Tax credits for employers
MK 9 Eligibility requirements
What is required
(1)
For the purposes of section MK 1(2), an employer must—
(a)
pay an amount of employer contribution in relation to an employee who—
(ii)
is not entitled to withdraw an amount from a fund or scheme under schedule 1, clause 4(3) of the KiwiSaver scheme rules in the KiwiSaver Act 2006 or a rule that is the same as that clause; and
(b)
provide details of the amount of the tax credit relating to the employee in an employer monthly schedule or PAYE payment form; and
(c)
meet 1 of the requirements of section 6(2) of the KiwiSaver Act 2006.
When details not required
(2)
Subsection (1)(b) does not apply if the employer has—
(a)
an unpaid amount of compulsory employer contribution referred to in a notice under section 101I(5) of the KiwiSaver Act 2006; or
(b)
an amount of short payment under Part 3, subpart 3 of that Act.
Defined in this Act: amount, compulsory employer contribution, employee, employer, employer contribution, employer monthly schedule, PAYE payment form, tax credit
Compare: 2004 No 35 s KJ 7
MK 10 Amount of credit
Amount of contributions or calculation
(1)
For a payment period, the amount of a tax credit under section MK 1(2) is equal to the lesser of—
(a)
the amount of the employer contributions for the employee for the period; and
(b)
the amount calculated using the formula—
$20 × weeks in payment period.
Definition of item in formula
(2)
In the formula, weeks in payment period is the number of weeks in the payment period for the payment of the employee’s salary or wages, in which the employee meets the requirements of section MK 9(1)(a), including weeks in the payment period in which the employer does not pay an amount of employer contribution. Parts of a week are expressed as a decimal.
Meaning of payment period
(3)
In this section and in sections MK 11 to MK 13, payment period means a first payment period, a second payment period, or a month, as applicable, in which PAYE is withheld in relation to the employee.
Defined in this Act: amount, employee, employer contribution, first payment period, salary or wages, second payment period
Compare: 2004 No 35 s KJ 8
MK 11 When tax credits arise
A tax credit referred to in section MK 10 arises—
(a)
for an employer who provides details of the amount of the credit under section MK 9(1)(b),—
(i)
on the end date for the payment period under section RA 15(3)(a) (Payment dates for interim and other tax payments) if the employer is not a private domestic worker:
(ii)
on the date referred to in section RA 10(3) (When obligations not met) if the employer is a private domestic worker:
(b)
for an employer to whom section MK 9(2) applies, on the day the Commissioner—
(i)
receives the notice referred to in section 101I(5) of the KiwiSaver Act 2006; or
(ii)
determines that the employer has an amount of short payment under Part 3, subpart 3 of that Act.
Defined in this Act: amount, Commissioner, employer, notice, private domestic worker, tax credit
Compare: 2004 No 35 s KJ 9(1)
MK 12 Using tax credits
Commissioner’s use of credits
(1)
The Commissioner must use a tax credit referred to in section MK 10—
(a)
first, to pay—
(i)
an amount of short payment under Part 3, subpart 3 of the KiwiSaver Act 2006 relating to a compulsory employer contribution for a payment period; or
(ii)
to the fund provider of the complying superannuation fund, an amount equal to an unpaid amount of a compulsory employer contribution referred to in a notice under section 101I(5) of that Act:
(b)
second, to pay an employer contribution:
(c)
third, to pay an amount payable for the payment period by the employer to the Commissioner under an Inland Revenue Act:
(d)
fourth, to pay an amount that is payable by the employer to the Commissioner under an Inland Revenue Act:
(e)
fifth, to treat a tax credit as overpaid tax refundable under section RM 2 (Refunds for overpaid tax).
Treatment of tax credit used
(2)
An amount of tax credit used or paid under subsection (1)(a) is treated as an amount of compulsory employer contribution—
(a)
received by the Commissioner for a payment period, for the purposes of calculating an amount of short payment under Part 3, subpart 3 of the KiwiSaver Act 2006:
(b)
consequentially reducing a relevant amount of a compulsory employer contribution remaining unpaid, for the purposes of section 101K of that Act:
(c)
received by the Commissioner for the purposes of section 74 of that Act.
Defined in this Act: amount, Commissioner, complying superannuation fund, compulsory employer contribution, employer, fund provider, Inland Revenue Acts, tax, tax credit
Compare: 2004 No 35 s KJ 9(2), (3)
MK 13 When short payment and unpaid compulsory employer contributions found after tax credit used
When this section applies
(1)
This section applies when—
(a)
the Commissioner uses an amount of a tax credit under either or both section MK 12(1)(b) and (c); and
(b)
following that use, for the payment period to which the amount of tax credit relates, there arises—
(i)
an amount of short payment under Part 3, subpart 3 of the KiwiSaver Act 2006:
(ii)
an unpaid amount of compulsory employer contribution referred to in a notice under section 101I(5) of that Act.
Employer’s liability
(2)
The employer is liable to pay an amount equal to the lesser of—
(a)
the amount of the tax credit used:
(b)
the amount described in subsection (1)(b).
Treatment as amount of tax
(3)
The amount is treated as an amount of tax for the payment period in which notification of the amount described in subsection (1)(b) is given to the employer, and an equal amount is treated as a tax credit for use under section MK 12(1)(a).
Defined in this Act: amount, Commissioner, compulsory employer contribution, employer, notify, tax credit
Compare: 2004 No 35 s KJ 10
MK 14 Employees opting out
When an employee opts out under the KiwiSaver Act 2006, the amount of a tax credit for an employer contribution for the employee’s salary or wages is treated as an amount of a tax credit paid in excess of that properly payable under this subpart.
Defined in this Act: employee, employer contribution, salary or wages
Compare: 2004 No 35 s KJ 11
MK 15 Groups of persons
For the purposes of this subpart, a group of persons described in 1 of the following paragraphs is treated as 1 employer:
(a)
2 or more companies, if the companies are a group of companies; and
(b)
all partners in a partnership; and
(c)
all persons in whom property has become vested, or to whom the control of property has passed in the case of an estate of a deceased person, or a trust, or a company in liquidation, or an assigned estate, or other case in which property is vested or controlled in a fiduciary capacity.
Defined in this Act: company, employer, group of companies, group of persons
Compare: 2004 No 35 s KJ 12
MK 16 Private domestic workers
For the purposes of this subpart, a private domestic worker who is an employer under paragraph (c) of the definition of employer in section 4 of the KiwiSaver Act 2006 is treated as paying salary or wages to themselves in the capacity of employee.
Defined in this Act: employee, private domestic worker, salary or wages
Compare: 2004 No 35 s KJ 6(4)