition of the term “quarter”
in subsection (1)), the words “or (where fringe benefit tax is payable on an income year basis pursuant to section 336tb of this Act) income year, as the case may be,”
.
(2)
Section 336n(1) of the principal Act (as so inserted) is hereby amended by inserting, after the definition of the term “quarter”
, the following definition:
“‘Shareholder-employee’ means a person who is in relation to a private company (as defined in section 2 of the Companies Act 1955)—
“(a)
A shareholder in and an employee of the private company (including a shareholder who is deemed to be an employee pursuant to subsection (8)(c) of this section); and
“(b)
A person to whom section 6(2) of this Act applies:”.
(3)
Section 336n of the principal Act (as so inserted) is hereby further amended by adding the following subsections:
“(9)
For the purposes of this Part of this Act, to the extent that it relates to an employer electing under section 336tb of this Act to pay fringe benefit tax on an income year basis in respect of fringe benefits provided or granted to shareholder-employees of the employer in any income year, where the employer 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, every reference in this Part to an income year shall, unless the context otherwise requires, be deemed to be a reference to that accounting year.
“(10)
In this Part of this Act, references to employers with an early balance date or a late balance date are references to employers who furnish returns of income under section 15 of this Act for accounting years ending with an annual balance date other than the 31st day of March, being references to—
“(a)
An employer with an early balance date, in the case of a balance date that falls on any day from the 1st day of October to the 30th day of March (both days inclusive):
“(b)
An employer with a late balance date, in the case of a balance date that falls on any day from the 1st day of April to the 30th day of September (both days inclusive).”
(4)
This section shall come into force on the 1st day of October 1991.
17 Value of fringe benefit
(1)
Section 336o of the principal Act (as inserted by section 34(1) of the Income Tax Amendment Act (No. 2) 1985) is hereby amended by repealing subsection (1), and substituting the following subsection:
“(1)
For the purposes of this Part of this Act, the value of any fringe benefit, being a benefit that consists of the private use or enjoyment, or the availability for private use or enjoyment, of a motor vehicle, shall, in relation to each motor vehicle the private use or enjoyment of which or the availability for private use or enjoyment of which constitutes that benefit, be—
“(a)
Where the benefit is subject to fringe benefit tax on a quarterly basis, an amount calculated in accordance with the following formula:
where—
y
is a number equal to the lesser of—
“(i)
The number of days, during the quarter, on which that benefit occurred, reduced by the number of days (if any), during the quarter, in relation to which the said motor vehicle is a work related vehicle; or
“(ii)
The number 90; and
z
is the amount, calculated in accordance with the Tenth Schedule to this Act, that in relation to the quarter and to the said motor vehicle is the value of the benefit that would be able to be enjoyed by the employee if the employee had unlimited private use or enjoyment of the motor vehicle in that quarter:
“(b)
Where the benefit is subject to fringe benefit tax on an annual basis pursuant to section 336ta of this Act, an amount equal to the aggregate of the amounts calculated under paragraph (a) of this subsection in respect of the benefit for the 4 quarters that fall within the relevant year:
“(c)
Where the benefit is subject to fringe benefit tax on an income year basis pursuant to section 336tb of this Act, an amount calculated in accordance with the following formula:
where—
y
is the number of days, in the income year, on which that benefit occurred, reduced by the number of days (if any), in the income year, in relation to which the said motor vehicle is a work related vehicle; and
z
is the amount, calculated in accordance with the Tenth Schedule to this Act, that in relation to the income year and to the said motor vehicle is the value of the benefit that would be able to be enjoyed by the employee if the employee had unlimited private use or enjoyment or availability for private use or enjoyment of the motor vehicle in that income year.”
(2)
The said section 336o is hereby further amended by inserting after the word “quarter”
, wherever it occurs in subsections (1a) to (6), the words “or (where fringe benefit tax is payable on an income year basis pursuant to section 336tb of this Act) income year, as the case may be,”
.
(3)
This section shall come into force on the 1st day of October 1991.
18 Taxable value of fringe benefit
(1)
Section 336p(1) of the principal Act (as inserted by section 34(1) of the Income Tax Amendment Act (No. 2) 1985) is hereby amended—
(a)
By inserting, after the words “employee in any quarter”
, the words “or (where fringe benefit tax is payable on an income year basis pursuant to section 336tb of this Act) in any income year”
:
(b)
By inserting in paragraph (a), after the words “in relation to the quarter”
, the words “or the income year, as the case may be,”
.
(2)
The said section 336p(1) is hereby further amended by repealing paragraph (b), and substituting the following paragraph:
“(b)
In relation to a motor vehicle which is owned in part by the employee, an amount equal to—
“(i)
Where the employer pays fringe benefit tax on a quarterly basis, 2. 5 percent; or
“(ii)
Where the employer pays fringe benefit tax on an annual basis pursuant to section 336ta of this Act, 2. 5 percent for each quarter within the relevant year during which the vehicle was owned in part by the employee; or
“(iii)
Subject to subsections (1a) and (1b) of this section, where the employer pays fringe benefit tax on an income year basis pursuant to section 336tb of this Act, 10 percent, —
of so much of the cost price of the vehicle as is the cost price of the vehicle to the employee.”
(3)
Section 336p of the principal Act (as so inserted) is hereby amended by inserting, after subsection (1), the following subsections:
“(1a)
For the purposes of subsection (1)(b) of this section, but subject to subsection (1b) of this section, where the vehicle is subject to fringe benefit tax on an income year basis pursuant to section 336tb of this Act, and any period for which the employer accounts for fringe benefit tax in relation to the vehicle is less or more than a normal income year by reason of-
“(a)
The employer commencing or ceasing business during that income year; or
“(b)
The employer furnishing a return for a period longer or shorter than a normal income year, where the employer has elected, with the consent of the Commissioner, to furnish a return for the year ending with the date of the annual balance of the employer’s accounts, —
the amount by which the value of the fringe benefit shall be reduced pursuant to subparagraph (iii) of the said subsection (1)(b) shall be an amount calculated in accordance with the following formula:
where a is the number of days in the period that is less or more than a normal income year.
“(1b)
Where an employee has not been part owner of a vehicle for the whole of—
“(a)
The income year referred to in subsection (1)(b)(iii) of this section; or
“(b)
The period referred to in subsection (1a) of this section, —
the amount by which the value of the vehicle shall be reduced pursuant to the relevant one of those provisions shall be reduced or further reduced, as the case may be, by the proportion that the number of days within the income year or period on which the employee was not a part owner of the vehicle bears to the total number of days within that income year or period, as the case may be.”
(4)
This section shall come into force on the 1st day of October 1991.
19 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) is hereby amended by repealing the proviso to subsection (2) (as substituted by section 57(2) of the Income Tax Amendment Act 1989).
(2)
The said section 336s is hereby further amended by adding the following subsections:
“(3)
Where, in relation to an employee and any quarter,—
“(a)
Any fringe benefit of the kind referred to in paragraph (e) of the definition of the term ‘fringe benefit’ in section 336n(1) of this Act is provided to the employee by his or her employer in that quarter; and
“(b)
The employer is required to pay fringe benefit tax on a quarterly basis in relation to that fringe benefit, —
the aggregate taxable value of all such fringe benefits so provided to the employee in that quarter shall be reduced by $75, and the liability of the employer under subsection (2) of this section shall be reduced accordingly.
“(4)
Where, in relation to an employee and any year, —
“(a)
Any fringe benefit of the kind referred to in paragraph (e) of the definition of the term ‘fringe benefit’ in section 336n(1) of this Act is provided to the employee by his or her employer in that year; and
“(b)
The employer is required in accordance with section 336ta of this Act to pay fringe benefit tax on an annual basis in relation to that benefit, —
the aggregate taxable value of all such fringe benefits so provided to the employee in that year shall be reduced by $75 for each quarter falling within that year in which any one or more of such benefits were provided.
“(5)
Subject to subsection (6) of this section, where, in relation to a shareholder-employee and any income year, —
“(a)
Any fringe benefit of the kind referred to in paragraph (e) of the definition of the term ‘fringe benefit’ in section 336n(1) of this Act is provided to the shareholder-employee by his or her employer in that income year; and
“(b)
The employer is required in accordance with section 336tb of this Act to pay fringe benefit tax on an income year basis in relation to that fringe benefit, —
the aggregate taxable value of all such fringe benefits so provided to the shareholder-employee in that income year shall be reduced by $300, and the liability of the employer under subsection (2) of this section shall be reduced accordingly.
“(6)
Where, in relation to any income year and an employer who pays fringe benefit tax on an income year basis in respect of that income year, any period for which the employer accounts for fringe benefit tax is less or more than a normal income year by reason of—
“(a)
The employer commencing or ceasing business during that income year; or
“(b)
The employer furnishing a return for a period longer or shorter than a normal income year, where the employer has elected, with the consent of the Commissioner, to furnish a return for the year ending with the date of the annual balance of the employer’s accounts, —
the amount by which the aggregate taxable value of the fringe benefits may be reduced pursuant to subsection (5) of this section shall be an amount determined in accordance with the following formula:
where a is the number of days in the period that is less or more than a normal income year.
“(7)
For the purposes of this section, —
“(a)
References to the aggregate taxable value of any fringe benefits are references to the aggregate taxable value of such benefits as determined in accordance with the provisions of this Part of this Act other than this section; and
“(b)
Where the aggregate taxable value of any fringe benefits of the kind referred to in subsections (3) to (6) of this section is less than the amount by which that value may be reduced pursuant to the relevant one of those subsections, the amount to which the taxable value of the fringe benefits is reduced shall be nil.”
(3)
This section shall apply to fringe benefit tax on fringe benefits provided or granted—
(a)
On or after the 1st day of April 1992, in the case of fringe benefits provided or granted by an employer who pays fringe benefit tax in respect of those fringe benefits—
(i)
On a quarterly basis; or
(ii)
On an annual basis pursuant to an election made under section 336ta of the principal Act; or
(b)
In any income year of an employer that commences on or after the 1st day of October 1991, in the case of fringe benefits provided or granted by an employer who, in respect of that income year, has elected to pay fringe benefit tax in respect of those fringe benefits on an income year basis pursuant to section 336tb of the principal Act.
20 Payment of fringe benefit tax every quarter
(1)
Section 336t of the principal Act (as substituted by section 37(1) of the Income Tax Amendment Act 1986) is hereby amended by inserting, at the beginning of subsection (1), the words “Subject to subsection (1a) of this section,”
.
(2)
The said section 336t is hereby further amended by inserting, after subsection (1), the following subsection:
“(1a)
This section shall not apply to any employer to the extent that the employer pays fringe benefit tax—
“(a)
On an annual basis pursuant to section 336ta of this Act; or
“(b)
On an income year basis pursuant to section 336tb of this Act.”
(3)
Section 336t(2) of the principal Act (as so substituted) is hereby amended by inserting, after the words “by an employer”
, the words “who is required to furnish a return under subsection (1) of this section”
.
(4)
This section shall come into force on the 1st day of October 1991.
21 New sections inserted
(1)
The principal Act is hereby amended by inserting, after section 336t (as substituted by section 37(1) of the Income Tax Amendment Act 1986), the following sections:
“336ta Payment of fringe benefit tax on annual basis in respect of employees other than shareholder-employees
“(1)
An employer who, in relation to any year commencing on the 1st day of April, meets the criteria specified in subsection (2) of this section may, by notice in accordance with subsection (3) of this section given not later than—
“(a)
The 30th day of June in that year; or
“(b)
Such later day in that year as is specified in relation to that employer by subsection (3)(c)(ii) of this section, —
elect to pay fringe benefit tax on an annual basis in relation to fringe benefits provided or granted in that year and subsequent years to employees of the employer other than shareholder-employees.
“(2)
An employer may make an election under subsection (1) of this section in respect of any year commencing on the 1st day of April where—
“(a)
Gross tax deductions (as defined in section 353(6) of this Act) and specified superannuation contribution withholding tax deductions payable by the employer in the preceding year did not exceed $100, 000; or
“(b)
The employer was not an employer in that preceding year.
“(3)
Every notice of election by an employer under subsection (1) of this section—
“(a)
Shall be in writing; and
“(b)
Shall state the first year (being a year commencing on the 1st day of April) to which the election applies; and
“(c)
Shall be furnished to the Commissioner not later than—
“(i)
The 30th day of June in the year in which the election first applies, in the case of an employer who was an employer in the preceding year; or
“(ii)
The last day of the quarter that first ends after the day on which the employer first became an employer of employees (other than shareholder-employees), in the case of an employer who was not an employer in the preceding year.
“(4)
Where an employer makes an election in accordance with this section to pay fringe benefit tax on an annual basis in respect of any year, —
“(a)
Fringe benefit tax shall, subject to section 336va of this Act, be payable by the employer in respect of the taxable value of fringe benefits provided or granted to employees of the employer (other than shareholder-employees) in that year and in every subsequent year; and
“(b)
Except as otherwise provided in this Part of this Act, the fringe benefit tax so payable shall be calculated in relation to fringe benefits provided or granted in any such year in the same manner as it would be calculated in relation to fringe benefits provided or granted in the 4 consecutive quarters that comprise that year.
“(5)
An employer who has made an election under this section in respect of any year shall, not later than the 31st day of May that first follows the end of that year, forward to the Commissioner a return, in a form prescribed by the Commissioner, setting out—
“(a)
In respect of the fringe benefits received or enjoyed by each of the employer’s employees (other than shareholder-employees) in that year, such details as are prescribed in the form; and
“(b)
A calculation of—
“(i)
The amount of fringe benefit tax payable in respect of the taxable value of those fringe benefits; and
“(ii)
The additional amount in the nature of interest that is payable under section 336tc of this Act in respect of the amount of fringe benefit tax so calculated, —
and the employer shall be liable to pay the total amount so calculated to the Commissioner not later than the said 31st day of May.
“(6)
For the purposes of subsection (1) of this section, where at any time an employer ceases business and begins a new business, or operates 2 or more businesses simultaneously, the gross tax deductions and specified superannuation contribution withholding tax deductions relating to all business carried on by the employer shall be aggregated.
“336tb Payment of fringe benefit tax on income year basis in respect of shareholder-employees
“(1)
An employer (being a private company as defined in section 2 of the Companies Act 1955) who, in relation to any income year of the employer, meets the criteria specified in subsection (2) of this section may, by notice in accordance with subsection (3) of this section given not later than—
“(a)
The end of the quarter that first ends after the commencement of the income year; or
“(b)
Such later day in that income year as is specified in relation to that employer by subsection (3)(c)(ii) of this section, —
elect to pay fringe benefit tax on an income year basis in relation to fringe benefits provided or granted in that income year and subsequent years to employees of the employer who are shareholder-employees.
“(2)
An employer may make an election under subsection (1) of this section in respect of any income year of the employer where—
“(a)
Gross tax deductions (as defined in section 353(6) of this Act) and specified superannuation contribution withholding tax deductions payable by the employer in the preceding year did not exceed—
“(i)
$100, 000; or
“(ii)
In the case of an employer with an early balance date, such proportion of $100, 000 as is equivalent to the proportion that the period commencing with the 1st day of April in the preceding year and ending with the date by which the employer’s notice of election is required by subsection (3)(c) of this section to be furnished to the Commissioner bears to a full year; or
“(b)
The employer was not an employer in the preceding year.
“(3)
Every notice of election by an employer under subsection (1) of this section—
“(a)
Shall be in writing; and
“(b)
Shall state the first income year of the employer to which the election applies; and
“(c)
Shall be furnished to the Commissioner not later than—
“(i)
The last day of the quarter that first ends after the commencement of the income year of the employer to which the election first applies; or
“(ii)
In the case of an employer who was not an employer in the preceding year, the last day of the quarter that, within the income year of the employer to which the election first applies, first ends after the day on which the employer first became an employer of employees.
“(4)
Where an employer makes an election in accordance with this section to pay fringe benefit tax on an income year basis in respect of any income year of the employer, fringe benefit tax shall, subject to section 336va of this Act, he payable by the employer in respect of the taxable value of fringe benefits provided or granted to shareholder-employees of the employer in that income year and in every subsequent year.
“(5)
An employer who has made an election under this section in respect of any income year shall, not later than the terminal tax date of that employer for that income year (as specified in section 388 or section 395 of this Act), forward to the Commissioner a return, in a form prescribed by the Commissioner, setting out—
“(a)
In respect of the fringe benefits received or enjoyed by each of the employer’s shareholder-employees in that income year, such details as are prescribed in the form; and
“(b)
A calculation of—
“(i)
The amount of fringe benefit tax payable in respect of the taxable value of those fringe benefits; and
“(ii)
The additional amount in the nature of interest that is payable under section 336tc of this Act in respect of the amount of fringe benefit tax so calculated, —
and the employer shall be liable to pay the total amount so calculated to the Commissioner not later than the said terminal tax date.
“(6)
For the purposes of subsection (1) of this section, where at any time an employer ceases business and begins a new business, or operates 2 or more businesses simultaneously, the gross tax deductions and specified superannuation contribution withholding tax deductions relating to all business carried on by the employer shall be aggregated.
“(7)
In this section, the term ‘preceding year’, in relation to an employer and an income year of the employer, means—
“(a)
In the case of an employer with a standard balance date, the year ending on the 31st day of March that immediately precedes that income year:
“(b)
In the case of an employer with a late balance date, the year ending on the 31st day of March that last ends before the beginning of the employer’s income year:
“(c)
In the case of an employer with an early balance date, —
“(i)
The year that commences on the 1st day of April that occurs before the beginning of the employer’s income year and ends on the 31st day of March that occurs within the employer’s income year; or
“(ii)
For the purposes of subsections (2)(b) and (3)(c)(ii) of this section only, that part of the year referred to in subparagraph (i) of this paragraph that commences on the 1st day of April and ends on the day preceding the commencement of the employer’s income year.
“336tc Amount in nature of interest to be added to fringe benefit tax paid on annual or income year basis
“(1)
Any employer who pays fringe benefit tax—
“(a)
On an annual basis in accordance with section 336ta of this Act; or
“(b)
On an income year basis in accordance with section 336tb of this Act, —
shall, in addition to any amount of fringe benefit tax payable on that basis for any income year, pay an additional amount in the nature of interest in respect of the fringe benefit tax so payable.
“(2)
Any additional amount payable under this section
“(a)
Be calculated in relation to the amount of fringe benefit tax to which it relates in accordance with regulations made under subsection (3) of this section; and
“(b)
Be payable at the same time as the fringe benefit tax to which it relates; and
“(c)
For all purposes be deemed to be of the same nature as fringe benefit tax, and shall be assessable, deductible, and recoverable accordingly.
“(3)
The Governor-General may from time to time, by Order in Council, make regulations for the purpose of specifying the manner in which any additional amount in the nature of interest payable under this section is to be calculated.
“(4)
Any such regulations—
“(a)
Shall, in specifying any method of calculation of the additional amount payable, have regard to—
“(i)
Any period or average period for which, whether generally or in any class of cases, the required date for payment of any amount of fringe benefit tax to which the additional amount relates has been deferred when compared with persons paying fringe benefit tax on a quarterly basis; and
“(ii)
Any annual rate of interest specified under section 398a of this Act; and
“(iii)
The fact that any additional amount calculated pursuant to this section will be deductible to the employer:
“(b)
May specify different methods or variables for calculating an appropriate additional amount, having regard to any differences, whether generally or in any class of cases, in the length or average length of the period between the end of any year or income year in respect of which the fringe benefit tax is payable and the date by which the fringe benefit tax to which the additional amount relates is required to be paid.”
(2)
This section shall come into force on the 1st day of October 1991, and shall apply to fringe benefit tax on fringe benefits provided or granted—
(a)
On or after the 1st day of April 1992, in the case of fringe benefits provided or granted by an employer who pays fringe benefit tax in respect of those fringe benefits—
(i)
On a quarterly basis; or
(ii)
On an annual basis pursuant to an election made under subsection 336ta of the principal Act; or
(b)
In any income year of an employer that commences on or after the 1st day of October 1991, in the case of fringe benefits provided or granted by an employer who, in respect of that income year, has elected to pay fringe benefit tax in respect of those fringe benefits on an income year basis pursuant to section 336tb of the principal Act.
22 Additional tax to be charged if default made in payment of fringe benefit tax
(1)
Section 336u(1)(a) of the principal Act (as inserted by section 34(1) of the Income Tax Amendment Act (No. 2) 1985) is hereby amended by repealing paragraph (a), and substituting the following paragraph:
“(a)
On the amount of any fringe benefit tax unpaid—
“(i)
At the expiry of the day on which the time specified in section 336t(1) of this Act expires, where the employer pays the fringe benefit tax on a quarterly basis; or
“(ii)
At the expiry of the relevant 31st day of May specified in section 336ta(5) of this Act, where the employer pays the fringe benefit tax on an annual basis; or
“(iii)
At the expiry of the relevant terminal tax date specified in section 336tb(5) of this Act, where the employer pays the fringe benefit tax on an income year basis,—
additional tax of 10 percent:”.
(2)
Section 336u of the principal Act (as so inserted) is hereby amended by adding the following subsection:
“(3)
For the purposes of this section, the term ‘fringe benefit tax’ includes any additional amount in the nature of interest imposed under section 336tc of this Act.”
(3)
This section shall come into force on the 1st day of October 1991.
23 Assessment of fringe benefit tax
(1)
Section 336v(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 the word “quarter”
, the words “or any income year”
.
(2)
Section 336v of the principal Act (as so inserted) is hereby amended by adding the following subsection:
“(4)
For the purposes of this section, the term ‘fringe benefit tax’ includes any additional amount in the nature of interest imposed under section 336tc of this Act.”
(3)
This section shall come into force on the 1st day of October 1991.
24 Change in period for which fringe benefit tax payable
(1)
The principal Act is hereby amended by inserting, after section 336v (as inserted by section 34(1) of the Income Tax Amendment Act (No. 2) 1985), the following section:
“336va
(1)
Where, in relation to any year and to an employer who has elected under section 336ta of this Act to pay fringe benefit tax on fringe benefits provided or granted to employees (other than shareholder-employees) on an annual basis, the employer does not meet the criteria specified in subsection (2) of that section that would be required for an election in relation to that year, the employer shall furnish returns and pay fringe benefit tax on a quarterly basis in accordance with section 336t of this Act in respect of fringe benefits provided or granted by the employer to such employees on or after the first day of that year.
“(2)
Where, in relation to any income year and to an employer who has elected under section 336tb of this Act to pay fringe benefit tax on fringe benefits provided or granted to shareholder-employees on an income year basis, the employer does not meet the criteria specified in subsection (2) of that section that would be required for an election in relation to that income year, the employer shall furnish returns and pay fringe benefit tax on a quarterly basis in accordance with section 336t of this Act in respect of fringe benefits provided or granted by the employer to shareholder-employees on or after the first day of that income year of the employer.
“(3)
An employer who has elected to pay fringe benefit tax on an annual basis or on an income year basis in relation to any category of employees may at any time elect, by notice in writing to the Commissioner, to pay fringe benefit tax on a quarterly basis, and where an employer so elects the employer shall furnish returns and pay fringe benefit tax on a quarterly basis in accordance with section 336t of this Act in respect of fringe benefits provided or granted by the employer to the relevant category of employees on or after—
“(a)
The 1st day of April that first follows the date of the employer’s election under this section, in the case of an employer who had previously elected to pay fringe benefit tax on an annual basis; or
“(b)
The first day of the income year of the employer that first follows the date of the employer’s election under this section, in the case of an employer who had previously elected to pay fringe benefit tax on an income year basis; or
“(c)
Such other date as may be agreed between the employer and the Commissioner and notified by the Commissioner in writing to the employer.
“(4)
Where, pursuant to this section, —
“(a)
An employer transfers from paying fringe benefit tax on an income year basis to paying fringe benefit tax on a quarterly basis; and
“(b)
The day specified in subsection (2) or subsection (3)(b) of this section as the day on and after which fringe benefit tax is payable on a quarterly basis is not the same day as the first day of a quarter, —
the employer shall furnish a return and pay fringe benefit tax in accordance with section 336t of this Act as if the period commencing with the day so specified and ending with the day preceding the first day of the quarter that first commences after that specified day were a quarter.
“(5)
Where—
“(a)
An employer has made an election in accordance with section 336tb of this Act to pay fringe benefit tax on an income year basis in respect of any income year; and
“(b)
The first day of the first income year of the employer to which the election applies is not the same day as the first day of a quarter, —
the employer shall furnish a return and pay fringe benefit tax in accordance with section 336t of this Act as if the period commencing with the first day of the quarter in which the first day of that first income year falls and ending with the day preceding the first day of that first income year were a quarter.
(2)
This section shall come into force on the 1st day of October 1991.
25 Application of other provisions to fringe benefit tax
(1)
Section 336y 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 the word “quarter”
, the words ‘or (where hinge benefit tax is payable on an income year basis pursuant to section 336tb of this Act) an income year, as the case may be”.
(2)
This section shall come into force on the 1st day of October 1991.
26 Overestimates to be set off within specified group
(1)
Section 383(1) of the principal Act (as substituted by section 17(1) of the Income Tax Amendment Act (No. 3) 1988) is hereby amended by inserting, after the words “This section shall apply for the purposes or”
, the words “Part XIIA and”
.
(2)
This section shall apply with respect to the tax on income derived in the income year commencing on the 1st day of April 1990 and in every subsequent year.
27 Credits arising to imputation credit account
(1)
Section 394d(1)(a) of the principal Act (as inserted by section 55 of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by inserting, after the words “The amount of any income tax paid by the company during the imputation year”
, the words “on income derived by the company”
.
(2)
Section 394d(1) of the principal Act (as so inserted) is hereby amended by inserting, after paragraph (a), the following paragraph:
“(aa)
The amount of any tax deemed to be paid by the company pursuant to section 383(3) of this Act:”.
(3)
Section 394d(2) of the principal Act (as so inserted) is hereby amended by inserting, after paragraph (a), the following paragraph:
“(aa)
In the case of a credit referred to in paragraph (aa) of that subsection, on the date on which notice in writing of the allocation of the tax referred to in section 383(4) of this Act is given to the Commissioner:.
(4)
This section shall apply with respect to the tax on income derived in the income year commencing on the 1st day of April 1990 and in every subsequent year.
28 Debits arising to imputation credit account
(1)
Section 394e(1) of the principal Act (as inserted by section 55 of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by inserting, after paragraph (ab), the following paragraph:
“(ac)
The amount of any provisional tax allocated by the company pursuant to section 383 of this Act to an underpaid company (as defined in that section):”.
(2)
Section 394e(1) of the principal Act (as so inserted) is hereby amended by omitting from paragraph (c) the words “The amount of any refund of excess retention tax”
, and substituting the words “Where a credit has arisen under section 394d(1)(c) of this Act for payment of excess retention tax, the amount of any refund of that excess retention tax”
.
(3)
Section 394e(1) of the principal Act (as so inserted) is hereby amended by adding to paragraph (j) (as inserted by section 37(1) of the Income Tax Amendment Act (No. 2) 1989) the words “, except to the extent the refundable excess is paid in respect of an income year during which the company was not an imputation credit account company.”
(4)
Section 394e(2) of the principal Act (as so inserted) is hereby amended by inserting, after paragraph (ab), the following paragraph:
“(ac)
In the case of a debit referred to in paragraph (ac) of that subsection, on the date the company gives to the Commissioner notice in writing of the allocation of tax pursuant to section 383 of this Act:”.
(5)
Section 394e(2) of the principal Act (as so inserted) is hereby amended by adding the following paragraph:
“(i)
In the case of a debit referred to in paragraph (j) of that subsection, on the date the refundable excess is paid.”
(6)
Subsections (1) and (4) of this section shall apply with respect to the tax on income derived in the income year commencing on the 1st day of April 1990 and in every subsequent year.
(7)
Subsection (2) of this section shall apply with respect to a refund of excess retention tax made on or after the 1st day of April 1990.
(8)
Subsections (3) and (5) of this section shall be deemed to have come into force on the 1st day of April 1989.
29 Company dividend statement
(1)
Section 394h of the principal Act (as inserted by section 55 of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by repealing subsection (2), and substituting the following subsection:
“(2)
Every company to which this section applies shall, not later than the time allowed in accordance with section 17 of this Act for the furnishing of a return of income in respect of an income year, furnish to the Commissioner any company dividend statement required to be completed in the imputation year corresponding with that income year.”
(2)
This section shall apply to company dividend statements in respect of dividends paid in the imputation year commencing on the 1st day of April 1991 and in every subsequent imputation year.
30 Annual imputation return
(1)
Section 394j(1) of the principal Act (as inserted by section 55 of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by omitting the words “not later than the 31st day of May following the end of each imputation year, furnish to the Commissioner an annual imputation return for that year in the prescribed form”
, and substituting the words “not later than the time allowed in accordance with section 17 of this Act for the furnishing of a return of income in respect of an income year, furnish to the Commissioner an annual imputation return in the prescribed form for the imputation year which corresponds with that income year”
.
(2)
This section shall apply to annual imputation returns to be furnished in respect of the imputation year commencing on the 1st day of April 1991 and every subsequent imputation year.
31 Further tax payable where end of year debit balance, or when company ceases to be an imputation credit account company
(1)
Section 394l(2) of the principal Act (as inserted by section 55 of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by omitting the expression “31st day of May”
, and substituting the expression “20th day of June”
.
(2)
This section shall apply to payments made in respect of the imputation year commencing on the 1st day of April 1991 and every subsequent imputation year.
32 Imputation penalty tax payable where end of year debit balance
(1)
Section 394n of the principal Act (as inserted by section 55 of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by omitting from both subsection (3) and subsection (4) the expression “31st day of May”
, and substituting in each case the expression “20th day of June”
.
(2)
This section shall apply to payments made in respect of the imputation year commencing on the 1st day of April 1991 and every subsequent imputation year.
33 Payment and recovery of foreign dividend withholding payment, etc.
(1)
Section 394zn of the principal Act (as inserted by section 55 of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by omitting from both subsection (1) and subsection (5) the expression “14 days”
, and substituting in each case the expression “20 days”
.
(2)
This section shall come into force on the 1st day of April 1992, and shall apply to deductions and amounts payable on or after that date.
34 Annual dividend withholding payment account return
(1)
Section 394zzc 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 “not later than the 31st day of May following the end of each imputation year for which the company was a dividend withholding payment account company, furnish to the Commissioner an annual dividend withholding payment account return for that imputation year in the prescribed form”
, and substituting the words “not later than the time allowed in accordance with section 17 of this Act for the furnishing of a return of income in respect of an income year, furnish to the Commissioner an annual dividend withholding payment account return in the prescribed form for the imputation year which corresponds with that income year”
.
(2)
This section shall apply to annual dividend withholding payment account returns to be furnished in respect of the imputation year commencing on the 1st day of April 1991 and every subsequent imputation year.
35 Further dividend withholding payment payable where end of year debit balance, or where company ceases to be resident in New Zealand
(1)
Section 394zzf(2) of the principal Act (as inserted by section 55 of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by omitting the expression “31st day of May”
, and substituting the expression ‘20th day of June.
(2)
This section shall apply to payments made in respect of the imputation year commencing on the 1st day of April 1991 and every subsequent imputation year.
36 Dividend withholding payment penalty tax payable where end of year debit balance
(1)
Section 394zzg of the principal Act (as inserted by section 55 of the Income Tax Amendment Act (No. 5) 1988) is hereby amended by omitting from both subsection (3) and subsection (4) the expression “31st day of May”
, and substituting in each case the expression “20th day of June”
.
(2)
This section shall apply to payments made in respect of the imputation year commencing on the 1st day of April 1991 and every subsequent imputation year.
37 Tenth Schedule amended
(1)
The Tenth Schedule to the principal Act (as amended by section 76 of the Income Tax Amendment Act (No. 5) 1988) is hereby amended—
(a)
By inserting, after the word “quarter”
where it first appears, the words “or (where fringe benefit tax is payable in respect of the vehicle on an income year basis pursuant to section 336tb of this Act) to any income year,”
:
(b)
By inserting, after the word “quarter”
wherever it subsequently appears, the words “or income year (as the case may be)”
:
(c)
By inserting, after the expression “6 percent”
wherever it appears, the words or (where fringe benefit tax is payable in respect of the vehicle on an income year basis pursuant to section 336tb of this Act) 24 percent”.
(2)
This section shall come into force on the 1st day of October 1991.
This Act is administered in the Inland Revenue Department.
Versions
Income Tax Amendment Act 1991
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